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spk_0: welcome to the birth order with luke twenty two when he to earn a call for joanna cooperated my name is adrian another operate of this call at the time up with fifth or analysts and only mode later will conduct a question and answer session during the question it's best if he have a question please press dar and one and your touch tone phone please note the conference this thing recorded and i'll turn the to eighteen director of both the relation you may begin
spk_1: the you operator and good afternoon oh what to remind everyone that comments made today may include forward looking statements which are subject to significant risks and uncertainties the could cause a copy special results to differ materially for management court expectations these statements big as of today and the cop the undertake no obligation to update or revise any forward looking statements to reflects ah op's one of those new information per view pewter circumstances please review the cautionary statements and risk factors contained in the company's earnings press release and recent violence with the fcc during the call today management may refer desert non gaap unusual measures a reconciliation between the gap and ongoing financial measures can be found in the company's earnings press release which was filed with the as he see today and posted it to the investor relations section of chileans website and investors dodge o n dot com on a call today from julian is wade mikel on president and chief executive officer and that shoes chief financial officer own out from the call over to wait mikel on wait grab another that you for joining us today
spk_2: i would be remiss if i didn't start by welcoming aging to the join a team it and we lead and or a bus relations average and is extremely town leader with extensive background the financial markets i know you will really enjoy getting to know him as we share the and story the current and potential stakeholders related lee is truly grasp on the barge lands return to the public equity markets many anyway already been my with her company's history going back more than seventy five years from his humble origins in a single location ugly to it has become the nation's largest battered and crafts don't for those who are new to our story that joe our missions to inspire the good spirit in each of us the strong legacy as a nation's category later and selling we're also on the fast growing retailers in the arts and crafts category with robust homage our platform our business to be an inspirational leader that helps everyone finer how the blaze through superior assortments strong merchandising execution and a relentless focus on customer service experience or first for full color as a public company was accessible one and exceeded our internal expectations are still friends remain strong going to fifteen percent over last year's first quarter with without strength spread broadly across are much less categories customer segments channels and he these the also draw gross margins badge and control the earth is to increase net income to fifteen point one million expand adjusted ebitda margins by five hundred and seventy basis points to ten percent of sales resulting in a thirty five point eight million or hundreds by percent increase in adjusted he would divert his last year's first core well that provide more detail on our financial performance and when also really high or momentum and debt reduction over the past year driven by are many balance sheet initiatives and seventy said million dollars in net proceeds from a recently appeal we reduced or long term net debt by five hundred and seventy million dollars from the same period last year seven hundred sixty million dollars at the end of our lives quarter and we anticipate further debt reduction to level of six hundred to six hundred fifty million dollars by the end of fiscal poor
spk_3: two point two
spk_2: over the past several years with the knowledge or to truly transform joanne and define a differentiated customer experience that will lead a sustainable growth in value creation while the pandemic dealt all retailers including joanne many challenges over the past several years we've been laying the foundation to elevate the joanne experience across several key initiatives for us the bed pandemic a crisis was the intersection of opportunity mean preparation and this in turn has made us one of the best growing stores and online retailers over the past year or initiative to refresh our stories continue to show enormous promise as we are literally stepping out of the traditional sewing arts and crafts base into one that as future relevant and far more experimental we believe the impressive topline a bottomless we're experiencing in large part is because or for many customers we truly are are there disneyland the place they go to be inspired to connect and great we believe that are extremely strong the promoter scores for the validate our success and driving repeat visits and attracting new customers when we get it right we expand share of wall of traditional customers and attract new customers as well as relates to our lips initiatives we are now beyond the pilot phase of our store in asian program and a rabbit to the execution days in this new phase will be significantly in helping our servants and improving our customer experience across the vast majority of joy and stores over the next seven to ten years and are targeting a for your overall payback and total capital and project expenses and does it is part of our story but program will also do a significant number relocations