Express, Inc. ver: 3

Q1 2021 Earnings Conference Call


spk_0: the day and thank you for standing by welcome to the extra think he won twenty twenty one earning a conference call at this time operative the pin or analyst and only mode after the speakers presentation there will be a question and answer session you asked the question during the session you will need to press star one on your telephone please be advised that at a conference is being recorded if you require any further assistance we've press start zero i wouldn't like the him the conference your speaker today the and aldridge vice president of in bath relation with go ahead
spk_1: but real good morning and welcome to recall of like the open by reminding you of the company for barbarism any statements made during the conference call a clipper countrymen historical back maybe been to the constitute forward looking statements within the meaning of the private securities would get a good mood litigation performer of monkey ninety five all due to result from a different materially from both just i'm bored looking statements due to a number of risks and uncertainties all of which are described in the company filings with be you tv including today's pursue it express assumes no obligation to up the any bored looking statements or information except was required by law are gonna today will supplement the detailed information provided we both the press release and the investor presentation available on the company's investorrelations website in addition you can locate a reconciliation have any adjusted result discussed on our comments to amount to born under gap on our website or an earnings release all commentary on a year on year over year comparisons and are prepared remarks today reported twenty twenty unless otherwise noted with me today or ten baxter chief executive officer very very clear chief financial officer and that and president and chief operating officer on out on the colorado thank you dan and good morning everyone our top and bottom line performance and the first quarter exceeded our expectations although february with tough march and april were considerably better and we experienced a significant inflection point in the business at easter our prompt trying to further accelerated and our second quarter called volume today are now exceeding two thousand and nine
spk_2: teen level
spk_1: our results are now beginning to reflect the power of our product brand and customer strategies we have meaningfully advance the expressway forward and made excellent progress on our transformation from a store and them all to a modern relevant multi channel band with a compelling purpose and we are well positioned for the post pandemic world in the first quarter we introduced to plan to drive a billion dollars and ecommerce demand by twenty twenty four and our first quarter ecommerce results are a strong start towards achieving that goal we drove a forty percent increase in transactions a nineteen percent increase in conversion and an eighteen percent increase in traffic all of which contributed to an ecommerce comp of up over forty percent in the first quarter we continued to see strong the mentioned with our passion deliveries with sell three is a double digit compared to two thousand and nineteen we establish new court that i'm and express essential and both categories posted positive cost versus two thousand and nineteen with denim up double digits in our retail channel we pull back on promotions in the first quarter based on positive customer response to our new product and will continue to be left promotional going forward we delivered a nearly eleven hundred basis point improvement in merchandise margin and expect to improve further as our inventory composition reflects a higher penetration of new receipts we drove greater brand awareness through influence or activation and saw demand driven by the channel increased by thirty percent we completed the relaunch of our loyalty program added a one hundred and sixty two percent more new members the last year and seven percent more new members than in two thousand and nineteen we kicked off a customer reactivation strategy in april that has already led to a twenty two percent increase in returning last customers we maintained a sharp focus on conversion into increases in this important metric across all of our channels we further both boasted are liquidity position and improved operating cash flow by a one hundred and thirty million dollars we delivered significant sequential improvement from the fourth quarter in all three of our channels and of theme further acceleration in the second quarter today i'll provide an update on our progress and each channel starting with the commerce which is the biggest contributor to our current growth as we drive to our billion dollar and ecommerce demand goal by twenty twenty four we will leverage data to provide more relevant compelling experiences that bring the versatility of our assortment to life and a more personalized way for our customers we made significant progress toward this goal in the first quarter posting a false positive forty percent increase in demand and that it's further accelerated to up over seventy percent in the second quarter today conversion is up nineteen percent compared to last year and these results were all achieved on far fewer deep site wide promotional date average order value so showed the quench will improvement during the quarter with a or via six percent in march and april combined and compared to last year the have been challenge by the impact of the pandemic on traditionally higher price point categories such as dresses and food so it is especially encouraging to see this improve as more restrictions are lifted and more people resume social gathering occasions and going into offices i expect it will continue to rise we enhanced our mobile app experience to bring it closer to parity with our website including a new digital wallet functionality and outfit building tool for the remainder of twenty twenty one we will be adding capabilities including user generated content and live chat for real time suggestion and advice from a digital
