Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc first quarter fiscal 2023 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press Star, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to introduce Oona McCullough, Executive Director of Investor Relations. Ms. McCullough, you may begin. Good afternoon, and welcome to the URBN first quarter fiscal 2023 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three-month period ending April 30, 2022. The following discussions may include forward-looking statements. It's important to note at this time the global COVID-19 pandemic has had and continues to have a significant impact on URBN's business. Given the uncertainty about the duration and extent of the virus's impact to the global retail environment, content discussed on today's call could change materially at any time. Accordingly, future results could differ materially from historical practices and results or current descriptions, estimates and suggestions. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the company's filings with the Securities and Exchange Commission. On today's call, you will hear from Richard Hayne, Chief Executive Officer, Frank Conforti, Co-President and COO, and Melanie Marein-Efron, Chief Financial Officer. Following that, we will be pleased to address your questions. For more detailed commentary on our quarterly performance and the text of today's conference call, please refer to our investor relations website at www.urbn.com. I will now turn the call over to Dick. Thank you, Oona, and good afternoon, everyone. Today, I'll begin the call with some brief remarks regarding our first quarter sales and make a few macro consumer observations. I will then turn the call over to Frank and Melanie, who will provide more details by brand, along with our thoughts about future performance. URBN produced strong sales gains in the first quarter, with total retail segment comp sales increasing by 11% versus Q1 last year. Each brand posted positive retail segment comps led by Anthropologie, with a powerful 18% gain, and Free People with a 15% increase. The Urban brand retail segment comp was 1% driven by strong sales in Europe, partially offset by weakness in North America. The Urban Outfitters brand in North America saw a deceleration in comp sales throughout the quarter as it faced progressively more difficult comparisons against sales in the first quarter last year. When we last spoke with you in March, we were optimistic that strong consumer demand would continue through the spring season. We believe this remains true for the Anthropologie and Free People brands. These customers are excited for a return to normal. They're shopping in stores again and are out and about with family and friends, traveling, dining out, and going to many, many events. Customers are shopping to accommodate their social calendars, and the products they're choosing are those tailored specifically for going-out moments. The Anthropologie brand prioritized dresses for the spring/summer season, and that is paying off nicely. The customer has reacted favorably to their offerings and the fabulous marketing materials the brand created. We believe both Anthropologie and Free People will continue to see nicely positive sales in Q2. Most Urban Outfitters North America brand customers received stimulus windfalls in March and April last year, which quickly swelled their disposable income. Many spent it just as quickly and helped drive a surge in demand in the first half of last year. As a result, Urban Outfitters North America has very difficult comparisons this year during the first half. Furthermore, this customer is the most sensitive to inflation, as they are typically younger and earn less than their Anthro or Free People counterparts. Adding to these powerful headwinds, the brand in North America did not execute to the level we would have liked. Taken together, we believe Urban Outfitters North America will likely underperform in the second quarter. Q2 comparable retail segment sales to date for the Anthropologie and Free People brands are running nicely positive. We believe total URBN comp sales for the second quarter could be in the low single-digit positive range, even though Q2 comparisons versus last year are a full 1,200 basis points more difficult than Q1. With that, I will now turn the call over to Frank to provide more detail on our performance. Thank you, Dick, and good afternoon, everyone. I will begin my commentary discussing our total company Q1 results versus the prior comparable quarter, followed by additional notes by brand. Total company sales grew by 13% to a first quarter record of $1.1 billion, driven by a total retail segment comp sales increase of 11%, a 6% increase in wholesale segment sales, and a Nuuly segment sales increase of $15 million. The growth in retail segment sales was driven by outperformance in the store channel versus the digital channel. Please remember, during the first quarter of last year, North American stores faced capacity constraints and our European stores were largely closed due to government restrictions related to the COVID-19 pandemic. This resulted in poor store performance and incredibly strong digital performance a year ago. This year, across both the stores and digital channels, we