In the recent earnings call, Allbirds , Inc. (NASDAQ:BIRD) reported its financial outcomes for the third quarter of 2024. The company disclosed a net revenue of $43 million, which reflects a decline due to lower unit sales and transitions to a distributor model in certain regions. Despite these challenges, Allbirds achieved a gross margin increase to 44.4%, thanks to reduced freight costs and a more efficient inventory position.
The company also announced the launch of two new products, the Tree Glider and Lounger Lift, which have been well received by consumers. Looking forward, Allbirds has revised its full-year revenue guidance to between $187 million and $193 million and expects an adjusted EBITDA loss of $75 million to $71 million. The company remains optimistic about its future growth, driven by upcoming product launches and strategic marketing efforts.
Key Takeaways
- Allbirds reported a net revenue of $43 million in Q3 2024, with a gross margin improvement to 44.4%.
- The company launched two new products, the Tree Glider and Lounger Lift, and closed 15 U.S. retail locations.
- Two new international distributor agreements are set to expand Allbirds' reach in Latin America and Europe from mid-2025.
- Full-year revenue guidance has been revised to $187 million to $193 million, with a projected adjusted EBITDA loss of $75 million to $71 million.
- Allbirds plans to focus on strategic promotions and marketing adjustments to prepare for new product launches in the second half of 2025.
Company Outlook
- Allbirds expects net revenue between $187 million and $193 million for the full year, with U.S. revenue projected at $143 million to $147 million.
- Gross margins are forecasted to be between 43% and 46%, driven by cost efficiencies and reduced promotional activity.
- The company plans to reduce promotional activity and adjust marketing spending for greater returns in preparation for 2025 product launches.
Bearish Highlights
- Net revenue was impacted by lower unit sales and the transition to a distributor model in five regions.
- Store closures and international transitions are expected to account for approximately 40% of the revenue decline for the year.
- A one-time cash charge of $1.5 million was incurred due to retail store closures.
Bullish Highlights
- Gross margin improved by 90 basis points to 44.4%, attributed to lower freight costs and a healthier inventory position.
- Strong cash reserves of $79 million and a 28% reduction in inventory position the company well for the holiday season.
- Anticipated growth from new product launches and marketing campaigns, including collaborations with companies like Uber (NYSE:UBER) Eats and Marriott Bonvoy.
Misses
- Allbirds reported lower than expected unit sales, contributing to the decline in net revenue.
- The company's shift to a distributor model and retail store closures have negatively impacted revenue.
Q&A Highlights
- Management highlighted improvements in inventory management and strategic promotional plans for key shopping events.
- Cash burn for the quarter was $11 million, with expectations for seasonal fluctuations.
- SG&A expenses decreased by 23% year-over-year, with further cost improvements expected from the transition to a distributor model.
- No further store closures are planned for the remainder of the year, but the company will remain opportunistic.
Allbirds, with its CEO Joe Vernachio and CFO Annie Mitchell at the helm, has navigated through a challenging quarter with strategic closures and product launches. The company's focus on inventory management and marketing partnerships sets the stage for a potentially stronger performance in the upcoming quarters. With new distributor agreements in place, Allbirds is poised to expand its global footprint and enhance its brand presence in key markets. While the transition period has led to a dip in revenue, the company's cost-saving measures and cash reserves suggest a foundation for future growth. Allbirds' management team concluded the call with a note of optimism and holiday wishes, looking forward to capitalizing on the opportunities ahead in 2025.
InvestingPro Insights
Allbirds' recent earnings report and future outlook can be further contextualized with real-time data from InvestingPro. The company's market capitalization stands at $87.86 million, reflecting its current position in the market. This relatively small cap size aligns with the challenges and transitions the company is facing.
InvestingPro data shows that Allbirds' revenue for the last twelve months as of Q3 2024 was $205.9 million, with a concerning revenue growth decline of -22.67% over the same period. This decline is consistent with the company's reported challenges in unit sales and the transition to a distributor model in certain regions.
An InvestingPro Tip highlights that Allbirds is "quickly burning through cash," which corroborates the company's reported cash burn of $11 million for the quarter. This rapid cash utilization underscores the importance of the company's strategic cost-saving measures and inventory management efforts.
