Good morning. My name is Amanda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Co.'s second quarter, 2024 earnings conference call. Please be advised that today's conference is being recorded. All parties will remain in a listen-only mode. I would now like to turn the conference over to Mr. Kevin Wynk, Vice President of External Financial Reporting and Investor Relations at Victoria's Secret & Co. Kevin, you may begin. Thank you, Amanda. Good morning, and welcome to Victoria's Secret & Co.'s second quarter earnings conference call for the period ended August 3rd, 2024. As a matter of formality, I would like to remind you that any forward-looking statements we may make today are subject to our safe harbor statements found in our SEC filings and in our press releases. Joining me on the call today is CFO and Interim CEO, Tim Johnson. We are available today for up to forty-five minutes to answer any questions. Certain results we discuss on the call today are adjusted results and exclude the impact of certain items described in our press releases and our SEC filings. Reconciliations of these and other non-GAAP measures to the most comparable GAAP measures are included in our press release, our SEC filings, and the investor presentation posted on the Investors section of our website. Thanks, and now I'll turn the call over to TJ. Thanks, Kevin, and good morning, everyone. I'm pleased to report that second quarter results exceeded or met our expectations for the quarter on all key financial metrics, and we delivered year-over-year quarterly operating income growth for the first time since 2021. We were encouraged by the continued sequential improvement in quarterly sales results in North America for the fourth consecutive quarter, as sales trends improved in both our stores and our digital channels. Our customers responded to new merchandise deliveries and events with particular success in the launch of our Victoria's Secret Dream Bra Collection, in apparel with our PINK Friday Back to Campus event in late July, and through consistent, steady improvement of VS Sport as we introduced the Featherweight Max Front Close Bra and a broader assortment of merchandise flow to stores and digital. Sales for the second quarter 2024 were $1.4 billion, a decrease of 1% to last year, and at the better end of our expectations for the quarter. In North America, the improvement in sales trends was evident in both our stores and in our digital businesses. Momentum experienced at the end of first quarter in April continued into the month of May. As anticipated, sales performance during our Semi-Annual Sale period in the June time frame was lower than last year, driven by fewer units on sale, particularly in PINK apparel. We saw strength in July, driven by the introduction of product newness with Victoria's Secret Dream Bra Collection in apparel with our PINK Friday Back to Campus event and consistent, steady growth of VS Sport. From a store's perspective, we experienced improvement in traffic, which outperformed the balance of the mall for the quarter and with meaningful outperformance in late July during PINK Friday. In terms of our digital business, traffic levels improved in the quarter and were up compared to the second quarter last year, while conversion was down in the quarter, in particular, during the Semiannual Sale period, when year- over- year, we had fewer units on sale in our digital channels. From a market perspective, third-party market data indicates the sales trend in the overall intimates market in North America got a little bit softer in the second quarter than what was reported in the first quarter. Our combined Victoria's Secret and PINK market share in the intimates category remained at 20%. We were encouraged to see our digital market share increase in both bras and panties, along with an overall increase in our sports bra market share for the second consecutive quarter. This was partially offset by a slight decrease in market share in the stores channel, where value or low-price points appear to be gaining share. From a merchandise category perspective for Victoria's Secret, our beauty business continues to be our best-performing category, with year-over-year growth for the fourth consecutive quarter, followed by strong acceptance of VS Sport as merchandise available for sale grew throughout the quarter in anticipation of an important event in Q3. In bras and panties, newness and innovation sold well, and several older legacy styles were exited or down trended during the spring season. PINK's sales trend overall improved in the quarter, both in total and in most major categories. Specifically, in apparel, we were encouraged by the improving customer response to product newness during our PINK Friday Back to Campus event in late July as we ended the quarter. This strength continued into August to start the third quarter as the Back to Campus event continued in stores and online. In addition to improving trends for Victoria's Secret and PINK, we experienced sales growth in the high single digits for both our international business and Adore Me. International sales in the second quarter were driven by year-over-year growth with our franchise and travel retail partners. Our performance with our partner, Next, was also strong in the U.K., and we grew profitability in China, where our top-line trends were challenged by the overall market and