ZUMZ - NASDAQ

Good afternoon, ladies and gentlemen, and welcome to the

Thank you. Hello, and again, thank you for everyone joining us on today's call. With me today is Chris Work, our Chief Financial Officer. I'll begin with a few remarks about the second quarter and the back-to-school season before touching on our strategic priorities. Chris will then take you through the financials and our outlook for the balance of the year. After that, we will open the call to your questions. We are pleased that our second quarter results exceeded expectations, demonstrating the continued resilience of our North American business and the effectiveness of our strategic initiatives. Comparable sales grew 2.5%, marking our fifth consecutive quarter of positive comparable sales growth. Even more encouraging is that our two-year comparable sales stack accelerated 300 basis points versus the first quarter, indicating our momentum is building even as we face increasingly year-over-year comparisons. Comparable sales growth accelerated each period during the quarter as we built towards back-to-school, and the North American business continues to be the primary driver of our performance. This strength reflects our successful execution of our merchandise customer experience initiatives, which are clearly resonating with our core customer base despite the challenging operating environment. Our momentum continued to build into August, with low teens comparable sales growth in The United States, on top of a double-digit increase in the year-ago period, providing confidence in our approach and optimism heading into the important holiday season. However, we remain prudent in our outlook given the broader economic uncertainties around tariffs and the consumer. Heading into 2025, we remain focused on three strategic priorities. First, driving revenue growth through customer-focused strategic initiatives. Our commitment to refreshing our product mix with innovative offerings continues to generate strong customer response, building on momentum from introducing over 120 new brands throughout 2024, we persist in our mission to deliver distinctive, exclusive merchandise that sets us apart in the marketplace. Expanded presence of these new and emerging brands in our sales mix validates the effectiveness of our merchandising approach. Private level performance remains exceptionally strong, reaching 30% of total sales year-to-date through the second quarter, versus 27% a year ago, and represents the highest private label penetration in our history. This sustained expansion showcases our organization's capability to identify emerging trends and create compelling products that connect with our customers while enhancing our margin profile. Our commitment to exceptional customer experiences across both physical and digital touchpoints remains unwavering. Continued investments in staff development and technological capabilities allow us to engage with customers through increasingly tailored and meaningful interactions, reinforcing the relationships that have anchored our success for decades. Second, sustaining our rigorous commitment to profitability optimization across our geographic footprint. Within North America, our emphasis on premium pricing strategies continues supporting margin gains alongside market share expansion. The operational improvements we have executed continue to generate benefits, establishing a more efficient and profitable business framework. Regarding Europe, market conditions are challenging, making it difficult to build on the improvements we made in sales, product margin, and operating results in 2024. We remain actively engaged in driving revenue through distinctive product offerings while preserving our commitment to premium pricing and expense management. We continue to have confidence in its long-term potential, particularly as we see trends developing locally before expanding internationally. Third, capitalize on our solid financial foundation to manage volatility while funding expansion. Our financial position remains strong with cash and liquid investments exceeding $106 million at quarter-end and, historically speaking, our highest cash generation months ahead of us. This fiscal stability enables continued investment in our strategic objectives, provides the ability to address obstacles that could emerge, and simultaneously deliver shareholder value through our stock repurchase initiative. Despite operating in an environment characterized by economic volatility and shifting trade relationships, I am confident in our ability to generate value for our entire stakeholder community. Fundamental approaches that have powered our achievements across the organization's history continue holding tremendous relevance. Our teams demonstrate adaptability, and execution capabilities fuel my enthusiasm regarding our trajectory through the balance of 2025. Our direction remains well-defined, maintaining our dedication to delivering distinctive fashion-forward merchandise through the customer connection strategies that have propelled our growth while preserving the operational rigor that has strengthened our financial performance. We have proven our resilience through previous market cycles, and I am certain we are strategically positioned to uphold that tradition. Before transitioning to Chris, I want to express my appreciation to our entire organization for their ongoing commitment and flexibility. Your dedication to our values and our customers continues to serve as a foundation for all of our achievements. With that, let me hand the call over to Chris for the financial review.

