Thanks, operator, and thank you all for joining Aritzia's third quarter fiscal 2026 earnings call. On the call today, I'm joined by Jennifer Wong, our Chief Executive Officer, and Todd Ingledew, our Chief Financial Officer.

As a reminder, please note that remarks on this call may include our expectations, future plans, and intentions that may constitute forward-looking information. Such forward-looking information is based on estimates and assumptions made by management regarding, among other things, general economic and geopolitical conditions, as well as the competitive environment.

Actual results may differ materially from the conclusions, forecasts, or projections expressed by the forward-looking information. We would refer you to our most recently filed management's discussion and analysis and our annual information form, which include a summary of the material assumptions as well as risks and factors that could affect our future performance and our ability to deliver on the forward-looking information.

Our earnings release, the related financial statements, and the MD&A are available on SEDAR+ as well as the Investor Relations section of our website. I'll now turn the call over to Jennifer.

Thanks, Beth, and good afternoon, everyone. I hope all of you had a wonderful holiday season.

I'm pleased to share that Q3 of fiscal 2026 was another standout quarter. Our teams executed on our strategic growth levers at a high level across the entire business, and our strong momentum has continued into the fourth quarter with record-breaking results over the holiday shopping season.

In Q3, we achieved, for the first time ever, a billion-dollar quarter. Total net revenue of $1.04 billion was well above the top end of our guidance range.

Sales in October and November exceeded our expectations, particularly as we started to lap the exceptional top-line growth beginning at the end of Q3 last year. On a two-year stack, trends accelerated sequentially throughout the quarter.

This was fueled by broad-based strength across channels and geographies. The unparalleled demand for our everyday luxury offering, combined with our digital initiatives, new boutique openings, and strategic marketing investments, drove a 43% top-line increase over last year.

We're extremely pleased with our performance across both channels, with net revenue increasing 58% in e-commerce and 35% in retail. Comparable sales grew an outstanding 34%, fueled by double-digit positive growth in all channels and all geographies, led by our US e-commerce business.

The holiday season was off to a great start as we delivered another record-breaking Black Friday event. Retail sales in both Canada and the United States hit all-time daily highs, with nearly 60% of our boutiques achieving all-time sales records.

E-commerce sales in both Canada and the US also hit record daily highs. In addition, we benefited from lower markdowns compared to last year's event, driven by increasing affinity for our brand, broad-based demand for our product, and our strong inventory position.

During the quarter, our performance in the United States continued to drive our overall results. In Q3, we generated a 54% increase in US net revenue.

This highlights the extraordinary demand for our product and the tremendous momentum of the Aritzia brand. Our results were fueled by accelerated growth in e-commerce, supported by the launch of our mobile app and our investments in marketing.

In addition, our new and repositioned boutiques over the last 12 months continued to perform well. We also generated outstanding comparable sales growth in our existing boutiques.

In Canada, we accelerated our sales growth for a fourth consecutive quarter. We achieved a 29% increase in net revenue in Q3.

This was fueled by exceptional performance in e-commerce and strong comp growth in our boutiques. In our retail channel, we delivered net revenue growth of 35%.

This was driven by the success of our real estate expansion strategy and strong boutique comp growth in both countries. Over the past 12 months, total retail square footage growth was in the high teens.

We opened a total of 13 new and four repositioned boutiques. This included five new boutiques in the third quarter, all in the United States, as well as the reposition of our Flatiron flagship.

The strong comp growth in our boutiques continued to be primarily driven by traffic. This was fueled by the increasing affinity for our brand, which we supported with our strategic investments in marketing.

Our real estate expansion strategy continues to yield exceptional results. This underscores the vast opportunity for growth in the United States, where we have just 72 boutiques today.

The boutiques we've opened in the US in fiscal 2026, they're tracking to pay back in less than one year on average. This continues to beat our target of 12 to 18 months.

In Q4, we expect to open four new boutiques in the United States. These include locations in Cincinnati, which is a new market for us, as well as in Las Vegas, Los Angeles, and Scottsdale.

