Welcome to the Williams-Sonoma, Inc. fourth quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the conclusion of the prepared remarks. I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead. Good morning, and thank you for joining our fourth quarter earnings call. Before we get started, I'd like to remind you that during this call we will make forward-looking statements with respect to future events in financial performance, including guidance for fiscal 2024 and our long-term outlook. We believe these statements reflect our best estimates. However, we cannot make any assurances that these statements will materialize, and actual results may differ significantly from our expectations. The company undertakes no obligation to publicly update or revise any of these statements to reflect events or circumstances that may arise after today's call. Additionally, we will refer to certain non-GAAP financial measures. These measures should not be considered replacements for and should be read together with our GAAP results. A detailed reconciliation of non-GAAP measures to the most directly comparable GAAP measure appears in Exhibit 1 to the press release we issued earlier this morning. This call should also be considered in conjunction with our filings with the SEC. Finally, a replay of this call will be available on our Investor Relations website. Now, I'd like to turn the call over to Laura Alber, our President and Chief Executive Officer. Thank you, Jeremy. Good morning, everyone, and thank you for joining the call. Before we get into our Q4 results, I'd like to acknowledge the accomplishments of the entire team at Williams-Sonoma, Inc. The results we are about to share with you today reflect their collaboration, innovation, and dedication, and I want to give everybody on this team a huge shout-out and a huge thank you. We are pleased with our strong finish to 2023. In Q4, our comp came in above expectations at -6.8%, with a two-year comp at -7.4% and a four-year comp at +29.1%. In the quarter, we exceeded profitability estimates with an operating margin of 20.1% and earnings per share of $5.44. Turning to the full year, our comp ran down 9.9%, with a two-year comp at -3.4% and a four-year comp at +35.6%. We delivered an annual operating margin of 16.4%, with full-year earnings per share of $14.85, beating our 2023 comp guidance of -10% to -12% and hitting our operating margin range of 16% to 16.5%. I think it's worth putting these results in context. Four years ago, the global pandemic changed how we worked and lived as most of us began to spend an unprecedented amount of time in our homes, and interest rates were at historical lows. As a result of these two dynamics, the demand for home furnishings surged. Our company was well-positioned to meet this demand with its compelling product assortment, supply chain capabilities, and the experience of our tenured management team. But the demand of the pandemic came with complications, including supply chain inefficiencies and higher vendor costs. Despite these increased costs and complexities, we stayed focused on innovating our proprietary product, running a full-price business, and managing ad costs and employment expenses. As we came out of the record year in 2022, we started to see slowing in our sales trend as interest rates increased and home sales declined. Decreases in furniture demand continued to put pressure on our top line, but again, we stayed focused on transforming our operations, cutting costs, and improving supply chain inefficiencies, all which drove us to nearly double our profitability compared to pre-pandemic. Our exceptional results in 2023 were driven by strong operational execution in a challenging environment for home furnishings. While the data suggested that consumers were resilient, they shifted away from home into experiences and entertainment, and they had been hesitant on furniture purchases. Nonetheless, we have continued to drive results. From pre-pandemic, through the pandemic, and to today, we have navigated, learned, optimized, and built all in preparation for our next chapter of growth. We have developed a strong omnichannel platform and have invested in a distribution network with additional capacity. Going forward, we see another growth opportunity on the horizon for our company, resulting from a more normalized interest rate environment, improved home sales, and a strategy. As we look to next year and beyond, we are focused on three key priorities: first, returning to growth, second, elevating our world-class customer service, and three, driving margin. Our growth will be driven by our business strategies in each of our core businesses: our B2B program, our emerging brands, and our global business. We will continue to improve our world-class customer service by driving supply chain improvements from reduced out-of-market and multiple shipments, fewer customer accommodations, lower returns and damages, and reduced replacements. These improvements will continue to contribute meaningfully to our profitability in 2024 and beyond, and we see opportunity to drive margin by continuing our focus on full-price selling and cost negotiations. As it relates to other cost efficiencies, we will maintain our employment cost savings that we achieved last year following our comprehensive review of our organization structure. Regarding marketing, we continue to increase our spend, and we are seeing very effective returns on our paid marketing and on our social strategy. This investment will both drive sales and help us acquire new customers. Our in-house marketing expertise and performance-driven approach continues to serve as a differentiator between us and our peers. Also, our ongoing investment in our proprietary e-commerce technology continues to improve our online experience. We are focused on offering customers inspiring content and dynamic tools to assist with design projects, and AI is accelerating these efforts. We see many opportunities for our business from developments in AI, and we believe our leadership in this area will be yet another competitive advantage. As focused as we are on our digital and e-commerce capabilities, we remain passionate about our best-in-class retail