spk_3: i list
spk_1: we achieved a forty one percent increase in demand driven through the mobile app and are moving quickly towards the theme with digital customer experience we launched the deferred payment feature through climate in the third quarter of last year and have seen a twenty seven percent higher a o v for customers who choose the payment option we increase the amount of user generated content and applied it across all of our digital properties with a particular focus on product pages and social media where we know customers are making real time purchase decisions in the first quarter we've featured user generated content at approximately forty percent of our product pages with ten percent higher conversion than the average and our goal is to double the number of pages that feature user generated content in the back half of this year we continued to expand our digital stylus program and saw twenty five percent increase in demand and an eighteen percent increase in a ovie in the first quarter only a small percentage of our customers use this feature today so as we increase coverage and expand the number of stylus we expect this program to grow we continue to drive success with our outbidding recommendations tool with twenty percent higher conversion and six percent higher a of the on product pages with this feature we will expand the use of this tool across our site and app experience so customers will be able to shop trends and outfits as easily online and they already do in our physical stores we've expanded our marketplace business and now feature over eighty brand that compliments and broaden our breath brand assortment marketplace allows us to stay focused on what we do best while offering great product from complimentary categories such as active swimwear and home express our for rental program continues to resonate with our customers we have more than doubled our women's membership and have exceeded our expectations and men this program offers our customers the opportunity to try our product and have to in their closet with no ownership commitment our rental business is driving new customer acquisition so we planted double the membership over the next eighteen months
spk_4: turning to retail stores
spk_1: we continue to see improvement from the fourth quarter and saw a dramatic acceleration in march and april and we've seen further improvement in the second quarter we continued to see encouraging trends in areas where corona virus guidelines were less restrictive and the first quarter were math mandates were lifted our can't perform it's was approximately ten percentage points better and we're already seeing that performance materialized more broadly as they continue to lift mandates and restriction as i said previously our focus has now shifted from fleet rationalization in twenty twenty to fleet optimization in twenty twenty one tweet rationalization spoke to the number of stores will operate
spk_4: lead optimization speak to the location five concept format and perhaps most importantly the role physical stores will play in customers post pandemic live
spk_1: our more stores can and will be more productive and we will also expand beyond them all or reduced square footage concept of the king of prussia mall has driven productively double that of the balance of are big and we will apply this approach to a new store at the north park mall in the second quarter these stores and others like them will help us determine the optimal five of our mob a stores and we have tremendous flexibility with approximately two thirds of our leases actionable over the next three years are a expressed that it concepts stores are valuable test and learn opportunity
spk_4: wifi a higher percentage of both new and reactivated customers
spk_1: and the first ninety days or columbus location reactivated customers and twenty two percent faster pace and our national location added forty five percent more new customers than the average door in the balance of the fleet
spk_4: the towards also generated higher average dollar sale and higher conversion with the columbus location achieving a conversion rate over twice the company average
spk_1: express edit stores have short term leases and off more locations with strong foot traffic that allows the flexibility to path learn and modify going forward as an example while the columbus location i guess mentioned headstrong conversion and twelve hundred square feet it was the smallest of these concepts too small in our view so weak ones that store a few weeks ago and open a new store at south lake town square near dallas we plan to operate approximately ten express edit concept stores by the end of this year
spk_4: we've already selected sites in westport connecticut and washington dc with footprint thunder forty five hundred square feet
spk_1: and true to the express that concept the product mix will be curative to reflect local thousand and trends within each market and neighborhood
spk_4: another facet of the express that it's strategy is the exploration of multiple stores in a single market
spk_1: we will open to locations in washington d c where we currently operates stores in the adjacent suburbs so testing the smaller formats and the city centre will allow us to read the impact on existing stores ecommerce they'll to the zip codes and new and existing customer activity overall
spk_4: turning to our stores