We've also already opened a repositioned boutique in Laval, Quebec. Our immersive retail experience is truly unmatched.

This includes our aspirational store design, passionate style advisors, incredible cafes, and, of course, our beautiful product. Our boutiques, particularly our flagships, are the best showcase of the Aritzia everyday luxury brand ethos.

In November, we opened our third New York City flagship, located right in the heart of Manhattan's iconic Flatiron District. It sits just a couple blocks away from our original boutique, which opened in 2015, and now, a decade later, our new space is nearly two times larger and it includes its very own A-OK Cafe.

To celebrate, we hosted a series of exclusive events which garnered significant social and media coverage, amplifying the enthusiasm for our brand and introducing Aritzia to new audiences. Every flagship marks a major milestone for our business.

With every launch, we've raised the bar, refining and perfecting our strategy along the way. Our Flatiron flagship is a testament to that progress, celebrating the passion, collaboration, and drive of our team as we continue building momentum and shaping our success across the United States.

In e-commerce, we delivered an increase in net revenue of 58%. This was driven by the increasing appreciation for our brand as well as the successful launch of our mobile app.

Our focus on full-funnel marketing continued to fuel website traffic, which increased meaningfully in both countries. We also continued to benefit from site enhancements, operational improvements, and higher omnichannel engagement.

The launch of our mobile app at the end of October achieved exceptional results and surpassed even our highest expectations. We drove strong adoption and excitement with elevated marketing and an exclusive product drop that sold out in just one day in the US.

The Aritzia app was the most downloaded app in the entire App Store on its first day. In Canada, it remained the number one shopping app for nine days straight.

In the US, it was number one for four days. Total downloads to date are more than 1 million, far exceeding our expectations for the entire first year and reflecting the love clients have for our brand.

Clients were quick to discover the value the Aritzia app provides to them, including greater access to our product assortment, styling expertise and guidance, and exclusive product and content. This is driving increased conversion and helping further fuel the momentum in our e-commerce business.

We've already launched new app features and updates to elevate the client experience, with many more to come. In addition, our new international e-commerce website continued to perform well.

Sales in the quarter more than doubled compared to Q3 last year. This enhanced shopping experience is already fueling higher revenue growth through increased conversion.

Turning now to product, throughout the third quarter, our assortment continued to resonate with clients across both Canada and the United States. Our fall and winter launch was exceptionally strong.

We saw a positive client response across our iconic franchises, new styles, and new colors. We offered excitement through the launch of the app, including collabs and drops such as the Nike-Aritzia collab and the multi-color Sweatfleece drop.

In addition, we remained well positioned with the right inventory in the right place to drive sales. Our rigorous focus on inventory and the exceptional demand for our brand enabled us to deliver an improvement in the year-over-year markdown rate and higher full-price sell-through.

We continue to refine our integrated marketing approach to help grow awareness, build brand affinity, and emphasize the features behind Aritzia's unique value proposition. These include our high-quality beautiful products, our aspirational shopping environment, and our engaging client service, and our captivating communication, all at attainable price points.

We're reaching more and more new clients while reinforcing our connection with existing clients. This is a key contributor to the outstanding momentum in our business.

In the quarter, we also continued to leverage product collaborations to introduce Aritzia to new audiences. This further amplifies our brand and creates interesting moments to captivate our clients.

In Q3, this included the partnership with Nike, as well as our collab with Dalton Stone. Both of these created excitement and helped drive traffic online and in our boutiques.

As I mentioned earlier, our strong performance has continued into the fourth quarter with another record-breaking holiday period. Excellent operational execution across our three strategic growth levers, geographic expansion, digital growth, and increased brand awareness, is driving sustained brand momentum and keeping Aritzia top of mind.

This momentum, along with our proven operating model and healthy balance sheet, gives me immense confidence in our long-term goals for the business. As we look to fiscal 2027, we remain steadfast in further advancing our growth levers.

First, our real estate strategy has continued to perform exceptionally well. We have yet another exciting pipeline of boutiques in premier locations planned for next fiscal year.

