As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Oona McCullough, Executive Director of Investor Relations. Ms. McCullough, you may begin. Good afternoon, and welcome to the URBN First Quarter Fiscal 2026 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, 2025. 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. 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. Thanks, Oona, and good afternoon, everyone. We're excited to share that Q1 was another record-breaking quarter for URBN. Both sales and profits exceeded our expectations and easily outpaced last year's Q1 results. You'll hear more about these strong results from Frank Conforti, our Co-President and COO. Melanie Marein-Efron, our CFO, will walk you through our outlook for Q2 and beyond. I'll wrap things up with a few closing thoughts before we open it up for your questions. Now, over to Frank. Thank you, Dick, and good afternoon, everyone. Today, I'm excited to share our company's first-quarter results compared to last year, and then I'll dive into some detailed notes by brand. Overall, our teams delivered another outstanding quarter, exceeding our plans as we discussed on the recent fourth quarter conference call. Total URBN sales grew by 11%, hitting a Q1 record of $1.3 billion. All of our brands delivered positive sales comps, and four of our five brands performed exceptionally well, posting record first-quarter sales. Urban Outfitters also continued to make significant strides as the brand posted the first positive sales comp in quite some time and delivered continued progress in reducing its operating loss compared to last year. Our sales growth was partly driven by a 5% increase in the retail segment comp. URBN comps were positive in both channels, with stores outperforming digital. Nuuly delivered impressive 60% revenue growth, with a 53% increase in average active subscribers. Additionally, the wholesale segment saw a 24% revenue increase, driven by a healthy rise in full-price sales at Free People. Now, let's talk about gross profit. URBN saw a 20% increase in gross profit dollars, reaching a record $489 million. The gross profit rate also improved nicely by 278 basis points, which includes non-recurring benefits of 74 basis points, rising to 36.8%. The remaining 204 basis point increase was due to better gross margins across all segments. The improvement in gross margins was due to leverage on occupancy and delivery expenses and lower markdowns, largely driven by the Urban Outfitters brand. In the quarter, SG&A increased by 8.1%, leveraging by 65 basis points. The growth in SG&A dollars was primarily driven by increased marketing spend, which fueled sales growth for all brands. The marketing efforts drove increases in traffic and transactions, both in stores and online, for total URBN, while Nuuly's campaigns resulted in healthy double-digit growth in average active subscribers. Overall, total URBN operating income rose by 72% compared to last year, reaching $128 million, while the operating profit rate improved by over 340 basis points to 9.6%. Net income saw a 75% increase to $108 million, or $1.16 per diluted share. Moving on to brand performance, starting with Anthropologie. The Anthropologie team had another fantastic quarter, achieving a 7% increase in their retail segment comp, which marks four years of consecutive quarterly positive comps. This success was fueled by equal strength in the digital and store channels, both of which benefited from increased traffic. Every category saw positive regular price and total sales comps, with strong performance across all apparel categories, in addition to shoes, accessories, beauty, and home accessories. The team at Anthropologie continues to do an excellent job with their strategy to expand their product offerings to fit their customers' full lifestyle. As mentioned on the last call, the brand recently launched Celandine, an exclusive in-house resort wear label that offers year-round vacation-ready styles. This category's growth has exceeded our expectations. Alongside Celandine, Daily Practice and the expanded assortments of intimates and loungewear are also seeing impressive growth, and we believe these could become significant categories in the future. Turning to the home category, the brand saw impressive growth driven by the increase in home accessories and textiles, both of which are benefiting from consumers' desire to refresh their homes. The team has focused on incorporating more newness into these categories, catering to consumers' desire for more frequent updates for their homes. The brand's ability to create compelling product assortments in conjunction with strategic marketing investments and exceptional creative content have enabled them to succeed in their goal of attracting new, younger customers while deepening engagement with their existing ones. The brand drove growth across new, retained, and reactivated customers in the quarter. These efforts led to strong traffic increases in both stores and digital during the first quarter. The Anthropologie brand delivered exceptional top-line growth and the 10th straight quarter of double-digit operating profit growth, resulting in a record first-quarter operating income. Based on our current plans, we believe the Anthropologie Group could deliver a mid-single-digit positive retail segment comp in Q2. Next, I want to highlight the fantastic performance of the Free People team this quarter. They delivered an 11% increase in total retail and wholesale segment sales and double-digit operating profit growth for the brand. Their