spk_1: once we began flowing the first delivery that reflected the express that a lot like philosophy in march we saw an acceleration incomparable sales that continued as we move through the quarter and our second quarter to date can't fail in our our channel are not tracking ahead of two thousand and nineteen we're bringing styles for retail to outlive more quickly which is already generating strong response especially to our passion product denim and express essential the entire outlet assortment will reflect be expressed that it by the third quarter and while outlets represent an important value cop component of our holistic channel strategy all of the progress we have made from a product perspective has allowed us to be less promotional in this channel as well now turning to the for foundational pillars of our strategy let me take you through what we've done the result we've achieved today and what is still to come up start with product we establish new core product graham and introduced big ideas such as denim and express the central balanced with passion tested in built inventory behind what worked and we've seen incredible customer response the new fashion deliveries are feeding our expectations with sell three than the first quarter up double digits compared to two thousand and nineteen
spk_4: average unit repealed nine percent higher and merchandise margin approximately four hundred basis points higher
spk_1: our early second quarter delivery than may have achieved a total fell through of almost forty percent higher than in two thousand and nineteen we put a stake in the ground last year to become a more powerful player in the denim market and our results are outstanding in two thousand and nineteen only eight percent of expressed customers purchased our denim and today we're a twenty four percent we saw significant acceleration in our than a business and the first quarter selling over a million units resulting in a positive double digit comp in our retail santa lacrosse men and women as compared to two thousand and nineteen it was driven by the introduction of new like shape
spk_4: new fit and the denim by you customer could create an assortment knew that not only grow sale and also attracted new customers and the first quarter we had over eighteen percent new customer penetration in denim one and a half times that of two thousand and nineteen
spk_1: our express the central program is the second component of what we refer to as the new core and we have also exceeded our expectations here we made real progress during the quarter selling over a million units across men and women and driving a forty eight percent comp and are ecommerce channel express central drove as much volume and as many unit sales and the first quarter as it did in the entire paul twenty twenty season the performance was driven and women by the launch of body contour compression and high compression program
spk_4: in men that continued success of our polo business the expansion of our act logo icon and pk polo can teeth plucked enhance fabric than fashion details contributed to a positive can't of ten percent versus two thousand and nineteen in men's knit top
spk_1: and these new core elements of our business are performing well the were to work and occasion baked categories that have historically been our strength are starting to show signs of recovery for example store sales plus demand and men suits when from down forty one percent in february two down twenty three percent in march and april time period and second quarter to date are relatively flat in women dressed as went from down over fifty six percent in february two down twenty five percent in march and april and second quarter today are down just fourteen percent and are woven tops business has progressed from down fifty two percent in february two down thirty one percent in march and april and are down single digits second quarter to date
spk_4: while it will of course take time to fully recover and these categories we are very encouraged by these early signs and our core inventory is well positioned to take advantage of the demand
spk_1: in fact our first quarter with these were down twenty five percent compared to two thousand and nineteen as we cook a cost of planning approach coming into twenty twenty one
spk_4: however are competence grew during the quarter and our new go to market process allowed us to be more agile and aggressive and as a result our second quarter receipts are positioned to be three percent higher compared to two thousand and nine thing turning to our second pillar brand
spk_1: restoring the relevance of the expressed brand with the top priority and brand tracking measures social media engagement and customer feedback indicate that we've made good progress and first introducing or new brand positioning in august twenty twenty our grand purpose to create competent and inspire self expression come through and all of our marketing in the way we invaded customers and in our marketing tactics across channel engagement metrics have increased across social channels with instagram up eight percent and twitter up one hundred and forty percent compared to two thousand and nineteen
spk_4: we're expanding our president been picked up and just completed a campaign called express reentry to inspire customers to reconnect with style as they get ready to return to some of their pre pandemic routine
spk_1: the campaign which is a new and innovative way to connect our brand to our customers through a shared enthusiasm for fashion has been viewed over fourteen million times the health of our brand is improving as evidenced by the increase in traffic metrics with organic search up forty four percent direct load up eight percent an email driven traffic up three percent our dream big project which launched at the end of twenty twenty supports organizations and individuals whose mission aligns with our brand purpose in addition to financial support we use our social platform to drive awareness and visibility for their efforts since the project began we have raised over five hundred thousand dollars to support those organizations who share our commitment to creating competent and inspiring self expression we tested a purpose based initiative and forty of our retail stores called random act of confident which empower sales associate to give product to customers in need of a confidence boost the feedback from stores and customers has been overwhelming and we plan to expand the program and the third quarter i'll share just one example of the very real and personal impact of our brand purpose a woman came into one of our stores in carmel indiana and shared with a sales associate that she was making a career change in would be starting her new job in a few weeks he had been endorsed for many years and always wear scrubbed to work but for her new job she would have to dress very differently
