are you on hitting a number versus saying, say, well, if the real estate deals aren't right, then it's going to be 65 or if they're really, really good, maybe it's 75. Can you just talk about your flexibility around that and sort of whether you're prioritizing hitting a number in terms of openings or if it's really about real estate and trying to get that leverage point down?

Really, the goal is to open the best stores that we can open and not settle for stores that are going to be subpar. And so we've got the goal out there of the 12 to 15%. We like the pipeline as it's laid out for the balance of this year. We feel good about our guide for this year. As we get into next year, we expect to be within that range. But as we evaluate real estate, we'll be able to lock into a number that's a little bit more precise than what we have out there for next year as we lay out guidance. As far as the leverage points go, we're We're in a good place with our occupancy and occupancy rates. And I know that the 10% leverage point on buying an occupancy and distribution center cost is often an area of focus. But as we look to the EBIT rate expansion, we feel great about that, particularly this year with the more recent tariff impact or help in the business. It's 240 basis points. We will have expanded EBIT over a three-year period. Thank you for joining us. And one thing I just added, we've opened 93 stores over the last 12 months, 20% increase in store count over the last 12 months. And so the math on that is just going to put some pressure on the occupancy rate, but that's included in the design of what we're doing here with opening these stores.

Completely makes sense. Thank you so much. Very helpful. Thanks, Jay.

Our next question comes from Janine Strickter of CTRG. Please go ahead.

Hi, thanks for taking my question. I want to go back to the exclusive brand penetration. You're sitting here this year at a bit over 40%. I know in the past you've talked at maybe surpassing 50%. Does this change at all the way that you think about the long-term opportunity? And then also I was just curious what you're seeing on some of the newer e-commerce initiatives. In the past you talked about TikTok shops and also some of the branded e-commerce sites. Thanks so much.

Yeah, absolutely. I still believe 50% is the right number. I don't think as we stand today and the brands that we have that it is north of 50. I think we're a house of brands, we're a retailer, but I believe 50 is the right number and I still have full confidence that we will get to 50% over the coming years. So this is a rebalancing due to some wins in the work boot space, which is good news. As we look at the exclusive brand sites, they continue to gain traction. The traffic or sessions, as well as the sales coming from those sites, continue to comp upwards. Cody James is still, given that it's our biggest brand, makes sense, is the biggest success among those. So I'm still very pleased with the storytelling and the brand building that we're able to achieve with those sites. The sales that come from them are a nice after effect, but we've got millions of sessions or visitors coming to those sites and learning more about Cheyenne or Cody James or Hawks than they ever would on a product detail or product listing page on bootburn.com. So thrilled with the amount of traffic we're getting to those sites. TikTok shop continues to be great. We are selling both our own brands on TikTok shop, as well as certain third-party brands have partnered with us, which has been exciting. And we continue to see nice traction on TikTok. It continues to grow very quickly in the U.S., as I'm sure many of you know. I believe it's the size of eBay right now in terms of sales. So TikTok has become a pretty... Broad and large marketplace. And we continue to use everyday influencers, as I called them last time. I've seen this term kind of bandied around lately of nano creators or nano influencers. Everyone seems to be leaning into these, you know, influencers with less than 10,000 followers. We're partnering with different sororities going into rush talk season this year. So all's going well with TikTok shop as well. Still very bullish on it.

Great, thanks so much. Our next question comes from Max Brechtlenkel of TD Cowan. Please go ahead.

Thanks a lot. So first, can you speak to the health of your customer and whether some of the macro pressures from higher gas and other costs may have a greater impact on the more rural economy than the broader consumer? As you did mention, I think that traffic in July was down across all regions, which feels like it's maybe a bit more of a broader situation.

Yeah, again, July, you know, four weeks, summertime, World Cup distraction. It was broad-based. You're absolutely right. And I don't believe it was, you know, gas prices or something macro. When we look at our customer data and we do this at the end of each quarter, we're not seeing a K-shaped customer. We're not seeing, you know, the lower-income customer cutting back versus our higher-end customer. It was very even in terms of Subdue Traffic in the month of July for, we think, the reasons we described. We're not seeing anything that would say the lower-income customer is cutting back on trips or purchases. As a reminder, we're very much a needs-based business, and if you need our product to work, it's going to be one of the last purchases you cut. But nothing we're seeing would indicate, either by geography or income level, that that it's a particular group of consumers that have shifted their behavior. I think it's more the month of July was just a little bit odd for a variety of reasons.

Got it. That's helpful. And then on in-store transaction trends more broadly, can you speak to the mix of new shoppers versus returning shoppers? And then can you discuss the success that you're having with the new websites in getting new shoppers to visit stores? Because I think that's One of the key sort of strategies to continue to drive in-store transactions.