double-digit sales growth was driven by a 3% retail segment comp, a 26% rise in Free People wholesale segment revenues, and over 200% increase in non-comp sales. The positive retail segment comp was driven by a low single-digit comp in both the stores and digital channel. Throughout the quarter, Free People saw positive comp sales growth across all major categories. The FP Movement brand also delivered robust total retail and wholesale segment sales growth of 29%, driven by total retail segment growth of 16%, a 6% retail segment comp, and explosive 78% growth in FP Movement wholesale segment revenue. Non-comp sales growth was boosted by the opening of 43 new stores, including 14 Free People brand and 29 FP Movement brand locations over the past 12 months. Based on our current plans, we believe the Free People group's retail segment could deliver a mid-single-digit positive comp in Q2. Free People wholesale revenues increased by 26% during the quarter, driven by full-price sales gains in specialty and department stores. The profitability of Free People wholesale improved significantly from the prior year. Now, let's move on to the Urban Outfitters brand. Urban Outfitters recorded a positive 2% global retail segment comp for the quarter. Congratulations to the team on much-improved business and the first positive comp in some time. North America recorded a negative 4% retail segment comp, and Europe an exceptionally strong positive 14% retail segment comp. The total global comp was driven by positive store comps, partially offset by negative digital comp in North America. The digital business in North America continues to anniversary heavy promotional activity from the prior year, which will begin to abate after the second quarter this year. Positive global comps were a result of strong regular price business in most categories in both channels, which led to a significant reduction in markdowns versus last year and an improvement in profitability levels for the brand. In North America, the teams continue to focus on the pillars of transformation strategy [Chief] spoke to last year: focus on the customer, evolving the product assortment, rebuild our customer base, adapt our channels to offer a more relevant experience, and deliver profitable growth. The teams have evolved the product assortment to be more relevant for the customer. Denim, lounge, accessories, and home sales were all comp positive in the quarter. Notable market brands have been added to the assortment, including a successful Bagu collaboration and the recent addition of the Nike brand, currently available online and in 40 stores. Regular price sales for the brand were positive for the second consecutive quarter and accelerated from Q4 last year, showing continued improvement in the product offering, inventory management, and marketing campaigns. Marketing and creative efforts have improved significantly. Our focus on acquiring new customers has been successful, with positive growth in new customers entering the brand in the right demographic. Lastly, as mentioned before, the brand showed an improvement in profitability versus last year, largely due to a lower markdown rate. Now, turning to Europe. Our European business delivered a 14% comp, driven by double-digit comp increases in the digital and store channels. During the quarter, the brand achieved positive comps across apparel, home, and accessories. Strong sales comps and improved maintained margins fueled a healthy increase in operating profit for the European team. Based on our current plans, we believe the global Urban Outfitters brand could deliver a low single-digit positive comp for the second quarter. Finally, let's touch on the Nuuly business, which delivered another exceptional quarter. Nuuly added over 40,000 average active subscribers since the end of the fourth quarter and has grown average active subscribers by over 110,000 compared to the prior year. This beat even our most optimistic expectations. This growth in average subscribers contributed to a 60% increase in brand revenue and added nearly 400 basis points of revenue growth to total URBN top line. The strong revenue growth in the first quarter resulted in leverage in almost every expense line item, helping to deliver a record first-quarter operating profit of over 5%. The current momentum in the Nuuly business has continued into May, where we now sit above 380,000 active subscribers. The performance at Nuuly over the past year has fortified our confidence that our business model is strong and the rental market opportunity is very large. We are thrilled that Nuuly now appears to be leading the industry with an opportunity to continue to see significant growth. Based on our current plans, we believe Nuuly could deliver a healthy double-digit revenue and profit growth in the second quarter. Now, moving on to tariffs. We would like to give you as much clarity as possible, but unfortunately, you all know this is not possible given the continued uncertainty with news on tariffs changing daily. We can only offer our perspective based on what we know today. Our current assumptions are based on a 10% global tariff on all items entering the US, except for items from China, where we are assuming a 30% tariff. First, I want to acknowledge the amazing work our sourcing, brand, and logistics teams have done. Over the last several years, the teams have worked hard to diversify our countries of origin as well as dual-source most of our own brand products. This means many of our products are made in two different origins, enabling us