spk_4: she needed a number of thing
spk_1: but couldn't afford the people that she loved most a terrific drape believe mock mac dress so we surprise her with a random act of confidence and gave her the dress as a gift from express
spk_2: the sales associate felt so good thinking about giving the customer confidence on her first day and her new job
spk_1: our third pillar a customer and we have driven strong results through the insider loyalty program relaunched in the first quarter delivering better engagement and increases the cough customer acquisition and reactivation while reducing the number of left customers
spk_4: express insider members have tremendous lifetime value they spend on average two times more than nonmembers annually that retention rate is eight times greater and new members are nearly two times more likely can make a second visit within their first ninety days
spk_1: with the launch of the new tears and earning structure at the end of march we have seen improved profitability and the utilization of rewards with a six percent increase in sales and a thirty eight percent decrease in markdown tied to reward redemptions compared to two thousand and nineteen additionally nineteen percent of express existing express inside our customers reengage with the loyalty program by qualifying for the new five dollar express cash reward
spk_4: we continued our positive momentum with customer acquisition which was up seven percent with reactivation up twenty five percent and last customers down thirty six percent compared to two thousand and nineteen
spk_1: additionally all channel fun improvement in into express insider transaction with the ecommerce up thirty percent compared to two thousand and nineteen well new express insiders drug an impressive sixteen percentage point friend improvement in transactions quarter over quarter compared to two thousand and nineteen we initiated a lap customer reactivation strategy at the end of the first quarter with direct mail messaging a strategic customer targeting program and paid media and the early results are very encouraging total reactivated customers increased by twenty two percent in the quarter compared to what two thousand and nineteen these results were double what we anticipated over the last year we have completely reimagine our marketing approach and reallocated our investment across the marketing mix we have increased engagement with our customers and new and creative ways and with more relevant and authentic content through ongoing dialogue among our top loyalty program members and our design and merchandising teams we're able to better understand our customers evolving wardrobe needs and style preferences as a result of this dialogue we developed a customer coke created denim assortment called denim by you this was one of our fastest selling collections for the quarter and over two hundred and thirty thousand units generating over one hundred thousand new customers as a result we have exceeded our customer acquisition and retention plan in fact almost one third of our customers in the first quarter were new to the brand and new customers and r ecommerce channel increased by over twenty seven percent compared to two thousand and nineteen
spk_4: our final pillar execution is both a through line across product brand and customer and the evolution of are operating model as the result of more streamlined and discipline systems and profit
spk_1: conversion is a key component of execution and we have successfully driven increases across all of our channels in stores conversion was driven by new customer experience model new associate education program and continued focus on loyalty sign up another key component of execution is inventory management and we have significantly improved our inventory level and composition versus the end of the fourth quarter which positions of well the floor blow more new product as we head into the second quarter and the back half of the year our historical strengthen categories such as men's and women's dresses position as well for continued improvement especially of gatherings and occasions are expected to increase throughout the balance of the year product brand customer and execution
spk_4: across each one of these pillars we have meaningfully advanced the expressway forward strategy
spk_1: and we are committed to driving long term value for our company and our shareholders i expect that our sales and profitability will accelerate as we move through twenty twenty one and that we will deliver positive operating cash flow in the second quarter and positive be better in the third quarter perry will provide more detail on our first quarter results and share our view for the balance of the you
spk_5: thank you came
