The Children’s Place, Inc. (NASDAQ:PLCE) Q3 2022 Earnings Call Transcript

It’s not about necessarily spending more, which we will be in ’23, but it’s about spending what we have smarter. And you look at the campaigns that we launched, and you brought it up about Christmas and you brought it up about holiday Christmas dress up in the holiday sleepwear, when you look back at the campaigns that Maegan spoke about, those are 2 of our largest campaigns of the quarter, and those are 2 of our strongest business. So we’re just absolutely dominated social media across the entire kid set, which Maegan gave you the numbers on. We’re holding on to the AUR increases versus pre-pandemic. So when cotton comes down in the back half, that’s going to be really important that we have those double-digit increases and our product, which we don’t talk about enough is — continues to resonate with our customer and thank goodness mom loves our product.

And then you look at some of the structural changes to the P&L. We’ve closed 1/3 of our stores. We’ve gotten significant occupancy out, fixed expense. So there is a lot more going for us than the short-term challenges of high cotton prices and high supply chain costs that are going to be in the rearview mirror in the back half of ’23. So we’re just going to keep doing what we’re doing. We’re going to keep focused. We’re going to keep our head down. We’re going to stay on offense, and we’ll get through this. You want to talk about marketing spending?

Josh Truppo: Yes, sure. We have historically, and we’ve said this before, underfunded marketing. And to Jane’s point, from a year-over-year perspective in ’22, our marketing investment is not significantly higher. One thing we are doing, and Maegan talked about her third-party providers and the tools that we brought on, we’re definitely getting more out of our dollar, right? We’re increasing our marketing effectiveness, which obviously is a very important piece of our P&L and optimizing that marketing spend. As you move forward into 2023, we expect to take a small portion of all of these transitory costs that we’re experiencing and reinvest it into marketing to really get that marketing spend up to the levels that we need to be at as a 50% digital-first retailer. So that’s kind of how we’re thinking about marketing investment.

Operator: Thank you for joining us today. If you have any further questions, please call Investor Relations at (201) 558-2400, extension 14500. You may now disconnect your lines, and have a wonderful day.