Good day, and thank you for standing by. Welcome to the G-III Apparel Group Second Quarter Fiscal 2024 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. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Neal Nackman, Chief Financial Officer. Please go ahead.

Good morning, and thank you for joining us. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the Federal Securities laws. Forward-looking statements are not guarantees and actual results may differ materially from those expressed or implied in forward-looking statements. Important factors that could cause actual results of operations or the financial condition of the company to differ are discussed in the documents filed by the company with the SEC. The company undertakes no duty to update any forward-looking statements. In addition, during the call, we will refer to non-GAAP net income, non-GAAP net income per diluted share, and adjusted EBITDA, which are all non-GAAP financial measures. We have provided reconciliations of these non-GAAP financial measures to GAAP measures in our press release, which is also available on our website. I will now turn the call over to our Chairman and Chief Executive Officer, Morris Goldfarb.

Thank you, Neal, and thank you everyone for joining us. We registered another strong quarter, significantly exceeding our top and bottom-line guidance. The second quarter concludes a robust first half for G-III, showcasing our ability to navigate a dynamic environment. This gives us confidence as we look forward to the remainder of the year, prompting us to raise our full-year guidance. As a global leader in fashion, we remain focused on executing our business effectively while pursuing numerous growth opportunities. For the second quarter of fiscal 2024, net sales were $660 million, a 9% increase from $605 million last year, surpassing our guidance by approximately 10% or $65 million. Non-GAAP net income per diluted share was $0.40, exceeding our guidance by the same amount. Similar to the first quarter, second quarter gross margins were better than last year’s figures. Our freight costs have moderated, and we're beginning to anniversarize last year's significant one-time logistics expenses, primarily occurring in the third quarter. We are very pleased with our progress in rightsizing our inventory, which is now $805 million, down 23% from $1.04 billion in last year’s second quarter. We remain disciplined in our approach to future inventory purchases and have adjusted our warehousing needs appropriately as inventory levels have aligned. Our new inventory purchases are coming in at significantly lower freight costs. We are well-positioned for the second half of the year. We ended the quarter in a strong financial position with $825 million in cash and availability, after repaying $75 million of debt. Year-to-date, we have repurchased 1.6 million shares, returning $26 million to shareholders. Furthermore, our Board has replenished our stock buyback capacity to 10 million shares. Maintaining the strength of our balance sheet is a top priority, allowing us the flexibility to invest in the future growth of both our existing and new businesses. Let me discuss the development of our three recently announced growth initiatives, all of which are on track to launch with first deliveries next year. These include the repositioning and expansion of Donna Karan, which will be more widely distributed in better department stores, digital channels, and our own Donna Karan website both in North America and internationally. We plan to launch in over 200 partner doors and establish 150 branded shop-in-shops. The new collection has been well received. Our long-term license for Nautica in North America will begin with the jeans category and expand into a wider range of additional categories. Our jeans will launch in over 200 partner doors and we will build 60 branded shop-in-shops, with orders already coming in from retail partners. Our 25-year agreement as the master licensee of Halston will cover a full range of products across our global distribution network. Although Halston is well-known globally, its North American and international distribution is currently limited, providing significant growth opportunities. We also have the potential to act as a licensor for additional categories, creating another revenue stream. The agreement includes an option to purchase the brand. Additionally, we announced our new multi-year license with HanesBrands to produce outerwear for Champion, an iconic American brand with broad global recognition. We will create quality heritage pieces to enhance Champion's lifestyle offerings. This license is well-aligned with our core competencies and fits seamlessly into our established outerwear divisions. The products will be distributed through our diverse channels in North America, as well as Champion's global network, with first deliveries expected for fall 2024. We are committed to growing our owned and