Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc. Third Quarter Fiscal 2024 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. 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 Third Quarter Fiscal 2024 conference call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the three and nine month period ending October 31, 2023. The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. 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 Frank Conforti, Co-President and COO, URBN; Dave Hayne, Chief Technology Officer and President of Nuuly; Sheila Harrington, Global Chief Executive Officer of Free People and Urban Outfitters; Melanie Marein-Efron, Chief Financial Officer, URBN, and Richard Hayne, Chief Executive Officer, URBN. 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 Frank. Thank you, Oona, and good afternoon, and thank you to everyone who joined our call today. I will begin my commentary with comments on our operating results for the third quarter and then discuss more detailed notes by brand. Overall, the third quarter performed largely in line with our expectations, as discussed on the August call. URBN delivered strong sales growth of 9% to a record $1.3 billion for the third quarter. URBN's sales growth was driven by a 6% retail segment comp and robust growth from Nuuly, which added $30 million in revenue during the quarter. Retail segment comp was driven by high single-digit comps in the DTC channel and mid-single-digit comps in stores. Sales comps in both channels were the result of higher traffic and increased AUR. The Anthropologie, Free People, and FP Movement brands all produced double-digit sales growth in stores and online, with FP Movement leading the way with a comp sales increase of 49%. Each of these brands achieved record third-quarter brand revenue, which more than offset a negative comp at the Urban Outfitters brand. URBN's bottom-line results were even more impressive than our strong sales growth. Total URBN operating income soared 90% higher than the prior year to $109 million, and earnings jumped 123% to $83 million, or $0.88 per diluted share. Our earnings growth was driven in part by a 27% increase in gross profit dollars, while gross profit rate surged by over 500 basis points. The improvement in gross profit rate was due to significantly improved initial margins as well as lower markdown rates at all brands. I will now provide more details by brand with a little help from Dave Hayne on Nuuly. Thank you, Frank, and good afternoon, everyone. I'm happy to provide a brief update on our rental subscription business, Nuuly. Judging by our Q3 results, our model of a monthly rental subscription certainly seems to be resonating with our target customer. We often hear from new subscribers that they first learned about Nuuly from their friends or family, and after a month or two of renting from us, they then become vocal advocates for renting and go on to tell all their friends about Nuuly. It is this viral word of mouth, paired with an attractive value proposition and strong execution, that has helped us grow quickly in our first few years of business, and Q3 was a continuation of this trend. In the third quarter, Nuuly drove $65.5 million in revenue, which was an increase of 86% from last year. This revenue growth was driven by a net increase of nearly 39,000 subscribers in the quarter, up to a total of 198,000 active subscribers at quarter's end. As you may remember from our second quarter call, we spoke about two milestones relating to the Nuuly business. One, that we thought it was possible we could reach 200,000 subscribers by the end of the year, a goal we have now achieved in November. And two, that we believed we would see our first quarter of profit in the back half of this year. Today, I'm very pleased to share that Nuuly saw an operating profit in the third quarter. This is a goal the team has been pushing very hard to achieve, and it makes me proud to see everyone's hard work recognized today. As we look forward, there is much to be excited about in Nuuly's future. With the strong partnership of our sister brands, Anthropologie, Free People, FP Movement, and Urban Outfitters, as well as over 400 other partner brands, we have curated what we believe is the most compelling rental clothing assortment on the market. With the help of our robust digital platform, driving both the customer experience and fulfillment center operations, Nuuly is very well positioned to further enhance our rental program with exciting new features that can drive higher customer value. The opening of our Raymore, Missouri, fulfillment center in Q4 provides the business with the urgently needed operating capacity to grow well into the future, supporting, in total, over three times our current subscriber count. I'm very excited today to be reporting our first profit as a young company, with the best rental assortment in the business, with a homegrown digital platform that empowers us to drive more program value, and with the infrastructure to realize continued growth, and most importantly, with an incredible team to help us realize this future. Thank you. I will now turn the call back over to Frank. Thank you, Dave. Congratulations to you and the entire Nuuly team on this incredible milestone. I know we are all confident there are many more notable milestones to come. Now, moving on to Anthropologie. The Anthropologie team delivered an exceptionally strong 13% retail segment comp in Q3. This increase was driven by double-digit positive store and digital comps. Both store and digital comps were driven by increased traffic and strong growth in regular price sales. Strong sales, improvements in IMU, and low third quarter markdown rates all led to record third-quarter operating profit dollars for Anthropologie. The impressive quarterly performance was largely driven by apparel and accessories. Within apparel, the Anthropologie