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 third quarter 2024 earnings conference call. Please be advised that today's conference is being recorded. All parties will remain in a listen-only mode until the question-and-answer session of today's call. I would now like to turn the call over to Mr. Kevin Wynk, Vice President of External Financial Reporting and Investor Relations at Victoria's Secret & Co. Kevin, you may begin. Good morning and welcome to Victoria's Secret & Co.'s third quarter earnings conference call for the period ended November 2nd, 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 statement found in our SEC filings and in our press releases. Joining me on the call today is CEO Hillary Super and CFO Tim Johnson. We are available today for up to 45 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 release 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 investor section of our website. Thanks. Now I'll turn the call over to Hillary. Thanks, Kevin. Good morning, everyone, and thank you for joining us. I'm pleased to be with you and honored to be leading these iconic brands at this pivotal moment in their evolution. Today, I want to talk about where we are in our journey, our results from Q3, our outlook for Q4, and finally share my 90-day insights. But first, I want to thank the entire VS&CO team for such a warm welcome over my first three months. I have had a very effective onboarding and have been energized by their love for our customers, our brands, and our company. Their hard work and commitment are behind the impressive results we are sharing today, and I'm proud to be on this team with them. As you know, when we stood up VS&CO as an independent business in 2021, we also undertook a transformation focused on strengthening the core of our business and establishing an operationally sound organization. Today, our strong Q3 performance indicates we've reached an important milestone in that transformation. In short, it's working, and we're starting to see the results. Q3 sales growth was well ahead of our expectation, driven by broad-based strengths across our business: all regions, all channels, all major merchandise categories, and importantly, all brands, Victoria's Secret, PINK, and Adore Me, leading to our best quarterly sales growth performance since 2021. I'm particularly optimistic because these results were powered by emotional product she loves and clear, elevated brand storytelling. They were supported by exceptional shopping experiences, and I believe that VS&CO is the best experience in them all and has been significantly enhanced in digital. Lastly, our marketing and brand messaging integrated seamlessly with those shopping experiences, resonated deeply with existing customers, and, as I saw myself in stores across the country, attracted a new generation of customers to our brands. So what did that add up to? For the third quarter, sales increased 7% in total, with mid-single-digit growth in North America and 20-plus% growth from our international businesses. Strong sales, well-managed operations, and disciplined inventory management led to healthy margins and a lower operating loss than originally forecasted. In North America, Victoria's Secret and PINK had positive year-over-year sales growth across all major merchandise categories, and both our stores and digital businesses grew in Q3. Traffic was up compared to last year in both channels, with significant outperformance in our stores compared to the balance of them all. Third-party market data indicates that sales in the overall intimates market in North America was down low single digits in the quarter, though our intimates business was positive in the quarter, which was encouraging. Victoria's Secret sales increased last year, and sales trends for all merchandise categories improved. Our beauty business continues to be our best-performing category, followed by casual sleep and intimates, which also experienced growth. These categories are must-win for holiday, and our current trends are very encouraging. PINK sales trend also improved significantly in the quarter, with sales for the brand increasing compared to last year. Specifically in apparel, we were encouraged by improving customer response to our PINK Back to Campus event in August and early holiday selling in October and Q4 to date. Apparel experienced a significant trend change in the last four months and is a key opportunity to reinvigorate the PINK brand going forward. Outside of North America, our international business continued its strong performance in the quarter, with system-wide retail sales up mid-teens, driven by growth with our franchise and travel retail partners, and in our joint venture in China with our partner, Regina Miracle. During the quarter, I had the opportunity to meet many of our international partners ahead of the VS Fashion Show. I was inspired by their passion and commitment to our brands, and I share their excitement around our sales, profit, and growth opportunities around the world. Our sales and financial performance over the last 90 days was driven by several key initiatives aimed at repositioning the business for success in holiday and beyond, including creating meaningful and memorable connections with our customers through the return of PINK Friday, the last weekend of July, as our collegiate customers headed back to campus and with the celebration of National Underwear Day in early August. We relaunched VSX, sport done in a uniquely VS way, combining performance, comfort, and fashion with innovative designs that leverage body mapping and superior fabrics. VSX is not a collection. It's a lifestyle with adjacent apparel categories that will drive higher shopping frequency and engagement. We kicked off the holiday