saw increases in AUR, decreases in conversion rate, while traffic was up in stores and down in digital. By product category, demand for women's apparel and accessories were the strongest, with home decelerating from their recent healthy trends. The growth in our wholesale segment was due to strong full price channel sales at Free People, which more than offset a slight decline at Urban Outfitters. Although we delivered double-digit sales growth, the operating environment remained challenging and weighed on profits. The decline in gross and operating profit margins in the quarter were largely due to supply chain disruptions, resulting in continued increased inbound freight costs, deleveraging product margins. Additionally, as stores faced capacity restrictions last year, we held staffing well under normal levels. Now that stores have opened up again and traffic is rebounding nicely, our store staffing levels are closer to historical averages and resulted in increased SG&A spend. As supply chain costs remain high and our SG&A comparisons remain historically low, we believe our profit margin will remain challenged in the second quarter versus the prior year. I will now provide more details by brand, starting with the Anthropologie Group. The group delivered an impressive 18% retail segment comp in Q1 versus the prior year. The double-digit comps were driven by exceptionally strong full price comps in apparel, which increased by more than 50%. This led to over 100 basis points of improvement in the brand's markdown rate. Anthropologie started the season by strategically bringing in early receipts of an expanded dress assortment in anticipation of the consumer's desire to return to events in the spring season. Dresses led the apparel category with outsized growth, and BHLDN recorded the highest Q1 revenue on record. The brand pushed the boundaries on newness and style, and their customer is responding. To support this strategy, the brand marketing team produced a compelling integrated dress marketing strategy, refocusing on the original intended age demographic for the brand. Superior product execution and marketing in the quarter led to double-digit growth in new apparel customers to the brand. During the quarter, the home category was positive, driven by strength in furniture and a positive comp in gift and entertaining. We believe gift and entertaining could moderate some as the customer is spending less time in her home than the previous two years. Overall, with the current strength of the apparel and accessories, we believe the Anthropologie Group could drive a nicely positive comp in Q2. Now I will call your attention to the Free People brand. Once again, the Free People team produced an extraordinary quarter with retail segment comps achieving a 15% gain versus last year, driven by strength in apparel and accessories. The brand continued their strong customer growth, due in part to some of the best marketing campaigns in the industry. The wholesale channel returned to growth this quarter, driven by strength in the full price channel, along with many specialty stores operating at full capacity again. The FP Movement brand also delivered another outstanding quarter, delivering 42% total retail segment growth. We believe Free People will continue to drive healthy sales growth in the retail segment, as well as continue to grow the wholesale segment in the second quarter. Now moving on to the Urban brand, which delivered a 1% retail segment comp versus the prior year. UO Europe delivered a robust 44% comp, which was largely offset by a -8% comp at UO North America. As Dick previously mentioned, we believe the macro environment, especially in North America, is having an outsized impact on the UO brand and customer. With inflation rates not seen in over 40 years, in addition to lapping trillions of dollars in stimulus funding from the prior year, it presents a unique challenge for the UO North America customer. While we know the macro environment for the Urban customer may remain challenging for some period, we also know we can execute better. The brand's inventory is higher than where we would like it to be, and we are focused on correcting those inventory levels throughout the second quarter. As a result of a difficult Q2 comparison, macro environment headwinds, and execution opportunities, we believe UO could deliver a negative comp in the second quarter. Lastly, I will speak to Nuuly. The first quarter was a very strong one for Nuuly Rent. Nuuly finally experienced a period with limited COVID interruptions, and the business was well-positioned to capitalize on the customer's interest in fashion and going out. Marketing campaigns continued to build brand and concept awareness in addition to driving robust customer growth. Active subscribers ended Q1 up nearly 200% versus Q1 last year and up nearly 50% from the end of Q4. The brand outperformed our expectations with stronger growth in new subscribers, more reactivated subscribers, and greater subscriber retention than planned. Momentum built throughout the quarter, and as of today, the brand has over 82,000 active paying subscribers. We are looking forward to continuing to grow the Nuuly customer base and our learnings over the coming year. I will now turn the call over to Melanie