Another relevant InvestingPro Tip indicates that Allbirds "holds more cash than debt on its balance sheet." This aligns with the company's reported strong cash reserves of $79 million, which management views as a positive factor for navigating the current challenges and preparing for future growth initiatives.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 12 more InvestingPro Tips available for Allbirds, providing a deeper understanding of the company's financial health and market position.
Full transcript - Allbirds Inc (BIRD) Q3 2024:
Operator: Good afternoon, ladies and gentlemen, and welcome to the Allbirds Third Quarter 2024 Conference Call. All participants have been placed in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session, at which time instructions will follow. Now, I would like to turn the call over to Christine Greany of the Blueshirt Group.
Christine Greany: Good afternoon, everyone and thank you for joining us. With me on the call today are Joe Vernachio, CEO, and Annie Mitchell, CFO. Before we start, I’d like to remind you that we will make certain statements today that are forward-looking within the meaning of the federal securities laws, including statements about our financial outlook, including cash flow and adjusted EBITDA expectations, 2024 full year and Q4 guidance targets, impact and duration of external headwinds, strategic transformation plan and related planned efforts, go-to-market strategy, transitions to a distributor model in certain international markets, anticipated distributor model arrangements, expected profitability, cost savings targets, gross margin estimates, product plan timelines and expectations, marketing strategy and investment, product and brand strategy, and other matters referenced in our earnings release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please also note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise any statements to reflect changes that occur after this call. Please refer to our SEC filings, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, for a more detailed description of the risk factors that may affect our results. Also, during this call, we will discuss non-GAAP financial measures that adjust our GAAP results to eliminate the impact of certain items. These non-GAAP items should be used in addition to and not as a substitute for any GAAP results. You will find additional information regarding these non-GAAP financial measures, and a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures to the extent reasonably available, in today's earnings release. Now, I’ll turn the call over to Joe to begin the formal remarks.
Joe Vernachio: Good afternoon and thank you for joining. Q3 was another solid quarter for us, with strong execution across our teams with results that matched our expectations. We’re pleased with our sustained progress and confident in the steps we’re taking to advance the business. We’re gearing up for a faster pace of change in the coming quarters, especially when it comes to product and marketing. Today, I’ll recap the quarter and share updates on what's ahead. Starting with the highlights from Q3. We recently launched two new products: the Tree Glider, a performance-inspired shoe, and the Lounger Lift, a slip-on designed for women. To support the Tree Glider launch, we enlisted wellness expert Melissa Wood-Tepperberg, founder of Melissa Wood Health, for an in-person event in our New York Soho store. This activation created engaging social content and positive media coverage, helping us reach a wider audience. The Lounger Lift was a top pick on the Today Show’s Trend Report, highlighted as a must-buy for the holiday season. We’re thrilled with the strong consumer response to these launches, which reinforces our confidence that our upcoming product, set for release in the second half of 2025, will drive future growth. As part of our ongoing efforts to optimize our store fleet for profitability, we completed two additional closures, one in Q3 and another shortly after the quarter ended. This brings our total US store closures in 2024 to 15. As part of the international distributor strategy, we secured two additional agreements, one in Q3 and another in early October. These new distributors will help us expand awareness and reach in strategic markets, covering six countries in Latin America and six countries across Mainland Europe, both beginning in mid-2025. And lastly, our operational and financial rigor enabled us to achieve strong gross margin performance, reduce costs and continue to carefully manage inventory levels this quarter. We are operating with a strengthened foundation and an improved cost structure resulting from our transformation work. We're now in the next phase of our journey. Our renewed emphasis on making great product, telling great stories and providing customers with an engaging shopping experience is propelling the brand forward and positioning us to achieve growth and profitability. Let's start with product. We're returning to our roots as a modern lifestyle footwear brand, refocusing on our core tenets of comfort and versatility that have always defined us. Our future product lineup brings a new level of modern sophistication that pays homage to our origin story of comfort and sustainability. This next-generation offering will begin to hit the market in the second half of 2025. In the meantime, we're keeping things fresh with new silhouettes, materials and colors. It's gratifying to see customers responding positively to our latest releases. As mentioned, this includes Tree Runner Go, Tree Glider, Lounger Lift and Canvas Piper. We've also brought back the Tree topper by popular demand. And next week, we're launching the Lounger Mule. Many of these introductions have been strong performers, demonstrating that we are delivering the newness customers want from Allbirds. Additionally, we will be introducing corduroy to our best-selling runner franchise, rolling out more rugged versions of our water repellant collections later this