spk_6: oh start with our first quarter result it's got her liquidity position and provide a high level outlook on the bulk of the year my comment than compatible will be to twenty twenty unless otherwise noted now all to make them quarter over quarter comparison were both a relevant and meaningful birth quarter nickel's worth three hundred and forty six million dollars an increase of sixty four percent compared to twenty twenty consolidated comparable pill reportedly five percent rico comb through a positive eleven percent and express back to the out in the or negative nineteen he come with a month compared to last year with up over forty percent driven by the initiative team got earlier it was important to note that comparable filth copulation are not consistent across all retailer are comparable to exclude talk to them so that were closed for at least one full day including during the pandemic consistent with our historical policy still showed significant recovery in the fourth quarter party particularly in the back couple of the quarter it is worth noting that the results were cheap with let promotional dvd reflecting the strength of our product and brand strategy we improve their mission that martian by approximately eleven hundred basis points compared to twenty twenty and expect to improve further or even to come with the should reflect the higher penetration of new receipt in fact newly fit the live at home or from the martian in the fourth quarter compared to twenty nine nineteen reflecting a back on deep still why and sidewise promotion been and occupants expenses were down thirty million dollars compared to twenty twenty leverage instilled by approximately thirty four hundred big point little improvement was you and by significant reduction in our expense structure mainly by rent savings that cheap to london negotiation fleet rationalize they shown a the november twenty twenty workforce reduction additionally there was a fifteen million dollar impairment in the fourth quarter of last year compared to twenty nineteen been inoculated was down twenty nine million dollars during the fourth quarter we had a good properly the seventy nine million dollar with the growth market rate of twenty two point eight percent increase in approximately forty five hundred big point of compared to the fourth quarter of twenty twenty we thought also reflects a sequential improvement to the fourth quarter twenty twenty and we expect the cost much rate to significantly improve it loud twenty twenty one at built continued took the lead in our strategy continue to advance action expenses were one hundred and nineteen million dollars an increase of twenty million dollar compared to twenty twenty do you mainly to last your store closures and all of the medication actions we took to in the pandemic we leverage if inexpensive by approximately thirteen hundred basis points given about don't encrypted and the previously announced cause reactions associated with our corporate restructuring and flipped rationalization activity compared to twenty nineteen eighteen expenses were down six pain million dollars our operating loss with forty one million dollars compared to an operating loss of one hundred and forty five million in two thousand and twenty first quarter dilute a lot for show seventy cents on a guppy is compared to a lot of two dollars and forty you want that particular the sure in the first quarter of twenty twenty adjusting for ten million dollar valuation alone book that game thirty for tax acid are adjusted into the love to share with fifty five then oh cryptic tax rate for the first quarter with essentially zero and reflect the impact of their migration allows recorded i get out before taxes it excluding with alone are effective tax rate for the fourth quarter was twenty two percent turn to abolish it and cashflow we ended the quarter with eighty four million dollars of cash and cash equivalent and are operating cash flow improve by one hundred and thirty million dollar as we move forward with that to return to posted the operating cash flow in the second quarter inventory at the end of the fourth quarter were two hundred and sixty four million dollar a two percent decrease as compared to last year two hundred and sixty nine million dollar we have made significant progress with you can read like inventory which allow that to blow more nudity in the past couple of the second quarter and into the third quarter we also expect to like significant liquidity benefit from the character in twenty twenty one during the fourth quarter winter with the fifteen million dollars in our balance sheet or they do you want reflects ninety seven million dollars with kids that two syllable of which forty five million dollars with the subsequent quarter and and we now expect to receive the remaining fifty two million bullet in the back half of the year are borrowing with two hundred and thirty three million dollars of which one hundred and five don't have to one hundred and five million dollar withdraw and i guess or exist in a bill could facility and the remaining one hundred and twenty eight million dollar was drawn on our term loan the quarter we pay down twelve million dollars on our term long and quarter today we have paid an additional sixty one million dollar against our debt before moving to outlive i will review the equity offering believe we should this morning we filed a prospective supplement with a see which gives us the ability over the next three years to fill up to fifteen million shares of our common stock from time to time the do on at the market or eight pm et qui the offering program no timing associate with this announcement and know many more offering them out moving to a high level outlook we expect that pulling for twenty twenty one the glacial com self improvement throughout the year picnic gun good much improvement for the year ban in actual six when dollars to decrease double digit as to pretend to twenty nine pain echenique spent bullet to decrypt meet single digit at the pretend to twenty nine pain net interest expense of four million dollars in the second quarter and sixteen million dollars for the full year effective tax rate of approximately sixteen percent for the second quarter and approximately twenty percent for the third quarter fourth quarter a for the year excluding the impact of any migration allowances recorded again before tax at it positive he beat up with a third quarter and the second half of the year positive operating cash flow for the year beginning with qq capital expenditure of approximately thirty five million dollars