Yeah, I'll start with the sites. Given, and I just quoted this with Janine, the millions of sessions we have on those sites, as with most e-commerce sites, the conversion usually hovers somewhere around a two. Most of those people aren't shopping on the site where we're trying to drive that traffic to the stores to drive traffic. You know, the storytelling on the site. I love the brand. Where can I find it? Well, you can buy it at Boot Barn or Shepler's Country Outfitter, Amazon, TikTok. But the best place to buy it is in our 550 plus stores. So we're constantly using those exclusive brand sites to drive traffic into stores. The attribution of that, of course, is difficult. Right. So we don't have. You know, it's not a ship-to-store order. These are people who visited the site and then hopefully come to store. So I don't have an attribution number for the sites that I can share with you, but the sustained traffic that we see, I'm pretty darn optimistic about. And the first part of the question, again, my apologies, was?

I guess new versus returning shoppers.

Yeah, we continue to see a balance between new and returning. We've quoted in the past that it is roughly half and half. And as I'm looking at the number of new customers by region, it continues to be, you know, in some of the parts of the country, we're a little newer. For example, the Northeast, it tilts higher. And in legacy markets such as California and Texas, it's a little bit lower, but there's been no real swings there. in new customers versus existing over the last few years since that big kind of COVID push in fiscal 22.

Got it. That's helpful. Thanks, guys, and good luck.

Thank you.

Our next question comes from John Kepor of Goldman Sachs. Please go ahead.

Hey, good afternoon. Thank you for the question. So I wanted to dig into new openings. Just wondering how those have been trending versus a year or two ago. I think you reiterated the 3.2 million. That number's been floating around for a while. Just curious about whether or not that may get an upgrade. And then just in terms of learnings that you could apply from opening to opening and how your assortment changes maybe and how you tailor stores based on region or customer type. I just want to get a sense of productivity in those new stores and how that's advanced. Thank you. Thanks for the question, John.

The $3.2 million number, we're tracking to that. I would say it's roughly in line with that, maybe slightly better, but not meaningfully more than $3.2 million. And so we'll continue to monitor that. And if we need to update that to a different number, we'll let you know. But they're opening really nicely across the country and different geographies. And so pleased with how those are coming along. As far as the learnings that we've taken as we open stores in different geographies, we start with a pretty similar assortment across the country. And we will look at other stores that we believe behave similarly to the stores we're about to open up and we'll make some tweaks around that. And then we'll monitor the new stores very closely to see what's selling, what's not selling, look at the competitive nature of the market that it's in and make tweaks to the assortment accordingly. Some of those happen before we open. Many of them happen after we open and try to address those so that we're maximizing the The traffic that we get there. And then we're also monitoring the marketing around that and looking at areas that we can improve and how we can drive more people into those stores, depending on what the market or what the store is doing. But it really is a store-by-store analysis that we look at. But as you walk into any of our stores across the country, you likely will not see or notice a significant difference from store to store. But our merchandising team and our stores team, they will notice the subtle differences as you move from market to market or store to store.

Okay, thank you. And then just another one on marketing. That came in a little bit lower, I think, than we might have expected. Just wondering, are you guys seeing a better ROAS or what exactly is driving maybe some of the pullback on the marketing spend?

It's really just timing shifts between quarters. We target a 3% marketing for the full year. We model that marketing out in advance of the quarter. And sometimes we're able to get all of that in. Sometimes things shift. Sometimes there are new store openings that shift or grand openings that move around. And so it really is just timing, nothing more than that.

Okay. Thank you, guys. Thank you, John. Thanks.

Our next question comes from Chris Nardone, Bank of America. Please go ahead.

Thanks, guys. So first, how should we think about the pricing assumptions that are embedded in your guidance? Are you expecting third-party brand to take more price this summer? And are you seeing customers chase product on promotion more, you know, over the last few months relative to the trend line over the last few quarters?

Great questions. The pricing It feels like we're back to normal price increases, maybe a little bit lower on the increases than what we would historically see, but definitely lower than what we saw last summer. I think that trying to manage price increases and minimize those for the consumers is something that we and also our third-party vendors have been aware of and conscious of and We're seeing those be more muted this year. Typically, summer is when we'll see those price increases. That's what's happening on the pricing front. What was the second part of the question? Sorry about that, Chris.

No worries. Just whether you're seeing a higher take rate of products that are on promotion over the last few months relative to what you've seen over the last several quarters and years. I would say not really.

Not really. It's been very similar. We have markdowns of the percentage of inventory that remain pretty low for us. And as we said on our last call, the promotions that we're doing for clearance items have been not as deep as what we saw maybe a year ago. And so we're not seeing a shift towards promotion.

Okay, and then just one last one. I know inventory per store was only up slightly during the quarter, but just given, I know it's only been a month of slowdown, just talk to us about the health of inventory on the balance sheet, particularly that woman's leather boot category.

