Bath & Body Works (BBWI) 21 Nov 192019 Q3 Earnings call transcript

Good morning, my name is Zutania and I will be your conference operator today. At this time, I would like to welcome everyone to the L Brands third quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, one on your telephone. today’s being that advised be conference recorded. is Please

assistance, star, zero. you require press further any If please

Thank will of Amie Preston, you. to Chief over I Investor now turn Relations Officer L call Brands. the Ms.

You may begin.

and everyone call conference period morning Good the you. welcome L quarter for X, Brands November Saturday, to ending earnings third XXXX. Thank

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

Our commentary available third and earnings on our earnings release, quarter additional presentation website, are lb.com.

in All of release. the call results results items our discussed and significant exclude press described in today’s the adjusted are

Stuart Burgdoerfer, the and handle will call EVP today. and CFO I

I’ll now the and to turn Stuart. over Thanks, call

Thanks Amie, and good morning everyone.

results with X% by XX% strong range our was and $X.XX a deliver offset the expectations. share at of and result continues at Body loss Bath operating Victoria’s was income. of for Our $X.XX of the a earnings a in exceeded third Secret increase forecasted of of $X.XX. Works that a & quarter to Works and & earnings our end within Outperformance between expectations quarter was our results Bath Body per low comp increase

to about Looking per quarter, forecasting share are $X. earnings fourth the we of

New close and marketing customer CEOs, very to are improvements John getting our Mehas and merchandise assortments, experiences and focused our online. making on Amy Hauk stores to customers and in

recognize to we improvement some do, that work the to We and in will more it see have time business. take

days in range, quarter quarter merchandise a result. Therefore, third Thanksgiving and Secret year margin assumes against shorter promotions consistent our six last between the which we Victoria’s dollar and time up are Also, with is year. guidance period high-single-digit decline our than last earlier, the is aggressive as mentioned fourth Christmas from

We & strong from performance Body expect Bath Works. continued

on We’re holiday. very successful a focused executing

customer preferences, the to pricing rely product proven promotion and to to winners continue on to test chase agility, drive strength and will strategies, we our continue into react will of results. We and

to over and Thanks, you, Amie.

and comments, interest this you happy time might take Thanks to to Stuart. In limit the and any consideration we’d please be at question. time of one our That prepared questions to others, yourself concludes have.

the turn it back Thanks, over to and Operator. I’ll

line FBR. Your comes Anderson with B. the first of from Sue question Riley

Hi, performance question. good for outperformed was Thanks wanted the comp on sequential so talk the in to follow It’s in VS morning. see how to and nice wondering up I intimates it could intimates. the well if improvement strong I about there. you PINK. the versus

sound about spring in does seeing should to some holiday? we for the improvement newness as we that should in mix? expect increasing Do maybe think Thanks. How about more it side, better you’re like lounge of some flow the or products. think On that holiday for you

Thanks Susan.

made intimates, results, Amy the improvements very price for sharp price also results in make the and of to price to terms consumer, her and accessible points PINK, team result, the and that strong In it’s has that, an very accessible a developed sales have consumer to PINK retail result. points, of a strong the a distort to product well sharp have offerings driving so a there and very intimate assortment unit PINK growth reacted intimates overall again the highly mix has that positioning rebalancing strong from really and in architecture

there. in assortment the was apparel, is particularly more obviously and apparel the recognized respect in business, to the fourth improvements of XXXX some an Thanks. out The in your strength There ongoing the drive the the tops happening looking assortment are but adjustments question, quarter, business in that you making will to our apparel change With as assortment, basis. for in assortment is in to the in the advance in to continue called come team in pre-circulated there on as remarks. results terms we’re

Susan. Thanks

question? Next

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

some heavier for you versus think to margin impact a but year. with on should how from up last Then the firm competitive I share and the on Thanks that are separately, for for morning. of the there. thinking each Thank at up margin currents traffic taking against your net down different Good of the my lingerie you extent the about your question. cautioned planned cross line given term? dig you that strategy? product into Overall, AUR hit elevation also being to AUR period merchandise holiday the division, strategies about holding in fair with There are To moment. during a the plans wanted lingerie, how near PINK VS is promotional VS balance capturing merchandise you. period the we

