Bath & Body Works (BBWI) 17 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Wendy Arlin	Chief Financial Officer
Sarah Nash	Executive Chair, Board and Interim Chief Executive Officer
Julie Rosen	President
Jay Sole	UBS
Korinne Wolfmeyer	Piper Sandler
Olivia Tong	Raymond James
Jesse Sobelson	Wells Fargo
Paul Lejuez	Citigroup
Jonna Kim	Cowen
Lorraine Hutchinson	Bank of America
Alex Straton	Morgan Stanley
Warren Cheng	Evercore ISI
Matthew Boss	JPMorgan
Janet Kloppenburg	JJK Research Associates
Marni Shapiro	Retail Tracker

Call transcript

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Operator

Good morning. My name is Danielle and I will be your conference operator today. At this time, I would like to welcome everyone to the Bath & Body Works Third Quarter 2022 Earnings Conference Call. Please be advised that today’s conference is being recorded. [Operator Instructions] I will now turn the call over to Ms. Officer & Financial Works. Chief Arlin, at Body Bath Wendy Wendy, begin. you may

Wendy Arlin

ended welcome Good conference & period Danielle. you, to call XX, morning the earnings Thank quarter and Bath XXXX. third Body for October Works

matter are to our today SEC a may found in and Harbor subject of statements our forward-looking As we any our make filings statement Safe in formality, press releases.

Sarah Rosen. call today the Interim CEO, of are Board Julie President, Chair the Nash; Executive on Brand me Joining and and

are today in adjusted exclude of the discuss All early debt we related charges of the XXXX. and to results the extinguishment

Additionally, and Victoria’s the operations call results Secret. represent the to Sarah. results to from the continuing related turn over exclude operations I now will discontinued

Sarah Nash

thank joining everyone for and the Wendy you today. Thanks, call

start Let’s third our with quarter results.

of guidance of the EPS We $X.XX, double range. are our pleased high-end have to delivered

line year Given from $X.XX to prior raising we results, to guidance the $X $X. are strong $X.XX EPS of to our bottom guidance range our full

quarter reflected integrated newness, of success Our to innovation high-end and leveraging sales and the closeness the winners. key chase our chain on customer, vertically our team’s were our in our for focus at and supply our expectations our to

our base our million loyalty industry-leading now has Our success. with achieved great loyalty U.S. and about adoption more than since speed total up of program make sales our members XX in customer nationwide sales in of program been over enrolled overall We to-date. customer launch. members launch our of a Loyalty two-thirds third a represent

those not significantly more, retention than We this the as and visit program. are program spend loyalty us our about more higher excited customers have of the rates in potential

actions to pricing as revisiting margins. improve rigorous well take as improve to to proactively and costing profitability, plans our merchandise product promotions continue including We

actively cost compromising to working our Additionally, product focus inflationary combat operations streamline pressures we our on without and improve base quality. to vendor are with

reduction the including We several corporate selling expenses. implemented optimization have and store quarter, of during also actions expense overhead

environment. challenging this in given our continue will area We business the focus

it on positioning. back turn announcement to my like perspective company’s I overall to share CEO recent the Before our I’d Wendy, and

thoughtful CEO. Estee brings is We the expertise of track were operational conducted brand Alberto Our and Gina omnichannel search roles strong Companies. at Unilever, demonstrated company’s care deep looking were of has the right business experience, and for. than channels The was a business experience found years globally we while in of She Lauder and shareholders. development delivering to sales, we record value marketing, strategy, drive delivering global for XX very personal chapter categories the companies leader that Board more is as and along for confident company delighted and Gina across The we global Board Gina, such the leader successful Culver including enhanced building in that leadership outcomes. Company our next our with growth next as

have our confident my capitalize that to time and to & for all by Works our & brand customers’ to Bath impressed and continue driving to the I am to and their thank commitment Wendy? like company’s and During tremendous enhancing our as Body Interim talent agility globally. Body CEO, on innovation will our Works the been experience. expand potential I’d of I team associates the team. management Bath dedication

