Richard Hayne: I’ll start with the second part first, Paul. Certainly, we don’t have AI and machine learning at our fingertips. It is something that we will invest in over time, and we will make steady progress. As I said, it’s very much like some of the other initiatives that happened like e-commerce in the early ‘90s. We didn’t jump into that full throttle from 1990. We started it. We got some feedback. We find out what worked, what didn’t work, invested a little bit more. And I think we’re fairly ahead of the curve then, and we expect to be somewhere near the beginning of the curve in this endeavor as well. As it relates to turning the Urban brand around, I think Sheila gave a fairly comprehensive dissertation about how we plan to do that.
The one thing that you didn’t talk about that I do want to emphasize is that we think hiring a President for Urban Outfitters is a key component. And we’ve made significant progress in — toward that end. And I think you might hear something in the next few months. So, that will be one thing. And then we have to improve our product offering, and we have to improve, most importantly, our marketing. I think the product offering I think that what you’ve seen is a shift in fashion to a more feminine look. And that feminine look is performing quite well. And we will increase the penetration of femininity in our assortment. This is not — while we’ve always had feminine, this is not something that Urban Outfitters is particularly known for.
It’s not like the Free People or Anthropologie brands, which are much more highly feminine. And so I think in that sense, we’re swinging a little against the side, but I don’t want to put that out there as an excuse. Our job is to always have the products that our customers want. I think in terms of the marketing, I think that that is — as Sheila said, is and was a miss and that we didn’t move along with the customer and appear where the customer was residing in areas like TikTok and we didn’t quickly enough adopt YouTube as one of our main platforms. We did have an awful large exposure on Instagram and remain on that platform. So, I think as we move along and have better marketing and show up where the customer is, we will continue our march toward a greater penetration of digital customers and improve our sessions.
So I think that does it. So ask for the next question.
Operator: Our next question comes from the line of Alex Straton with Morgan Stanley.
Alex Straton: I wanted to focus on the Urban banner as well. Thanks a lot for the color on the initiatives. With those in place, how do you think about the time line for the Urban Outfitters inflection from here and what are the key metrics you’re watching in the meantime? And then secondly, just on profitability for that business. I’m having trouble thinking about where it sits versus history and how much of a drag it is on the total business. So perhaps if you could just kind of outline the puts and takes on that piece, too, it would be super helpful. Thanks a lot.
Sheila Harrington: Okay. Alex, I’m going to take the first part of that question. I think when we think about how long it will take to turn the Urban Outfitters brand and how we’re thinking about how we’re measuring that. I think we want to do it in a very healthy way and look for improvement month-over-month and quarter-over-quarter because we’ve lost our consumer, we’re staying highly focused on the 18- to 25-year-old Urban Outfitters consumer. And we feel like with laser focus on the consumer we will gain that customer back. We are hyper focused on the new consumer. We’ve lost our way. We need to get that consumer back. And through our marketing efforts, whether it’s engagement in the different social platforms, we’re looking for that.
We’re listening hard to the consumer there as well as watching what they’re reacting to in terms of product offering. So I think not only from a top line sales perspective or a sales velocity as we look at from a merchant, but also trying to listen much harder to what we do and where it resonates the most. So quarter-over-quarter improvement is what we’re looking for, for a long-term, healthy return for Urban Outfitters growth.
Richard Hayne: And Alex, this is Dick talking. I think that you asked about metrics. I know that Sheila is always watching, and watching extremely carefully the number of sessions on a daily basis and store traffic. And I think those two metrics, if we can see those in true, we will know that we are on the right track, and sales will follow. Frank, do you want to take the last part of the question?
Frank Conforti: Sure. Obviously, the UO profitability has fallen pretty meaningfully from where they’ve historically run at. I think the nice thing is with the strength of our other four businesses, we’ve been able to more than compensate for that and drive really, really healthy operating profit gains. And then that leaves for the opportunity for as Urban does begin to turn their business around for them to then contribute to incremental growth in fiscal ‘25 and beyond and begin to recapture from where they were.