Thanks, Rick, and good afternoon, everyone. I'm going to start with a review of our second quarter results. I'll then provide an update on our third quarter to date sales trends. Second quarter net sales were $214.3 million, up 1.9% from $210.2 million in 2024. Comparable sales were up 2.5% for the quarter. As Rick mentioned, the primary driver was our North America business, which shows outsized strength even as macroeconomic uncertainty spurred by global trade policy intensified during the period. For the second quarter, North America net sales were $180 million, an increase of 2.1% from 2024. Other international net sales, which consist of Europe and Australia, were $34.2 million, up 1% from last year. Excluding the impact of foreign currency translation, North America net sales increased 2.1%, and other international net sales decreased 4.2% year-over-year. Comparable sales for North America were up 4.2%, marking the sixth consecutive quarter of comparable sales growth. After positive comparable sales in the important 2024, our other international comparable sales have been negative in 2025, declining 5.5% in the second quarter. From a category perspective, women's was our largest positive comping category followed by hard goods and accessories. Footwear was our largest negative comping category followed by men's. The consolidated increase in comparable sales was driven by an increase in dollars per transaction, partially offset by a decrease in transactions. Dollars per transaction were up for the quarter driven by an increase in average unit retail, offset by a decrease in units per transaction. Second quarter gross profit was $76 million, up 5.9% compared to $71.8 million in the second quarter of last year. Gross profit as a percentage of sales is 35.5% for the quarter compared to 34.2% in 2024. The 130 basis point increase in gross margin was primarily driven by 60 basis points of improvement in product margin, 60 basis points of benefit related to the leverage of store occupancy costs on higher sales, and the closure of underperforming stores. SG&A expense was $75.9 million or 35.4% of sales in the second quarter compared to $72.2 million or 35.4% of net sales a year ago. The 100 basis point increase in SG&A expense was driven by a 40 basis point increase in corporate costs, 30 basis points related to a higher than anticipated legal settlement, a 20 basis point increase related to annual incentive compensation, a 20 basis point increase related to store wages, a 20 basis point increase in non-store SG&A wage costs, and a 30 basis point increase related to numerous smaller changes to impairment costs, training, and other miscellaneous costs. These increases were partially offset by 60 basis points of benefit in non-wage store operating costs. Operating income in 2025 was $100,000 or 0.1% of net sales compared with an operating loss of $400,000 or 0.2% of net sales last year. Net loss for the second quarter was $1 million or $0.06 per share. This compared to a net loss of $8.8 million or $0.04 per share in 2024. Our effective tax rate for 2025 was 210% compared with 202% in the year-ago period. The higher than usual tax rate in the second quarter this year and last year was primarily due to the allocation of losses across the jurisdictions in which we operate. Turning to the balance sheet, the business ended the quarter in a strong financial position. We had cash and current marketable securities of $106.7 million as of August 2, 2025, compared to $127 million as of August 3, 2024. The decrease in cash and current marketable securities over the trailing twelve-month period was driven primarily by share repurchases and capital expenditures of $38.3 million and $14.1 million, respectively, partly offset by $26.6 million in cash provided by operating activities and the release of $3 million in restricted cash. As of August 2, 2025, we have no debt on the balance sheet. During the second quarter, we repurchased 600,000 shares at an average cost, including commission, of $13.10 per share for a total of $7.8 million. As of August 2, 2025, we had $7.2 million remaining on the $15 million repurchase authorization approved by the board on June 4. We ended the quarter with $157.7 million in inventory, down 0.6% compared with $158.8 million last year. On a constant currency basis, our inventory levels were down 1.7% from last year. We feel good about our current inventory position. Now to our third quarter to date results. Net sales for the thirty-day period ended September 1, 2025, increased 10.6% compared to the thirty-day period in the prior year ended September 2, 2024. Comparable sales for the thirty-day period ended September 2025 were up 11.2% compared to the comparable period in the prior year, representing a two-year comparable sales stack of 23.3%. From a regional perspective, net sales for our North America business for the thirty-day