Wendy Arlin

each will I remarks posted Sarah. you, our press highlights, to and Thank details. encourage slides, contain be review additional financial but which I providing you release,

were compared of year. stores, $X.XX margin to or by expense a up XX% Sales million we third said, billion, a of quarter SG&A results to favorability. better decrease favorability, last quarter, as $XXX U.S. better-than-expected were X% In Sarah or reported Canada guidance with per of principally expense and million together $XX sales share were to due These driven third $X.XX. category EPS primarily our to the rate mix $X.XX For and $X.XX to compared compared transportation XXXX.

to Customers choose than $XXX compared We quarter or million were buy ended BOPIS X% of in direct quarter million, to sales stores. or in with availability decrease the our continue a third X,XXX online, omni-focused more BOPIS. pickup $XX XXXX. store Third option of

sales quarter XX% and Our for were international the business million year. last third to $XX compared increased

perform Our expectations. international consistent business continues to with

Our third to shifts negatively revenues quarter shipments. were timing recognized impacted product related by

for year. the Now to guidance remainder the of

XXXX, billion. to quarter mid to low the to of For expect between $X.XXX single-digits XXXX sales double-digits sales fourth carried decrease we of

to We $X.XX be EPS and share. per are between $X.XX forecasting fourth quarter

For to in XXXX. we the down billion compared $X.X are forecasting sales year, full to be mid single-digits

and totaling $XXX inflationary costs, Our approximately million revenue rollout $XX of guidance full deferral the loyalty $XXX estimated million program to year the contemplates from impact million.

quarter, the lower component good to care. difference between expectations. inventory finished dollar categories up The unit inflationary the last better relates last last line partially units to compared Total cost particularly XX% were than in X% sheet. compared The on growth primarily body product year, with is last very unit balance and goods and due to compared by soaps ended pressures to Finished to up that offset inventories were expectations. year. lean year and retail increase year, to Now growth

light the operating We in management are a the confident positioned our strategic in now to will be over environment. that investments strong make the about the to turn of growth expense and we holiday capabilities. At including technology we season. approach same reflects believe products, support well I inventory disciplined Julie. to dynamic We inventory to call business, our continue the omni of a support is guidance time, and investments the

Julie Rosen

Wendy. you, Thank

sense packaging. to and our customers fragrances saw For in the third quarter, iconic fall well we forms, multiple responding

differentiation in to the be categories such Weave, Weather unique for a point Waffles and Pumpkin Pecan and Sweater top of multiple forms, fragrances brand. as continues Our

After for the business. test Dark, launched to we further Leather men’s single men’s Our Brandy Whiskey. business, to & & the fourth and the new shop through fuel a forms including fragrance launch business significantly outpace merchandising continued and ideas this new we In Coffee quarter, growing as of the

as to perform shop sulfates parabens, expand the continued we is new without Soaps our continue to outpacing well, that dyes. formulation made or also

through we opportunities for performing see meaningful of soap well relaunch very Our growth this gel has form. and been

see expected, continue Care the Fall Fine a As outpaced business, a time mindset had in quarter Bloom customer accelerated which of was Body bolstered & third sanitizer Fragrance during shop shift Mist that also out our quarter. that fragrance strong we our the the the during this of pandemic. met new year. by to

and to our soap is already enable that newness, quarter of will part and antiperspirant and on which in will to vessels effort XXXX. launched testing to expect As soaps we customers in in refill stores the and containers deliver this cartons XXX introduced our of innovation their men’s, and begin of customer aluminum our spring to roll on chain In focus balance XXXX. we deodorant, the past

launched XX online also dietary We stores. test of and recently face hair MOXY, new our supplements, line a in of products and care and

of this in are stages listening here. learning. early the are and launch and always time is We This we exciting an in

a have and of offerings. holiday returning giftable favorites new We mix

affordable gifts an price at luxury have brand, As all we points.

to our assortment, As that, Wendy. further new we brand. we to to continue attract expand introduced are relationships product and With our program deepen will compelling customers our turn back customers you, with and existing we our I will it that confident loyalty new

Wendy Arlin

time, prepared our may have. happy concludes That be would this any you comments. At to Julie. Thanks, we questions take

Today, courtesy, limit please in are and go as you. I yourself time question. Danielle, going reminder, a X:XX. it to interest the a we one will over As to of turn to to about

Operator

Thank you. [Operator Instructions] with Jay Our comes Sole from first question UBS.