Second, we have several digital initiatives that will support continued momentum in our e-commerce channel. These include additional app features and enhancements, further digital marketing optimization, and client engagement initiatives.

Third, our new boutiques and marketing investments are proven multi-year strategies to help grow brand awareness in the United States. We also plan to keep making strategic investments to fuel our rapid growth.

This includes investments in infrastructure, such as technology and a second distribution center in the United States. As always, we will continue with a long-term focus and balance investing for the future with driving profitable growth.

In closing, I'd like to thank our people for their unwavering commitment to creativity, excellence, and teamwork. Without this dedication, our incredible achievements in 2025 would not have been possible.

What's even more impressive is these exceptional results came against the backdrop of significant macroeconomic challenges. Our team has set the standard for everyday luxury, and I couldn't be more proud.

With that, I'll now hand it over to Todd to discuss the details of our financial performance.

Thanks, Jennifer, and good afternoon, everyone. In the third quarter of fiscal 2026, we generated record net revenue of over $1 billion.

Top-line growth in both the United States and Canada was well above our expectations. We also continued to expand our margins, all combining to deliver a 55% increase in adjusted net income per diluted share.

Turning to the details of our performance, third quarter net revenue increased 43% from last year to $1.04 billion. This was above our guidance range of 20% to 24%, as trends from the middle of October through the end of the quarter exceeded even our highest expectations.

Comparable sales grew 34%, driven by outstanding growth in all channels and across all geographies. Here's what drove this unprecedented performance.

First, we saw an exceptional response to our winter product. This was supported by our strong inventory position.

Second, we generated accelerated momentum in e-commerce, fueled by the successful launch of our mobile app. Third, our performance was further driven by total retail square footage growth in the high teens.

Finally, our increased investments in full-funnel marketing generated substantial traffic growth and helped sustain our brand momentum. In the United States, third quarter net revenue increased 54% to $621 million.

This was driven by tremendous momentum in our US e-commerce business, powered by traffic growth of nearly 60%. In the US, we also benefited from square footage growth of approximately 30%, including a total of 15 highly productive new and repositioned boutiques over the last 12 months.

In addition, we delivered outstanding comp growth in our existing boutiques. The consistent momentum we are generating gives us great confidence in our long runway for growth in the US as we bring Aritzia to new markets and strengthen our presence in existing markets.

In Canada, net revenue growth increased sequentially for a fourth consecutive quarter, up 29% to $419 million. This was driven by accelerated growth in e-commerce, which was supported by the launch of our mobile app, and strong comparable sales growth in our boutiques.

Turning to our sales channels, in e-commerce, net revenue increased 58% to $383 million. This tremendous performance was fueled by strong traffic growth driven by exceptional demand for our product, the successful launch of our mobile app, our investments in digital marketing, and the halo effect from our new boutique openings.

In retail, net revenue increased 35% to $657 million. This was driven by the ongoing strong performance of our new and expanded boutiques, as well as outstanding comparable sales growth in our existing boutiques.

Importantly, boutique openings continue to be our most predictable driver of top-line growth, enhancing brand visibility and supporting client acquisition in both new and existing markets. This top-line performance was instrumental in delivering gross profit of $479 million, an increase of 44% compared to the third quarter last year.

Gross profit margin expanded 30 basis points to 46%, despite 410 basis points of pressure related to tariffs and the elimination of the de minimis. This pressure was more than offset by leverage on fixed costs, improved markdowns, and freight tailwinds.

SG&A expenses for the quarter were $290 million, leveraging 170 basis points as a percentage of net revenue to 27.9%. The improvement was primarily driven by expense leverage and savings from our Smart Spending initiatives.

Adjusted EBITDA was $208 million, an increase of 52% compared to the third quarter last year. Adjusted EBITDA margin expanded 120 basis points to 20%.

The consistent margin improvement we've now delivered for seven consecutive quarters underscores our dedicated focus on delivering multi-year margin expansion. Excluding the non-operational FX impact this year and last, adjusted EBITDA margin expanded 220 basis points.