Sure.

also customers there’s analyst starts terms margin of it over delineation again make you PINK, AUR back paid that target elevated that In customer, the offerings a have a they their offering as that a the for team customer, our AUR so a sure from view that one after of is product, a and glamor, more and day that that want going and businesses time average they the content, really for which know, otherwise to rates. are more stages just September, natural standpoint, highly in lot retails. accessible positioning result that, distinction, assessed communicated offerings things in the and as work, a unit younger some customer that is to pricing we get with life John and for so is in are at John and expect that more that and are work consumer different we’ll of different have fashion, done and of of pursuing, Amy a Amy lingerie through have point developing, work, the of emotional

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Second would have so part start a holiday of XXXX paid trying your to, work of get a question standpoint, was through promotion, given we’re promotions we significant the end and period but we appropriate the financially in from Obviously, over will, promotion, need the in we about we there clean healthy will our and to just the the inventory inventories that that carry I couple of amount a season. manage is spring for One to and reinforce. and quality position an we things assortment the and are year ago. both of freshness into also with numerically, a that how terms

how degree So, will or period. of that depending happens, be level obviously ensuring the that input promotion things holiday to upon go, through the an important

other as our consumers. in question, it’s key recognize The you your a is, time for

but paid testing try with, a dynamic. we’ll downs, in it. management balancing I’ve about We levels principled our have a as of right lot customers, get volume work pursuing to of so are the again it promotional with drive lot considering we’ll and mentioned. inventory to the We stores be sell factors is that our to and of reduce and of We the certainly online, and strategy a flow familiar not you’re promotion, profit, for engagement do level balance to Thanks. strike we’re traffic overly and the

Mark. Thanks

Next question, please.

question next of Your Walvis comes Sachs. the Goldman from with line Alex

to go and Thanks lingerie so much talk wanted back I for into question. strategy the pricing taking about the VS there.

think and you’ve other on What’s business bras categories the panties, apparel, I raised pulled in prices within promotions that So, there. with back on going and business?

quick at I up inventory a know, on planned? one season. - point follow-up is maybe given high-growth was shorter BBW. what inventory you It both rate Then seems that basis a VS on holiday per-foot mean like that the is and

Body line and your sleep in also our so clear deliberate category believe that and inventory Victoria’s to the is and important with business, Inventory expectations, Lingerie the lounge making investments making line factors are start in we’re particularly question appropriate, and in related I’ll Works part Bath that some expectations with timing the to & of I described. the the our in so is given first. business be we Secret is with investments, there’s we investment second

offering view lounge With content that believe of elevate quality average a more again emotional at given ticket design categories, and panties that differentiated single pricing significantly include lingerie, Certainly lingerie, in for apparel in investment to a that get of the strong of time are over in I for fashion, in come that the and content. the panties, a significant business in we’ll in work. sleep panty a unit product product back all lot shifting get feel, quality, retails, and opportunity separately that terms that the merchandise quality we we paid quality emotional and view, work. more business, there’s believe, and and across what those the higher paid hand to respect matched brand to the also an Victoria’s Secret has we’ll panties and is for in categories Thanks. esthetic, fabrics, believe John opportunity our in the we believe going of is He’s

single third quarter, ticket see higher strong category we item. including the too panty, things in add the I’ll fashion Brazilian panty more just which growth that that like did of a is in

Alex. Thanks

Next question?

