Good day, and welcome to the Second Quarter Fiscal Year 2025 Stitch Fix Earnings Call. At this time all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Ms. Cherryl Valenzuela, Head of Investor Relations. Please go ahead.

Thank you for joining us today for the Stitch Fix second quarter fiscal 2025 earnings call. With me on the call are Matt Baer, Chief Executive Officer; and David Aufderhaar, Chief Financial Officer. We have posted complete second quarter 2025 financial results in a press release on the quarterly results section of our website, investors.stitchfix.com. A link to the webcast of today's conference call can also be found on our site. On today's call, Matt and David will share their prepared remarks. We will then move to Q&A before concluding with Matt's closing remarks. Before we begin, we would like to remind everyone that we will be making forward-looking statements on this call, which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please review our filings with the SEC for a discussion of the factors that could cause the results to differ, in particular, our press release issued and filed today, as well as the Risk Factors sections of our most recent quarterly report on Form 10-Q previously filed with the SEC. Also, note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the press release on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. In the first quarter of fiscal 2024, we began to report our U.K. business as a discontinued operation. Accordingly, all metrics discussed on today's call represent our continuing operations. Finally, this call in its entirety is being webcast on our Investor Relations website, and a replay of this call will be available on the website shortly. And now let me turn the call over to Matt.