spk_7: to come right
spk_6: a from the momentum we have seen in our business across all channel is it there
spk_8: further exploration in the second quarter
spk_6: continued strong response to new fashion receipt our expectation the both fill in martian will continue to improve as we move forward and the significant improvement in our operating cash flow well well positioned for twenty twenty one and to achieve our long term goal of emit single digit operate be marching
spk_4: i look forward to adding you on our progress and i will now turn the clock back team thanks very before moving on to my clothing thought i want to briefly provide an update on another way in which we are driving long term investor value our digitally native brand up with had another exceptional quarter and the brand
spk_1: product and purpose continued to resonate extremely well up west of palm experience strong increases in traffic conversion and average order value in the first quarter and the growth has been impressive with net sales increasing approximately one hundred and thirty percent and gross margin expanding double digits and
spk_9: the first quarter
spk_1: we're continuing continuing to explore retail through pop up concepts which relocations already open and three to four more plan for the second quarter i am proud of the progress the team is made in a short amount of time and although at west is not yet material to our overall results i am confident that it will drive significant
spk_4: shareholder value in the future
spk_1: the strong performance we have been in a versatile side of our business continued in the first quarter and is now complemented by a resurgence in our were to work and occasion based categories which position as well for the post pandemic environment we are on track to reach our billion dollar ecommerce demand goal and achieve amid single digit operating margin
spk_4: the expressway forward strategy is moving ahead with momentum and the inflection that we saw in the first quarter has accelerated quarter to date and more now exceeding two thousand and nineteen comp volumes i bucked the trend will continue to improve it's we moved through the second quarter and i'm confident that we will return to positive operating cash flow in the second quarter and positive ebitda in the third quarter
spk_1: thank you for your continued interest and express and we'll now think your questions
spk_0: as a reminder to ask a question will need to press star one on your telephone to withdraw your question of press the pound key please stand by while we compile the in a roster your first question comes on the line of marnie shapiro with retail tracker your line is open
spk_10: hey guys graduations and the progress and the stores have looked fantastic though they need inventory and spot
spk_11: in a good way
spk_10: you talk a little bit about your best your best sellers are sold out so body contour some of the stress essential denim is a really important part category for you guys especially the back half the year so could you talk to us a little bit about how you're thinking about the store those categories inventory oh and forward how it can affect your buys just overall as you push forward in these big these big new pillars in your store
spk_1: yeah absolutely i thank marty and i agree we all agree that we do need more inventory in our stores our our our soldiers on both fashion and the big category distortions that you mentioned like then i'm may express the central have far he did our expectation of particularly send the inflection point that we experienced at easter so as we move forward yeah i guess the our fourth quarter receipts we were very conservative they were down twenty five percent to two thousand and nineteen first quarter with the
spk_4: as we move through the second quarter we've gotten very aggressive about going after the the best sellers within the fashion assortment and the big categories that that are driving the business right now and our second quarter receipts will be plus three percent
spk_1: specifically the two categories that you mentioned of start with express essentials which had been fantastic in both men and women body contour specifically has been explosive for us we more than doubled our inventory from the beginning of the first quarter to the end of the first quarter and we will more than double our inventory position in body contour again in the next thing weeks
spk_2: so very aggressive we've taken a very aggressive stance on that category in addition to the other everyday essentials
spk_1: within that
spk_12: denim a is the same our our performance has been hot explosive like i said we actually drove a double digit increase versus two thousand and nineteen and denim in the first quarter and that trend has also accelerated as we've moved into the second quarter so we're also of bolstering our inventory positions
spk_10: city significantly and denim including and in women then i'm all for more than doubling are our him and current inventory position by the time how we get near the end of the second quarter emily look and i don't want to overstate this with i know there's a lot of work to do but body contour in particular feels like it has changed the entire look of the women's business for you
spk_1: i mean how do you think about that is it just body contour does it seep into dresses and other parts of the assortment for women's because it feels to me as as somebody walking in the stores that i can really change the trajectory of the brand that it it's that impactful
spk_13: yep thank you we we agree and it has been that impactful and
spk_4: it is absolutely
spk_1: something that we're going after across categories
spk_12: we just delivered several dresses within the body contour
spk_1: collection they have been outstanding but it it to your point it it it transcends just body contour we've also had incredible success with sweaters that that our body contoured