if or of the overall real estate strategy we further reinforce a relationship with our customers through our data driven digital capabilities customers can interact with our brand whenever and however they want because would connect with us through our newly redesigned mobile first website joined our car and are widely used mobile application has generated more than twelve million downloads today these point differentiation are reinforced by an audible friendly and first a team members a significant number of whom are sewing and crap and this to offer services or and experience for customers that we believe cannot be replicated by mass retailers were pure play online retailers we've invested heavily in around the capabilities over the past several years and this too is not gone unnoticed by customs effect joy was recently recognized as the number one fastest growing economies retailer i'm on the field of one thousand by digital commerce three sixty four the year twenty twenty one and what we greatly value or a hundred and fifty five stores with nearly one hundred percent of our stores cash flow positive we continue to robustly and bust in a rapidly growing best in class army channel business in which we serve our customers the differentiate manner by offering sold them being if a full the options including bulbous curbside pick up and should the hallmark especially we never want to give our customers a reason to leave joe an ecosystem er homage our platform is now achieved with get scale with over affably and sales in the past fiscal year with seventy percent of sales will directly by the physical store location and roughly forty percent either picked up in store at curbside in the latest quarter on a shell contributed brashly thirteen percent of our net revenue compared to four percent in the same period last year importantly are only platform is highly profitable and leverage a central and their party capabilities as well as or efficient in store for from at network are currently investing additional the don't give ability that will support both army growth and our overall supply chain network looks like this additional film capability to ramp up throughout the fiscal year and be fully complete by to bring of twenty twenty two our ability to effectively market to our customers is another critical component of our business success we've levers a robust the around data to segment and target customers allowing us to be relevant and further dried customer engagement we tear our customers based on total tail fine and frequency of purchase and last quarter roughly one third of accountable store sales were generated by our top three million customers the best customer shot at i frequency and contribute strongly to are positive gross margin friends or recent success is also being driven by new customers were also shot at high frequency and generate strong average to get sites based on our customers limitation new customers account for the second highest rate of sales growth and feels contribution across our customer tears why are we seeing as broad base custom success but we believe it's because we appeal to all skill levels whether you're a novice for expert we an unparalleled overall assortment most of which cannot be directly cross shot in our team member serve as true friendly clever allies including often a variety of classes and services that help customers on they're selling or crafting story we feel with a better backdrop remains favorable to joanne as evidenced by continued market share games as strong gross margin trends in the latest quarter we're a leader in the virus so i get annoyed with the thirty three percent market share and we are rapidly growing in the other half of our business which includes arts and crafts seasonal and core underlying as momentum is the fact that a broadway twenty five percent of our customers made to sell nuclear platforms such as at the shop a i eat a and those mart changes continue to grow these customers depend on us to provide the supplies that they need at the right price so they can operate their own successful and profitable businesses encouragingly related memorable trends including joanne sales of both so engrafting machines which have also been growing even more so in the past year these machines will provide a good foundation for the business louis board as balance deals with his customers is significant was showing are reaching an entirely new younger customer demographic and based on the ongoing technical innovation across the graph category we believe that the riot acknowledged combined with the coolest after we wanted customized personalized share or even so will be a major driver in our industry and our company for many years ago we all have series of several exciting growth initiative and process which we will he will our staff and a new and lucrative market domestically and abroad and i'll be sharing more about these over time during subsequent call while there are many things to do great about we remain vigilant a potential risks and way him and ways to mitigate inflation is certainly a risk but with and at largest issued a we are accounting or the area gentle supply chain disruptions and increases in costs particularly oceans free that said preview on we delivered at of our internal plan for the fiscal twenty two and a professional twenty two people he was be able to deliver on the plan for the bells of the year where these additional supply chain costs should be able to the offset by the continued robust product margin expansion in summary and are strong first quarter results should set the foundation for exciting year ahead at the newly public company or team members remain true to our mission ambition to inspire creativity and ourselves and our customers and our customers find their happy place the joint leadership team has never been more enthusiastic about our future thank you for all of her support of our journey and with that to turn the call over to man to discuss our first quarter results in more detail