season with the return of the VS Fashion Show in October, bringing fashion to the screens of millions of viewers around the world. For the first time ever, every look in the show was shoppable, allowing customers to purchase their favorite runway looks from our holiday assortments. In addition to driving brand awareness leading into holiday, the show drove brand relevance, putting VS at the center of culture and fashion conversations with about 34 billion media impressions, four billion social media impressions, and an increase of more than four million followers on TikTok. Beauty is critical to our holiday success, and we started the season strong with compelling, unique giftables like the Bombshell Advent Calendar and limited-edition Bombshell Midnight Holiday Fragrance to ensure VS Beauty is at the top of everyone's holiday wish list. Finally, we continued to further develop our understanding of our Victoria's Secret and PINK customer through our multi-tender loyalty program, which now has approximately 35 million members who drive over 80% of our sales on a weekly basis. As we look forward, we are excited to see that our momentum from the third quarter continued through Black Friday and Cyber Monday. Our merchandise offering and giftable product assortments are clearly resonating with the customer and driving traffic both in stores and online. The strong product acceptance, supported by our best-in-the-mall in-store experience and dozens of digital enhancements, are driving solid conversion and basket size. And while more anecdotal, I would be remiss if I didn't mention that as I've traveled stores over the last few weeks, I've noticed ours are often the busiest in the mall. We recognize that we have several large volume days and weeks in front of us in December, and we are encouraged by the positive sales trends quarter to date and remain focused on winning each moment in the days ahead. For the fourth quarter 2024, we are forecasting net sales to increase approximately 2%-4% to a comparative 13 weeks from the fourth quarter 2023. Our forecast assumes trends in North America remain relatively consistent with the third quarter, adjusted for the timing impacts and the retail calendar shift. At this forecasted level of sales, fourth quarter 2024 adjusted operating income is now expected to be in the range of $240 million-$270 million. For the full year, we are increasing our sales and profit forecast to reflect third quarter outperformance and the positive start to the holiday season in November and early December. We now expect sales for the year to be up approximately 1%-2% on a comparative 52 weeks from last year. At this forecasted level of sales, we now expect adjusted operating income for the year to be in the range of $315 million-$345 million. So in summary, we're pleased with Q3 and optimistic about Q4. Now, as promised at the start of this call, I'd like to share a few observations from my first 90 days. In addition to being focused on executing and winning holiday, I've been listening, learning, and thinking deeply about how we can supercharge the best of who we are. Much of my time has been spent with the product and brand teams and traveling to stores, meeting our wonderful associates who are true ambassadors for our brands. Everything I've seen and learned so far has made me proud of who we are and confident in our future. As I mentioned previously, the team has established a solid foundation that we can build upon and a business that has momentum and is showing early signs of the growth we all believe is in our future. I believe our biggest opportunity is to put the best of who we are back at the center of how we work in three ways. Number one, the customer, making sure she is at the heart of every conversation, every decision, everything we do. We are doing well with our existing loyalty customers, but I see opportunity to attract new customers by making sure our brands, products, and go-to-market strategies are in sync with the fast pace of culture and dialed into the ever-evolving world she lives in. Number two, brand and product. We need to continue to differentiate PINK and Victoria's Secret in every way, from product to marketing to in-store and online experiences. Speaking of PINK, I'm all in, and I see a lot of white space with the brand and opportunity to reclaim our market share in apparel. I'm impressed with the work the team has done already to improve the PINK business, and I see opportunity for even more brand clarity and elevation, as well as a go-to-market strategy that is mobile-first and culturally connected. And number three, innovation and brand heat. Victoria's Secret and PINK can and should not only be in the cultural conversation, but also creating cultural moments through products and marketing. We have proven we can do it both with big events like our VSX launch and the return of the fashion show, and with viral moments like outfitting Sabrina Carpenter for her current tour and our viral satin bow PJ set. There is a lot of opportunity there, and we have the talent and brands to do it. Customer, brand, innovation. Watch for us to continue to leverage those areas to grow, deliver shareholder value, and most importantly, delight her. That includes this month as we execute holiday. Thank you. That concludes our prepared comments. At this time, we'd be happy to take any questions you may have. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one and record your name. Again, please press star one if you would like to ask a question. Our first question comes from Simeon Siegel with BMO Capital Markets. Your line is open. Thanks. Hey, everyone. Morning. Welcome, Hillary, and nice job on the progress, so from the outside, it kind of feels like a switch has been flipped, but obviously there's much more to it, so it's amazing to see the resonance, PINK Back to Campus, VSX launch, fashion show, but can you speak to the why the seemingly sudden resonance? How are you thinking about product versus marketing versus promotions at this point as the brands do appear to be regaining that perception among consumers? And then I don't know if this is Hillary or TJ, but we've gone back and forth over history with co-located versus independent stores. You're talking about closing, I think, 42. I think there's 35 renovations. You're talking about consolidating the co-located stores. Any color you can share on what you expect that would do to productivity and profitability as that progresses? Thanks very much. Hi, Simeon. Thanks for the question. I'll start off, and then TJ can fill in anywhere that's necessary. So on your first question, Victoria's Secret first, our brand is about sexy, glamorous, accessible luxury, and I think that we were building towards that with the new team that was put in place about 12, 18 months ago, and that was in the works. I think the fashion show really doubled down on that. And when you look at what's working in the business, it is exactly that. It is sexy, glamorous, and accessible luxury. In terms of the sexy side, it's really the bra franchises such as Dream and Wicked and lots of shine in the intimates assortment that is driving that success in beauty. Beauty is very broad-based success, but what's really exciting to me is the upper price points in the beauty assortment. It's very, very luxury, and we're talking $100, $200+ dollar things that are doing really, really well. And then branded goods, so things that are literally logo, which to me really indicates strong brand health, and the Heritage Stripe collection, which was in the fashion show and a huge part of our Q4 assortment. It's just incredible. It's a very, very recognizable VS, and I think not a perfect storm because it was very purposeful, but assortment strategy married with marketing strategy, married with a big upper funnel event, just really came together in a very powerful way. In terms of PINK, I think we're very much earlier in that trajectory. We've had a few fits and starts, but apparel being the big driver there, and I would say lots of virality through TikTok driving a lot of our success, a lot of heritage pieces such as the flare and branded fleece. And then as we moved into holiday, I would say shine in both brands is working across the board. So lots of positive things there. On your second question around stores, this is something that I'm thinking really just a lot about, especially as it relates to PINK and how we've pulled back on PINK. So we've been traveling stores really thinking specifically about that, and we're in the early stages of that. As you know, and we've reported before, Store of the Future has been successful on many, many levels, and the unit economics are quite positive. What I want to make sure is, one, are we delivering on the promise of sexy, glamorous, and accessible luxury in our store design, and maybe thinking about ways that we can power that up a little bit? And then number two, are we allocating the appropriate amount of square footage for each line of business? And with PINK specifically, how are we making PINK feel like PINK in those stores that are combined? That's what's on my mind, and I've left anything out, TJ, please feel free. No, I think you covered most everything we've been thinking about in terms of the future. I'd just say that, Simeon, to your question, the stores that we are closing this year and the plans that we have for next year, there's really two buckets. There are situations where we're actually just downsizing a store that already has a Victoria's Secret and a PINK, but the store was just too big from origination, and then there are situations where we're bringing a standalone store from Victoria's Secret together with a standalone store for PINK and make a combined location. In each of those situations, we are seeing not just a little bit of productivity improvement, we're seeing a significant amount of productivity improvement. So we may be going from either a standalone or combined situation where we have 15,000 or 18,000 sq ft in a mall down to 10,000 or 12,000 and seeing, again, a reduction in square footage of could be 25%, 30%, 35% and a productivity improvement that is larger than that and a profit improvement that's meaningful and an operational improvement that also shouldn't be overlooked in terms of how Becky and the teams can operate a combined location versus multiple. So there's a lot to like about it, but to Hillary's point, we do want to make sure that whatever we end up with in location in a store has both brands appropriately sized. Thanks a lot, guys. Exciting stuff. Best of luck for year-end and happy holidays to you and your families. Thank you. Thank you. Our next question comes from Brooke Roach with Goldman Sachs. Your line is open. Good morning. Thank you so much for taking our question. Hillary, you spoke about elevating brand heat through creating the conversation and leaning into select marketing opportunities. You've also mentioned TikTok a few times here this morning. Can you talk about what we should expect on the evolution of your marketing strategy? Where might you spend those dollars and this percent of sales that you might spend on marketing over time? And then just as a follow-up for TJ, can you talk a little bit more about the promotion plans that you have for holiday? If you continue to outperform your plans, what might we see in promo plans on a go-forward basis? Thanks, Brooke. I'm sure I'll start. So in terms of marketing spend, I would expect consistent marketing spend as we go forward, so no change