Good afternoon, everybody. We'd like to welcome everyone to the room, to the Ulta Fireside Chat. Also those who are on the webcast. We'll do Q&A at the end. Given the webcast, if you could make sure you grab the microphone and ask the question into the microphone so the audience can hear. I'm very pleasured and happy to have with us the Ulta management team. To my left is Dave Kimbell, the CEO, and to his left is Scott Settersten, the Chief Financial Officer. I'm going to ask questions, but then I'm gonna pass it over to you, and please feel free to engage and ask questions. We'd appreciate that. Maybe, to set the table- Mm-hmm. The proverbial table, can you talk about 2022 a little bit, right? Obviously, things came in much better than your even, your original conservative plan. What were the drivers? How would you disaggregate that between, you know, share of wallet, price, newness, execution, whatever buckets you wanna break it into? Great. Well, first, thanks for having us. Thanks for joining this session. Appreciate your interest in Ulta Beauty and looking forward to a great conversation. Yeah, 2022, we were really proud of what we delivered. Certainly was well ahead of our expectations going into the year. I'd say there are a few things, and you mentioned some of them, but I'd start with the overall strength of the category. The category came out of the pandemic stronger than we anticipated. A few things are contributing to that. Certainly, there's an element of the world opening back up, and we knew that going into the year. We certainly anticipated some of that, but, and that helped as people were going out, particularly in the makeup category, more events, more activities, and that increased and elevated throughout the year. But I'd say much more impactful or much more important to it was that elevated connection that beauty enthusiasts have between beauty and wellness and self-care. 2/3 of beauty enthusiasts now see an elevated role in the, in the importance of beauty as part of their self-care routine. What that means is they see beauty as more than just the superficial, like how I show up, like what I look like today, to how I feel about how I'm taking care of myself, and ultimately how I'm expressing myself to the world. That, what that has led to is... That's contributed to is strength across all major elements of the category: makeup, skincare, haircare, fragrance. The category itself is healthy. With that, coupled with strong innovation, strong level of engagement, strong social media engagement, strong category health. At Ulta, we've been able to leverage that, to take advantage of that, and in many ways lead it. We gained share in 2022, the drivers of that were broad-based. We had strength really across every aspect of our business. Each category had double-digit growth. We had strength across all consumer, you know, segments, from ages to ethnicities, geographies. We had strength in channels. Our stores were very strong, our e-com business grew, as did our salon. We advanced and accelerated our partnership with Target, and ultimately that led to growth with our consumer base. Our loyalty program reached an all-time high at 40.2 million members. Spend per member increased, and our connection with our consumer continues to elevate because of the unique nature of our proposition. We feel like we executed with excellence. I'm proud of what the team did operationally to enable all of that. The consumer responded to our offering in a, in a strong beauty market, and that led to what were really record-setting results last year. Absolutely. As we bridge into 2023, how do you think about what are the drivers of the industry? You talked about, you know, industry growth at the higher end of the 2%-5% range. Two feels more of like a recessionary kind of or a downturn kind of environment, but the higher end of that range, more towards the back half of the year. How are you thinking about, one, do you think share of wallet in return to leisure activities will continue to be a driver? How are you thinking about the price component? Mm-hmm. How are you thinking about the newness component in 2023? I'll preface it by saying there's clearly uncertainty in the world ahead of us as we see how the economic environment outside of beauty, just that our consumer is living in. That's, you know, I guess that's always there, but it's definitely there right now that is kind of a halo over over the category. When we look specifically through beauty, a few of the positive drivers, this underlying wellness connection that I talked about, we see it. We know that momentum coming out of last year is important. It is connected. It's not a short-term trend. It's a long-term contributor to the health and success of the category over time. Innovation is strong. We saw that throughout 2022. After COVID-related innovation pipeline disruptions that varied by segment of the category, really all segments came in. We see strong innovation, particularly in health and wellness, but other aspects as well. In skincare, there's, you know, a lot of innovation around skin health and skin diagnosis and treatment, that's driving greater connection. Certainly in hair, there's scalp health, that's a important trend, at the same time textured hair. There's an overarching sense of combination of skin and makeup that's driving a lot of connection and innovation in the pipeline. Also some great trends. Beauty enthusiasts mixing big, bright, bold looks, reminiscent even of some areas of the 