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Good morning. My name is Annis, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Roots Fiscal 2021 Third Quarter Conference Call. [Operator Instructions]On the call today, we have Meghan Roach, Chief Executive Officer; and Mona Kennedy, Chief Financial Officer of Roots. Before the call begins, the company would like to remind listeners that the call, including the Q&A portion, may include forward-looking statements about current and future plans, expectations and intentions, results, level of activities, performance, goals or achievements or any other future events or developments. This information is based on management's reasonable assumption and beliefs in light of information currently available to Roots, and listeners are cautioned not to place undue reliance on such information. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company refers listeners to its fiscal 2021 third quarter Management's Discussion and Analysis and/or its annual information form dated April 7, 2021, for a summary of the significant assumptions underlying forward-looking statements and certain risks and factors that could affect the company's future performance and ability to deliver on these statements. Roots undertakes no obligation to update or revise any forward-looking statements made on this call. The fiscal 2021 third quarter earnings release, the related financial statements and the management's discussion and analysis are available on SEDAR, as well as on the Roots Investor Relations website at www.investors.roots.com. Finally, please also note that all figures discussed on this conference call are in Canadian dollars unless otherwise stated. Thank you. You may begin your conference.
Good morning, everyone, and thank you for joining us. We continue to see favorable momentum in the third quarter as highlighted by the increase in total sales, the gross margin expansion and the growth in adjusted EBITDA compared to Q3 2020. Our results also reflect meaningful improvements in gross margin and profitability compared to Q3 2019, which points to the sustained impact of our strategic initiatives set out in the company today. These initiatives have included providing an engaging omnichannel experience to enable our customers to shop however, wherever and whenever they choose, delighting our customers with compelling new product offerings that capitalize on the authentic heritage of the Roots brand while significantly reducing promotions to fuel full-price sales and leveraging efficiencies gained across the business to improve profitability. We are pleased with the progress we've made in the third quarter, even as we continue to face pandemic-related headwinds, including supply chain disruptions, which led to inventory delays and higher freight costs during the period. I continue to be very proud of our entire team for their dedication to and passion for the business and working under these unusual circumstances. Their commitment to Roots has been unwavering and assisted us in reporting solid growth, maintaining and increasing our strong customer satisfaction scores and positioning the company well for the holiday season and fourth quarter. Turning to our financial performance during the quarter. We expanded total sales by 4.6%, marking our third consecutive quarter of year-over-year sales growth. We also drove a significant increase in our direct-to-consumer gross margin in the third quarter, which grew 630 basis points compared to Q3 2019 and 140 basis points relative to Q3 2020. The margin expansion was achieved despite the negative impact that increased freight costs arising from supply chain disruptions and our tactical use of airfreight to ensure we had the inventory needed to support our peak period sales. The DTC gross margin expansion predominantly reflects our continued efforts to drive more full-price sales at Roots through a significant reduction in store-wide promotional days. Over the last 2 years, we have significantly reduced commercial events, which declined from 81 days in Q3 2019 to 49 days in Q3 2020 and only 4 days in Q3 2021. These actions to improve margin were also supported by the tighter buying of new collections and exciting new product launches that resonated well with our customers. Our goal is to continue to minimizing store-wide promotions while delivering compelling assortments and creating a greater sense of urgency amongst customers to purchase at full price. These increased sales and gross profit offset the impact of lower government subsidies and temporary rent abatements and drove an increase in adjusted EBITDA compared to the prior year. Notably, the adjusted EBITDA in both Q3 2020 and Q3 2021 included temporary positive impacts from government subsidies and rent abatements. Excluding these temporary impacts, adjusted EBITDA would have been $16.1 million in Q2 2021 and which is 38% higher than Q3 2020 EBITDA, including the temporary impacts and 52% of Q3 2019. Turning to a review of our operational performance. We experienced a meaningful rise in store traffic during the third quarter as customers became more comfortable returning to the stores. Our omnichannel capabilities also remain a key strength. In particular, we continue to leverage our unified pool of inventory for retail and e-commerce and use our stores as fulfillment hub, enabling us to service our customers more seamlessly. As customers return to stores, we saw a moderation in e-commerce sales compared to Q3 2020. However, online sales remained nicely above the third quarter of 2019. As for our international channel, we relaunched our Tmall store in China on July 22, an important milestone to reestablishing our presence in that market. While still early days, we are