Lands' End, Inc. (LE) Q1 2024 Earnings Call Transcript

Good day everyone, and welcome to today's Lands' End First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later you'll have the opportunity to ask questions through the question and answer session. Please note, this call is being recorded, and I'll be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Chief Financial Officer, Bernie McCracken. Please go ahead.

Good morning and thank you for joining the Lands' End earnings call for a discussion of our first quarter 2024 results, which we released this morning, and can be found on our website, landsend.com. I'm Bernie McCracken, Lands' End's Chief Financial Officer, and I'm pleased to join you today with Andrew McLean, our Chief Executive Officer. After the prepared remarks, we will conduct a question-and-answer session. Please also note that the information we are about to discuss includes forward-looking statements. Such statements involve risks and uncertainties. The company's actual results could differ materially from those discussed on this call. Factors that could contribute to such differences include, but are not limited to those items noted and included in the company's SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking information that is provided by the company on this call represents the company's outlook as of today, and we do not undertake any obligation to update forward-looking statements made by us. Subsequent events and developments may cause the positive company's outlook to change. During this call, we'll be referring to non-GAAP measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings release issued earlier today, a copy of which is posted in the Investor Relations section of our website at landsend.com. With that, I will turn the call over to Andrew.

Thanks, Bernie. Good morning and thank you for joining us today. We delivered strong first quarter 2024 results from the continued execution of our strategy centered around Lands' End's being the innovative solutions-based brand that's ready for life's every journey. This vision is the cornerstone of our value creation strategy, which is underpinned by three key priorities. Build the brand, increase product margins, and grow our customer base. Our deliberate efforts to generate more profitable sales by deploying asset life approaches in tandem with our core digital business gained momentum in the first quarter of 2024, resulting in an increase in gross profit dollars and significant gross margin expansion. With inventory down 23% year-over-year in the first quarter, we remain nimble and continue to prioritize newness and speed to market in our assortment, introducing new styles, fabrics, and colors to which our customer responded positively. We are focused on further improving our inventory turn through a variety of speed and efficiency initiatives. As noted, it also serves as a reminder to our customer, buy it now or it may be gone. Based on our gross merchandise value, or GMV, we returned the brand to growth in the first quarter with a low single-digit increase year-over-year. We did this by continuing to evolve our brand story, especially across our digital and licensing channels. We're also leveraging our proprietary data to better understand the shopping behaviors of our two key customer cohorts, resolvers and revolvers, to further refine our customer journey and match that with a user experience that is reflective of the Lands' End of today. Late in Q1, we continued to showcase our innovation when we introduced our newly designed website that better represents Lands' End as the brand's ready for customers at every moment. Social media has become a key part of our marketing, one that has generated strong new customer acquisition. By combining our elevated brand story with a multifaceted paid social media approach, we're better promoting newness across our assortments, which drives traffic to our own channels and drives more full-price selling. As a result, in the first quarter, we've more than doubled demand from social media year-over-year. Moving forward, we will continue to build our brand through marketing rather than discounting. We will do this by taking a more outfit-centric approach to our assortments, featuring significantly more productive and compelling inventory that facilitates demand across natural adjacencies. From a product standpoint, we had several high-performing categories during the first quarter and saw increased full-price selling from introducing newness. Our transitional weather solutions performed particularly well and were a key driver of our success. As milder weather prevailed across the winter and early spring, we seized the opportunity to meet the moment for our customers by leading with our wear-and-our approach to our assortment, which yielded a great customer response. Through our authority in outerwear, we once again drove sales across key adjacencies with layering products, including women's sweaters and knit tops performing particularly well. Zeroing in on outerwear, we're pleased with the performance of our weatherproof assortment of lightweight jackets, raincoats, and fleeces, which all continue to perform well in the first quarter. Women's bottoms were another winner, with customers responding well to new styles, like wide-leg denim and chino pants and on-trend materials like linen and garth. In addition to delivering newness in key apparel categories, our strong franchises like our wonder white line of ultra-light packable outerwear, squall jackets and drifter sweaters, enable us to offer a family of products that solidify our positioning as a lifestyle brand. We remain incredibly confident in our ongoing innovation strategy. Turning to our swim business, we looked across the season that allowed us to introduce and sell our key franchises, including the newly patent-pending WaveShaper Sculpting Suit at full price for a longer time period. Periodic events like our highly popular National Swimsuit Day have reduced our reliance on daily promotions to drive sales. And across all our channels, we were able to deliver on our gross margin goals while leveraging the success of swim to drive growth in our new-to-file customer counts. In fact, looking at the season to date, where we are consistently flowing more newness, our swim business has the potential to exceed our margin dollar plans while maintaining our leading market share. Before I touch on the performance of our various businesses, I want to remind you that we are preparing to change the way we talk about our performance to be more consistent with the evolution of our brand. Specifically, we plan to discuss our business in terms of B2C and B2B. Beginning with our B2C activities, our U.S. e-commerce business is our largest direct-to-consumer channel. The business delivered its fifth consecutive quarter of great margin performance with an increase of over 600 basis points due to our more targeted approach to promotions, which drives higher quality sales and improved inventory management. As we've mentioned, we continue to maximize key events to drive demand with lower levels of inventory, we are utilizing occasions like President's Day and National Swimsuit Day to lean into newness and quality products that our customers are responding to. These events have allowed us to drive profitability by achieving more full-price sales while maintaining lower levels of promotional activity. Put another way, our strategy is not to simply move units. We're maintaining lower promotional levels while achieving more quality sales from the strength of our brands and the solutions we offer customers. In addition to driving quality sales, these efforts around key events are also driving a nice increase in new customer acquisition with our global new customer acquisition increasing in the first quarter year-over-year by high single digits.

