Good day, thank you for standing by. Welcome to the Q2 2022 Steven Madden, Ltd. Earnings Conference Call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during that session, you will need to press star one one on your phone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ms. Danielle McCoy, VP of Corporate Development and Investor Relations. Ms. McCoy, please go ahead.
Thanks, Chris, and good morning everyone. Thank you for joining our second quarter 2022 earnings call and webcast. Before we begin, I'd like to remind you that our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to materially differ from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our press release issued earlier today and filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. The financial results discussed on today's call are on an adjusted basis unless otherwise noted.
A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release. Joining me on the call today is Ed Rosenfeld, Chairman and Chief Executive Officer. Unfortunately, Zine Mazouzi , Chief Financial Officer, is under the weather recovering from COVID and is unable to join. With that, I'll turn the call over to Ed.
Well, thanks, Danielle, and good morning everyone and thank you for joining us to review Steve Madden's second quarter 2022 results. We delivered strong results in the second quarter, with revenue increasing 35% and diluted EPS increasing 31% compared to the prior year. While macro pressures intensified during the quarter, our team remained laser focused on executing our strategy, combining outstanding product and effective marketing to create closer connections with our consumers, thereby enabling our four key business drivers. One, driving our direct to consumer business led by digital. Two, expanding in categories outside of footwear like handbags and apparel. Three, growing in international markets. And four, strengthening our core U.S. wholesale footwear business. Our strong execution against these initiatives drove above plan performance in the second quarter in each of our primary business segments.
In wholesale footwear, revenue increased 47% compared to the prior year. Steve Madden was the largest contributor to growth with strong gains across women's, men's, and kids, followed by Dolce Vita, which continues to have exceptional momentum and grew more than 150% compared to the prior year. In our wholesale accessories and apparel segment, revenue grew 65% compared to the prior year, driven by robust gains in Steve Madden handbags, BB Dakota Steve Madden apparel, and private label accessories. In direct to consumer, revenue increased 2%, a strong result considering it came on top of the phenomenal growth from a year ago when our DTC business benefited from pent-up demand and stimulus checks and increased revenue 63% over pre-COVID second quarter 2019.
Finally, across each of these segments, we delivered robust growth in international markets. International revenue increased 82% versus the second quarter of 2021, driven by particularly strong performance in our directly owned subsidiary markets, Canada, Mexico, and Europe. Overall, international represented 15% of our total revenue, up from 11% a year ago and a new quarterly high. Overall, we were very pleased with our performance in the second quarter. That said, macro conditions deteriorated during the quarter, and we did see consumer demand and sales trends moderate beginning in June, which has continued into July. Given these macro pressures, the near term outlook has become more uncertain, and we are taking a cautious approach to managing our business in the back half.
Looking out further, however, we remain as confident as ever that by leveraging our core strengths, our people, brands, and business model, and executing on our strategy, we can drive growth and create significant value for our stakeholders over the long term. Now, I'll turn it over to Danielle to review our second quarter financial results in more detail and provide our outlook for the remainder of the year.
Thanks, Ed. Our consolidated revenue in the second quarter was $535 million, a 34.5% increase compared to 2021. Our wholesale revenue was $397.1 million, up 51.5% compared to the prior year. Wholesale footwear revenue was $291.4 million, a 47.1% increase from 2021, driven by strong performance in our flagship brand, Steve Madden, as well as in Dolce Vita, Anne Klein, Betsey Johnson, and private label. International wholesale footwear revenue grew more than 60% versus the prior year.
Wholesale accessories and apparel revenue was $105.7 million, up 65.2% to last year. The growth was driven primarily by strong gains in Steve Madden and private label handbags, as well as in our apparel business, which recorded year-over-year growth of more than 100% for the third consecutive quarter. Q2 also benefited from a pull forward of deliveries from Q3, particularly in private label. In our DTC direct-to-consumer segment, revenue was $135.5 million, a 2.2% increase compared to 2021. As Ed mentioned, we had an extremely tough comparison in Q2 2021 due to the benefit from stimulus and pent-up demand. As such, we were pleased to exceed last year's direct-to-consumer revenue in the quarter.