pleased with our progress. We also experienced strong growth in Taiwan, reflecting higher wholesale order volumes from our operating partner due to the recovery in that market and the terms of our new agreement. Despite product delays, we are also pleased with the progress we made in the merchandising front. We are buying tighter into new collections and generally selling through at a higher rate than in past. This is creating a sense of urgency amongst our customers to buy full price and is more sustainable longer term. Our design teams have been working well under the leadership of Karuna Scheinfeld, who joined us in July 2020 as Chief Product Officer, and her positive impact has also started to flow through in our new collections. This year, we have successfully tested limited edition premium collections with made-in-Canada fleece and leather, which continues into the third quarter. These new collections are garnering favorable responses from our customers and enabling us to assess customer reactions to higher price points. While we are still learning from these initial drops, we see further opportunities to broaden our premium offering in the future. Early in the third quarter, we also introduced the One Collection, a new fleece offering with a gender pre-fit, extended sizing and sustainable materials. Specifically, it was comprised of 80% organic cotton and 20% recycled polyester. Roots is a brand that builds on the value of the community, authenticity and integrity, and we are committed to removing boundaries for our customers who are encouraging individual expression. We are pleased with the early readings on the sales of the collection, particularly given that it has been excluded from all storewide promotions. The One Collection showcases our continued evolution as a brand and speaks to our long-term commitment to inclusivity and sustainability. We also believe that our ability to showcase exclusive, innovative and sustainable products aligned with our customers' increasing desire for product offerings, style and comfort while considering your social impact. To that end, we continue to make progress in other areas impacting ESG at Roots. During the quarter, we became a member of the Textile Exchange, a global nonprofit that develops industry standards to see the adoption of preferred fibers and materials such as organic cotton and recycled polyesters. We also joined the Leather Working Group, an international organization comprised of key stakeholders across the leather supply chain, promoting environmental best practices within leather manufacturing and related industries. We look forward to reporting on our progress in these areas in future calls. The third quarter also saw the launch of Révolutionnaire by Roots collaboration, which is based on the same silhouette as the One Collection and offering 6 different skin tone-based shades. This collaboration, with respect with Révolutionnaire, and it has been a pleasure to continue our partnership with them while supporting their story and platform for change. The quarter also saw us launch a custom worn jacket designed by Japanese artist, MR., for the Weeknd in celebration of the tenth anniversary of the Weeknd's Thursday album. We continue to see collaborations as a great way to elevate the brand perception amongst customers and introducing new customers to the brand. We are excited about our fourth quarter collaborations, including the Roots x Better Gift Shop limited edition drop that occurred in the first week of December. Founded in Toronto, Canada in 2017 to bring cultural, social and artistic ideas to life, Better Gift Shop joins Roots [ in solidarity ] to celebrate the artistic side of our iconic Buddy the Beaver. This collaboration includes a limited run of awards jacket, premium hoodies and accessories all made locally in our leather factory. As we look to the future, our long-term strategy continues to focus on 3 main pillars. First, maintaining our strong position as an nonchannel brands. We will continue to make it easier for our customers to shop with us however, whenever and wherever they choose. While we have robust online capabilities today, we are continuing to enhance and elevate our mobile and web experience through our investments in upgrading our online platform and our omnichannel offering. The second is reinforcing Roots' position as a brand beloved by customers globally. We are a brand with 48 years of history that has effortless style, exceptional quality and remarkable comfort and is continually proven it can innovate and adapt to the evolving needs of customers. We plan to continue to curate our product section to suit our global customer base, including making more investments in sustainable materials and programs. We expect to continue to expand our geographic reach with our medium-term focus on the United States and China. The third is a continued emphasis in driving operational excellence by incurring our investment decisions on those expected to generate the best return. As we look to the remainder of fiscal 2021, we are pleased with our early holiday performance, and we feel we are well positioned to meet customer demand during the rest of the quarter. Though we still have several significant routes ahead of us, we feel good about our label readiness and our inventory levels. As you reflect in the last 7 quarters before I had joined Roots, it has been exceptional to see the transformation of the business fundamentals. While our strategy to maximize full price sales has created some short-term pressures on revenue, it has created the intended improvements in profitability and then position us very well for the future. With that, I will turn the call over to Mona to discuss our financial results in greater detail. Mona?