spk_4: thank you wait i to truly grateful for the efforts are over of our entire organization collectively or field distribution center and corporate team is unwavering focus on serving our customers and communities resulted in strong first quarter results for join
spk_1: now let me share highlight of our first quarter of fiscal twenty two comments which exceed our internal plant on top line sales performance operating margins and bottomline profit net income was fifteen point one million dollars in the first quarter of fiscal year twenty twenty two compare to a lot of twenty three point six million last year deluded earnings per share was thirty eight cents compared to a lot of sixty eight cents in the same period last year just a deluded earnings per share was forty six cents compare to and adjusted loss per share of thirty one sense in the first quarter of last year
spk_2: as we mentioned adjusted ebitda increased a hundred and sixty five percent to fifty seven point five million dollars compared to the same quarter last year
spk_1: that girl was driven by the sustained momentum in sales and customer engagement we experience last year
spk_4: adjusted even to be without percent of failed expanded by five hundred seventy basis points to ten percent driven by strong growth and gross margin in our ability to manage growth and expenses well below are increase in net sales
spk_1: i will now provide more detail color on our quarterly results net sales for the quarter increased fifteen percent to five hundred seventy four point four million dollars compared to the same period last year with total comparable sales also increasing by fifteen percent driven primarily by an increase in customer transactions or only channel also remained strong and important part of our business reaching seventy six million dollars for the quarter representing thirteen percent of total sales
spk_2: as economy rebounded and coven eighteen restrictions have less and throughout the country we saw broad based sales growth across all geographic regions gross margin expansion with a key driver of are significant improvement
spk_5: in earnings for the quarter
spk_2: gross margin dollars increased twenty three point one percent compared to the same period last year to three hundred and two point seven million dollars reflecting a gross margin rate of fifty two point seven percent compared to forty nine point two percent in last year's first quarter a three hundred and fifty basis point improvement
spk_1: this was driven by several factors including reduction average cost per unit driven by our ongoing strategic sourcing efforts more optimal levels of promotional discounting and improvements in our inventory quality that have had a direct impact on reducing shrink and clear as markdowns
spk_2: these gross margin games were partially offset by higher import for a cost that have impacted a variety of us retailers first quarter action expenses increased by three point two percent to two hundred forty nine point nine million dollars primarily due to slightly higher selling costs given the first quarter strong fifteen percent sales growth as well as from higher and cent of compensation across growth and expenses was partially offset by a reduction in costs incurred in the first quarter last year relating to our response to the coven eighteen pandemic that did not fully record this year as a percentage of net sales as you in a expenses for the first quarter or forty three point five percent and improvement of five hundred basis points compared to last year's first quarter as we have leveraged fixed cost against our sales growth and continue to identify and implement operating efficiencies depreciation and amortization expense was twenty point four million for the first quarter of fiscal twenty twenty two an increase of six hundred thousand dollars compared to the first quarter last year driven primarily by investments in information technology
spk_4: store pre opening and closing expenses totaled one point eight million for the quarter consistent with the prior year
spk_2: interest expense for the first quarter was thirteen point two million the nine point five million or a forty two percent decrease compared to the first quarter last year this decline in interest expense was primarily driven by a thirty eight percent decrease in average debt level vs last year's first quarter or blended interest rate also the find as we utilized as we utilized ip all proceeds to pay off our highest interest trash of term dead in march
spk_4: i will now highlight of you selected ballot she items
spk_6: our long term debt
spk_2: was seven hundred sixty point four million as of may one twenty twenty one a decrease of five hundred and sixty nine point five million from me to twenty twenty and a further decrease from the seven hundred and eighty six point three million as of january thirty and twenty twenty one or seventy seven million in debt
spk_1: proceeds from our initial public offering we used to retire debt primarily or term loan do in twenty twenty four which has been repaid and fall
spk_2: merchandise inventory do decreased by seventy five point one million or twelve point two percent in the first quarter of fiscal twenty twenty two compared to last year