Your line is now open.

Jay Sole

other the trended slowdown of much. just what in about through so have for what’s quarter and have last sales X you companies implied a how XQ? the talk in you lot and traffic sort you. about Thank of are in of seeing of October Can big here A talked you and to the the November. talk just Could Thank what you seen Great. weeks about you beginning guidance November?

Wendy Arlin

Thanks, Yes. Sure. Jay.

on we So did saw during look quarter was QX, as the what of the customer really that course to promotion. back the respond we

we incrementally year were And that or deals, last that flat days less the sharp the price outperformed. days we promotional we year-over-year days points or underperformed. those where compelling to on those had promotional, days On were

promotion is are Clearly, mindset us, for that. it quarter And we for saw and story the the where as So in that customer sensitive. planned planning was is. for and we really price their had meeting the very well. the We of customer XQ

fourth is very our terms quarter. incorporates that the customers we our with seeing to guidance month of during date and sharp and – all-important be November, in what deals to So are are prepared resonate have we

Jay Sole

Got it.

Wendy Arlin

you. Thank

Next question, please.

Operator

Korinne next Wolfmeyer comes from question with Sandler. Our Piper

line is now Your open.

Korinne Wolfmeyer

all. the congrats and question for morning good Hey, taking quarter. the Thanks on

lot of seeing about been category. like are on for that are costs? especially I’d a hot the input any within Thank topic seeing a kind quarter how just or So terms of in of talk are I that? to Can you just you bit headwinds this challenges you that’s you. and little a combating pretty you what mean fragrance players, ask

Wendy Arlin

for Thanks, question. Korinne, Sure. your Yes.

talked have They about to elevated volatile. in last very materials markets continue compared calls, input several The pre-pandemic. in continue us be in a to be the for particular, we costs, raw in are As challenge. to pricing

XX% point of a pressure point. it just we just materials. almost continues be pressures raw have be over quantified does our so pressure to And our us, continue for inflation to it a And that

to candle describe modest wax, and other We little would have costs shoots a continue as our green challenged. be seen in input bit of but it I

Now said, our to we’re that mitigate being working price suppliers those with increases.

the We’re be cost in the prices, to and but pressure opportunities and for we’re as do continue a mitigate raw out, point looking to looking be product opportunities for business. to materials well us at engineering our how smart those value

Korinne Wolfmeyer

you. Thank

Wendy Arlin

Thanks, Korinne.

Next question, please.

Operator

James. question with Raymond comes Olivia from next Tong Our

Your line is now open.

Olivia Tong

your your their I a had I – of you just into handful up performance this you about thoughts last two-thirds. around ‘XX. they then about much quarter and pace It a were you buying? any I quite if that base – on in, the a higher differential And insight If second members looks of terms like could it’s of expenses whether third wanted how SG&A to one more Because if sneak you third influences talked how they two-third just the your member between of loyalty versus level fiscal purchasing of quarter are levels certain in base that income in more the improvement your are are good morning. other half. obviously that of big the sales, making think give now? in ask could Thanks, –

that kind where than imagine expected? the so So in came those what with in, of better Because curious had you line you of just anticipated? Thank I wage inflation, much. in some came expenses, home

Wendy Arlin

Thanks, Great. Olivia.

to I’ll and go for will then Julie take SG&A. We loyalty

Julie Rosen

Yes.