season. Turning to marketing. It is clear to us that now is the right time to begin reintroducing the Allbirds brand by telling great stories to both loyal customers and new audiences. We're on a mission to reinforce our aspirational brand position and rebuild our cultural relevance. With a strong lineup of products set to launch in mid-2025, we're beginning to thoughtfully lean into fresh marketing initiatives under our Allbirds by Nature brand narrative. We're already seeing positive engagement from our campaigns. We expect to build on this momentum in the coming months. Soon, we will be launching a top-of-funnel strategy to increase brand awareness by partnering with OBB Media and its branded content division, Bolded to build a premium digital content series. OBB is well known for creating some of the most successful marketing campaigns in recent history. A great example is Cold as Ball (NYSE:BALL), a series they created with Kevin Hart in partnership with Old Spice. Our primary focus will be long-form video content, which is emerging as a highly effective strategy for breaking through in today's attention economy. We believe our By Nature messaging will enable us to convey our values around betterment and celebrate our roots, while the video format will help us build deeper and more meaningful connections. More specifically, we will be building a premium digital content series, surrounding the Allbirds brand with inspirational people, ideas and storytelling. To lead this effort, we have brought on acclaimed producer Kristen Wong to act as show runner for our series. Kristen's work on shorts and TV specials includes Dave Chappelle and Disney (NYSE:DIS). We are preparing to start production with featured partners soon. We also have a series of middle funnel initiatives and PR activations planned - some of which are already underway. In October, it was announced that Allbirds will become the inaugural footwear partner to Uber Eats Climate Collection. This is a curated selection of eco-friendly brands that will be available for delivery on the app. This collaboration will enable us to tap into their user base to increase awareness, making it easier for people to discover Allbirds. When we overlaid Uber Eats' users with our store locations, the overlap was significant. In California, New York, and Illinois alone, there are 19 million Uber Eats users within delivery distance of our stores. We are teaming up with Marriott Bonvoy on a sweepstakes with cross-channel activations, including email, paid and influencer. This is a high visibility campaign for us, providing our brand with exposure to Marriott's customer base. Later this month, we'll be celebrating our most comfortable products with a special media and influencer event in New York ahead of the holiday season. As we bring fresh, updated products to market and amplify our marketing, it is essential that we provide our customers with an engaging shopping experience across all brand touch points. To that end, we're planning improvements to both our e-commerce site and stores in the US that will begin mid-2025 and take shape throughout the second half of next year. Our e-commerce site will be reimagined to make navigation easier and to ensure that our storytelling and the overall shopping experience are aligned to our new product architecture and marketing message. In our Allbirds stores, we'll improve the shopping experience through new product displays, sharper storytelling and other enhancements, everything from seating and store navigation to flooring and display tables. Looking just ahead to the upcoming holiday season, we believe our 2024 product launches and marketing initiatives position us to capture consumer attention. We recognize that shoppers will be looking for value and we are planning for relevant promotional moments throughout the season. Black Friday and Cyber Monday (NASDAQ:MNDY) will be the most significant. Importantly, we are well positioned from an inventory perspective, and expect our overall promotional activity to be below last year's levels. We are confident in our plans and how they're coming together. We're passionate about where we're going as a brand. Footwear is a long game, with product cycles taking up to 18 months, but our revitalization is well underway. We're just coming off our fall/holiday 2025 sales meeting which we believe was a resounding success. This was the first outside look at the new product architecture we've been talking to you about and the feedback from our external partners was tremendously positive. It's great to receive this validation of the product offerings we're planning to bring to market in the coming months. We're working swiftly, making big moves in a short period of time. In fact, from a product and marketing standpoint, we've never been sharper. Alongside our work on these critical focus areas, we're also staying committed to the foundational aspects of the business. We've made significant progress on cost of goods, expenses, inventory and cash. You can expect to see continued discipline in these areas. Since day one, sustainability has been at the heart of our brand. Our latest sustainability report revealed a 22% reduction in our per unit carbon footprint. Just last week, our M0.0NSHOT Zero, the world's first net zero carbon shoot set to launch early next year, earned a spot on Time Magazine's list of Best Inventions in 2024. True to our core values, we remain committed to making a positive impact on the planet as we work toward both profitability and further carbon reduction. It's incredibly gratifying to see the hard work and dedication of our teams across the organization. Everyone is aligned, working with speed and diligence toward a shared goal. This unity gives us tremendous confidence in our direction. We appreciate the continued support of our shareholders and remain focused on advancing our core strategies while staying committed to creating long-term value for all our stakeholders. Now I'll turn the call over to Annie to discuss the financials.