customer continues to respond favorably to fashion newness. In the quarter, Anthropologie launched its largest marketing campaign to date, Falling for Anthro, leveraging a range of talent, including celebrity Phoebe Tonkin, brand ambassadors, and influencers. The campaign was a resounding success, resulting in strong increases in brand impressions, sessions, and new customer growth. The brand's incredible execution across marketing, product, and operations has helped to drive over 25% growth in new customers in North America. The strength across all apparel and accessory categories, along with new customer acquisition, has resulted in a nicely positive start to the holiday season. Turning to Free People. Free People delivered yet another historically exceptional quarter, once again achieving record sales and profits in the third quarter. Retail segment comps at Free People finished the quarter up a robust 23%. The Free People brand produced a strong 18% comp, and the FP Movement brand produced an impressive 49% comp. Total retail segment comp was driven by double-digit comps in the store and digital channels. These double-digit comps were driven by strong traffic growth in both channels, due in part to excellent marketing, product, and operations execution. The strength of the Free People assortments, marketing campaigns, and store experience has continued in the fourth quarter, resulting in a strong retail segment start to the holiday season. Free People wholesale segment sales decreased 4% during the third quarter. The decrease in sales was a result of weakness in department store accounts, partially offset by growth in specialty store accounts. Although wholesale sales remain slightly negative, profitability has returned to a healthy level. Now moving on to Urban Outfitters. Urban recorded a -14% retail segment comp in Q3. UO's negative comp was a result of disappointing performance in North America and Europe. In North America, comp store and digital channel sales were low double-digit negative. The brand is experiencing some improvements in their assortment and marketing execution, but not enough to move the needle just yet. In Europe, the weakness was concentrated in the U.K., while the rest of Europe continued to see positive retail segment comps. Due to the weaker-than-expected sales during the third quarter, as well as forecasts for the fourth quarter, inventory levels at the Urban Outfitters brand are elevated versus where we would like them to be. These inventory levels will lead to higher markdowns than originally planned during the holiday season for the brand. I will now turn the call to Sheila Harrington, who will speak to the Free People, FP Movement, and Urban Outfitters brands. Thank you, Frank, and good afternoon, everyone. I am pleased to provide an update for the Free People, FP Movement, and Urban Outfitters brands. First, I will discuss Free People and FP Movement. As Frank reported, the total Free People brand had an exceptional quarter, with total brand revenue up 18%. The consistently strong growth over the past few years at Free People can be attributed to the team's maniacal focus on the consumer and use of creativity in product, experience, and marketing. We believe the brand can continue to achieve growth by expanding its reach and product offering. Distributing into select labels, including Intimately FP, Freiest, and We The Free, along with our core Free People label, will allow us to complete the consumer's lifestyle looks and welcome more people into the brand. We The Free enjoyed robust growth this quarter. The We The Free label offers heritage-inspired staples, which capture the spirit of FP through hand-touch details and wash. The We The Free label includes several product categories, but we believe the significant growth opportunity exists in denim, accessories, and footwear. It currently accounts for over 20% of the brand's retail segment net sales and is experiencing outsized growth. We plan for this label, and the denim category particularly, to be a meaningful part of our continued growth. As mentioned, marketing is a key factor in FP's growth. The brand launched several successful marketing campaigns during the quarter and throughout the year, targeting consumers across multiple social platforms, and achieved double-digit growth of new customers in Q3. Free People's revenue is currently concentrated in North America, with 148 stores and a strong digital business. However, we believe its unique aesthetic and strong fashion handwriting. Free People has the opportunity to be a larger global brand. Just over five years ago, we opened our first European store in Amsterdam. Today, we operate 12 stores in Europe, with locations in the Netherlands, France, and the U.K. Our total international business grew by 34% and was profitable in Q3. We believe that strong growth could continue over the next several years. Moving on to FP Movement. FP Movement offers women's activewear at the intersection of fashion and function, and looks to redefine the female activewear market by infusing a strong feminine voice into a business long dominated by male sensibilities. The FP Movement design and buying teams have found unique opportunities to express this feminine voice and define the brand successfully. One example is the creation and marketing of the Righteous Runsie, a one-piece performance product the team created to capture white space in the activewear market. The team continues to develop and strive for excellence in performance pieces from studio, run, and outdoors. After experimenting with shop-in-shops in the Free People stores for several years, we decided to open our first standalone Movement store in 2020. Since then, we've opened additional stores and currently have 37 locations in the U.S. Four-wall performance has greatly exceeded our expectations. Sales productivity per sq ft, as well as overall store profitability of