licensed brands while incorporating new brands that align with our long-term vision. Supporting this growth is our robust corporate foundation, which includes our high-performing, forward-thinking team, experienced senior leadership, strong merchant expertise in product development, dominance in various product categories, a well-developed sourcing and supply chain infrastructure across diverse geographies, and our varied distribution network of retail partners to engage a broader consumer base. This framework has enabled G-III to harness the value of more than 30 licensed and owned brands in our portfolio, including some of the most sought-after names in global fashion. We have successfully built entirely new product lines for our brands across a diverse set of core categories. Our efforts have helped them reach wider audiences, achieve significant sales growth, and elevate their lifestyle appeal. Our proven track record continues to position G-III as a partner of choice for brands and retailers. Our entrepreneurial and agile culture has consistently driven results. Agility is central to our operations at G-III, and we keep evolving regardless of outside factors. Since announcing changes to our Calvin Klein and Tommy Hilfiger licenses in December, we acted swiftly to establish the four new strategic initiatives I've just outlined, with more in the pipeline to enhance shareholder value. Now, let me update you on our progress this quarter in relation to our strategic priorities. Our first priority is to drive our power brands across categories. Our results continue to be buoyed by strength in outerwear, alongside dressier categories such as sportswear, dresses, and suit separates within our key brands: DKNY, Karl Lagerfeld, Calvin Klein, Tommy Hilfiger, and Levi's. We also witnessed strong performances across denim, footwear, and team sports. Looking ahead to the third quarter, our order book appears robust and our inventory is well-aligned. We are well-positioned for the pivotal fall and holiday season. As we consider future growth drivers, several key brands stand out, such as DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, Nautica, and Halston, each with distinct propositions appealing to various customer segments and lifestyle needs. DKNY captures the energy and attitude of New York, offering a modern wardrobe for day and night that resonates with younger consumers seeking contemporary products. Donna Karan delivers a modern dressing system that appeals to women's full lifestyle needs, offering sophisticated products from one of America's most recognized brands. The Karl Lagerfeld brand embodies a contemporary spirit through Parisian-inspired classics. Vilebrequin, our prestigious swimwear brand, balances refinement and casual charm, tailored for an upscale clientele. Nautica stands for casual, nautical-inspired designs, appealing to shoppers seeking a relaxed style. Halston epitomizes simple, classic elegance for consumers seeking aspirational fashion. Our brands cater to a range of price points and feature specialized distribution strategies with dedicated design teams tailored to their respective positions. Each of our core brands enhances our offerings and widens distribution opportunities. Expanding our owned brands, including DKNY, Karl Lagerfeld, Donna Karan, and Vilebrequin, is a key strategic focus, representing significant long-term profit potential by driving higher operating margins and generating licensing income for G-III. These brands also support our global expansion efforts. This year, with our ownership of the entire Karl Lagerfeld brand, we expect international sales to increase by 20% year-over-year. With $1.3 billion in annual revenue last year, we believe we can grow this business to over $3 billion over time. Our DKNY and Karl Lagerfeld brands recorded solid year-over-year growth in the second quarter. It's been a year since we acquired the full Karl Lagerfeld brand, and its integration was seamless. We launched Karl Lagerfeld jeans in Europe, marking a new key growth category for the brand, with two dedicated stores for this line in Paris and Madrid. DKNY’s fall marketing campaign will revolve around DKNY For You, highlighting New York's uniqueness from various perspectives. This campaign will be promoted through a comprehensive media mix, including digital platforms, premium outdoor placements, as well as social media and influencer collaborations in the US and key international markets. Building on the momentum from the Met Gala, Karl Lagerfeld’s fall campaign will leverage impactful marketing activities globally, with a focus on digital engagement through innovative NFTs, augmented reality filters, and creative collaborations. We continue to seize opportunities to leverage our brands' recognition through lucrative licensing arrangements. This quarter, we've secured renewals from several key licenses, indicating strong brand strength. Moreover, we are working to broaden