business. We continue to improve our in-store experiences with inspirational products and next-level design services. I truly believe our teams are the best in the industry, and our continued retail optimization efforts have transformed our fleet to be positioned in the most profitable, inspiring, and strategic locations. On the sustainability front in Q4, we are proud to be the only home furnishings retailer included in the 2023 Dow Jones Sustainability North America Index, and we started 2024 by being named one of Barron's 100 Most Sustainable Companies. Our commitment to values is embedded in our company strategy, and we are proud of our recognition as a leader in sustainable home furnishings. Now, I'd like to spend a few minutes talking about our brands. Pottery Barn ran a -9.6 comp in Q4 and ran a -3.8 on a two-year basis and +38.1 on a four-year basis. The comp improved sequentially from Q3 but still ran negative due to the pullback in consumer spending on furniture. During the holiday season, we saw strength in seasonal decor, entertaining, and home textiles. The brand experienced a strong customer response over the Black Friday/Cyber Monday period, and we continue to reduce discounting and strengthen our merchandise margins. The brand benefited from Q4 launch of the Pottery Barn mobile shopping and design app. This new app allows customers to shop full-room designs, share their favorite products, and connect with a design expert all through the convenience of their phone or tablet. We anticipate the continued customer adoption of this app will drive conversion for Pottery Barn in 2024 and beyond. As we launch our exclusive spring product collections, we're seeing continued strength in fashion bedding, home furnishings, and botanicals. Customers are continuing to gravitate towards easy updates with color, prints, and pattern. The Pottery Barn children's business ran a -2.5% comp in Q4 and was +1.5% on a two-year basis and 21.1% positive on a four-year basis. We continue to be focused on delivering compelling innovation and evolving the customer experience, and we are pleased to see improvement in the comp. Our baby business continued to be very strong and represents a sizable opportunity. We have been delivering growth in registry with our curated assortment, easy-to-use mobile app, and in-store baby experts. We've also introduced new products that are both high in quality and innovation, such as our Dream Deluxe Power Swivel Recliner with heat and massage. Also, we're proud of our collaborations, and we just launched Aerin Lauder, who is making her debut line for baby with whimsical design and keepsake quality. Also in Q4, we saw a strong consumer response to our expanded seasonal offerings that ranged from babies' first Christmas to Grinch-themed bedding for teens. We saw customers return to us for Valentine's Day and Easter with a strong response to our new collaborations, including an expanded collection of Hello Kitty. We're also seeing a particularly strong trend with our NFL offering in team. And finally, we're seeing strength in nursery furniture, a purchase that is less dependent on new home sales. Moving to West Elm, West Elm is the brand that has been the most impacted by the consumer pullback in furniture. In Q4, West Elm ran a -15.3% and was -26% on a two-year basis and +17.5% on a four-year basis. However, what I'm excited about are our new product sales from this year's holiday assortment, which had strong growth to last year across all categories. The customer responded positively to fresh designs in furniture, textiles, and decorative accessories. We also saw strong sales in holiday decor. As we move into 2024, newness continues to accelerate and is performing well. Given these positive trends in newness, we continue to see a sizable opportunity in West Elm as it rebalances more inventory into these new products. The Williams-Sonoma brand ran a positive 1.6% comp in Q4. On a two-year basis, the brand was -0.9% and was +29.8% on a four-year basis. In Q4, the Williams-Sonoma kitchen business ran a positive comp for the third consecutive quarter, and our Williams-Sonoma Home business meaningfully improved. Retail has been very strong with inspiring in-store events and dramatically improved in stocks. Our seasonal categories grew double digits, and we saw strength in core businesses like cookware and bakeware as customers gravitated toward gifting and entertaining at home. Throughout the quarter, collaborations like our cookware partnership with GreenPan and Stanley Tucci and the launch of a partnership with one of Netflix's most-watched shows, Bridgerton, continue to drive sales, buzz, and new customer acquisition. Now, I would like to update you on our other initiatives. Business to business ended the year strong with Q4 at +5%, bringing the total year to a +1%, coming in just under $1 billion. The contract business exceeded expectations at +31% on the year, fueled by continued strength in the hospitality and residential sectors, along with early traction in developing segments such as healthcare, gaming, and senior living. Flagship projects in the back half of the year ranged from providing furnishings for medical office providers across the country as well as entertainment venues like Dave & Buster's. Our B2B team also provided guest room furniture for the new Fontainebleau Hotel that recently opened in Vegas. Now, I'd like to talk about our global business. While macroeconomic pressures continue to affect our global business, we are pleased with our performance in India, Mexico, and Canada. In India, we are seeing growth from strong marketing and brand awareness campaigns across the brands with a high penetration of our Design Crew business. In Mexico, the market continues to show strength driven by improved in-stocks and a strong holiday season. The Canada business continues to build momentum, fueled by our commitment to enhance the customer experience both online and in retail. Our digital initiatives in the Canadian market continue to gain new customers and drive results for our brands, and we are pleased with the initial positive response to the recent launches of Rejuvenation, Mark and Graham, and Williams-Sonoma Home in Canada. As