80s and 90s, but at the same consumer might be a different day looking for a softer, more muted, dewy look. There's a lot of innovation that's driving, so we think that's healthy, and just overall engagement. On pricing, last year was an extraordinary year for pricing, perhaps in every category, but certainly in beauty. We saw it in beauty. I mean, you would anticipate kind of an always-on normalized level of pricing that's kind of a regular state of the business. Well, last year was well ahead of that. As we lap that this year, the contribution from pricing was up to 400 or 500 basis points of comp contribution last year. We'll be lapping that this year, that we do not anticipate to be, you know, at that level of price increase this year. There's no indication that we see yet that that would repeat itself. That, you know, we get some benefit from that from a comp standpoint, more benefit from that from a comp standpoint in the first half of the year. We start lapping the bulk of the price increases as we move throughout the year. That'll be a bit of a headwind. A lot of positives as we look out, and we're optimistic as we go into this year. In January, you talked about acceleration from a comp perspective. You know, clearly lapping Omicron last year. It was much nicer weather in January on a year-over-year basis. Our sense is that the underlying business actually accelerated despite some of the easy compare math. Is that a fair characterization? Did you see it across the box? Was it more one category? Was it prestige versus mass or skincare versus cosmetics? We saw strength across our business really, frankly, throughout the year, throughout the fourth quarter, and as we reported, January was strong. Some of the reasons that you identified. Yeah, it was really an elevation of the broad-based strength. Each category continuing to contribute, which for us is a great sign that there is this broad-based connection to beauty. Our success last year and the category success wasn't confined to one segment or one subcategory. It was broad-based, which again, reinforces this connection between beauty and wellness, that it is affecting all aspects. When we look at January, all categories, all channels, our stores are leading the way as they have been all year, but e-com continues to contribute. Our salon is performing very well. That was a big part of it, all geographies. Broad-based strength that was really fueled by many of those factors that I, that I've been describing and gives us confidence as we go into this year for sure. Dovetailing back to the newness question, there was this wall of worry in the back half of last year around lapping some very big product launches, Fenty, Olaplex, and you've had the ability to see some of that. You mentioned positivity around the newness that you see ahead in the category. I guess, is it fair to say that the lap of Fenty and Olaplex was, you know, sort of an overly raw concern amongst the investment community? Well, no, I mean, it's a, these were major launches. What was a bit unique about the combination last year of Drunk Elephant, Olaplex, and Fenty all launching within a few months of each other was they're all big brands in their respective categories, skincare, haircare, and makeup. Yeah, for sure, we were anticipating the lap of that, and as we always do, trying to make sure we're finding avenues of growth. The lap of Fenty actually happened, it's happened here in the first quarter, so we'll be sharing, you know, specifics about the first quarter, obviously, at our call. When we think about lapping any major launch or any activity, it's a combination of elements that come together. There's always additional newness. I mean, this quarter, we've one of the, a couple examples of launches that we've announced this quarter that you've probably seen is the expansion of our luxury portfolio, the launch of Dior, Natasha Denona, among others, that are elevating our luxury position, really supporting the Chanel part of our business that we've had. Just recently, Beautycounter is an exclusive retail partner launch of an influential skincare and makeup brand. We have a lot in the pipeline. I don't. It is important, it is something we watch, and it's something that we try to make sure we have enough, you know, elements in our plan to drive growth, whatever we're going over. just to put a fine point on that, I think you've historically said 20% - 30% of growth each year is driven by newness. Mm-hmm. Was that true in 2022, and is that how you're planning 2023? Yeah. It was true, and it has been true over time. It's one of the great things about this category is there is a steady pipeline of newness, both big new brands that we haven't carried, Dior in makeup and skincare is an example of that, but also new brands that are just getting started that really create new connections with consumers. The collection of brands is how we think about innovation, even when we have a big lap of something like Fenty. You mentioned earlier, you know, the macro uncertainty, and obviously, we just went through another crazy March. March is just a terrible month, apparently, for in history. You know, the banking shock. Mm-hmm. The layoff announcements. How has your business performed historically in shocks? You know, the business, I think you've always said it's a resilient business. It's not, you know, recession-proof. It was down in 2008, right? It wasn't down like other discretionary categories. How does your business historically react around