Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements related to: continuing changes in general economic, political, competitive and other conditions beyond our control, and the impact on consumer confidence and consumer spending; the continuing impact of inflation and measures to control inflation, including changing interest rates, on consumer spending; the impact of current and potential future tariffs and our ability to mitigate impacts; the outcome of our growth initiatives; our ability to anticipate consumer preferences and buying trends; dependence on timely introduction and customer acceptance of our merchandise; our ability to introduce and grow new brands and brand extensions; delays in store openings; competition from companies with concepts or products similar to ours; labor and material shortages; timely and effective sourcing of merchandise from our foreign and domestic vendors and delivery of merchandise through our supply chain to our stores and customers; effective inventory management; our ability to manage customer returns; uncertainties in e-marketing, infrastructure and regulation; multi-channel and multi-brand complexities; challenges associated with our increasing global presence; the continuing impact of global conflicts, such as the conflicts in Ukraine and the Middle East, and shortages of various raw materials on our global supply chain, retail store operations and customer demand; dependence on external funding sources for operating capital; disruptions in the financial markets; our ability to control employment, occupancy, supply chain, product, transportation and other operating costs; our ability to improve our systems and processes; changes to our information technology infrastructure; new interpretations of or changes to current accounting rules; impact of actual and potential wars, conflicts or acts of terrorism; the potential for increased corporate income taxes; and other risks and uncertainties, as well as statements of belief and statements of assumptions underlying any of the foregoing. You can identify these and other forward-looking statements by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” or the negative of such terms, or other comparable terminology. The risks, uncertainties and assumptions referred to above that could cause our results to differ materially from the results expressed or implied by such forward-looking statements include, but are not limited to, those discussed under the heading “Risk Factors” in this document and our Annual Report on Form 10-K for the fiscal year ended January 28, 2024, and the risks, uncertainties and assumptions discussed from time to time in our other public filings and public announcements. All forward-looking statements included in this document are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

OVERVIEW

Williams-Sonoma, Inc. ("Company", "we", or "us") is a specialty retailer of high-quality sustainable products for the home. Our products in our portfolio of nine brands – Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, and GreenRow – are marketed through e-commerce websites, direct-mail catalogs and our retail stores. These brands are also part of The Key Rewards, our loyalty and credit card program that offers members exclusive benefits across the Williams-Sonoma family of brands. We operate in the U.S., Puerto Rico, Canada, Australia, and the United Kingdom, offer international shipping to customers worldwide, and have unaffiliated franchisees that operate stores in the Middle East, the Philippines, Mexico, South Korea, and India as well as e-commerce websites in certain locations. We are also proud to be a leader in our industry with our values-based culture and commitment to achieving our sustainability goals.

The following discussion and analysis of financial condition, results of operations, and liquidity and capital resources for the thirteen weeks ended October 27, 2024 (“third quarter of fiscal 2024”), as compared to the thirteen weeks ended October 29, 2023 (“third quarter of fiscal 2023”) and thirty-nine weeks ended October 27, 2024 ("first thirty-nine weeks of fiscal 2024"), as compared to the thirty-nine weeks ended October 29, 2023 ("first thirty-nine weeks of fiscal 2023"), should be read in conjunction with our Condensed Consolidated Financial Statements and the notes thereto. All explanations of changes in operational results are discussed in order of magnitude.

Third Quarter of Fiscal 2024 Financial Results

Net revenues in the third quarter of fiscal 2024 decreased $53.0 million or 2.9%, with company comparable brand revenue ("company comp") decline of 2.9%. This decrease was driven by continuing customer hesitancy towards furniture purchases, partially offset by strength in our emerging brands and our children's home furnishings business.

In the third quarter of fiscal 2024, Pottery Barn, our largest brand, saw 7.5% comparable brand revenue ("brand comp") decline driven by reduced furniture sales, partially offset by relative strength from our decorating, entertaining, and seasonal holiday categories. The Pottery Barn Kids and Teen brands saw 3.8% brand comp growth in the third quarter of fiscal 2024 driven by strength in decor, seasonal products, textiles and collaborations.

West Elm saw 3.5% brand comp decline in the third quarter of fiscal 2024, driven by the continuing impacts of the customer pull back in furniture as a result of the brand's high percentage of its assortment in the furniture category, partially offset by strength from new product introductions across categories including textiles, kids and furniture.

The Williams Sonoma brand saw 0.1% brand comp decline in the third quarter of fiscal 2024 with strength in the brand's kitchen business driven by high ticket electrics and tabletop.

For the third quarter of fiscal 2024, diluted earnings per share was $1.96, compared to $1.83 in the third quarter of fiscal 2023.