there. It's really how we spend and how we bring things to market, and that looks different for Victoria's Secret versus PINK. The first thing that I would say is we need to be using the full funnel, and we need to be meeting the customer where she is, and that may be different for both brands. Victoria's Secret is we are the queen of the launch, and that's not going to go away, but we also need to think about product evangelism in Victoria's Secret, and that's really more of a mid-funnel idea, and then on the lower funnel, lots of segmentation and really thinking about our diverse audience of customers and how to reach them best. As it comes to PINK, I talk about TikTok a lot, and I spend a lot of time on TikTok myself, and that has really changed this customer base and the culture around her, and if you think about the inception of PINK, TikTok wasn't around, and this customer is much more sophisticated than she was at the inception of PINK, and she has access to ideas, fashion, and movements in real time, and we need to think about what that means to how we create content. Do we need campaigns in PINK, and how do we connect to her in an authentic way where she's living, and that is online, and so you'll see a shift over time in how we go to market in PINK. And then I think we haven't scratched the surface yet when it comes to collaborations and partnerships, and that's something I'm really interested in doubling down on. And I think the second part of your question, Brooke, on the promo piece, maybe I'll take third quarter first. I think from a promotional standpoint, we ran the promotions that we intended to from the beginning of the period through Q3. So nothing really changed meaningfully in the plan. But what we saw was the customer response to those promotions was much stronger than originally forecasted. And that contributed to the upside volume and the upside margin dollars, but it did mean that promotions were a little bit more of an impact to the rate. But again, our rate was still well within our range of guidance. As we think about fourth quarter, we actually think the promotional environment for us ought to be pretty flat year over year, meaning the dollars we put towards the promotions, the events we put towards promotions, recognizing we've got a compressed calendar even. When we put that all in the mix, we came into the quarter thinking the promotions would be relatively flat in terms of impact. Now, the strong business in the month of November, Black Friday, Cyber Monday, the follow-on after Cyber Monday, we've been very encouraged by. As we get closer and closer to December 25th and as we get closer and closer to ship cutoff in the next 11 days, obviously we're going to be looking very closely at promotions and is there an opportunity maybe to do a little bit less than originally forecasted just based on the strength of the business. But obviously we want to be very diligent about that. We want to test our way into that where possible, but I think from a promotional standpoint, relatively flat year over year in the fourth quarter here. Having said that too, I want to speak just a moment to fourth quarter margin because I know that some might look at it and say this is the first time that we've guided the margin rate down a little bit in the quarter for several quarters, first time in several quarters. What I want to say on that topic is, first off, the selling margin, so what the customer sees, what the customer pays, our selling margin will actually be up for the quarter. So the initial markup on goods, less the promotions, our selling margin rate will be higher year over year in the fourth quarter. What's pressuring our gross margin rate a little bit in the fourth quarter is really three things. First off, the transportation environment, both ocean and air rates are up meaningfully year over year. Last year in the holiday season, we benefited, or we all benefited as retailers from really trough pricing in transportation rates. Rates in ocean and air are both up year over year. Second piece that's impacting margin, the outperformance of the business has us in a place where we think that our incentive or our bonus expense in fourth quarter will actually be higher than last year and higher than our plans, which is a good thing for all those people who've been working incredibly hard to get us to this point. And the third piece that's pressuring margin a little bit in the quarter, I just remind that last year in the fourth quarter, we had an extra week of selling, and that deleveraging impact on really B&O is a challenge this year. So transportation rates, higher incentive comp, and the deleveraging impact of last year all are offsetting the selling margin, good guy, so to speak. So feel very comfortable with how the teams are executing all of this. Again, we've done a significant amount of testing, particularly for Black Friday and Cyber Monday, which proved to be very insightful, and it worked. So I feel like the teams are managing both inventory and margin here really effectively as we point towards the end of fourth quarter and holiday. Hopefully that helps. Great. Thanks so much. Best of luck as you go through holiday. Thanks. Thank you. Our next question comes from Alex Straton with Morgan Stanley. Your line is open. Perfect. Thanks so much. Congrats on a great quarter. I wanted to focus on the digital business. It seems like that had some real standout momentum. So curious what you attribute that to and what that percentage of the business can be over time. And then one quick secondary question is just on the recent momentum. Is that driven by a new customer, existing customer, or a combination of both? I'd love some thoughts on that as well. Thanks a lot. Yeah, I'll take the first part to