economic softness in the country. We're optimistic about sales, profit, and growth opportunities for all of our partners around the world. The retail environment in North America was challenging, and the promotional environment remains competitive, but improving product acceptance and disciplined inventory management led to adjusted gross margin dollar growth and eighty basis points of adjusted gross margin rate expansion year- over- year in the quarter. Adjusted SG&A dollars were down in the quarter, leveraging twenty basis points compared to last year and coming in better than our guidance due to discipline and proactive expense management initiatives to drive incremental efficiency within our operating model. You may recall at our Investor Day, we committed to transforming the foundation of our company and established a $250 million three-year goal, and we are on track to exceed that goal. I believe we have demonstrated our commitment to focusing on efficiencies within our model and improving the cost structure of our business. Aside from the financials, over the last ninety days, we've executed several key actions in support of our strategy and brand positioning for the long term, including, in July, we introduced newness with the launch of the Victoria's Secret Dream Bra Collection, a collection of bras, panties, and sexy sleepwear that combines the ultimate experience in beauty and everyday comfort. Also, in July, we added a new style to our top-selling sports bra with the launch of the Featherweight Max Front Close Bra, where maximum support meets maximum comfort, now with an easy zip-front closure. Additionally, within the VS brand, we launched the Tease Sugar Fleur beauty collection, a limited edition version of our fan favorite, Tease. We continue to create meaningful and memorable connections with our customers, including the return of PINK Friday, the last weekend of July, as our collegiate customers get ready to head back to campus, and with the celebration of National Underwear Day in early August. You may have heard the Victoria's Secret Fashion Show is returning on October 15 in New York City with an amazing cast of talented women. The show's return will deliver precisely what our customers have been asking for: glamour, runway, fashion, fun, wings, entertainment, all through a powerful, modern lens reflecting who we are today, and we continue to further develop our understanding of our Victoria's Secret and PINK customer through our multi-tender loyalty program, which has now been active for just over a year. We have 32 million members who drive about 80% of our sales on a weekly basis. Through insights and data, we are focused on turning our understanding of our customers into world-class, seamless customer experiences. As we look forward, we're encouraged our North America business trends have continued to improve as we've moved through August and the start of the third quarter. Early customer feedback on fall assortments is encouraging for both the Victoria's Secret and PINK brands, and our beauty business has continued solid performance and is driving traffic to our stores. Strategically, we have several exciting events planned for the balance of third quarter, including a major VSX sport launch and the return of our Victoria's Secret Fashion Show to kick off the all-important holiday season. While we're optimistic about the positive signs we're seeing in our business, we recognize the consumer environment remains challenging, and our customer is pressured economically. We remain focused on what we can control, which is leveraging our market position in intimates and delivering on multiple initiatives to drive growth in our business over the longer term. Today, for fiscal 2024, we are raising our financial forecast to reflect Q2 and spring outperformance to our original expectations, and also some level of modest improvement in our fall assumptions. For the year, we now expect sales to be down approximately 1% to a comparative 52 weeks from fiscal 2023, compared to prior guidance of down low single digits. This forecast reflects sequential improvement in North America, along with continued strength in our international business, and tracks in line with the positive trajectory we've been discussing throughout 2024. At this forecasted level of sales, we expect our adjusted operating income in 2024 to be about $275 million-$300 million, compared to prior guidance of $250 million-$275 million. We also now forecast our adjusted free cash flow in 2024 to be approximately $200 million-$225 million, compared to prior guidance of $175 million-$200 million. For the third quarter of 2024, we're forecasting sales to increase low single digits compared to sales in the third quarter of last year. And at this level of sales, we are forecasting a third quarter adjusted operating loss in the range of $40 million-$60 million. And finally, we're sure you also saw our recent announcement regarding the appointment of Hillary Super as our next CEO, effective September 9. Once again, we want to thank Martin for his time with the company and his support, and we're excited for Hilary to take us into our next chapter. Thank you. That concludes our prepared comments, and at this time, we'd be happy to take any questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one and record your name clearly when prompted. To withdraw your question at any