spk_1: we've continued to improve inventory turn and quality of our overall inventory which are generated strong year over year improvements and shrink reduction and a lower pronunciation of clippers inventory and markdowns we continue to be pleased with our ability to maintain healthy and stock positions in our store locations and online
spk_4: at a lower overall inventory investment cash and cash equivalents were twenty two point seven million as of may one twenty twenty one down from one hundred and forty seven million at the end of the first quarter last year
spk_1: the figure from last year reflected additional cash the company carried on the balance sheet from a drawdown on her ass had paid revolving credit facility which was repaid during the second quarter of last year
spk_2: and of the end of the first quarter the trailing twelve month adjusted he da reported under our credit facilities was three hundred sixty three point six million resulting in a reported leverage ratio for net debt less cash to adjust even die of two point one tax on may twenty first twenty twenty one our board of directors declared a quarterly dividend of ten cents or common share the dividends pay is payable june twenty fifth twenty twenty one shareholders of record at the close of business june eleventh twenty twenty one the first quarter dividend will be the companies are since we left it on nasdaq on march twelfth of this year
spk_1: in summary we're very pleased with are strong financial performance as quarter driven by sustained growth and our top line sale trends and gross mark improvement
spk_2: this momentum was broad base across our retailing operations and reflects continued improvement in consumer sentiment
spk_4: as we mentioned in is prepared remarks while we expect to incur higher supplied and cause based on the current operating environment we are very comfortable and are believed to contain these near term at went through a variety of margin enhancing initiatives with that we'd be happy to take your questions
spk_0: thank you will now begin the question antecessor it to have a question these tests tar and one and your touched on phone if you wish to be the month the please press the pound sign or the hatch a i'll be delayed by the first question now if he the a phone you may need to pick up the handset or of were and amber once again in a question please pets die in one on your touch tone phone and effort questing cousin with the keep a bank of america you line up and
spk_7: oh thank you i can get a locker room with that thing biggest drivers of that gross margin on this corner and i get or he either quantify or rank order the impact of the strategic sourcing efforts a promotion activity and shrimp or any other good guys to gross margin
spk_4: charlotte and of mad i'm having to do that yet primarily driven by what we would qualify internally as product margins so outdated primary driver of that being ah our ability to optimize discounting relative to what we were able to do a year ago out the closely followed by what been ongoing six out of our direct sourcing
spk_2: ah wins in terms of being able to go direct a factory in many cases or negotiate better terms with existing vendors
spk_4: after that i would say a deadly the initiative has been on
spk_2: a big win for us again just a lower all overall him in tory carrying values is helpful there but we've also implemented a number of controls in our stores over the last twelve eighteen months they're starting to really bear fruit ah and then one i would place of shortly after that i think longer term is something that were quite excited about is just
spk_4: ah the overall lower penetration of clearance to our total inventory and privileges sales of markdown dredge to our toilet gotta lotta under data points on we actually bill for the coming quarters that actually going to want a lot nicer to gallons for us going forward
spk_7: gray and a big a lot of those benefits when yeah theoretically continue in this as the thing of the glencore her as i mean is there anything other one time and temporary nature that we should think about or your a lot of these benefits likely the continue
spk_2: amen jumping i think these benefits will likely continue again up to one thing we're seeing now is really young primarily these massive oceans free increases and these are you know i'd say yeah
spk_8: with any says they're probably on president and him in their nature but the good news is as they're not been able to some point they're gonna go back to normalcy
spk_4: yeah he's a resident kind of tail and guy i talked to we do feel their sustainable certainly the promotional environment on could change i think that a portion of the benefit we're seeing what i would also trivia much of that to took our own analytics and really reading of they are unprecedented number of new customers we coming in to the space and really understanding or their sensitivity to promotions and our ability to leverage ilo model against that
spk_9: we do feel and most of that sustainable
spk_10: right thanks very much
spk_0: if you eaten it
spk_11: and the next patch and tenth impala irony of barclays the line is open
spk_12: i want this to take my question and to the first good quarter out of the gate
spk_11: and you done