to shift production from one country to another if needed. We currently have no single country that accounts for more than 25% of our production. India, Vietnam, and Turkey are our three largest countries of origin, while China represents less than 5%. Quickly, after the announcement of tariffs, our team started working on how to mitigate the impacts, with a primary focus on the customer's experience. We are working hard towards minimizing the impact on the consumer. We have several mitigation tactics that we've been working on. First, negotiating better terms with our vendors. Second, shifting our countries of origin where possible. Third, shifting our mode of transportation from air to boat. And lastly, gently and sparingly raising some prices. Please note that any price increases will be very strategic, protecting opening price points and only targeting areas where we believe we could raise prices without affecting the overall customer experience. As of today, based on the previously stated assumptions, we believe that tariffs could have a minimal negative impact on gross margins in the second quarter and potentially a negative 20 basis points impact in the back half of the year. Although tariffs present a temporary headwind to our business, we are confident in our ability to manage through this environment and still achieve 50-100 basis points of gross margin improvement for fiscal year 2026. Again, I want to stress that this plan is based on what we know today. In summary, it was an exceptional quarter. All brands delivered positive sales comps. Both the wholesale and subscription segments drove double-digit sales growth, and all brands and geographies recorded healthy operating income improvement. We could not be prouder of the teams and their amazing execution. I will now turn the call over to Melanie. Thanks, Frank, and good afternoon, everyone. Let me walk you through how we're thinking about our second quarter financial performance. We're off to a solid start this quarter, and based on what we're seeing so far, we're planning for total company sales to grow in the high single digits. In our retail segment, comp sales could grow mid-single digit, driven by mid-single digit positive retail segment comps at Anthropologie and Free People brands, while Urban Outfitters brand could be low single digit positive comps. At Nuuly, the brand could deliver mid-double digit revenue growth, driven by continued subscriber momentum. Finally, our wholesale segment could produce low double-digit growth. As Frank mentioned, we believe gross profit margins could improve by about 50-100 basis points compared to last year, both for the second quarter and the full fiscal year. This improvement could come from lower markdowns at Urban Outfitters and occupancy leverage, partially offset by lower initial product margins due to higher US tariffs. Our current assumptions on tariffs are based on 10% global tariff on all items entering the US, except for items from China, where we are assuming a 30% tariff. Turning to SG&A, we expect expenses to grow roughly in line with sales based on current sales performance and plans. The planned growth in SG&A is mainly driven by higher marketing spend to support customer and sales growth, along with increased store labor costs related to new store locations. 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're planning for an effective tax rate of about 23.5% for Q2 and the full year. Now, on to inventory. While our teams continue to focus on increasing inventory turns, the uncertainty around tariffs means we are likely to bring in fall product a bit earlier. Because of that, inventory growth in Q2 may grow at a rate above sales growth. For FY2026, capital expenditures are planned at approximately $240 million. The FY2026 capital project spend is broken down as follows. Approximately 50% is related to retail store expansion and support, approximately 25% is related to supporting technology and logistics investments, and the remaining 25% is for home office expansion to support our growing businesses. Lastly, we're planning to open approximately 64 new stores and close approximately 17 this fiscal year. Most of our net new store growth will come from FP Movement, Free People, and Anthropologie. Specifically, we're planning 25 new FP Movement stores, 15 new Free People stores, and 16 new Anthropologie stores. 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. With that, I'll hand it back over to Dick. Thanks, Melanie. What a fantastic start to the year. Operating profit came in just shy of our ambitious 10% goal, an incredible achievement. Huge congratulations to all URBN teams for delivering such impressive results. Despite the noise in the headlines and the broader economic uncertainty, our customers continue to show resilience in Q1. We have not seen any signs of a demand slowdown. In fact, customers were eager for fresh spring fashion, and our teams delivered. From compelling assortments to standout store experiences and inspiring marketing, we exceeded their expectations. The result: positive comps across every brand and every segment. This performance speaks volumes about the strength of our strategies, the quality of our execution, and the appeal of our brands. Most of all, it affirms the talent of our leaders and their teams. We are attracting new customers, keeping our loyal ones, and growing our market share across the board. Each brand is playing a valuable role in the URBN portfolio. Anthropologie and Free People, our two larger brands, continue to grow revenue and deliver