Thanks, Meghan, and good morning, everyone. Our third quarter financial results were strong. We increased sales, gross margin and profitability above last year and delivered outstanding gross margin and adjusted EBITDA expansion compared to third quarter of 2019 prior to the impact of the pandemic. These results are even more impressive when you consider that we continue to pursue our strategy of elevating our brand by reducing promotional activity significantly. Additionally, we and the rest of our industry have been navigating unprecedented supply chain challenges. Our results reflect the strength of our brand and product, our ability to react to challenges and further enhancements to our operational discipline. Now let's delve further into our third quarter results. Total sales in the third quarter were $76.3 million, up 4.6% from $72.9 million last year. DTC sales were flat to last year at $63.4 million despite the elimination of a number of popular historical promotions, including our sale in September. We experienced improved traffic in corporate retail stores, and e-commerce sales continued to demonstrate growth over pre-pandemic levels even as the increase in store activity resulted in moderated demand online. Inventory delays partially dampened the growth in the DTC segment due to supply chain challenges.Within our Partners and Other segments, sales were $12.9 million, up from $9.6 million last year. This increase was primarily due to higher volumes in our Asia business and the benefits of a new agreement, which was partially offset by an unfavorable foreign exchange impact. We also saw strong growth in the royalty revenue earnings from our third party licensees. DTC gross margin also continued its strong performance, increasing by 140 basis points to 65.2% from 63.8% last year, and up 630 basis points from 58.9% in Q3 2019, primarily reflecting our tighter promotional discipline. We had only 4 promotional days in this year's third quarter compared to 49 days last year and 81 in 2019. The improvement in our DTC gross margin is especially impressive given the significant incremental costs we absorbed as we navigated extensive supply chain disruption. Higher freight expenses pressured DTC gross margins by 160 basis points in the quarter. Selling, general and administrative expenses were $29.4 million for Q3 2021 compared to $26.6 million last year. This increase reflects a $2.3 million reduction in temporary rent abatements and a $2 million reduction in government subsidies. Excluding these onetime impacts, SG&A expenses would have been lower by $1.5 million year-over-year in the third quarter, reflecting our continued efforts to gain efficiencies across the business. Increased sales and expansion in gross margin drove adjusted EBITDA to $19.2 million, slightly ahead of last year's $19 million. Excluding temporary rent abatements and government subsidies, adjusted EBITDA would have been $16.1 million in Q3 2021 compared to $11.7 million in Q3 2020 and $10.6 million in Q3 2019, representing an increase of 38% to 2020 and 52% in 2019. Now turning to our balance sheet. We ended the third quarter with an inventory balance of $66 million, which is up 6% from $62.5 million last year. This reflects our efforts to bring key holiday collections earlier in response to the industry-wide supply chain challenges. Recognize that freight cost and supply chain disruptions are not behind us and have taken actions to mitigate the impact by using airfreight for key seasonal programs, moving up inventory purchases and leveraging our pack and hold strategy. Net debt at quarter end was $74.6 million, improving $16.3 million from $90.9 million at quarter end last year. In a separate release today, we announced our intention to begin a share repurchase program or a normal course issuer bid for the repurchase of up to 2.2 million of our common shares, which represents 10% of our public float. This announcement, which was approved by the TSX, is a reflection of our strong cash flow generation after investment and the Board of Directors' confidence in our company and strategy. Overall, we're pleased with the health and strength of our business in the third quarter. Our ability to navigate challenges and deliver sales and profitability growth demonstrates that our strategies and operational discipline are working. This gives us even greater confidence for continued long-term success. We want to wish you a happy and healthy holiday season and look forward to updating you with our full year 2021 results next spring. With that, operator, please open the line to question.
[Operator Instructions] The first question comes from Patricia Baker with Scotiabank.
Yes. Good morning, everyone. So thank you for providing us with the data on your promotional base. I think that really goes a long way to just showing how far you've come and how you've really dramatically changed the promotional stance. So if we look at that 4 versus 49 versus 81, is that 4 kind of a good proxy for what we can expect going forward that you try to maintain promotional days at that level?
Patricia, from a Q3 perspective, yes, for sure. I think 4 is kind of what we're targeting. The promo that we offered in Q3 was our customer appreciation event, and that's what we're planning to offer next year as well with some potential modification. But as we go into Q4, obviously, Q4 is a more promotional period and we plan to have a seasonally relevant promotions. So it will obviously be more than that many days. But for Q3, that's a good target.
