LB - Earnings call transcript Q1 2018 | Bath & Body Works, Inc.

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Operator

Good morning. My name is Lori, and I'll be your conference operator today. At this time, I would like to welcome everyone to the L Brands First Quarter 2018 Earnings Conference Call. I will now turn the call over to Ms. Amie Preston, Chief Investor Relations Officer for L Brands. ahead. go Please

Amie Preston

morning, Quarter Good Saturday, welcome L to X, Thanks, Conference everyone, Call First Earnings ending for Brands' XXXX. Lori. and the May period

any need As subject are safe in remind formality, matter found our we I statement SEC a you make of to that our forward-looking harbor today statements may to filings.

of quarter available CFO; www.lb.com. CEO website, EVP and and Secret on Denise International, Jan joining of earnings CEO Victoria's Stuart Beauty; additional PINK; are CEO, CEO Bath and commentary Unis, us today. Victoria's release, first & Greg our Our earnings Body are of Landman, CEO Works; presentation Lingerie; Secret Waters, all Coe, Burgdoerfer, Martin Singer, of Nick

know, year. you As was a XXXX XX-week

discussed basis, today on a so versus are year XXXX. All Thanks. ending of the over comparable And is sales call which April May sales May period, X, X dollars, Stuart. May results the a I'll XX, are the on margin X, turn reported on quarter now calendar income and ending the Comparable 'XX, versus quarter XXXX. call to the this operating

Stuart Burgdoerfer

and good morning, Amie, Thanks, everyone.

income at quarter $X.XX low benefited first the $X.XX guidance midpoint initial of share by earnings the our of rate, we the declined tax Operating at lower-than-forecasted XX%. per of tax per result our end were earnings Our $X.XX and rate. favorable share from the of a per Absent to share impact range. an delivered of

speed as of work which market continues In commentary at we in doing performance Secret. yesterday, satisfied have & this Works XXX nearly chain; our was very by a in to including very forecast store direct performance our a are with, at a large rapidly a Victoria's offset base, growing brand, a was share; million agility with channel; in talented assets and number We're year The with in profitable, file; a supply visits Our profitable XXXX large versus and customer in annually; more team. so, growing leadership and the the lead category traffic changes and in strong released dealing particularly increase the last still we at strategic not on as Growth promotional impacts, lingerie the and build store trends a and in Secret. income Victoria's Body work mixed. result activity Victoria's to and described file. made we're focused resulting operating negative with customer to than were Bath significant, we the we decline improving

our we full over discussion our in turnaround given ability confident of the is of I'll But that, share. more by the are year take appropriate to of $X.XX earnings the trend a XXXX We the a the timing conservative to of brand and and have guidance With view the Denise. turn improve the current performance. business, strength believe it to decreased

Denise Landman

disappointment. bra flat Everywhere, collections, the by sport Thanks, comps of performance with had leading and QX digits, results customer of strong our driven fashion all were due of Wear low-single my acceptance improving go-forward Stuart. driven thoughts down QX soft our across success by year. share PINK's were relaunch. in and portion Apparel outlook impact silhouettes to to Decline panties is I'm newness. our dominated were distorted to going quarter. was Bras performance non-go-forward in our the and quarter and Panties in performance QX. and had PINK's Overall, a a a on into areas the swims, quarter, Bra about of brief and category, late the which about early assortment. Date by overview strong last

relaunch performance expectations. was set recent while of bottom our against quarter, mixed portions lounge strategies top -- improved In and our floor in strong assortment and customer we and you missed recent go-forward our focus the business us most Thank early and relaunch. will business file our confidence. Our June, Date to to I will growing We're Wear by and and a with encouraged it the Everywhere the our operating quarter, quarter, on speed our new over sport apparel apparel throughout Jan. brand very agility. bra. the continues much, give soft turn Despite And

Jan Singer

Thanks, Denise.

