So there’s a lot of activity that we’ve been investing in that should mature in the back half of the year. And so, the likelihood is that digital will increase in its participation for us. And happily, the profitability of the channels is pretty much the same for us. So we don’t really mind where the customer shops with us, we’re prepared for her in both arenas. I think the other thing to note about digital is we talked about the synergies from Adore Me. And a very important one is the launch of Try-on at Home, which will be launched on a test basis in the fall season. That, of course, points at the digital business rather than the stores business. So that’s another benefit to that side of — to that channel. I hope that helps though. Thanks.
Ike Boruchow: Thank you.
Operator: Our next question from Marni Shapiro with Retail Tracker. Your line is open.
Marni Shapiro: Good morning, everyone. Martin, I was hoping you could dig in a little bit to your loyalty program. I think impressive, you had 16 million people sign up in a matter of three months. Can you — or do you have any insight into: are these new or existing shoppers? Are these lapsed shoppers? Are you seeing activity change once they sign up? And I guess what is the look forward to that as we get into the holiday season? How do you expect to use the loyalty program?
Martin Waters: Yes. Thanks, Marni. Good morning. Yes, we’re pleased with over 16 million members in three months. I think that’s a very strong adoption rate. And I think as I look back over the last couple of weeks in the sort of low 70%-s, 72%, 73% of sales coming through that device, so that gives us great data, and data is our friend when it comes to marketing and personalization. So, how much of the file is new? About 50% is new. So, of those 16 million, about 15 — about 5-0, 50% would be new. And new, we define as we’ve not seen this customer in the last, I think, 24 months. So that’s pretty strong adoption rate, I would say. In terms of the — what we know about that customer, it’s broadly consistent with the customer that we’ve seen previously in terms of demographics, in terms of age, in terms of other segmentation.
The real win for us, as I said, is enabling us to move from a one-size-fits-all marketing campaign to campaigns that reflect the needs and preferences of the individual. And we’re kind of at page one of that. We just started it, but we’ll gain capability as the system learns more from the data and as we get more comfortable with personalization. So that’s the big win. Now of course, from an external point of view, when you’re looking in, you will be receiving marketing that we and our systems and our capability and artificial intelligence think are most suited to you. You will no longer be able to see all of the marketing that’s pointing at all of the people. So, you just kind of have to trust us that there are multiple campaigns in place pointing at different people at different times.
Marni Shapiro: Great. Thank you so much.
Operator: Thank you. Now our next question is from Jonna Kim with TD Cowen. Ma’am, your line is open.
Jonna Kim: Thank you for taking my questions. Just curious on the beauty side, it seems like it’s really growing nicely. What is sort of the growth driver behind the beauty? And how big do you think the segment could grow over time? Thank you.
Martin Waters: Yes, thanks for the question. Beauty has always been a really important part of our business. It’s a natural adjacency to lingerie. It’s a really, really beautiful partner, both in store and in digital to our lingerie business. What’s been driving the strength in performance recently, let’s say, this year is a couple of things. One, the EDP strength of performance, particularly the Heavenly restage was very good. The Bare Rose launch was terrific for us. But also Body Fragrance Mist, I think, was up in the mid- to high-single digits in the second quarter. And that’s at a very accessible price point, it’s a good entry into the brand. And we do, on occasion, see a different customer coming into the brand through beauty.
And that gives us an opportunity to talk to her about other things that we sell. So, beauty is a terrific business for us. We’re excited about what’s coming in the back half of the year and it’s a very important strategic business for us. Thanks for asking.
Jonna Kim: Thank you.
Operator: And now our next question from Corey Tarlowe with Jefferies. Your line is open.
Corey Tarlowe: Great. Thanks. I was wondering if you could talk a little bit about some of the newer initiatives at PINK. How that business is trending? And then maybe just an update on how PINK is doing into back-to-school? Thanks.
Martin Waters: Yes. Thanks for asking. PINK is — if I say early days, I literally mean early days. We launched the first of the new PINK merchandise on August 29. So, it’s kind of two days in. So it is very, very early days. I do know, though, from some tests of early merchandise that we put out to a certain number of stores and some customers online, the response has been favorable. We’re seeing good pickup on our new merchandise. What I will tell you is, though, we’ve not built a big impact from the turnaround of PINK into half two. Our goal is to watch and learn and chase like crazy into the winners. We’ve already started to see some chase opportunities, particularly in the Seamless Air Bra. We expect that there will be others that will emerge in the coming days and we’ll chase hard into them.
For us, it’s about redefining the PINK brand to be more declarative with the brand narrative and appeal to Gen Zs specifically. And that won’t happen overnight. So, early signs — very, very early signs are positive. We have not baked in a big U-turn for the back half, and we’ll keep you posted as we go. I think by the time we get to our investor meeting, October 12, we’ll have some reasonable indications, and we’ll certainly show you and anybody else that comes to that meeting or watches that meeting the merchandise that’s trending.
Tim Johnson: Yes, I think on the second part of the question, Corey, around back-to-school, given the transition we’re in, in PINK, it’s more difficult to kind of isolate into PINK-only back-to-school. So I’ll pivot back to Martin’s earlier commentary around the month of August. And that’s really about merchandise green shoots, particularly on the VS side, strong beauty, significant marketing launch with Icon, significantly more marketing dollars, visual online, all in relative to the launch last year of So Obsessed. And then also, you’re seeing good early signs of us utilizing the strength of our new loyalty program with the successful Beat the Clock event in August. So, if August is a proxy for back-to-school, it was our best month of the year really driven by some of the merchandising green shoots and marketing efforts on the part of the team.
Martin Waters: Yes. One other thing on PINK that I forgot to mention, which we’re really pleased about is the collaboration with Chloe and Halle, which has had fabulous media pickup, particularly in social media. The product looks amazing. And early indications on that are that it’s going to sell out and sell out quickly. So that’s a good indication of a green shoot on PINK that I should have mentioned earlier. Well, next?
Corey Tarlowe: Great. Thank you.
Martin Waters: Welcome.
Operator: Now our next question from Carla Casella with JPMorgan. Your line is open.
Carla Casella: Hi. My question is around the heavy marketing spend you talked about for third quarter and the tour. Is that completely additive or some of that pull forward from the spend you would normally spend in 4Q?
Tim Johnson: Yes. Good question. Thanks, Carla. I think we took the approach of really leaning into the investment here from a marketing perspective with two of our largest marketing spend since we’ve become a public company with the World Tour and the launch of the Icon Bra all happening in the same quarter and our lowest volume quarter of the year. So, we really are taking the longer-term view here and expect that the halo of both Icon and World Tour will carry on with customers through the holiday season and will also present for us a lot of marketing collateral to utilize in our stores and on our digital sites for a number of weeks to come. So, while the expense, Carla, hits largely in the third quarter, we do see benefits of the marketing spend for stores and digital all the way through the fourth quarter season.