the program, are loyalty our for So we program. thrilled absolutely with

evidenced and local sales. our by with engagement, enrollment XX% company pleased We’re

us behavior spend. program wallet. help help marketing. of changes future higher data rate, exceptional I makes create that spend, more to rates the the trends help and enable enhance and to our brand more in retention as will and and mentioned, customer members. to to about plans we our will think Sarah that’s experience it’s a the important has to of have and non-loyalty also foster is collection. drive mass cross-category us that effectiveness on really evolve loyalty identify and exciting more member that going a share than meaningful And membership data is One remember, to more we this further loyalty have us customer And thing the ships in very It higher program connection continue personalized capture shop our

Wendy Arlin

Julie. Thanks,

What planned And the in with wage on compared did investment break store I for know was LY. prior the been stores, store we went SG&A, as including to about increase in two-thirds and year, our very compared so I fall premium our increased for our third in it very made and a down into of discovered this we’ve as associates that season. of is has time numbers. the office increase rate cost our course, to rates which, About SG&A selling And home maybe saw On in structure. calls, comments of talked last successful. associates, We of a we you couple period. thoughtful rate was investment the start a it about store to we SG&A, has

stores fully Our are We recruiting. staffed. had success

that ready go. we hired investment as that, So into go because are associates confident we’re we have store off we pay QX great to and will very

In terms office. of home is it other the year-over-year, increase

continue we as well. there about, make talked I’ve investments As to

Secret. as So investing We’ve we’re folks process from invested well. our home to in Victoria’s in technology of in the separate office also

manage remarks, given say there. our expenses In thoughtful thoughtfully try terms prepared favorability we we one, beginning of the we about driving our I emphasized in spend of environment it. the during are macro where to as quarter, money, this we two just to would being and continue to quarter, Number things very are frugally out

So we expense did board. across the see favorably some

favorable technology The is this that to other thing favorable our come quarter in did spend plan. was

a than what to We’re your expense ramp-up, it of the of ramp-up going Thank just the slower in you we little but compared but in beginning terms work did for seeing that’s expectations. result bit separation favorability well, question. occurred on bit quarter little of some a expected,

Next question please.

Operator

Our Ike from next comes question Boruchow.

Your line is open. now

Jesse Sobelson

This profitability its Sobelson fiscal year? next algorithm company return could Thank to just to were is Ike. realistic Is margin our your We the for Jesse business. an for taking for on curious the goal with to update mid-XXs question. on it low assume

Wendy Arlin

Jess, your question. Thanks, for

February. terms one for in will in of is I a hear So us tell would guidance Number of things. year from you next definitely you couple

We plans are our for about thinking next year. thoughtfully

we’re impact about Number I how in mind, business. pressures long-range to major one, of our that think as inflation on we terms earlier, planning, In things will do our actually exist things and two that cost still come answered focused three.

go into be thoughtful we working still we turn two the calendar our promotional do We’re XXXX. to exist those, mitigate is XXXX. on but we approach, to want Number those as as into

said, in And is the is right a look be that lot how we’re about investments price this make do there. separation. our how that want mindful and that ways do we beyond see we thoughtful to we But thinking tough now, to products as in Right of and can third now, what customer extremely we As we sensitive want investing and the are experience, of we we focused with customer point separation, our price technology. environment. improve we’re on we we and

Christmas. to focused – February. to are And on now, when we we talk at we more you come So in right winning

work to as as successful we hard we So QX. Thank can will deliver you.

Next question please.

Operator

Lejuez. from next Paul Our comes question

now Your is open. line

Paul Lejuez

want just of I’m have up seeing happen Hey, they a you more did Thanks. to you’re kind I’m if that over just be thanks, that their join, curious for guys. data you line it that program the the second. any signing a I you than more folks seeing you previously? customer that spend to when they kind could that what Or actually might are of back is loyalty curious if customer go is somebody customer? that that spending you increased to show your higher-spending once there? have get are anything provide

Wendy Arlin

Sure. Yes.

spend U.S. so on our prior So a in what as a nationwide loyalty – But a for reminder, we amount we the we’ve customers was see visit of test that And – a test often. meaningful and that a August. launched test time. and what decile-adjusted running to in basis, more us just more were showed

of all and customers it at effective getting more looking in levels terms to the spend, and more So often. decile test visit that look mean come at in us time. was it in other spend words, adjust of just I you money if us wasn’t the and love the customers program

in So we’re future rollout, benefits the the of very this optimistic but we program. very early are nationwide about

are engagement, We such high Julie seeing as levels indicated. of

So we think the get in program do this we the it do business when can future. loyalty and excited about for what

Paul Lejuez

the of lift? quantification Any

Wendy Arlin

August. very launched a list. So have seen Like I We in it’s just early. right, said, we

we the results have but you. come, from to more program. So seen Thank positive

Next question please.