Compared to pre-COVID second quarter of 2019, direct-to-consumer revenue was up 66.4%. We ended the quarter with 213 brick-and-mortar retail stores, including 66 outlets as well as six e-commerce sites and 19 company-operated concessions in international markets. Turning to our licensing and First Cost segments. Our licensing royalty income was $2.2 million in the quarter compared to $2.8 million last year. First Cost commission income was $0.1 million in Q2, or $0.3 million last year. Consolidated gross margin was 40.7% in the quarter, compared to 42.7% in the prior year. The decline was entirely due to a mix to wholesale from direct-to-consumer as we recorded year-over-year increases in each of wholesale and direct-to-consumer.
Wholesale gross margin was 31.6%, expanding 100 basis points compared to last year, driven by margin improvement in wholesale footwear. Direct-to-consumer gross margin was 66.4%, an increase of 100 basis points compared to the prior year, driven by margin improvement in international markets. Operating expenses were $150.8 million in the quarter, compared to $119.1 million last year. As a percentage of revenue, operating expenses were 28.2% in the quarter, 170 basis point improvement compared to 2021. Operating income for the quarter totaled $67 million or 12.5% of revenue, compared to $51 million or 12.8% of revenue last year.
Our effective tax rate for the quarter was 23.5% compared to 20.7% in 2021, primarily due to the decreased discrete benefit from the exercise and vesting of share-based awards. Net income attributable to Steven Madden, Ltd. for the quarter was $49.8 million, or $0.63 per diluted share, up from $39.7 million, or $0.48 per diluted share in 2021. Moving to the balance sheet. Our financial foundation remains very strong. As of June 30th, 2022, we had $180.5 million of cash equivalents and short-term investments and no debt. Inventory totaled $306.5 million compared to $125.5 million last year and $146.1 million in 2019.
Inventory continues to be higher than historical levels as a result of our need to place production orders earlier due to supply chain disruption and longer transit times. We built an average of an additional 40 days of transit time into our production schedules and as a result have approximately 40 days more supply of inventory than we did pre-COVID. We remain comfortable with the amount and composition of our inventory and our ability to meet our customers' ship windows. We began seeing improvement in the supply chain and a reduction in transit times in the second quarter. As we return to a more normalized way of operating, we expect inventory levels to come down meaningfully beginning in Q4. Our CapEx in the quarter was $1.7 million.
During the quarter, we repurchased 34.6 million of the company's common stock, which includes shares acquired through the net settlement of employee stock awards. The company's board of directors approved a quarterly cash dividend of $0.21 per share. The dividend will be payable on September 26th, 2022, to stockholders of record as of the close of business on September 16th, 2022. Turning to our outlook, we are reiterating our full year guidance. We continue to expect revenue to increase 13%-16% compared to 2021 and diluted EPS in the range of $2.90-$3.00. Now, I'd like to turn the call over to the operator for questions. Operator?
Thank you. As a reminder, to ask a question, you'll need to press star one one on your phone. Please stand by as we compile the Q&A roster. Our first question comes from Camilo Lyon of BTIG. Your line is open.
Thank you. Good morning. Good morning, all. Nice job on the quarter in an increasingly challenging environment. Ed, you talked about it in your pre-prepared remarks.
Starting to have seen deceleration in your business in June that's continued into July. I was wondering if you could give a little bit more color around that comment. Maybe talk about is there a disparate level of activity by your wholesale partners? If we think about the higher income exposed partners or the lower income exposed partners, where you're seeing the pullback unfold. That's my first question.
Sure, yeah. The pullback that we saw that began in June, I think we've really seen that across channels. We saw that in our DTC channels, and we saw it to some degree in our wholesale sell-throughs. Wanna make the point that, you know, we were starting with essentially through May, phenomenal performance, and there was a slowdown, and that took us to a level that I would still characterize as pretty darn good. You know, I can give you some color on our DTC channel, maybe just to give you an indication of what we're talking about.
Through May, if you look at our DTC comp sales, including, you know, total, including bricks and mortar and digital versus 2019, we were running over +70% comp to 2019. That was for Q1 and also through the first two months of Q2. June and July, that number has looked more like 57%. Again, meaningful slowdown, but, you know, 57% comp to 2019, nothing to be ashamed of. You know that there's a lot of brands that would probably like to like to be seeing those kind of numbers. In terms of your question about high end versus low end, again, I think, you know, the slowdown has really been somewhat across the board.
