Good day, and welcome to the Abercrombie & Fitch Co. First Quarter Fiscal Year 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Mohit Gupta. Please go ahead.

Thank you. Good morning, and welcome to our first quarter 2025 earnings call. Joining me today on the call are Fran Horowitz, Chief Executive Officer, Scott Lipesky, Chief Operating Officer, and Robert Ball, Chief Financial Officer. Earlier this morning, we issued our first quarter earnings release, which is available on our website at corporate.abercrombie.com under the Investors section. Also available on our website is an investor presentation. Please keep in mind that we will make certain forward-looking statements on the call. These statements are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mentioned today. These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we'll be referring to certain non-GAAP financial measures during the call. Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are included in the release and the investor presentation issued earlier this morning. With that, I will turn the call over to Fran.

Thanks, Mohit, and thanks, everyone, for joining. I'm pleased to report first quarter results came in ahead of the expectations. I am proud of how the team is applying our playbook to execute for our customer and our business. As we've mentioned before, our playbook and read and react model are an important part of the strong foundation we've built over years of transformation. This foundation allows us to manage and adapt to the environment, while maintaining focus on strengthening our brands and company for the long term. We are one quarter into 2025, and our team is doing an excellent job balancing both of these priorities. For the first quarter, we delivered record net sales of $1.1 billion on growth of 8% to last year, above our expected range of 4% to 6%. Operating expense leverage partially offset lower gross margin and marketing and earnings per share of $1.59 for the quarter, both above the ranges we provided in March. We also used our strong balance sheet to return $200 million to shareholders through share repurchases totaling 5% of shares outstanding as of the beginning of the year. We saw net sales growth across all regions in the first quarter. The Americas grew 7% on good traffic levels in both stores and digital, building on a terrific first quarter in 2024 where we grew 23%. In EMEA, we grew 12% on top of 19% growth last year. We saw continued strength in the UK and Germany, with digital demand complementing the positive reception we've seen to the six stores we opened in the region last year. In APAC, we grew 5% on top of 10% growth last year, with nice comparable sales performance in China. From a brand perspective, Hollister led the way, delivering record first quarter results with…

Throughout our business, we are looking for expense efficiencies while remaining on offense in key investment areas. All of this work will have a clear impact and based on our current assumptions on tariffs, we are not planning broad-based ticket increases. As we've done season after season, our goal is to deliver high-quality product and align inventory and promotions with our customers' value perception. This will give us the best opportunity to produce healthy sell-throughs, AURs, and gross margins that underpin our track record of net sales, earnings, and cash flow growth. Our playbook and model both work, and we will continue to leverage them moving forward. Thinking further about what we've built over the years, we also have a history of capitalizing on moments like these to further strengthen the business, and we remain focused on the long-term opportunity ahead. We strongly believe in the global power of our brands, and we are continuing to further their reach by investing in marketing, technology, new channel partnerships, and company-owned stores. On the store side, we expect to add around 100 new physical experiences this year in total, with additional localized product and advertising to build lasting market presence and growth. The first quarter was another example of where we set a goal and delivered on that goal. As we move through the second quarter, we expect to add to our track record of controlling what we can control and doing what we say we're going to do. Global growth remains our highest priority for 2025, and we look at our first quarter progress while investing for the long term. And with that, I'll hand it over to Robert to expand more on our results and key outlook drivers.

Thanks, Fran, and good morning, everyone. Recapping the quarter, we delivered record Q1 net sales of $1.1 billion, up 8% to last year on a reported basis, above the range we provided in early March. Comparable sales for the quarter were up 4%, and we did not see meaningful impact from foreign currency. By region, net sales increased 7% in the Americas, 12% in EMEA, and 5% in APAC. On a comparable sales basis, the Americas was up 4%, EMEA was up 6%. For EMEA and APAC, the spread between reported and comp sales was due to net store openings, third-party channels, with EMEA also benefiting from foreign currency. On the brands, Abercrombie brands net sales declined 4% with comparable sales down 10%. Consistent with our first quarter outlook, the sales decline was primarily due to lower AUR, as we worked to clear seasonal carryover inventory. Hollister Brands net sales grew 22% on comparable sales of 23% with both unit increases and AUR growth on lower promotions. Operating margin of 9.3% of sales was above the outlook range we provided in early March, delivering operating income of $102 million compared to $130 million or 12.7% of sales last year. Lower gross margin was partially offset by around 140 basis points of operating expense leverage, led by general and administrative expenses on lower payroll and incentive compensation. Consistent with expectations, marketing, which as a reminder is fully included in selling expense, was 5.3% of sales for the quarter and was the primary driver of the 110 basis points of deleverage in selling expense. We ended the first quarter with inventory at cost up 21%. Within that, inventory units are up 6%, so we're positioned to support future growth, along with four percentage points from freight and inventory actions related to tariffs,…