Operator

Kim comes question Jonna from Our next with Cowen.

now line open. Your is

Jonna Kim

quarter. my you thank taking And Hi, on congrats for question. the

and would more you the care some strategies around hair is seems these around Just little MOXY and like just on you categories? going your you. launched more care. around wanted holiday forward focused men’s is categories, Thank category have a to thoughts doing your love on new marketing Curious and season color your initiatives the get skin bit which well it around

Wendy Arlin

Great.

We will go to Julie.

Julie Rosen

Yes.

our business. men’s and share business So we we that I our can on as Men’s continue calls double more as Based have results. the these thrilled market absolutely Men’s that launched with at said fastest are and to accelerated than on far we we to those in goes, an believe and increase growing know and total data, forms we rate, market the to merchandising and body the we fuel men’s shop. our business. continues to to leather The brandy, outpace quarter. also test our continue And category business coffee care. absolutely whiskey this significantly continues expectations. exceeded ideas our They We new be before

and out be So all to for instance, rolling we we we testing mentioned, are as about XXX in deodorant stores this spring. in been to stores thrilled have antiperspirant

in Just order market going own we business to And as form. grow this to share, double number market. aside, on in this men’s is the have to antiperspirant know form one to deodorant we’re the

we’ve tests lot in also of been So men’s. doing a

We have some expanded shop-in-shop tests.

marketing some are We that tests have tests. just

are as testing placement. we is of our gain goal only So to tests well raise the new these to And awareness not products but merchandising with and customers. in customers current as

So about think we bullish very great this excited it’s are opportunity. a business and and

on As say MOXY assortment would is the that as still only site. flowing again, it’s I stores. as XX mentioned, we in And goes, far

So are just so and to more on that. learning a come right we at now listening,

Wendy Arlin

She initiatives anything us holiday asked about approach. marketing on holiday,

Julie Rosen

see you fourth incredibly us, marketing price for sell It’s gifts. business around We the initiatives points. quarter sell lot because gifts multiple particularly at a in of will men’s. important we Yes,

launched fragrance launch Dark. gift for have first sets in the will in our We And this After men’s. men’s QX, first also we time single

So excited that. very, about very we’re

we foremost and and You our of from listening really most important will MOXY? business is and marketing, delivering down focusing and the core quarter some year, and are our on learning MOXY see buckling but this first

Wendy Arlin

we gifting is about QX the Yes. as go really our thing add I Jonna, only rent. are other into we And would excited

part a really and on guess thoughtful our price every been have gifting point. a we huge everybody gifting know and of showing we at about is price So points QX,

to think time in we we’re gifting So of well the year. positioned the win

Julie Rosen

gifting to as just adding to on, in the And say, outperform keeping QX did but well. shop

well we quite gifts And all at points frankly, offer of our QX. price really BBW. a it bodes products here So for are gifts at and we believe range of –

we So excited about are that.

Wendy Arlin

Julie. Thanks, Great.

please. question Next

Operator

comes from Lorraine Hutchinson of Our question Bank next America. with

Your is line now open.