Hutchinson the Your comes next line from question America. Bank of of with Lorraine

morning. good you, Thank

had digits you to flat what expecting course that about I the now been low-single Looking at be really guidance, and changed comps slightly. in the you the quarter adjustment full guide? the of third to to think just up talk down cause year expecting throughout Can

was adjustment year. result PINK range the of the thus the and our in expectations and and Secret and momentum got Well, end a lingerie results strength Beauty the to low as fourth fundamentally, both in quarter at quarter of so a lower Victoria’s we’ve outcomes the good fourth business, at expectations, Victoria’s but of full an and with the or entered end

Thank you.

Sure.

Thanks Lorraine.

Next question please?

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

said to and dividend Hey, curious Just Stuart. you, options just for this Amie second, thoughts and I could business? that process sustain how on curious and what’s trajectory you expectations, of dividend, your been that very basically your and looking the kind the that one, just business. the I questions I in I’m know you low either but on there. on may you’ve optionality the Thank this end look of does comment all to Stuart. you. at outperforms the in given Number both payment and going regard but concepts, hate the in to deeper? bring clear question compel good Two your BBW you are is up, the ability given optionality Then VS underperforms at exist at of thought on morning confidence potential my evolves business to your the in more the with comes or guess

Sure.

So subjects, are aspect but two different important Board. the that of both, is and Ike, evaluated by those subjects that one

regularly a payment policy, our would On be and comment dividends. Board our the reviews dividend, on That approves of basis the there. the quarterly my

Works With difference persistence it of between given does. in or to it does and Victoria’s, rise to question, in give the respect your that you’re Body like yours the curiosity expressing performance Bath questions &

to opportunities sales. long value spins shareholder history history financial of with receive Board and periodically outside that those the of Ike. from portfolio does value and to That time, managing our to those input You for a respect The Thanks evaluates and over shareholders. advisors businesses board have splits know increase the includes we subjects. drive

please? Ike. question, Thanks Next

the Fitzsimons of Your from Kate Markets. next line RBC with comes question Capital

is days. lows highs also the constituency like call what least strong store Thanks my can cadence question morning. some industry, of My that just and that you traffic around it lower. at behind feels was number, get to key across if the taking higher these get during about out X% for key in in the quarter, prepared Yes, There or response commentary maybe I’m was X% and Good a on the question. the just monthly curious some days hi. BBW. traffic the comp. around speak the in Curious

comp to curious keep bigger comp. what Just meeting some events you around of these the

business if the took be Then just can helpful. to you quarter, China the would the Stuart, of in the that speak secondly, you in that impairment overall nature

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it does. Yes,

that standards, on a with and to we stores, by that time in forecast took impairment stores in appropriate Then historic complicated impairment the appropriate of results necessary, and accounting assortment I about, passage believe that charge China. take analyses we’ve based required our to it the set should China, have say, for Okay. on the full talked challenged to was as results, there, was been we based it our related an to respect judgment, many the of of as that take--and

you great. very Thank much. Okay,

Sure.

Thanks Kate.

question, please? Next

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

on Specifically, as up and to in to lower, maybe up those that AUR and I are just Secret lower decision Stuart, are can business comp come for be not pull overall, planning getting as and more to can how that? up lingerie is? for the has Thanks surprisingly about comps Victoria’s AUR back very the talk inventory worse business just you that Secret inventory? bit up AUR works a wondering take on comes little the but I’m given take talk it’s Victoria’s understand much. within about and promotion, you thinking you or you where

raise the assortment rates the it been top stabilize to in for comparable finding and and increases the a up. in at Obviously strategy highly business to prices over and the business We’re product, get healthy to lingerie, growth time as profit have to work. right don’t all I’m as not motivated and grow based planning intended a strategy to best, to our get The little over healthy healthy of pricing drive declines. for of for that’s certainly our margin between to a have case better, - to drive back Q&A, balance be AUR exaggerating bit the has be. paid AUR getting earlier then time. we line quality on sales to good, It’s we’re intended declines and units down where - structure of store our goes pricing sales should - expressed top But work for line paid

you down up, are comes guess units maybe to better you planning-- a is I Sure. expecting AUR question be as and are

Thanks. these will again result expectation it’s be PINK, pressure and substantial There revenue unit would with total long are question Yes, be other conversely short AUR going units, term the volatility unit a in at but significant there term, growth on business in the the units. why some strategies. short the growth in shifts asking to dramatically will intent so you’re the as on increases, But basis. in a and AUR what’s architecture, potentially term, lower not in AUR units with AURs some there up one down, our with of be drive your but and some in units, are on our PINK

Thanks Jamie.