Thank you. One moment for questions. Our first question comes from Dana Telsey with Telsey Advisory Group. Your line is open. Dana, if your telephone's muted, please unmute.

Hi. Good morning, everyone. Sorry about that. Great to see the updated guidance. And would love to get some more color both on Hollister, Fran, and on Abercrombie. How do you see the outlook go forward on the different on men's and women's for Abercrombie? Cycling the compares and the newness that you're looking for. And, also, what other initiatives do you see at Hollister that continue to drive this growth? And then just on the real estate side, I noticed that the closures are being reduced this year in the guide to twenty from forty. What's changing? What's new there? And on the remodels, to forty from sixty. Any takeaways there? And gosh. Thank you.

Thanks, Dana. Good morning. Yeah. So super excited about the record results that we just put up, Total Company. Let's break down your question. We'll start with Abercrombie. So Abercrombie, you know, we talked about this during the last call. We came into the quarter with a bit of carryover from last year up against obviously a spectacular Q1 of last year where we were essentially clean of carryover. That put the pressure on the AUR as we had expected it to do so. But, you know, our model gives the team an opportunity to really stay flexible and chase goods. That's what our playbook is built on. A great example of that was as we got into the first quarter, we had a terrific response to our swim. We had a vacation shot set for second quarter. We were able to get back into that swim, really ramp it up, ramp up our assets and our marketing even stronger than we're planning to. And we've been nice reaction to that. So exciting to see progress, and we do expect to see an inflection in Abercrombie in the back half. Hollister, again, what a quarter, up 22% in incredibly proud of that team. Lots of exciting things going on in that brand. Guess most recently to discuss would be The Grad Shop. So, again, staying very culturally relevant to these teams, what's important to them, The Grad Shop just launched. We've seen nice success to that. The first quarter was driven by fleece, by jeans, by skirts, lots of exciting categories. So our expectation is obviously to continue to see that Hollister grow throughout the year. With that, I will turn it over to Robert on your real estate questions.

Yeah. Hey, Dana. I'll hit this real estate one. So, again, you know, we're really thrilled here to be talking about being NetStar openers again here for another year. You know, adjustments here are pretty consistent. You know, excited to see hundred new store experiences, sixty new stores, forty refreshes in model. We're always opportunistic here as we move throughout the year. From a store closure standpoint, we did close forty stores last year. Planning to close twenty stores this year. You know, teams have been working through landlord negotiations and packages, and we just see opportunities to keep these stores rolling. So again, excited to be out there for the consumer and then build this fleet, which, you know, as we talked about last year is nicely contributory. So as long as we continue to see these productivities up on these stores, we're gonna keep these things rolling.

Thank you.

Thank you. Our next question comes from Corey Tarlowe with Jefferies. Your line is open.

Great. Thank you for taking my question. I guess, Robert and Scott, on the outlook for the full year, you obviously took down profit mainly as a result of tariffs. But on the sales outlook, the high end of the guide was actually revised up. So I'm just curious how you think about that and what's your confidence in sort of that the higher end of that range as we look to the remainder of the year, and what informs that?

Yeah. So I'll take this one, Corey. So for the full year, you know, we are expecting growth across the regions in that 3% to 6% top line guide. We're rolling through that Q1 beat on the top end of our guide, and we're holding the bottom, which again, you know, when we think about the environment that we're working in here, we feel is reasonable and appropriate with just one quarter in the books for the year. On the margin front, you're exactly right. We're rolling through that $50 million of tariff impact. Net of the mitigation efforts to date, and that expect margin pressure from Q2 to walk us from that 14% to 15% from March to that 12.5% to 13.5% guide today.