healthy mid-teen operating margins. FP Movement is growing faster than its sister brand, thanks to new store openings and strong wholesale demand. Nuuly, our women's apparel rental business, is one of the most exciting high-growth concepts in the market today. Both FP Movement and Nuuly are nicely profitable, gaining brand awareness and showing real potential to scale. Urban Outfitters North America is making steady progress. Stores were comp positive for the quarter, and the number of new full-price customers grew nicely. In Europe, after a slower start in Q1 last year, Urban delivered powerful comp sales gains that led to a jump in profitability. All in all, I'm delighted with how our brands are performing. Yes, we're keeping a close eye on supply chain risk and global uncertainty. As Frank said, based on what we know today, we believe we can continue to grow revenue and expand margins, not just in Q2, but for the full year and beyond. We're confident URBN is well-positioned for continued success. Before we move to Q&A, I want to thank our Co-Presidents, Meg and Frank, our brand leaders, Trisha, Sheila, and Dave, and their incredible teams across merchandising, creative, and operations. I also want to recognize our shared service teams and our 28,000 associates around the world. Your hard work made this record quarter possible, so thank you. To our global partners, thank you for your cooperation as we work together to navigate the new trade rules. To our shareholders, thank you for your continued support. That wraps up our prepared remarks. Now, let's take your questions. Certainly. Ladies and gentlemen, we just ask that you please limit yourselves to one question each. You may get back in the queue as time allows. Our first question for today comes from the line of Lorraine Hutchinson from Bank of America. Your question, please. Thanks. Good afternoon. I was hoping you could talk about some of the key drivers of success at UO Europe. Was it branded products, different label products? And which of these learnings can you apply to help bolster the US Europe business? Okay, Lorraine, I'll apply that, and then ask Sheila to back me up. I'm going to ascribe much of the progress to product. They have a number of really strong bottoms that are propelling their business in that area, and now they have added great tops to that. To your question, the Urban brand in North America is also sharing in a number of those items, and it is helping them very much as well. Product is number one. Number two, I think they have a very strong marketing group, and some of their marketing initiatives have proven to be very successful in growing the customers. I think that about does it. Sheila, anything you want to add? Yeah, I would add just that the women's wear in Europe has continued to find momentum over the quarter. Starting in Q3 last year, they had tremendous growth Q4, and that accelerated into Q1 very nicely. I do think there is strong partnership between Europe and North America that I am quite excited about with Shea and Emma's leadership. I think we are only at the beginning. Thank you. Our next question comes from the line of Adrienne Yih from Barclays. Your question, please. Great. Thank you very much. I have to say, I do not think I have seen all of the brands look this spot on at the same time in years. Really, Dick, like you said, congrats to all the brand leads. My question—you're welcome. A couple of quick ones, primarily on Urban Outfitters. I know at one point you were talking about kind of a different format, perhaps making them smaller to be more productive. Has that actually happened yet? Melanie, on the early inventory, is that to avoid tariffs? Because I know you are on a shorter cycle than most, or is it to kind of anticipate congestion? Just curious about that. My final one would be you're always on air, and to try to kind of cut some costs by going to boat increases sort of some uncertainty. I am wondering if that is consistent with the speed model. Thank you. Go ahead. I can answer the inventory question, and then we can answer the other ones that you have, Adrienne. Our inventory position at the end of the first quarter really reflects the fact that inventory transit times were faster than planned. We also probably had some early receipts to bring in inventory ahead of the uncertain tariff outlook, but a lot of it had to do with the inventory arriving earlier than planned. In the second quarter, the story changes a little bit. I think while there is some fashion risk of bringing product in early, we believe that it is prudent planning to bring in fall inventory, which is less sensitive to fashion early, given the uncertain tariff outlook and any potential supply chain disruptions that could occur in the future. Those are our current plans for Q2, again, that we would likely have inventory ahead of our sales growth. Adrienne, to your last question, going from air to boat definitely adds about 30 days to delivery time. You are right, there is always a risk as you go out in time that the fashion might not be as accurate as we would like it to be. To offset that, we are working very hard to use some of the advanced technologies to shorten that time period. Shea, I think Adrienne wanted to know about the smaller format. Yeah. Hi, Adrienne. We have not, per se, made any adjustments yet, but we have a ton of flexibility over the next couple of years with our fleet as leases become available. Even as soon as a couple of this year. As we look at leases, we'll be looking either to relocate and downsize where