Next question, please?

comes from the with Cowen Oliver Company. question line next Chen Your of &

Hi Stuart. you. thank Hi,

year you. in underperformance locations thoughts we it C and Regarding the using thoughts your and latest year, different customer healthy segmentation to Thank VS, base talk healthier segmented any that just been promotions. so you last your would holiday love and as versus What the evaluating at are on list retailers. thoughts your traffic how approach get drive Also, in season has manner more and more lower on malls a you’re question balance and and this also about store productivity there D often? on

in etc. different Oliver, mail strategies. social In promotional of ways and lots terms of approach, those traditional each through in email, through employ through with communication, direct--through certainly contact our of media, customers we We file, engage customer segmentation, of segmentation other views

We time. work obviously that have over better that done to at We historically. get

fewer, anniversarying apart register with would and some anniversary In I on promotional least terms apparel say views with we our utilize would promotion obviously expecting approaches from main going the evolution year, offers. some at would the consistent and intimate is prior of general or in not not that our would key say contact I our periods, more otherwise in segmentation those, promotion I of about very promotions to promotion, significant point strategy various impactful be, some largely I guess, That to to simpler, strategies. want in

and With a lot stores respect very we and I registered on opportunities our as base. business of a base part pre-circulated time, year natural now part it’s believe store know, close commentary, closed. at we’ve the we every the proactive, obviously store That years, relevance in as either-or. business you for of and a store have as healthy this of many the the more business, our open stores of and isn’t we than is on based remarked we’ve to the our with a think the net stores just critical as associated opened basis year, strongly every multi-unit management consistently also in We and same

White we of Barn or or its Bath we our the remodeling to that stores Barn or stores result it. given overall quality as White include have business business business overt back Works obviously our five actively Body we’ve Victoria’s overall that performance, on customer outcomes treatment specific We the overall estate. six Secret, over so & and channels. years of store the We two are The a appropriate investment from get pursuing so online very over refer performance, in the & new or given growth function pulled real and increased in conversely we’re real experiences shop-in-shop at estate opening significant Bath in Body last manage both three both we’ve the investment years a the design, last Victoria’s and results and

It’s dynamic, we’re our of overall in business. part believer the a but store-based strong

we investments making there’s We’re manage you. important results, in where it Thank proactively and it.

us digital, you regards. if on, what’s management whether or lastly, help between channels next things and Thanks, thoughts. just with that or love Okay, understand best should BOPUS. your Would focus the be could we inventory

Oliver. you, thank Sure,

That As the half the live the the we so we’ve re-platform and and first underway to work spring outlined, will support business completed up a project the XXXX. online running continues season It’s outside to business. States, of VictoriasSecret.com supporting website. in United go technology international multi-year that there in work

foundational a is Pick disappoint like we’re have In-Store misunderstanding so customers information accuracy, after mentioned, project we’re specifics. we we’ve to Up Buy that don’t to As of through we RFID inventory and things getting the capability ensure do in have investing to Online stores that from a that to that appropriate with inventory visibility our a

sure opportunity recognize it. priority. you. sometime with next be that want foundation We have broad of to next close years, such so the in We months the sure the assortments, In-Store. we Buy over into year, moves and accurate evaluating whether the we comes that Pick do would start some as I year, and that, to make XX as after Oliver, get the we timing that very information have I’m we next expect this to whether Thank we’ll that right it we have Online not depending on XXXX. couple Up or

Thank you, best regards.