Marein-Efron, our Chief Financial Officer. Thank you, Frank. Now I will discuss our thoughts on our second quarter and full fiscal year 2023 financial performance. As you think about sales growth for the second quarter, it's important to keep the prior period comparisons in mind. As a reminder, we had exceptional comp sales improvement in Q2 last year as COVID restrictions lifted and the consumer purchasing accelerated. Last year, we reported comparable retail segment growth of 10% in Q1, with Q2 accelerating 12 full comp points to a robust 22%. While we still believe that we can grow sales in Q2 this year versus last year's impressive number, we believe our retail segment comp sales growth could land in the low single-digit range, and wholesale segment sales could grow in the mid-single digits. Together, this would result in total company sales growth in the low single-digit range. Now on to gross profit margin. As a reminder, second quarter gross margin last year significantly benefited from unsustainably record low markdown rates as demand exploded and inventory levels could not keep pace. Due to last year's exceptionally low markdown rates at all brands, we are planning for increased rates in Q2 this year. Additionally, our current inventory levels, mostly at the Urban Outfitters brand in North America, are higher than we would like and could lead to higher markdowns versus last year's low levels. Also, as the supply chain challenges continue to drive higher freight costs, our initial product margins will continue to be negatively impacted. The combination of higher markdown rates and lower initial product margins could result in an approximate 500 basis point decline in gross profit margins for the second quarter based on today's current sales performance and plan. Now moving on to SG&A. Based on our current sales performance and plan, we believe SG&A growth for the second quarter will increase in the low double digits. Our planned growth in SG&A is primarily due to increased store labor costs versus prior year. This could result in SG&A rate deleverage versus last year, but we would expect SG&A rate as a percentage of net sales to come more in line with previous years. We are currently planning our effective tax rate to be approximately 24% for the second quarter and 25% for full year fiscal year 2023. Now moving on to inventory. Our inventory is elevated in the first quarter due to several factors. First, inventory costs have increased as a result of higher freight and raw material costs. Second, last year's inventory was significantly constrained due to supply chain disruptions. Third, as supply chain disruptions have persisted, we have extended our inventory lead times and are holding more inventory earlier than normal to ensure that we have adequate inventory to protect sales. Lastly, Urban Outfitters brand sales came in lower than plan in Q1, resulting in their inventory being higher than where we want it to be. Due to all those factors just discussed, we believe that overall inventory levels in the second quarter will continue to be elevated, although we are planning for Urban's inventory to show meaningful improvement. Capital expenditures for the fiscal year are planned at approximately $225 million. While lower than last year, the level of spend is still elevated due to installation of our automation equipment in our new North America distribution facility just outside of Kansas City, Kansas. This facility will support the growth and expansion of our retail segment business in North America by providing more efficient and faster logistics. Lastly, we will be opening approximately 38 new stores and closing approximately 16 stores during fiscal 2023. Our new store number includes 12 new Free People Movement stores this year. As a reminder, the foregoing does not constitute a forecast, but is simply a reflection of our current views. The company disclaims any obligation to update forward-looking statements. Now, I'm pleased to turn the call back to Dick. Thank you, Melanie, and thank you, Frank. That concludes our prepared remarks. I want to thank our brand, creative, and shared service leaders. I also want to thank our 23,000 associates worldwide for their hard work, their dedication, and amazing creativity. I thank our many partners around the world for their extra efforts in helping us overcome numerous supply chain disruptions. Finally, I thank our shareholders for their continued interest and support. I will now turn the call over for your questions. As a reminder, please limit your questions to one per caller. Thank you. If you have a question at this time, please press star one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Please limit your questions to one per caller. Your first question comes from the line of Kimberly Greenberger of Morgan Stanley. Your line is open. Okay, great. Thanks so much. I wanted to know if you could just comment on operating cost inflation that you're experiencing. Obviously we saw freight costs start to rise in the back half of the year last year. How many more quarters of freight cost inflation do you have? And then are you experiencing any further pressure on distribution center and store wages here in 2022? Thank you. Hi, Kimberly Greenberger. Thank you for the question. This