Release Date: December 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Chris, can you explain the fourth-quarter comp guidance of 6% to 7.5% when you're currently running at 2.9%? Are you expecting a significant increase in December? A: Yes, Mitch, you're correct. We anticipate a comp guide of 6% to 7.5% and are currently trending at 2.9%. We expect a higher concentration of sales around Christmas due to the calendar shift. Historically, when Christmas falls on a Wednesday, sales tend to peak around that time. We are confident in this trend based on past data and our current trajectory, especially with strong apparel and footwear performance in Q3.
Q: Footwear went from a low double-digit positive comp in Q3 to negative in Q4 to date. Is this category more concentrated around peak buying times? A: Yes, footwear demand often peaks around specific times, such as post-Christmas when gift cards are used. The negative comp in November is likely due to less discounting compared to last year. We are focusing on full-price sales, which has improved margins, particularly in footwear.
Q: What are your expectations for occupancy costs in the fourth quarter, considering the 13-week versus 14-week comparison? A: We expect to leverage occupancy costs despite the calendar shift. We are closing 33 stores this year, which will impact occupancy. However, we aim to manage costs effectively and leverage occupancy on a positive comp.
Q: Can you elaborate on your promotional strategy and inventory agility post-Black Friday? Are there any trends yet to emerge? A: Our promotional strategy remains consistent throughout the year, focusing on delivering value through private labels and bundling. We are less promotional than competitors, emphasizing unique and on-trend products. We expect the holiday season to be promotional, but our focus is on delivering unique value.
Q: How do you plan to improve profitability in the U.S. and Europe, and what are the key opportunities? A: In the U.S., the focus is on regaining sales levels from the pandemic peak, driving product margin growth, and managing costs. Internationally, especially in Europe, the focus is on increasing sales and product margins while managing SG&A growth. We aim to apply successful strategies from North America to international markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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