we continue to expand our omnichannel presence around the globe, India, Mexico, and Canada remain our key strategic growth markets. Lastly, I'd like to update you on our emerging brands. Rejuvenation delivered a strong quarter with a double-digit positive comp driven by success in our remodel product categories and new growth initiatives. We continue to see strength in both consumer and B2B sales. Rejuvenation continues to establish itself as a destination for home projects by providing products with great function, high quality, and timeless design details. We're excited by the momentum in the brand and the growth potential in 2024 and beyond and believe Rejuvenation can be our next billion-dollar brand. Mark and Graham, our high-quality gifting business, saw strong growth this year with a high single-digit positive comp in the quarter. Our monogramming capabilities, coupled with unique high-quality gifts and the brand's curated online gift shops, make it easy for customers to find the perfect gift. And finally, our startup, GreenRow. We continue to gain momentum in this new brand, which utilizes sustainable materials and manufacturing practices to create colorful, heirloom-quality products. We remain optimistic about the potential of this brand and its aesthetic. In 2024, we're planning to grow GreenRow with substantial increases in product assortment. These successful and exciting emerging brands demonstrate our ability to develop new businesses that expand our portfolio and address white space in the market. In summary, we're extremely proud of our accomplishments and financial results this year. We outperformed in 2023 despite the slowest housing market in several decades and massive geopolitical unrest. Although this pressured our top-line trend, we stayed focused on full-price selling, supply chain efficiencies, and best-in-class customer service. We have transformed our business model, and as a result, we deliver an operating margin well above our guidance and well ahead of our pre-pandemic operating margin. We have a powerful portfolio of brands serving a range of categories, aesthetics, and life stages, and we have built a strong Omnichannel platform and infrastructure, which positions us well for the next stage of growth. It is early, but our reads on Q1 are strong, and we are optimistic about the opportunities that exist ahead. With that, I'll turn it over to Jeff to walk you through the numbers and our outlook in more detail. Thank you, Laura, and good morning, everyone. As Laura said, we're pleased to deliver a strong finish to fiscal year 2023 with Q4 and full year 2023 earnings significantly exceeding expectations. We delivered these earnings despite a challenging backdrop for home furnishings pressuring our top line. Our strong profitability in this environment demonstrates the durability of our operating margin. Our results once again reinforced the themes we consistently communicated in 2023. First, our steadfast commitment to maintain price integrity and not run site-wide promotions. Second, our first-half supply chain cost pressures became tailwinds in the second half. And third, our discipline to control costs and manage inventory levels. Given the strength of our earnings through this challenging period for home furnishings, we're confident we can deliver long-term growth and even stronger earnings as the customer shifts back to home. Now, let's dive into the numbers. I'll start with our Q4 results, followed by our full fiscal year 2023 results, then provide guidance for 2024. Q4 net revenues finished at $2.28 billion. Our revenues came in at the high end of our expectations, driven by strong holiday performance across our portfolio of brands, partially offset by ongoing customer hesitancy towards big-ticket expenditures. During the quarter, we continued our commitment to maintain price integrity, and we reduced our overall level of promotions. Our Q4 comps came in at -6.8%, with our two-year comp at -7.4%, and our four-year comp to 2019 at +29.1%. From a cadence perspective, our comps reflect a strong Black Friday to Christmas holiday period, bookended by inconsistent and choppy sales on both ends. Moving down the income statement, Q4 gross margin improved 480 basis points over last year to 46% as higher selling margins more than offset the impact of higher occupancy costs. Q4 selling margins at 55.1% were 560 basis points higher than last year, reflecting the full impact to our profitability of the supply chain tailwinds we've been guiding for several quarters. Our higher Q4 selling margins were driven by both higher merchandise margins and lower costs from supply chain efficiencies. Q4 merchandise margins contributed about half the increase in selling margins, driven by lower input costs and our focus on full-price selling. The balance of improvement came directly from supply chain efficiencies, which drove an improved customer experience and lower costs. We're proud to see our focus on execution and investment in supply chain paying off. Key metrics, including out-of-market shipping, multiple deliveries per order, returns, accommodations, damages, and replacements, are all performing at pre-pandemic levels, if not better. Our higher Q4 selling margins more than offset the 2% growth in Q4 occupancy costs to $208 million or 9.1% in net revenues, up 80 basis points to last year. Turning now to SG&A, our Q4 SG&A expense of $591 million grew 13% and ran at 25.9% of revenues, deleveraging 460 basis points. As a reminder, our Q4 2022 SG&A results benefited from favorable items that we guided would not repeat in Q4 2023. Excluding the favorable items from last year, our SG&A dollars decreased 4%. Q4 employment was 300 basis points higher year over year, driven by higher performance-based incentive compensation in fiscal year 2023 than last year. In Q4, we continued to manage variable employment costs in accordance with top-line trends. Q4 advertising expense was 60 basis points higher year over year as we took advantage of opportunities to invest into higher levels of advertising spend. As Laura mentioned, we continue to increase our spend as we are seeing very effective returns on this investment. Our ability to invest in these