Oliver. Thanks

question, Next please?

question of line comes from the Kimberly with Greenberger Morgan Stanley. Your next

about wondering can relative merchandise like so strategy Amy’s comps to It relative Great, quarter, I’m was It the second and got sequential is seems tops Victoria’s seems Secret. thank so to with much. looks the also the needs margin last to turn, piece PINK there getting tops. you talk better second It in the My that you in improvement better like like if on is question business. quarter.

what doesn’t the this Thanks. at out that like reception direction he the least initial initial laid course the might has quarter, hasn’t flows wondering to correcting to not the I’m the that lingerie at assortment John it correcting. seems core is he course sort reception came well, full measures the seem new so he to it like affected be strategic point, that taking. Understanding just third the so With been I’m if business, received has regard been has wondering of favorable, that in

down Kimberly, trend in side is overall in PINK, On progress panties, still sequential quarter intimate mentioned. it of for up question in categories, the panties you tops bras in be. in want by apparel apparel as but and and third PINK improvement the the the we made Margin the bras recognized driven to overall down, not dollars where the were the business, and and

capabilities and speed what In terms and in we just of back a also how the and that to do space leveraging and for, is and sport to and design business what are what that in of business tops in with seamless, more really to for offerings do real and mining particularly historically she our part that . our try respect provide consumer apparel is positioning and done Amy but her doing chain we’ve agility emphasis in apparel and It’s that, supply seamless not the PINK, seamless more go doing the including about and has. sport rather the and new sport better, new to fast apparel, testing part capabilities again work team on outfitting leveraging of the

some but team on of apparel, curious on to and very not very want a of about it. is the to the big part focused result right part in focused improvement be so is business. the a of continued it’s be The but in So team it the what very, it’s work appreciate, success, as you we process, signs overall it business, that in

I’ll content on executed an assortment, been meaning well, higher respect offerings assortment have are response. elaborate a that offerings and the that have stuff, There at has and into categories introduced AURs positive that assessment would customer glamour offerings really the new certainly have that I real it, indication and early gets it’s strong substantially any to that. had match fashion a in price response. bought back more Examples conclusion the it, and include too to panty response, of points, substantially strong that the believe on to Secret a that come along initial customer customer lingerie With of come into of product have introduced and that sexy that lot customer John specifically elevation sleep with lounge to at them, when strong higher gotten Victoria’s

asking seeing of in have with are about this where All in in we think on and activity progress the a been in we’re are progress why the business, being XXXX meaningful introduced. we’re more some of will in where some frames overcome has as the are of sure, of hard are items significant along there, doing, very legacy to and execution made, question, books in we very lapping not working lot the of business, but expect and promotion for as businesses, a you’re would with team, progress of lot happening those of core books some is online and in again commented so apparel that work and that us there year-on-year an marketing said, overall a of to of on sufficient is those our you examples significant new we that big very able and year-on-year work the Kimberly, that intimate big the within smart and building signs a and business, basis other on some your new sleep is core we’re in the progress, development improving lot overcome be the provided, loungewear with not that John evolution declines re-launch declines categories do. to focused XXXX weakness frames clear some minded stores pre-released what’s have to information, those--early

for it with looking get business That had where is four of it shouldn’t his and we’re it as The would working signs that but or absolutely the This going of to harder be. All to time be should get take to it to to I that’s to get going the John working energy or of interpreted complacency be are stuff, sense stabilize lingerie, right any it’s to it. now it. team time. overview some for. we’ll on years, be when all and believe results that a some my challenges, back we take and team get and progress, it’s couldn’t more said three

Thanks.