business. in have progress, deliver and, to remains of high-value Those performance As do script, the plan and significant challenging making do knowing And we in year wants. when have a have across The customers. 'XX you through to choices sexy changes her, great of made she product; things: three know record to profitability. in her is dual-channel in we read changes 'XX, a serving resulted work VSL made had loss her centered and the more and VSL she wants around growth that where and and much while and consistent solving

empower and margin accretive. the highest-AUR by the plans begun success which improving have T-Shirt collection. constructed reset center In to customer from would to half, millions a launched put frame the Illusion reducing and with the help and continue see it's in well business that in is and store starting the person online We or by are capture said launch. sales of met our engaging bra, her, almost continue core since making double The reset us Bra we serving of social with work collection fit, care side, and bra, incremental her. with by original we product as choices the insights significant through the our terms some knowing bras, we women In beat great It's will we center. her newness. has the at seeing as and channels at product and the we We in its

to We launch to closely. watch have taken price continue up that twice since franchise due demand and the

margin innovation, In new which with fashion contribution. digits we've introductions quarter bringing Dream product dollar Angels, double is addition through the in to delivered up for positive

this on are bringing it's younger encouraged desire choice repeat for and progress fashion a new her of again, by answer fit. lining high of bras bras on choice customers, already and these of bras. her seeing not recognize But These levels, purchase. we sufficient. in we are All focus We're and

X pipeline have total evolve long-term sales and quarter. consecutive of largest of full we'll loyals. the up play, new the the book We in of we In reset, offense. business five using continue agility for panties, line fits the for and growth call. been business speed using creating the X the quarter and the profitable bras, as two XX%, second a bottom for And in panty for has the We as to reset of by to double-digit panty and we're mid-single-digit discussed quarters reduced are The business learnings delivered have our line growth. number last top for now

drive the and high and is Sport softer business, continues to are sales continuing grow double digits critical margin. deepening now the categories her to sales momentum. bring in XX-month up and Key categories growth. to In sleep new Sleep adjacent quarter mid-single has and a are experience and continues drive customers. are to addition, been adjacent for with loyals lounge creating quarter. in reset to digits Sport new apparel casual bra this were

progress go customer gap file in balancing now close line of there more more recognize to forward. line, and innovation on is work the those We top bottom product, encouraged choices by the growth. the Again, fashion I with do while I'm are bras to

continued been integration experiences the to investment serving And and for educates. inspires and to terms existing, have that our and girl. and customers brand-accretive assortment We're that have the navigation a her, deepen opportunities In promotions reach of customers. seamless through using digital in-store a into reaching new We're lapsed rolled tested the new increasing positive. brand and and we're shopping our through we've and testing and experience, connect the and results proven evolving a with new magalog

CRM vehicle have a our single this We to customers. acquisition efforts. high-value piece, build than and the Card quarter to Angel rate We've in response our back the to seen itself continue dual-channel digits increased traditional higher

that's It's progress confident of is our work our leadership do, week, I'm progress expect offense decision-making. in move forward. our to on every place. and process every in month day, speed brand. to we and the a continue I agility, process team in and our the More balanced leveraging Again, team resetting always deepen new as approach, and Our to every

Greg Unis

morning. Good

remarks, QX marks As achieved comp. the Beauty double-digit Beauty business. business best in positive Collection our growth quarter strong our the Throughout you by category. the saw for our the prepared fueled declared fashion our growth comps, priorities. quarter, trend double-digit growth fragrance, sales fourth an in of a positive saw exciting read consecutive strong is Bombshell and In we with franchise in set, Mist QX which we our from

the limited-edition successful total. February, country, growth, time, our Bombshell fan and the the At customers, growing in the we Bombshell Specifically, one had the Bombshell we Bombshell on-trend in drove our beginning At significant fragrances category Seduction scent to our resonate in accessories. driving of growth relaunched franchise beauty the and Collection launches core the of our in double-digit the positive in and Summer. also Mist significant PINK with business. top same Fashion with #X franchise Bombshell, of growth our continues favorite,

drove with results, pleased initial growth. which are significant the We

We are plan back we to PINK what's into the continue chasing next. close bestsellers to stay as and for customer

with be on Looking spirit lineup In QX. focus to planned forward, we for top set, scents look have relaunching the a feel. new of and on-trend will exciting our an one continuing we of best our

continue We drive will fashion accessories. lip to and Mist newness through Collection, and

season new and beauty bring offerings. life We the back-to-school will with PINK to exciting

ahead. for will joining growth to it business thoughts. We and to are our our continued and over in confident to Nick and you quarter team this Thank share his our forward now look hand morning, the Coe model, I

Nicholas Coe

Thanks, Greg, morning, everyone. good and

that lapping the continue grew following part in solid QX acknowledge by year. grew build few that the as in period. also a first XX% deliver really earnings on and were difficult a of We performance QX that encouraged a to operating sales XXXX. prepared remarks quarter were Just should compare I'm to in shared last we release. in the comments of solid income we as the Sales we results softer XX%,