opportunities is an example of the competitive advantage of our agile, performance-driven marketing organization. Our in-house capabilities, first-party data, and multi-brand platform continue to drive efficient advertising spend. Q4 general expenses drove the balance of the increase as we lapped a favorable insurance settlement received in fiscal year 2022. On the bottom line, our Q4 earnings significantly exceeded expectations. Q4 operating income came in at $458 million and operating margin at 20.1%, 20 basis points above last year, with Q4 diluted earnings per share of $5.44. Turning now to our full year results, which again exceeded expectations. Full year net revenues finished at $7.75 billion. Our full year revenues reflect a larger home furnishings backdrop and our commitment to maintain price integrity, even if it meant forgoing some revenues in the short term. Our full year comp ran down 9.9%, with our two-year comp at -3.4% and our four-year comp to 2019 at +35.6%. Full year gross margin ended at 42.7%, a 30 basis point improvement over last year, as our first-half supply chain headwinds turned into even stronger tailwinds in the back half. Full year selling margins at 53.2% were 170 basis points over last year and our highest-ever selling margin rates. Driven by a nearly equal mix of higher merchandise margins and supply chain efficiencies, these higher selling margins more than offset the 4% increase in our full year occupancy costs to $814 million. Full year SG&A expense decreased 5.8% to $2.04 billion. This decrease was driven by employment reductions taken in Q1 and Q2, our management of variable employment in line with top-line trends, and a 20 basis point reduction in advertising on the full year. Full year SG&A deleverage of 140 basis points was primarily driven by lapping the favorable items recognized in Q4 2022 that I discussed earlier. On the bottom line, full year operating income finished at $1.27 billion and operating margin at 16.4%, significantly above our pre-COVID levels and the 15% operating margin floor we established at the start of the year. Full year diluted earnings per share ended at $14.85. On the balance sheet, we ended the year with a cash balance of $1.26 billion, with no debt outstanding. This was after we invested $188 million in capital expenditures supporting our long-term growth, and we returned over $545 million to our shareholders through share repurchases and quarterly dividends. Year-end merchandise inventories stood at $1.25 billion, down 14.4% to last year. At these levels, we are well-positioned to maintain our price integrity as we've proactively managed our inventory levels in line with our top-line trends. We generated a record level of free cash flow in 2023 at $1.49 billion, driven by the strength of our earnings, proactive inventory management, and financial discipline. Speaking of financial discipline, a prime example is our fiscal year 2023 return on invested capital of 45%. This is among the best in the retail industry. Summing up our 2023 results, we're proud to have delivered earnings substantially exceeding expectations. As Laura said, these results reflect the efforts of the entire team at Williams-Sonoma, Inc., and I'd like to thank our talented team for delivering these outstanding results in a challenging environment. Now, let's turn to our 2024 outlook. First, let me point out that 2024 is a 53-week year for Williams-Sonoma, Inc., so the fourth quarter will consist of 14 weeks. We will report comps on a 53-week versus 53-week comparable basis. All other year-over-year compares will be 53 weeks versus 52 weeks. We anticipate the additional week will contribute 150 basis points to revenue growth and 10 basis points to operating margins, both of which are embedded in our guidance. We anticipate 2024 will be a year of continued macroeconomic uncertainty. Lower interest rates could spur the housing market and shift consumer spending back to home, but timing is hard to predict. There is also the election and global geopolitical tension. With this in mind, we are providing a wide range of guidance for 2024. 2024 net revenues are expected to be in the range of -3% to +3%, with comps between -4.5% to +1.5%, and operating margins between 16.5% and 16.8%. On the top line, we anticipate sequential improvement across the year, with the first half tougher than the second half as our top-line comparisons get easier. On the bottom line, we expect our supply chain tailwinds will continue through at least the first half of 2024 but will be partially offset by higher advertising spend. In the back half, we anticipate our operating margins will be in line with 2023 results. Our capital allocation plans for 2024 prioritize funding our business operations and investing in long-term growth. We expect to spend $225 million in capital expenditures to invest in the long-term growth of our business. 75% of this capital spend will be dedicated to drive our e-commerce leadership and supply chain efficiency. We expect to continue to return excess cash to our shareholders in the form of increased quarterly dividend payouts and ongoing share repurchases. For dividends, today we announced an increase in our quarterly dividend payout of 26% or $0.23 to $1.13 per share. Fiscal year 2024 will be the 15th consecutive year of increased dividend payouts, which we are both proud of and remain committed to. For share repurchases, today we also announced our board has approved a new $1 billion share repurchase authorization, replacing previous authorizations, and under which we will opportunistically repurchase our stock to deliver returns to our shareholders. Combined, our dividend increase and new share repurchase authorization continue our commitment to return excess cash to our shareholders. In fact, we've returned over $3.8 billion to our shareholders over the last six years. As we look further into the future beyond 2024, we are reiterating our long-term top-line guidance of mid- to high single-digit revenue growth. In the long term, we now believe we can sustain operating margins in the mid- to high teens. We're confident we'll continue to outperform our peers and deliver shareholder growth for these reasons: our ability to