Thanks, Cherryl, and good afternoon, everyone. Thanks for joining us today. Our team delivered another strong quarter, as we further advanced our transformation strategy. We exceeded our expectations in Q2, with revenue of $312.1 million and adjusted EBITDA of $15.9 million. The team achieved a 710 basis point sequential improvement in year-over-year revenue comps and a contribution margin of 33%, our fourth consecutive quarter above 30%. In addition, both our men's business and our Freestyle channel returned to year-over-year revenue growth. We are encouraged by these results and remain focused on the work ahead to return Stitch Fix to overall revenue growth. Based on our current performance, we are also raising our annual guidance for the current year, which David will detail shortly. We attribute our progress to a number of improvements we've made to reimagine our client experience. These include increasing newer, more on-trend styles in our assortment, expanding fixed flexibility, and strengthening client stylist relationships. In addition, we are investing in Freestyle, our personalized direct e-commerce platform. All of these enhancements are resonating with clients, let me touch on each and the impact we're seeing. First, the investments we've made to improve the quality of our assortment and ensure a healthy inventory position are working. In Q2, we delivered AOV up 9% year-over-year, driven by broad-based strength in keep rate, AUR and items per Fix. We are seeing particular success with new styles. We finished Q2 with keep rates for new inventory up 7% year-over-year. We also continue to leverage our proprietary AI merchandising tool for improved inventory management. As a reminder, this tool utilizes our client transaction and feedback data to predict demand at the individual style and client level, so that our merchandising team can make buying decisions that are more effective and efficient. It also enables our merchants to spend more time on the art of merchandising, including trend identification, vendor partnership and private brand development. Speaking of our private brands, our newest labels, The Commons and Montgomery Post are performing well with The Commons now a top five revenue brand in men's. And styles from national brands such as Vuori, Marine Layer, Roan, Vineyard Vines, Public Rec, Verity, and Pistola continue to resonate with our clients. In terms of category performance, for our women's clients, dresses and denim-led category growth. Denim sales as a percentage of our overall women's business increased from Q2 of last year and within dresses, workwear dresses generated a positive year-over-year sales comp of more than 60%. Meanwhile, the standouts in men's were cashmere and performance workwear, up year-over-year by over 400% and nearly 150%, respectively. As mentioned, our men's category returned to revenue growth in Q2 and we believe our men's clients have responded well to the enhancements to our assortment into the more precise and segmented marketing we've applied. While a smaller percentage of our portfolio today, we are encouraged by the growth inflection and remain confident men's can be a durable growth engine for us going forward. I will also note that as part of our broader focus on newness, we've expanded our non-apparel categories across lines of business to deliver full outfitting solutions. We have seen favorable results in sneakers, jewelry and accessories, with each category delivering positive revenue comps within the quarter. Second, the enhanced flexibility we are building into our experience has been well received with our clients' response surpassing our initial expectations. Of note, we are seeing increased adoption and greater AOVs with clients embracing the ability to receive up to eight items in a Fix. We believe that offering this increased level of flexibility helps our clients navigate seasonal transitions, outfitting solutions and changes in their fit profile. And that this change will become an important driver of long-term engagement. Third, deep client stylist connections are an essential part of the highly personalized shopping experience we are known for, and we have made ongoing investments to strengthen those relationships. Since Stitch Fix's inception, we've combined expert stylists with best-in-class algorithms and advanced data science to deliver tailored style recommendations. In Q2, we launched enhancements to our models that deliver better stylist recommendations so that they, in turn, can deliver the right apparel and accessories to each individual client. Our broader investments in these relationships which also include the launch of stylist profiles, so clients can better know who is styling them are resonating. In Q2, the percentage of clients requesting the same stylists for their next fix hit the highest level in nearly five years. I also mentioned that we are continuing to invest in Freestyle, as a complement to our fixed offering. While Fix remains a majority of our business, our healthiest clients are those who utilize both channels. In Q2, we ran dedicated campaigns to drive awareness and consideration of Stitch Fix as a destination for holiday shopping for the first time. In addition, we adopted more advanced data-driven forecasting tools which expanded our shoppable selection by more than 20% without any increase in inventory ownership. Initiatives such as these contributed to Freestyle returning to year-over-year growth in Q2, and we see more runway to improve future performance. In aggregate, we are seeing the impact of the changes we've made to our experience in our client metrics. We are making progress toward active client growth. Clients new to Stitch Fix increased year-over-year and importantly, Q2 marked our smallest sequential decline in active client count in three years. Since August, when we introduced the first set of changes to our client experience, each monthly cohort we have acquired has spent more than cohorts from the same month in the previous two years, contributing to ongoing strength in 90-day LTV. We are also pleased to see further increases in clients who have enabled recurring shipments. The performance of these cohorts gives us the confidence to invest further in both engaging our existing clients and acquiring new ones. To achieve this, we are building upon our retail therapy brand platform that explores how Stitch Fix helps solve our biggest shopping fit and style challenges people face. We have also optimized our channel-specific media and overall media mix, as well as launched segmented onboarding experiences that speak to distinct needs of different clients. I'd also like to recognize that this earnings call is happening during a time of uncertainty with respect to the macroeconomic environment and, in particular, the impact of tariffs. Our team and partners have a history of managing tariffs well and have confidence will continue to do so. We currently do not expect that tariffs will impact client prices or margins in the second half. We remain focused on our clients, and we will continue to work hard to deliver the best experience and value to them every day. To wrap up, Q2 was a strong quarter and demonstrates the undeniable progress of our transformation strategy. Our team remains focused on execution to unlock our market opportunity, and we believe our recent performance shows we are making the right investments as we look ahead to the growth phase of our transformation. With our expert stylist curated assortment of private and national brands, best-in-class AI and recommendation algorithms and in-depth customer data, I believe more than ever that Stitch Fix offers a superior alternative to traditional shopping, and we constantly challenge ourselves on how best to serve our current and prospective clients for all of their apparel and accessories needs so that we are their retailer of choice. I also want to take a moment to recognize the entire Stitch Fix team and thank them for their dedication and hard work in service of this goal. With that, I'll turn the call over to David to share more details of our financial results and outlook.