Thank you, Andrew. Before I dive into our results, I want to remind everyone on the call that the first quarter of 2023 included the conclusion of our work with Delta. This resulted in the pull forward of significant revenue and gross profit dollars into the first quarter last year. What I'm making note here as the comps adjusting for Delta are more indicative of our year-over-year performance across the company. With the first quarter, total revenue performance came in slightly above our guidance range at $285.5 million, a decrease of 8% compared to last year, or a 1% increase when excluding the $27 million difference in year-over-year revenue from Delta. GMV increased low single digits for the first quarter of 2024, which was in line with our guidance. As a reminder, we believe GMV, which accounts for the total order value of all merchandise sold to customers through B2C and B2B channels, as well as the retail value of the merchandise sold through third-party channels, is an important indicator of the performance of the comparable growth of our brand. We delivered adjusted EBITDA of $12 million in the first quarter, which exceeded the high end of our guidance range and a year-over-year increase of over 60% when excluding the $13 million difference from Delta. These results reflect our continued efforts to prioritize profitability and balance efficiency versus solely sales, which has continued to improve our profit margins across our business units. Gross profit increased by 1% compared to last year, driven by our fifth straight quarter of gross margin expansion, and excluding the $13 million difference from Delta, gross profit increased by 11%. Gross margin in the first quarter was 49%, and approximately 410 basis point improvement from the first quarter of 2023. The margin improvement was driven by new products across the assortment, strength in transitional outerwear, swimwear and adjacent product categories, lower promotional activity, reduction in sales of clearance inventory, and improvements in supply chain costs. Our U.S. e-commerce business saw a sales decrease of 4% compared to the first quarter of 2023, and we generated a 10% increase in gross profit dollars driven by continued efforts to prioritize higher quality sales. Our European e-commerce business increased gross profit dollars by 27% compared to the first quarter of 2023, with sales down 2% year-over-year. Sales from Lands' End outfitters were down 42% from the first quarter of 2023, reflecting the impact from Delta. Excluding the $27 million difference in year-over-year revenue from Delta, the outfitters business was down 9%. Our third party business increased gross profit dollars by over 40% compared to the first quarter of 2023, with revenue increasing by over 60% year-over-year. The increase in sales was primarily due to revenue from licensing arrangements, including $10.5 million of kids product inventory sold to a licensee as this business transitioned to a licensing model. Online marketplaces saw increased gross profit from higher margins driven by the expansion of our higher quality sales strategy to third-party partners. As a percentage of sales, SG&A was 45%, which was an increase of approximately 630 basis points compared to 2023, primarily due to deleverage from lower revenues and investment in digital marketing, driving new customer acquisition. As Andrew noted, these investments are critical to our strategy and we are already beginning to see them drive results. For the first quarter, we had a net loss of $6.4 million, or $0.20 per share. We had an adjusted net loss of $6.2 million, or $0.20 per share, which came in better than our guidance range. Moving to our balance sheet, inventories at the end of the first quarter were $289 million compared to $376 million a year ago. The 23% improvement in our inventory position was a result of our supply chain team's continued efforts to drive efficiencies in our business. In terms of our debt, at the end of the first quarter, our term loan balance was $257 million and our ABL had $40 million of borrowings outstanding, which was $60 million lower than the first quarter last year. During the first quarter, we purchased $1 million worth of shares under our $25 million share repurchase authorization announced in March, bringing the balance of the remaining authorization to $24 million as of the end of the quarter.