is Frank Conforti. Yes, we're still experiencing higher freight inbound costs. I would say similar to the recent trend, and by recent trend, I would mean fourth quarter. Significantly higher than, you know, how we would normally operate from an inbound freight perspective. I would anticipate those costs remaining pretty consistent into the second quarter. We believe that the rate of deleverage as it relates to IMU, which was mostly impacted by the inbound freight costs, would start to reduce in the third quarter, and that there's an opportunity for improvement when we look at the fourth quarter. Now, please keep in mind that this is our view as it sits today. There's a lot of uncertainty out there right now, right? You've got shutdowns going on in China. You've got a potential strike, port strike here in the U.S. You've got a war going on in Ukraine. This is our view as we sit today. You know, best view that we have. As it relates to store payroll, right now, I would say there are certain pockets where there's pressure from a store payroll perspective, but for the most part, that is baked into our forecast. From a distribution center, I would say right now, we're sitting in pretty good shape as it relates to payroll. Like I said, though, you know, a lot of things could change as it relates to inflation. Your next question comes from the line of Lorraine Hutchinson of Bank of America. Your line is open. Thank you. Good afternoon. Could you talk a little bit about any pricing actions you've taken at any of the brands, if you're seeing any pushback from customers? Just a quick update on the 500 basis points of IMU opportunity that you outlined last quarter, if we might see any of that come to fruition this year to help offset some of these higher operating costs. Okay, Lorraine. I'll try to handle a few of those questions. First of all, the pricing action. Yes, we have been selectively raising some of our prices. To date, we really haven't seen much in the way of reaction from customers that we can determine are based on the increased prices. Now, having said that, we've seen a little bit more. I wouldn't call it pushback, but a little bit more hesitancy on the part of some of the Urban customers, and we believe it's because they're a little bit more impacted by inflation, given their status in life as younger and not as affluent. I think that as far as Anthropologie and Free People is concerned, we have seen none. The second part of your question? I can jump in on that, Dick. As it relates to the 500 basis points of IMU opportunity, yes, we absolutely still believe that opportunity exists over the next coming several years. I would tell you as it relates to this year, similar to what we just spoke to Kimberly about, I would expect our IMU deleverage to be pretty consistent in the second quarter as what you saw in the first quarter, starting to peel that back a little bit in Q3, and then actually being able to show improvement year-over-year in the fourth quarter as some of those strategies really begin to take hold. Obviously, to get the full 500, some of the strategies have a longer lead time, as well as we're gonna need to see a more steady ground and more normalization in the supply chain, inbound freight costs than where we're at right now. To be totally honest, you know, it's only one quarter, so we're not truly surprised by, you know, the cost environment where it sits today. We have made some progress on our product assortments. We've lowered some of the style counts and then raised the quantities that we're ordering, which has driven some very nice increases in IMU in several cases. We've also employed more vendor direct production methods, and that has reduced slightly some of our agency fees. As Frank said, this is very early days, and we're making some progress. Unfortunately, we've got some headwinds that we're facing from the supply chain. Your next question comes from the line of Paul Lejuez of Citigroup. Your line is open. Hey, thanks, guys. Can you just talk about the Urban Outfitters North America business? Just curious if you can share what the comp metrics were, traffic versus conversion ticket. What sort of increases are you seeing on the e-com side from your third-party brands? What sort of you know MSRP increases are you going to try to put through to the customer? I'm curious if that's getting larger as we move throughout the year. Thanks. Hi, Paul, it's Sheila. Just to start with Urban Outfitters North America. From the execution side of the business, we feel like our men's business was particularly disappointing. We've identified and isolated where the team was off track, and I believe our men's business has a clear visibility to get back on track going into third and fourth quarter. We also, within our women's business, saw massive wins towards new fashion and didn't step away from some of the older fashion as quickly as we needed to. You'll see a change of distortion going into those where the customer is choosing going into the third quarter in an aggressive way. As far as traffic is concerned, our AUR and AOV continue to be up versus history, slightly down to last year, but up versus fiscal 2020. Our conversion is similar or in a similar spot to historical metrics. Paul, as it relates to traffic, the