shocks scenarios? Yeah. We've seen a lot of different things over a long period of time. Mm. Dave, 9+ years, and me, 18 years, I guess. Yeah. We've seen a lot of cycles. There hasn't been any correlation really with things like spiking gas prices, let's say, or even during the worst of the Great Recession. We didn't see anything with savings rates or delinquencies on credit cards or anything like that. There seems to be a little special sauce with the beauty category. Again, it's been, over time, proven to be a very resilient category. Again, when people are thinking about the trade-offs they need to make in their personal spending habits, this seems to be a category that holds up pretty well. Maybe one of the last ones, right, to get squeezed, if circumstances warrant. We did see. Again, when things, big things happen, shocks to the system, like all retailers, we see impacts on our business. Fortunate for us, they're usually pretty short-lived, and we usually see the demand kind of bounce back, and we recapture whatever lost sales we might see during that period of time within a reasonable period. Great. I wanna talk about the unit growth opportunity. Your sales have nearly doubled in a very short period of time. Your store target really hasn't changed all that much. You've added, obviously, a lot of omni-channel capabilities, but still very much an in-store shopping environment. You've added Target, but Target seems more like a customer acquisition vehicle. Mm-hmm. You know, given how much productivity now is in the existing boxes, why isn't there more of an opportunity to even infill even more in markets, cannibalize a little bit, but raise the overall productivity of the market? Our store target, consistent with what we've communicated over the course of the last couple years, so still 1,500-1,700 full-size, 10,000-foot Ulta prototype stores in the United States here over the next few years. During our Analyst Day back in late 2021, we said the sequence or the pace was gonna be about 50 new stores per year. For 2023, we have scaled that back a little bit to 25-30 stores here this next year. That's based on some supply chain disruptions we're seeing with, like, HVAC units and things like that that we have to source from overseas, so there's more of a challenge landing those things. The landlord population of just being a little bit more careful about signing leases and make sure they've got all their co-tenancy requirements met before we officially sign off on that. Again, a few less stores this year, but we're confident we're gonna get those back in 2024, so it's primarily just a shift in timing, I would say. Again, store fleet is operating, you know, delivering super strong results. Again, we see this with consumers. The brick-and-mortar environment, the experiential nature of what we offer is still a very important component to our overall proposition. I would say we're staying focused, though, because it's not just a brick-and-mortar versus a digital. It's them working together in a cohesive manner. Continuing to invest in our digital assets, like our Digital Store of the Future platform and our app and other things that we're doing to engage with guests, and just making sure that we deliver a, an excellent omni-channel offering, which is what we're focused on. you know, we've always made the argument that given, you know, essentially almost a duopoly or will eventually become a duopoly in the prestige side of makeup, that your share should exceed what's a typical threshold for any, you know, retailer. I mean, Walmart might have 23% share in grocery. Like, Home Depot narrowly find is 30%. Best Buy is about 30%. How do you think about your share opportunity given you have a unique assortment? Mm-hmm. You have a competitors who are donating share. You have your largest competitor doesn't have the assortment advantage that you do. How do you think about your long-term share in the, in the cosmetics, the beauty category, and where do you see the biggest opportunity from here in terms of share growth? Well, we're proud that we've been able to gain share for a while now. We did so in 2022, you know, despite some of the competitive activities and other dynamics going on. We're confident that we've got a, you know, runway to continue to gain share. When we talk about gaining share, I should clarify that that's through the lens of our prestige side of the business. That's what we report publicly when we're commenting on earnings call and in other places about share growth. That's through NPD and prestige. We also recognize we have opportunity and we track in the math side of the business, and we believe we're gaining share and have opportunity to gain share in that space. Our assortment, while on the prestige, the competitive dynamic's a little different. We've broad range of competitors across all price points and all different styles and types. For us, what we look at is, that gives us confidence in our growth, the ability that we can exceed the category growth rate over time is the uniqueness of our, of our proposition. We're the only ones that. That do what Ulta Beauty does. The assortment, the breadth of the assortment, the power of our loyalty program, the unique nature of our experience, all these factors come together in ways that we've been able to evolve and adapt and excite guests over time. Our entire strategy, and probably for those of you that have been close to our business, you've heard us talk about the strategy that we laid out at