Now moving to guidance. We are continuing to prioritize high-quality sales and improved cash flows, which we expect to drive continued gross profit and margin expansion during the summer selling season. In the second quarter, we expect net revenue to be between $290 million and $320 million, with gross merchandise value, or GMV, expected to be mid-to-high single-digit growth. We expect an adjusted net loss of $4.5 million to $2 million, an adjusted diluted loss per share to be between $0.14 and $0.06. We expect adjusted EBITDA to be in the range of $14 million to $17 million. For the full year, we raised the low end of our revenue guidance and now expect net revenue to be between $1.36 billion to $1.45 billion, while GMV is expected to be low to mid-single-digit growth. We now expect adjusted net income of $5.5 million to $13 million, and adjusted diluted earnings per share of $0.18 to $0.41. We now expect our adjusted EBITDA to be in the range of $88 million to $97 million. Our guidance for the full year incorporates approximately $30 million in capital expenditures. As we have discussed, we expect our improved inventory management to enable us to maintain inventory at normalized levels, and bolster our work to further expand gross margin moving forward. With that, I will turn the call back over to Andrew. Thanks, Bernie. I want to thank our team for their hard work and for delivering a great start to the year following a busy holiday season. We are making significant progress against our strategy and our efforts to innovate every aspect of our business and define and refine our brand are bearing fruit. As we transition from spring to summer, we are encouraged by how our customers are responding to our assortment of summer solutions that offer both fashion and function. Our strong performance during the recent Memorial Day holiday weekend gives us confidence that the solutions we provide and our go-to-market strategy are the right ones for Lands' End and for our customers. We are incredibly excited for what is in store for Lands' End in 2024 as we become a larger part of our customers' daily lives as a brand that can truly meet any moment for our customers. On May 30th, I had the honor of ringing the NASDAQ opening bell alongside many members of our team to celebrate Lands' End's 10th anniversary as a public company. It's amazing to see how much Lands' End has evolved since then, and particularly over the last year, while staying true to its heritage as an iconic American lifestyle brand. Thanks to the great Lands' End team, we're extremely confident in Lands' End's future and our unique ability to serve as a partner to our customers, ready for life's every journey. That concludes our prepared remarks. We look forward to your questions.

Thank you. We will now take our first question from Dana Telsey with Telsey Research.

Good morning, Andrew and Bernie. Congratulations on the nice progress, it's great to see. As you consider your core customer, the resolver and the evolver, what are you noticing regarding differentiation in price points and category sell-through? With the improved gross margin and reduced promotions, is there any change in full-price sell-through? Additionally, are there any differences in sell-through of newer items compared to core and classic products, essentially reflecting the health of the consumer from your perspective? Thank you.

Hi, Dana, it's Andrew. Thanks very much. It's great to hear from you. Yes, we notice a distinction between the resolver and the evolver. The resolver represents our long-term customers, of which we have millions, while the revolver is the segment we believe we can grow further. We've given this customer segment considerable thought. Traditionally, the resolver shops in a single category and tends to replace items that are worn out. However, we've observed a shift, with resolvers beginning to explore new options. They still primarily shop within single categories, but we've expanded the Swim category to cover entire outfits. This change has started to gain traction, and we see more resolvers purchasing fashion items, including an increase in their purchases of prints, which performed strongly in the quarter for both revolvers and resolvers. We noted resolvers starting to invest more in full-price items. For the revolver segment, our discussion highlighted a significant increase in new customers, and our overall customer database is likely the healthiest it has been in recent years. We attracted customers looking to shop across various categories and willing to pay full price. Key categories performing well for us included swim, bottoms, and women's tops, with noticeable improvements in our men's business as well. Regarding your question about consumer health, we didn't observe any decline; instead, we attracted more consumers, sold to them more, and achieved higher margins. So currently, our customer base appears to be in strong condition. Your follow-up question likely pertains to Q2, for which we provided guidance in the script regarding our performance over Memorial Day Weekend. That weekend was notably successful for us, with both resolver and revolver customers engaging. Additionally, we've begun to differentiate our resolver and evolver segments further, with some resolvers displaying evolver behaviors. We're planning to broaden this categorization as we focus on different customer groups and the various paths our customers are taking, recognizing that it's more complex than just two cohorts and a single journey.