Okay. And then just I understand fully though Q4 being more the promotional, that's kind of the clearance quarter. But on a relative basis, we can anticipate that promotional days in Q4 2021 would be fewer than they would have been in '20 and '19, right? Is that fair to say?
Not as material as you have seen in Q3, but we may have made some marginal modifications in Q4, but not to the same extent.
Okay. And then a second question, if I may. With respect to these higher freight costs and the airfreighting of inventory to ensure that you have product and inventory on the shelves and in stock, how long do you anticipate you'll be engaging in freighting the goods over?
From an airfreight perspective, we expect to still see some air freighting going into next year. The biggest impact will be in Q4, obviously, as we had to airfreight products for holiday season to meet Christmas demand and holiday demand. But going into next year, we expect to still have some airfreight throughout the year.
Okay. I'm going to throw in -- yes, go ahead.
Patricia, maybe I'll just some add on that. So just as a reminder, obviously, the fourth quarter and third quarter for us account for approximately 70% of our sales in a typical year. So when you think about the impact of airfreight for us in the first half of the year, which is really our seasonal low period from a sales perspective, what we do anticipate is there being airfreight carrying into next year. For us, it's more about what happens next third and fourth quarter that we're really focused on.
No, that makes perfect sense. And then just speaking about holiday, and you noted that with things opening up that you are seeing good traffic to the stores, has that been maintained through the holiday season?
Yes. I think we're pleased with our holiday results so far. I think that we've been in a good position from a label perspective. And also, we feel good about the inventory we brought in from an airfreight side of things to really position as well as to capitalize on the time period. We have quite a number of significant weeks ahead of us. The next few weeks are quite important to us in the holiday season. So it's too early to tell how the entire season pans out, but we're pleased with our results today.
Your next question comes from Brian Morrison with TD Bank.
Apologies if I repeat some questions, I had a little bit of phone trouble, but I want to just talk about the gross margin in the DTC side of things. Clearly, you've got a very strong consumer demand environment and couple that with inventory tightness, I guess, offset it by the freight cost. I wanted to just talk about when you look out beyond this year, what do you think the sustainability of your gross margin is specifically on the DTC side.
So from a margin perspective, we're really happy with our margins. Obviously, this quarter, we saw 140 basis points of improvement and excluding the freight cost, that would have been 300 basis points. We're really happy about that and the strategy that we implemented around promotions, and we're going to continue to do that. But needless to say, as you know, there are some cost pressures going into next year from a commodity perspective, freight costs and things of that nature that are going to pressure margins. We were going to try to kind of to take advantage of the strategies that we've put in place from a promotional perspective to offset that. But the cost pressures are still there. So I guess that's kind of the only guidance I can provide in that area.
Okay. When I think about the promotional side of things, I have to assume unit sales are down, basket's up. Is there ability to drive labor leverage further here?
Yes. I mean, I'll take that one. I think, Brian. So I think that when you look at our business, we've been focused on driving up AUR, so our average unit retail price. And so that's kind of been the key focus. We've generated, I think, a good level of labor efficiency to date. And I think that coming out of the pandemic, which we hope -- we all hope will be soon, we definitely have a more efficient labor structure than we've been going in. And so I think Mona can speak about it more specifically. But if you look at our EBITDA margins and you look at our SG&A as a percentage of total sales, we're really happy with those levels. So from an efficiency perspective, we think we're in a good spot today. And we're obviously going to continue to try to drive efficiencies where we can. But we think we're also in a pretty healthy position as we stand today.
Okay. Last question for Mona, I guess. You've -- you now have an NCIB in place. In terms of target leverage, I realized that there's great seasonality in your results. But how should we think about what a target leverage rate would be or what you're comfortable with, you're going to be down close to the one turn of leverage by year-end here?
That's right. I think by year-end, yes, it looks like we will be around that. We're not really guidance around the target leverage. We continue to manage our capital structure, and we're really happy with our cash flow position. We have accelerated our debt payments this year as well, as you know, as part of the last amendment that we filed last quarter. But from a target perspective, we're not providing a target. And we're happy with our debt right now. And as you mentioned, there is seasonality in that leverage rate as well that you need to keep in mind.