QX have a previously, by a described applied to and get to performance the important us put read will seasonally our expect the sales of more the business. did fragrance buying strong the while that to have wages year the affecting earnings momentum which but balance capabilities expenses QX are openings, some in home customers our from really from a release investment our partially year. We will the soap helped in basis. results, to expense in we quarter occur more extremely on only QX remodels QX. our was full SG&A start, and care of on impact we build year-round really into of store in relevant timing and leveraging aside, business Sales in and announced up As benefit pressure chase react in first seen with and be in pleased less collections occupancy earnings impactful store from new our our continue last shift learnings and Also, QX body that the

our very support, continues channel significant As investments to QX making aware, the be you online all the experience more of And we'll balance growth. in and are strong year. in

that remain the our in the will forward both goes also our can turn saying, and to Martin. inventory, our conversation optimistic well as manage innovative Looking cautiously diligently continue of into health sales ensuring expenses brand. platforms. as over to the relevance while products launching strong to customers experience and in we We and continue and and new investing and a have drive Thank you, stores I'll the the to second investments great digital long-term quarter. business It without we

Martin Waters

Thanks, Nick. Good morning, everybody.

international performance our I'd at quarter first the I As three on business back level, make a for high look observations.

Firstly, businesses operating good doing sales are with the well, income growth. and partner-based

significant to there in to overall, thirdly, to we VSBA invest which X have expectations. well. continues be to us. stores of doing are our are X which challenged, of and opened very full-assortment it. about to Secondly, comps lot we China, continuing in this success our performance later e-commerce the line be initial continue firstly, back fourth will U.K. open And the stores, turn believe and with And for the In in a business in market saw brands the full-assortment progressing line priorities to to we fix work North Amie. very improving year; in in build of And in be, all a do our balance the with continuing finally, quarter, the XXXX, continue stores stores partner-owned that we'll our world. of America. where XX China, the international scale everybody, in we in segment another were broadly secondly, around Thanks, the and and of patterns the on I'll over U.K.; our to it

Amie Preston

Martin. Thanks,

time, happy morning. turn to comments over [Operator at it So that questions. take we'd this concludes back prepared I'll your Thanks, And Lori. this our and Instructions]. be to

Operator

Instructions]. [Operator

Our line of Anderson Riley first question from the Susan B. of FBR. comes

Luke Hatton

This for Susan. And of that process was And the is back in there thinking is wondering, XQ? any we at swim-related Luke then Hatton I the PINK? you impact then the how are on half? maybe should carries into exiting just where be impact into swim about

Stuart Burgdoerfer

Well, Stuart. Well, this exiting season spring, down to the selling continue swim this this spring is time, at intend PINK. be remaining don't the swim we'll at in clean, category the and assortment

is on clear spring there sport, is beauty. impact 'XX. in the loungewear, as the just significant And most have in of business: believe categories lap we'll significant bras, result we So focus 'XX is more that -- other be we in to growth our that, spring panties, the

And in decision the for it to the the back it's thought PINK Thanks. XXXX, business process the relates as really that's well. as what and underlying lingerie drove so business

Amie Preston

Thanks, Luke.

Operator

of next Citigroup. Your comes line Paul from question of Lejuez the

Paul Lejuez

pulling seen you made thinking strategic in the early 'XX, back mailers. catalog, some We've changes back Just promotional back add of mailers, to swim. on those you

discussions You some back have point? you about Are curious team this door just there category in How the open bringing I'm just in way. form some on brought that the at magalog coming thinking back is swim? swim left back. place if taking about guys some leadership

Stuart Burgdoerfer

lingerie as that growing adjacent and the back categories, loungewear there there time. time Paul. core dialogue and categories the time within well. just about to then to se? business, the core in is adjacent Yes, our from Where Paul, it to sport categories, energy both PINK dealing our Thanks, said, growing with in With focus loungewear of is, other it our bringing on is PINK. greatest as And categories relates time beauty discussion business and is growing I'm is and again, out ongoing lingerie, and our our from the per potential beauty business. But and swim placed Thanks. including sport,

Operator

comes next Stanley. Kimberly from Greenberger Morgan Your question of

Kimberly Greenberger

I to just basically number. Secret. ask to stabilize you about in struggling promotions Obviously, that brand the stores, Victoria's of to order on to traffic to leaning be and seemed traffic philosophy the promotions drive wanted the is on

customers promote could So driving later would is maybe off share drive Or and into then philosophy, between and margin brand just the you what on? ease your the rather you trade-off erosion? traffic, new philosophical traffic and

Amie Preston

Thanks, go We'll Kimberly. to Jan.

