Good morning, everyone and welcome to the Duluth Holdings Incorporated First Quarter 2024 Conference Call. [Operator Instructions] Also note today's event is being recorded. At this time, I'd like to turn the floor over to Nitza McKee. Ma'am, please go ahead.

Thank you and welcome to today's call to discuss Duluth Trading's first quarter financial results. Our earnings release which was issued this morning is available on our Investor Relations website at ir.duluthtrading.com under Press Releases. I'm here today with Sam Sato, President and Chief Executive Officer; and Heena Agrawal, Senior Vice President and Chief Financial Officer. On today's call, management will provide prepared remarks and then we will open the call to your questions. Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements which can be identified by the use of words such as estimate, anticipate, expect and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include but are not limited to those that are described in our most recent annual report on Form 10-K and other SEC filings as applicable. These forward-looking statements speak only as the date of this conference call and should not be relied upon as predictions of future events. And with that, I'll turn the call over to Sam Sato, President and Chief Executive Officer. Sam?

Thank you for joining today's call. Let me begin by stating that despite some key quarter wins, we are not satisfied with our first quarter results which fell short of our internal expectations. Our top line performance had a decline of 5.7% was hampered by challenging traffic in a subpar in-stock position following stronger-than-expected unit selling late in the fourth quarter. In fact, we entered the first quarter with inventory levels 19% below the prior year. We took swift action to improve our in-stock position in core items which improved throughout the quarter and into Q2. Let me highlight a few actions we're focused on to improve our results. We are doubling down on our efforts to further leverage technology to deliver more targeted advertising to drive incremental traffic, both online and in stores. We continue to leverage additional streaming platforms and vendor technologies to hone our marketing efforts and to better target specific audiences and markets. Across our 65 store fleet, we're elevating events to emotionally engage with existing and new customers within our local markets. For example, during the first quarter, we successfully tested an underwear trade-up event. On the day of the event, store traffic jumped more than 50%, contributing a 120 basis point benefit for the entire quarter. And more than 1/3 of the underwear trade-ups were from female shoppers which remains a key strategic growth opportunity for Duluth. During the quarter, we completed a comprehensive benchmarking study to identify opportunities to improve our operating margin, working capital and asset efficiency. More to come on this initiative over the coming quarters. And finally, we've engaged a third-party expert to partner with our internal team to conduct an in-depth review of our retail strategy to identify efficiencies and solidify our go-forward plan. As you can see, we're…

Thanks, Sam and good morning. Let me start by reflecting on my first 90 days with the business. This is a resilient organization. The theme has been resolute in taking on the challenge to future-proof the business. I'm encouraged to see meaningful impact from investments in talent and infrastructure to enable the company to capture the next inflection point of growth. I'm impressed by this team that embodies the desire to excel the dedication and can-do spirit of the Duluth brand. Our strengths span our brand, our unique and loyal consumer base, our innovative and superior product designs are cutting edge and engaging storytelling and the capabilities we have built through key hires infrastructure and technology. The opportunity and in turn, the significant work ahead of ours is to build on this progress. First, to unlock the full profit potential of Duluth's current business. Next to strategically deploy capital to unlock growth and white space opportunities. Let me first elaborate on unlocking the full profit potential of Duluth's current business. We are focused on 3 key areas of opportunity. As Sam mentioned, first, an in-depth review of our real estate portfolio, strategy and operating productivity; second, embarking on Phase 2 of our fulfillment center network footprint to maximize productivity and capacity; and third, leveraging the insights from a comprehensive benchmarking study to unlock structural gains in operating margin, working capital and asset efficiency. As we get deeper into the work behind these 3 strategic work streams, we look forward to updating you on our progress and the potential current business unlocked. Our next lever is the strategic allocation of capital to drive growth in our current channels and capture white space opportunities. To drive growth in our current channels, we are focused on consumer acquisition and retention to traffic drivers…

Thank you again for joining this morning's call. I want to reiterate our near-term focus is on improving results and unlocking the full potential of the current business. Although our first quarter did not meet internal expectations, we delivered several key wins. We took swift and appropriate near-term action to improve the trajectory of the business, we're in the process of identifying and auctioning opportunity to drive efficiencies across our operations and our foundational investments are paying off, setting the stage for long-term sustainable profitable growth. Thanks again, and we'll speak to you again, during our next quarter's call.

Ladies and gentlemen, that does conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.