that and then ask Hillary to chime in. I think from a digital perspective, Alex, I think whether it's digital or stores, it all starts with product. As Hillary mentioned in her opening comments, the strength of assortment year over year that the team has created, I mean, you know from following us for a while, we've been really, really looking forward to third quarter when a lot of those newness which showed up, and it showed up in a meaningful way, drove results. More newness in terms of what the new team has delivered in fourth quarter. Obviously, it is working for us, so it all starts with product. I think additionally, from a digital perspective, we've made multiple quarters in a row now of investments in people and process and technology to help drive the digital business. Just in the last quarter, a couple big engagement opportunities that went live for us was really badging on our site, keeping me signed in on our site, things like that that have both improved not just the conversion on the site, but drive an average basket size. And then I'd be remiss if I didn't mention from a traffic perspective, we don't talk a lot about this, but we brought some of our media buying and media operations in-house, so we brought it back from a third-party provider, brought it in-house. We believe we're seeing a much more efficient spend and better traffic results as a result of that. And then obviously at the end of October, traffic from the holiday set and the fashion show both were meaningful, strong moments for the digital business as well as the stores. I don't want to shortchange at all. We're seeing, as Hillary mentioned, significant traffic in our stores. We are outperforming mall traffic on a meaningful basis, day after day, week after week. We see that data live as it's happening, so we know we're getting better traffic off the mall than the balance of the mall. So a lot to like about the digital business, which was your original question, but also from a store's perspective. I guess from a customer point of view, whether it's new versus existing customers, you may recall last year around June 1st, we launched our loyalty program, and we now have over 35 million members in that program. So in a very short period of time, we've built a very large base of customers that make up over 80% of our sales on any given week. We're seeing that customer, so that's more of an existing customer at the moment, shop more often and spend more when she comes. That's a good formula for successful launch to the loyalty program. And then most recently, some of the market data insights that we get back from the team, particularly in the month of October, suggests that we saw new customer growth for really the first time in several months. So long way of getting there, but what I'm trying to paint for you, Alex, is a picture of breadth across multiple things that the business is doing well, not just one thing. Just one thing I would add there. I've been very anxious to get our customer and brand health data. I think it's going to take a little bit of time for us to get a very clear picture on that, but I personally am seeing a lot of younger customers shopping in our stores, particularly in the Victoria's Secret store, and we just received our brand equity results for the month of November, and we saw a very clear uptick with Gen Z on both consideration and brand equity, and that, to me, is just incredibly exciting, and we will be monitoring this and reporting on this as we move forward. Thanks, Alex. Thank you. Good luck. Thank you. Our next question comes from Ike Boruchow with Wells Fargo. Your line is open. Hey. Good morning, everyone. Let me add my congrats. Two questions. First, for Hillary, you talked about a lot of change over the last four months in apparel, which I assume predominantly talks to PINK. Can you just give us a little bit more insight on what changes and KPIs you've seen that's giving you renewed confidence? And then TJ, real quick, just trying to understand the Adore Me payments that are being made this year. I think it's like $200 million or $40 million. I was trying to make sure I understood. Is that because the business is outperforming? How should we think about that impacting cash flow? And then is there more payments in future years if the business continues to outperform? Hi. You're a little hard to hear. I think you asked me about apparel and what we're learning there. I would point to a couple of things. In the Victoria's Secret brand, I would point to the launch of VSX. Incredibly successful launch, I think. A very modern go-to-market strategy, and I would say we know that when we have great complementary apparel product, it increases frequency and engagement with the brand. So that's something, whether it's a swim-adjacent apparel, whether it's lounge-adjacent apparel, whether it's sport, it's something we're very interested in dialing up and really complementing the rest of the assortment to drive that frequency and engagement. In PINK, certain apparel categories are doing very well. And I would say when you look back to the real heydays of PINK, it was apparel-led. And over time, we have become more intimate-led in apparel, and I think we have extraordinary opportunity in PINK to broaden our lens in apparel and not just be singularly collegiate. And then I think beyond apparel, we have a huge accessory and beauty opportunity in PINK. So really diversifying our assortment, building a full lifestyle brand, and creating that emotive, interesting content for the Gen Z customer, I think will be very important as we move forward. And the second part to your question, Ike, the Adore Me payments, contingent payment structure, you may recall there were three contingent payment items, one based on technology