we think we're overspaced or potentially downsize in place. Our goal is to make sure that we are positioned close to our customers. As we have this flexibility, I think we'll be looking to do that where, again, we feel like we're overspaced. You may want to talk a little bit about the Houston store. Yeah. The size of that. Yeah. One of those examples is one of our Houston stores where we'll be downsizing a couple thousand sq ft and also applying our new store concept. We're really excited about that, and that'll open later this fall. Thank you. Our next question comes from the line of Matt Boss from JPMorgan. Your question, please. Thanks. Congrats on a nice quarter. Thank you. Dick, could you elaborate on performance by brand, what you've seen in May, maybe your larger picture view on consumer spending on apparel in the back half of the year, just all of the moving parts right now? Melanie, on sustainable top-line growth at the Urban brand, what's a reasonable operating margin, you think, for the Urban brand's multi-year? I'll take your first question. May to date, we see the comp sales being very similar to the Q1 print. When we look at comparisons against the same period last year, we believe total retail segment comps could register in the mid-single digits for Q2. I think that Melanie went over that, but I'll reiterate it. We think it might include mid-single digit comps for both Anthropologie and Free People brands, a low single-digit positive comp for the Urban brand, and strong double-digit growth in average active subscribers and revenues for Nuuly, and double-digit sales growth for the wholesale segment. When you combine all of those, we believe that total URBN Q2 sales could increase in the high single-digit range. Matt, I'll take your question on UO's return to profit. First, I just want to give Urban some more congratulations and airtime here. We're just really excited to see the continued progress that the team is making. First positive comp in some time, first positive store comp in North America in some time, continued reduction in their markdown rate based on improved product performance, marketing, and inventory management. The creative execution and marketing continues to improve, which has seen a new customer acquisition. Just a ton of boxes being checked there, which is great to see. I do not know that we have landed exactly on a number as to where Urban should operate from an operating profit just yet. I think we are uber-focused on turning the business back to profitability. We know that that will not happen this year. I think in order to do it right, it is about slow and steady progress, capturing that right customer and really improving all those different metrics that I talked about. I think when you think about mid to high singles being a reasonable opportunity for the brand, but again, that is going to take some time, and it is not going to happen this year. We're just focused on continuing to make the progress, continue to fall back on that loss, and doing it right. Thank you. Our next question comes from the line of Paul Lejuez from CITI. Your question, please. Hey, thanks, guys. Maybe just to go back to UO margins for a second. Frank, maybe can you frame for us where rent and occupancy is today for the UO brand versus where it was, let's say, pre-pandemic, 2018, 2019, whatever's a good year you think to use? Same question for SG&A and that UO brand. Just want to get an idea of how much recapture opportunity there is on the margin as sales increase. Thanks. Yeah. Those specific rates, Paul, change a lot as it relates to the mix of the business between stores and digital. As you know, we're going to follow the customer wherever they are. As Shea talked about, store formats are going to be shrinking from a square footage perspective. That's going to affect your occupancy leverage. I don't think those rates are as important from a focus right now. I think the important focus is on maintained margin improvement, which the brand is seeing driven by lower markdowns. Where we are is we've made a ton of progress, but we're not at historical averages just yet. We've fallen back a lot, but there is still remaining opportunity this year, and there will still be opportunity next year. I think the next leg after maintained is as they've now started to, as a total brand, hit positive comps, and Urban North America is its positive store comps and is inching even closer to positive total comps into leveraging that occupancy and those fixed expenses. I think we have opportunity to do that in the back half of this year and then continue that progress next year, which would be the next leg in clawing back that operating profit loss and turning the brand back into profit. Thank you. Our next question comes from the line of Alex Straton from Morgan Stanley. Your question, please. Perfect. Thanks so much for taking the question. Just a couple from me. One just on guidance. You outperformed on gross margin quite a bit, but maintaining the full-year guidance. Just curious kind of what's holding you back from flowing that through and the puts and takes as you see it on that line item for the rest of the year. Just on the tariff mitigation tactic of very selectively taking price, I'm just curious what types of categories you see as having the biggest opportunity and also how quickly you can implement that. I can take those, Alex. I just want to stress on price. You're right. It is different from one category to the next. I want to stress that we're being extremely thoughtful and careful about protecting