Thanks, Matt. To reiterate, we are encouraged with the momentum we're building. The team delivered a strong Q2, which gives us greater confidence in a return to overall revenue growth during FY '26. We can see the impact of our transformation strategy across the P&L. Our year-over-year revenue comps continue to improve each quarter. And while they are currently smaller areas of our business, the return to growth in Men's and Freestyle indicates that we are on the right path, we are making the right investments and we have the right team in place to deliver on our commitments. We are applying learnings from the success of these two areas across our entire business. Now let's dive into the results. Q2 net revenue came in at $312.1 million, down 5.5% year-over-year and 2% quarter-over-quarter. Revenue was above our guidance range due to sustained strength in AOV which was up 9% year-over-year and 4% quarter-over-quarter. January was a particularly positive month for us as we were well positioned from an assortment perspective to better meet our clients' apparel needs. As Matt noted, the AOV upside in the quarter was driven by higher keep rate, AUR and items per Fix. This contrasts with last quarter's growth in AOV, which was primarily due to AUR. This quarter, we saw strength across all three of these AOV drivers. Our AOV has now increased year-over-year for the last six quarters, which is encouraging, and we believe there is additional opportunity. On the client side, active clients ended the quarter at 2.4 million, down 16% year-over-year and down 2.6% quarter-over-quarter, in line with our expectations. Return to client growth is a big opportunity and one we're focused on. Though progress may not be linear, and we still have work to do to get there. Within the context of our active client declines, it's important to note that our recent AOV increases could present more challenging revenue growth comps in the future. And that's a factor we're considering as we look ahead to FY '26. Revenue per active client or RPAC for the quarter was $537, up 4% year-over-year and relatively flat on a sequential basis. Gross margin for Q2 came in at 44.5%, up 110 basis points year-over-year, driven primarily by AOV upside and improved product margins. Our contribution margin in Q2 was 33%, our fourth consecutive quarter above our historical range of 25% to 30%. Our warehouse and styling teams continue to drive leverage, and we believe this new cost structure is sustainable going forward. It is because of the great work our teams have done in building and maintaining a strong foundation for our business that we can continue to lean in and invest in areas such as inventory assortment and marketing. In advertising, we came in slightly below our estimated range at 7.8% of revenue in Q2, down 160 basis points quarter-over-quarter. We consistently bring a disciplined ROI lens to our marketing spend and the holiday period tends to be a more expensive time to acquire new clients. With our focus on long-term durable growth, we adjust our ad spend regularly aiming for efficiency and acceptable ROI. We ended Q2 with net inventory of $109.6 million, down 13% year-over-year and down 8% quarter-over-quarter due to our improved inventory management, which as Matt mentioned, is aided by AI tools that help us maintain healthy levels across our assortment to meet client needs and balance risk. Q2 adjusted EBITDA was $15.9 million or 5.1% margin, up 380 basis points year-over-year and up 90 basis points quarter-over-quarter. Free cash flow was negative $19 million in Q2, in line with our expectations. As I said last quarter, we anticipated Q2 would be negative due to the timing of working capital requirements related to inventory purchases. We ended the quarter with $230 million in cash, cash equivalents and investments and no debt. Turning to our outlook. As a result of the strength we saw this quarter, we are raising our annual revenue and EBITDA guidance. Today's update reflects our current expectation that tariffs will not impact client prices or margins in the second half of this fiscal year. We'll continue to monitor the potential impact of tariffs, as well as the increased uncertainty in macroeconomic conditions and consumer sentiment. For full year FY '25, we expect total revenue to be between $1.225 billion and $1.240 billion. We expect total adjusted EBITDA for the year to be between $40 million and $47 million. This guidance still assumes we'll be free cash flow positive for the full year. For Q3, we expect total revenue to be between $311 million and $316 million. We expect Q3 adjusted EBITDA to be between $7 million and $10 million. We expect both Q3 and full year gross margin to be approximately 44% to 45%. And we continue to expect full year advertising to be at the high end of the 8% to 9% range we provided last quarter. In closing, our first half results and second half outlook demonstrate that we are making clear and measurable progress across many areas. We're methodically executing on our strategic priorities with financial discipline and striking a healthy balance by maintaining a lean cost structure and a strong balance sheet, while making disciplined investments that aim to fuel future sustainable, profitable growth. And with that, I will turn the call over to the operator for questions.

And that will come from the line of Aneesha Sherman with Bernstein. Your line is open.

Thank you so much for taking my question. Matt and David, I was wondering if you could start by telling us reminding us a little bit about your customer demographics in terms of household income and any other demographic features you think are relevant given the current changes in consumer sentiment across income bands. And then I have a follow-up regarding some of the comments that you've made previously in your presentation around market size, you're under 1% of the total accessible market as you define it in U.S. apparel. Do you think that you need Freestyle in order to expand that TAM? Or do you think there is continued opportunity for expanded TAM with just the fixed model in terms of driving brand awareness and penetration. Thank you so much.