time, you may press star then two. As a reminder, we ask each participant to limit themselves to one question and one follow-up for ample time to respond to each participant that may wish to participate in this portion of the call. Our first question comes from the line of Ike Boruchow with Wells Fargo. Your line is open. Hey, good morning, TJ. Congrats on the results. Two- Thanks. - two for me. Just first, real quick on the model. You talked about international up high single digits. Sounds like you're confident there. Can you just tell us what you're expecting from the international segment in the back half of the year? And then, could you just elaborate further on the promo environment that you're seeing and, and what you're basically baking into your plan? I'm most curious what kind of promo slash, you know, gross margin outlook, you could maybe share with us for the fourth quarter, specifically. Thanks. Yeah, thanks for the question, Ike. You know, first off, we continue to be very, very excited about our international business, really all around the world. As I mentioned in our prepared remarks, both the travel retail, as well as franchise businesses were the strongest in second quarter. We continue to do very well with our partners in the U.K. And the one area of the international business that softened a bit is in China, which is, I don't think, unique to our business. You know, there does appear to be a more pressured consumer there in that country at the moment. As we look forward, I would expect more of the same from our travel retail and franchise partners in the third quarter, as well as our partners in the U.K. I do think there's some timing on promotional events in China and some events that are more national in nature from a e-commerce perspective, that will likely get pulled into third quarter because of the calendar shift, so third quarter for our international business might be a little bit better than fourth, but I think that's largely due to calendar shifts in and around the China business. From a promo perspective, as we look at third quarter and fourth quarter, you know, our guidance assumes much of the same that we've incurred here in the front half of the year. We do think it will continue to be promotional. We're prepared to be more promotional, if need be, in the third and fourth quarter to drive our outcomes. I think what the business has gotten much, much sharper with is utilizing key, key areas of the business. I mentioned the beauty business as a traffic driver. You've seen us be very successful leveraging our panty business as a traffic driver. Clearly, the size and growth of our loyalty program is also supporting level of traffic growth. We're seeing that customers inside our loyalty program, now that we have some annual data, are actually shopping more year-over-year and spending more year-over-year. That's a really good sign for us in terms of product acceptance and how we're reaching them, so I do think each of the three of those items I mentioned have the opportunity to drive traffic in our business and might lead to a little bit more promotion here in the fall season. But it, you know, coming back up to a high level, I think the most exciting part about our business is really the early merchandise acceptance to newness, particularly in the VS and PINK brands. You'll recall that if you go all the way back to almost a year ago now, when we were in New York for our Investor Day, and the team laid out some of the strategy from a merchandising perspective and the newness that would be coming and some of the adjacent category expansion work that would be coming, it's now starting to show up in stores here in July and August, and clearly, something is working. We're excited about that. We think we're very early in that process, and again, merchandise, product and newness, ultimately, we think will win the day in the back half of the year. Thanks for the question. Could you say if gross margins will be up or down in the fourth quarter? Gross margins are guided to be up in the third quarter. I'd say embedded in the model is the rate might be down a little bit in fourth quarter, principally because you'll recall we had an extra week in our results last year, and obviously, an extra week of selling and leveraging B&O has a pretty meaningful impact on margin rates. But I would suggest from a merchandise margin rate, when we think about, you know, the fourth quarter compared to last year, it might be down a little bit, but the gross margin rate being down is more about the B&O rate than anything else. Perfect. Thank you. Yep. Thank you. Our next question comes from Alex Straton with Morgan Stanley. Your line is open. Great. Thanks so much. I just have a couple for you both. So just on the sales guidance raise for the year, I know you said, TJ, that that embeds, you know, the back half outlook being slightly better than previous. Can you just talk to us about where you've grown more optimistic, either by banner or geography or category, just so we understand that a little bit more? And then just a quick follow-up on your promo color that you just gave, which was super helpful. I'm just wondering, bigger picture, do you feel like you guys are at the right promotional levels, or is it still too elevated compared to what you think of as, like, a steady state level for the brand? Thanks a lot. Yeah, thanks for the question, Alex. I