period ended September 1, 2025, increased 11.7% compared to the thirty-day period ended September 2, 2024, while our other international business increased 2.3%. Excluding the impact of foreign currency translation, North America net sales for the thirty-day period ended September 1, 2025, increased 11.7% from the prior year, while other international net sales decreased 2.1% compared to 2024. Comparable sales for North America increased 13% for the thirty-day period ended September 1, 2025, compared to the same weeks in the prior year, while comparable sales for other international business declined 3.2%. From a category perspective, all categories delivered positive comparable sales quarter to date, with women's being the largest comp, followed by men's, accessories, footwear, and hard goods. The consolidated increase in comparable sales was driven by an increase in dollars per transaction and an increase in transactions. Dollars per transaction were up for the period driven by an increase in average unit retail, partially offset by a slight decrease in units per transaction. With respect to our outlook for 2025, I want to remind everyone that formulating our guidance involves some inherent uncertainty in estimating sales, product margin, and earnings growth given the variety of internal and external factors that impact our performance. This is even more pronounced in today's environment with the current tariff situation that adds additional uncertainty and complexity to pricing and the potential to limit the ability of the consumer to continue to spend. Our recent trend line in North America during back-to-school has been very encouraging and provides confidence as we head into the holiday season. That said, we think it is prudent to balance our current domestic momentum with some near-term conservatism given the general uncertainty in the macro environment and recent trends where we have seen non-peak consumer traffic soften. We are anticipating total sales will be between $232 million and $237 million for the thirteen weeks ended November 1, 2025, including comparable sales growth of 5.5% to 7.5% over the prior year. For the third quarter, we are expecting product margin to increase from the third quarter of last year, and consolidated operating income for the third quarter is expected to be between 2.3% and 3.3% of sales, and we anticipate earnings per share will be between $0.19 and $0.29 compared to EPS of $0.06 in the prior year. Regarding full-year 2025 results, uncertainty remains in the macro environment. The overall tariff situation and continued pressure on consumer discretionary income require caution. We have performed well in North America during the important back-to-school season, which is generally a reasonable indicator for holiday performance. Overall, barring a significant downturn in the economy, we remain confident in our original projections for the year. We now believe that we will see year-over-year sales growth of 3% to 4% in 2025 despite the closure of 33 stores in 2024 and twenty store closures planned primarily in late 2025, which combined are estimated to have a negative impact on sales of roughly $14 million for the year. We anticipate modest year-over-year growth in product margins in 2025 on top of 70 basis points of improvement in fiscal 2024. We anticipate driving additional gross margin leverage through other expense categories such as occupancy, distribution, and logistics. And finally, we believe that we can hold our 2025 SG&A costs, excluding the one-time legal charges, relatively flat as a percent of sales with our fiscal 2024 results through continued focus on expense management while also investing in important long-term strategic initiatives. Combined, these expectations will drive a year-over-year increase in operating margins and net profit for fiscal 2025, bringing the company back to profitability. Included in these fiscal 2025 expectations are the following: six new store openings during the year, including five in North America and one in Australia. We also plan to close approximately 20 stores in fiscal 2025, including up to 17 in The United States and Canada, and one in Europe. We expect our capital expenditures for 2025 will be between $11 million and $13 million compared to $15 million in fiscal 2024 and $20.4 million in 2023. We expect the depreciation and amortization, excluding non-cash lease expense, will be approximately $22 million in line with the prior year. And while effective tax rates are likely to fluctuate significantly by quarter, we anticipate that our full-year effective tax rate will be roughly 50% in fiscal 2025. We are currently projecting our diluted share count for the full year to be approximately 17.3 million shares, which excludes any stock repurchase beyond the end of the second quarter. With that, operator, we would like to open the call up for questions.