Urban brand is the most challenged of the three. All three brands are still under their FY 2020 traffic patterns. Urban has slightly higher penetration of stores in places like New York City, Chicago, San Francisco, where the traffic is most challenged. We believe while we've made substantial progress in the last year and a half, we still have a long way to go, particularly with the Urban brand. Your next question comes from the line of Marni Shapiro of The Retail Tracker. Your line is open. Hey, everybody. Dick, I'd just like to take a step back from all the noise of the expenses and distribution and everything and talk about the underlying business for a minute. Could you focus just a little bit on Anthropologie, 'cause really great improvement there over, you know, a couple of years prior. If you can talk a little bit about what's really driving full price sales there. Is she coming back and buying more than once? Then it sounds like just from that last comment, even at Urban, it sounds like the customer is still very much fashion engaged. It's just that the fashion she moved to very quickly, and it sounds like you guys didn't have enough of the fashion that she was looking for. What she didn't want, it didn't matter how, you know, typical for Urban Outfitters, it didn't matter what the price was. If she didn't want it, she didn't want it. She wanted what was new and hot. Can you just dig into those thoughts? Sure. Thank you, Marni. What I'm gonna do is ask Tricia to talk about Anthropologie because she's much closer to it. Mm-hmm ... has done a great job, overseeing it. Tricia, do you wanna take a shot at it? Yeah. Thanks, Richard. Hi, Marni. You know, I think as Frank mentioned, you know, the primary drivers of the Anthropologie growth came from a significant investment in categories like dresses, recognizing that there was customers returning to occasions. That was not limited to our strategy overall. We're definitely seeing the customer return to travel again. We launched a capsule collection geared towards resort. Swimwear, coverups, all of those categories are performing incredibly well. We really wanted to make sure that we were addressing the needs for whatever form of return to office happened for our customers. Really invested heavily into all of the newness that's happening in bottoms and footwear. We expanded that category and further expanded our shoe assortment online into more stores. I'm happy to share that just behind dresses, both pants and footwear were our top two performing categories. Really our longer term strategy is to continue to prioritize our investments in these categories. Feeling good about the customer's demand. She's got places to go, and we're trying to prioritize and execute really well to invest significantly in those categories and then ensure that our marketing messaging is supporting that as well. Okay. Thank you. Do you have Sheila like say anything about Urban? Yeah. I do think the Urban customer coming out of a lockdown from the previous year definitely told us loud and clear that they wanted very specific items and fashion trends. We were happy to have them. We wish we had them slightly more distorted, and I think the teams are reacting accordingly going forward. It keeps us fresh. It definitely keeps us on our toes. Definitely seeing new attributes sort of leading the way in the industry. That feels very good. We just need to own it stronger going into the next half. I would say that all the brands saw very similar patterns of fashion. All brands did well in their dress assortments. They did well in their pants and denim assortment, and they did well in their blouse assortment. I think that there are some similarities across brands, although the manifestation of those categories were different across the three brands. Yes. Marni, thank you so much for the question because in the end, this is what we do. We talk about fashion, and that's what interests us most, even though we have to pay attention to things like supply chain. Your next question comes from the line of Mark Altschwager of Robert W. Baird & Co. Your line is open. Good afternoon. Thanks for taking my question. So on UO, you called out some of the macro challenges on that consumer, but also the execution opportunities that you see. Maybe just dig into that a little bit more and help us understand some of the controllable levers you see to drive growth in what looks to be a little bit tougher macro backdrop. You know, bigger picture, Dick, would be helpful to get just your view on the health of the, you know, maybe more mid to upper income consumer and the duration of this wardrobe refresh cycle. I think, you know, three months ago, you were pretty positive on the signs you were seeing there, you know, despite some of the macro readings that had been softening. Just curious if your views have changed at all on that front, again, beyond sort of what you already discussed on UO. Thank you. Yeah, I'll take the second question first. You know, we do believe that there's a sort of bifurcation that has happened as a result of the inflation and as a result of the stimulus checks that were sent out last year. As you know, the Urban customer tends to be the younger ones that are out on their first job or maybe second job, and they're