Turning to the balance sheet, inventory was $508 million at the end of the third quarter, up 10% from last year. Our inventory continues to be well positioned to meet client demand and a key driver of our sales momentum.

Our liquidity position is strong, with $620 million in cash, no debt, and zero drawn on our $300 million revolving credit facility at the end of the third quarter. With our growing cash balance, we are reviewing our capital allocation strategy with our board of directors.

In the meantime, we plan to continue to opportunistically repurchase shares under our NCIB. Since the implementation of our NCIB on May 7th and through the end of the third quarter, we repurchased 474,000 shares, returning $41.3 million to shareholders.

Turning to our outlook, the strong momentum in our business has continued into the fourth quarter, fueled by another record-breaking holiday season. Given quarter-to-date trends, we expect net revenue in the fourth quarter to be in the range of $1.1 to $1.125 billion.

This represents an increase of 23% to 26%, driven by double-digit comparable sales growth and the contribution from our boutique openings. We expect gross profit margin in the fourth quarter to be approximately flat to up 50 basis points compared to the fourth quarter of fiscal 2025, as ongoing leverage on our fixed costs and lower markdowns are offset by approximately 400 basis points of pressure from tariffs and the elimination of the de minimis exemption.

We forecast SG&A as a percentage of net revenue to be approximately flat to down 50 basis points compared to the fourth quarter last year, as expense leverage and savings from our Smart Spending initiatives are offset by strategic investments in digital and technology to fuel our growth. Given our year-to-date performance and improved outlook for the fourth quarter, we are raising our net revenue forecast for the full fiscal year to the range of $3.615 to $3.64 billion, representing growth of 32% to 33% from last year.

We are also increasing our outlook for adjusted EBITDA as a percentage of net revenue to the range of 16.5% to 17% for fiscal 2026. The strength we've generated in our business and our mitigation strategies are more than offsetting the 280 basis points of additional tariff and de minimis pressure this year.

Importantly, excluding this pressure, our adjusted EBITDA margin for fiscal 2026 would be above our previous long-term target of 19%. We are extremely pleased with the sustained momentum in our business, particularly as we've begun to cycle the extremely strong revenue growth starting in November of last year.

This puts us well on track to achieve our fiscal 2027 revenue target one year early. Our proven operating model, healthy balance sheet, and long runway for growth in the United States gives us confidence in our ability to sustain strong momentum in our business.

We are executing at a high level and we continue to make strategic investments to fuel our growth. This leaves us well positioned to create long-term value for our shareholders.

Thank you.

With that, operator, let's please open up the line for questions.

Thanks, and good afternoon, everyone, and congratulations on another exceptional quarter. As you noted in your commentary, boutique openings continue to be the most visible driver of growth, and you mentioned a few times the long-term sustainable runway.

I'm wondering whether we should be thinking that, at this point, maybe you might be accelerating the number of new store openings as we look ahead.

Hi, Irene. Thank you for your question.

We certainly did have a tremendous quarter, and we have talked about the market potential in the past, particularly in the United States, where we have just 72 boutiques right now. I have mentioned that we see a long-term opportunity of anywhere from 180 to 200, possibly north of 200 boutiques in the US, and our focus continues to be on attracting new clients and engaging our existing clients.

Right now, we're talking about opening a minimum of 12, 14 boutiques in this year and in the next year, and as we look forward, we think that this cadence probably makes sense for us, that also includes a number of repositions, four to five repositions. At this time, this is the cadence of store openings and repositions that we're looking at.

Thank you.

Thanks, and good afternoon. I wanted to ask about the app, more specifically how successful was the launch of the app and the promotion for the 20% off on the initial order.

How successful was this in driving new clientele both online and in-store?

Thank you for your question. The app launch was phenomenal.

In two words, I'd say it was wildly successful. In my prepared remarks, I talked about downloads of over a million.

To date, it's at 1.4 million downloads. In the first day that we launched, we were the number one app in the entire App Store in both countries.

I think we were the number one shopping app in Canada for 18 days. We were beating out ChatGPT there for a number of days, particularly in Canada.