these standalone Movement stores, are performing at similar levels to the Free People brand, despite Movement being a young brand that is still building brand awareness. Given the success of the current store fleet, we plan to open at least 25 additional FP Movement stores in fiscal year 2025. The wholesale team delivered over 60% year-over-year growth this quarter. While achieving this growth, they also ensured that we are selling to the correct partners who align with our brand aesthetics and values. The marketing and digital teams not only connected with our consumers across various platforms and with strong brand athletic investors, but they also connected with customers in person through experiential events in local markets, such as organized runs and workout events. These efforts led to over 50% new customer growth for the FP Movement brand in the quarter. The success of FP Movement continues to build across all three distribution channels: retail, digital, and wholesale. Total revenues grew by 55% in the third quarter. We are still in early stages of growth, but our eyes are on the goal of achieving $1 billion in annual revenue. Thanks to Meg and the teams at both Free People and FP Movement for helping produce such amazing results in Q3, and your continued passion for the brand and our consumer. Turning to the Urban Outfitters brand. On our last call, we noted some improvement in women's and men's apparel comps in stores during the early back-to-school season. While the trend in apparel comps did improve, and in stores, our men's business was positive for the quarter, total retail segment comp improvement fell short of our goals. We know there is much more work to be done. Negative traffic trends within stores and online remain our single largest challenge, and we know we have declined in consideration for our target consumer. In order to change the trajectory of the Urban Outfitters business, our teams have identified three priorities. They are curating the right mix of products from meaningful national and emerging brands, improving the relevancy of our internally generated brand products, and connecting with and inspiring our customers where they are. Let me expand on each of these priorities. First, Urban Outfitters has always been a brand of brands. We rely on offering a compelling assortment of national and emerging brands to drive traffic and sales. We need to modernize our brand offering to be more relevant to our Gen Z consumer. This has been an important part of differentiating Urban from its competitors, and we believe this assortment has been off pitch since the pandemic. Some successes in our current business with popular brands, brand collaborations, and unique offerings within our external brands reinforce this belief. Each merchant team across all divisions is currently reviewing their brand portfolio and working with new brands to build the most relevant mix possible. Second, the continued development and evolution of our internal proprietary products remains critical to our long-term growth and profitability. Strong own brand product provides us with the ability to assort into the right items for our consumers with the right price architecture. Recent successes within the apparel business support when we get the price value correct, we see strong response from the consumer. This fall, we were able to assort into a more feminine sensibility with labels such as Kimchi Blue and Silence + Noise. This feminine attribute showed higher productivity and drove an outsized percentage of women's apparel. Third is how and where we connect with our consumer. Historically, Urban Outfitters has been known to be early adopters in fashion and in marketing. We know we got behind prior to the pandemic and missed the opportunity to follow our consumers when they changed their platform preferences. We need to develop inspiring and relevant content to meet the consumers where they are, be it on YouTube, TikTok, or in our stores. We have begun to see progress with sequential improvement throughout the quarter on new, reactivated, and total digital customers. While we're gaining momentum, rebuilding this relationship with the consumer will take time. I'm convinced that our laser focus on our target consumer and executing on our three priorities will lead to a return to long-term growth and profitability for the brand. I'm grateful for our teams for their commitment and dedication to Urban Outfitters. Now, turning your attention to the Urban brand in Europe. Total retail segments in Europe delivered growth in Q3. Positive retail segment sales were driven by new store openings, while comp sales were negative. By geography, business on the mainland was comp positive in both channels, while sales in the U.K. were more challenged. We believe our connection with our consumers across Europe remains strong, and we have an opportunity to continue to grow our brand in this region. Tomorrow, our first flagship Urban Outfitters store opens in Madrid on Gran Vía, which boasts one of the highest pedestrian traffic counts in the city. The store is housed in a repurposed cinema and commands unparalleled street visibility. Strategic openings such as this will be key to increasing the Urban brand's name recognition, which should also drive greater digital penetration. Congratulations to our European teams on this momentous opening, along with the other first market openings this past year, and I would like to say thank you to our total Urban Outfitters global teams for their passion, hard work, and drive to service our consumer, both in stores and digitally around the world. I will now turn the call over to Melanie. Thank you, Sheila, and good afternoon, everyone. Now I will discuss our thoughts on the fourth quarter and fiscal year 2024 financial performance. Consumer demand in October slowed slightly versus the first two months of the third quarter. November sales