If we look at how the wholesale customers are reacting to that, we are seeing them pull back and get more cautious, incrementally more cautious about how they're approaching forward orders, particularly for Q4. I would say that on a percentage basis, we have seen more of a pullback from the folks that target the low-income consumers, but we have seen virtually all the customers get more cautious.
That's really helpful. Thanks for the color. I think you just said at the end that you're seeing more of a pullback on the fourth quarter order pattern. Maybe just shifting what you're starting to see, if anything, on the trend side. I'd be curious to see what you're seeing from the demand perspective in that regard, any early reads you're getting, as we head into the back half. Does your inventory position today, given the improvement in supply chain lead times that you're seeing, give you a better ability to chase or fill demand should some of the pullback in the fourth quarter be an overshoot to the downside?
Yeah. In terms of fashion trends, which I believe was the first part of your question, we don't like to talk this early in the season too much about what we're seeing prospectively because it's for obvious competitive reasons. I think one piece of color I can give you is that boots and booties we are seeing good early reads on boots and booties. That's a category that's performing better at this time of year than it did a year ago. The penetration, for instance, in our DTC channels is significantly higher than it was a year ago at this time. We are optimistic about that category. In terms of your second question, yes, we have seen a pretty meaningful improvement in transit times recently.
As an example from China, as you know, we were seeing 70-day transit times and earlier this year. More recently, we're looking at more like 45 days from China. Still not back to the 30 or so that we were at pre-COVID, or frankly, sometimes it was more like three weeks, 21 days, but still meaningful improvement. That's gonna give us a better ability to chase going forward. Of course, as you know, in fall, we also do quite a bit out of Mexico, which means we have a better ability to chase those products. However, we're still not back to our normal speed to market.
I think it'll really be into 2023 before we can chase the way that we're accustomed to.
Do those improved transit times reflect, or will they be reflected in terms of a cost improvement this year, or is that more of a 2023 story? How do we contextualize, you know, the margin opportunity from the improvement in supply chain, assuming that it stays at this level or continues to improve from here?
Yeah. If you're asking about the freight pressure that we've seen, I guess I'll split it up between air and ocean. Air freight is down. The freight rates are down from where they were a year ago. They've come down a little bit, but still obviously dramatically higher than where they were pre-COVID. Ocean is higher than a year ago. The spot rates have come down off their peak, but it's still a headwind for us this year because last year we were benefiting from a contract where we had locked in rates well below the spot.
All in all, when you put that together, freight's pretty neutral this year, after the big headwind that we had last year, maybe a slight headwind again this year. Hopefully, if things continue, it'll become a tailwind in 2023.
Got it. Thanks so much, and good luck with the back half of the year.
Thanks, Camilo.
Thank you. One moment please for the next question. Our next question comes from Jay Sole of UBS. Your line is open.
Great. Thank you so much. Ed, I just wanna follow up on the last point. What's your view on how much improvement you will see in the freight cost that you're talking about over time? You know, hopefully it'll be a tailwind next year, but this'll be a little tailwind. I mean, what's your visibility into freight rates getting back to maybe where they were pre-COVID? That's the first question. Thank you.
Yeah, I don't think anybody knows the answer to that. Certainly I don't. If the rates continue as they are now, there will be some tailwind next year. We certainly, you know, we're talking about 250 basis points or more of headwind that we're experiencing now compared to pre-COVID. You know, the rates still remain significantly higher than where they were pre-COVID. If they stay where they are now, yeah, we'll get a little bit of that back, but not that much. You know, obviously we hope that over time rates return to where they were before, but I don't have any special insight as to whether or when that will happen.
Got it. Maybe just on the inventory, is it possible to sort of break down a little bit further, you know, your comments on inventory? You know, what kind of inventory you're carrying and sort of like how it's gonna play out to, you know, to get to the point in 4Q where inventory levels look more in line with the sales trends.
Yeah. You know, I think Danielle, as Danielle pointed out in the prepared remarks, you know, if you look at the inventory compared to Q2 of 2019, I think that's the right comparison by the way, 'cause Q2 last year we were dramatically under inventoried and had to fly a lot of goods, et cetera. If you look at it compared to Q2 of 2019, we have almost exactly 40 days more of supply. That makes sense because on average we have built an additional 40 days of transit time into our production calendars. Again, from China, you know, we used to work on 30 days, an assumption of 30 days, and then we began working on an assumption of 70 days earlier this year.