The app launch was beyond our wildest expectations, and we couldn't be more pleased at the results. I'm so proud of the team.

Great. Thanks.

I just had a couple of questions. One, on the complexion of the comp, could you just talk a little bit about the traffic versus ticket and maybe how that's trended so far throughout the year, or any color on what that's looked like quarter-to-date?

Then the second one was just a follow-up for Todd. On the second DC that you're opening, are there any considerations about what that cost might look like from a margin perspective, or the fact that you're comping so strongly, does it just basically get netted out?

Curious if you could provide any color there. Thanks so much.

On traffic, Corey, we said in our prepared remarks that our business, our top line and our comp, in particular are primarily driven by traffic. We aren't seeing a huge change in terms of any other indicators like ticket price or basket size.

I would say our business is primarily driven by traffic.

Great. On the new distribution center in Vancouver, which I assume is the one you're referring to, not the potential second DC in the United States, for next year, obviously, we will have incremental rent as that DC ramps.

We do expect to have savings from it, but not at the beginning. We are still planning for increased margin or margin expansion next year.

We look forward to providing guidance in May as it relates to the distribution center and the rest of our line items. We do anticipate margin expansion next year despite the DC starting up.

Great. Thanks so much.

Is there any color on maybe any categories specifically, or anything you can provide there that resonated really well in the quarter, and then maybe quarter-to-date as well where you've seen some nice traction? Thanks so much.

There's nothing really that we can speak of in terms of category. Our demand for product was broad-based across all of our assortment.

We've said this before. When our business is this good and we're delivering 43% top-line increase, there's a lot of things working really well.

Certainly, our product assortment is just fantastic. I love what I see when I walk into the stores and when I'm scrolling online.

I think our product looks absolutely fantastic, and what's even more is that we are in and have been in an excellent inventory position to meet the demand. Everything is working.

Thanks very much. I want to go back to the mobile app.

Can you just talk about perhaps what the penetration rate as a percentage of e-commerce was? Maybe elaborate then on you talked about additional initiatives or new features that are forthcoming, and does the initial reception make you feel in time it could represent 40% of e-commerce sales?

Is that realistic? Then just as a follow-up, your international website, can you just comment on where you're seeing the greatest traction with respect to regions?

All really good questions. Thanks, Brian.

It's still very, very early days for us with the app. We've just launched it.

It's really only been up and running for a couple of months now. I have also said that it's going to take us a few quarters to really see where the app nets out.

What we're seeing with our best-in-class peer set is that the app makes up anywhere from 20% to 40% of their overall e-commerce business. I would say we are on track to be in that best-in-class category for sure, and so I'm very encouraged to see these early results, but, as I say, it's probably too early to tell.

I do anticipate that a portion of that will be incremental lift to our e-commerce business, and so only time will tell. Certainly, as it relates to the new features that you're asking about, I suppose a by-product of our success is that everyone is watching us.

Keeping in mind the competitive factors, I can share probably in very broad strokes what we're leaning into. Certainly, the digital styling is something that keeps our customer returning to the app.

We'll produce more content, more interesting content, unique content, and storytelling for the app. Of course, there will always be smaller optimizations to reduce the friction in the shopping journey.

Looking to integrate the app with the boutique experiences in store for a truly omni experience, things of this nature. We've got a really robust roadmap that the team has put together, and, again, super excited for future releases of the app and upgrades.

Just, again, couldn't be more thrilled with the performance of the app so far. As it relates to international, that was a big piece of news, too, and Todd and I were actually kind of joking that after the app news, it's almost like a secondary thought, but still a really important aspect of our overall digital business.

We're already seeing higher revenue growth driven by increased conversion on the international e-com site. I realize that it's only just over 1% of our current e-commerce business, but we've stated that we see that tripling in two years, and we are, again, well on track to see that.

Right now, I don't know for sharing where the top five areas of the world are, but certainly, I'll say in no particular order, English-speaking countries like the UK and Australia, which isn't a surprise. Certainly, we have interest in Central Europe, like Switzerland and Germany, and certainly Asia, China is a very big market for many people, and so you would expect that to be the good response there, too.