making a little bit less money than their Anthropologie and Free People counterparts. As a result of that, inflation is really hitting them much harder than the Anthropologie and Free People customer. That sort of higher income bracket of those two brands, we don't see any sign right now of inflation impacting their buying decisions. I'm very convinced that what's impacting their buying decisions is exactly what Tricia talked about, which is they wanna be out and about, they have lots of events to go to, you know, weddings and many other things. The reason I can say that is that we have this concept called Terrain. Within Terrain, we have a thing called Terrain Events, where we actually sponsor events and rent out space. I can tell you that we've never, ever been more inundated with requests for events than we have in the last six months. We're well aware of the fact that she's out and that she wants to go to these events, and she's gonna spend her money to prepare for those events so she looks good during the events. That's what's driving her. That's what's important to her. We're very. You know, we're convinced that this is gonna continue to go on. More than anything, it's because the event space that we do have is fully booked through next year. You know, we believe it's gonna continue. Great. Just to discuss Urban, what is in our control versus the macro headwinds. Like I led with, men's definitely is a place that we felt like we had more control of. I think the team delivered very, very strong denim increases and really tackled that as a priority business. The execution was quite strong versus history. We believe that will only continue with the strength of the team. They lost some footing within men's tops, and we feel like we can easily get that back. It's a business that is more reactable, quicker. Within the women's business, I think it was being a little bit braver within the fashion trends and turning the business quicker coming out of the pandemic and what the knowns are. I do think the team recognizes that we need to stay focused on what we can control, and that definitely is a controllable factor. Okay. Thank you. Your next question comes from the line of Janet Kloppenburg of JJK Research Associates. Your line is open. Hi, everybody, and congrats on the good progress and getting the fashion right. Frank or Mel, I was wondering if you could perhaps give us a glimpse of how the freight expense, supply chain expense pressures look beyond the second quarter and how we should be thinking about, you know, some relief in the second half. Do you think things will improve? Are you seeing things improve? You know, that would help a lot. I was wondering, I was impressed that the home business was, I think, up in the quarter, maybe it was up at Anthropologie. I was wondering about trends there because we are seeing some softness in the industry in the home category. Maybe for both UO and Anthro, how that is looking as we move to the second quarter and beyond. Thank you. Thanks for your question, Janet. I'll take the freight and then hand over to whom to Tricia and Sheila to talk about. As mentioned, I do think that our IMU deleverage, which is largely driven by the increased freight costs, will look similar in the second quarter as it did in the first. As you noted, I do start to think that we'll claw back that rate of deleverage in the third quarter so the deleverage wouldn't be as much as what we saw in Q1 and Q2. I do believe that there's opportunity from the fourth quarter for us to show improvement in IMU on a year-over-year basis. Again, you're starting to see some of the benefits of the initiatives that we put in place, as well as hopefully a little bit of normalization, as it relates to the supply chain. And then lastly, obviously, we're also anniversarying higher costs, by the time we get into the fourth quarter. I think the Q3 you'll see improvement, not improvement year-over-year, but improvement in the rate of deleverage as we start to claw that back. By the time you get into the fourth quarter, I think we could see improvement on a year-over-year basis, within IMU. Again, that's as we sit here today. Tricia? Hi, Janet Kloppenburg. I'll speak to Anthropologie or Anthro Living as we think about the home categories. A bit of a mixed performance within the category. Overall, our performance was strong in the mid-single-digit growth on the quarter, with furniture and decor really being the categories that are continuing with their growth trajectory and demand. We're pleased that we seem to be gaining market share there. There's definitely a bit of a slowdown for us in certain gift and entertaining categories, home fragrance in particular, and more kind of experiential categories. They're shifting nicely back to pre-pandemic retail channel levels, but we're definitely seeing some softening in DTC. Then I think, you know, on a positive side, we're definitely seeing the customers' interest in entertaining at home again. We're focusing on expanding kind of tabletop glassware, serveware, all of those categories, and feel like we've got some new growth opportunities to invest in. You know, definitely some softening and some deceleration in the business, but we feel confident that we're continuing to see some nice growth in the home