think you raising the sales guide for the year was predominantly the spring outperform, you know, coming in at the better end of the range, two quarters in a row, obviously pushed the year up a little bit in terms of dollars. I'd say, generally speaking, that the sales estimates for the balance of the year are largely unchanged. You know, where the model probably got a little bit stronger would be below the sales line and some of the margin elements, or particularly from an expense standpoint, the teams continue to do a great job managing costs and managing inventory and cash. You know, I think from a, what am I kind of most encouraged by, I'll just reiterate what I mentioned, that, you know, product acceptance early in both the Victoria's Secret and PINK brands has been very encouraging. As I mentioned, we've been waiting for this inflection moment here in July and August for a long period of time, and the newness that we were expecting, both in intimates and adjacent categories to intimates, has shown up and is doing well. I think that's the single most encouraging part of what we're seeing in the business. And, you know, the team that has been working on that tirelessly has done a really, really good job. I think from a promo color and kind of, you know, back half of the year or just general discounting levels, it is true our discount rate is up a little bit year on year. I think it's also true that, we don't believe that we should be at this discount rate, forever and ever. I think this is a reflection of the environment. It's a reflection of where we are in terms of the evolution of the merchandising assortments and making sure that we're getting enough customers across the lease line or to our site for trial of the newness that the teams have delivered. But, you know, coming out of the holiday season and going into next year, I think we would all like to believe that we could be a little less promotional as a brand, and I'm sure we'll be working towards that. I do think it's important to highlight, and I've mentioned this on previous calls, that we do have a fair amount of testing rigor around promotionality. And what I mean by that is we do have testing control groups or holdout groups where we are less promotional. And in the current environment, what we're seeing is the promotions matter. Promotions matter to the customer, they're accretive to sales and accretive to margin dollars. So again, for the moment and where we are in the evolution of merchandising and where we are with the customer, we think the promotions make sense. Longer term, I think we would all like to be a little less promotional than we are today. Great. Good luck. Thanks, Alex. Thank you. Our next question comes from Corey Tarlowe with Jefferies. Your line is open. Great, thanks, and good morning. So TJ, I wanted to ask about PINK, because you highlighted an improvement there, and I know that you infused a fair amount of newness in that segment. Could you talk a little bit about what you feel is working with that segment and what you think the trajectory might look like into the back half? Thanks so much. Yeah, thanks for the question, Corey. And you know, it's we've been looking forward to talking about the PINK business in a positive light because there's been a tremendous amount of work to get us here. I think in summary, you know, tees, tanks, dresses continue to start off well for the business in July and August, around the PINK Friday event. And as we deliver more and more newness and capsules to the front of the store, we're seeing good customer response. If you think about what you see on the front table, particularly end of July and early August, a fair amount of stores had sellout activity, but tees, tanks, and dresses were some of the early good winners for the business. You might have seen some denim shorts on the front table here in the third quarter, different types of pant inventory available for sale. I'd be remiss if I didn't mention, you know, the Wink Bra that delivered early in the season that has continued to sell through well. I think there are a number of different category examples, Corey, that give us optimism as we move into the back half of the year, that there's more opportunity to come with PINK. You know, for back to school, I'd be remiss if I didn't mention we actually had backpacks this year, to drive customers to the store and to get that basket started and use it as a promotional item. So backpacks for back to school is a pretty novel idea, and the teams have done a good job executing against that, and it's been very well received. I think maybe one of the most encouraging parts, and I know you're in stores almost every day, if not every day, but for those that are in store, particularly end of July and for back to school, seeing a younger customer return to the PINK side of the store was very encouraging for our stores team and our merchant team. So getting back to that younger customer in that 18-22- year-old age demographic. You saw significantly more of that type of foot traffic in our stores in late July and August than maybe you have in prior seasons. So a lot to like about what's happening so far in PINK, but more to come. Great. Thanks so much, and best of luck. Yep. Thanks. Thank you. Our next question comes from Simeon Siegel with BMO Capital Markets. Your line is open. Simeon, your line is open. You may need to