our licensing agreements into new categories, helping us reach wider audiences. Expanding our global reach also remains a high priority. We have unique partnerships for Karl Lagerfeld that enhance international visibility, including last month's opening of the brand's first five-star luxury hotel in Macau, featuring 271 opulent guestrooms and a Michelin-starred restaurant. This project represents Karl's design vision, which he dedicated six years to before his passing. The grand opening was celebrated with Academy Award winner Michelle Yeoh, alongside other globally renowned VIPs and 2,000 guests. This initiative offers a sophisticated luxury brand experience aimed at a global audience. In June, we announced a second Karl Lagerfeld Hotel Tower at The Sail development in Malacca, Malaysia, a UNESCO World Heritage Site emerging as an international tourist hotspot, with a design that resembles a ship. The summer debut of Vilebrequin's new beach club, La Plage, has been a major success, providing an elevated beach experience that quickly attracted international vacationers, hosting high-profile celebrity and corporate events during The Cannes International Film Festival. This model can be replicated through franchise and licensing opportunities for beach clubs, and we are exploring further prospects to create additional Vilebrequin experiences, boosting global awareness and enhancing brand prestige. The brand also opened two new international stores this quarter, one in the Bahamas and another on Paris' Rue de la Paix, focusing on our luxury line and increasing our average unit retails significantly. We continue to expand our DKNY international business, with our Milan office actively working on enhancing the brand’s presence in Europe, supported by franchise partners who have opened three stores and are planning more openings. We are also investing in our digital and omni-channel growth, which is crucial for driving sales for our brands. Our North American digital business with pure-play partners and our owned DKNY and Karl Lagerfeld Paris sites increased by over 60%. Collaborating with Amazon, Fanatics, and other digital retailers is yielding results, and these investments are paving the way for enhancing digital capabilities across our entire portfolio. We are excited about the growth potential with these partners and see this as just the beginning of our digital expansion. Our brick-and-mortar business, particularly in department stores and wholesale accounts, is also vital. As customers continue to shop in-store, our teams have excelled in strategizing to deliver the right products through the right channels at the right time, which is reflected in our strong performance this quarter. We have developed a unique business model that supports our success in wholesale, staffed by strong planners and merchandisers who collaborate with designers to deliver desirable, data-informed products. On the sales front, our teams work closely with retailers to plan their inventory, using insights from our data to ensure appropriate products are well-positioned in stores in a timely manner. Our investments in analytics have empowered us to design and update our product lines to meet retailers’ needs effectively. Additionally, our proven strategy for developing each category line results in a strong array of products that satisfy consumer demand, ensuring robust sell-through rates that benefit both our retail partners and our business. This approach establishes us as a best-in-class partner for retailers. Lastly, I am pleased with our recent Board refreshment efforts, having added three new independent directors. Overall, six new independent directors have joined us in the past four years. Among them are Bob Johnson, Founder and Chairman of RLJ Companies; Victor Herrero, CEO of Lovisa; Patti Ongman, former Chief Merchandising Officer of Macy's; Dr. Joyce F. Brown, President of the Fashion Institute of Technology; Michael Shaffer, recently retired CFO of PVH Corp; and Andrew Yaeger, Global Head of Jefferies’ Strategic Equity Transactions Group. Each of these new additions, alongside our existing Board members and management team, brings independent and diverse perspectives to G-III, which is crucial as we position ourselves for future success. In conclusion, our execution of strategic priorities has been strong, and I am optimistic about our product line, strength in the wholesale segment, digital growth, responsible inventory management, financial discipline, and the enthusiasm of our team. Based on our solid second quarter performance and upcoming orders, we are confident in raising our fiscal 2024 outlook, now anticipating net sales of $3.3 billion and adjusting our non-GAAP net income per diluted share to a range of $3.20 to $3.30, compared to $2.85 in fiscal 2023. I will now pass the call to Neal for a review of our second quarter financial results and our guidance for the third quarter and full year of fiscal 2024.