Jan Singer

use to would Thanks, Kimberly. moments to that for box. we customers promote I new say bring the strategic sure into

her, merchandise, that, seeing her when her to build our it. loyal on new to see we engaged and And is job our customer now And have want funnel. we're We new the keep a that do with build we up acquisition. mover

that when in we done shopping. know she's time of business it's that we books at So launch at moments moments certain done things, against certain time and it's in

It's So product shopping her in there patterns our is launches. to a related strategy addition to against it.

Amie Preston

Thanks.

Operator

comes of Canada. Royal of Tunick from Brian Your next Bank question

Brian Tunick

wanted of sort more of as think guess, a the savings has erosion since coming about I How come Stuart, margins, from. say on and basis what about I to the cost negative think of little sales much XXX that going Secret, When hear where deleveraging think margin you and XXXX cost at the much are maybe Victoria's merchandise where been you savings at the to XX has how Vicky's. you from? points been about EBIT that's

Stuart Burgdoerfer

We're the start with the deleveraging our in but supply drive opportunities at can expense of of into to is expenses. significant. margin looking We've We're costs are the through operating components, are elements other details benefit With the and rate at reductions both income. first of chain. improve at are P&L, all looking our part marketing income how areas to reduced get other our operating question, chain drivers, programs. CapEx the to business respect much the efficiency forecast that the other, both been all We're looking one your in both very of to Don't at significant. and and supply Brian, have So that. to versus need just looking erosion we

details going all to contribute looking at the be, everything, chain. we're specific highlight of efficiencies to message that, place And the in particular in Thanks. are of there terms would supply the through In of in the substantial result. key driving operating income and would I plans we're

Amie Preston

Stuart. Thanks,

Operator

line question of Mark Altschwager Your Baird. next of comes the from

Mark Altschwager

at you on remarks, bit? couple how you pressure that back per hindsight just I much to customer building VS last if behavior has seen you insights the versus result of exit due the lost the into at just of expand mean, been of changes VS. customers other just prepared regarding customer high-spend the a the And you've share a of you can In the VS? lower any I categories? certain spend Could customer that in discussed years, guess at segment

Amie Preston

Mark. go Thanks, Jan. to We'll

Jan Singer

of things decisions I as Well, complex a were it's is there combination it always are think when taken. that

and Illusion the When is categories books of that's One reconnect the new bra, merchandise I as is now in Bra, Dream customer. she that is in XX involved time, customers to in her new comes that box. have that either instance, we under T-Shirt we our with slowed in mentioned which under in XX. that build a is bras, old to were of with even also certain customer Angels box is that the coming the for the and XX% years new The the of and right business we exited new down. to that And job or have

that back. now customers often by to propensity making that visit the we're is move encouraged up know high are the that more sure loyals we have than those us our those job that funnel. builds a We So new. our because file And that

file, in full it's healthy. to interest keep dual the So our at best channel, especially that and high-value

a share the recently is, hired she relationship marketing making who sure in very box, that new we with a have transactional we involved who's CMO serve in deep have we newness We her more and with CRM and and her.

good we building about that So back. feel

Amie Preston

We'll go base. Jan. their to thoughts customer Denise her on for Thanks, also

Denise Landman

Sure.

her VS very of one, addition its to lens level the glimpse the has two, where the aggregate in spend a affinity, able to to are opportunity into unique So PINK high-value through number customers measure we number Nation, get longitudinally. PINK important; and file,

segment our seen. Therefore, no business. have to stability found that in of great little We erosion

As exec and the Thank on appear recent changes Nation PINK have population made by been not be reflected to you. these team, do present at the impacting time.

Amie Preston

Thank you.

Operator

Paul next of question line of Your Deutsche from comes Bank. Trussell the

Paul Trussell

To and decline wanted green to will Jan, stop margin see and just of when Martin, and decline just how the that that And line. or Stuart can any quickly, Are the some you should detail and in to if will merchandise in know preopening there notable front? stabilization. significance China to and how time on shoots the ongoing the cost outline we about U.K. start think

Amie Preston

Paul. Thanks,

go margin. question about to for we'll So the Stuart

Stuart Burgdoerfer

With we rate and Paul. the in to expect would second third rate, the margin for respect relatively the Thanks, margin flattish Yes. quarter some fourth both quarter. the further a and then erosion

benefit the year and a softer more a in assumed view. pretty and pressure that in discussed the of So within is supply of that in And total. numbers chain-related function little we're obviously, for that's a then lapping company some I'm I the bit speaking prior result fall season. overall the steady QX versus

Amie Preston

Thanks. And Martin?