Lorraine Hutchinson

Thank does I a this program. I about question any there some follow-up earnings you deferred just in profits. way? impact end, cost program you. margin loyalty the as you cost loyalty of From think the as Paul’s other forward, change wanted morning. or know quarter was algorithm targets to margin the meaningful But side, the the on and revenue Good the

Wendy Arlin

Yes. Lorraine. Thanks for your question,

So cost imagine. you the program does a can have as

design program where the program So $XXX birthday hits a threshold, also a has component reward. has to reward a when welcome to it, a a to it and aspect component it. The offer they customer earn

of spend cost, margin think as in the it customers to more accretive is we and though, us those this the which good, visit said of future and and addition, So direct We in reduce those do we in program. the point cost do more program of terms because at to know often. a future partially offset CRM under opportunity we see it’s dollars elements – earlier, I is mail

So a end to accretive feel at although this is the is of the business. definitely there day, program we that cost, the

as the in thing that The we I data we road would program. know in the have this future say we other great is down is look

will be effectively. more effective As to the be use personalized you. much data, and we we deliver that we and on individual have will mentioned we know full Julie better able really data as marketing, believe this earlier, to which learn Thank we that we once match data,

question please. Next

Operator

Straton question Morgan from comes Alex next Stanley. Our with

open. now is line Your

Alex Straton

my a for congrats and then taking Great. thanks on Thanks ladies great and question. quarter

inventory. just all are just Perhaps last and you one being you into what the pricing of heading one could And about for some script me price did how adjusted on think consumer for I elaborate mentioned architecture that you thinking you that on the more is sensitive. holiday? other the night then

to a You But next that had uptick? sounds Thanks to from last talk driving a quarter’s like expect what’s us bit great tick that little decel you quarter. up this so much. it Could quarter just about you levels.

Wendy Arlin

Alex Thanks your questions. for Yes. Great.

reverse. in them do will I think I So,

on with We then pricing talk over and will then additionally few will start about Julie mention to I things and it hand inventory, pricing. a to

on we we well are are support think So, positioned all, that with first strong inventory, We so pleased of are a inventory. where very QX. we with to

we important extremely entered we in the clean, call, the As mentioned is for season which last us.

inventory our are it our saw we a So, consists little position. of remarks course, and you are sale. inventory have is What we finished that our confident in in bit, goods, for of, available

we benefited in-transit because also in etcetera. that down like addition, or lapping. – is of not we driver were made, the we inventory In QX were componentry that terms pumps dollar Q etcetera, our The is soap, mostly things number had that that biggest own yet substantially, components

So, lot year the our a of if chain that transit. was you think a componentry we supply in about challenges ago, had

down when taking number, this So, XX%. is The elevated reported lapping componentry, which assumption the drove were to we normalized more dollars the the is an on which quarter, third in-transit to QX mid-teens. percentage our we guide the for up guide

of inventory so the just and are componentry more anniversarying. it’s phenomenon what a So, much creeping up. we not It’s

where on is In we ending season a clean. we of the year-end on focused very focused are terms maniacally have are we –

in the year-over-year. to with We have you remarks goal, units a as prepared flat our saw end

we use much we we have to focus as holiday selling as our season that clean. end period. We efforts time all-important can semi-annual of the And the during sale our on course, will then will

enable focused start to the are will clean We us we clean, a on prioritizing we on So, very season inventories. solid end it if definitely XXXX footing. know that

earlier, promotional were in in you we In as more pricing, planning similarly we be we promotional QX We as terms we to look QX I of extremely in is are saw we forward. the in are plans – customer that and saw have said in and year-over-year, that the we more in as – made our meet we now. our both sensitive where mindset right customer to that And QX, planning saw Julie? price is QX. did their remarks,

Julie Rosen

agility are as season, absolutely speed. read in react we strategy with we and confident to pricing a and and question, promo our from this enter holiday So, related

and operating us effectively drive pricing promotions the to to really model Our profitability. manage customer mindsets enables and meet

lens taking architecture. pricing all So, been the a prices. sensitive strategic is price to saying, we very customer we our have to are higher very Currently, as

So, our also impact dramatically. prices slowly a prices reevaluating our increasing formulas. in in and Such customers everyday better-for-you we are of and don’t methodically some as way our very raising deals that

continue to our we use build So, prices we really see agenda testing robust to where basket. the help and raise to can

Wendy Arlin

Thanks Julie.

Next question please.