Annie Mitchell: Thank you Joe, and good afternoon, everyone. The third quarter of 2024 marks another successful quarter of results in line with our expectations. To echo Joe, our teams are delivering impressive execution and we are confident in our path forward. Net revenue for the third quarter totaled $43 million and primarily reflects lower unit sales, partially offset by higher average selling prices within our direct business. As anticipated, revenue was also impacted by our international distributor transitions and retail store closures. Of note, Q3 is the first quarter in which all five of the direct regions we identified for transition are now operating under a distributor model. Gross margin expanded 90 basis points versus a year ago to 44.4%. The improvement is primarily attributable to lower freight and duty costs, as well as benefits from our healthier inventory position. This is in line with the expectations we previously communicated for gross margin in the mid-40s for the full year. Turning to expenses, we are pleased to see that our cost control actions are continuing to bear fruit. SG&A dollars, excluding stock based compensation and depreciation and amortization, totaled $25 million. That’s down 24% versus a year ago, driven by lower personnel expenses and occupancy costs. During the quarter, we closed one US store, followed by one additional closure subsequent to quarter end. That brings us to 15 closures year-to-date at the high end of our plan. In connection with store closures, we incurred one-time cash charges of $1.5 million. We are pleased with our progress on this front and will continue to opportunistically evaluate our fleet going forward. In the fourth quarter, we expect SG&A to be down modestly on a year-over-year basis. Third quarter marketing expense totaled $10 million, or 23% of net revenue, down 3% on a dollar basis compared to prior year. We expect total marketing dollars to continue to be down year-over-year in the fourth quarter, with US spend anticipated to be up. Notably, we’ve made the strategic decision to hold back on starting our top of funnel spend in the US until the latter part of Q4. We believe adjusting the timing of these investments will enable us to generate greater returns as we strive to build brand awareness ahead of our 2025 product launches. Turning now to the balance sheet and cash flow. The company remains in strong financial condition with cash and cash equivalents of $79 million and no outstanding borrowings under our $50 million revolver. We ended the quarter with inventory totaling $57 million. That's down 28% versus a year ago and reflects healthy levels heading into the holiday selling season. Our ongoing financial rigor enabled us to narrow our operating cash used to $11 million in Q3, a sequential improvement from $16 million in the second quarter. Moving now to full year guidance. We are revising our top line outlook, maintaining our gross margin outlook and narrowing our adjusted EBITDA range. Full year net revenue is expected to be between $187 million and $193 million. This guidance range is inclusive of the full year impact from retail store closures, which we were able to execute at the high end of our range and international transition. These structural changes comprise about 40% of our expected year-over-year revenue decline and are estimated at $23 million to $28 million of impact. Broken down by geographical market, full year 2024 U.S. net revenue is expected to be between $143 million to $147 million. This includes a $10 million to $12 million impact resulting from store closures. International revenue is expected to be between $44 million and $46 million, including $13 million to $16 million of impact resulting from transitions to a distributor model in certain international markets. We continue to anticipate gross margins in the range of 43% to 46%. Ongoing margin strength is expected to be driven by reduced promotional activity compared to last year, lower inbound and outbound freight and initial savings from our factory shift to Vietnam and materials innovation. Partially offsetting this strength in the fourth quarter, we expect a greater portion of our business to come from international distributor sales, which are lower gross margin. Full year adjusted EBITDA loss is now expected to be in the range of $75 million to $71 million compared to our prior range of $75 million to $63 million. Turning now to fourth quarter guidance. We expect net revenues to be in the range of $53 million to $59 million. U.S. revenue is expected to be in the range of $45 million to $49 million and international revenue is expected to be in the range of $8 million to $10. Our Q4 guidance for the U.S. market reflects the following factors; our plans for lower promotional activity versus a year ago, our expectation that the landscape will be highly competitive this holiday season, the shift in timing of our upper funnel marketing spend, and store closures at the high end of our range. Q4 adjusted EBITDA loss is expected to be below year ago levels in the range of $25 million to $21 million, primarily due to our Q4 revenue outlook as well as a modest impact to gross profit related to the upcoming transition to our new European distributor. Entering the final stretch of the year, we are continuing to execute on our strategic focus areas while maintaining financial and operational discipline. We appreciate your time this afternoon, and we'll now open the call for questions.