synergies, one more of a fixed component around continuation of employment, and the third around actual performance against two different targets, sales and EBITDA over the two-year period, so 2023 and 2024. What I think your question is referring to, the roughly $200 million that is included in our cash flow forecast for the fourth quarter and for the full year that will go out in January, those two payments are based on A, the fixed component, which I mentioned, which is more continuation of employment, and B, the completion of the technology synergies that were originally set out at the beginning of the acquisition or at close on acquisition. So that's the $200 million fourth quarter included in our guidance, included in our forecast. The performance aspect against sales and EBITDA targets, that payment would occur in first quarter of 2025 in or around the month of March. The reason for that is really we do need year-end results from the business, and we do need a chance to review those, audit those, however we proceed there to evaluate how the business ultimately did against the targets. So that's why the timing on that payment could be different. So January included in our forecast on the first two synergies. The third synergy would be in first quarter, depending on final outcome of performance. Thanks so much. Yep. Thank you. Our next question comes from Matthew Boss of JPMorgan. Your line is open. Great. Thanks. Hillary, can you elaborate on driving the balance between top-line growth and gross margin expansion? Or with promotions expected flat to slightly down in the fourth quarter on 2% to 3% top-line growth, do you see this as a potential multi-year inflection in the model? And to that point, TJ, what do you see as the potential markdown recapture opportunity as we think about maybe next year or any change to the 39%-40% gross margin by FY26 as a target? Sure. I'll start there. We are absolutely looking for opportunities anywhere we can to be less promotional and more brand forward. And I think we are getting to a place where the product is starting to stand on its own and the storytelling is starting to stand on its own, particularly in the Victoria's Secret brand. We will be looking for any opportunity possible, and I passionately want to lead this brand as these brands as brand-first brands. And that will take some time, and that will take some experimentation. If I think about the third quarter into the fourth quarter, there was a lot of unknown over the past few months. We had an election, we had a shorter selling season, and we made some choices to keep our promotional strategy flat to last year, really thinking that we wanted to bank what we could as early as we could. And what we found was that we banked more than we expected, and we found that the big days were bigger than we expected and that we didn't fall off in between. So as we move into December and into January, we'll be looking for opportunities to be less promotional. I think our semi-annual sale will have opportunities there. And as we strengthen our messaging, as we strengthen our cultural relevance, we will absolutely be looking for that opportunity. And I think it will be a journey, and we all know this isn't easy work, but it's something we're very committed to and quite frankly, I'm excited about. Yeah. I think the second part of your question, Matt, Hillary just kind of touched on it. I think we all believe that there's an opportunity, as we look to 2025, to test our way into more effective promotions and what could end up being certainly better margin dollars, better margin rate. We see that as an opportunity. I think historically, we've talked about when the business was hitting on all cylinders, the discount rate was in the high 30s%, and when the business was more challenged and has to be more promotional, it can be in the low 40s% or mid-40s%. So I'm not forecasting where I think we are going to end up for this year or where we'll go for next year, but just to kind of dimensionalize it for you, there is a meaningful difference. I also want to underline what Hillary mentioned around the big days being bigger, and that really was a benefit to us in the third quarter at the cost of a little bit of rate, but the outcome at plus 7 and the margin dollar growth at plus 8 or plus 9 and leveraging the good cost work that's been done, obviously the flow-through was quite strong in the 30s, so really, really good trade-offs that we're missing, and I think too just to go a little bit deeper, when we say big days being bigger, what we're also seeing is when we get outside of those big days that our base business is solid and getting stronger, and that's very encouraging as we move forward, and I think really goes back to product, really goes back to strength of execution. It wasn't that long ago in prior quarters where we would have moments where we were promotional and we got a result only to give it back in the weeks following. That's not what's happening in our business today, and that might be one of the more encouraging parts of what we're seeing here in the holiday season. So a lot to come, but encouraged that we have this opportunity in front of us. Does that conclude your question, Matthew? Great. Thanks. Best of luck. Yep. Thanks, Matt. Thank you. Our next question comes from Dana Telsey with Telsey Advisory Group. Your line is open. Hi. Good morning. Nice to see the progress. Hillary, in your assessment of the stores as you've gone around the country, as you look at the classifications, the space allocations, what do you see as the opportunities going forward? And with the Store of the Future, are there any new visions that you have to enhance what's been there already? And just lastly, can you remind us about China manufacturing