unmute yourself. All right, I'll go to the next question. Our next question comes from Brooke Roach with Goldman Sachs. Your line is open. Good morning, and thank you for taking our question. I was hoping you could speak to the drivers of the better SG&A cost control that you saw in the quarter. Could you provide a few examples of where you're finding those efficiencies? And then as you look ahead, how are you thinking about the cadence of SG&A dollar growth in the back half of the year and any additional levers that you might be pulling there? Yeah, it was a little soft, but I think you were asking about cost opportunities and kind of what drove the outcome in second quarter and our outlook for the balance of the year. I think that's what the question was. Brooke, there were a number of different areas within the business. I wouldn't want you to think that it was any one big thing that drove the cost outperformance in second quarter. I think the best way to think about it is the teams have rallied around keeping costs under control as we've kind of come into this inflection point. They understand that driving profitability is important while we're in this inflection moment, and keeping costs under control is one thing that we can do to help in that regard. There are a number of different areas throughout the business, whether it's, you know, closely monitoring travel and headcount, or whether it's really looking at, you know, our ship commitments and promise dates and how we deliver to the customer differently from a digital and distribution standpoint, or whether how we're managing our store payroll or what we're expecting of our stores in terms of changes and frequency of change and kind of monitoring that closely. There are a number of different areas throughout the business where we were able to keep costs in check here in the second quarter. Have every expectation that will continue on into the third quarter. You've probably worked through your model at this point, and the leverage that we're guiding to, on the sales we're guiding to, has SG&A dollars relatively flat year-over-year. And I'd expect there'll probably be a little bit of growth in SG&A dollars, potentially as we move into the fourth quarter, when you account for the extra week last year. That growth in fourth quarter, you know, candidly, is probably as much about the good start to the season and the expectation that, you know, we will be, you know, providing for more incentive compensation in the back half of the year than last year than anything else. We're not doing anything differently or adding costs to the business, in the fourth quarter differently than we have in any prior years. So I feel very good about the cost outlook. And maybe, again, most importantly, I just want to underline that this is something that the teams have rallied around. It's not always the most fun part of what we do, but it's necessary in the environment that we're in. And this has been a multi-year journey. This isn't something that's been new to VS & Co. in just the last quarter or two. This has really been something we've been after for a while. So feel very good about how the teams are managing cost and managing inventory. You know, you didn't necessarily mention, but I'll mention it anyway. You know, we do have costs that sit inside of the gross margin component in the business, buying and occupancy costs, and those costs were down year-over-year, and I expect they would be, you know, flat to down as we move through the balance of year. So again, much the same disciplines around all areas of the business, plus some pretty meaningful positive movement from a I'll call occupancy cost, meaning lower rents, working on locations and getting better terms on a go-forward basis, looking at things like co-tenancies as anchors have gone out and things like that. So really, there's no stone unturned right now from a cost perspective to keep things heading in the right direction. Great. Thanks so much. I'll pass it on. Yep. Thank you. Thank you. Our next question comes from Mauricio Serna with UBS. Your line is open. Great. Good morning. Thanks for taking my questions. I wanted to ask about, you know, the third quarter guidance. You know, it calls for a sequential improvement. I just wanna understand, like from a business, from a segment standpoint, what segments are driving that improvement? Is it, like, across the board or anything in particular? And then, like, as you think about that improvement, just focus on the North America intimates market. You were mentioning that it got softer, slightly softer in the second quarter. What are your expectations for, like, the industry growth of the North America intimates industry growth for the second half of the year? Thank you. ... Yeah, thanks for the question, Mauricio. When we think about third quarter, if I could just maybe stay at a high level for a moment and use big round numbers. We were down 1% in Q2 as a business on the top line. We've guided to low single digit growth in the third quarter. So 1% to 3% is how we define low single digits. So if I just take the midpoint of that at plus two, so really what we're talking about is going from down 1% to +2% in the third quarter. In our prepared remarks, we talked about the retail calendar shift that is happening for us and all retailers this year, and as it relates to the third quarter, that's about