Operator: Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Janine Stichter of BTIG. Your line is now open.
Janine Stichter: Hi. Good afternoon. I wanted to ask to start out about the top line. If we think about the Q4 guidance in terms of revenue decline, maybe help us square where we are now versus where you had expected to be a quarter ago. Is the delta simply the timing of marketing expense and the additional store closures? Or is there anything else happening in the environment that would change that guidance? And then maybe along those lines, just if you could give us some guide to us about how to think about the timing of potential return to growth for '25. Thank you.
Annie Mitchell: Hi Janine, thanks so much for your questions. Yes, the timing of the marketing spend is part of the contribution to our Q4 guide, as well as the retail doors being closed at the high end of our range. Additionally, because of the great work that we've done on inventory year-to-date, you probably noticed that our inventory was down 28% at the end of Q3. We feel like we don't have to be aggressively promotional in Q4 the way that we were last year. Of course, recognizing that the consumer is always going to be looking for value this time of the year, we will be leaning into consumer moments like Black Friday, Cyber Monday. But when you look at our expectations for this year, especially compared to last year, our inventory is in just such a different, much stronger position. We are not going to be nearly as promotional. And so we recognize the impact that will have on our overall unit sales.
Joe Vernachio: And then maybe I'll just address the -- when the growth will come into our business. So we've got the 3-legged stool well in place. So the product, marketing and the shopping experience. All 3 of those are well underway. The product pipeline has been has been developed and is delivering in the back half of next year for fall holiday '25. And it is as rich of a product offering as this brand has had maybe since its origins. And so it is in the back half of the year that you will see the growth starting to inflect. And it's when the marketing will start to come to bear and the experience that we're going to try to give to consumers through our website and our stores and through our distribution partners that the brand will start to reconnect and have cultural connection back out into the marketplace. So we are laser-focused on the back half of next year to deliver growth.
Janine Stichter: Okay. Great. And then maybe just the last one. If you could elaborate a little bit more about some of this branded content that you're planning for next year. It sounds really interesting and something different. So just anything you can share on that.
Joe Vernachio: Yes. So first, focusing our brand around the message of Allbirds by nature has been paramount to us being able to connect all of the communication from the very top of the funnel all the way down to a PDP. And it's really starting to pay dividends. We're really starting to see some of those early leading metrics starting to turn in our direction because of our consistency of message. And so everything we do will be wrapped in this message of Allbirds by nature. And then we believe at the very top of the funnel, just doing plain advertising is -- doesn't work as effective as it used to. We need to create content that is engaging and entertaining and has a series associated with it, so people keep coming back to it. We're trying to create a mechanism that we can bring in popular people and connect with popular culture. And most importantly is, we've been able to secure OBB, which is -- they're experts at building this type of content, and we're well underway of building it, and we'll probably be teasing it in the back end of this quarter, and then it will start to really show up in the beginning part of Q1 and into Q2, priming the pumps so that we get people into the top of our funnel for when the new products arrive. And then there'll be lots of mid-funnel and lower-funnel activations as the new product starts to hit the market. But we're really excited about that work that we're doing and think that we've got a really unique proposition on how to connect with people.
Janine Stichter: Perfect. Thank you so much.
Operator: One moment for our next question. Our next question comes from the line of Alex Straton of Morgan Stanley (NYSE:MS). Your line is now open.