Thank you. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment for questions. Our first question comes from Mitch Kummetz with Seaport Research Partners. You may proceed.

Yes. Thanks for taking my questions. I got a few of them. First of all, I guess, Chris, on the 3Q guide, maybe a couple of things there. Obviously, you are comping very well quarter to date. What are you assuming for comp for the balance of the quarter to get to your comp guide for the quarter? And then also, can you maybe kind of break out the op margin in terms of kind of gross and SG&A? I would imagine that you would get a pretty good amount of leverage both on kind of BDO and also SG&A expense based on the kind of the comp level that you are expecting, but you are also expecting product margin to be up too. So maybe some more color there would be helpful. Yeah. Thanks.

Mitch. Happy to take that. I think from an overall comp perspective, as we have seen from the last couple of years, we have seen kind of the non-peak time period slow. And while we are ecstatic about how our back-to-school has run here, I mean, as we said in our prepared remarks, the August comp was 11.2%. The two-year comp was 23.3%. If we just look at North America, the two-year stack is 27.9%. So we are really encouraged by what the product offering has been through back-to-school, but we know we have seen some slowdown in the last two years after back-to-school. So we are assuming a much lower comp level in the I'll say, low single digits. To end the quarter as we kind of wrap up this week, which is week five of the period. So from here on out, we would assume it and then, obviously, if we are able to beat that, we see if there's some upside to the plan. To go back to something closer to what we saw in Q2. On the second piece of your question, just thinking about Q3, on this type of comp growth, we expect to get pretty meaningful expansion both in gross margin tied to what we would expect to see pretty significant leverage on things like occupancy and distribution. As well as some product margin expansion. And on the SG&A side, we would expect to have pretty meaningful leverage. As we talked about in our annual remarks, we expect to grow SG&A at a lower rate than sales. And I think with the sales levels that we are predicting at this point for 2025, I think we'll be there kind of absent some of these one-time legal charges that have happened in the first six months that we've laid out. So we feel like we can leverage SG&A. Obviously, you know, Q2 is a little higher, but I think that's going to show to be timing as we wrap the entire year. And feel like we'll get some good leverage on SG&A in Q3.

Great. That's very helpful. And then maybe two others. It sounds like comp in the quarter was really driven by AUR. And that that's also benefiting you guys for 3Q to date. Could you maybe speak to what's driving AUR? Like, how much of that is just higher MSRPs given the tariffs versus maybe mix of business or a lower level of promotions or anything else. Could you maybe address that?

Yeah. I'll start and let Chris add on, Mitch. It is going to be a combination of those factors clearly. I mean, as we've discussed in the previous quarter call, we have taken some price increases as we prepare for the back-to-school window. But there's also obviously mix shifts in the business. Obviously, our apparel businesses that are driving the business, so you're seeing some positive, I think, mix shifts relative to the nature of the business and, you know, away from other departments that have been, you know, a little bit more pressured or, like, accessories, which tend to have lower AUR. So there is no doubt mix shift in place here as well as some of the price. And then, of course, we also have the price we took was also in our private label businesses. So we have been dealing with mix shifts on the brand side too. And then I think you do look at what we've been doing with our bundling promotions. There's aspects of that. But, again, there's mix shifts among those too that are playing out, not only in Q2 but into Q3 as well. Did I miss anything, Chris?

No. I think the only thing I do think is important to call out is, you know, this is our fifth overall quarter. Q2 is our fifth overall quarter of positive comparable sales. It's our sixth in North America. And what's interesting across those quarters is almost all of it has been driven by AUR gains. As you indicated and Rick just laid out. What's encouraging for us is we did move into back-to-school here as we did see transaction gains. And so it was AUR was still a larger portion, but we're encouraged to see transactions as well during the peak of back-to-school.

And then I guess my last question, just on the strength of the private label business. Getting to a 30% penetration level in the I guess that's year-to-date. You know, what categories product categories are you seeing the most strength in your private label? And I don't know if you're willing to say it, but I'd be curious to know what private label penetration is of denim and if you're benefiting from some or if you think you're benefiting from some of kind of the overall strength in the denim category these days.

I'll start again and let Chris add. Mitch. I mean, clearly, you could be in our stores and see how significant our denim presentation is amongst our private label brands. So I think you can surmise that we have fairly high penetration within our private label brands in those key bottom categories just by observing what we're doing in-store. Now I think what's going on in private label is something a bit deeper relative to the trend. What's happening more broadly within the consumer world today and what our share gains and private label reflects over the last number of years, because we've been doing well in growing private label for the last four or five years now. I think it fundamentally reflects something different from the consumer world perspective. And that's that brand cycles are so fast now. And new brands are cycling fascinating. Every cycle into our business, which is really exciting from that perspective. But it also means that new brands don't have as much time to develop their competencies around cut and sew categories. So I think we've over the last few years that we have to own those categories in a much deeper way. And that's been the initiative. And, of course, to do that, you have to lead on track. And be at the front end of the trend cycle. So I think that is exactly what we've done over the last few years with our private label products. And I think we have the advantage again of a number of brands that are positioned uniquely to target specific consumer segments within our customer base. And, again, so it's not just one brand fits all sizes that we're actually targeting different brands at different niches of our consumer base. So I think we have a really well-established platform. I think we're recognizing the realities of the consumer world and reacting to it. And we're benefiting across that both in terms of our ability to be responsive to the customer and to drive sales because we're not a value player here in private label. I want to be clear about that. Whereas as we talked about, we're the premium price player now in the mall, in a lot of these categories like denim. So we're really do and it's because we're offering unique product and leading on the trend cycle itself. So feel great about where we're at. I think it's been, again, reflective of what's going on in the consumer world. And I think our teams are back to you to a really high level. Chris, anything else?