Thank you for your response. As a follow-up, how are you planning to allocate marketing spend this year to attract new customers? You mentioned the strength of the Costco business. Are there any additional developments with third-party partners that might be noteworthy, such as an increase in third-party business, new partnerships, or any transitions in third-party arrangements? Thank you.

Okay. So with the market, we're quite careful with our marketing, which is like the marketing is going to have to have a return in season. So, we did increase that, and we saw a return in new-to-file. But we made sure that we covered our bases and it generated enough incremental gross margin that we were going to hit our plans, are not one for taking the foot off the gas in terms of where we're going to go with our numbers. What we did see was we pushed more into consideration by looking at like cultural events and being sort of more focused further up the funnel with our customers than we had been before. So I mean, I'll give you an example, we created over Memorial Day Weekend. We created 2.3 billion impressions with our marketing over $700 million last year. And that's symptomatic of how we're investing in the experience of the brand versus just putting discounts out there. Now there will always be some form of discounting, particularly with paid search, but we've been able to reduce the overall levels of that discounting to maintain a much lower price business and that allows us then to continue the cycle of investing in new customers. I was pleased with the new customer funnel, not just because it was up. But because it was up across the board, we saw it in different channels, we saw in different geographies, our teams in Europe. Now I do want to give a shout out to them on the call, they did a really nice job driving their new-to-file as well. And that augers well for success for us later in the year and into future years as we work on getting those customers back in for their second purchase. In terms of Costco, we were on with Costco. Hello, Dana, can you hear us?

Yes, I can hear you.

In terms of Costco, we were really pleased with the results. We introduced just a few items, and they sold out quickly. It's a business we plan to revisit, and we appreciate the potential it brings. While we intend to keep it small, there’s a significant opportunity to reach a broader customer base, especially with evolvers. Considering Costco's size compared to ours, there’s plenty of growth potential. Looking ahead, we are entering a new marketplace, so stay tuned for Q2, as we believe there are opportunities there. Regarding licensing, I see it as a chance for geographical expansion. While we haven’t ventured into that yet, it's certainly on our agenda as we aim to increase brand visibility and attract new consumers. We’re exploring various areas for expansion, such as beauty and wellness, which present substantial opportunities for advancing our brand. We feel confident in our positioning; it’s no longer a discount brand but rather a more elevated one that resonates culturally. We value our customers and, as we extend our licensing channels, we seek partners who align with our philosophy.

Got it. Thank you.

Thanks, Dana.

Good morning. Let me add my congratulations.

Thanks Eric.

I want to talk a little bit about licensing. I believe that you started now to do the shoe business again with the licensee. I'm curious what the response has been to that in terms of being able to offer expanded styles on the customer response to that. And I guess an update here now when we should start to see the kids license product shipped over and the new category you mentioned also. And I do have a follow-up?

Yes. Okay. Fantastic, we're obviously happy with our licensing it gave us a nice contribution in the first quarter and it was great to see the overall the company's close to the merchandise value, was positive it's a really strong sign that our strategies are taking root not just with the channels that we're distributing in. But with the product and branding differences that we're making and the customer that we're really reaching here. Right now, there wasn't really much to talk about in Q1 as it turns out Eric, Eric it's like we - moved over to our shoes license, but we really only started to see product come in towards the end of the quarter that will ramp up on our website through the second quarter. And arguably where the most benefit will come from will be from distribution in channels outside of our own digital channel. We'll get that reach into other retail channels and wholesale channels, and you'll really see that as a backup upside for the business. It's a similar story with kids there's nothing new on kids. We're working with our partner selling through our existing kids' product and we won't see that newness really hit, until the back half of the year at the earliest. And again longer path into wider distribution beyond our website. What I would say is just given the initial results and given the product that I've seen, I'm very, very happy with it and I think that the elevation of the product and the representation of how we view Lands' and is really powerful. I think the opportunity to take that product, and add it to the product that we're generating ourselves gives us a tremendous opportunity for amplification, not just in the back half of the year, but in the future years to come.

Very good. Shift here to talk about international so that was a really strong international result. I'd like to drill down a little more I know you've talked before about international having some of their own product for each region, and how that really helped drive margins and other pieces. I'm curious if that where that kind of strategy is, and when you look at the international where do you think of best potential in terms of countries, is also to? Thank you.