spk_10: so this is an idea that we're going to go forward with in a very very meaningful way not just in the core product that you see but also within our passion deliveries across categories
spk_12: and testing facility that serves to look great
spk_0: thanks morning
spk_14: your next question comes from the line of using anderson with be riley your line is open come on a nice to see the improvement in that business
spk_6: the and carry on so you're planning for positive evident third quarter in the back half against hundred carats what's the put then take some that how much is planned for improvement and gross margin or as in a reduction and then also how much it's reliant on sales i guess remaining about two thousand and nineteen levels really good question is and obviously we haven't provided guidance in terms a large bills for the bottom of the year but based on are cutting plan which obviously we actually there are planting in in the queue on time for him from ireland expectation were expecting that we're going to continue to see the glacial improvement if you look at it he wanted to queue to and in the back couple of the year the that the improvement a will translate to obviously merchandise marching of lot to an improvement there and they continue to leverage and like even see we have made over the last couple of years we've begun roommate now by to up and i know cube and see rent redactions and to call your so we expect that significant leverage their translate into growth market the back couple of the year that it would not be approaching the twenty nineteen level and then from that obviously through the thought improvement and expensive actions that would be scared of week
spk_14: getting to the put the the be done for the qb and the back couple of the year okay great and then just off and and maybe if you could get some more details on the liquidity epic you said you be paid sixty one million of debt after the first quarter what's that from the cares that money that was received after the quarter also and then what the remainder of that money do you plan to pay down debt and then finally i guess with the eighty and money it is that can all go towards their nfl i'm just curious what your expectation for debt level dark
spk_6: after both of those fans come in and then by the end of the air tail yet to roam roam littered with for the cure attack from the kids at some point we've you done on the somewhat well we've all the cure some money to pay down debt who paid sixty one million dollars or stuff that went to court to rain we've got really put the you know good operating cash floating que en and we continue to improve on are operating cash flows and we're going to continued to pay down bulletin on our fifty million dollars i'd be late draw from long and we're going to use cures act money for that and then also from on a o some point we use our poor people put it in cash flows to pay those down on we haven't provided guide on the floor debt levels of the end of the year are but i do at rid of the the push around the eight pm implemented him some point we believe it is prudent to have the a human file anything fifty five you may know or through april of two thousand twenty four and simply provides that provides us with optionality for future use on at this point we haven't really be god would disclose
spk_15: when and how we will be in the market and something that obviously we will be disclosing that
spk_14: i had of time okay great and then just one clarification i think you guys had said that door health plus the man
spk_6: we're being a dad two thousand and nineteen levels is that door can't sell the oil does that include a calm maybe if you get it's kind of clarify what that is i think i heard that the outlet sales were above ninety maybe if you could talk about that full price or sell them with a trend leveled are to thanks yeah absolutely the the the the common around of the above twenty nine level is based on to conceal plucked the month so if you look at the to memorial weekend through that monday of the memorial day that is cracking from confirm point i head of the twenty nine few level
spk_14: commercially prepared remarks that the outlets are posting boards income point do they really from a constant point and the report billion in through the acceleration that we have been in the man is also opposed to the
spk_16: got it and what's the plus the man represent is that the econ sell them
spk_14: yes yes
spk_17: great okay that's a computer i'm okay great thanks so much you guys could like directly yeah
spk_0: thanks isn't and que
spk_18: your next question comes on the line of roxanne part with and k and partners your line is open greek good morning and and let me have my congratulations on the accelerated for improvement i appreciate your expectation for the sequential improvement in the gross margin but i was hoping you could give us more perspective on gross margin vs two thousand and nineteen i guess specifically for one q how one que twenty one fared march march and and buying an occupancy burst
spk_6: nineteen and how we should think about the murky nice margin peace the progression versus the quarters of two thousand and nineteen thanks a lot great question so than the limits are thick good morphine component for so from a key want some point or growth morphine k mean twenty two point eight percent and when you look at that compared to the twenty ninth level on daddy down approximately four hundred some point and we expect because martian to continue to improve compared to those twenty nine level and when you look at our overall off with a backup of the year we expect be gross margin to get very very close to the twenty nine q level that the computational continued murky that martian improvement our merchandise morphine and que on would obviously impacted by the mix of inventory but as we move through out the year or even to recoup would be shown in improving significantly with a new feet and team a he's prepared remarks that are rethink you want to were down twenty five percent that it's new fashion believe very and then as we move into kids who are we going to be up and were expecting or mission that marshals the even to completion he prove to continue to improve and get closer from emerson that market dump way two to those twenty nine p level and from a binding occupancy given all the reductions that we have made on the line item would expect and as though are improving obviously they bind and i could but if you continue to expand and improve and get in on two levels that are higher than twenty nineteen or better