our Analyst Day, this consumer strategy of all things beauty, all in your world, at the heart of the beauty community is our guest-facing strategy. All things beauty with our assortment. All in your world is touch points that engage and make it easy, whether it's our stores or our app or our e-com or our salon or our Target business, all the other ways to engage. The heart of the beauty community is all about the emotional connection. We think we do that arguably. We believe we do that better than anybody. Our focus is continue to do that, supported by great operational excellence. We keep doing that, we're confident we can gain share. Absolutely. Pivoting to the more the margin topic. You've laid out a 15% roughly margin target for this year. You sort of gave a mini update for next year on, of 14% -1 5% operating margin. Can you talk about the as you haven't readdressed, you haven't rebuilt your long-term targets, right? You're sort of staying within the existing timeframe that you've talked about. How do you think about the big puts and takes over the long term relative to this 14% - 15%? First, let me say how happy we are and proud of what our teams have been able to deliver here over the last couple years, especially as we've navigated through, you know, the chaotic time of the pandemic and then coming back and the big rebound we've seen here over the last couple years. Our team has been very flexible, agile, if you will, in addressing that and making sure we take advantage of opportunities that were presented to us. As you said, we have updated our operating margin piece of our long-term algorithm. Again, we're using a time period of 2022 through 2024, which is the time period we were talking to back in October of 2021. As we think about the business, Ulta Beauty, you probably heard me say this before, I mean, we feel like we're in a much healthier, stronger position today than we were back prior to the pandemic. Again, there's a lot of elements at work here. You know, over the last year or two, we've delivered extraordinary operating margins. Again, 16%, I guess, last count here in 2022. A lot of that was driven by significant overperformance in the sales line, right? It's a combination of good things that we've been doing as part of our ESG efforts across the business. Again, when we talk about occupancy cost leverage, some of that's coming from us taking costs out of and optimizing our store fleet. When you layer overperformance on sales on top of that, you kind of get supersized results from that, right? Occupancy cost leverage is a big driver. Merchandise margins, again, it's kind of there's a multiple variables at play here. Some of it is with us and all the good work that our merchant team has been doing over the last few years on better disciplines around negotiations, about what we're adding to the assortment, kind of taking a more balanced approach there. Things we're doing on the inventory side to optimize what we buy, where we put it, how we exit brands over time to be more efficient. Part of it is a natural tailwind that we've got from a pullback in the promotional environment over the last couple years. This wasn't just a beauty or an Ulta thing, right? All of retail has kind of benefited from that. There's, you know, multiple variables at play there as well. There's a lot of other self-help things we've done. We've done added BOPUS capabilities, ship from store capabilities. We've captured efficiencies in our distribution centers over time. Again, all of this is part and parcel of our ESG efforts that now lead us into efficiencies, I'll call 2.0, through our continuous improvement initiatives that we have queued up for the next couple years. I think there's a nice mix of things going on here, things that we've implemented over the last couple years, coupled with things like UB Media, which is, you know, we're in the midst of scaling up here. Our investments around Project SOAR and our Digital Store of the Future are major platform upgrades, along with our supply chain refreshes in all our major buildings. Again, we feel like there's a lot of things in play here that give us a lot of confidence that we'll be able to sustain improved operating margins, even from where we guided back in 2021, on a much more moderate comp level of 3%-5%. Feel good about where we're headed. As you think about, you know, the incremental margins of the business and you're baking into this year promotional normalization. As we look further out, you know, this year in this current cycle, sort of at the peak expense dollar investment of this cycle, as that bakes off, on the lower comp, shouldn't the leverage in the... If we're starting from the base of promotional normalization, peak investments dollars, if the business continues to decomp, what would hold back margin expansion, operating margin expansion? We're definitely at a significantly elevated kind of investment level at this point in time. Again, during the course of COVID, we kind of, like most people, kind of pulled back the reins, right? To make sure we took a prudent approach to how we were viewing the financial performance of the business. You know, some of that sequence has come back. Along with major transformational type investments. A once a generation kind of thing with supply chain, building investments, Project SOAR, Digital Store of the Future. We're at an elevated level, right. We had roughly $70 million of P&L investment last year, and we're expecting another $60 -$70 million incremental