Yes. Right. The own product question is a great one, where we gave the well let me step back with the international business. What's going about it is that we gave them the opportunity to test and learn for the whole organization. So ideas that work internationally, are ideas that we're happy to bring back to our domestic business in the U.S. And the thing - the mission that we set them on early was on their sourcing, because we had moved in the pandemic to having one global assortment. And the customers in Germany saw the same product as the customers in the U.S. that really doesn't work. I've had a lot of experience with that in my career, and you can do it for a little bit of time, but you can't do it consistently. Because trends just evolve at slightly different times, and if you put your customer at the center of everything you do, and we do put our customer at the center of everything we do. It's we want to give them reasons for consideration, beyond just discounting. And so, we really needed to start to localize the assortment, or some percent of the assortment, and that's what we did. So, we will likely never be more than about 20% of the assortment being localized in the international markets we're in right now, because we do want to get sourcing leverage in there. But our opportunity to test and learn falls into two buckets. One, there's really we're trying something that is a new line or it's a new fabrication, but it's a mark to change to our assortment. We're able to test that out quickly with our partners in Europe, or there's something that's important to the market that we don't have. We saw the whole crochet trend come into Europe, before it came into the U.S. And we were able to jump on that and get ahead of it very quickly particularly for the U.K. And then it moves to Germany, and it's interesting to see that that's now moved into the U.S. as we follow that fashion, and it becomes a global trend. We'll continue to do that that's a very good arrangement for us. We'll like having sourcing closer to home, the closer we can be to the customer. I think the more opportunity to make money, and drive margins that there are and particularly it fits a more asset light approach and not having heavy inventories. The potential for where we would go is we have adjacencies in Europe that are easy to expand into and sit right in front of us. France is a big market, we're not really pushing the narrative in France that's an opportunity for us. But just leverages existing infrastructure similarly with countries like Austria. We can leverage our German operations. And then I think we can expand to other markets where we see opportunity from Eastern Europe to Spain. We have considered the Middle East, the time it's not right, right now. We will come back to that market another market that interests us, where we had exited is Japan. We see opportunity there for a significant leverage and that's an itch, I'm going to scratch at some point. And then really a market I've been successful in my career, and I see a lot of opportunity and it is Latin America. We sell pretty substantially into Mexico, right now it's mostly expats, but I think there's a market there. There's several South American markets, there's Chile, there's Colombia. I think that stands out in North America, obviously there's Mexico. We see those as being really sort of easy leaps for us, because the narrative for Mexico is it's not too far away from the U.S. and we see that customer in our cohort in any case.

Great. Thank you. Congrats again.

Thank you.

Thanks Eric.

Hi guys. Thanks very much for taking my question. You wanted to ask about the impact that, some of your more high-end technical items that are more functional are having on gross margin, looks like you know you guys are having a lot of success. You mentioned the Wanderweight packable jacket, swimwear as well-being seeing and you guys are selling a lot of more technical UV resistant and tummy-tucking type items, over a $100, which I believe is more than the brand that's historically commanded. How much more opportunity is there, to be inserting more of those high-value higher-price items into the assortment? And are there other categories where you think there's an opportunity outside of maybe swim and outerwear where you can really take the assortment up like that?

Good morning, Alex. How are you doing?

I'm doing great, thanks Andrew.

Right, roughly what about a third of our items right now are some form of solution. So as we look through the greater assortment, they've got something on them, it might be some protection factor, it might be some sort of tummy flattening technology. It might be pants that will move with you as you resize. They all sold really very well. If we look at those items. They really appeal to the customer and attract the consideration of largely full-price paying customers. And so clearly, there's a lot of running room for us to lean into to continue to expand that assortment over the coming years, quite frankly. And drive higher gross margins. I just think it's also worth noting that we did change the business model fairly substantially this year to flow newness more continuously. And if I just look at something like our women's business in the first quarter, newness, we saw it drove about 80% of our upside, and we had significant upside in our newness. I think the other part that I don't want to forget is that much as we're engineering solutions into this. We're also by reaching underlying trends, our customers deserve the trend. And they deserve to be able to dress in a way that makes them feel great. And so, there were other wins within that. I wouldn't necessarily call a solution, but I would call out as being differentiated from where we've been before. So for example, our number one performing item in bottoms, I beg your pardon, in jeans, was our high-rise wide leg. We saw similar within linen, and those are styles that as a brand, we've not necessarily approached in the past. I think also, we changed some of our philosophy on how we would drive third layer pieces. And if I look at sweaters, I want to make sure that they get a call out. The sweater teams, the company go over really excelled in the first quarter with that third piece layering. And in particular, if I look at our Drifter sweater, it doesn't come with a solution per se, not to say we won't engineer one in. But it's been a very powerful had and driven significant increases in that, I would say, of a 12-week plan that we had for sweaters, they had it in within eight weeks. So that gives you a sense of how powerful that class as we come to us. So, I don't know if I totally answered your question. I'm happy to tell you...