have started off similar to October. Based on the start to the quarter, we believe fourth quarter total company sales growth could be in the mid-single digits. Sales growth in Q4 could result from low single-digit growth in Retail Segment comp sales and high double-digit growth of Nuuly segment sales versus last year. Our growth in the Retail and Nuuly segments is likely to be partially offset by sales decline in our Wholesale Segment, similar to Q3. Now on to gross profit margin. Based on current sales performance and plan, we believe URBN's gross margin rate for the fourth quarter could improve by approximately 300 basis points compared to the prior year fourth quarter. The increase in gross profit margin could be primarily driven by higher initial product margins from lower inbound freight, as well as cross-functional initiatives, which will favorably impact product margins. Now, moving on to SG&A expenses. We believe SG&A growth for the fourth quarter could increase in the high single digits. Our planned growth in SG&A could be primarily driven by higher overall payroll due to increased store payroll expenses and higher incentive pay from improved company performance. In addition, we expect marketing expenses could be higher versus last year to support growth in customers and sales. As always, if sales performance fluctuates, we maintain a certain level of variable SG&A spending that we can adjust up and down, depending on how our business is performing. We are currently planning our effective tax rate to be approximately 26.5% for the fourth quarter. Now, moving on to inventory, we believe that inventory levels in the fourth quarter could grow at a rate below sales growth. We have made significant progress this year, controlling our inventory to sales ratio and expect to continue that trend into next year. Capital expenditures for the fiscal year are planned at approximately $235 million. The spend is primarily related to investments in additional distribution facilities. Earlier this year, we opened our highly automated omni-fulfillment facility in Kansas City, Kansas. In addition, we're investing in a new rental fulfillment facility in Missouri within the Kansas City region. We are targeting to open this facility in the beginning of fiscal year 2025. Lastly, we'll be opening approximately 27 new stores and closing approximately 22 stores during fiscal year 2024. 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 over to Dick. Thank you, Mel, and good afternoon, everyone. As you've heard from my colleagues, four of our five brands delivered outstanding results in Q3. The Free People, FP Movement, and Anthropologie brands all set new third quarter records for both sales and profits. The Nuuly brand posted record active subscribers and revenues, adding $30 million in additional revenues during the quarter. Nuuly also achieved a huge milestone in Q3 by recording their first quarterly profit. All of this as they celebrated only their fourth anniversary since launching the concept. Moving on to an overview of our fourth quarter prospects, there's been much market chatter about a slowdown in consumer spending. As Melanie reported, our brands did experience a slight moderation in demand beginning in early October. I want to emphasize the word slight. November to date, business is in line with October results, and customers continue to choose fashion newness as their preferred purchase and are willing to pay full price for what they want. We're still planning Q4 retail segment comps at both the Anthropologie and Free People brands to remain double-digit positive and the Urban brand to show some improvement, but remain negative. Our Q4 plan calls for the company's total retail segment to produce comps of 3%. As we prepare to enter our fiscal year 2025, we enjoy two young brands, which have produced strong revenue growth this past year and several larger brands that drove excellent comps and we believe will continue to attract new customers and gain market share. Together, these should drive nicely positive retail segment comps in FY 2025. In addition, we possess the opportunity to further improve merchandise margins while holding the line on SG&A increases. This bodes well for profitability, so we remain encouraged that FY 25 could produce solid growth in sales and profits. We are, of course, acutely aware that our single largest opportunity to improve the bottom line rests with our ability to turn the Urban brand around. To that end, and as Sheila discussed, we are highly focused on building the team, improving the product offering, and strengthening our marketing efforts. We have made significant progress in our search for a brand president, which is a critical step in moving forward. Looking further into the future, I believe we are witnessing the beginning of another watershed period in retail, much like the impact e-commerce had beginning in the early 2000s and mobile commerce had the following decade. Current advances in machine learning technology hold the promise to transform the business of retail once again. Data science and artificial intelligence have the potential to deliver much shorter product lead times, more accurate demand forecasts, better allocations, more personalized marketing, and optimized inventory planning, among many other benefits. These technologies should improve efficiency, reduce waste, and provide cost savings across a wide range of functions. Our brand teams and I are especially excited by the potential for generative AI to augment and enhance our already superb creative capabilities. We expect to give you an annual update and appraisal of our progress in realizing the benefits of these amazing new tools. In closing, I thank our brand and shared service leaders and their merchant, creative, and operating teams and our 24,000 associates worldwide. Their efforts produced another outstanding quarter, and I thank them. I'm