two points of positive impact. Really, that plus two in my example, without the retail calendar shift, would be more like flat. On an apples-to-apples basis, you might be talking about going from down one to flat. Again, on a reported basis, would be going from down one to plus two because of the calendar shift. Again, to be clear, the calendar shift is really about we move the first week of November last year into the third quarter this year. First week in November, as you know, is a big holiday week or holiday volume starts to ramp in our business. You can kinda hopefully visualize the positive impact there. To the heart of your question, what's gonna drive that? From our view, we're already seeing some of that in our business in the month of August. I would expect the month of August will be positive in the low single digits, if not a little bit better, based on the strength of Pink Friday and National Underwear Day to start off the month, and then just better core business here as we're finishing the month. So feel good about August. What's driving that, and what we anticipate will drive the third quarter, is all about newness and product, product acceptance, major VSX launch coming in September, kickoff at the fashion show, which will be commercialized this year, live and commercialized this year, to drive, hopefully positive results from a sales perspective, and really kick off the holiday season for us in a major, major way. So that's what we anticipate will drive from a product perspective. We do think that North America, Pink, you know, Victoria's Secret and Pink, the brands in North America, again, business gets sequentially better from second to third quarter. Again, that would be the fifth quarter in a row. I do think North America, in total, will get closer to flat, in the quarter or maybe down slightly, but again, sequential improvement or quarter over quarter for the fifth quarter. And then we have every expectation the international business and our partners at Adore Me will continue to grow in the high single digits or better. So those are kind of the building blocks of third quarter, but I think it's important to understand the calendar shift does need to be accounted for there. You know, on the last part of your question as it relates to the domestic market share, you know, coming into the year, we had to make some assumptions on the domestic intimates market and performance. We said at that time, we expected the market to be softer here in the front half of the year and then stabilize in the back half of the year. I guess that's as good of an assumption as any still. Maybe it continues to be a little bit softer in the back half of the year. I'm not quite sure. But what I am confident in is here in the second quarter, where the market was tougher, our business has still got better in North America. And even if in the third quarter, the domestic intimates market is difficult, I'm seeing our business get better in the month of August, and we have every expectation it'll get better in September and October. So while we'd prefer it to be a tailwind, we just have to kinda keep our heads down and push through it with all of the newness, innovation and, you know, initiatives that we're launching in our business. So, feel comfortable with where we are to start the Q3 timeframe, and we'll see how we do in September and October. Got it, and just a quick follow-up on gross margin. You know, one of the things I noted in the commentary provided for Q3 is you call out, you know, transportation costs on ocean, air. Maybe you could elaborate a little bit more, like what kind of impact are you expecting in Q3 gross margin, and if that's only like a one-time thing, or is this something that we should be maybe considering for, you know, Q4 and maybe going into fiscal year 2025? Thank you. Yeah, I wish my crystal ball was that clear on forecasting transportation rates. I can only see, you know, for sure, a month or a few weeks out, Mauricio. But what we really saw was that, you know, transportation rates were down significantly as we exited 2023 and in the front part of 2024. And those transportation rates were being down are what rolled through our margin and was a tailwind in the spring season. As we started to work through second quarter in the June, July timeframe, and even here in August, what we've seen is that, you know, transportation rates, whether it's ocean or air, start to spike in the spot market, for a number of different reasons, some capacity related, some, you know, movement between East Coast and West Coast related. But regardless, we're seeing the overall rate environment... you know, pick up here over the last few weeks and the last couple months. Our expectation and our guidance is that likely continues through the balance of the year. So what was a tailwind will likely be a little bit of a headwind as we move into the fall season and potentially even, you know, a little bit more than that as we move into fourth quarter. Where it goes next year, you know, your estimate might be as good as mine, but, here in the near term, in our guidance, we've assumed that transportation rates are a bit of a headwind in the back half of the year. Got it. Very helpful. And that's also why you think, like, merchandise margins in Q4 might be down a little bit? It's certainly an element that is new and different. I mean, last year, transportation