spk_2: can you talk a little bit about what what on what categories drove some of the sales growth and where you can continue momentum yeah i mean in or are our city in our results hurry broad base really all of our for division some were up and growing on you know on nicely especially on the strongest i was really are arts and crafts and seasonal was was it it stronger than balance the but very broad based on you know selling wasn't as far but one of the things even though selling telling his is up nicely and is going to your stat but when we're pretty optimistic about is similar biggest businesses and selling of actually are actually still how much i done so i'm your things like are fashion a barrel or special occasion you know and others are sale to come with in terms of with a hot so in construction wow know these businesses and and large a bunch of amateurs or amazon you know weddings got godparents can the air as that hasn't done
spk_11: you know below palms of those kinds of things and as we see different geography isn't supposed open up be overseen those businesses now start to blossom but we did that into the actual a nice little tail and for us to was we're back to the new normal great they i'm just a quick ball up maybe on on the the storefront on i'm on the refresh planned it may be reminded how many projects you plan for this year what would they they expect the timing and just broadly what kind of
spk_4: returns the use the on on a store refresh program in terms of of can't lift or and profitability thank you
spk_2: a great by since this is matt we were both fairly modest number of projects this year are somewhere between ten to fifteen they'll be completed as we've talked earlier on a bit of an impairment are building a plan those projects here just given the pandemic
spk_4: as construction crews and are so many markets we are on we've just completed a thorough review of our college chain in terms our strategy for those requests projects ah and are well on our way to ramping up to full roll up our starting ah really the end of this fiscal year and moving into early next that will result in about sixty seventy projects per year on we endeavor to have are blended return and those projects of about four years pay back the initial investment into those into the project
spk_13: on some of them will blend a bit longer than that a lot of them are more quickly where were getting pretty healthy lives on not project for relatively modest investment
spk_0: they grow up
spk_14: internet question and and even for it as guggenheim had lines up and
spk_1: a good evening at way baby apollo for your you mentioned machine sales right during the prepared remarks here but just curious if you could die provide some color on the quarterly performance and eat update
spk_15: updated thoughts and i expect machine sales the trend this year versus last
spk_1: a year holistically and and
spk_2: eddie any sort of changing and those year one or year to spending trend to call out or relatively consistent what we talked about before
spk_4: get us machine sales across the border then very strong i think
spk_2: i think around post two hundred percent us over some on a tuesday basically can do to be strong and you know the days of the ceiling for mass making are long gone missing the kind of stopped and september october so i'm annette that allows we feel very very good in bristol seeing a lot of young consumers come in and and learning the art and evolving we're seeing experience consumers continue to trade up i'm a nurse allows to grab machine was very strong very good pipeline of innovation still coming i'm and customers are engaging in we're seeing your very good follow on sales were around the metrics out of him same as a sport so me again i think as a little bit distorted because a lot of these some major events to do a lot of selling of are not happening yet but they're starting to and so we're seeing a good life where that is happening
spk_4: that we're we're pretty optimistic that these trends are here to stay and i'm and that we're not going to see of you know of the be drop of unease we're still seeing on with it and trapping a bar newer customers recently we're still seeing their of frequency of it and about twice what are our customer and interact pick it up fifteen or twenty percent higher so yeah we're still seeing her again
spk_16: oh and activity those customers that the about their first machine last year
spk_14: and then maybe just that a quick follow up on i'm on the expense side of the piano
spk_16: in any sort of a piano you tracking relative to those in direct spending saving target that you're laid out
spk_17: the did it did seem like he acts the a sort of i eat on expenses here out to the internal plan was so it was that something specific to call out
spk_4: where does your breivik cheap and against those those goals as great lesson a little about i would say we had devil your seen some get traction on and beards and projects that we've run this year i would often say we're seeing nice ability to be more efficient on are lower inventory carried that provides some nice flavor of agencies for us and our distribution centers as well and our stores on we've we've done a i think a pretty good job
spk_18: leveraging i was i think that also that of potential tailwind for us as we continue to be able to manage pretty well
spk_19: and in orem utah
spk_20: thank you
spk_0: and you if you
spk_21: added a classic that's computer to eat and piper stadler you line up and i good afternoon my congratulations on the first quarter out as well
spk_5: an emmy just a follow up on knob match smear most recent comments other fees question i would new customers i know when the past talked about the twenty twenty cohort of customers at by either a sewing machine or a cricket machine and thought that that the sales have you for for twenty twenty one was based on retaining about sixty five percent of those customers and that those customers on average we'll see about a sixty six percent increase in spanned from year one year to all the line with the historical matters is that something now we're getting into que to and were laughing these compares