constantly humbled by their remarkable dedication and creativity. I also recognize and thank our many partners around the globe, and finally, I thank our shareholders for their continued support. That concludes our prepared remarks, and I now turn the call over for your questions. Thank you. Ladies and gentlemen, to ask a question, please press star one one on your telephone and then wait to hear your name announced. To withdraw your question, please press star one one again. We ask that you limit yourself to one question per caller, please. Please stand by while we compile the Q&A roster. Our first question comes from the line of Lorraine Hutchinson with Bank of America. Your line is open. Thank you. Good afternoon. How much of a headwind does the Urban Outfitters weakness pose to your fourth quarter gross margin? And then separately, how are you planning receipts for that brand for the first half of next year? Hi, Lorraine. I can take the first half of your question. The UO headwind is baked into our forecast, so it is contemplated in our plans of being able to achieve over 300 basis points of gross profit margin improvement in the fourth quarter. I also just want to point out in that plan that is off of sort of what I would call an adjusted Q4. It does not include the $5.4 billion of impairment that was in the fourth quarter of last year. If you were to include that impairment, our gross profit margin improvement could likely come in over 340 basis points of improvement, but we normally just adjust that out. And then as it relates to inventory, I think, you know, Sheila can take that. I can take that. Hi, Lorraine. As we believe that the business can improve in small amounts quarter-over-quarter, we want to make sure that we manage our inventory accordingly, and that we don't basically be too aggressive one way or the other. We feel like as we move throughout the first half of the year, we will start to see sales outpace inventory levels. We want to make sure that we give the stores a compelling assortment to walk into. And so we definitely feel like it's going to be an ease versus an immediate reaction. Thank you. Please stand by for our next question. Our next question comes from the line of Matthew Boss with JP Morgan. Your line is open. Great, thanks. On the positive reaction to assortments and marketing that you cited in the holiday, Dick, could you just elaborate on recent trends you've seen in November across banners, maybe any key color by category that you're anticipating in holiday? And then, Melanie, could you just speak to gross margin drivers in the fourth quarter, and just any opportunity remaining as we move into FY 25 on the gross margin front? Sure, I'd be pleased to do that, Matt. Retail segment comp performance so far in Q4 are very similar to our results in October. As Melanie discussed, the October results were slightly, and again, I want to emphasize that word slightly, below Q3 total results. The biggest difference has been Free People, which is now posting comps in the high teens rather than the stratospheric mid-twenties that they achieved in Q3. Meanwhile, the urban brand in North America is seeing some comp improvement to date, but is still negative. If you wrap that all together, we believe total URBN Q4 retail segment comps should come in at approximately 3%. And then, Matt, as it relates to gross profit margin, I think the over 300 basis points of improvement in the fourth quarter is largely going to be driven by IMU improvements. And that's really across all of all of our brands, as we're really starting to realize the normalization of inbound supply chain costs, as well as just the benefit of all the several cross-functional initiatives that we're seeing across across the entire enterprise. As we look forward into fiscal 2025, we do think that there's room for continued gross profit margin expansion. Again, I think the part of that would be driven by improved IMU across all banners. You know, obviously, still, we'll be reaping the benefits of the inbound transportation costs coming down, but also and more importantly, the incremental benefits continuing of the cross-functional initiatives that we have, that we've led on with. And then secondarily, I think we do think that we'll start to see some improvements, potentially from a markdown rate perspective, largely being driven by the Urban Outfitters brand. And then lastly, we think we can start to see a little bit of improvement and benefits of the new distribution facility that we built in Kansas, that is now up and running. As that begins to start to reach its sort of full allocation, we'll start to see those benefits in not just logistics, but in delivery expense moderate throughout the year, and then hopefully build on those to have continued benefits in the following year as well. So, so I think there's IMU opportunity across all three brands. There's a healthy amount of markdown opportunity at the Urban Outfitters brand, and I think you could start to see some logistics and delivery expense opportunity due to that new facility in Kansas. All leading to some nice opportunity in fiscal 25. Thank you. Please stand by for our next question. Our next question comes from the line of Paul Lejuez with Citi. Your line is open. Hey, thanks, guys. Dick, I'm curious how you view the potential turnaround at Urban Outfitters in the context of just where fashion trends are. Do you think performance there is about not interpreting the fashion correctly, or is there something more structural in terms of store size and number of store locations, or, say, number and locations of stores, the competitive set? Just how you thinking about the turn there. And then separately, you know, you talk about machine learning, efficiency tools. Is there a big cost that is tied to that coming up in the future for you guys, or is that something you already have at your fingertips? Just curious