Aneesha, it's Matt. Thank you for your question. To start, when we think about our clients, we focus on their attitudes and behaviors rather than just their income levels. Our client base is diverse, and what's crucial is how Stitch Fix is uniquely positioned to meet their needs. Our clients seek assistance, advice, and convenience when shopping for clothes and accessories, understanding trends, and putting outfits together. This is particularly relevant as a recent article in the Wall Street Journal stated that only about 10% of U.S. consumers are satisfied with in-store shopping for apparel. Additionally, around 90% of people feel anxious when choosing what to wear each day. This stress, compounded by difficulties with other shopping methods, strengthens the connection to Stitch Fix's value proposition. We offer a service that helps clients discover styles matching their preferences, ensuring the apparel fits—factors that are particularly valuable compared to traditional shopping methods. Clients generally don’t want to waste time in crowded department stores or sifting through irrelevant online options. They also face the hassle of online purchases not fitting, leading to a pile-up of unsatisfactory deliveries. We simplify this process with our in-depth understanding of each client, powered by AI insights, proprietary algorithms, and our skilled human stylists. In a time when consumers might be more cautious about spending, we believe our business model provides a competitive edge. The relationships we build with our clients are lasting, as they recognize the convenience and solutions our service offers, allowing them to try clothes in their own homes. We effectively minimize the need for them to go through traditional shopping routes. This positions us well to thrive even during challenging economic conditions, which is reflected in our recent success as highlighted by David. We saw strong performance in January and continued through February and March, leading to a significant increase in our guidance for the fiscal year. We're poised to serve clients across various income levels and demographics because of our compelling value and unparalleled service. Regarding your second question about Freestyle's role, it is vital for both us and our clients. Freestyle allows clients to shop between their Fixes. For example, if a client loves a polo shirt they received, they can easily purchase it in multiple colors from the Stitch Fix platform. Our personalization technologies are seamlessly integrated into the Freestyle experience, enabling clients to build outfits with items they kept from their Fix. Since launching our style file last year, clients have appreciated the personalized shopping experience tailored to their unique styles. Freestyle complements our Fix experience, helps us capture more wallet share, and ensures that when clients need apparel and accessories, Stitch Fix is their go-to retailer. This not only increases our client spend but also helps us penetrate the total addressable market further.

Very helpful. Thank you.

Thank you. One moment for our next question. And that will come from the line of Dana Telsey with Telsey Advisory Group. Your line is open.

Hi, good afternoon everyone. As you think about the dynamic world of tariffs that we're in, how are you thinking of that impact on your pricing and own brand versus national brands? And then as you've expanded the number of brands that you carry, what categories are you seeing that are performing? What categories are being adjusted? Thank you.

Alright. Hi, Dana, thank you for your questions. Regarding tariffs, we have already touched on this in our prepared remarks, and I'm happy to provide more details on how we're navigating the current environment, given the reality of tariffs and their potential volatility in the future. We established a tariff task force composed of individuals with a strong history of effectively mitigating the impact of tariffs. They have developed a solid strategy to protect the profitability of our private brands. Our private brand portfolio includes several vendors, many of which produce in multiple countries, allowing us to be strategic in minimizing any long-term financial impact from tariffs. This ties into the second part of your question as well. As a multi-brand retailer, we benefit from a wide range of national and market brands alongside our private brands. If necessary, we can shift within that portfolio to effectively address any potential tariff impacts. As I mentioned in the prepared remarks, we do not currently anticipate any effects on our margins or increased costs to consumers for the remainder of this fiscal year. This gives us a competitive edge compared to others who might be facing a different situation, and I credit our team for their effective strategy and execution. Concerning the balance between national and private brands, we always aim to be client-led, focusing on client demand to guide us in determining the ideal mix. We have a strong lineup of private brands, and we've recently launched two new ones that are performing exceptionally well with our clients. It's exciting to see one of them already ranking among the top brands in our men's portfolio shortly after its launch. We aim to continue investing in the value of our private brands. As we discussed last fiscal year, we’ve refined our assortment to ensure that the national brands we carry provide additional value and differentiation for our clients, distinguishing us from what we offer with private brands. The strong work from our merchant team allows us to reinvest and introduce new, in-demand national brands, which has significantly improved our overall assortment metrics. Our investments in fresh offerings and recalibrating our positioning within the style and trend spectrum have positively influenced our metrics, including our keep rate and average order value. Moreover, we have historically been strong in tops and bottoms, and we continue to maintain our market share in these categories. I'm impressed with our merchant team's response to challenges over the past nine months, particularly in ensuring we capture our fair share in all categories. We’ve seen success as we expand into additional categories, gaining market share and consumer wallet share. I want to highlight our continued focus on non-apparel categories, particularly as sneakers and accessories grow in importance for us, and we will keep investing in those areas. A crucial aspect of our category expansion and market share growth is the flexibility we've integrated into our fixed experience. Clients appreciate being able to select six, seven, or eight items in a particular fix, and the adoption rate continues to surpass our expectations. Notably, we observe improved order economics with increased selections by clients. This flexibility empowers us to expand into new categories without jeopardizing the historical success we’ve had in tops and bottoms. Therefore, category expansion will be a key contributor to increasing our wallet share and market share as we aim for growth.

