McInnes chair CCX, page-51

Instructive for the CCX USA and Avenue teams.

Comments from Torrid earnings call; encourage those actually interested in CCX as a business to read the full transcript.

“No, I would just reiterate or confirm that we are seeing stabilization in the customer file. We're adding more customers to the file than we were a year ago, which is very encouraging, attributable to reactivation, as Lisa said, but also sequential improvement in new customer acquisitions. So both moving in a very positive direction. We have more flexibility and I think more intelligence than we had a year ago with the partnership of our third-party digital marketing agency. That's allowing us to be more responsive in the way that we allocate and really maximize EBITDA ROI on our digital marketing investments, driving enterprise value. So both to the store channel and the e-commerce channel.Lisa HarperAnd I think adding to that, we also are in the midst of -- we've done the work and now we’re going through the testing phases of enhancements to our loyalty program that will drive frequency. And so we think that there are some -- we brought in a group to really evaluate where we are with loyalty and we're in good shape with loyalty. But there are some core things that we can change in terms of bonus points and special events that help drive frequency, and we'll be rolling that out in the back half of the year.Brooke RoachGreat. And then maybe for Paula, can you quantify the gross margin benefit that you saw this quarter between markdowns relative to the lower product costs? And then can you elaborate on the magnitude of the benefit that you expect for each of those two drivers for the remainder of the year?Lisa HarperYeah, absolutely. I would say the majority of our gross margin benefit that you saw coming through in Q1, Brooke, was truly coming through the regular-priced items, right? So we saw a great benefit from that. And we're going to continue to see that benefit in Q2 and Q3 and tempering down a little bit in Q4 as we progress through the year. But I would say that we're happy with our margins. We're ecstatic with it. And again, the expansion should be for Q2, fairly similar to what we've seen in Q1.Paula DempseyYeah, I would add to that that in Q1, specifically, about two thirds of what we experienced from a product margin expansion, so truly just product, not fully baked gross margin was from benefit of cost of goods, the other third from reduced discounting and markdown. We'll see that relationship continue through the second quarter, and then we'll start to see that invert as we progress further into the balance of the year, where we start to lap some of the product cost benefit that we saw, but we will have benefit from reduced discounting that continues with our inventory levels remaining far reduced.Brooke RoachGreat. Thanks so much. I'll pass it on.Paula DempseyThanks.OperatorThank you. [Operator Instructions] Our next question comes from the line of Marni Shapiro with Retail Tracker. Please proceed with your question.Marni ShapiroThank you. Hey, guys, congrats on some great improvements and also congrats on hitting a million on Instagram

Ashlee WheelerYeah, we've seen great response to our tops businesses. As I noted in the prepared remarks, we've seen positive comps at regular price in our knit tops, graphic tops. We're seeing woven's turn and we're actually starting to see dresses turn positive too. So across the board, we're seeing receptivity to our more casual product.Corey TarloweGreat. Thank you so much.OperatorOur next question comes from the line of Brooke Roach with Goldman Sachs. Please proceed with your question.Brooke RoachGood afternoon, and thank you for taking our question. Lisa, can you elaborate on the new customer acquisition and lapse customer reactivation results that you're seeing in your business today? As you look ahead, what actions are you planning to take to keep those new customers and expand your share of wallet with those customers?Lisa HarperSure. Hey, Brooke, thank you for the question. We are seeing a very positive reaction that we saw basically the minute we started the model search reactivation.”