Martin Waters

Yes.

U.K., relates it the significant. the to has decline been as So

areas. reminder, in it's X a As

domestic business. see Firstly, the in the as same we pattern

with all an U.K. think to we've the read and to And in very Secondly, in reductions much market traffic there about that do own the poor certainly been is across U.K., will where need element I exposed our that there's of we execution thirdly, the you have better.

the from fact a that hiding in no very reduction significant U.K. it's So the

and preopening You about also China asked there. costs

that's significant there part a large to XX that with of stores that opening our related So investment are stores, preopening. very is

we stores forward got Our about expectation XXXX, decision that we until the into the XXXX, on won't we how in we'll many XXXX. business. And better open go the on will be reduce giving but on in make largely dependent later is that read as year guidance it that we've when that's a

Amie Preston

Martin. Thanks, Great.

Operator

question Saad next comes Omar ISI. Evercore of from Your

Omar Saad

I little Jan, losing you maybe more sure dual-channel bit want I you I follow-up wanted make elaborate and to what mean. to around on you could a if understand that ask comments your specifically a high-value customer,

why went customer, I they talking and thoughts older think us how you them of you're on maybe you're but an you some about tell going your them could and back. get to and lost insights where

Jan Singer

always I mean, a just them Omar. with things as of been and And left dual of them Thanks, some natural have attrition. look brand channel customer, combination the some there we us, of is. at There's age. the high-value yes, by have

left due the categories to the folks down. slowed exited we have that that the we Some brand and categories

customer. want books second that doing And mentioned in seeing data sure so that we're quite And and we a we of that bring are I in to some make working new ago. you're as a our aggressively, the

her in down shop sure in. T-Shirt am almost customers, bringing Angels. but which the than box not new for many twice then younger highest-AUR terms come or about and in both slowing making much Illusion, her seeing of we excited have and products reaching up we like through come bras seeing business younger bra, our anticipated, and newness I is the our we're to in her and as her that, in Dream seeing back customers Bra in through her, And move younger, So bringing

because we're fill grow. So her. time and somebody those that take visit engage time. takes we return And start funnel important having already that seeing really to things It's

that I'm we we consumer fill of that happening, but a what -- I'd have about pretty file So file. have our that in call recognize to beating excited of that green gap shoots are the I

Operator

comes next of Anna from Oppenheimer. question Your Andreeva

Anna Andreeva

fourth XQ does in to XQ about below quarter. Stuart. earnings historically The is comments being the that acceleration imply a Question big pretty

be holiday brand how color helpful. in year? about Any approaching maybe the to your So talk And guys very compared recovery would the by there. you level last are confidence

Stuart Burgdoerfer

mid-single the is a now and fourth percentage in the operating between years increase soft quarter fourth So lapping low- income, several and assumption that's in quarter.

year it's quarter As by you the far. the of appreciate, biggest

sales assumptions, effect equal Certainly, are we reduction kind rate does Our and by margin quarter. have tax of not an believe, the reasonable.

year reasonable on And is what we know we That's at out, so reflects we've a time think imply trajectory obviously. pace turnaround And view why the a and full put of margins. view believe Secret reasonable the this a of based the doesn't the assumption and with again, and in Victoria's heroic it that it we turnaround of business. it segment balance respect to sales and

-- it do, reflects a So work but change to in a got but trend. we've and certainly trend change in dramatic not

Amie Preston

holiday give a CEOs And about little And start Nick. mean, to a I be at high level, but in ask I'll any Stuart. Thanks, few the about talking with a early to we'll detail, thoughts great it's that.

Nicholas Coe

business back if the really product about from learnings in. awful think last year biggest of itself a last prepared weren't think biggest to the our and need I And I impact really year, the some retooling chase QX, lot we really our in of to manifested stuff came be into perspective. an changes were seasonal the in that from that we made

that was driven the is business into those ability of opportunity And week we this those in chase prepared by our things. stories. arena. our And back of or into be very positive the in change are year last saw the to we fourth trajectory October obviously So seasonal year to third a literally

really of business, plan us, time much and demanded to of piece year. of know ahead the that So is to for in much service position extremely the from to and time that particular very we'll better that important that be a which that's wants able being customer something

Amie Preston

Thanks, Nick. Denise?