Congratulations. Thank you.

I think what

I'd say the good news is that we're getting lots of good information for future expansion of the Aritzia brand.

Absolutely.

Hey, thank you for the question. I was wondering, given the momentum you guys are seeing and the seeming synergies in the word-of-mouth and the awareness around the brand, are you finding any flexibility in the previously stated target of low-single-digit marketing as a percent of sales?

Marketing has certainly amplified our brand and building greater affinity for our brand. I think it's been a huge add in the last year, year and a half to our overall playbook.

What we see with marketing is increasing the marketing spend in line with sales, it'll grow commensurate with our overall top-line sales and remain a low-single-digit percentage of sales.

Great. If I could get a follow-up, just curious about the progression of the sales momentum from the pre-Black Friday period to the off-sale period between Cyber Monday and Boxing Week, the two periods of non-discounting, just what the momentum between those two periods look like.

As both Todd and I stated, we're absolutely thrilled with the momentum going from Q3 into Q4. Effectively, the momentum has been tremendous.

We've had a phenomenal season. We've had a phenomenal last quarter.

Couldn't be more thrilled with what's happening going into Q4. Remind you, we're lapping extremely robust growth last year in Q4, and we's really seeing our business firing on all cylinders.

Fantastic. Thank you.

Yeah.

Good afternoon, and I'll echo my congratulations on the stellar results. Two areas of follow-up, I guess.

First, just on the app integration or introduction, where would you say that puts you in terms of e-commerce 2.0? How far are you in terms of, I guess, execution, and then how far along do you think you are in terms of seeing the payoff from that with consumers?

About two years ago, we embarked on e-commerce 2.0 and we had a real concerted effort and intention to accelerate our digital and omni business with the build-out of the team and leadership there. I think we're probably a third to approaching halfway through.

I think we've built a lot of good fundamentals, a lot of good base infrastructure. We've replatformed our technology stack.

We've restructured the team and our ways of working a little bit. We've now hit a couple of milestones with the international e-commerce site, with the app.

There's still a lot of runway to go and still a lot of really exciting things for us to do. I think, with it continuing to be about a third of our business, while our retail business has absolutely taken off as well, I think back when we were talking about e-commerce 2.0, we had been projecting the retail business at a certain clip, and the retail business is actually outperformed what we originally thought then, too.

Considering that our penetration has stayed the same and continues to keep up with the retail base continuing to grow at the clip that it's growing, I think overall our business in both channels is doing phenomenal. Certainly, accelerating digital and the omni experience is a big part of that.

Okay. Thanks for that.

I'll pass the line. Thanks.

Hey, guys. Congrats on a great quarter, and thanks for taking our question.

Just wanted to ask, were there any transitory costs associated with kind of logistical process shifts due to de minimis exemption change? Then secondly, as we build through next year, can we just talk more about some of your IMU initiatives and what inning you're in there, especially as scale continues to grow so rapidly?

Thanks. 100% there were costs in Q3 embedded related to the de minimis removal and the shift of all of our fulfillment in the United States.

That makes up a portion of the 410 basis points of pressure that we experienced from the tariff and the removal of the de minimis, with about two-thirds of the pressure coming from the tariffs and a third coming from the removal of the de minimis. Of note, obviously, we were extremely pleased that we still leveraged 30 basis points for really a total increase of 440 basis points ex the tariff and de minimis in the quarter, pleased with that.

There was some benefit from IMU improvement in Q3, but as we look forward, we are continuing that multi-year IMU improvement and do anticipate that it will be part of the driver of what helps us improve our margins again next year.

Got it. Thanks so much.

Great. Good afternoon.

Thanks for taking my questions, and congratulations on the results. First, maybe could you talk a little bit more about the brand awareness component?

You mentioned that as one of your levers. How has that progressed in the US, and how does that look relative to Canada?

Then quick follow-up on the Q4 guidance. Is it fair to assume on sales that implies around like a mid-teens comp for the quarter, and what is the comp looking quarter-to-date?