As I pointed out, right now we're getting products in more like 45 days. As that transit time decreases, we'll be able to carry less inventory. As I said, I think that you'll really start to see that come down again, assuming that supply chain disruption doesn't get worse. Assuming we stay on this path, you'll see the inventory levels start to come down in Q4.
Got it. Okay, thank you so much.
Thanks, Jay.
Thank you. Okay, one moment for our next question. Our next question comes from Samuel Poser of Williams Trading. Your line is open.
Good morning. Thanks for taking my questions. One, you talked about the retailers being a little more cautious. How is your performance relative to other things? Or are they being cautious with you? Or potentially cautious with goods that aren't there yet despite how they may be performing relative to the rest of the business, other categories and so on?
We still believe that our performance is on the high end of what they're seeing. We still think relative to the competition, we're outperforming. I think that, you know, this slowdown that we talked about in June and July. I think that's something that's certainly not just us that's seeing that. I think a lot of retailers are experiencing that and they're taking action as a result to try to make sure their inventories are in line.
two follow-ups. Or three follow-ups. How big is June and July this time period sort of in the big picture? Is this a busy time normally, or is this sort of an in-between time? How, you know, we're coming up on back to school. You know, do you believe that people's moods could change pretty quickly if back to school comes in and it's, you know, we get sort of out of the doldrums into a time when people really need to shop more?
Yeah, to your point, these are not huge months. You know, we are certainly, yes, obviously, if things get considerably better, people will react. As of now, we're essentially assuming that things continue as they are today.
Lastly, a Nordstrom anniversary sale, how does that look for you?
It was good. Yeah, we were very pleased with it. We had a very overall very strong increase to last year, which in and of itself was, you know, last year was quite good as well. That was great. I think what we were pleased about was really strong performance across our various businesses. We did well in Steve Madden, Dolce Vita, Blondo, apparel, kids. It was really broad-based strength, and that was exciting.
Thanks very much, and continued success.
Thanks, Sam.
Thank you. One moment for the next question. We have a question from Laura Champine of Loop Capital. Your line is open.
Thanks for taking my question. Can you talk about growth of your versus your branded sales and maybe give a little more color on the growth of the Steve Madden brand specifically?
Yeah, I'm sorry. I think that you were cutting out a little bit. You asked at first about private label versus branded. Is that right?
Correct. That's correct.
Yeah. Branded is growing faster than private label, and we expect that to be the case in the back half as well. You know, our biggest customers on the private label side are the mass merchants, and you know, obviously both of them have, the big ones have talked publicly about their desire to right-size inventory, and so we will feel some of that impact on the private label side. You know, look, Steve Madden has been the big driver of growth for us, and that continues. Steve Madden, you know, as an example in wholesale this quarter was up north of 40% to last year in the U.S. and faster than that in international markets. That's wholesale footwear.
Great. Thank you so much.
Yeah.
Thank you. One moment, please, for the next question. Our next question comes from Ms. Susan Anderson of B. Riley Securities. Your line is open.
Hi. Good morning. Thanks for taking my question. Nice job on the quarter. I was wondering if you could talk about ASPs versus units in the quarter. I guess, you know, how much of each drove the sales growth and also what you're seeing from a AUC perspective in the back half.
Yeah, sure. ASPs were up meaningfully in wholesale versus last year. In DTC, our AUR was actually down a little bit versus last year. Keep in mind, we had the huge improvement in AUR last year, so we're still well above pre-COVID levels, but we did have some pullback.
Great. What about units, I guess, in both channels and then AUC in the back half too?
Units were up in both. Yeah.
Okay.
Going into the back half, I still think there'll be a little bit of AUR pressure in DTC.
Okay. I guess, you know, just maybe kinda wanted to get your thoughts to follow on just the promotional environment, like, you know, how you're feeling in terms of, you know, having to promote more or not promote more in the back half.
Yeah. We are seeing promotional activity increase across the industry. Obviously, it was unusually low last year, so we did build that into our plans coming into the year. Certainly that has come to pass. I think there will be more promotional activity, and you'll see some of that from us as well. We think that we can keep it controlled, but it will be more than we did in 2021.
Great. Just to follow up on the inventory comments, I was curious, you know, the extra 40 days that you talked about that you have right now, I guess, what's the composition of that? Is that for the fall, or is that summer product? Or, you know, how should we think about that given, you know, historically, you've always up, you know, obviously been more real time?