gain market share in the fragmented home furnishings industry. The strength of our in-house proprietary design. The competitive advantage of our digital-first but not digital-only channel strategy. The ongoing strength of our growth initiatives. And the resiliency of our fortress balance sheet. With that, I'll open the call for questions. At this time, if you would like to ask a question, press * followed by the number 1 on your telephone keypad. We ask that you please limit your questions to one and one follow-up, then return to the queue for any additional questions that you may have. Our first question will come from the line of Steven Zaccone with Citi. Please go ahead. Great. Good morning. Thanks for taking my question. Congrats on the strong margin execution here in a tough environment. So, Jeff, first question for you. Can you talk a bit more about the margin assumptions in the 2024 guide in more detail? You gave the commentary about operating margin in the back half. Could you talk about gross margin in particular? How does that look on the cadence of the year? Good morning, Steve. Yes. On our gross margin outlook and our EBIT margin outlook, as you know, we don't guide the individual line items. We provide top-line guidance and bottom-line operating margin guidance. The reason why is it gives us the flexibility to react as we see trends evolve in the business and the different levers we can pull along the way. As you've seen, as we did in 2023, we know the levers to pull to deliver results. We see continued strength in our operating margin. As we guided today, we see it landing between 16.5%-16.8% on the year. We do see that the supply chain tailwinds that we've been seeing in the back half of 2023 will continue into the front half of 2024 but will be offset by some additional advertising expenditures, as we talked about we did in Q4 of 2023. But overall, we're very confident in our operating margin and looking forward to delivering these results. Okay. Great. Then second question for you, Laura. I was hoping to get more detail on the West Elm turnaround. You talked about some newness, and that's doing well. But how long do you expect the turnaround to take? And if we think about the performance of that brand relative to the overall guidance for the company, would you expect West Elm to still underperform? Thanks. Yeah. I'm so excited about West Elm. I've had a chance to see all of the product that's coming in this year and their strategies. And I think it's a very clear, exciting growth story, again, for us. I think in terms of timing, it's always hard to predict exactly when things will go. But we are seeing, as I said, really strong results, not just in the holiday seasonal decor but the new product offer that's core and the new design language that we've brought out, the new modern forms. We are building back our non-furniture business, which drives customer engagement and also new customer acquisition and is very relevant and important for UPTs and repeat purchases. So that is on its way. You're going to see that continue to grow through the year. And then also, now that we have success on some of these furniture items, we know that the timeline on when a furniture bestseller will be relevant is a lot longer than if you're a fashion apparel person. So we can then buy into it with confidence versus now our newness, although very high over last year, it's just not a big enough percent of the total. So as we buy back into these winners and they compound through the year, that's when we expect to see them hit the total top line in a meaningful way. Great. Thanks very much. Your next question comes from the line of Seth Basham with Wedbush Securities. Please go ahead. Thanks a lot. And good morning. Congrats on another strong quarter. My first question is just thinking about the 2024 outlook. Obviously, a lot of uncertainty with the environment and your revenue growth guidance reflects that. But you guys have been very good at managing costs. And if we were to see revenue come in a bit below your guidance, would you still be able to hit that 16.5% operating margin target? Good morning, Seth. Yes. To simply answer your question, even if revenues were to come a little bit lower, we're confident in our operating margin guidance. There's additional levers that we can pull within the business if that were to be the case. But our outlook is a little bit more positive. We think we're closer to the end of the down cycle in home furnishings rather than the beginning. And we're focused on delivering results in our business and really think that we have opportunities to continue to improve what we're doing. And there's more things that we can do to drive earnings throughout the year. Thanks. That's helpful. And then secondly, it seems like there's been a little bit of a change in how you're approaching advertising. You're finding good opportunities to invest there. Can you give some more color there? Is that one of the levers you can pull if this top line doesn't play out the way you expect? It's not a difference in approach. It's that when we see more opportunity, we invest more. We want to invest in advertising if we're going to get payback. We are looking at this every day, every week, every brand. We're so lucky to have a test-and-learn methodology where we can try something in one brand, and if it works, roll it. If it doesn't work, shut it down. When we find something that works, you spend more. The added cost then stays lower, or it goes up with sales in tandem, giving you more on the bottom line. We've done this for years. It's a little more complicated than it used to be with we just had the catalog because there's so many different things to invest in. And we're seeing a lot of opportunity in organic social now. And that is not paid. Now, it helps to have paid social go along with organic social. But we're getting really good at pushing our content, not just through our own channels but into the whole social media world in a very effective way to get new customers into our brands. And so it's not just the added cost spend. It's the creative spend that goes in building that incredible content like we did with Stanley Tucci, for example, which continues