in 2023. Again, as we look to 2024 and beyond, we would expect some of those things to moderate some. Again, SOAR will come off the schedule as will Digital Store of the Future. We would expect the P&L headwinds coming from that will moderate as we look three years ahead. Excellent. With that, open up the mics for questions. If you have a question, please grab the mic and ask your question so everyone can hear. Over here in the corner. Great. Thank you. Can you give some more insight on the luxury opportunity and where that mix can grow or what you're targeting? Have you quantified the potential comp lift or basket increase opportunity? Thanks. We're excited about luxury. We've had a partnership. We've been in the luxury space for a while. We've had a long-term partnership with Chanel and fragrance, and then more recently in their beauty line, which has performed well, and we're excited about that. We saw an opportunity to expand that presence. That's what we rolled out this quarter with a new fixture in about 200 stores and online that brings to life Dior, Natasha Denona. Hourglass is part of that, anchored by Chanel. There's, you know, and a couple of other elements from some key brands that bring to life the luxury experience in a, we think a really unique and special way. It's a great opportunity for us to extend further into that space. It's a great opportunity for these brands. Dior came to Ulta Beauty because they felt like they could reach a new consumer in a really compelling environment, in a modern current way that they're excited about. We're encouraged by what we're seeing. We'll certainly, in, as we report first quarter, give some more details. We haven't broken out exactly, you know, any targets or goals or expectations other than we're expecting that it will, you know, be additive to our business as a new way to engage in Ulta Beauty. One of the unique key differentiating factor of Ulta is the assortment that we have across price points. We're the only retailer in the country where you can buy entry-level mass and high-end luxury in the same trip and the same experience. Our guests do that. Even guests that can afford to buy the more expensive products, you know, still shop across all price points. That behavior is true across all different parts of our business. We're excited about the luxury opportunity because it further rounds out the portfolio of offerings that we're given in a key segment that's growing in the category. Can you hear me? Mm-hmm. Could you talk about the Target partnership? Sort of the learnings after, I guess two years now of that partnership, whether it be differences needed in that assortment and then also the success in expanding, you know, Ulta Target customers overall sort of spend at Ulta Beauty and/or bringing customers into Ulta Beauty through that partnership. Thank you. Yeah. It's been about a year and a half now since we opened our first location. It's been rolling out. We're at about 350 Ulta Beauty at Target locations, and we'll be adding more this year. Our relationship is strong. We're very pleased with the partnership. They've been great partners. Most importantly, the consumer response has been very positive really from day one, from the moment we announced it. You know, the strategic reason for this partnership was to give us an opportunity to extend our presence, to find a new convenient way for our guests, an additive, incremental way for our guests to engage in Ulta Beauty. We found in so many other ways historically that if we make it easy, we find a new way to engage in Ulta Beauty, they reward us with their loyalty. We have higher retention, higher share of wallet, higher overall spend, and that was strategic rationale with Target. What I'd say about the performance right now is we're really, you know, we're really encouraged by what we're seeing. It's still in the grand scheme of our business, 40 million members, the growth that we saw in the fourth quarter in our members. It's a small part of that. It, by no means is it a majority of our growth, but it is. We see a couple of things that you called out. We do see the opportunity to attract and acquire new members. What we're encouraged by is these new members end up looking and behaving like members that we attract in our core stores. We're encouraged by that, meaning that they come in, they come back to our store, they spend at, you know, at healthy levels. While it's not a material driver of our new member growth, we're encouraged by what we see, and we think there's an opportunity there to do even more. There's 30 million people that walk through a Target every week. As we expand the presence and get more experience with this, we think there's opportunity there. For our existing guests, you know, they get, as a reminder, they get Ulta Beauty points when they shop at Target, and they can redeem those points at our core Ulta Beauty, our stores or online. What we see within that is, again, our intention here is to give an additional convenient touch point. What we're seeing is encouraging about their overall engagement with us. This isn't just a trade-off. This is ultimately, we believe, will drive incrementality to our business, and we're encouraged by what we're seeing so far. Right. Scott? A couple quick questions. You mentioned earlier the 1,500-1,700 stores that you were talking about, full 10,000 sq ft stores. I know you have experimented at times with smaller boxes. What's the status on those, and does the Target partnership at all