Yeah, it's fall.
Okay. Just fall. On the top line, you know, just to reiterate guidance there, just curious, you know, it sounds like things have pulled in a little bit. There's some macro uncertainty. Just curious, maybe if you can elaborate a little bit more on what's driving the confidence there. I guess, you know, was there a big cushion to begin with there, and so you feel comfortable still with where you're at for the rest of the year?
Yeah. Well, I'll tell you, on May thirty-first, we were trending to be ahead of the top end or above the top end of our annual guidance, on the top line, and the bottom line. We have made a, I think, sort of, a meaningful adjustment, based on what we've seen in June and July. As of today, that still keeps us within our range.
Great. Thanks so much. That's really helpful. Good luck in the back half.
Thank you.
Thank you. One moment for our next question. Our next question comes from Paul Lejuez of Citi. Your line is open.
Hey, thanks, guys. You mentioned that the 2Q came in above your expectations. I was curious if you could share where you saw the biggest upside relative to your plan. I think you had mentioned there was a pull forward. Curious about the size of that. You know, obviously, you know, it didn't flow through the beat. Makes sense, but I am curious. If you're just taking a more conservative approach on the top line for the second half, is there also an aspect of increased promotional assumptions that are built in?
Just high level, what are your wholesale, you know, retail partners, you know, how are they thinking about accepting price increases now at this point, relative to how they were willing to accept those in the beginning of the year? Thanks.
Sure. Okay, there was a few there, so I hope I'm gonna remember. I think the first question was about the beat in Q2 and where that came from on the top line.
Yep.
Most of that was in wholesale, and most of that was pull forward of orders that we planned to go out in early Q3 that we were able to pull forward in Q2. We talked about the improvement in the transit times. We did get some stuff early, and we were able to get our accounts to take some goods in early. You know, we had, I think, planned for Q2, if I'm remembering, to be up in wholesale high 30s, maybe 39%, something like that, to last year. Obviously we came in at 51.5% growth to last year, and the vast majority of that was the pull forward. On the DTC side, we were also, you know, modestly ahead of what we anticipated.
I think we were looking at to be around flat, and we came in at up 2.2%. That was again driven by April and May outperformance. What was the next one?
Sure. Yeah, just the assumptions for the back half. I think you'd mentioned as part of an earlier response that you were taking a little bit more of a conservative approach on top line. Be curious if you adjusted your assumptions on promotions and pricing as well, and you know, tie that into how willing your retail partners are, you know, to accept price increases that you were hoping to pass through.
Yeah, I think we've increased our assumptions for promotional activity modestly. Although we, you know, as we've talked about in previous calls, we had built in an assumption that there was gonna be an uptick in promo activity, so a lot of that was already in our numbers. But we have taken that up a little bit as well. Yeah, I still don't think we're getting a lot of pushback from our wholesale customers on price increases. You know, they seem to be accepting those. And we'll obviously have to carefully monitor how the end consumer reacts to that, but so far it's not. I wouldn't say there's a lot of pushback from the wholesale customers.
All right. Thanks, Ed. Good luck.
Thank you. One moment for the next question. It looks like our next question comes from Tom Nikic of Wedbush. Your line is open.
Hey, good morning, Ed. Good morning, Danielle. Thanks for taking my question. I just want to ask you, as we kind of work through our models for the back half, can you help us sort of understand kind of the shape of the back half? Like how we should think about Q3 versus Q4? Obviously you have, you know, pretty challenging compares in Q4, especially in the wholesale channel. I think, you know, on the last call, you kind of gave some guidance around like wholesale versus DTC for the full year. I was just wondering if anything's changed from a channel by channel perspective. Thanks.
Sure. Yeah, well, look, you know, we don't give quarterly guidance, so I'm not gonna get too detailed about Q3 versus Q4, but I think that what I will tell you is, on an EPS basis, obviously our guidance implies back half earnings down from last year. The vast majority of that decline we expect to come in Q4. Q3, I think that, you know, we can get close to where we were a year ago, but Q4 we expect to be down. In terms of expectations for revenue growth by channel, that's not too different from where we were before. We've made slight tweaks there, but, you know, we're still really in wholesale, looking at mid- to high-teens% for the year and in DTC mid- to high-singles%.
Got it. Thanks, Ed, and best of luck the rest of the year.
Yeah.