Yeah, we feel great about the health of the inventory. As I just mentioned, the markdowns as a percentage of inventory are below historical standards and pretty low. We We've made a conscious effort and we've talked about just being in stock on what we call our tried and true styles, the styles that are on replenishment that oftentimes have been in our assortment for years and making sure that we've got the product that our customers want. And our inventory being on replenishment style kind of shows that it's pretty low risk. If it takes us a little bit longer to sell through it, That's fine. It is still going to sell. So not something we're concerned about right now.

Sounds good. Thank you, guys.

Our next question comes from Sam Poser of William Trading. Please go ahead.

Thanks for taking my question. First of all, to what degree has your vendor count changed? Has it come down? and is that what's helping provide the leverage on the freight costs? Are you becoming much more important with less vendors, with more tried and true items, which would make moving containers and all that stuff much more cost efficient and get you better pricing at the same time?

The vendor count is pretty similar to what we've had in the past. It's really not impacting the freight, but what is happening is we do volume discounts with some of our third-party providers. We can take a full container load of product or styles from that vendor and get that discount. That's something that as we grow and scale, we're just buying more with each vendor just because of your size and the growth that we've seen. That helps us get more of those volume discounts, but not really anything to do with the freight per se.

And then were there any markets in the quarter that performed better than others, regions of the United States? And then also, as you've opened stores, are there new markets you've entered or are planning to enter for the balance of the year? And maybe how some of the new markets, such as parts of the Northeast, are doing?

Yeah, there are always markets that perform better than others. Nothing worth calling out on this call. As far as opening into new markets, there are new markets that we'll be heading into over the course of the year. Not something that we want to talk about on the public call for competitive purposes.

All right. Thanks very much and continued success.

Thank you, Dan. Our next question comes from Corey Tarlow of Jefferies. Please go ahead.

Great. Thanks. I just wanted to ask a question on fashion trends, and I recognize it's not the genesis of what your business does, but I'm curious that the categories that are exposed to certain areas of fashion, Are there any specific trends worth calling out?

Well, I mean, not really. If you look at all the categories where there is some fashionable, more fashionable product, it is very much as it's always been. If I really had to get down into the details and look for something, you'll see Some brands do a little more of a wider flair. So we still have boot cut jeans make up the vast majority of what we sell at Boot Barn. But you're seeing a silhouette that is not that barrel jean I talked about on past calls or at conferences, but a little bit of a wider bootleg jean from some of the Western retailers. But again, that's a very, very small piece of the women's denim business, which on its own is only roughly 5% of our business. So By far and large, it's more of the same Western traditional, Western boots, traditional bootcut jeans selling in the performance category. There's a lot of rubber-soled kind of brown women's boots that are selling. Nothing new to really call out from a fashion standpoint unless you really want to get into some newer silhouettes on the denim side that make up a very small piece of business.

Understood. Thank you so much. And then just to follow up on an earlier question, Jim, I believe it was about AUR versus transactions. I was wondering if you could talk about what's embedded within the guidance for this year from a ticket perspective. It does sound like the increases should not be as sizable as what we've seen in prior years, but I was wondering if you could provide more color there in terms of what you're seeing. Thanks so much.

Yes, I think you characterized that correctly, Corey. We're expecting AUR to be up 2% to 3% on the year, and we expect the transactions to be flat to up 1% on the year. That kind of gets us to that 3% stores comp number at the high end of our range. And addressed the question earlier about the price increases this year being more tempered and more in line, if not a little bit. lower than what we normally see from the third-party vendors.

Great. Thanks so much and best of luck. Thank you, Corey. Thanks, Corey.

Our next question comes from Jeremy Hamblin of Craig Hallam. Please go ahead.

Hey, this is Will on for Jeremy. It sounds like you're still seeing a lot of new customers fall into the exclusive sites. I'm just curious if you've seen any sort of Are there any behavior differences between this new cohort of customers and your existing base?

For the exclusive brand sites, no.

There's nothing particular to call out around the exclusive brand customers. Those who purchase on the sites, those are the ones of course we have the most information about. It varies by site. Some of those sites are more impulsive purchases that will have a lower AUR or ADT, rather, depending on the site. Others will look exactly like a typical purchase on Boot Barn. So there's nuances to each of the sites. We're now running Idlewind Hawks, Cody James, Clio, and Cheyenne. And so behavior shifts a little bit by site. and many more. It really is about the storytelling and the brand building and the sessions and the time that people spend on those sites learning about the brand so they can come into a Boot Barn store and experience what makes us great. It's the store more than anything. So our goal with all of those sites is to drive those folks into stores. And for the 2% who decide to purchase on the site, we do everything in our power to get those folks into the stores as well and convert them into an omni-channel customer.

Okay, that's helpful. Thank you.

Thank you, Will.

This concludes the question and answer session and today's conference call. This call has now concluded. Thank you for attending today's presentation. You may now disconnect.