category of Anthropologie. I think within the Urban, slightly, different story. I think the softening is stronger than it is in Anthropologie within the home business. We have increased our pricing here in a tremendous way over the past several years. We feel very confident this will continue to be an opportunity division as we settle back into key categories that we can expand into go forward. Yeah, I'd like just to throw in there with the Urban team. I think we have a real opportunity for back to school to do better than we did last year. Our back to school business wasn't as strong as we would've liked last year, so I think that's our earliest opportunity. Your next question comes from the line of Dana Telsey of Telsey Advisory Group. Your line is open. Good afternoon, everyone. As you think about the different channels, certainly seems like the return of stores improving and the labor costs of that added to the SG&A and getting traffic, working to get traffic back, how do you think of the buckets of SG&A going forward with some of those areas? Any update on digital and what you saw in that performance and margins by brand? Thank you. Hi, Dana, it's Melanie speaking. I'm gonna start with your first question, which was about SG&A growth. Going forward, we do expect SG&A growth to outpace our sales, but not quite as much as you saw in the first quarter. The drivers would be similar to first quarter, where we had store payroll increasing as the traffic came back versus prior year. Of course, we continue to have marketing investments, which are focused on driving customer acquisition and retention. Just wanted to remind you, as you think about SG&A, the acceleration is really about the comparison, right? Where we had really tight spending in our stores. The rate, SG&A rate as a percentage of sales would be more in line with our historical SG&A. As you get farther through the year, the difference between the sales growth and the SG&A growth will be diminished as our expense spend became more normalized in the back half of the year versus the first half. As it relates to digital, Dana, because the stores were largely impaired in Q1 of last year, there was a surge in demand when the stores opened, and that caused record strong double-digit gains in Q1. This year, in the first quarter, stores rebounded nicely and registered double-digit comps. Total sessions decreased by low single digits but remain up almost 30% versus FY 2020. Really what happened is, the digital pulled back some of the forward business that they've achieved over the last several years as the stores comped back up. Your next question comes from the line of Jay Sole of UBS. Your line is open. Great. Thank you so much. I just wonder maybe if you can share a little bit more information or elaborate a little bit on the composition of the excess inventory at Urban Outfitters. When do you expect to get into a better inventory position? Do you expect to take actions in Q2 in order to, you know, get to Q3 in that better inventory position, or you think there's gonna be more of a prolonged impact? Thank you. Hi, it's Sheila again. I'll take that question. We are being aggressive to clean up what the customer has voted that they don't want from us and recognize that we can get this back on track before we hit Q3. We feel very strongly that we need to get out of what they don't want and into what they do. Feel very confident by Q3, we will be back in the correct position. Your next question comes from the line of Ike Boruchow of Wells Fargo. Your line is open. Hey, two questions. I guess my first question is on profitability. You know, just looking at the Q1 numbers and putting the pieces together for Q2, it kinda looks like the margins are now kinda trending back to the pre-pandemic levels. I know there's a lot of moving pieces, but is that a good way to think about the back half of the year, when we are trying to model out Q3 and Q4? Just another question on Anthro. You guys are doing a phenomenal job, and the business has been robust. I guess, you know, when you think about that customer, being more affluent, tied to the market and things like that, what are the things you're looking for to kinda gauge the health of that consumer and her willingness to continue to spend? Ike, this is Frank. I can take the profitability and then hand it over to Tricia to speak a little more about Anthropologie. You're correct. As we're sitting here looking at the second quarter, the gross profit margin decline would actually put us pretty in line actually with where we were pre-pandemic in fiscal 2020. I think what's important to note, though, is obviously the supply chain is really different right now than it was in fiscal 2020. If you think about an opportunity to build off of that fiscal 2020 number, we would anticipate being able to drive improvement in IMU, as you know we talked about a lot of our strategies there, and as the supply chain hopefully normalizes over time. Yes, in the near term, I think you, as you're looking at fiscal 2020 and being able to compare our numbers for Q2 and Q3, that's a good comparison. We do think that there's, you know, some nice healthy growth that we can continue to drive off of those rates and certainly off of those dollars, when you look into fiscal 2024 