Well, I appreciate that. Thanks, and good luck.

Thank you, Mitch.

Thank you. And as a reminder, to ask a question, please press 11 on your telephone. Our next question comes from Jeff Fan Sinderen with B. Riley Securities. You may proceed.

Hi, everyone. And let me say congratulations on the stronger peak back-to-school trends. Looking at your business, from sort of a high level, what do you believe is feasible in terms of operating margins for the enterprise over the next couple of years? And what are the drivers that you see to get you to whatever that higher level of operating margin is?

Jeff, I'll let Chris deal with the numbers here as he's usually better at the numbers side as I am. But I think clearly, the story is a simple one, which is that we have to have unique products both in the sense of what we're delivering from a brand perspective and also, as I just commented on, relative to trend cycles and those trend cycles that really play in our private label. And this is going to benefit margin, but most importantly, our story is a sales recovery story. And post the pandemic where we actually had a good year in 2020, a really good year in 2021 like everyone else with the stimulus spending, then we had some really tough challenges after that. Right? The moved all that skate volume into 2020, really difficult year across skate hardgoods the last few years. And likewise, we had a big challenge with the footwear brand that had a big downturn. So we had some big headwinds that hit us. In '22, '22, 2022, and 2023. So our story is how do we recover back our sales level at the same time establish a much higher basis for our product margins. And I think that's why we're so excited about the stacked back-to-school comps and particularly here in our US business, because I think that is exactly what we're demonstrating we can do. So with that color, I'll let Chris comment a bit on how he thinks about the target.

Yeah. And I, you know, I think, Jeff, you've been around the model for a long time. You know, as we have kind of rethought this and obviously had a little bit of a reset here, I don't think our long-term goals have changed. Now I'm not saying this is where we're going to be in the next three years, but I think over time, we still believe we can get long-term operating margins back to that high single-digit level. We've been there before. We've been beyond that before. And I think it speaks to what Rick's talking about is number one, a sales recovery. Right? When you look at our sales even compared to a period like a lot of retailers look at 2019, there's a good chunk still a good discrepancy from where we are planning this year to 2019. And if you break that apart even further, knowing that we've grown the international side of the business, the North America side of the business, still has a lot of growth to get back to 2019 levels. And that's just on a pure dollars perspective. So as we think about really the newness and the ability to inject with both our branded and our private label format, we think we should be able to grow beyond 2019 because we all know that AURs have gone up since then. So we have to continue to push to bring in newness that will drive sales beyond those levels. That alone would solve a lion's share of our delta to where we sit from 2019 profitability. Beyond that, as Rick said, I think product margin is an opportunity for us. I think there'll be some pretty meaningful leverage on some of the bigger cost items of the business with sales at that level. And then the international side of the business continues to be an opportunity for us to fix. As we've talked about with Europe, we are in year one of a three-year plan to really drive that back to a breakeven level. We're pushing very hard to do that. I think the first six months have been tougher than we would like. But I think we're on the right trajectory to be able to execute on that over a multiyear period. And I think as that piece flips, you'll see additional kind of leverage and growth and operating profit on the bottom line that's that would be significant.

So you sort of touched on the European business and was also thinking about the Aussie business. But just thinking about Europe, in that business, and I realized you have a multiyear plan to improve it. But what are really the biggest headwinds that you're facing in that business now? What do you need to overcome to sort of have that three-year plan work out?