inhibit your ability to do smaller boxes in some regions? Then I had a follow-up question. All right. Yeah, thanks for asking that, Scott. We do have a handful of smaller 5,000 sq ft stores, which are in what I'd call later demographic markets for us, less population, place where we wouldn't ordinarily consider putting an Ulta store. Again, a handful of those. We're happy with the performance so far. That's an incremental opportunity above and beyond the 1,500-1,700 stores that I referenced. We're happy with the performance and optimistic about what the future could look like there. On the Target piece of it, yeah, when the 1,500-1,700 includes an estimate on the impact of the 800, roughly Target stores that we've talked about here historically. There's been nothing that we've seen, again, when we went into that, eyes wide open about potential sales transfer, cannibalization, impacts on our, you know, nearby located stores. Haven't seen anything different than what we expected that would change our opinion on how that opportunity shapes up for the long term. Yeah, the Target store, just to be clear, I probably should have said it. We really like that experience. It is designed in a way it's custom designed to be the right experience for that environment. It is not the complete Ulta Beauty experience. It has 50- 60 brands. You know, our stores have over 600 brands. It's about a, what, 1,000 sq ft, I think, you know, or 10,000 sq ft. Our stores have salons. They have, you know, multiple highly trained, you know, staff. It is designed to be a complement, not a replacement. That's what we see even in locations that are close to our existing stores. While we anticipate some cannibalization, particularly early as they open, over time, we'd expect that it complements. It just provides another touch point for, to get a part of the Ulta Beauty experience, drive them back to get the whole Ulta Beauty experience at our, at our complete touchpoints, either in-store or online. Just the other question. I know several years ago, you guys had done some initial groundwork around potentially, opening stores in Canada. I know those got canceled, put on hold, indefinite hiatus, whatever. Yeah. Any thought to revisiting that? You learned enough then to decide this is not a great use of your capital? Yeah, it's, yes. As a reminder, we were moving down the path. We were pretty far down the path of opening a handful of stores in Canada. In 2020, with COVID, we stopped that effort as we wanted to focus on our U.S. business, and we're uncertain of that environment, of that investment. It was the right decision at that time. As we look forward to, we have no immediate plans to launch into Canada or anywhere else outside of the U.S. Having said that, as we think conceptually and long term on our business, international is certainly a potential area and avenue of growth. We know the, you know, the challenges of that, we also know that it's a global industry, there's probably is opportunity at some point in some locations for our model. Nothing as we shared our long-term plan that does not anticipate or include any international expansion at this time. The next investment cycle. The next investment cycle. There you go. I have just a quick question to follow up on Target. Have you changed the planogram? Aside from the newness evolution, has there been a rethink of who that customer is and what they're buying such that you went in, you're like, "Well, we thought we would have, you know, more masstige or opening price point prestige," you know, you know, sort of gateway brands or products. Have you rethought the planogram in any significant way? Since we launched it? Yeah. No, not in a transformative way. The idea from the beginning, and it's still largely true, is to be a prestige destiny, a prestige experience. Does have a few masstige brands, but it's predominantly a prestige. Within those, it's a curated assortment of those brands. Think of brands like MAC and Clinique. It's the best of the best kind of, you know, environment. There's been some tweaks. We've added some brands. We've, you know, like we always do, optimize assortment. One of the opportunities is there's more brands that wanna be in it than if any had questions at the beginning, they're like, "Oh, no, that's a pretty good idea, and we wanna be in it." We think about how to manage space, but, you know, there hasn't been a big shift. The one opportunity that we're thinking about is we did not start with much of a fragrance presence. We had a couple, and that's an area where we see some opportunity maybe over time. No radical shifts to it, and we think that initial strategy is right, and we'll continue to optimize it going forward. Over here. James? Can you talk a bit about the promotional intensity now versus 2019, and if there's been any structural changes industry-wide, which would mean that would be lower going forward than it might have been pre-COVID? Yeah. Versus 2019, Ulta and really the whole beauty industry is, has less promotional intensity. In 2019 was a elevated year, largely due to the challenges in the makeup segment. Again, for those who have been tracking for a while, you probably remember after years of just extraordinary growth, 2014, 2015, 2016 into 2017, the makeup category hit a rough spot. The other categories were doing fine. Makeup hit a rough spot. Prestige makeup, some in mass too, but particularly on the prestige side, hit a rough spot in 2018 into 2019. That led to, you know, some scrambling