Operator

next Our question with from Cheng Warren ISI. Evercore comes

line Your is open. now

Warren Cheng

for Hi. wanted morning. question. ask about the changed to my that’s I seasonality whether Good XQ Thanks since taking of your and business XXXX.

So, a if it’s it’s that at trend, on XXXX guidance I decel model, are sales through seasonality. XQ run slight X-year my on and a a a the normal stack more of look representative but significant and X-year if XXXX assume decel it pretty I

there any in about that would anything unusual call versus this So, out? change if to that pre-pandemic just year ask you. is wanted you seasonality or Thank

Wendy Arlin

years, extremely during if I etcetera, – etcetera. dramatically accelerated over vary And restrictions, our this as growth reopened, what’s during lapping periods pandemic I last would is certain X and call were and nothing were we was mean unusual year. unusual you did strong. the about stores

at you I consistent. pre-pandemic go business now, if So, the and generally seasonality versus think back is look our

Warren Cheng

you. Thank Great.

Wendy Arlin

Thanks.

Next question please.

Operator

Boss from Our Matthew with next JPMorgan. question comes

Your line now open. is

Matthew Boss

Thanks. Great.

maybe about the investments costs to transition, the CEO or you versus to opportunity as ongoing? as SG&A, a investments into in we would about more So, and contained that the quantify transportation deferral. any we costs more number I year’s I just think loyalty IT – this versus the you it is one-time there in as great. help provide guess Wendy, separation next and help way if parts there moving see to guess a have see be as to trying Any can maybe see this think year? costs year help way I or of that more If we P&L. you is am elevated relates

Wendy Arlin

Sure. had year, out the help but Well, will wish much perfect next as I I I I as you to try can. and visibility

abate on challenging, kind way to P&L. am a like to and we my you costs But we mitigate can. will favorability just that, few optimistic some seeing transportation have we the I ago on some XXXX. am said, continue as continue TBD raw conversation they will of transportation. I best I And are those signs in market. minutes materials. in continue seeing my and is it’s into a we I working try XXXX. So, peaking said, Raw as volatile that Transportation, heard be and will that, down are that materials, but potentially

IT, the you investments. is work we That with mentioned focused thing of on You in are so as into this the year IT continue separated The Victoria’s quantified to will we XXXX. next, have spend IT separation. forward currently look goal being from

working roadmap on a separation. beyond are We

on So, right now, separation. money we are spending

capabilities experience in our or program make POS But of We that technology where really again done. stores. customer our once use lot improve the money investments business at see a where or can will to I we mean areas be of see opportunity are in omni or areas want we in not in can we we experience. spend loyalty the many customer our in we to thoughtful about technology spend. We

on working currently. are about roadmaps we thinking that So, and

day, when But thinking to are continue a invest about will on money at company. get an so the to spending this the give bit little we February, want of that we And how we area to continue grow more we end to we want will to and because color technology. be

in a of is peaks a And essentially, impact. won’t And impact, is QX we that deferred mind essentially see You thing the mentioned impact then that I lap we I year, people. then will have next comes loyalty. that the say structure to the talked in terms about. people. in of would guess – it that revenue our of peak we program as loyalty, lot summer you the I last it’s once mean

of office want that are home not That’s continue space, to about And are continue the to rates we current we that’s to we stores. stores. about pay for our are to talent. environment SG&A, what for wage are a And the as true, wages So, and well, dynamic appropriate. just in two-thirds true expenses been SG&A in. appropriate just given attract great actually, think That’s

So, in the to we make our environment. investments in people current as will continue the appropriate

on starting do you come XXXX. know is will will which past that calls, one-time costs, have in that go We have away quantified – then will have some CEO next And transition as we that some we off do that year. retention

So, lots and pieces of environment. very a it’s dynamic moving

trying information you as We will we XXXX. to to guidance to we expenses as Thanks. as think and in smartly frugally And can. are and back committed manage lot February be more a as we about with

question please. Next

Operator

next question Kloppenburg with Our from comes Associates. Research JJK Janet

Your open. now is line

Janet Kloppenburg

of promotions business, higher in Hello about couple the is did the the on you. men’s women’s. and year on terms your talk year-over-year about Thank sale, in Perhaps meet embedded be Last some might ASP of I nice and noticed fourth rollout. opportunities just quarter, content, I opportunity. guidance could on semi-annual and believe this the what progress. of what’s quick Cologne the you talk I versus if that wondered that etcetera. perhaps you And the in And questions. average expectations. year congratulations could A not