spk_18: are therefore overall your gross martian getting closer to the twenty ninth level okay great i'm and those are my supply chain perspective i know that simmons had been delayed you know on average three to four weeks and and certainly that was a factor in the in the first quarter and i'm assuming that's what's really driving your commentary around the band in general that there are to leadership man i'm just wondering if you could talk to where you know where your deliveries are now you know relative to to where you'd like them in terms of being on track
spk_19: the and also can you actually quantify what that the man peace looks like because you speak to a lot it it it feels like the sales friend one que would have been a lot stronger if if things wrong time i just want a better appreciate
spk_13: the the qualification of demand both and one q and keep you think thought your we
spk_12: sure this is matt so we definitely felt an impact from the transportation issues a lot of them driven by the port of long beach and then back up subsequent to that on the east coast as well in where we did to your point see those three to four week delay in our combined with the fact that we did play a very conservatively from earthy standpoint to begin with and que one as we were just starting you know before we both started come out the pandemic we were down twenty five percent and were sleep on top of the what we have done is pushed more set out about two week before starting the poor said we're about two weeks or later than originally planned on a subsequent for that going forward and dog
spk_1: in que tu as to mention in his comments
spk_12: the receipts will be up three percent versus down twenty five percent you want our we definitely would like to have more inventory in our stores and online right now in as we start to get more newness into our stores and our fulfillment center we think that will definitely be
spk_18: a tailwind poorer in as we progress through que to
spk_20: okay great thanks to our best of luck
spk_0: thank you
spk_21: your next question comes on the line of feed morocco with feel king and associates your line is open the morning jim carrey and met can maybe get a very high level you could provide a little bit of contact on your current market share
spk_22: overlaid with a a number of doors at may have close the last fifteen months or simply the competitive landscape is a little bit different now again and going into the pandemic and the opportunity to present for you and
spk_4: categories thing
spk_1: sure thanks the yeah as as you know we have enjoyed very strong market share penetration in her categories that you would typically describe as occasion based or were to work so we we've had strong market share
spk_4: they're held strong marketshare position and categories like men who which has historically been our biggest business and men
spk_1: men dress shirt
spk_4: our second biggest business historically and men
spk_1: big businesses like women's dress pants dresses blouses woven have all been historical stronghold for us and our strengthen those categories it was a significant headwind for us obviously during the the pandemic much more significant headwind than our much more casual competitors faith those head when are poised to become tailwind as we emerge from the pandemic and as consumers begin to resume
spk_2: pre pandemic activities and occasions
spk_1: and going back into the office i mentioned in my prepared remarks that we have seen that that resurgence as states lift restrictions we see a very distinct change in our business and particularly in those categories so i as i described in my comment we we saw a major acceleration in those categories post easter and i expect that we will continue to see great progress in those categories as we move forward particularly because as you mentioned many of our competitors in those categories
spk_2: we have closed a substantial number of stores during the pandemic and the the retail landscape the physical retail landscape in those categories has changed very dramatically
spk_1: how much it has changed i think remains to be seen how can i don't want to quantify of
spk_2: marketshare a percentage of marketshare that i think we can can go get but i will say that we are very aggressively going after market share in those categories
spk_1: we did not walk away from them during the pandemic and we are not walking away from them going forward we have changed our approach in many cases in those categories because the one thing that i do think customers are going to expect moving forward his comfort and so we have are infused comfort characteristics comfort qualities across all of our categories including categories like men
spk_12: booth and dress shirts women's dress pants
spk_4: even dresses
spk_23: so that people can be as comfortable
spk_1: when they are
spk_21: dressed for work or for an occasion as they have been throughout the pandemic
spk_0: it's really helpful think about my question about one thing
spk_4: thanks
spk_1: there are no further questions at this time i will now turn the call back to presenter as far closing remarks
spk_0: thank you everyone we appreciate your continued

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