Thank you, Morris. With respect to our results of operations, the comments I'm about to make are on a non-GAAP basis. A full reconciliation of our GAAP to non-GAAP results are included in our press release issued this morning. Net sales for the second quarter ended July 31, 2023, increased approximately 9% to $660 million from $605 million in the same period last year, and were approximately $65 million above our guidance. Included in our sales for this quarter was $38 million of additional sales from the acquired Karl Lagerfeld business, which became a wholly-owned subsidiary on June 1, 2022. Accordingly, the results of the Karl Lagerfeld business were included in our results commencing with the last month of the prior year's second quarter. Net sales of our Wholesale segment increased approximately 9% to $639 million from $588 million last year. This segment now includes the acquired Karl Lagerfeld business results. Net sales of our North American Retail segment were $34 million for the second quarter compared to net sales of $31 million in last year's second quarter. Our gross margin percentage was 41.9% in the second quarter of fiscal 2023, compared to 37.8% in the previous year's second quarter. The Wholesale segment gross margin percentage was 40.6% compared to 36.2% in last year's comparable quarter. As we have stated before, the acquired Karl Lagerfeld business operates at a higher gross margin percentage than the rest of our Wholesale segment. Their inclusion in the quarter resulted in increased wholesale gross margin percentages of approximately 150 basis points. The remainder of the increase in gross margin percentage is a result of a decrease in inflationary pressures in product and transit costs. The gross margin percentage in our Retail Operations segment was 50.5% compared to 51.6% in the prior year. Non-GAAP SG&A expenses were $237 million or 36% of net sales compared to $186 million or 30.7% of net sales in last year's second quarter. SG&A grew by approximately $29 million, primarily related to the inclusion of the acquired Karl Lagerfeld business in our results for the additional two months in the quarter. In addition, we had increases in compensation and warehousing costs as well as overall inflationary pressures. Non-GAAP net income for the second quarter was $19 million or $0.40 per diluted share compared to $19 million or $0.39 per diluted share in last year's second quarter. Driven by the higher sales we achieved and the associated gross margin flow through, this was significantly above the midpoint of our guidance of a breakeven quarter. Turning to the balance sheet, we made good progress with respect to our inventory levels. As compared to last year's second quarter, inventory levels were $805 million, decreasing approximately $236 million or 23% from last year's $1.04 billion. We have tempered our buying this year and are well set up for the fall and holiday shipping season. We expect our lower inventory levels this year as compared to the prior year at both the end of the third and fourth quarters. We ended the quarter in a net debt position of approximately $268 million compared to $424 million in the prior year. This decrease in net debt is primarily a result of cash flows from operations as well as the large decrease in our inventory levels, offset by $36 million used for stock repurchases. We had cash and availability under our revolving credit agreement of approximately $825 million at the close of the quarter. This was after we repaid $75 million of debt in the quarter. We expect strong positive cash flows this year that will continue to reflect our normalization of inventory levels. We believe that our liquidity and financial position provide us the flexibility to invest in our future growth. As for our guidance, I will provide non-GAAP guidance. Again, a full reconciliation of GAAP to non-GAAP results is available in the press release we issued this morning. Based on our performance in the second quarter and our current view of the second half of the year, we are raising our guidance. For the full fiscal year 2024, we now expect net sales of approximately $3.3 billion. On a non-GAAP basis, we expect net income for the full fiscal year 2024 to be between $152 million and $157 million or between $3.20 and $3.30 per diluted share. This compares to non-GAAP net income of $139 million or $2.85 per diluted share for fiscal 2023. Full year fiscal 2024 adjusted EBITDA is expected to be between $284 million and $289 million compared to adjusted EBITDA of $266 million in fiscal 2023. For the third quarter of fiscal year 2024, we expect net sales of approximately $1.13 billion compared to $1.08 billion in the same period last year. On a non-GAAP basis, we expect net income to be between $96 million and $101 million or between $2.03 and $2.13 per diluted share. This compares to non-GAAP net income of $66 million or $1.35 per diluted share in the third quarter of fiscal year 2023. As a reminder, last year's third quarter included significant one-time demurrage charges of approximately $27 million or $0.40 per diluted share. We do not expect to anniversary these costs in this year's third quarter. Let me add some context around modeling. We expect continued gross margin improvement during the balance of fiscal year 2024 and anticipate ending the year with gross margins up approximately 450 basis points compared to the fiscal 2023 rate. The second half of fiscal 2024's gross margin will benefit from a few factors. As I just mentioned, we do not expect to repeat significant one-time logistics costs and additionally, freight costs have significantly moderated. While we are anticipating improved operating margins in both the third quarter and fourth quarter, we anticipate SG&A will de-lever as we continue to expect elevated warehousing costs as well as continued inflationary pressure on costs. We expect non-GAAP interest expense to be approximately $45 million for the full year. We are estimating a tax rate of 28% for the balance of the year. We have not anticipated any potential share repurchases in our guidance. That concludes my comments. I will now turn the call back to Morris for closing remarks.

