Dylan Carden: Yes. Thank you very much, guys.
Operator: Your next question comes from the line of Oliver Chen with TD Cowen. Your line is open.
Jonna Kim: Thank you for taking our question. This is Jonna on for Oliver. You mentioned higher full price selling. I’m just curious how you’re managing that as consumers are a little bit more conscious about spending as well. And also., just on marketing, what’s your strategy around marketing this year and sort of your thoughts around driving higher ROI on spend? Thank you so much.
Claire Spofford: Sure. Thanks for the question, and thanks for being with us. I think from a full price selling standpoint, our inventory strategy has been supportive of keeping the focus on full price selling, telling our brand story, telling our product assortment story without competing with ourselves from a markdown standpoint. And that has yielded nice full price penetration, which we saw play out in fiscal year 2023. And again, our customer, we’ve said this repeatedly, but if we offer her the product that she’s looking for and it’s unique and special, she’s willing to pay full price for it. And so, that focus on what makes us special and different and highlighting our key products has helped support that. As we go into 2024, we are making an investment in marketing behind a brand campaign, which you’ll see rolling out in the next few months, which we’re very excited about.
We think that there’s a real opportunity to drive brand awareness. We know we have relatively low awareness compared to some of our competitors, and some of that comes from having a smaller store fleet, but we’re putting some investment behind that brand awareness and are excited about telling that story. And so, we’ll have more to say about that on the next quarterly call.
Jonna Kim: Thank you so much.
Operator: Your next question comes from the line of Marni Shapiro with The Retail Tracker. Your line is open.
Marni Shapiro: Hey, guys, congratulations. The stores look great, and I love this new set that just went in. It’s beautiful. Can you talk a little bit – I think you said you grew your customer file very nicely. Could you talk a little bit about what actions you’re doing on top of funnel? And with all your technology updates, could you talk a little bit forward thinking about loyalty programs and things like that?
Claire Spofford: Yes, thanks, Marni. We agree. We think the assortment looks great right now, great color that she’s responding to. From a top of funnel standpoint, the brand campaign that I just talked about is definitely aimed at broadening awareness, introducing new customers to the brand. And that, as I said, is going to be forthcoming in the next few months. In addition, we’re very focused on new-to-brand acquisition through our performance marketing and other efforts. And those did yield some nice benefits through much of 2023 focused on usage occasions like the work wear edit, and our inclusive sizing initiatives, both focused on introducing new customers to the brand and customers that are at the younger end of our target demographic and very valuable.
So, lots of efforts in terms of feeding the health of that file, and also in making sure that we’re communicating effectively with and nurturing our relationship with our best customers and our core customers, which we did see nice growth from our best customer segment, as I mentioned in 2023.
Marni Shapiro: No, that’s fantastic. And could I just ask you a quick question. Online, I’ve been spying the fit assortment. It looks nice. It’s highly additive. I’m curious, are you thinking about bringing that into stores a little bit more, expanding it? Is it a nice to have, or do you feel like it’s a need to have and these are your first steps into it? If you could just expand on that.
Claire Spofford: Yes, it’s – thanks, Marni. It’s a small part of the business and we have it in select stores, and we have it online. We think it’s an important part of her life and a use education that she cares about, but it’s not a major initiative, growth initiative for us as we look forward.
Marni Shapiro: Okay, fantastic. Thanks. I’ll take the rest offline.
Operator: Your next question comes from the line of Dana Telsey with Telsey Group. Your line is open.
Dana Telsey: Hi, good morning, everyone, and congratulations on the nice results. Claire, as you think about the assortment going forward and the changes and the enhancements that we should see, what are you looking for this year? Is there any markers? Obviously, you mentioned the marketing campaign that we should be mindful as we go through the year. And then Mark, as you talked about the Red Sea issue impacting more of Q2, is there any bleed-through to any other quarters that you foresee? And with the lower cotton costs, how is that being projected throughout the year in the space of also the full price sales that you’re generating? How are you thinking about pricing the goods this year as compared to last year? Thank you.
Claire Spofford: Sure. I’ll take the first part, Dana, and then hand it over to Mark. I think markers, we’re heading into what is our big season, and obviously we love the Mother’s Day timeframe and moving through spring into summer. You’ll see our core franchises really hit hard, our linen programs, our Knit Basics programs. We also have some really exciting things happening with cotton gauze and other very summer breezy fabrications that she really looks to us for. So, I think you’ll see a lot of that again, as well as just wonderful colors that she really responds to at this time of year. So, we had real strengths in 2023, with growth in dresses, woven tops and novelties, a strong sweater business in the back half of the year.
But we also had some opportunities, and we think that those opportunities hopefully will be addressed in terms of better performance in things like bottoms and knit basics that where we saw some challenges last year. So, overall, some opportunities that we see in front of us, and then some growth leaning into where we have strength and momentum.