by their brands and retailers, and elevated promotional. COVID came, changed the dynamic for every part of beauty and probably no more so than makeup and promotional intensity has gone down. We've been able to do is, and we were on this journey before COVID, but COVID did give us the opportunity to accelerate it. To try to reduce as many of the broad-based offers, coupons that I would describe as, you know, historically have been important, but they weren't terribly strategic. They were volume drivers, but they weren't as strategic. Reduce those, use those at the right times of the year, like holiday, when the environment is different, but, and shift our value-driving efforts to our loyalty program, to more targeted strategic programs. Programs like 21 Days of Beauty, which we're in the last week of. Get to your local store before the weekend, this weekend, take advantage of 21 Days of Beauty. It's the reason it's strategic is it introduces our guests through a one day only, 50% off the best items in prestige. We've, we have years of history and tons of data, introduces them to that brand, that item, sometimes to prestige overall, and we see them, you know, they're buy more over time. Their spend with us goes up. We have, through our loyalty program, a whole range of activities that are more targeted, so we see a greater ROI because, you know, the response is there and it's more incremental. That's the focus for us. We'll continue to be competitive. We'll watch closely the landscape. We're not gonna lead, broad scale, discounting, but, you know, if things change, the economy changes, competitive environment changes, you know, we're, we've got the tools, but our focus is to continue to be very strategic and add value in our overall offering. Over here. Milan. Thanks. Yeah. I know you. No, you have to use that. Yeah. You have to use it. It's too. [audio distortion] Yeah. We're really excited about UB Media. I can't answer your questions directly. We're not given that level of detail on it. What I will say is, and you touched on it, yeah, Did you say golden data set? That's, I like that term. It is, our data is one of our greatest strategic assets. The fact that we've got, you know, 40 million members, 95% of our sales, so we can track almost every single item we sell back to an individual. Our assortment is the broadest in beauty from entry-level mass, masstige, prestige, luxury, hair care, skin care, fragrance, bath, wellness. We've got in-store, online, salon. We have a, arguably the most robust understanding of transaction-level data in all of beauty. That is the reason that brands in beauty are attracted to our program. We had been, I guess, dabbling in retail media for two years. We really announced at the Analyst Day about 1.5 years ago and invested last year getting the team, getting the resources, the technology to accelerate. We made a lot of progress last year. There's high level of demand, and we're investing more this year to take full advantage of it. While to your point, we've said it's not a material driver today, and we're investing, we're doing it because we see opportunity. We think we're uniquely positioned, and we wanna lead this space for beauty, and I think we've got every right to do that. Over there. Great. Thanks so much for the time. Just looking at spend per customer, it's like 20% above pre-COVID levels, which is really impressive. Can you talk about the opportunities that you see to drive spend higher, but also at the same time, the blocks that got us here, like, you know, bigger baskets, more items, more frequency, and also inflation, and the opportunities that you see go forward to drive maybe higher frequency or bigger basket? Thank you. Well, I'd say on the go forward, so much of what we do is designed to try to get a greater share of wallet. As, as successful as we've been and as connected as we are to our guests, on average, we have about 1/3 of our of our members' share of wallet, which gives us a lot of opportunity. It's a bit of the blessing and the curse of a beauty enthusiast is, the blessing is that they are highly engaged in the category. The curse is that if they're around beauty, they're likely to go walk down that aisle. If they're, you know, if they're in the mall or, you know, in a mass store or whatever, they'll, you know, they... It's an always on activity. Our opportunity when it might be the right time, I think if there's one limiter to it's, you know, we're making choices, and there's, we're not trying to be anybody else. We're not trying to be a department store. We're not trying to be certainly not trying to be solely prestige or luxury. We're not trying by this, the expansion into luxury is not a signal that we're trying to be a luxury-only destination. That's not who Ulta Beauty is. We want you to be able to buy e.l.f. and Chanel in the same basket. That's what our guests love about us. There'll always be a balance. We'll always be bringing in new brands and new opportunities. There's as much progress as we've made, there's more out there and more to come. The core idea of all things beauty, all price points, all categories, will continue to guide us for as long as I can see ahead of us. That's our focus. We'll keep adding brands, but you won't walk into an Ulta five years from now and think, "Oh, I'm in a department store." That's not our intent. With that, our time is actually up. We thank your participation at our conference, and thank you everyone for joining us. Have a great day. Thank you.