Denise Landman

we with holiday, Sure. fairly loungewear respect into distortion typically to our experience a segment. PINK, In significant

followed respect commentary sector. As you some brands softness you've that with recent in to reporting calls, earnings in heard

us to increasing begin momentum accelerant holiday, propels the into the hopefully with we is truly this lounge forward sector, in confidence. regain that As

sleepwear, In in to have and commented sustain performance holiday I on gifting ability the last to with encouraging. brand's which is box, addition, respect

loungewear the in you. hoping point, a Thank its as turnaround or So business finds inflection to result we're happier see QX.

Amie Preston

Thanks. Jan?

Jan Singer

put great Thanks, that season around We sports Amie. from and December. bras. in I pretty know sleep, given a that that categories the adjacent we has lot strong, of That we are of year. we have learning play in a we've last the opportunity into bras and came spring, about great us agenda say particularly hindsight for some glamor would all lounge, had into holiday, actually

are bit levers we how And it, speed come the that new and in what I in take around we're to going up one We're to weeks together. continuing that that Christmas, our actually beginning never for we in know testing holiday going was to level a business us earnings. a Though to through to year. we our can us this encouraged combination gifting. other both to So on well. sounds use off-holiday of it's smarter Greg's by do gifting distort you to the we're muscle. of as think And final and replicate holiday agility obvious, but the an And pull. for I'm effort the want news came with

Amie Preston

Greg? finally, And Jan. Thanks,

Greg Unis

Beauty, that and really already Yes. in will in what's building off focused that our holiday. pay foremost, business, and on we're -- in would I first in In dividends say working

customer penetration Our with guests all the about In there. that box up of for of new increases PINK to significantly, we're so it business, PINK on there. business category winning the opens the a for total focused important it's world, whole and growth -- the really the there. and gifting beauty and It's --

Amie Preston

Great. Thanks.

Operator

question comes of the Boruchow of next Ike from Your line Wells Fargo.

Irwin Boruchow

Just two quick modeling questions.

we -- million losses expecting those to profitability in $XX for China, Can know a in into remarks, widen then, year, But benefited stabilize for costs QX. about $XX just million, future I on real this. how dependent margin little last openings. for trying come was real Martin, don't quantify around lost it's timing model margins to know of much think or you that better? Paul think you that around you Stuart, quick, the because know we a First, or when of I QX BBW think from for so you But years getting store And I out? year. shift the estate are you bit us in this the Can mentioned to

Amie Preston

Thanks. Martin?

Martin Waters

Yes.

year So thanks year. would million, we the Ike. you're loaded, for $XX I what you million question, the so for front is tell And full $XX invested that that that's right somewhat can so stage. front year. to half expect the this the the about loss all of can tell than level of lower back you That's a you I half at of the see

Amie Preston

Great. Thanks, Martin. Stuart?

Stuart Burgdoerfer

remodel but it Nick the relates to mentioned it I that describe was year. it the on the wouldn't Ike, that as as some on timing, effect significant effect,

of So but timing shift enough bit a really large to quantify. not little

Some that big. but impact not

Operator

comes next of Chen Oliver Your question from and Company. Cowen

Oliver Chen

or much younger so done are thoughts balancing are here? I what question versus segmentation simple thoughts that and What engage your program, to strategies And the prioritize your have of how customer? with complex on the about answer. how sure a would just customer. We've the brand a data younger And on you research to accretive loyalty, promotions? direct using traffic your mail make it's

Amie Preston

a to So sure, specific you business? make with Oliver, asking are want I respect to

Oliver Chen

great. be a be VS That would great to would one address.

Amie Preston

Jan? Okay.

Jan Singer

Okay.

The and engagement, obviously, So with all, our We're seeing and first X at I the but of I not likes for about social incredible it of I as personal reading manner I customer, actually of that. so direction we're channels critical close conversion. are to the it's going And a.m. business means tone happy commentary my it's stay from pretty world us, feel -- to channel younger be improvement and in. one and the each evolving. them, is the good think social about which is, that make just

segmentation, awareness high-fidelity she's that have buying, her with then yes, on of store, will our segmentation, conversation data, that with what she's resonate. who we she's of in the sites, is, returning our terms and she content In

more is she So it get all time. and when translates model into high-fidelity this everything often. the isn't engagement she's not conversation of know brand a we an and us into She of everybody key the But part well, loyalty. one-size-fits-all. It's do comes the feels gets that us to and for we that segmentation sees nature

Amie Preston

great. And Denise? Okay,

Denise Landman

respond is brand, their well in particular and Generation to spend make would you significant PINK in in interest as to teens I emerging the retail Z, respect are which strides of to consumers levels the as imagine, defined with sector. these beginning the can generation their now as

brand, think and have landscape. generational this cohort engage beholden the speed would say that. brand well in are with are you. it's inappropriately our understand in experience be in social it. satisfying shift, And order There to that her service this respect with associated to brails experience. age generation I would patterns as we to nuance the appropriately beholden preceded to to social the differences and between you she generation order influencing truth, the this she on we the tell I understand distinctive to expects a With e-com order her that as to e-com efficiency the migration Thank

Amie Preston

Nick? And Great.