And Dana, I would just add really quickly that when we look at that expansion, we look at those investments, it is also really encouraging to know that we can do that and still maintain the gross margins that we have and that we guided to in our prepared remarks, still being in the back half of the year, from a full year perspective in the 44% to 45% and still having really healthy contribution margins. We had 33% this quarter, and we believe that, that's sustainable going forward. And so just really encouraged with the leverage that we are driving the business to allow those investments as well.

Thank you.

Thank you. And that will come from the line of Jay Sole with UBS. Your line is open.

This is Jay's representative. Congratulations on a great quarter. My first question is about gross margins. Do you have any outlook for the third quarter? In the second quarter, it appears gross margins increased by about 105 basis points. Could you share what contributed to that? Additionally, what are your expectations for gross margin changes in the third quarter?

Yes, Serge thanks for the question. In Q2, it was really more about typical seasonality in gross margin, we tend to see a quarter-over-quarter decline between Q1 and Q2. Certainly, promotions play a part in that. But we're still very comfortable with the 44% to 45% that we have for the full year guide. And I think thinking about the back half, I would still think about the back half in that same range.

Got it. Got it. And then just one more quick one, if I can. You briefly mentioned that March was strong, but just wondering if you can give any more color on sort of quarter-to-date trends. anything you are seeing in February and March? Is it similar to what you were seeing in 2Q? Is it a little stronger?

Yes. Maybe I'll jump in at a very high level. And David, if you want to follow up with a little bit of detail. It's nice to chat again. Look, I mean we're just incredibly encouraged by the momentum that we are seeing. We were really encouraged by the results that we had in Q2 that exceeded our expectations. And the initial response I think based on the very significant increase in our guidance over the back half of the year, we're looking to see that momentum, not just continue, but also accelerate over time, which I think is just a really good way to be thinking about what that performance was in February and what we've seen March to-date. The piece that I think is also maybe worth just reiterating a bit from the prepared remarks, I shared that since August, when we both launched the rebrand of Stitch Fix, as well as the first set of changes around our client experience or the reimagination of that client experience. We just continue to see tremendous success with all of the clients that we have been acquiring over that period of time. And normally, when you launch a rebrand and you launch so many net new updates to your client experience, often, you actually see a bit of a short-term setback in your performance metrics. And then often also some initiatives will take root and perform while others might not take route or might not perform to expectations. I think in credit to the team for having the right strategy and credit to the team for really great execution of that strategy. Since that moment in August, nearly every initiative that we've introduced as part of that reimagination of the client experience has performed well. And nearly every initiative has also exceeded our expectations. And that performance is what enabled us to achieve year-over-year revenue growth in men's. That is what has enabled us to achieve year-over-year revenue growth in our Freestyle channel. And although not noted in the prepared remarks, I think also really important to share, that's also what enabled us to drive significant improvement in trend in our women's business, and it's also what enabled us to drive significant improvement in trend within the Fix channel. So I think, ultimately, we've really focused on strengthening the foundation of our business and instituting retail best practices across the board. And now with the reimagination of the client experience layered on top of that, we are really starting to see that outsized improvement in trend in our business overall. And we expect that momentum to continue. And as I noted, I believe that should be quite evident in the raised guidance that we shared for the balance of the fiscal year.