to be a really wonderful example of a successful collaboration that's working both in the short-term sales but also in bringing new customers to the brand. And so it's a great example of the kind of things that are changing and that are really different from 10 years ago when those channels were not available to use. Got it. Thank you very much. And good luck. Thanks. Your next question comes from the line of Jonathan Matuszewski with Jefferies. Please go ahead. Good morning. Nice results. And thanks for taking my questions. The first one is on B2B. Just curious how you're thinking about B2B in the context of your 2024 guide in terms of sales or comp. And relatedly, maybe if you could just update us on what you're doing to make that channel more profitable. It seems like you're doing a lot of good things on the consumer side to take costs out of the business in terms of less accommodations and damages. But curious anything to make B2B more profitable. That's my first question. Thanks. Good morning, Jonathan. We see B2B contributing about 100 basis points to our comp in 2024, which is embedded in our guidance. Here's what's exciting. We're really optimistic about B2B growth as we look forward to 2024. The business was up 1% overall in 2023 with contract up 31%. And while the trade business has been more impacted by the slowed housing market, we've seen some recent improvement in that trend. However, we remain focused on accelerating our contract business. And we're really pleased with the momentum we're seeing. And here for us, it's really a growth story. Overall, B2B is slightly accretive to our operating margins. And we just see continued growth as we disrupt this $80 billion piece of our TAM. That's really helpful. Thanks. And then just a quick follow-up on your store fleet. Just maybe update us on the mindset regarding store closures. What's embedded in the 2024 guide? Obviously, a lot of leases up for renewal. Thanks so much. Yeah. It's a really exciting story in our retail stores because we're very successfully leaving certain stores in certain areas and moving to vibrant centers. A great example is Annapolis. I don't know if you've been there. But we moved our WS, and it's right next to a Whole Foods, which is a really different strategy than your traditional retail placement. And it's up to performance. It's up to the previous store. And the four-wall is much higher than our average. It's a really good case of where we worked with a landlord to really build a killer store. And we're paying less, and the financials are really strong, and the store is great for the customers. That's what we continue to do as leases come up for renewal. There are amazing centers we're staying in. We've been successful in reinvesting in the right things so that if you're staying in a center, that the stores look really fresh and also serve the customer in the way they want to be served. There's new things. When we built stores 10 years ago, new businesses to fund, space allocation. Across all of our brands, we're constantly looking at what's working, what's not working, and how do we continue to optimize but also keeping that beautiful, inspiring store experience where you go in and the music plays, and you're excited to be there, and you're inspired by the features. We've got great salespeople who help you. We're matching that also with very intuitive and helpful tech to help build these rooms, these houses. Just while I'm talking about this, I really just during this time where people are buying less furniture, we've taken the time to really reinvest in how we take our design service to the next level because we know that they're dying to buy new houses. When the market switches, we're going to be there with an advanced platform for design services that we can use and leverage in our stores and also online that I think is game-changing. Thanks for the color. You're welcome. Your next question comes from the line of Max Rakhlenko with TD Cowen. Please go ahead. Great. Thanks a lot. So first, Laura, can you just provide any more color on your comment that 1, 2 reads are strong? What brands are you seeing that in? And then just how are you thinking about what brands will lead the return back to growth over the coming quarters? Sure, Max. We really do have a strong lineup of opportunities in our portfolio of brands. And we're really confident in our outlook. Some examples of things that are working: we're in a color trend phase, and we're seeing print and pattern and color sell across the brands, actually. Easter's strong, and that's good. It's early. So Jeff's telling me to be careful with his comment because when it's early, sometimes it ends a little differently than you expect. But so far, so good and even shifted. That tells you customers, "We saw Christmas decor be strong too. This is good for our brands." There's not a lot of people out there that serve in a quality way the seasonal holidays. We think they're wonderful. We love to decorate and entertain and show people how to do that across them. For West Elm, that's been a business they haven't really gone after. That's really upside for them. Easy updates. People, they may not be buying a house, but they might decide to redo one room. We can see the effects of that on our sales. Also, the projects. I mentioned in my prepared remarks about Rejuvenation. Bath and kitchen remodels are still happening. We are getting more attention as someone who can help provide high-quality and unique product in those spaces. New furniture. We're seeing strong results in West Elm, as I mentioned, new forms. That's very exciting. Then collaborations. Whether it's Tucci - I keep talking about Tucci - Colin King, LoveShackFancy, Sheila Bridges, Elf. I mean, we've got a wide range of these collaborations. They bring new customers in, and we have a great time with them. They help us think about new design language that we may not naturally design into. All of that is really good for the teams and great for the customers. Then there's continued categories that we're pushing as a bigger percent of total and pulling back. So without going on too long or giving away too much competitive information, we're seeing some pockets where we have