and sourcing, given what could be tariffs coming up? Thank you. Hi, Dana. Thanks. I'll start and then pass it to TJ. I've been in lots and lots of stores in multiple states over the past few weeks and months. I think Store of the Future overall looks great, and it's a proud brand moment. It really lets products sing. I think some of the things that we're talking about really is around space allocation. We pulled PINK back pretty aggressively, and we did that because the trend wasn't there. But what we know about Gen Z is that she likes an in-real-life experience sometimes. And so I think there is an opportunity to ensure that as we are condensing, particularly in the locations where there's a shop-and-shop rather than a side-by-side, that we're really scrutinizing that. And as I think about the product assortment for PINK in the future, it will be more balanced towards apparel, and we will need some space for that, and we will need a different experience for that. So that is work that we need to do, and I think we're all pretty excited to do that work. As it relates to the rest of the assortment, I think VS feels good in the store. I think beauty could feel a little more elevated in our Store of the Future. When I think about our positioning of accessible luxury and beauty really being a big piece of that, I think we can do some tweaks there to make that feel like a more elevated experience, and then I just think the two brands, when they are in a side-by-side, they need to feel different and yet connected, and I think there's a little bit of work to do there, and it's something that we're all really excited to do, and I would say that we're really thinking about, is the pace of remodel the right pace or not? Can we accelerate it? Are there places where we can go faster? Those are all questions we're asking ourselves right now as we think about future budgets. I think the second part of your question, Dana, the large, large, large majority of our product comes from three countries: Vietnam, Sri Lanka, and Indonesia. Specifically, your question on China, that's a single-digit number for us, which includes some apparel and some beauty. It also includes some China-for-China product. So even all of that product that's being made in China isn't necessarily even coming to the U.S. in all occasions. A couple of other countries that have been topically mentioned, both Canada and Mexico, are less than 1% for us. So I think the teams, over time, the teams have done a very effective job of de-emphasizing the impact of where product comes from China and putting it in other locations around the world. So hopefully that helps with your question. Thank you. Thank you. Our next question comes from Adrienne Yih with Barclays. Your line is open. Great. Thank you very much. Hillary, I was wondering if you can talk to us about customer reactivations. I'm really interested in what you had said that you were seeing a younger customer come in, and I think that's the key to kind of consumer in this day and age is that Gen Z. So reactivations of existing customers, and then what source are you getting the new customers from? And then, TJ, just a clarification on the comment that you made on discount rate. I think there's a huge differential between the normalized and when you are highly promotional. Does that include clearance, or are you only talking about the% at reg price to promo? Thank you so much. Hi, Adrienne. Customer reactivations are probably largely not Gen Z. Gen Z are mostly new customers. When I stand back and look at it, I think that the fashion show introduced us to a new generation of consumers. We weren't on their radar. We hadn't been in the cultural conversation. I think we came in and surprised her, and she was like, "Oh, I'm going to pay attention to this." We are engaging with an entirely new generation of young women who are saying to us, "We want big hair. We want more glamour. We want more shine. We want more of it. We want all of it." That's exciting because we know how to do that. For me, and what I've seen so far, and I do think we have a lot more work to do on this as we start to read some of the data over the next quarter, it's the new customer. The reactivated customer just is a more millennial or even Gen X, but we are focused on this Gen Z customer in particular, and it really thrills me that she's noticing us. I think, Adrienne, on the second part of your question, I would just say the discount rate callout is more general in nature. I'm not going to go into the kind of components of that, but that would include our promotional events in store. It would include box promotions, meaning if we run a buy-2, get-to, or something like that, it would include our SaaS performance, our semi-annual sale performance, our mid-season sale performance, things like that. So it's more of an all-inclusive number. Now, having said that, I think we believe there might be a little bit of opportunity in all of those areas. So I think it's the appropriate compare. Fantastic. And then, Hillary, one last one. Historically, back in the day, Victoria's Secret was known for just these systematic bra launch, bra franchise launches, the newness, and kind of really having kind of almost a seasonal kind of cadence to that. Can you talk about kind of what you've learned or when you kind of go back into the archives and are thinking about kind of how to execute that going forward? Thank you. Yeah. I'm actually glad you asked about that. Innovation was just the core, core, core of our business in those days. And I think over the past few years, it hasn't been as big of a focus. And so that is something that we are absolutely doubling down on, something that Anne, our Head Merchant, talks a lot about, and rightly so. And I think the way