Thank you.

Thanks, Mauricio. I'll take the first part of the question on our brand momentum.

Experiencing amazing brand momentum, particularly in the last year, year and a half, when we increased our marketing efforts and our strategic investments in marketing. That coupled with the boutique openings themselves and the flagship openings, I think it's not any one thing.

It's many things all coming together, and certainly the marketing is amplifying all of the amazing things that we're doing in the business to elevate our brand and to really ensure that everyday luxury comes to life in everything that we do in every touch point with the client. Certainly, I think our business itself is showing the results of the increased brand awareness in the US and not just awareness, but actual affinity for the brand and love for the brand.

In Canada, we're very well known and loved, and that our goal was to achieve that same level in the US, and I think we are well on our way. Certainly, our results with 43% top-line increase and billion-dollar quarter shows that.

Great. I'll take the comp portion of the question.

In the fourth quarter, our guidance assumes comp in the high teens, which delivers the 23% to 26% revenue growth. We are trending slightly ahead of that today.

Got it. Just a very quick follow-up on that.

I guess if I think about your commentary that you said two-year stacks accelerated throughout Q3, does that mean that acceleration has continued into December and quarter-to-date just based on this guidance and what you're expecting in the comp?

Yes. 100%, it's accelerated slightly.

Obviously, we're lapping 26% comp in Q4 last year, we've got 43% to 46% approximately from a two-year stacked comp that we have embedded in our guidance. We're extremely pleased with what we're seeing in the fourth quarter and we were obviously a number of months ago seeing great momentum in our business and knowing that we had November and the acceleration that we saw in November coming up, and obviously we've just moved right through that and continued to see the extremely strong momentum in the business.

Hi, good afternoon, and congrats on the strong results. My first question is, I know that over the last couple of years, you have done a lot of work to make the inventory more productive and efficient.

Are you pretty much where you need to be now, or is there room for further optimization that will allow you to really capitalize on the strong product demand and drive further margin improvement?

Thanks for your question, Chris. We have done a lot of work in terms of how we approach our inventory, and I would say the team has done tremendous work and has taken things to the next level in terms of how they're looking at our inventory.

The level of sophistication with our inventory management is just phenomenal. I would say, nothing's ever perfect around here.

I think that's one of the things that drives us, is we're striving for perfection and we have this culture of continuous improvement and always refining right down to the last minute, in finest detail of what we can be better. We're always going to be honing our craft here and always getting better, and we always do get better.

Certainly, as it relates to inventory, I would say that is a huge driver, one of the many things that we're doing very well, but it's a huge driver to these fantastic results. Certainly, we have had the inventory to meet the demand and the increase in demand that we've experienced, particularly in the last year.

Again, I couldn't be more pleased at what the team has done in order to make sure that we are in that position and continue to be in that position.

That's very helpful. If I may squeeze in just a follow-up, just in terms of the comps guidance for Q4, high teens would imply north of 45% two-year stack.

I know you guys haven't given guidance for next year, but as you start really lapping really strong comps, is sort of that two-year stack reasonable to expect for next year given the strong momentum that you guys are continuing to see?

I like your enthusiasm for what's going on here for us. We're just as enthusiastic about 2027 as well, although we're not providing any guidance on this call today for 2027.

What I will say is we are thrilled with the momentum. We do have to keep in mind the two-year stack.

That said, we are super well set up to succeed and have a strong year with all the elements in place to deliver in 2027 like we have in 20 so far 2026. We're going to stick to our strategy and stick to our playbook and because that's proven that that's delivered, whether it be having the right product in the right place, the right time, increasing our square footage growth with this 12 to 14 boutique openings and additional repositions.

We got those digital initiatives on the go, and certainly, the strategic investments in marketing that help create more demand and drive even more traffic. All of those things remain in place, and it gives me tremendous confidence for what we have ahead.

I've been with the company now for a very long time. I'm coming up on 39 years, and I've never been more excited about the business as I am right now.

Hey, let me add my congrats. I guess two questions for me, maybe for Todd.