Well, first, I think, Jeff, we have to we need the economy to cooperate there, and I think we feel that we have maybe some good indications that the economy will start growing at a more cyclical rate, and particularly our the largest market for us in Europe is Germany, which last years has had basically no growth. In fact, it's slightly negative. So but with the spending package coming into Germany that the government's just approved, we're hoping and the forecast of gonna see some growth economically from the GDP perspective in 2026. I hope we get some assistance from that perspective. It'd be nice if there wasn't a war in Europe too. In terms of consumer confidence. And then we have to execute. To be clear, we have to execute better. I think we said this in the script that we have to really distinguish our assortments more than we have. We have to have, we have to be better on the trend side of business over there, and we're really leveraging from the strengths of and what we know here in The US. And we have to make sure that we are curating and differentiating this over. That is mission one. And then, of course, we want to replicate and amaze I think we have a really unique store experience today, but I want to continue to work on that. And heighten that experience so we can, again, sell more units and win more wallet share with that consumer. So I think we own the piece that we own, better assortments, great in-store experiences, and then we need some cooperation just in general recovery of the, in the economic environment.

Okay. Thanks for taking my questions, and best of luck.

Thanks, Jeff.

Thank you.

Our next question comes from Mitch Kummetz with Seaport Research Partners. You may proceed.

Yeah. Thanks. I've got a couple of follow-ups. One, Rick, you mentioned in response to one of Jeff's questions that it's a sales recovery story. And you mentioned a couple of, you know, somewhat unique headwinds to your business, one being skate and the other one being this large footwear brand. I'm curious, as you kind of look at those two pieces, do you think that you know, you kind of reached the bottom there with those and that that being a kind of a pressure point on comp, that's largely behind you. And I have one more.

Alright. I'll start and try to best address both the skate and shoe business Mitch and let Chris add again to it. So as you saw from in our disclosures, our skate business skate hard goods businesses turned positive. Now we're still going to be cautious while we're encouraged there, and I'll remind I know you know this well, Mitch, but generally, I think we're probably the most significant skate retailer, skate true skate component businesses in the world today. In terms of just our scale. So we benefit greatly We benefit disproportionately on the upcycles and, unfortunately, disproportionately when there's a major down cycle like we've had over the last few years. So I'm encouraged, and I think our whole team is encouraged by the positive results we've been getting lately in our skate hard goods business. Again, I'll be a little bit cautious. I want to you typically we always see better results in skate hardgoods in the spring and summertime. Think I want to be a little bit cautious as we head into the fall and winter season in North America before I call that a permanent trend, but it certainly is encouraging. We've been feeling like we just have to find the bottom, so we're hopeful we have found the bottom of the cycle. Shoes, continue to be why we ran some comps here periodically in shoe categories. It continues to be a very challenging category. Overall. And it's not just one brand. We've had a few brands have been very challenging in the footwear business. So but, again, this speaks in some ways to, when looking at our whole business, again, consecutive quarters of comp gains now, we're doing despite the up and downs in the footwear business, despite the negative drag of skate, I think it shows resilience that we can find ways to run gains. And so I would say we're not out of the I'm hoping we're I'm hopeful that we're out of the we found the bottom of the skate trend. We can look to a prolonged period of upward cycle and skate. And I think we still have a ways to go, Mitch, on really getting shoes figured out. Relative to what the consumer wants today.

Yep. And then my last question, because it also sounds like you expect continued product margin opportunity. And I guess I'm wondering how much of that is tied to the private label penetration continuing to grow. Is there any way you can say on it from a product margin standpoint kind what the delta is between private label and third party?

Sure. Yeah. I'll go ahead and take that from a numbers perspective. And I just want to remind you too as we look back in time, I mean, we do believe that a chunk of our product margin great gains are driven by what we're doing in private label. But we've run product margin gains and branded cycles too. And if we look back into seventeen, eighteen, nineteen that we grew product margin pretty meaningfully, and private label is actually shrinking as a percent of the business. This is a pretty heavy branded cycle. So as we think about product margin overall, we think there's probably 10 to 15% benefit in our private label product, from our pure branded product. And then, of course, is also kind of an in-between where we work with brands on more of a licensed model, which is sort of a will fall in between those numbers. So we're executing all of those today and believe there's a real benefit of that strategy to both have your own private label to capture trend as Rick has talked about. Obviously, to have brands that are hard to find and unique in the market, and then we have a license model as well in which we can work with brands that we can help in more ways. We got a lot of resources in regards to building product and sourcing product and we can help brands, we'll kind of execute in that way as well.

Great. Thanks again.

Thank you. I would now like to turn the call back over to Rick Brooks for any closing remarks.

Alright. Again, as I always like to say, I truly appreciate everyone's interest in