what that looks like. Thanks. I'll start with the second part first, Matt, Paul. Certainly, we don't have AI and machine learning at our fingertips. It is something that we will invest in over time, and we will make steady progress. As I said, it's very much like some of the other initiatives that happened, like e-commerce in the early 1990s. We didn't jump into that full throttle come 1990. We started it, we got some feedback, we found out what worked, what didn't work, invested a little bit more. And I think we're fairly ahead of the curve then, and we expect to be somewhere near the beginning of the curve in this endeavor as well. As it relates to turning the Urban brand around, I think Sheila gave a fairly comprehensive dissertation about how we plan to do that. The one thing that she didn't talk about that I do want to emphasize is that we think that hiring a president for Urban Outfitters is a key component, and we've made significant progress toward that end, and I think you might hear something in the next few months. So, that will be one thing. And then we have to improve our product offering, and we have to improve, most importantly, our marketing. I think the product offering, I think that what you've seen is a shift in fashion to a more feminine look, and that feminine look is performing quite well. We will increase the penetration of femininity in our assortment. This is not—while we've always had feminine, this is not something that Urban Outfitters is particularly known for. You know, it's not like the Free People or Anthropologie brands, which are much more highly feminine. And so I think in that sense, we're swimming a little against the tide, but I don't want to put that out there as an excuse. Our job is to always have the products that our customers want. I think in terms of the marketing, I think that that is, as Sheila said, is and was a miss, and that we didn't move along with the customer and appear where the customer was residing in areas like TikTok, and we didn't quickly enough adopt YouTube as one of our main platforms. We did, you know, have an awful large exposure on Instagram and remain on that platform. So I think as we move along and have better marketing and show up where the customer is, we will continue our march toward a greater penetration of digital customers and improve our sessions. So I think that does it. So, as for the next question. Yeah. Thank you. Please stand by for our next question. Our next question comes from the line of Alex Straton with Morgan Stanley. Your line is open. Perfect. Thanks a lot for taking the question. I wanted to focus on the Urban banner as well. Thanks a lot for the color on the initiatives. With those in place, how do you think about the timeline for the Urban Outfitters inflection from here? And what are the key metrics you're watching in the meantime? And then secondly, just on profitability for that business, I'm having trouble thinking about, you know, where it sits versus history and how much of a drag it is on the total business. So perhaps if you could just kind of outline the puts and takes on that piece, too, it would be super helpful. Thanks a lot. Okay. Alex, I'm going to take the first part of that question. I think when we think about how long it will take to turn the Urban Outfitters brand and how we're thinking about how we're measuring that, I think we want to do it in a very healthy way and look for improvement month-over-month and quarter-over-quarter. Because we've lost our consumer, we're staying highly focused on the 18-25-year-old Urban Outfitters consumer. And we feel like with laser focus on the consumer, we will gain that customer back. We are hyper-focused on the new consumer. We've lost our way. We need to regain that consumer back. And through our marketing efforts, whether it's engagement in the different social platforms, we're looking for that. We're listening hard to the consumer there, as well as watching, you know, what they're reacting to in terms of product offering. So I think not only from a top-line sales perspective or a sales velocity as we look at from a merchant, but also trying to listen much harder to what we do and where it resonates the most. So quarter-over-quarter improvement is what we're looking for, for a long-term, healthy return for Urban Outfitters growth. And Alex, this is Dick talking. I think that you ask about metrics. I know that Sheila is always watching and watching extremely carefully the number of sessions on a daily basis and store traffic. And I think those two metrics, if we can see those improve, we will know that we are on the right track, and sales will follow. Frank, do you want to take the last- Sure. part of the question? You know, obviously, the yield profitability has fallen pretty meaningfully from where they've historically run at. I think the nice thing is, with the strength of our other four businesses, we've been able to more than compensate for that and drive really, really healthy operating profit gains. And then that leaves for the opportunity for as Urban does begin to turn their business around, for them to then contribute to incremental growth in fiscal 2025 and beyond, and you know, begin to recapture from where they were. Thank you. Please stand by for our next question. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Your line is open. Hi, good afternoon, everyone. As you think about the strength of some of the smaller businesses, like Free People Movement and now Nuuly, with reaching profitability earlier, what do you think the opportunity for them is in just early thinking about framing 2024 and the incremental improvement potentially to gross or operating margins from those businesses? And lastly, just on the gross margin discussion of the higher IMU and lower markdowns, is there opportunity to continue this going forward, in this environment? Or is there any changes that you see in the structure of IMU or markdown cadence? Thank you. Okay, Dana, I'll take the first part of that question and then pass it along both to Sheila, who will talk about Free People Movement, and to Dave, who will talk about Nuuly. I'm glad you asked the question because we collectively, here at URBN, are extremely excited about what you've called the smaller businesses, because we think they won't be smaller for that long. We think both Nuuly and Free People Movement have an opportunity to be billion-dollar-plus brands, and I can't tell you it's going to happen in FY 2025, because I know it won't, but I think it is going to happen much quicker than any of our other brands reached a billion dollars. So, Sheila, would you like to talk about Movement? Sure, I'll start. Yeah, we're excited about FP Movement. The metrics that we're reading just indicate that we should invest with as much speed as we possibly can, which Dick has been encouraging us to do all along. And with the speed comes scale. In that scale, it comes IMU. So I do think as we continue to grow the FP Movement brand, with nearly doubling our store count, with at least 25 new stores next year and a robust digital and marketing strategy attached to attracting new customers still, you know, there is only upside in terms of IMU from the depth of our buys, frankly. And there's a lot of strategies that have been in long works to be able to take advantage of that scale, Dana. Yeah. Okay. Dave, do you want to take Nuuly? Yeah, sure. Dana, thanks for the question. We've been having a lot of fun building the Nuuly business. We see a lot of opportunity with the Nuuly business to continue to grow. It's been really interesting to learn a new business, and there's been a lot of interesting learnings from it. I think one of the most interesting learnings that we've seen is that we're really growing a new market. We don't see ourselves necessarily always stealing share in the Nuuly business. We feel like we're growing a new market, and rental is a new concept that people have to learn. The indicator that kind of gives us that impression is that when we see... We survey all of our new subscribers, and when we see new subscribers join Nuuly, roughly 60% of them have never rented from anybody before. So it really feels like we're bringing new customers into a new consumption model, which just gives us a lot of excitement for the future and where this can go as more and more people come upon the idea of renting. So I think that's a really exciting thing. And then I think also as we continue to scale on the infrastructure that's going to be supporting Nuuly, opening our next warehouse in Raymore, Missouri, should allow us to really drive down a fair amount of our variable costs across our delivery and shipping costs. So those types of things are just going to allow us to continue to leverage as we continue to grow. So, fun times at Nuuly. I think, Dana, this is Frank. What's really exciting is when you think about our goal of getting to 10% operating profit, and obviously, we knock on wood, have made some really nice progress through the first three quarters this year and think we're going to continue to make progress towards that goal in the fourth quarter and rounding out fiscal 2024. Then you start to think about, you know, the levers that can get us there, that we can pull on. We do talk about improved IMU across all three brands. There is nothing structurally that we believe that we're done yet in driving IMU improvement. You talk about Nuuly, you know, reaching their milestone of hitting operating profit and being able to build upon that into fiscal 2025 and going forward. We talk about FP Movement, which is, you know, producing 55% growth just now in the Third Quarter and a double-digit operating profit rate, right? So they're going to continue to, you know, have outpaced growth versus some of our other businesses and meaningfully contribute to our operating profit growth. As we talked about, Urban Outfitters, you know, currently not running where they historically have, but as that business begins to turn around, contributing into our operating profit growth next year as well. There's really just a lot of, you know, a lot of opportunity across the table for us to build upon the progress that we've made this year and, you know, and hit that 10% operating profit goal and continue to run there on a longer-term basis. Thank you. Please stand by for our next question. Our next question comes from the line of Janet Kloppenburg with JJK Research Associates. Your line is open. Good evening, and congratulations on a great quarter. Thank you. Dick, when you think about FP Movement and its success, so Dick and Sheila, do you think that we should anticipate an acceleration of store openings for that brand, while the Free People store openings continue? And should we think that that's an opportunity for unit expansion to accelerate as we look forward? And then just on the recent sales slowdown, could you? And I know it's slight, Dick. I'm not hysterical. So I just wanted to understand if it was attributable to sort of, you know, warmer weather in many markets or any sort of geographical or category dispersions that you're seeing. Thanks so much. Okay, Janet, I'm going to ask Sheila to talk about it first, because I know she's really excited about Free People Movement and is planning to open a lot of new stores. Sheila? Yeah. So Janet, we have a strong pipeline currently ready to go for next year. So 25, we are saying at least 25. I think that's the most amount of stores, at least in my growth, of the Free People brand family that we've experienced. So I would say that we see that growth, knock on wood, continuing for several years to come. Frankly, as we explore new markets, we're, we're actually in a couple markets that Free People is not in with FP Movement as well. And that's—this isn't at the cost of the growth of Free People. As I spoke about, we have a lot of growth internationally, and digitally still to do with the, the Free People brand itself. So we see both brands growing independently, obviously, FP Movement at an accelerated level, towards our billion-dollar goal. As far as the slowdown of Free People, you know, Q3 ended the fourteenth quarter of sequential positive FP retail segment growth. 