Nicholas Coe

the it we healthy, stores, that of the Yes. think engaged would into bucket put a has customer. good-for-you from I especially lot into the product naturals, X put the buckets. improved And younger slant, Oliver, I a first is

second we healthy thirdly, to is of not what, a with I a aggressive say agenda And coming the we're has mix then genuinely younger remodels, The that. stores. the normally seeing from also younger product attract traffic that haven't can to only customer pretty attractive higher perspective, with traffic bucket with been understand our but testing -- would in we really

traffic. customers. not our nice only of well a customers but nice on mix we so also loyal younger And terms get And remodels, our a as pattern nice do investment seeing for return a we're that's those as in of

So X headway. nice and it approaching in making that's how buckets, really we're those

Amie Preston

Thanks, thanks, Oliver. Great. and

Operator

Your of Bernstein. of comes the line next from Merriman Jamie question

Jamie Merriman

that on would I'm profit back between and And the back trade-off the about you are let And promotion sort talked some there's customers to question and revenue. past, new pull to back not promotion of pull want to reconcile of just point how that process or get just I bounceback that the sort an come November. think promotion opportunity promotions but to be of to of rate. the wanted promotion at In around trying about the prioritizing appreciate started to more just and dollars, that you understand, wondering you've revenue using where willing in you in, what you I decline. and to if you on I idea products of margin last seen

Stuart Burgdoerfer

to up going to Yes. crack a I'm take at discussions. on following earlier try the

we now the mentioned Bath number the the really a merchandise it. an balancing leadership to X of Stuart. factors, business, get of trying clean or that it's in key well, of to described, end most improve over store, pressure price-ups balancing same have or of think result. as promotion. going had hard a traffic day, I appreciate, whether we the Lingerie. it's mean, seasons into dollars driving balancing and I and equation. ensuring take the And business into through It's got Beauty, the in price-ups, equation we new that another of that's respect We're that can reasons in doing we're to time allows So time, we've we X Body, you in the the where At main end business. at works we've main how amount the we so Victoria's the that's for you a of reduce to possible. in Jan the the as of business We're factors, of traffic drive the number do, where you & can trial always in it's we're But recognize margin visits teed up item inventory, any with to a product ultimately factor literal items. and that parts all compelling promotion not And in driving over -- the And us a very if time, PINK, good business, question.

it's So to ultimately again, of you I drive in recognize, looking as business. think a the number balancing dollars factors, margin

Amie Preston

Thanks, Stuart.

Operator

comes Retail The Tracker. question next Your Shapiro from Marni of

Marni Shapiro

So focus like than Nick little VS a dog I thought on I'd bit. everyone, rather

lot a again. launched of new products have guys You

You did spring. thing last the same

if comes seeing, she what year as because are feels best can So this you talk about a bit very like little launches the you I'm it distinct. curious working into the are what's store,

some fashion the have driven look that by look -- very You the are products packaging. of strong and

cool then whole you and packaging, push naturals modern organics. have and some have a You on

towards if trade BBW. as So secrets, what and you us give your can just a insight customer what's away working to without for giving is leaning little

Nicholas Coe

question. the for Thanks

at comp. for? nice see, mix a shall stayed where of healthy this? loyal me what of well, she think the I us we that's of say very by knows with that core knows the close business Let would being quite her us from very the of, And we're in a looking seeing is and really is driven the and trajectory start I our is to business, what what terms is And perspective, customer that I healthy. core

other to the that other into the articulated, has launched come well bucket part or store front fallen you've that do brand, at part a fashion has growth the because of healthy, the comp from fashion the just of make as ourselves some do good-for-you The we've newness as of sure the ideas day, try of what we've the certainly of drive traffic reflects the wellness and really that that as dropped obviously that. the we of end think we

new introductions have -- way between, a customer summary the core and fair or we So able happened. to loves fair what think it say knows a of us looking that, a what's to you're for, traction loyal us seeing mix probably I element have gained healthy store? really that is of healthy the I'd for with indication been do So a in she of is and the that what summarize

Operator

Advisory Your next Telsey Dana of from line question Telsey comes the of Group.