Yes. And Serge, just to add a little bit more detail around some of the numbers. For this quarter, we saw a 9% year-over-year increase in fixed AOV, and that was a big part of the outperformance and certainly the performance versus expectations. And there were a couple of things going on there. First, we saw higher-than-expected adoption of that Flex Fix offering, which increases the average number of items sent in a Fix. Fixes with that extra flexibility increase as a percentage of total fixes by almost 40% from the end of Q1 to the end of Q2. Second, we also saw higher-than-expected keep rate in the quarter. Historically, we've seen a pretty significant decline in keep rate coming out of the holidays. But the teams, the merchandising teams, the technology teams, the styling teams really took a number of actions to make sure that improved this year, and we saw that come through and we saw it build throughout the quarter. A stat just to sort of show that build is AOV in January was 16% year-over-year. And so just a really strong quarter. And to Matt's point, we played forward some of that AOV upside and also some of the volume benefits we've been seeing recently and played that forward in our overall guidance for the year. The other thing I would call out is sort of the active client side. We're definitely encouraged with what we're seeing from active client standpoint. And when you play that out into future quarters, for Q3, we expect active clients to be down quarter-over-quarter, but improving from last quarter. So roughly sort of approximately about 1% down quarter-over-quarter. The only call out there is there is seasonality to active clients as well. And so Q3 tends to be a stronger quarter than Q4 for us. And so because of that, we probably expect Q4 to be down slightly more quarter-over-quarter than Q3, but still much better than what we saw last year.

Thank you. One moment for our next question. And that will come from the line of Dylan Carden with William Blair. Your line is open.

Thanks. Maybe, David, just following from that line of thought. The comments that AOV go forward might present kind of a headwind to growth. Can you just unpack that a little bit? Thanks.

Yes, definitely. Thanks for the question, Dylan. I mean basically, AOV has been a really strong thing for us. AOV has been up six quarters in a row. And really, as you start comping that, and if you think about the two-year stacks, I mean, in Q2, this quarter, it was 9% this Q2. Last Q2 was up 4%. So that's a 13% stacked comp over the last two years. And so what I was alluding to is with those increases, certainly comping that going to next year just creates a little bit more of a challenge. And certainly, in the environment that we just described around active clients as well, active clients we do expect active clients to continue to decline into FY '26. And that, along with sort of harder comps from an AOV perspective, are just things that we're certainly taking into account as we start looking at FY '26.

Got it. And so I guess the flip side of that is that the growth that you're kind of forecasting at some point next fiscal year is more of an active client growth story then and kind of continuing to push on spend per?

I think we've actually talked about this the last couple of quarters is I think we have opportunity in both areas. And certainly, what we are seeing right now is strength in existing client engagement. And really offering them a lot more value and different ways to engage. And so we've been seeing that. But I think what we've said historically is that we really want to see both to talk about long-term sustainable growth. So I think there is a path to growth without that inflection active clients. But certainly, when you have both, that's when you get to that sustainable long-term growth that we're really driving towards.

Got it. Thank you both.

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Matt Baer for any closing remarks.

Okay. Thank you. To recap, I think I just want to reiterate how encouraged I am by our recent results. For the second quarter, we exceeded our expectations for both revenue and adjusted EBITDA, and we also raised our full year outlook for both metrics. And that momentum that we're seeing in our business, that momentum is undeniable. The improvements our team has made to our client experience are clearly resonating. We are getting great feedback from our clients on these changes, and our clients are telling us that we are increasingly delivering on our mission. The mission is to help them discover the styles they will love and fit perfectly, so they always look and feel their best. Importantly, we're also making progress toward active client growth, and we've already returned to top-line revenue growth in both our men's business and our Freestyle channel. And all this progress wouldn't be possible without our team, and the team continues to build a stronger operational foundation for our business to grow upon. That foundation will enable us to scale and move towards the growth phase of our transformation. I continue to believe that a judicious and disciplined transformation is one that will lead to profitable and sustainable growth in the future. Given Stitch Fix's compelling value proposition, which we just discussed, the innate strengths of the business model and all that we've accomplished in the first half of fiscal 2025. And I'm more confident than ever in Stitch Fix's future and our ability to be the retailer of choice for an expanded base of clients. We very much appreciate your interest in Stitch Fix and look forward to sharing our continued progress with you on our next call.

Thank you for participating in today's conference. This does conclude the program. You may all disconnect. Have a great day.