Your next question comes from Stephen MacLeod of BMO Capital Markets.
A couple of questions I just wanted to follow up on here. With respect to the supply chain, obviously, you cited some issues or some pressures on supply chain costs. Do you think you lost out on any sales because of the supply chain issues? And if so, is that something you're able to quantify even directionally?
Yes. So I think, Stephen, as we went into the third quarter, I think we did have some sales that were left on the table, but I'll give you some examples. We have something called a shirt/jacket or a shacket that typically would have been brought into the fore in August or July, and we didn't actually have those products received until October. And so from that perspective, there are definitely products that didn't get here in time for Q3 that definitely impacted our sales. And also once we got products in, we focused on getting them out to the stores as quickly as possible. So there were delays in getting certain things online, which we think impacted our sales there. It's difficult to quantify how significant that would have been for us as it really hasn't impacted as much in the fourth quarter because we airfreighted in a lot of goods to be ready for the fourth quarter. But as we looked at the third quarter, we did see some pressure on sales as a result of the fact that we didn't have everything in, in the time we expected.
Okay. That's helpful. But I guess as you think about Q4, given the fact that you were getting ahead of the supply chain issues, you wouldn't expect there to be sales left on the table because there's a bunch of issues given the airfreighting, is that right?
Yes, we feel like we're in a healthy inventory position going into Q4. And I think that there are certain collections that we didn't airfreight that we will pack and hold into next year. So we're continuing to leverage that pack and hold strategy that's been successful for us to date. But we feel good about where we're standing right now from an inventory level going into the rest of the holiday season.
Okay. That's great. And then just following up on the NCIB. Can you just talk a little bit about sort of what your intentions are with respect to pursuing buybacks? Is it something that you're going to pursue on a more opportunistic basis? Or is it going to be kind of an automatic repurchase program? And then how do you think about the NCIB and buying back shares as it relates to the float that's out there right now?
Sure. We believe that our shares represent an attractive investment opportunity. So we're going to continue and we have the intention of purchasing the 2.2 million shares by the end of next year. From a pricing perspective, that's not -- our strategy is not something that we're disclosing. But as you may have seen, we have put in place an ASPP to take advantage of doing the blackout periods. From a float perspective, obviously, as you know, our float is not that big, but we're hoping to clean up some of the shares that are out there that are creating some volatility in the stock.
Okay. That's great. And then maybe just finally, this is more kind of strategic or high level. But as you think about into next year and exiting the pandemic, hopefully, is there anything we should expect on the store networks front, whether it's adding stores, closing stores or potentially any refresh investments that need to be made for the stores specifically?
Nothing specific in terms of a store kind of contraction or big expansion plans in Canada in terms of assessing how the stores are doing. As I kind of mentioned on previous calls, we look at the profitability of the stores on a continuous basis and make decisions on that basis. And when we do make decisions to close stores, we want to make sure that we can recover those sales in e-commerce. So no big plans in terms of closing a material number of stores or opening a material number of stores. And from a renovation perspective, we're going to, within our capital -- within our capital investments, we're going to make sure that our stores are in good shape and are meeting customer experience, expectations that we've got internally.
And maybe, Stephen, I'll just add from my side that I think when we look at the business right now, we're making some good investments in the omnichannel capabilities. So if you look at our capital investments in this year and into next year, we're focusing on strengthening our web platform, so we have mobile enablement, we have better capabilities in the store network to make omnichannel more seamless. In addition to that, we are really focusing on how do we drive digitally led growth kind of outside of this country. So we have a number of different growth flows we are looking at from that perspective. We also think there's a good amount of growth left in our existing store base in Canada. So I think that by focusing on how we can drive kind of additional customer excitement, whether that's through new products, investments, whether that's through interesting collaborations or other different marketing exercises that we're engaging with, we still think there's a lot that we can leverage in our existing store base. So we don't think that we have to do a massive store expansion at this point in time to drive incremental growth in the business. We think we have a lot of other levers that we can drive to improve the performance of the business from a sales perspective.
Your next question comes from Matthew Lee with Canaccord.
So most of my questions were already asked prior, but maybe a follow-up on SG&A. I mean despite revenues closing on F '19 levels, SG&A kind of remain closer to F'20 level even when excluding abatement. Can you maybe talk about what drives that rent, that cost improvement and whether you're kind of expecting to maintain that level of SG&A intent to be going forward?