spk_4: you guys are are still continue to see hold true yeah i think generally the as i mentioned earlier the frequency and the basket value from their customer i kissed by
spk_1: in least as strong as we've seen a story clean lollipop i would say on the i'm on the retention piece was also talking with our tickets rosser bit and his earlier in the we and probably a little bit early to tell if we're gonna be kind of in that mid sixty's the seventy percent retention rate are just because we have so many customers were added
spk_21: i and or quarter last year but certainly and were and trend for that and and expects you out to be able to achieve that how can i write and i'm i guess there's there's no formal guidance for the second quarter but at least where the consensus number sits would have your sales growing on a to your basis
spk_4: at about fifteen percent and that's coming off of key one where sales on a tear basis grew eleven percent says raising nuance with cute to were on a to basis we can see some acceleration or or conversely do you think maybe the to your trend hold steady decline coming off key one
spk_2: whatever the about a two year trend for second quarter is on with anybody to think about ah with that a what we look at his dad you did the year two years ago that second quarter was a pretty weak porter for us and as they our first quarter that year was by far our strongest quarters so some of this is really
spk_4: leave the trends in that two years ago time period
spk_2: and we as a feel like are taught a quarter to quarter trans in terms of sales are gonna someone normalizes year and it may be the one piece delgado says it's way mentions we deal with you saw some businesses that have been shut down due to cope and things like are celebrations categories facilities
spk_21: we are hopeful those will it off some steam as we move to the or okay great up maybe one last question just thinking forward as well
spk_4: i'm i believe we're looking for some odd ongoing gross margin expansion per year on year to the rest of the year you are they now free cause is a headwind and and you expect to offset those does that apply think was marginal probably run more flattish year on year or do you still expected to see your your games in the coming quarters
spk_2: yeah the world is speaking to be held off said relatives or expectations that we had expectation the grow margins we still have expectations a girl margins are really saying is we as and tailwind the maybe would have had an even more optimistic those are to be softened a bit
spk_1: i mean for perspective on the i'm on the ocean free you know what we're seeing now on some of that know the that the brokered you know of
spk_4: containers that we're getting his is as high as ten times as wouldn't historically paid so again of gonna ultimately subside and i know others are seeing a similar issues with that probably the one you know anomaly and and that didn't hit us very much in the first quarter that that really is is a thing is that is as throughout the balance of year and and ultimately we will return to normal so we grew got growth margin by three hundred fifty basic points in the first quarter you don't expect to give all that bad but certainly
spk_21: now that strong stronger year over year basis for bells
spk_0: yep okay very helpful thanks so much
spk_1: and an s class in contempt tax havens some wells fargo your line up and
spk_22: hey good afternoon i'm so with again on that that tupper comparing you to in learning color on on your made trends you could talk about and and then on the at seen a i could you walk us through the d leveraging impact on on your model and to what extent you're able to flex down any of the sc in a a to better manage that
spk_2: profitability
spk_23: yeah i mean i'm just for some of the newer the company the queue to compare his last year had not only does kind of huge pp users which has been long gone on it also add you know mom our largest know competitors are space which other stores number one also have potter that know really anomalous to to that were up against
spk_2: ah but you know for a you know we feel good and we may as well as is gonna love in the middle the month
spk_4: but we finished you know really am really strong and there's nothing that that makes us feel that does underlying trends that we've been able to enjoy and his incremental customers hum are being so yeah because it didn't elaborate point
spk_9: the an ai the as teenage i have to tomb is historically are slower quarter we do i tend to try and control type even apps and on the unusual trend were up against for last year or the one a i would say as we br we also make a lot of our i earnings in the back after the year and a lot of what we need to do to prepare for that occurs in the second quarter so on lot of way of yellow manage or at or below are eternal expectations are what we may have share earlier around as dna we are also not going to on
spk_2: but the back at risk by trying to climb cause and allows them they're allowing us to be ready to do not the stronger business and better because when the i would say to as as we've we really spared no expense to make sure that we're standing strong and are in stock positions in our season on being able to really run through the year so
spk_22: you we feel good about that versus the opposite of dry that he had gotten that be able to to be as relevant or a strong to our customers so it's a choice we made and we didn't concern as well