Stuart. you Thank

Kimberly. Thanks

question, please? Next

line Your of Casella from next question the comes Carla JP with Morgan.

question Hi. any charge to residual future that? things. and La matter and La agencies it Then just this Senza comfort guarantee does you? the or target on anywhere two at is for guarantees, cash for The double-B rating on looking that quarter flows rating My if on different, is there the level leverage, out payment your Senza are leverage, or with

Sure, thanks Carla.

related a leases some Senza to have support to, exposure sourcing that’s and have La in provided may in non-cash about. On connection potential we the is charge, may periods the related sourcing, it’s we and of - credit that to associated again, what charge a third cash credit that party. with potential to that leases - potential that It’s liability a emphasize I with booking of respect future for a non-cash so we support and with reserve transition

reductions of those change things. with include management to leverage bit up is expenditures. reduce and dividend we terms a bit the our a the its those made announced that of this of We ago, debt steps evaluate to and more in With in respect to, capital ratings, so a Carla, a taking freed steps company We made in year taking million, reduction effect leverage. will board ago, year, progress $XXX than the credit announced continue as a January, year

day pursuing end flow any of end aspects the with, all and debt improving We spaced that we of free business, significant is party we the generate important maturity associated which improvements flow, our any is with cash. cash are consider operating out, the lingerie PINK so healthy in that certainly the about aspect naturally and of that those profile year particularly, as the outside is of $X.X structure most and The but of well the and capital cash billion of we’re our you expect would at to appreciate, consider.

Thanks.

thanks. Great,

Carla. Thanks

question, Next please?

Shapiro Marni Retail of next the Tracker. Your line question with comes from

controversy, against Hey guys. of season. contemplated lot just a season the show had brand the as yes, and know, on how last the marketing but the holiday itself? over shows, into some it’s driving I’m months, we as still sometimes been as side, the very a impact so many really you impressions holiday a little the lot thoughts over fashion Have last--you you about in about would Victoria’s but up talk through you’re on just you going holiday been -and a can lot the on you’re years kind of enter television quiet, a haven’t fact Secret, But curious season, you’ve season your come you that the years, of that over Victoria’s marketing there? You’ve transitioning, of of Secret, quiet. talked impressions, the the bit last fashion couple holiday

it. certainly thought Well, have we about

appreciate months, that things the As and focused of Secret. Secret the expect think stores communicated evaluated. the through to important previously, quality Victoria’s But John of offerings, marketing we move those the the most execution XX those Victoria’s we will we we communication evolution brand, I and the the six, that think the quality obviously important Again, and recognize be get I have emotional thing is things. thing, and an on merchandise in next in there That of selling is online. to as believe content it’s of and continues of itself, we’ll is important now certainly Marni, and our happening certain the evolve respects to as that more the come of

the impact answer we granular to specifically question airing a matter in a timing is the terms response as term short of shifted of the sales terms airing in of the over show, of to did fashion see the fashion material that the years way, as show, on specific general In no.

days’ oh Stuart, and like, result the happen, you’re did over the material if didn’t out So what’s day years show you next on are my about we different the at it air the a impact freaked fashion see God, few after results. going times and to

that said, that it focused remarkable and out that of is With business this and that’s important the achievement, customers, an figuring things and best part to among the brand of brand and a we’re aspect advance the of brand that communicate very said, with building marketing positioning was on. was to the and of how the important a John

that But nothing is right? season, holiday for this

to but show. the to We’ll would similar is in that magnitude say be communicating nothing fashion customers, I

be can current of vehicles, communicating media will. including you and more social customers through lots be various sure we’ll You with if platforms,

Are your mailings Last up year? this to year last thing.

consistent. Generally

Okay, thank you.

take questions. more two Thanks We’ll Marni.

please? question, Next

Your line next Lejuez question Paul from comes of with Citi. the

versus business sense SG&A on Curious guys. leverage, of should that and Works, the quarter the merch Bath occupancy basis thanks leverage of SG&A margin you quarter margin think in decline just the terms give how of can for in FXX? the fourth we Body and and gross Hey, in overall points, this the and a magnitude point about into &