things like opening price points, targeting areas where we believe we could gently and sparingly raise some price points, but we're extremely focused on protecting that consumer experience. You're right. It's different from one category to the next, but it is not the biggest piece of our mitigation strategies by any means. I just want to stress that with a high level of importance. Let me add to that, Frank, before you go to the rest of it. We are definitely considering this raising of prices as the last item that we will try in our portfolio of tricks to try to offset this tax. I think that what you'll see, Alex, is that product that has a little bit more make in it, has a little bit more embellishment, and is a little bit, probably a little bit higher priced would be where we would try to get a little bit extra if we need to. If we do not need to, we will not make the change. Alex, to your first part of your question, as it relates to the plans for the year, certainly we are really proud of the Q1 execution and how the business continues to perform. It seems like the customer has held up, and certainly our brands are likely gaining some market share and performing at a high level. I think planning the business right now in total at a high single digit, given the continued uncertainty all over the news and all over the media, feels like an appropriate place to be and a conservative, hopefully, a conservative place to be. The lion's share of the beat in Q1 was because we did exceed our top-line performance and deliver almost 11% top-line growth. I hope that opportunity continues to persist. I think just given the constant news around the uncertainty on the consumer, we feel like it makes sense to plan conservative, and I hope that our plans are conservative. Thank you. Our next question comes from the line of Dana Telsey from Telsey Advisory Group. Your question, please. Good afternoon. I echo the fact that seeing all three brands do such positive results, so nice to see with the path. Nuuly is very exciting, and would love to hear how you're thinking about the profitability profile of Nuuly compared to the base business and how you're thinking of pricing on Nuuly in regard to tariffs versus the other brand's business. Is there a difference? Are you seeing anything different in the customer in this environment with Nuuly and attracting new customers? Also, is there any carryovers, any cannibalization, or are they the same customers and the brands? Thank you. Great. Thanks, Dana. I will try and hit each of those if I can recall them. Yeah, the business has been very exciting. We've been very, very encouraged with the first quarter to grow active subscribers almost 23% within the quarter. It was just a really amazing feat for the team. We're feeling very good about it. From a pricing standpoint, we are aware, obviously, of all the tariff commotion that is occurring. We have not seen any sort of impact at this moment yet. In terms of taking price, it's a different proposition, obviously, for a subscription business to take price versus retail brands. We don't have any intentions to take price at the moment. We are going to be navigating the cost pressures and the cost prices that we may incur the same way the other brands are here at the business. Dana, I just wanted to jump in on the Nuuly profitability. Dave took, I think, three of your four. Great job, Dave. We said from the start, obviously, we felt like we could get this business to profitability. Congratulations to Dave and team doing it so quickly, hitting their first full year of profitability last year, hitting above 5% in Q1 this year. We have also said that we did not feel like it would be dilutive to our 10% URBN goal. What that implies is that we think that business can run at 10% operating profit. I do not think we have set a goal beyond that, but I also do not think that is appropriate for a brand that is still so young and still has so much growth opportunity ahead of it and so much for us to learn. We do not think that Nuuly would be dilutive to URBN going forward. We feel like 10% is an achievable target for it down the road. Continued congratulations to Dave and team on 60% growth. It is pretty damn impressive. Thank you. Our next question comes from the line of Mark Altschwager from Baird. Your question, please. Good afternoon. Thanks for taking my question and congrats on the great results here. For Melanie and/or Frank, I guess, first, could you quantify the markdown benefit in Q1, just of the 200 basis point kind of core gross margin improvement, more than half, roughly half, any help there, and how to think about that for the rest of the year? Then just bigger picture, Q1, as you mentioned, you're nearing the 10% operating margin goal. I think it would be unusual for the fiscal year to not exceed the Q1 rate, just looking at historical trends. Yet, it seems like there are some big levers ahead still on margin with UO profitability increasing over time, Nuuly scaling. Maybe if you could just speak bigger picture to how you're thinking about the long-term algo. Do you think you can take EBIT margins higher than the 10% rate, or do you choose to reinvest the upside and drive a faster top line through increased marketing spend as you approach that 10% goal? It'd be great to hear how you're thinking about that. Thank you. Mark, I think I know you're giggling a little bit because we know once we get near a target, we know the expectations always the bar gets raised and the street blinks more. Certainly, we are still targeting a 10% operating