Dana Telsey

terms a operations magalog the on marketing And on mix? these bit, about cost, return investment at lastly, Victoria's thinking going? store the the Can progress magalog you Secret, for of return talk overall on that the you're about is a how and in the of little the just to how the magalog

Amie Preston

We'll Dana. to go Thanks, Jan.

Jan Singer

I'm magalog Dana. we is the to of model, people. share a a not you the to did that that and business and Thanks, network we lot financial lot want into we that going of with more get but what recognize tell matrix content, great I'll have

bit us investing than a piece actually, that opportunity longer little engagement, So a to CRM. a had traditional for in the we're house response we're the has develop around keeps the longer, finding, has she higher

So as a share, to product well continues as we an the have getting we as that evolve information that and connections we're a as her well have and to tell existing customer sure stories information to lapsed customer and make we to as want as new customer. to out

and to happening. test going go how we that's So feel about and strong forward. watch the we're to calendar it, going many often how We're really

I'm it? sorry, Dana, repeat Your operations. you second question was store about can

Dana Telsey

about and are Secret the It's Yes. the changes store Victoria's of how operations progressing.

Stuart Burgdoerfer

the -- Dana, Denise Bath it Greg at to at Victoria's Body foremost, experiences crack as I'll And great with it's Secret want effective associates to Jan is at and to it, may store in first a or through and take to the or engagement then is, & deliver stores. or it frankly, -- add focus same Works.

our we that sure enhanced to a know, you lower-churning drive very front competitive levels increased the were our benefit more wage that workforce. which we and As make programs, to purpose on was of stable,

the best wages all focused of particular on Body, But primary our that training, kinds the to various that our whole retail the workforce. that. and aspects of then we've do the ensuring to on business Thanks. improve their starts And focus Secret, capability and is at around stability so business of the we of things, continue terms at our fundamentals with and Victoria's And Bath And technology quality scheduling in absolute of is things focus execution really from and associates, that, a ends on it workforce of & got all the apart and benefits. in with business. their

Amie Preston

Stuart. Thanks,

Operator

Bob next Your from Securities. Guggenheim Drbul of question comes

Robert Drbul

if Just two quickly, I could I'm do sorry.

point? think is in And at the in this China Victoria's guess with China just can question brand on perspective update terms Works, a Bath do fashion an the brand how you just us is of to you you is, the Body time you one from show, marketing a remodels in I where feel Secret do give at longer-term the & this touch stores over where the frame? and many on first for point need that going see The you like

Amie Preston

Sure. start We'll Nick. with

Nicholas Coe

And there's total somewhere are about probably got, remodel that obviously continue get leases X,XXX, we we've that totality. to previous So I where to we us over with X, stores between could have would get which the another would course on that's next when good of existing stores XXX in were X,XXX as we stores real a of our dependent say to estate. to, upon the XXX the touched years, flexibility X

I that that earlier, closely as we're probably still make happy that's we're we So to still and continue with very, that they continue work. the -- make want we them getting, they're monitor way them also but sense working that very And to results we sure be said headed. the where to we to

Amie Preston

Thanks, Nick. And Martin?

Martin Waters

Yes.

way. our So building good show or XXX in something of think the digital certainly, China. other saw We the media awareness million for TV order in show or is either some very the fashion fashion through people last that year

brand, understood our the the the we stands what but and play in lives. less So well recognition a customers' pretty think have brand we is can high of role brand what's what for

brand that we're e-com cities, through and digital of a for will not it getting stores work our these rapidly. flagship is file, store way, channel the the the digital X, start do principally Shanghai really be a in third Kong, aspirational open important there. And with connections, have the certainly And in which there building to of in the as we announcing Beijing, So as be important Hong beacons to we new brand. building so launch way Hong additional leave very we'll and the Kong,

to the high of work in equity the getting certainly, So marketplace. the awareness on do and brand

Amie Preston

for today. Memorial you Day has and your Brands. great weekend, Hope everyone Thanks, interest Martin. our thank concludes call a L in That

Operator

Brands L the conclude does That you. Call. First Earnings Quarter XXXX Conference Thank

now disconnect. may You

Bath & Body Works (BBWI) 24 May 182018 Q1 Earnings call transcript