rates were probably close to a historical low level. And as I mentioned, since they've been spiking here of late, we do think it likely continues through the fourth quarter. So that's probably one change from maybe our beginning of year expectation to where we are currently. I think the other piece that I'd be remiss if I didn't mention, and you'll recall, you know, fourth quarter last year is when we started seeing meaningful cost of goods sold reduction or reduction in average unit costs. And that's something that the teams had been working on, production, sourcing, merchant teams, and others had been working on. It's something that's part of our Transform the Foundation goal. You may recall us talking about an annual opportunity of, you know, probably $130 million-$140 million or more in the form of lower unit costs. That kicked off last year in fourth quarter. And obviously, we'll have, you know, our full 12 months here wrap up in third quarter of this year. So we will start to go up against that. But in terms of, you know, year-over-year change, you know, the transportation rates is probably the one piece, Mauricio, that's certainly different. So going from historic lows last year in fourth quarter to a spiky market here in the fall season, we've tried our best to reflect that in the fourth quarter guide. Got it. Understood. Very helpful. Best of luck. Thank you. Thanks. Thank you. Our next question comes from Simeon Siegel with BMO Capital Markets. Your line is open. Thanks. Hey, guys. Morning. Hope you had a nice summer, and congrats on some really nice improvement. I apologize, I got disconnected. So if you already answered any of these, just disregard, and I'll get it from the transcript. Sorry about that. All right, so could you quantify the puts and takes behind the gross margin improvement this quarter and how you're thinking about those drivers going forward? What do you expect buying and occupancy dollars to look like going forward, recognizing the comment from this past quarter? And then with the fashion show returning, how are you thinking about marketing dollars this year? So if you said any of those before, I'll get them again. And then just higher level or I'll get them from the scripts. You don't have to say them again. And then just higher level, the EBIT dollar growth was great, so that was really encouraging. Could you speak to your comfort in continuing that inflection going forward, or is this the beginning of that turn? Thank you. You made up for lost time there, Simeon. You got. I think I got three or four things. I'll try to address all of them, but the puts and takes here in second quarter from a margin perspective, as I just mentioned with Mauricio, you know, significantly, up to last year from a rate perspective, up about eighty basis points, gross margin dollar growth, in excess of sales, activities, so good performance in the quarter. The teams managed inventory. Inventories ended down 2% in line with our guidance, so everything seemingly moving in the right direction. You know, the positives here in Q2 were mostly about the cost of goods sold work that I mentioned in lower average unit costs, because of the lag and how kind of things sell through from a margin perspective and how we recognize cost of goods. We still did have some favorable transportation activity from the front half of the year flowing through in the second quarter. Again, it gets more challenging as we move forward. Those were probably the two good guys in the quarter, from a margin perspective. And then a third good guy would be just overall, for the second quarter, buying and occupancy dollars were actually down year-over-year. And again, that helped flatten out the B&O impact on a down one sales number. You know, the one item going the other way is it was a promotional quarter across our category and across retail. I mentioned earlier, our discount rate was up a little bit year-over-year. We did our best to try to target that discount rate in a couple of key areas, namely beauty, namely panties. So this discount was not about liquidating poor performing inventory at all. This was about trying to drive trial and traffic. You know, as we look forward, from a margin perspective, guiding the margin rate up year-over-year in third quarter, again, cost of goods sold will be the primary driver there and lower average unit costs. We'll start to see transportation rates turn from a tailwind to a bit of a headwind in Q3. And then I'd say from a promotion standpoint, probably pretty similar year-over-year or maybe slightly more promotional in our guide. So just, you know, same sort of elements, just, you know, moving slightly one way or the other. From a Buying and Occupancy standpoint, I would expect dollars to continue to be flat or down here in the third quarter and likely in the fourth quarter as well. Again, to Brooke's question earlier, we manage all costs in our business, not just the ones that show up in SG&A, and the team's doing a great job in that. So I feel good that, you know, on, you know, a low single-digit sales increase will leverage B&O with BNO dollars being down. So those are kind of some of the puts and takes from a margin perspective. You might not have picked up on, you know, I think Mauricio's last question on Q4. We talked about the margin rate in Q4, likely being down a little bit as we anniversary last year's cost of