that works is different in today's world. I think there's a lot more co-creation. There's a lot more driven factory partnerships. And the way we get work done is different. But bringing innovation back to the center of how we work is critical. And these bra launches are critical to our business, and we are committed to that and committed to be the leaders in the global intimate space and to be first to market on these new ideas. And so you'll see that in the years to come. Great. Thank you. Congratulations. Thank you. Thank you. Our next question comes from Jonna Kim with TD Cowen. Your line is open. Hi. Thank you for taking my question. Just wanted to get more thoughts around the beauty business, how large is beauty now and where you think that business could evolve over time. And also, would love any comments on Adore Me, how that has performed and where you see that particular brand going forward. Thank you so much. Sure. I'll start with beauty. Beauty is our strongest business. We just had our largest quarter to date on record for Q3. So incredible, incredible results, incredible brand love there. I watched customers over Black Friday engaging in beauty in a way that was just incredible to see. It is primarily driven by the Victoria's Secret brand, and yet I still think there's tons of opportunity to think about beauty differently and add on lots of new ideas. And PINK is relatively young in its beauty journey, and I think tons of opportunity there. If I think about beauty, and I'll go back to social commerce and the TikTok generation, there is so much that happens in beauty on social commerce, and I think that's very important for PINK as we move forward. While the beauty business is super healthy, lots of brand equity there, I think there's still a very long runway. Yeah. The second part of your question, Jonna, the Adore Me business, we did have growth in the Adore Me business during the third quarter. Top-line revenue up mid to high single digits. The Daily Look brand, which is more focused on home try-on and apparel, outperformed the Adore Me or the lingerie and intimates brand. That is the flexibility of the model that they have created to be able to move marketing dollars between the two channels and whatever is working best. So volume up mid- to high-single digits, profitable for the quarter, and I think well-positioned as we move into the holiday selling season here in October, November for that business. Thank you so much. Yep. Thank you. Our last question comes from Mauricio Serna with UBS. Your line is open. Great. Good morning. Thanks for taking my question, and congratulations on the results. Could you talk, Jonna, could you talk about what you're seeing in the sports bra category and what your opportunities are in that segment? And also your overall view on the intimates market. It seems that it's been down. So just wondering if you're seeing any improvement in the next couple of quarters. And then also, could you give us what you're seeing in China, just given the macro environment? Thank you. Sure. I'll start, and then TJ can finish up. Our sports bra launch this year was very successful. We've picked up some market share this year, and we're really happy with that, but we think we just scratched the surface. We pulled back as a brand on sports bras when sports bras were taking off. And so we have some market share that's due to us, and we intend to claim it. Sports bras are just one option in her bra library, and she's wearing them more frequently in sort of non-active capacities. So we intend to go after that business. The intimates market is a little soft, and I think the way women engage with bras specifically is a little bit differently. We're hearing from the younger generation that she's wearing them more selectively. She's wearing different kinds of them. She's wearing sports bras. And so it's our job to create such compelling emotional product and storytelling that she must have our bras. And I think we're on our way to doing that. We have proof points throughout our business right now where we are doing that. And then I think that's also where the complementary categories come in with frequency and excitement and emotion. And it's really the whole experience of our brand that brings her to us. And I feel like the team is very well-positioned to deliver on all of those things. And I think the last part to your question, Mauricio, if I understood it correctly, China. So we continue to be very excited about our opportunities in the market in China. We believe we have the right team. We believe we have the right partner in the Regina Miracle team. We did see growth in China in the third quarter, more so on digital, but we are also seeing some very encouraging trends of late at stores or in stores. The digital growth, as we mentioned in our prepared comments, the major event of Singles' Day actually moved into, largely moved into third quarter this year out of fourth quarter last year. So that was certainly a helper in that regard. But I think the market will continue to be a challenge maybe for the foreseeable future. But I have a lot of visibility into what's happening with our joint venture there in China, and I'm confident we're on the right track. And as I mentioned before, doing a lot of product that is China for China and having the right partner in the region is certainly a helper as well. Got it. Best of luck. Thank you. Thanks. Thanks, Mauricio. Okay. So that concludes our call this morning. Thank you for your continued interest in the business. Have a great day. Thanks, everyone. Thank you for participating in the Victoria's Secret & Co.'s third quarter 2024 earnings conference call. That concludes today's conference. Please disconnect at this time and enjoy the rest of your day.