spk_1: got it that that makes sense and then i'm on on the econ next taking a little bit of a step down in the corner ice in that that has to do with you know customers were returning to to stores and maybe could talk about whether there was any makes impacted to gross margin
spk_2: compared to your on an aunt and then as we move through the year on you know whether you expect that econ next step back god and and should we expect any offsetting you know gross margin get back it as a result
spk_24: you'll need on the thing to remember as we go and april last year and then you know as we move forward you know we had many of our stores that were you know shut down completely to visitors area so the only way they deserve them
spk_2: you know was was online
spk_8: while but now we're in a point you know discourse you know much mormon a normalized quarter of you will not whenever i overeat on the the numbers you see now and all of our stores are fully open the customers are coming back so i thank you you're getting a good view of what
spk_2: normal looks like as we grow from here
spk_4: yes we think that twelve fifteen percent penetration an annual basis as a healthy place for us to be we certainly out from initiatives or that may grow in the future
spk_2: but it is seasonal so we do typically or even with that a normalized and getting an environment and and our economy and we were typically out a bit higher penetration from the commerce in the back at the or relative to what we see in the early part of the year there's a little bit of primarily with related to free
spk_25: dragons humor free that it has on or margins but i would say it's a relative to other believe we talk about it it's pretty much and are you know you are you have this is now very profitable and we got no couple of really leavers that we can make it even more so i'm from a cause perspective and as well as a top line other than you know at the new and a normal mode and board so
spk_26: entered that
spk_0: god at that all makes sense appreciate the time tonight
spk_27: and just have to remind your tend to the queue please faster than one on your touchdown son and enough classy cause the cristina fernandez a tough the guys look at the line is up and hi good afternoon and congratulations and a quarter
spk_2: you didn't mention any government similar thing you're prepared remarks the do you think it had been a said during the quarter in arm and perhaps keep you quantify it in your any benefit from man and that i when i never see that we didn't have any minister right but if we did and very hard to measure you know i'm in versus new under a new under thirty dollars
spk_4: when the kind of customers we have it's it's you know it's very different than or the automotive new appliances and the like so
spk_2: no there's nothing there that we think distorts the quarter vs and online one any meaningful way he goes up for this quarter specifically those occurred when what was already expected by us to be the strongest part of the quarter it's when we are unrelated it's when we're up against the kind of the worst of the store covert shut down
spk_4: and last year we also had an earlier research service here which is beneficial for business
spk_27: so yeah to get to a point that makes it even a little muddy or for us really got to sort out how much of that strong period of the quarter with you to go and then follow up question on promotions key comments and binder seen across the industry in this industry traditionally has been promotional said to the extent that it some of your competitors bring back promotions did you feel compelled to follow them
spk_2: or do you think with you're not nothing it and said of differentiation and your product you can stay at a lower level versus your historic historical and on yeah tell me on throw my opinion americans drone has but you know that we're seeing of you know of debris rational environment out there and of he always we still from our always been promote but i think we're getting smarter as marv how and when and why we promote our customers seem to be with us and no both are the store customers with us but i think importantly we do the great value to promote when they promote now and a lot of a new customers that that he added them with us for a long time there are know very accepting of are now yep opposition we think is still very robust so i don't see that personally no changing a me i've never seen
spk_28: never but i think right now it's a good environment land with the diesel for some time
spk_0: delivery
spk_8: and we have no further questions out and the call back over to mr way miller clan for any of thing or remarks
spk_1: look i swear thank all of you know it's been a is been i'm sure for whole of you and your family's has been am the crazy year
spk_2: but you know here we are and hopefully we're all moving forward so you know writer times a lot of the results were seeing know we really feel is really because i'm in others transformational journey we started several years ago you're raising our game and all aspects of assortment of are still experience around a digital market or capabilities talent you know we've got our twenty seven thousand and change employees who worked very hard every day that takes takes every single one are doing their part and i'm grateful for all of them as well and up for those of you that are or stakeholders and
spk_0: and him about will be it's want you know that we're working as hard as we can everyday and your back on a got a great company here and we're we're really committed to dig deep and i right
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