Yeah. Just to add on there at the end, Corey. I guess the confidence, you know, comes from being on offense. You know, we have a strong balance sheet. Robert just mentioned a hundred new experiences this year. Let's add in marketing, let's add in tech digital and technology investments. That's what gives us the comp. Fran mentions, you know, the brands are open. The brands are chasing. So we have the inventory. Have the investments and that's the confidence.

That's great. And then just on Abercrombie, is the expectation that we return to growth later in the year that's presumably both sales and comp. Is there any expectation as to when or what the drivers might be for that as well? We think about the really strong compares that we're gonna be cycling.

Yeah. I think and I think Scott just said it. The team is hard at work, Corey. You know, that's what our model lets them do, which is really drive that open to buy and stay flexible and agile with their receipts going forward, reacting to the things that are happening in the business. You know, we do expect to see an inflection in the back half. We're not gonna give an exact date and time, but we do expect to see it in the back half. And the drivers are the categories that we're starting to see some nice reaction to that the team's getting back into.

Great. Thank you very much, and best of luck.

Thanks.

Thank you. Our next question comes from Matthew Boss with JPMorgan. Your line is open.

Great. Thanks. So, Fran, could you speak to the progression of traffic during the first quarter and into May at Abercrombie relative to Hollister? Just where Abercrombie stands also with end of season carryover inventory today.

Yeah. So we saw nice traffic actually throughout the quarter for Abercrombie. That's why I had discussed a little while ago, Matt, that, you know, the opportunity was really in this in the carryover and the compression of the AUR based on that product, which our expectation is that we are selling through that and seeing ourselves in a better position on all of that. And traffic was strong as well for Hollister on both digital as well as stores.

Yeah, Matt, I'll just add one thing on the A and F inventory side of the house. So we did work through a ton of that carryover inventory in Q1. Still got some sitting on the books here, but, you know, we're not concerned with where those levels are. So if you remember last year, we had, you know, abnormally low levels of carryover inventory throughout the spring season, and we're just up against that year over year. Just for some perspective, we are below our carryover levels from this time in 2023. So it really is just a more of a normalized level of carryover, and we're up against the low levels from 2024.

And then maybe, Robert, just as a follow-up, is there a way to break apart second quarter gross margin for thinking about promotions relative to tariffs and freight? How best to think about gross margin progression in the back half of the year? And maybe just higher level, as we're thinking about operating margins multiyear. Is there any giveback in the model or how best to think about operating margins on a multiyear basis?

Yeah. So on the gross margin guide in terms of what's we're working through a lot of the freight and the carryover pressures. Again, that was what drove the gross margin declines in Q1. So we got through a ton of that. We'll still see some pressure here in Q2 as we work through the balance of that freight. We've got about $10 million of excess freight sitting on the balance sheet that we'll work through here in Q2 before that normalizes for the back half. And that's been consistent with what we expected coming into the year. The carryover inventory, you know, we'll still see some AUR pressure here on the A and F side as we work through the balance of that carryover and right-size inventory, and that's a bit of a factor for Q2 as well. And AUR, you know, AUR was flat in Q1. Obviously, had some pressure on the ANF side that was offset by nice gains on the Hollister side. And so the way that we're thinking about this year is the balances of the year, Q2 and beyond. You know, we're gonna come in with flat AURs. And we're gonna work through, and expect sequential improvement here as we move through Q2 and moving forward. On the operating margin side of the house, you know, no change here. You know, our focus is squarely on driving long-term sales, operating profit dollars, EPS growth go forward. You know, as Fran mentioned, we've got two incredible brands. We've got a proven operating model. We've got amazing teams. And we've got a pretty healthy financial framework. So, you know, cash productivity is strong. We'll continue to invest back into this business to strengthen for the long term. We'll talk more long term here as we get deeper into the year, but, you know, we've guided to this 12.5% to 13.5% operating margin, which is a strong place to be and leaves us with potential to expand if we see that top line.

It's great color. Best of luck.

Yep. Thanks, Matt.

Thank you. Our next question comes from Paul Lejuez with Citi. Your line is open.

Hi. This is Kelly on for Paul. Thanks for taking our question. I guess, Fran, if we could just, you know, circle back on the ANF brand in Q1, and you mentioned that it's disappointed versus your expectations. So could you just dig into where in the assortment from a category product perspective, where you saw disappointment in what you were doing to course correct that? And then just secondly on the Q2 guide, 3% to 5%, is that sort of embedding in what you're seeing, Q2 quarter to date? Thanks.