a lot of upside. The other thing that's really important in all this that you guys got to realize is that we continue to reduce our promotional offering. So at the same time that we're pushing this growth posture for this year, we are also absolutely determined to continue to pull back on promotions, which is a tricky thing, right? So we did it last year. You're going to see us continue to push it this year and balance the two out. We really believe strongly that long-term, this is the right thing for our business. And we will take markdowns, and we will always try new things. And sometimes they don't work, so you take a markdown. But we do not want to have up-down pricing in our brands. Got it. That's very helpful. Thanks for the color. And then so the big update, I think, is the new long-term EBIT margin outlook. So just curious, what are you seeing now that gives you confidence to raise it? And then as we think about post-2024, is that going to be more on gross margin or SG&A? Just curious where you see the big opportunities ahead to continue to march forward. Yeah. Good morning, Max. I think the way we think about it is at the start of 2023, we established the 15% operating margin floor. And then year-end results, we delivered a 16.4% operating margin. And this year, we're guiding 16.5% to 16.8%. So we remain confident in our operating margin durability, especially as we start to see our growth algorithm of mid to high single-digit growth over the long term. So we're pretty confident on that. And we think that as we get beyond 2024, we certainly have the upside to sustain these operating margins longer. In terms of the pieces of margin versus SG&A, as you know, we don't guide those particular in the line items, especially over the long term. But on the bottom line, we've established that we can deliver these results. And we remain confident in it both for 2024 as well as the long term beyond that. Great. Thanks a lot, Jeff. Best regards, everyone. Your next question will come from the line of Peter Benedict with Baird. Please go ahead. Peter, your line might be on mute. Peter, are you there? Yeah. That's correct. It is on mute. I apologize. Thank you for taking the question, guys. So first, we're just on kind of the supply chain environment. You guys obviously have been doing a great job on what you can control. I'm curious about the things that are maybe out of your control, some of the events going on, some of the costs on ocean freight. Just kind of remind us maybe where you sit there, how you've maybe baked some of that into the outlook here for 2024. That's my first question. Sure. So our team, our supply chain team, I'd say, is just phenomenal. And they continue to show that through the results. Although things have normalized from the pandemic, we still have a lot of areas for improvement, which will result in margin upside. We want to continue to drive down returns and replacements and any issue that affects the customer. We want a perfect delivery. We want to take all the friction out of that delivery. And so we're seeing incredible numbers across the board on all those metrics I mentioned in my script. When a problem comes along, they're real. The Red Sea disruption is pretty terrible. However, it is not costing us any more money. So far, it is costing us about 10 days of delivery, give or take. As I mentioned last time, we padded the deliveries to our customers once we heard about it so we didn't disappoint them. If we outperform and deliver faster, they're always happier than if it's late because they can't, most people don't connect anything with these world events. We have to really manage our delivery quotes very quickly once we hear these things. That's the most recent example. There's no doubt in my mind, Peter, that this year we'll be met with other things that we have to deal with. We tend to be very proactive about thinking about what those things could be to make sure that we're ahead. I guess the good news is that if there is any, when these things happen, they affect everyone. We're usually able to get ahead of it and solve it better than most. Yep. No, very true. Thank you for that, Laura. Then I guess my next question was kind of the real estate, I guess, optimization process that's been going on for a while here, a couple of years now, maybe 10-15 stores lower year-over-year. Is that the cadence we should be expecting kind of going forward? And I'm just curious maybe how the occupancy cost growth is assumed for 2024, another year of maybe mid-single-digit increases, Jeff. Is that the way to think about it? Just trying to understand where you sit from that standpoint. Thank you. Yeah. I mean, in terms of where we are on our journey of retail optimization, we're probably in the middle innings. As I've discussed in the past, we have about 50% of our leases come due in the next 5 years. We look to continue to optimize the real estate. Usually, we target a higher number of store closures, but they just tend to net out through the way the process works to about where we've been in the past few years. In terms of particular numbers, you can look to the past, say, 3 or 4 years as a good guidepost. Then in terms of where occupancy is going to go, I'll go back to we don't guide individual lines. We really guide the top and the bottom lines. That gives us more levers to pull throughout the year. No, there are fixed costs within occupancy. There's also a lot of variable costs too. So there's things we can go do throughout the year if necessary. So it's all embedded within our full-year guidance. Got it. Okay. Great. Thanks. Best of luck, guys. Thank you. Your next question comes from the line of Christopher Horvers with JP Morgan. Please go ahead. Thanks. Good morning, everyone. Thanks for taking my question. So I guess my first question is, as you talk about the optimism about the bottom of the market and the improvement quarter to date, I was just curious what you're seeing on the furniture side of the business. You mentioned some newness in West Elm resonating, but it does sound like a lot of the decor categories are what's been driving the strength. On the other hand, the mix does shift back towards the furniture brands away from