We're really happy with our SG&A levels. And yes, I think I would say these are levels that we're comfortable with, and we've seen some SG&A as a percentage of sales, obviously, go down materially compared to 2019. So a few things that have impacted that, as you're aware of. Exiting the U.S. has obviously impacted that. We've seen some efficiencies within our e-commerce business and also within the distribution center that has impacted that. Also, as Meghan mentioned earlier, we have seen efficiencies in labor within the stores that we're hoping to continue and build on.And then obviously, the other thing that has helped EBITDA margin in particular is margin improvement. So I think from an SG&A perspective, we're in a comfortable position and are hoping to continue to stay at these levels. There are some cost pressures that are coming in next year, as you're aware. The Ontario minimum wage is increasing and also labor markets in general are tight. So there will be some pressure on that front, but we're going to continue to work on ensuring that any SG&A investment that we make is coming with an appropriate return.
That's great. And then maybe just a follow-up on that. I mean based on comments from last quarter, I really didn't expect you guys to get as much rent abatement in government subsidies we saw. Are you expecting to get any of that in Q4 and going forward?
No. So as you know, the government subsidies have ended as of October, and anything new we haven't actually qualified for. And from a rent abatement perspective, we're more or less finished.
Your next question comes from Sabahat Khan with RBC Capital Markets.
Just following up on that SG&A question earlier. I guess in terms of the in-store costs and just operational costs, should we assume those are sort of back at run rate levels? Or would you say those are still kind of somewhat below? And then how do you think about that going forward? Like is there an opportunity to maybe keep them at current levels, even just excluding any sort of subsides or any of that?
I think we're comfortable with our labor model currently at the stores and the efficiencies that we and all the training that investment that we've done in that area, we're comfortable with. And we've got a great team that has done an amazing job through the holiday season. So we're hoping to maintain that run rate.
Okay. And then I guess, just as the business evolves between sort of the stores opening and the e-commerce mix changes, is that having sort of an impact on just overall margins? How are you thinking about that going forward in terms of our run rate for e-commerce? I think you indicated it's still above pre-pandemic levels. How is that expected to impact just overall, whether you think about gross margin or just down to the EBITDA line?
Yes. I think we're in a good position, I think, between our e-commerce business and our retail business that we have pretty consistent margins across both platforms. So it's not as if our e-commerce channel is predominantly discount based. Actually, both of them are operating in a healthy full price basis, which is great to see. So while we shift between the various channels, really, they are quite supportive of each other in that we're not seeing significant degradation in margins by going from one to the other. So if we continue to see good growth in stores and moderation in e-commerce, we don't anticipate there being any significant negative impacts on our margins going forward. I would also say that when we look at our e-commerce levels, we are happy with the fact that they continue to remain above 2019 and we are really focused on investing in the omnichannel capabilities. And from our perspective, we really believe that serving the customers to shop however, whenever and wherever they want to is the most important thing. And we do see as a brand that being a really key differentiating factor that we've been able to throughout the pandemic and post the pandemic, we're still operating in a way that our omnichannel capabilities are really flexible and really attracting customers in a different way.
Okay. And then I guess just on inventory, if I understood that correctly, you indicated that the inventory you have for Q4 is sort of in the right place. And I guess the only headwind we should really think about is maybe just the additional costs you had to sort of incur to get that inventory here in North America. Is that sort of the right way to think about it? Or is there -- are there any products that you're like sizes or products that we wish we had, but it just might not be available in Q4?
From a Q4 perspective, any of the inventory that we were wishing to have, we airfreighted and made sure that it's here in time. And we feel like we're in a cleaner inventory position than we were last year. And we had our pack and hold from last year that we were able to kind of roll in as well. So I would say, from an inventory perspective, from Q4, we're in a good position. The weather implications in D.C. impacted our inventory coming in. So there was some inventory that was delayed that we were hoping to have, but we're going to continue to execute on our pack and hold strategy, and there might be some pack and hold for next year that we might keep. But we're feeling pretty good for Q4.
Thank you. There are no further questions at this time. Ms. Roach, you may proceed.
Thank you, everyone, for joining us for our Q3 call. We wish you a happy holiday season, and we look forward to speaking to you in the fourth quarter.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.