Sure. Hey, Kelly. So first, for Abercrombie, you know, as I mentioned earlier today, so we broke down you have to really break down Q1. As we set our expectation in the last call for Abercrombie Adult, we did have this carryover that we did not anniversary from 2024. And as Robert just said, from 2023, basically more normalized. That put the pressure on the AUR and drove a significant part of the decline. The other piece of it was up against, honestly, a spectacular launch of the wedding shop which we just did not comp as well. So we had dresses that were strong that sold, but they did not sell to the level of actually the launch of the shop. So the team, as I've said, is busy, hard at work. They're very open to back half, chasing into product, that we are seeing selling. And we're excited about seeing an inflection in the back half of the year.

Yeah. Kelly, I'll take the Q2 guide as we think about this. So, you know, we're excited to be in a position to grow top line in Q2 off of that plus 21 Q2 that we delivered last year. May month-to-date trends all incorporated into that outlook of 3% to 5% for the quarter. But as you know, you know, volume will build from here, particularly for Hollister as we move into the back-to-school season here. So, ultimately, you know, excited that we're targeting growth on growth here, and we feel good about the balance of the year from that perspective.

Hey. Can I just wanna add one last thing on the first question? So just as far as Abercrombie goes, you know, again, the traffic was positive. Our customer file is growing. The brand is strong, and we're really excited about, you know, future growth. You know, one quarter, but we're excited about the inflection of that half and the opportunity globally for the brand.

Thank you.

Thank you. Our next question comes from Marni Shapiro with the Retail Tracker. Your line is open.

Hey, guys. Congrats. Stores have looked absolutely fabulous. Could you just talk a little bit, just give us a quick update on a few things? What was the actual store count ending for the quarter? You know, what was the opening and closing for the first quarter? And then could you give us a little bit of an update just on YPB, where that stands, you know, how has it been doing, and also an update on your smaller footprint Abercrombie stores. I know you just opened the store in Williamsburg, but the smaller stores in cities and towns, if you could just talk a little bit about those.

Yeah. So on the real estate side, just real quick, Marni. We opened seventeen new experiences, seven new stores in Q1, three closures, so net four. We'll see that accelerate here as we get into Q2. We're expecting about nineteen new stores and about five closures here for Q2 as then that's what's embedded in our guide.

I'll take the YPB question. For YPB, active was actually a strong category for us for the first quarter. We're excited about what we continue to see with the opportunity of YPB, and there's some exciting things coming up for fall in that on that for that brand, that sub-brand.

Thanks. Yeah. On the smaller footprint, so I'll grab this one at the end. You know, we're really happy with Williamsburg. We talked about that opening. That was an exciting opening for us when we've been waiting for a while. There's more coming here in Q2. Just running these smaller stores, you know, it's been a muscle that we've had to build over the last year and has been a focus for Abercrombie, the brand. And we've learned a lot. You know, we're tweaking these stores a little bit. You know, each neighborhood has its own vibe. Whether it's how we build or the product that's in there. And so we're learning a lot and, you know, remains an amazing opportunity for Abercrombie to go forward.

Awesome. Thank you, guys.

Thank you. Our next question comes from Alex Stratton with Morgan Stanley. Your line is open.

Perfect. Thanks so much. Maybe for Fran, just on A and F. You mentioned that the wedding shop was weaker. But were there any bright spots within A and F that are comping above the total banner level? And then for Robert, is the full-year EPS reduction I know it's mostly a function of tariffs on gross margin, but can you just walk us through the other dynamics in gross margin and SG&A that have perhaps changed since three months ago? Thanks a lot.

Yeah. Just to reiterate, Alex. And if there are bright spots in ANF. That one particular category was not as strong, but we're excited about what we are seeing. We saw nice active. We saw strong bottoms. I've already mentioned swim. And, again, the flexibility of our models, letting the team read the business every single week, get back into what's working. They're very open for the back half, and there's some exciting things that they're reacting to.

