Mark Altschwager: Thank you.
Operator: Our next question is from Oliver Chen of TD Cowen.
Oliver Chen: Hi. Thank you very much. Tabby has been a really great platform. What do you see ahead? And will there be others that will be great second platforms in addition to Tabby? As we think about that average unit retail, is it more mix or like-for-like or a combination of both? And then on the Kate Spade side, why was now the right time for outlet? And you mentioned strengthening the core a few times. Just would love thoughts on what that really means and what your consumer research is indicating that you need there? And finally, Todd, Coachtopia has been amazing. Just how material is that for our modeling? And where do you see that heading at the penetration over time? Thank you.
Todd Kahn: I count it five questions total. Did we get that right? Do you want me to take the three.
Joanne Crevoiserat: We’ll kick it off with Tabby, Todd. I think that’s a great place to start.
Todd Kahn: I agree. Thank you, Oliver. First of all, Tabby is an incredible platform. And platforms aren’t created by us, platforms are created by our clients. They vote, ultimately. Our job is to continue to innovate on a platform, keeping it relevant. And you see that with Tabby. I see Tabby as something that isn’t a season or a year. It’s a multiyear opportunity. We just launched Quilted Tabby. This is phenomenal. Really early readings, but it’s doing incredibly well. And every time we launch a new iteration of Tabby in different fabrications or treatment, what it does is it elevates all of Tabby. So we’re super pleased with what we’re seeing there. On AUR, it is the combo of both initial pricing, less discounting, being really disciplined in our approach.
So we’re excited by that. Lastly, Coachtopia. Coachtopia is not meaningful enough from a dollars perspective yet to put in your model. What Coachtopia is doing for us is giving us a halo effect, I said this before, it basically outpunches its size yet. What we’ve seen is it’s creating incredible desire and relevancy in the brand. There are some opportunities in Coachtopia that I think will, over time, become very big. The loop product for one, which is effectively a nylon product, which in our history, we have not particularly been strong with, that’s resonating, And I could see that becoming something very material and maybe in a giant platform of its own one day. But again, it’s not for us to decide. It’s for our clients and consumers to vote.
Joanne Crevoiserat: And I’ll pick up the Kate question quickly here as we approach the end of our time. But for outlet.com at Kate, it really is about creating a better experience for our customers and a more 360 experience that customers in all channels at Kate Spade or served a tremendous experience in outlet.com allows us to do that, and we’re excited about building on that foundation. And what we hear from our customers about strengthening the core handbag. Kate has very strong core equities. They’re clear and enjoy and self-expression, but where they tell us Kate is not known for signature product or branding codes. That’s the opportunity that we continue to build. You saw with Dakota that we launched stronger hardware, stronger branding codes.
We’re excited about the Madison launch. It’s a coated cannabis spade flower signature program at outlet last quarter, and that’s off to a good start, and that’s the work of the work. That’s what we’re focused on doing at Kate. But we’re excited about the runway ahead there.
Oliver Chen: Best regards. Thanks.
Operator: And we’ll take a question from Paul Lejuez of Citi.
Paul Lejuez: Hey, thanks guys. Curious what drove the gross margin beat. I think you mentioned operational performance, but any more specific there in terms of by brand or channel? And how are you thinking about puts and takes in the second half, specifically on the freight side, I think you mentioned you may be seeing some pressure in dollars going up on the freight side as well. Any quantification that you can provide? Thanks.