27, if we exclude that one quarter a couple of years ago in fiscal 2021. So we're just up against more challenging positive comparisons. And frankly, I, I, I feel extremely strong that the, the buying teams, the design teams, and our marketing teams are all on the pulse of the right fashion trends. And so we remain extremely optimistic and positive going into the fourth quarter. I think this time of year is always a, you know, one to pause on, but we're, we're seeing very strong results to date, and we have no reason to believe our, our momentum is going to be interrupted. Janet, I just want to add in real quick on the FP Movement stores, you know, honestly, some really impressive stats. When you think about the fact that, you know, it's still a very young brand that's growing in an awareness, and the fact that their sales and profit productivity is on par with the Free People brand. In such early days, to have that strength and success in those doors, really leaves us very confident and excited about that store growth, and that's why, you know, Sheila talked about 25 at least, if not more. Just 'cause we, we've been really impressed over the first couple of years at how well those stores have performed, especially given the you know, the continued awareness that we're starting to build upon, but obviously much less than where the Free People collection brand stands. Janet, I can tell you, we all sit around and talk a good deal about what we have discussed as a slight and again, slight, slowdown in October. You know, we threw out there some potential reasons, like the weather, like the war, like the student loan repayments, and like having, you know, harder comparisons. You know, I think we've just kind of said this, we don't think necessarily there are any of them. Of course, the heavier, the harder comparisons are real, and so that's got to be a factor. Student loans, you know, you how could that possibly be positive? You know, it only could steal money away from purchasing, so that could be a factor. Quite frankly, we just can't come up with one that we feel is so compelling that we can attribute this slight slowdown to it. What I will tell you is that we're very convinced, given the behavior of the customer, that what it isn't is the beginning of the dreaded R word. We don't think there's any sense that we can see in our business of the consumer pulling back. She's very engaged with the brand, she's buying full price, and she's buying fashion. Those are very unusual, in my experience, if we're the beginning of a recession. So I don't think that we should fret about that. I think our business is very healthy, the customer is healthy, and we believe that we're going to have an excellent holiday season. Thank you. Our last question will come from the line of Marni Shapiro with the Retail Tracker. Thank you for taking my call under the wire, and if I don't, so I don't forget, Happy Black Friday to everybody. Dave, I have a question for you on Nuuly. Congratulations on turning to profitability, and starting a new business is very difficult, and one of the most expensive parts of that is the customer acquisition cost. So I'm curious if we can dig into that just a little bit. Have they come down at all? Are they high or low relative to the industry? And are you able to tap into or draft off of really, I guess, Free People and Anthro to bring customers into Nuuly? Just a little, you know, what that looks like. Yeah, sure, Marni. Thanks for the question, and thanks for all the kind words. Our customer acquisition costs have been, over the last few years, actually, a lot less than what we originally thought they were going to be when we originally started the business, so we've been very happy about that. I think our team has been very creative about how they go about marketing. They've been, you know, leveraging a lot of word of mouth, which has been something that's been a huge driver for the business. Putting in place things like referral programs that allow people to incentivize that word of mouth has been a big driver for us. We do spend across some social platforms, and in those, in those platforms, we are spending creatively across things like ambassador programs and influencer programs. So I would say that we've been very happy with what our customer acquisition costs look like. I think there's an opportunity to continue to draft off what we've been a lot of the good work we've been doing. We do, we don't, you know, draft off the other brands like you were suggesting, really at all from a marketing standpoint. What I would say is we draft off the other brands very much from a product standpoint, and that's a huge benefit of the platform. We have the luxury of working with some sister brands that produce amazing product that customers would love to rent, and do love to rent. So I think that is a huge customer acquisition source that we have that is a big benefit for us. The fact that Anthropologie and Free People and their first product is on our platform is just something that is also an attractive thing that brings in new customers. So I think all of that combined has been one of the big reasons for the success so far. Okay, I think that wraps up today's call. I thank you all very much for joining and wish you all the most joyous Thanksgiving. Don't overeat because Black Friday's the next day, and we all have to be out in stores. What if we just slightly overeat? Slightly overeat. Okay. Okay, thank you very much. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.