goods sold work, but probably more importantly, just some of the expectation that transportation rates could remain elevated for the balance of the year. Your question on marketing, I'd say we're spending an appropriate level of marketing from our view. Yes, our marketing dollars in total were elevated a bit last year with the world tour. This year with the fashion show, the fashion show is not the same cost as the world tour. It's lower than the world tour, so overall, marketing dollars will likely be down year-over-year, but again, from our view, still an appropriate budget. When we look to the third quarter, we're really excited to see what type of not just positive sentiment. We've already got a pretty good indicator on that based on yesterday's Instagram post of announcing the date and a couple of key people associated with the program. So very positive sentiment. Customers are super excited about it. We're really looking forward to seeing what we can do to generate new customer trial through the fashion show and through the launch of the VSX Sport here in third quarter. So a lot to like about what's coming from a marketing perspective, and I think I lost the last question. Just the idea of EBITDA dollars were growing, they inflecting, so just comfort in that continuing, this being the beginning of a trend, because that's obviously very encouraging. Yeah. So from an, you say EBIT, we speak in operating dollars. Since a lot of our incentive programs are tied to operating profit dollars, yes, the inflection point for the first time since really Q3 of 2021, I think you caught it right in your note this morning, was the last time operating income dollars were up year-over-year. Our guide for Q3 suggests that should continue into this quarter. You know, fourth quarter is a little bit tough to look at because of the extra week year-over-year, which we did quantify, that, you know, drove about $20 million of operating income last year, due to the extra week. So, we've got some work to do to get fourth quarter back to, you know, last year's fourth quarter from an operating income perspective. But there's a lot of dollars at play there from a volume perspective. You'll note, in squeezing the model a little bit, our sales expectation for Q4 is a little bit lower from a growth perspective than Q3. Again, Q3 being aided by the calendar shift. Calendar shift kind of works against you in Q4. Again, that November week one moves into Q3, and you replace it with a February week, and those volumes are not the same. So we've got a little bit of work to do yet on Q4, but, you know, I think the biggest opportunity there for us is, you know, such strong early acceptance of, you know, new product on both the VS and PINK side, really is where the opportunity sets to drive better sell-through, higher sell-through, better margin, lower promotion, or all of the above. So, a lot to like about how we're positioned for the balance of this year. Hey, Amanda, we're running up on time here. Let's go with one more question, please. Thank you. Our last question comes from Jonna Kim with TD Cowen. Your line is open. Thanks for taking my question. Just a quick one for me. You mentioned Adore Me grew high single digit this quarter. Just curious, what were the drivers behind it and what you're assuming for the back half for the brand? Thank you. Yeah. Thanks for the question, Jonna. In the Adore Me business, I think most people know there are actually two brands which fit inside the Adore Me business as we report it. There's the Adore Me brand, which focuses primarily on intimates, but does present other categories. And then there's a second business called DailyLook, which also you know features a home try-on model, but more focused on the apparel side. You know, in the last couple of quarters, we've seen outsized growth in the DailyLook business that's driving the growth you know in total or overall at Adore Me. So having two different businesses, two different brands inside of that business, gives the team the opportunity to toggle investment dollars from a marketing perspective into what's trending, what's working best, and I think they're doing a really, really good job of doing that. So putting the investment where the customer is in the near term. So the DailyLook or apparel side of the business is driving the majority of the growth there. Having said all of that, they're managing the total business to high single digit growth on the top line and pretty meaningful growth here in the second quarter from an operating income perspective. Looking forward, I'm comfortable that they have growth plans here for the third quarter. You may recall that they actually are on a one-month lag to our business, so we report them on a one-month lag, so we've already seen, you know, really the first half of their third quarter, and the business is off to a good start and is on forecast to not only grow in the top line, but be profitable in the quarter again, so I'm happy with where we are in the near term in the Adore Me business. Great. Thank you. All right. Thank you, everyone. That concludes our call for this morning. We appreciate your interest in VS. Have a great day. Thank you. Thank you. Thank you for participating in the Victoria's Secret & Co.'s second quarter 2024 earnings conference call. That concludes today's conference. 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