Williams-Sonoma into the first quarter. So does the implied sort of sequential improvement of first quarter—are you seeing better furniture demand trends? Maybe how much of it is some of the deflation working through the system from ocean freight normalizing? So any comment there would be really helpful. Thank you. Yeah. Good morning, Chris. So furniture trends in Q4 were down, but sequentially improved over Q3. And yes, we do see a benefit by the higher penetration of Sonoma in Q4. But overall, to Laura's comments before, we're very pleased with our quarter-to-date performance. But it's early. And as Laura mentioned, there's the Easter shift. It's an earlier Easter, which sometimes has impacts on the curves. But I think the important thing is we're not just a furniture company. We only have about half our assortment in furniture. So we have a powerful portfolio of brands with a wide range of product assortment. And we can really meet the trends as a consumer shopping. And that gives us confidence in where we see our outlook. And we can really service the customers to what they're shopping to today. For sure. And then in terms of the follow-up, I know you're not Jeff. You're not guided into individual line items, but could you maybe help us think about on the SG&A line? You've done an incredible job really managing around incentives and the advertising, flexing it with demand. And you had some headcount reductions as well a year ago. Should we think about that being more variable into a recovery? Should you see rate leverage? Should we think about it modeling it from a dollar growth perspective and focus less on rates? So any color there in terms of just how variable SG&A is into a recovery as you start to reinvest back into the business as the top line improves? Thank you. Yeah, Chris. Hi, it's Laura. How are you? I just wanted to comment. I think it's important to remember that our focus this year is threefold. It's delivering growth, elevating customer service, and driving margin. We believe we can do all three things. We have that many opportunities in our model, with our platform, with our world-class brands to achieve those things. I really, as we look to the year, believe that the natural investments that we need to make will drive the top line. To the extent of the line by line, I know we're not answering your questions about those line by lines, but you've seen what we've produced even in a down cycle, right, with margin improvements. As I said, I think last call, can you imagine what that looks like in an up cycle? Our investments that we've been making over the last 10 years have gotten us to a place where we are ready for more volume without having to have a step-up infrastructure investment. While we talk about these things, they're small potatoes compared to distribution costs that others or real platform replatform costs that others have to put in place. We're ready for the volume to come this year and next. I'm really excited about how that not only flows through but also the opportunities to improve these customer service lines. We love those customer service lines because they drive margin. Thank you. Your next question comes from the line of Kate McShane with Goldman Sachs. Please go ahead. Hi. Good morning. Thanks for taking your question. The question was around pricing. We wondered where you were on an average price versus last year. I know you talked about adding more opening price points last quarter. We just wondered if we could get an update on how that trended in Q4 and what you expect to see in 2024. It's interesting, Kate. We try to glean every piece of information from sales, and then they change. So I don't think it's fair to say right now that there's a specific price point that's the magic price point. We're seeing success across all prices. The customer wants value. So we have some really expensive stuff that's really selling. And then we have some value price points that are really selling. And so there's not a pattern there that I'd hang a strategy on for now. In all of our brands, we've worked on great value to the consumer and also really new, fresh designs. And so you cannot underestimate how important it is. When we get it right on a design, it's not that we take advantage of the price. It's that our price is generally a lot cheaper than other people making the same product, and our quality is better. So that's what we're focused on, is delivering value to the customer. And we were talking about this before the call. I can't prove that it's low prices, mid prices, or high prices that are soft or strong. It's the stuff they want. And it's the new, fresh product. Thank you. We just wanted to ask a follow-up question with regards to tariffs that if there were to be again. I know this isn't risk profiled for your guidance with the election. But how are you thinking about managing through a scenario where there could be more tariffs? Good morning, Kate. Well, first, we're in an election year. A lot gets said on the campaign trail, and who knows where this conversation really goes in the end? Second, we've transformed our sourcing base since the last time the subject was top of mind six years ago. Today, only 25% of our goods are sourced from China, which is about half of what it was back then. And here's the most important thing. We have some real key competitive advantages that service well under these situations. First, 90% of our products are proprietary, designed, and exclusively made for our brands. And then we operate our own in-house, best-in-class global sourcing operation. So with 12 overseas offices, it's our own boots on the ground managing sourcing decisions, production, and shipping. And we're the 13th largest container importer into the United States. So we have scale and relationships others do not. So punchline being, if the landscape changes, we have the ability to respond that others do not. Thank you. I'll now hand the call back to Laura Alber for any closing remarks. Well, thank you all for joining us. We really appreciate your support and look forward to seeing some of you in New York and talking to you throughout the year. That will conclude today's call. Thank you all for joining. You may now disconnect.