profit rate and confident we can achieve it. We delivered 100 basis points of improvement last year, reaching 8.6% in fiscal 2025 based on our plans of 50-100 this year. That would put us at 9.6%. Certainly, we have the opportunity to beat that. What I would say is before we set a new goal, let's hit the first one. Let's prove we can operate at that. I think you're absolutely correct in that with Urban's turnaround and then once that business turns into profitability with Nuuly having opportunity to continue to grow that rate, yes, there is upside. For us right now, before we set any new targets, I'd like to hit the first target, and then we can get back to you with what we think the upside is. As it relates to markdowns for the first quarter, it was about half of the 200-204 basis points that you mentioned. Thank you. Our next question comes from the line of Marnie Shapiro from Retail Tracker. Your question, please. Hey, guys. Congrats to all the teams. Shea, congrats to you on the Urban improvements. The site looks amazing, that Beck's Court, that Georgian. Everyone looks like they want to hook up. It's amazing. I wonder if you can touch on the changes you've made in marketing, specifically social media, because the brand has suddenly been in my feed very regularly with hauls and in a very positive light, which is fantastic to see. If you could also just talk a little bit about on-rotation, I guess, what was the thinking behind this, why Nike is a partner, though I love it. I'm just kind of curious what your thinking was behind all of that. Yeah. First of all, thank you for the compliment. It's great to hear. To your first question on social, it's a very keen observation, and I'll answer that really in two parts. Our team has been really working hard, and I would describe it as it's not really enough to just post on social anymore. We have really taken a multi-platform approach. It's not just about Instagram. It's not just about Pinterest. The team is really trying to get the right content, the right platform, the right product, and showing up in a truly authentic way and really optimizing for the algorithm. That really means trying to get into the feed. In your case, it sounds like we're being successful. That's great to hear. Secondly, I think we're really trying to engage with customers, be an authentic part of the conversation. Sometimes that means jumping into the conversation. Sometimes that means clapping back, really talking about a lot of user-generated content and allowing our customer's voice to be amplified. I think it's great to hear that it seems to be working. We're really proud of the creative assets that are showing up out there. You mentioned the site. That's great to hear as well. Secondly, you talked about on-rotation. Obviously, the Nike launch that happened last week. We're excited to have launched with Nike, of course, a big brand out there, one of the most popular brands with our customer. I would take this concept really back to our strategy. A great example of our team really focusing on the customer. We know that brands matter a lot to our customer. Essentially, brands are really how they identify themselves. It's also how they sort of create community. The idea that brands are important is really what led to what drives us to partner with great brands. Secondly, we've talked about this before. These customers did not grow up as mall reps. They did not grow up discovering retailers in the mall. They grew up quarantined in their house. In many cases, brands found them on their phone, and they were targeted. They really value in-real-life discovery. On-rotation is really about taking those two things and bringing it to life in the platform of our store. We are really excited to have launched on-rotation with Nike. I think you can expect other brands to show up in on-rotation in different stores in different ways. It is just a great example of our team really focusing on giving the customer what they want. Thank you. Our next question comes from the line of Ike Boruchow from Wells Fargo. Your question, please. Hey, good afternoon. Let me add my congrats. Two from me. First, maybe Frank or Melanie. On the SG&A rate, I believe three months ago, you said you expected flat for the year. Is that reiterated because you're going to reinvest more, or should you expect a little scale given the momentum on the top line? Just on UO, the turnaround's working. I guess the question is, do you expect this to be linear? Would you expect the comp to take a step back because you battle for margin in a certain quarter? Just kind of curious how you kind of envision this turn playing out over the next 12 months. Thanks. I'll take the first part of your question, Ike, as it relates to SG&A for the full year. I would say I'm reiterating our guidance that we believe that full-year rate of sales could be in line with sales. SG&A rate of sales would grow in line with sales growth. Now, by quarter, the relationship between sales and expense growth could be uneven as a result of marketing campaigns and other SG&A expense timing shifts. Yeah. It's Shea. I can take that answer. I would say that we certainly hope that this is a sequential build. I think what you see in retail is an example of the inflection point coming a bit sooner because of the nature of the price type in that business. In retail, it's a much larger penetration of regular full price. As the full-price business and the health of that business returned a bit sooner because there's a larger penetration of full price. In the digital channel, we have