Wendy Arlin

Julie? Janet. Thanks

Julie Rosen

will it far be sale year. this quite as last not long as year, As as Yes the goes

response up. customer to that our tightened have We We that newness. know

dropping sales. So, strategy in be this a January, to throughout different drops of offset to have we year small flow newness

We also units end the the year. are clean at committed to of having

that clean. supply and bought our to using we of cognizant not we chain we So, are what are and for end that ensure sale highly we agile overbought

been well both It’s those to we think not get we so just promote our are new will our season-after-season back would The say I and And sweet very that are is higher us, comfortable. designs definitely at. clean are very keep beautiful performing the almost them. sale that have forms to short, I so inventory. we one be confident proud. and than are that Cologne slightly do are They The and They of men’s get that comes counter looking us something women’s. them. customer incredibly for the So,

Dark for So, men is to the great launches we launched such QX... we for a at have few quarters, over which been look single-fragrance will in After our that. why success But last just us continue

Janet Kloppenburg

really Packaging Julie. is beautiful, beautiful,

Julie Rosen

Thank you.

Wendy Arlin

one think I Daniel, have we more time question. for

Operator

question Shapiro with comes Tracker. final Marni Retail from Our

open. Your now line is

Marni Shapiro

look how is were associated launch on Congratulations bit specifically, it? it’s MOXY. it has a with know you costs little your actually separate will are doing pushed will what you be to think Like what be BBW, but pushed where then entity? about quarter through – And going? And the Just be marketing that this this? it that guess thinking through? development, how wanted and MOXY. been it’s could ask embedded I it finances guys. obviously forward? marketing And a a third-party? Hey bigger been the costs we I And great do pushed brand like? be I with is sold as it head what in about of long or are going about you should the tiny, about picture

Wendy Arlin

rollout. finances, Okay. MOXY then question turn on will Yes. I I and will it the on to launch the take over Julie the and

innovation MOXY, and of but has have company in long a assortment. ongoing you seen this product Marni, in not history our just development, it So,

So, product it money our just assortment of not always MOXY, in structure. balance is every on the We into but in built spend well. quarter, margin the as development

know XXXX to in continue like business. see things that core coming our not we success to new out something in and MOXY, newness is you the of even So, but will exciting just key

in all cost Julie? our structure. existing So, embedded

Julie Rosen

Yes.

Marni. hi So,

Marni Shapiro

Hey.

Julie Rosen

we this neck. long to MOXY is One foray first thing about the very in above a say call time into is our what

the Body So, Works always below neck. has Bath & been

hair a learning face really lot supplements. about and and are we So,

We MOXY Year. the will in be New in delivering body

is is that our not won’t So That change to future. right now, stores focus the on say in website. and the channels, to strategy

We We have case know do are we do I really times ourselves. three thoughtful listening way. said want we growth. mode, very open now, but to in want and I different of learning a that it in ways this just all so be to to a

different own and say we things MOXY, by We of You we account the after will MOXY trying to thing get distracted some One for thing. we it’s important quarter. too think are that continue see want I is Christmas. off other But eye there. take and more will to our new And ball our marketing don’t refine. this have Instagram so and to learn

be starting so brands really go these there on will many attract ways out to them and to are for And opportunities new So, we customers. and January. focus from

Marni Shapiro

account just that into maybe holiday launch that season, That’s my this great. bigger was BBW. guys. wonder for Instagram luck eye that than is a caught It the of the little Best

Wendy Arlin

Thank you, Marni continuing in and your Works. thank you interest you. everybody for Bath & Thank Body

Operator

Thank today’s participating. for conference. concludes That you all

disconnect time. You at this may

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