I guess, I know you're not going to comment specifically on guidance for next year, but last quarter, you kind of took the 19 off the table and just went a little bit lower to high teens given the tariffs, but you've meaningfully outperformed in Q3 and your implied 4Q just went up by a lot. Are you comfortable putting the 19 back on the table just because of the upside you've kind of generated this quarter and what's coming up in the fourth quarter?

Then a quick follow-up to that is, it's a product of your own success. You guys are going to be lapping something like 25% plus comps annually next year.

You go back a couple years ago, you guys also had a phenomenal year, and you had a little bit of trouble lapping those tough compares. Doesn't seem like that's happening at all here, but are there other learnings from fiscal 2024 that you kind of apply to kind of make sure that doesn't happen again?

I'm just kind of curious how you can compare and contrast what's coming up in 2027 versus kind of what happened back in 2024. Thanks.

Hey,

I'll take the first question. First off, no, we would not put the 19 back on the table at this point, and I think we're most comfortable with that high teens.

We do plan to have further margin expansion next year, but I think we're more comfortable with the high teens than leaving the 19 or putting the 19 back on the table. We look forward to providing guidance again in May.

To

the second part of your question, which is kind of a broad question, my response to that is it comes down to execution. What we're experiencing right now is an example of as close to impeccable execution as you can get.

I think we've always prided ourselves on executing in the business, and when we're executing in all areas of the business is when we see these exceptional results. What I would say to your question is, right now, I find it immensely gratifying to see how our strategy, which has not changed, and the focus of the last three years is coming to fruition and delivering on these results.

I think if we stick to that and continue to do what we're doing, we will the consistency in our growth and in delivering results.

Got it. Thanks.

Hi, good evening. Congrats on your results.

Maybe just

a quick one for me on fiscal 2027. You've talked about for 12 to 14 boutiques opening and four to five relocations.

What does that mean in terms of square footage growth? Overall total square footage growth, it would be in the low teens.

Low teens. Perfect.

Okay. Thank you so much and congrats again.

Thank you.

Hey, just one question for me. The 1.4 million downloads that you spoke about, Jennifer, how do we think about that in terms of a penetration rate across your overall customer base?

How does that penetration rate compare against what you see with peers? Thank you.

Great question. Obviously, the response to our app has been tremendous, and I think our clients have been very quick to recognize the value that the app offers, and hence the number of downloads.

The majority of the customers downloading the app are our existing customers. They are a highly engaged customer.

The great news is that there is a good portion of those downloads that are new customers. What I find particularly encouraging is that we even have a few reactivated customers who haven't shopped with us in quite some time, and because of the app they've renewed their relationship with us.

I think, on all different points, the app is providing us tremendous benefit and certainly is allowing us to engage with our customer even more deeply.

I know you're unlikely to give me a number, but is 1.4 million How do we think about where that number could eventually get to over time?

As I've said earlier in this call, it's too early to tell, and you're absolutely correct. I am unlikely to tell you that number, but it's very early to tell.

Certainly, there was a lot of marketing support around the launch of the app, we came out with fantastic success, and we'll share more as we know more as the quarters progress.

Thank you.

The next question comes from Nevin Yochim with BMO Capital Markets. Please go ahead.

Thanks for taking my question. Nevin on for Steve today.

I'm hoping you can provide an update on your sourcing exposure by country rather, and just confirm whether you're on track for the mid-single-digit percentage or less from China by spring '26. Yes, we're on track.

That's one of the things that

we're extremely pleased with what we've accomplished over the last 12 months. The team has done a remarkable job.

Sitting here this time last year, we were receiving our spring inventory, and approximately 30% to 35% of that was being sourced from China. Today, we are in the mid-single-digit country

of origin from China, and so it's

actually remarkable what the team has done over that 12-month period. We are more weighted now to Vietnam and Cambodia, as well as a number of other countries, but I think over time the next phase of our sourcing initiative is to balance more evenly and try to get to a position where maybe we have no more than 20% to 25% sourced from any given country.

That's helpful. Thanks, Todd.