had a larger penetration of discounting and promotional business. As we face those headwinds, it's going to take a bit longer for us to see that inflection point. We think as we get through the second quarter and through the back half of that this year, we should see those trends play forward as we have seen in the retail channel. Thank you. Our next question comes from the line of Janet Kloppenburg from JJK Research. Your question, please. Hi everybody, and congratulations. It's remarkable, Frank or Dick. I think if you reach the high end of the gross margin guidance, you'll be at pretty much near historic levels on gross margin. Maybe you could talk a little bit about the opportunity for the historical levels to move higher. I also wanted to talk about the new occasion businesses at Anthropologie. Feels very much like what happened at Movement, where the product performed well in the Free People stores, and then it was spun out. I'm just wondering, is there an opportunity for that to happen at Anthropologie as well? Thanks. Janet, I think on the gross profit margin, the historical levels is probably not the right bar for us. I think we have had the Urban Outfitters brand sort of masking a little bit of what the great improvement and consistent improvement has been going on in Anthropologie and Free People for some time now. We've done a great job as a company sort of lowering what our historical averages have been in markdown rates. It's seen by the consistent mid to high teens operating profits that Anthropologie and Free People have been running at for the last several years. I do think, yes, you're right. We're close to eclipsing that. I do think that there's a new bar that is being set. It has been a little hard to see that over the last couple of years, which is where Urban has been. You are starting to see that come to fruition as that brand is starting to really, that turnaround is really starting to take hold. Richard? Hi, Janet. This is Tricia. Thanks. We are super excited about our new businesses, Celandine and Daily Practice, as well as our lingerie and sleepwear businesses, which are all significantly outperforming the total. We do not really have any plans currently to spin off standalone stores, but I think as we continue to grow those brands over time, we will continue to assess the opportunity. We have had tremendous success with some pop-up location experiences with our Celandine brand, so we will continue to monitor that over time. No plans currently, but yes, very pleased with the growth of those brands and what they're contributing to the overall growth of Anthropologie. Thank you. Our final question comes from the line of Simeon Siegel from BMO Capital Markets. Your question, please. Thanks. Hey, good afternoon. Great job, everyone. The wholesale EBIT margin looks more and more attractive each quarter. Any thoughts to how large the wholesale business can become and how high is high for the margins for the channel? Then just two quick ones. What's the right way to think about the impact from carrier costs and broader delivery expense going forward? I think there was a comment about reduction in packages per order helping gross margin. Could you just elaborate on what that was as well? Thanks, guys. I'll take the last ones first, and then let Sheila talk about wholesale. Packages per order, yes, we've done a good job at reducing those. I think there's a lot that goes into planning inventory and having it in the right place. Certainly, thanks to the logistics team. Thanks to Dave and the tech team for supporting that effort. There's a lot of moving pieces behind that and trying to get that right and can have a meaningful impact and improvement from a delivery expense perspective. We've seen some of those benefits and hope that they will continue, and I think there's still opportunity to come there. As it relates to carriers, we haven't seen really any challenges right now. As Melanie mentioned, we've been faster. I think inbound has been faster than the brands anticipated, which you've seen in their inventory numbers, and the costs have not been a challenge. What happens in the back half of the year as it relates to congestion and maybe a lot of companies bringing stuff in earlier, your guess is as good as mine. It is something that we will continue to monitor. We are not experiencing any cost or speed pressures right now, but it is something that we will continue to monitor closely. Okay. I can jump in with wholesale. Yeah. We are very pleased with our wholesale, both sales as well as profit. I think we are committed to our profit. I think that was a goal coming out of the pandemic of how to get this channel to be consistently profitable with the right partners. That continues to be our strategy in wholesale, to work in alignment with brands that have the same value proposition as us in terms of care of product and brand. With that, we're seeing nice growth with those brands and continue to see a really good outlook. What I would also say is, without saying how big the wholesale business for Free People and FP Movement could be, is on top of that partnership, we've been able to seed some of our new labels with some wholesalers that we're really proud of, whether that's our Freest label or We The Free Denim brand. That's allowing us to grow into new account base, which we're quite excited about for the future. I think that concludes the session for today. I thank you very much for joining, and I hope to see you in a few months. T hank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.