Thank you. One moment for the next question. Our next question comes from Steve Marotta of C.L. King & Associates. Your line is open.
Good morning, Ed and Danielle. Ed, you talked about June, July comps up 57%. Was there a material differential between June and July? I also would stipulate, of course, that they are relatively light volume months, but was the percentage materially different from the two months?
Almost exactly the same.
That's helpful. Also from an AUC standpoint, we're seeing roll-offs in commodities, hearing about factory capacity, actually.
Being a little bit more beneficial, can you talk a little bit about AUC? Have you realized any of the benefits of that? I know that you've already commented on freight, but have you realized any benefits of that expectations in the second half of this year and maybe into 2023 as well?
Yeah, we have started to see some, I guess, improvement as we negotiate with our factories. We think that perhaps some of the softening demand has made them a little hungrier for business, and it has made those negotiations go a little bit better. We think we're gonna do a little bit better than we were trending in terms of our factory prices, particularly out of China.
Would you say still above last year, but not as high as it had been on a year-over-year basis? Actually below, would you say it's below?
No, I would say that's right. Probably still, certainly for the full year, still above last year.
Yeah. Okay. Excellent. I appreciate it. Thank you very much.
Thank you.
Thank you. One moment. Our next question comes from Dana Telsey of the Telsey Advisory Group. Your line is open.
Good morning, Ed and Danielle. As you think about DTC with e-com and stores, what did you see on each? How are they doing either relative to last year, relative to your plan? I always know that buy now, pay later was impactful for you. Any changes that you're seeing there? Just lastly, the urban stores versus suburban versus outlet stores, any difference in performance in what you're seeing? Thank you.
Sure. Yeah. Like a lot of folks, we've seen a pivot back to brick-and-mortar this year, at the expense of digital. Brick-and-mortar was, on a year-over-year basis, stronger than digital. Digital was actually down in the quarter. This is in our owned and operated, versus last year. Brick-and-mortar was what got us to the positive 2% overall. Of course, if you compare to pre-COVID, obviously digital is still up dramatically, and has been a far bigger source of growth. In terms of buy now, pay later, yeah, that continues to be significant for us. We've seen the use of that tick up a little bit, which could be reflective of inflation and how the consumer is feeling overall, if they're feeling a little bit more strapped.
In terms of the last one about urban versus suburban locations, yeah, if you look at our in the U.S., at our comps by region, New York City was the top performer year-over-year, but that's really a function of the fact that it was the weakest last year. If you look at it versus pre-COVID, New York City was still the weakest region compared to 2019. It was still the only region that comped negative to 2019 in the quarter. Although we got very close, we were only down low singles there and expect to turn positive this quarter. In terms of, I think you asked also about full price versus outlet.
Full price was a little bit better than outlet stores in the quarter.
Got it. Are you taking price increases in the fall also? Where are you on the cadence of price increases?
No, we really pushed that through in spring. There's nothing incremental in fall in terms of percentage. I mean, they are up obviously over last fall. So was spring.
Thank you.
Thank you. One moment for the next question. Our next question is a follow-up from Samuel Poser of Williams Trading. Your line is open.
Thanks. I just wanna follow up with some of the other questions that are just being asked. Ed, could you talk about last year as a non-promotional environment versus historicals and how and what kind of difference that was from, you know, let's say last 10 years?
Yeah. It was clearly the lowest level of promotional activity for us and for the industry overall that I've seen in my career, which spans more than the last 10 years. It was meaningful. I mean, how many hundreds of basis points across margin? I can't tell you exactly off the top of my head, but it was significant. We are seeing some normalization.
Right. I mean, the return isn't going anywhere near what it was in 2019 or prior at the moment, but I mean, it's still, your margins are still gonna be better than that, so.
Yes. For us, yes. I would say the industry overall, though, we are seeing you know a pretty meaningful uptick relative to last year. Will we get back to 2019 levels? I'm not sure, but I wouldn't rule it out the way things are going.
Okay. Thanks very much.
Thanks, Sam.
Thank you. Again, to ask a question, please press star one one on your phone. Stand by as we compile the Q&A roster. I see no further questions in the queue. I would now like to turn the conference back over to Edward Rosenfeld for closing remarks.
Great. Well, thanks so much for joining us this morning. Hope everybody enjoys the rest of their summer, and we look forward to speaking to you on the third quarter call. Have a great day.
This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.