Yeah. Alex, on the EPS reduction, it's really two big pieces here. So as you think about where we were from March to where we are today, obviously, some color around the tariffs. You know, it's about a $70 million total impact on 2025. We're kind of early days with our mitigation playbooks and so we're working through some of those things. We think we can offset about $20 million of that, so that gets us to that $50 million that we've baked into our guide and that 100 basis points. The balance of it really just comes from, you know, Q2 where you know, again, we're working through some of the carryover. We'll continue to see a little bit of gross margin pressure that brought down the Q2 operating margin a bit on a year-over-year basis. The tax rates also up a bit. But the primary drivers are really tariffs and that Q2 operating margin guide.

Thank you. Good luck.

Thank you. Our next question comes from Mauricio Serna with UBS. Your line is open.

Great. Good morning and thanks for taking my questions. First, could you break down on the Q1 gross margin, the puts and takes you know, between a carryover and freight cost pressures. And then inventory, how are you thinking about inventory growth you know, as the year progresses? Thank you.

Yeah, Mauricio. So no major surprises here on gross margin for Q1 based on what we shared in March. When you think about freight, it was more than half of that 440 basis point decline here in Q1 and then the balance of it was really the carryover pressure on the higher cost of the fall goods. AUR was roughly flat for the quarter. So, you know, A and F pressure with that sell through the carryover inventory offset by improving in Hollister. So, you know, as we think about where that goes for the balance of the year, we'll work through the balance of freights as we've been committing to all year. That should kind of work us through Q2. Carryover will be some pressure here as we work through the inventory mix for the business and, you know, again, get through most of that during Q2. But again, just a reminder, that carryover it's not really an abnormal place to be. So it's not a major issue for us from a Q2 standpoint. We generally don't guide inventory on a cost basis, you know, as we've done historically. You know, we're looking to make sure that our units are aligned with our sales growth on a go-forward basis, so that's what we'll do here. You know, we ended the quarter with plus six units for the quarter. Happy with where that sits, and we'll continue to tightly manage those units as we move through the balance of the year.

Understood. And just a quick follow-up on inventory. Sorry. I based off for a second. I'm sorry. I'm on a holiday, sir. You talked about, you know, some success with the Grad Shop, like, good customer response. I guess, like, how are you thinking about the second half growth for this brand as, you know, you're gonna face a much tougher compare. So how are you thinking about, like, initiatives to sustain that growth? Thank you.

Emeritus brand. So let's just back up. Record performance. We saw balanced growth across regions, across genders. We are gaining share, which is incredibly exciting in the teen space. I would say the team is doing a great job of really evolving from being a teen outfitter to being very culturally relevant. That was exhibited during all the work we did with collegiate, again with the grad shop, We are there meeting this customer at their most important life moments. And so there are some exciting things. I'm not gonna share the go forward, but they have got some more exciting stuff ready for summer to start and lots of exciting things happening for fall.

Yeah. And I'd just say, Mauricio, you know, our job you know, is to grow the total. Right? We have two strong profitable brands. We've got a fleet of highly productive profitable stores. That complements a really profitable digital business. We've got three regions that are comping positive with line of sight to more growth ahead. So, you know, we love this diversified portfolio. We love this diversified channel and regions that helps us to deliver against that goal here in Q2. And know, we're excited about the balance of the year.

Got it. And if I may just one quick follow-up. On gross margin, you know, was down 440 basis points in Q1. Is the expectation of Q2 just know, down but maybe, you know, not as much? Or how should we think about the Q2 gross margin evolution and particularly the drivers there? Thank you.

Yeah. No specific guide for Q2, but you would expect sequential improvement from that down 440 in Q1 as we move into Q2. Again, freight won't be as big of a headwind for us. The carryover inventory is not that not gonna be as big of an impact for us in Q2. And again, we're assuming flat AUR. So sequential improvements the way that we're thinking about it. It's all baked into that operating margin guide.

Thank you so much, and congratulations.

Thanks, Mauricio.

Thank you. As a reminder, to ask a question, please press star one one. Our next question comes from Rick Patel with Raymond James. Your line is open.

Thanks. Good morning. I wanted to double click on your expectations for promotions going forward. So it sounds like you have some work to do for carryover for the Abercrombie brand in the near term, but that the back half should be cleaner. Does that back half improvement reflect fewer units that you have planned, or does it reflect just more confidence in the assortment? And then as a follow-up, what are your assumptions for promotions for Hollister going forward? Given the strong momentum there, do you see opportunity to pull back?