Well Alex. Let me convert it a little bit to the numbers. The significant gross profit drivers we've achieved over the last three quarters, but mostly in Q1, has been through lower discounting. So our AURs are up. So, we're getting a higher price. We're getting that higher price from newness. We're getting that higher price from the right trend and we're getting that higher price from having solutions. The rest of that benefit has been come from lower costs on our products. So while we're adding a lot of these solutions we're actually still driving a lower cost of the product coming in. So those two factors are really what's driving that gross margin improvement that you're seeing.

Great, that's really helpful. Thank you both for the very thorough response and congratulations on the strong results you're seeing.

Okay, thanks Alex.

Thanks Alex.

Good morning. Thanks operator and thanks for taking the question. A lot of my questions have already been asked. So I guess I just have a big picture question for you guys. In your prepared remarks, you touched upon quite a few themes of using technology, having a strategy focused on innovation and announcing new patents for swimwear, for example, announcing great results in terms of social media campaigns. Just curious as to whether, you think Lands' End is doing anything unique in these regards, or if you're just doing a lot of these things better than competitors that are also looking to take their data and leverage it into high-growth areas?

Hi Steve, it's nice to meet you. It's Andrew McLean. We have a vision, and it really is to be the innovative solutions brand for life's every journey. And that's the lens by which we judge everything in the organization. So as we go through our day, when we make decisions around product, we make decisions around technology investment, we make decisions around marketing, and it's like that's the filter that we pass everything through. And I think the fact that we're patent pending on merchandise gives you an indication of we really want to differentiate ourselves and we want to pull away from the industry at large, and we see an opportunity to do that. It's not for nothing that we have a leading market share in women's swim for women over 40. And we're not just defending that by just trying to say, but we're growing that and actively looking to expand that. We see tremendous opportunity, and we've been great on the technology that we've engineered into this product, and I think you should watch for more patents coming on that as we differentiate ourselves. But we've also really let in and thought about how the customer wants to wear it, how it fits with their lifestyle and that's taken us away from being quite so basic, and a little more focused on patent and a little more focused on fashion, and a little more focused on their lifestyle. And that will always continue to see us, not necessarily be at the edge of everything, but we're looking to create ways to differentiate our position, which is really why we come back to the solutions that are really along with you for your journey. I think as it comes to our technology, we've always been able to differentiate ourselves on our data. And I think for the company, the size we're at, we've been able to punch above our weight and we'll continue to do so. We have a number of data scientists on staff. And for us, it's really about looking in and being able to change how we think about a customer in a way that best suits how we're trying to come to market and best suits their lifestyle. So, you won't hear us talk about demographics as much as you'll hear us talk about psychographics. I don't tend to hear that, when I'm out in the industry quite as much. And I think that's another differentiator for us, because we're really building assortments around those customers at the center of everything we do, and we want to be there for their journey. As it pertains to technology, I would say, continue to watch this space, It's like Lands' End has traditionally always been at the leading edge of being first into the industry. And I think we've probably fallen a little back on that, but it's our intention to really continue to use that where appropriate to differentiate ourselves. And as I look out there, the notion of what the web and the relationship with the customer is going to be is changing and it's probably changing as fast as it has in a number of years. Look at the growth of Shiana and Otimo. And there are ideas there. There are other ideas around loyalty that we're really working on as an organization to make it about your experience as a customer with Lands' End, make sure it's your individual experience, make sure it's an experience that's always growing with you and give you as much access to it as possible. So, no technology for technology's sake in fact nothing for nothing's sake, what we're doing is very measured, it's thoughtful and it's pointed to where we think we can create the most value for our customers and by extension ourselves.

That's very helpful. Thank you so much and congratulations on the quarter.

Thank you.

Thanks Steve.

It appears that we have no further questions at this time. This does conclude Lands' End's first quarter earnings call. Thank you for your participation. You may disconnect at any time.