Thank you, Neal, and thank you all for joining us today. We're seeing the results of our performance. Closing out the second quarter, well exceeding our top and bottom-line guidance and our order book gives us confidence in our raised outlook for the full year. The strength of our balance sheet affords us tremendous financial flexibility to invest in our business and consider additional opportunities. Our diversification is a testament to the stable business model and solid foundation we've created, enabling us to navigate any environment. I'm very excited about the new opportunities we've secured, which our team is working hard to bring to market. We have strong plans in place to drive G-III with our focus on our strategic priorities and these new growth drivers. I'd like to thank our entire organization, our many partners, and all of our stakeholders for their continued support. Operator, we're now ready to take some questions.

The first question comes from Will Gaertner with Wells Fargo. Your line is open.

Hey, thanks for taking my questions. Can we discuss the guidance? You exceeded expectations by $65 million, but the top-line flow-through was only $10 million. Is that simply a conservative approach, or can you elaborate on that?

Looking at the order book, we conduct a thorough process throughout the company regarding our future forecasts. We consult with every division and examine the existing order book. These adjustments primarily stem from our internal expectations for the fourth quarter.

Got it. And just one more follow-up. On Champion, is this going to be similar economics to the other licenses you had previously? And maybe just frame out how big you think that this licensing deal could be for you.

The framework for the Champion licenses is quite similar to our other coat licenses. The unique aspect is that there is demand for the Champion brand in the outerwear segment at athletic stores. DICK's and Foot Locker represent potential opportunities for us, as our fashion brands do not have a significant presence in those venues. While it won't be our largest business, it will be an important segment in our portfolio, expected to generate sales volume comparable to our other brands such as Calvin Klein, Tommy Hilfiger, Levi's, DKNY, and Karl Lagerfeld. The plan is to maintain a similar scope and scale.

Are the economics similar from an EBIT margin perspective?

Hanes has agreed to give us exposure in most of their global venues. We hope to build an international business from that, while Calvin and Tommy were limited to North America.

Got it. Thank you. I'll pass it along.

Please standby for our next question. The next question comes from Mauricio Serna with UBS. Your line is open.

Good morning, and thank you for taking my question. I wanted to get a bit more detail on the expected growth for the second half of the year, which seems to be around 5% to 6%. I'm interested in understanding how much of that growth is driven by Wholesale compared to Retail. Additionally, could you share insights on the performance of the key brands this quarter? Which brands performed better and which ones may have underperformed? Also, did you mention any long-term expectations for the Champion business and its potential growth over time? Thank you.

Thank you, Mauricio, for your question. I'll begin with the last one. We typically don't share a dollar value for our classification brands, but they integrate well with our other brands and present further opportunities. Our strategy for them is similar to that of our co-brands. Regarding growth, it mainly comes from the wholesale distribution channels we have, such as department stores. We don't have an aggressive retail strategy; retail is expected to remain flat compared to last year, and our retail presence is minimal. In terms of brand performance, we don't have any underperformers. Karl Lagerfeld stands out with strong exposure and growth in both the United States and Europe. We still have untapped opportunities, with increased door counts and improved products that are attracting consumer interest. We're seeing significant appeal through digital channels, our retail, and our distribution network. Overall, our brands are managed by excellent teams that align with market needs, and I cannot identify any brand at the moment that I would consider underachieving.

Got it. Very helpful, and congratulations on the results.

Thank you, Mauricio.

Please standby for our next question. The next question comes from Paul Kearney with Barclays. Your line is open.

Hey, good morning. Thanks for taking my question. I think just to ask a little bit differently, relative to 90 days ago, what brands or categories drove revenue upside in the quarter compared to your expectations? And then could you comment on what you're seeing on channel inventory levels, whether you're seeing continued conservatism in wholesale ordering? Or are you starting to see them need to replenish their inventory levels? Thanks.

Our coat business has performed very well as we've shipped it. Historically, we released coats in late June and early July, and once they arrived in stores, we received immediate reorders that helped manage our inventory levels. The athleisure performance side of our business is also doing well. Initially, there were concerns that our business might struggle as creativity became more widespread, but the new and appealing products have led to rapid growth in this segment. Our suit separates business may not draw much attention, but it is very profitable and generates significant reorders. Additionally, our dress business has rebounded stronger than ever. In terms of footwear and handbags, we realized we were over-relying on canvas footwear, but we've made improvements in that area, and our canvas leisure footwear is performing better. While our handbag business is not where I would like it to be, we have made changes in designers and sourcing locations, and we expect significant improvements. However, the quarter has not been remarkable for handbags and footwear. Regarding channel reorders, we are receiving them from our usual customers, primarily department stores, and our support remains consistent. Our new brands are receiving the expected support, and we will be introducing products soon. We are also expanding our retail spaces in prime locations that we have negotiated. The impact of brands like Donna Karan, Nautica, Halston, and Champion has not been seen yet, but we anticipate their arrival soon.

Thank you.

Please standby for our next question. The next question comes from Noah Zatzkin with KeyBanc Capital Markets. Your line is open.

Hi. Good morning. This is Ashley on for Noah. I guess, just curious on how you see the promotional environment playing out relative to three months ago when you were looking out and maybe how your expectations have shifted. And then if you could provide some additional color on what is driving your holiday expectations, that would be great. Thanks.