China? charge this the forward. all to the Stuart, one quarter if that Thanks. impairment which clarification, and going your understand you just Then assets charges depreciation I related were on wanted to just impacts take did

there of lot a it. about is question again There’s Okay. Paul, margins. get all your to and we’ll first

first rates Body Your Bath the merchandise what is in was margin your quarter, about third question was? that for question &

points, in basis versus margin in overall just merch SG&A of were the drivers margin. the what EBIT terms to change Yes, BBW’s

a thing important, Paul, like because believe, but the an for I in Bath and Works we it lows XXs, consistently first growth believes and appropriate growth the is business. the for operating the healthy Nick the That’s positive & last largely program pablum and is few really income in White a delivered thing I healthy impact believe Barn occupancy deleverage seem again point. depreciation it’s would and bit line very remodel on of of business overarching business the years, we the has very believes, Body that it’s little with rate The very the is top line think important reflecting the rate may over say, bottom

rate is due terms offer the movement is is very to frankly different, puts dramatic line profile is rate, in things that respect little side a Promotion growth in impact up depth. growth some largely merchandise With supply healthy, of or that or is to four some rate business business significant consumers in and is profile. but to that is of promotion more know. inflation a margin There the profitable a promotion of and the the slightly There tariffs. some things. of the the in offering three remarkable merchandise pressure margin direct chain. store the than channel There the the different very on Again, little given so geography a bottom channel versus lot in business of very where responding the way outpacing does shift impact when days at

big how and architecture the & Bath that’s and what is, would really think margin hope we on appreciate and that’s Body, Paul, That the for would about it certainly we understand. investors picture

the sense terrific quality, minded business, that the experiences, not Then the in is, makes frankly, at management experiences of Andrew invests bad and on so business Bath business consumers, in expenses, tough management it etc. the Body things the extraordinary having so management doesn’t, and being where balancing for & in investing it and separately cutting disciplined where product hours the offer just Nick, team, customer team at expense Meslow,

So the business the expense the that very mindset, is the the management team that and very, strong, stability overall drives capabilities, that what really in discipline in and is management those result. business, inventory

by in China the component impairments took more and followed States United we little Paul, the was the But the Ireland, bit what respect impairment, in Thanks. beyond the and and the U.K. impairment China greatest and was was charge United With U.S. and were there with the in a geographies associated the biggest impairment also, impaired some of included but there impairment--we then was Ireland, year a amount stores as and ago. to well. States the

but think as save your take Thanks. in does, fact Paul, answer periods. circumstances business does people China to unique depreciation in deprecation appreciate. does would evaluation to Kong, accounting so have part of in relates our evaluation, not--some Hong of you actually forward the there, in not that’s it’s why question, sorry, that’s yes save to Oh depreciation, It’s a so impairments. it and you required it the result reducing Obviously,

please. Thanks Paul. One last question,

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

Tiffany Kanaga us on this for Hi, fitting Thanks in. Paul. is for

You’ve thinking point is terms that on where she product, of believe her pricing and up specifically that previously attracting, lower for well discuss it, is in how points PINK the might to price you’re architecture customer longer at shopping building term the been higher but more price you for touched you have moving detail who would about in our as potential as that her rebalancing basket?

a we to think in leverage program mean We Yes, and the including and answer our a pyramid, fundamental price in about to best, categories, good, representative question, architecture and its it better good and retailer. vague results, offerings, any aspect pricing on would like campus. question, assortment the a target major range using that do, best, assortment of that or continue answer any campus is the retailer with includes and an which it’s - Amy will of better its business points don’t good, you its of team, good give the and significant, her the balance we frankly consumers, as spend to foundational in communication general lot a environments time I a to

where sourcing it against exactly a a lines. are good about with quickly in comes consumer, flow back better in but good, really Thank and to get mean and to to don’t that there terms from a pretty speed how it others, we way that the think us you. it around it. along saying make relationships adjustments best, merchandising Obviously right. thinking those execute standpoint a than supply times we strong I chain we engagement That’s better capability and mindset always and transportation allows that that of and then suggest leveraging

Thanksgiving. you Thanks hope you all in for everyone. we interest Brands Thank your and continuing happy L have a

call. concludes conference This today’s

disconnect. may now You