Yeah. So when you think about promotions on the A and F side of the house, yeah, you know, we'll see some AUR pressure here as we work through the carryover inventory. Again, not as big of an issue in Q2 as it was in Q1, so we should see sequential improvement there. You know, we're always gonna align our promotions with our inventory levels and customer demand. So you know, we'll see how that goes. We're gonna come in every day, and this goes for the whole your Hollister question as well. You know, we'll come in every day. We'll work to make sure that we're pulling back on a day here or a promo or a discount depth there. You know, all of those things given this financial model are really beneficial for us, and that's our job. But you know, sitting here today, you know, we're gonna assume that we hold the gains. Again, multiyear double-digit positive AURs across the brands. We like where we are. We like the value proposition that we provide to that consumer. But, again, we're gonna come in every day and try to improve on that.

Can you also double click on your expectations for growth in Europe and Asia for the rest of the year? You know, some nice results in Q1 and you touched on positive global growth for the year. So just some additional color there would be great.

Yeah. No change to our thinking here. You know, it was great to see all three regions post growth and positive comps in the first quarter. We're expecting this full year for these regions to all deliver growth, which is you know, something that we commit to every year, and we still see that growth opportunity across Americas, EMEA, and APAC. So you know, nice balance healthy growth here that we're seeing and a lot of opportunity ahead for us.

Yeah. Rick, just to add on there for the international piece. You know, we've been very focused on the UK market and more recently moved into Germany, you know, with our team has gotten their feet under them there in Europe, our team in London. They've done an amazing job. So it was kind of the same story here in the quarter. Saw strong growth in UK, see Germany growing, and those are our biggest two countries in EMEA. So great to see growth out of the two of them.

Thanks very much.

Thank you. Our next question comes from Janet Kloppenburg with JJK Research Associates Inc. Your line is open.

Hi, everybody. Great job on the quarter. I had a couple of questions. When you talk about the improvement for Abercrombie for the second half? Does that reflect some void that maybe you had in the spring or last year in the second half? And I just wondered about your confidence level there. And then I wondered about the carryover product. My thoughts are that well, it's really true. My question really is could this just be markdown levels normalizing after you guys, you know, had four years of double-digit growth there and sort of no markdowns that to really speak of. So just would love to hear more on that. Thank you.

Yeah. Janet, let me jump in on that second one first. On the carryover product. You're absolutely right. I mean, you think about, you know, what we were up against from 2024's Q1. And we've delivered 66% gross margins, and we had basically zero carryover all the way through the spring season. So that's so we're just lapping that today. And, again, that's why we won't expect the carryover impact on margins on a go-forward basis to be as meaningful as we move into the back half.

Sure. Hey, Janet. On the first question, I guess what I would say is that there were some products perhaps that we just didn't see the same rate of sale as we saw last year against what was an incredible launch right, of a shop. I would say that there weren't voids. I think that there's new trends that are emerging that the team is very excited about, and that's what our model allows us to do. I mean, a great example of that would be, you know, it's happening now in boho and western. I mean, those are things that the customer's starting to respond to. Our model allows us to get back into that pretty aggressively. There's some leg shapes that are changing on the bottom that we're excited about for second quarter actually, for the second half. Excuse me. So there's things that the customer's starting to tell us that we're responding to.

And you have time to get that done, Fran, with the lead times and everything?

That was our model? I mean, that's that is what we do. The flexibility that we've built in, there's absolutely I mean, we're very open for the back half.

And are you feeling any competitive heat from some of the other brands out there? You know, that often happens after a brand having this many years of outperformance. Is, you know, this pressure as people you know, sort of admire what you've done and trying to get a piece of it.

Listen. It's certainly exciting that we have an incredibly successful playbook that we're gonna continue to stay focused on. Lining up that product voice experience is what, you know, what this team does best and staying close to that customer. It's a huge compliment, of course, that people are watching what we're doing. But it's our job you know, to stay ahead of them and to stay faster. And I believe it's the team has got some exciting things that they're working on. To do just that.

Okay. Congratulations, and good luck.

Thanks, Janet.

Thanks, Janet.

Thank you. I'm not showing any further questions at this time. I'd like to turn the call back over to Fran for closing remarks.

Thanks, everyone, and we just look forward to updating you after the second quarter.

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.