There are currently fewer promotions in retail compared to before COVID. It turns out that consumers are accepting the right products. If designed well, made with quality, and presented effectively, consumers are willing to pay for them. Promotions have decreased at retailers such as Macy's, Dillard's, and Belk. The general belief is that if a retailer has a lot of inventory, big markdowns will be necessary to sell it. However, our inventory is down 23% and our gross margins have improved, showing that we are not giving away products, as our inventory holds great value, and both retailers and consumers appreciate it. I can't predict the future, particularly concerning the political and economic landscapes, which are beyond our control. Currently, we are not concerned about unexpected aggressive markdowns. Our order book aligns with our guidance, reflecting historical patterns as a percentage of our budget. We have positive expectations for the holiday season in our categories and product mix. We are aware of current market trends, and while we are adjusting guidance, we are content with our situation today. We have suitable inventory and strong partnerships to support our needs, positioning us for a promising year ahead. Thank you for your question, Ashley.

Thanks so much. Yeah, thank you.

Please standby for the next question. The last question comes from Dana Telsey with Telsey Advisory Group. Your line is open.

Hi, good morning, Marcus, Morris, Neal, and Priya. Congratulations on your progress. As you consider the evolving and growing portfolio, are there specific categories you plan to focus on for new licensing deals that we should consider? Also, regarding the current wholesale environment with an improved order book, what has changed? How are the average unit retailed? What is the status of the promotional environment? How do you foresee the holiday season? Lastly, I have one more follow-up.

Thank you, Dana, for your question. We don't require new licenses or acquisitions. As you heard in our presentation, we have enough resources to grow significantly. We possess a variety of classification licenses that extend beyond what the company had in the '90s and early 2000s. We have major global brands that allow us to produce across all categories, and there is a strong demand for these brands as well as the ones we already support. The main concern is PVH, but we remain confident about our future. While we may not be fully satisfied, we are not worried. We believe we can perform better than we have historically with our licenses. Owning is preferable to renting, and we have control over our future, which is a great advantage. Additionally, we are receiving the expected support from our trading partners, knowing we do not need to rely solely on the brands but on the talent and culture within the company. We are transitioning to bring prosperity to ourselves and our stakeholders, so we are pleased with our current status, especially as our profit margins are increasing. Interestingly, a way to excite Wall Street would be to announce a 20% staff reduction to save costs. However, during this transition with PVH and new brands, we have maintained stable SG&A without adding or letting go of employees. We believe the talent that has built G-III remains engaged, contributing to whichever brand they are assigned to, preserving our culture without needing to onboard new employees. To address the elephant in the room, our AURs have risen across nearly all our brands, including Vilebrequin, which has a high AUR. We are focusing on specific higher-priced swimwear for selected stores to see how they perform, which has become a significant part of our business strategy. All our retailers are seeing an increase in AUR, approximately 10%, and we have not noticed any adverse effects from price adjustments. Furthermore, if you review our recent presentations, you will see our intent to expand in Europe, as it is recognized as a key market by our competitors. Unlike them, we are performing well in the US market, and our success is evident in our numbers. This year, we experienced approximately 23% growth in our European business compared to last year. We are exploring all possible opportunities for the company’s future. I hope I answered some of your questions, Dana. If I missed any, please let me know.

You answered most.

Okay.

Just a last thing, what's your outlook on holiday? How you're thinking about it? And given the diversification of wholesale accounts for Champion, how do you see wholesale evolving? Thank you.

For the remainder of the year, our guidance reflects our outlook. We are cautious about inventory levels, having learned from past experiences. We struggled to manage the logistics crisis effectively, and financing is more costly now than before. As a result, we will significantly adjust our inventory levels and adapt to a different business model that offers less growth potential. Owning inventory provides a better opportunity for sales. While there are some positive prospects in our guidance, they are not as substantial as they have been historically due to our different inventory management approach. Looking ahead, there are various factors at play, including political and economic influences that are beyond our control. We have the right products at the right prices, but there are elements we simply cannot influence.

Thank you.

Champion operates in the wholesale market and is not focused on retail for us. Our license was recently signed after a couple of months of negotiations, and we were confident we would reach this point. We have a complete collection ready to launch, and there is considerable excitement around it. We previewed it with some customers, including Hanes, for their global distribution needs and received positive feedback for creating an innovative product that combines political and athletic inspiration in a way that hasn’t been done before. It’s remarkable that the company has accomplished this, especially considering we had to adapt to losing half of our business six or seven months ago. Our new collections, such as those for Donna Karan and Nautica, have been well-received, and we are getting close to launching Halston. This achievement is incredible, and we are prepared with assets that we believe will not only make up for what we have lost but also do so more efficiently and profitably.

Thank you.

Thank you. Thank you all. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.