going forward and the back half of the year. Ike, this is Dick. What we look for with Anthropologie is what we look for with each of the brands, and that is, on a daily basis, we analyze sales. On a weekly basis, we analyze traffic in the stores. That tells us pretty darn close if things start to change. As I said to you, we have not seen any indications to date that that customer has changed. We're not necessarily expecting it. We're very well aware, believe me, that the market is down and that that could impact her and could cause a psychological change, in her mood to shop. As I said, there's no indication of it right now. Your next question comes from the line of Simeon Siegel of BMO Capital Markets. Your line is open. Hey, thanks for squeezing me in. Just a quick one on inventory. I was wondering if you could provide any color on what it looks like in terms of units by brand. That's all. Thanks. Yeah. This is Frank. I'll take the inventory question, and I'm gonna sort of take a long path here. I think, you know, first it's important to remember that as you're comparing inventory to last year, that the supply chain was significantly constrained last year. Our inventory was meaningfully lower than where we wanted it to be. If you look at things versus fiscal 2020, our comp inventory is up 33% and our comp sales versus fiscal 2020 is up 22%. Very much, you know, much more in line than when you look at it on a year-over-year basis. Yes, absolutely, there's inflationary pressures that are in there, which is why our cost is higher than our units. I would say our cost is higher than our units by about 15% right now, which is the inflation that you're seeing in there. I would also just say second, you know, the other item that's driving up the inventory is the fact that the supply chain is on, you know, unstable ground right now, and it's not as reliable as it used to be. We are placing orders earlier, and we are taking inventory in earlier, and that's, you know, what we believe is the right thing to do to protect sales. We're gonna continue to do that. I think you're gonna expect to see inventory continue to outpace sales here as we close the second quarter. Very similar to what Sheila mentioned about the Urban Outfitters brand, as we get into the third quarter, you'll start to see that that delta start to narrow. As we get into the fourth quarter, we'll have the opportunity for where our sales and inventory actually would be come back and be more in line with what you're historically used to seeing from us. Thank you. Our last question comes from the line of Corey Tarlowe of Jefferies & Company. Your line is open. Hi, good afternoon, and thank you for taking my questions. Firstly, how are you thinking about the promotional environment for the remainder of this year versus your initial expectations? Secondarily, it was nice to see some encouraging and robust growth from Nuuly. Can you maybe unpack a little bit about what drove that and what to expect at that brand or at that segment, excuse me, going forward? Thanks. I'll take the promo question and then ask Dave Hayne to talk about Nuuly. I think that there's a surplus of inventory, mostly I would say across the board at retail right now. I would expect the promotional activity, like we have in our own brands to be a little bit elevated over where it was last year. As Frank just said, last year was an anomaly. We couldn't get the inventory. It was really tight. It's not as tight now, and so I think that we will see promotional activity increase, not just in Q2, but throughout the year and into holiday. Dave, you wanna take Nuuly? Yeah, sure. Corey, thanks a lot for the question. Q1 was a really strong one for Nuuly. We were excited by the results and excited to report them. As Frank mentioned in his commentary, subscribers were up nearly 200% year-over-year and nearly 50% quarter-over-quarter from the fourth quarter. Now in mid-May, we have over 82,000 subscribers. Subscriber growth was strong across all segments, with new subscribers substantially ahead of plans. Resume subscriptions were trending ahead nicely as well, and existing subscribers were retaining at higher rates than planned as well. The rental business has been seeing some very nice traction so far in 2022. We're getting strong reads from the market that our target customers have a lot of events to go to and just in general a lot of life to get back to living after COVID. I think more and more people are recognizing that renting through Nuuly is a viable, enjoyable, and cost-effective way to add variety to their wardrobe for all of their events. Subscription momentum is very positive right now. We're also very encouraged with our progress on bottom line profitability. Last year's first quarter saw an operating loss rate in the low 40% range. Our loss rate in this past first quarter, by contrast, was in the mid-teens%, so seeing very significant operating margin leverage in Q1 versus last year. Feeling really good about the progress in the operating model and feeling great with where we are. Okay. I think that that concludes the questions. I thank you very much for joining, and we look forward to talking to you in three months. This concludes today's conference call. Thank you for participating. You may now disconnect.