Alex Straton: Hey. Thanks a lot for taking the question. I've got two for you both, first on inventory and then on SG&A. So on inventory, it sounds like you guys feel good about the levels in aggregate, they look good. But can you just dig into the composition of it? Like how much is legacy product that you plan to phase out versus kind of like newness? And then how are you planning that for next year? And then just on SG&A, you guys have done a lot of solid rationalization work there. It feels like that's been a bright spot in your strategy. But when we look at it, it's still a super high percentage of sales. So is there more room to go there? Or how do you think about SG&A as a percentage of sales over time?
Annie Mitchell: Thanks, Alex. I'll start with your question around the overall inventory levels and composition. We feel very good about where our overall inventory levels are being down 28% year-over-year. And when we look at that composition, especially compared to where we were last year, we have much more in-season appropriate inventory and goods in transit, so things that we're bringing in for the start of 2025. Versus this time last year, we still had quite a bit of legacy product that we need to clear through some of those non-go-forward styles or colors. So in short, we are opening up Q4 with a great both level and composition of inventory that we need for the quarter. As mentioned a moment ago, we will promote as needed. We have some great value opportunities for consumers around Black Friday, Cyber Monday. And the priority will be around ending the year clean with inventory, because we do want to have that availability in our open to buy to buy into the fantastic new products that are coming in the back half of 2025. So that's really what we're going to be focusing on for the rest of this year. We're in a great position right now, and we feel good about our plan nowhere near the legacy levels that we had last year. Regarding SG&A, yes, we have made quite a bit of progress this year. Some of what you saw in Q3 are still a little bit of legacy or leftover costs that we will not have in the go forward. But generally, the improvements that we've made and again, being down 23% year-over-year versus 21% in the prior quarter. You can see that this is -- what we're doing is really starting to bear fruit. We do believe that with the changes that we've made, we've successfully transitioned the five targeted international regions from the direct model to a distributor model. That's a contributor. Those five regions are now done. We will be transitioning as well the majority of the European Union, our EU business in the middle of 2025. So that will have a small beneficial impact as well on SG&A. And we've closed 15 retail doors, which is at the high end of our range for this year. We do anticipate that we're done with closing doors for this year. And -- but now that we've built up this rigor and the way that we look at our business and drive retail, we will continue to be opportunistic as needed.
Alex Straton: Great. Thanks a lot. Good luck.
Annie Mitchell: Thank you.
Joe Vernachio: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Dylan Carden of William Blair. Your line is now open.
Dylan Carden: Thank you. Is $11 million the right quarterly cash burn to use through to the back half of next year? And what's sort of the glide path for cash burn as you start to -- at least as you envision starting to see some traction in the top line?
Annie Mitchell: Thanks for your question, Dylan. When looking at the $11 million that we used in terms of operating cash flow for the quarter, there's still going to be some seasonal fluctuations between each of the four quarters as we normally do, especially as we buy for certain seasonal moments across the course of the year. But it's much more in line with the expectations for the coming months. We will be buying product as we go into fall holiday 2025. But because of the great inventory work that we've done to date and the plans that we have for the first half of next year, it's -- as much as we talk about the inventory and how important it is, the actual investment will largely be captured in the overall run rate of our cash -- our operating cash usage. So there will be a small uptick as we get into the back half of next year in terms of cash usage, but almost fairly enough even for you to notice it popping.
Dylan Carden: Got it. Thank you. And for gross margins now that you're kind of through the distribution agreement, is sort of the mid-40s the structural level? Or is that also dependent on kind of what the top line next year?
Annie Mitchell: So for the remainder of this year, yes, the mid-40s and our guide of 43% to 46% is the way to think about it. As we go into next year, 2025, there are some continued improvements that we've made in our -- on the cost of goods side of our products that will continue to bear fruit as we get into 2025 and that new product line. So I would expect to see some level of improvement in 2025 over 2024.
Dylan Carden: Got it. Thank you very much.
Operator: I am showing no further questions at this time. I would now like to turn it back to Joe Vernaccio for closing remarks.
Joe Vernachio: Thank you, everybody. I'm really proud of the management team and the work that we've achieved this quarter and are very excited about what the future holds for this brand. We believe it's a very special brand, and we're starting to realize everything that it has to offer and think that the future is really, really bright for us. Thank you for joining, and we wish you all a happy holiday season, and we'll see you next quarter.
Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.
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