As of October 27, 2024, we had $827 million in cash and cash equivalents and generated operating cash flow of $726.7 million in the first thirty-nine weeks of fiscal 2024. In addition to our cash balance, we also ended the third quarter of fiscal 2024 with no outstanding borrowings under our revolving line of credit. Our liquidity position allowed us to fund the operations of the business by investing $154.4 million in capital expenditures in the first thirty-nine weeks of fiscal 2024, and to provide stockholder returns of $916.3 million in the first thirty-nine weeks of fiscal 2024 through stock repurchases and dividends.

Out-of-Period Adjustment

Subsequent to the filing of our Form 10-K, in April 2024, the Company determined that it over-recognized freight expense in fiscal years 2021, 2022 and 2023 for a cumulative amount of $49.0 million. The Company evaluated the error, both qualitatively and quantitatively, and determined that no prior interim or annual periods were materially misstated. The Company then evaluated whether the cumulative amount of the over-accrual was material to its projected fiscal 2024 results, and determined the cumulative amount was not material. Therefore, the Condensed Consolidated Financial Statements for the thirty-nine weeks ended October 27, 2024 include an out-of-period adjustment of $49.0 million, recorded in the first quarter of fiscal 2024, to reduce cost of goods sold and accounts payable, which corrected the cumulative error on the Consolidated Balance Sheet as of January 28, 2024.

Looking Ahead

As we look forward to the balance of the year, we are focused on three key priorities, which include (i) returning to growth, (ii) elevating our world-class customer service and (iii) driving earnings. We believe these key priorities will set us apart from our competition and allow us to drive long-term growth and profitability. We believe we have a powerful portfolio of brands, serving a range of categories, aesthetics, and life stages and we have built a strong omni-channel platform and infrastructure, which will position us well for the next stage of growth. However, the uncertain macroeconomic environment with the slow housing market, elevated interest rates, layoffs, inflationary pressure, political uncertainty and global geopolitical tension may continue to impact our results. For information on risks, please see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024.

NET REVENUES

Net revenues primarily consist of sales of merchandise to our customers through our e-commerce websites, retail stores and direct-mail catalogs, and include shipping fees received from customers for delivery of merchandise to their homes. Our revenues also include sales to our business-to-business customers and franchisees, incentives received from credit card issuers in connection with our private label and co-branded credit cards and breakage income related to our stored-value cards. Revenue from the sale of merchandise is reported net of sales returns.

Third Quarter of Fiscal 2024 vs. Third Quarter of Fiscal 2023

Net revenues in the third quarter of fiscal 2024 decreased $53.0 million or 2.9%, with company comp decline of 2.9%. This decrease was driven by continuing customer hesitancy towards furniture purchases, partially offset by strength in our emerging brands and our children's home furnishings business.

First Thirty-nine Weeks of Fiscal 2024 vs. First Thirty-nine Weeks of Fiscal 2023

Net revenues for the first thirty-nine weeks of fiscal 2024 decreased by $222.4 million, or 4.1%, with company comp decline of 3.7%. This was driven by continuing customer hesitancy towards furniture purchases, partially offset by strength in our emerging brands and children's home furnishings.

Comparable Brand Revenue

Comparable brand revenue includes comparable e-commerce sales, including through our direct-mail catalog, and store sales, as well as shipping fees, sales returns and other discounts associated with current period sales. Comparable stores are defined as permanent stores where gross square footage did not change by more than 20% in the previous 12 months, and which have been open for at least 12 consecutive months without closure for more than seven days within the same fiscal month. Outlet comparable store revenues are included in their respective brands. Business-to-business revenues are included in comparable brand revenue for each of our brands. Sales to our international franchisees are excluded from comparable brand revenue as their stores and e-commerce websites are not operated by us. Sales from certain operations are also excluded until such time that we believe those sales are meaningful to evaluating their performance. Additionally, comparable brand revenue for newer concepts is not separately disclosed until such time that we believe those sales are meaningful to evaluating the performance of the brand.

			For the Thirteen Weeks Ended 1									For the Thirty-nine Weeks Ended 1
Comparable brand revenue growth (decline)			October 27, 2024			October 29, 2023						October 27, 2024			October 29, 2023
Pottery Barn			(7.5)		%	(16.6)		%				(8.4)		%	(9.7)		%
West Elm			(3.5)			(22.4)						(4.1)			(19.8)
Williams Sonoma			(0.1)			(1.9)						0.0			(2.3)
Pottery Barn Kids and Teen			3.8			(6.9)						2.7			(6.7)
Total 2			(2.9)		%	(14.6)		%				(3.7)		%	(11.1)		%
1 Comparable brand revenue includes business-to-business revenues within each brand.
2 Total comparable brand revenue growth includes the results of Rejuvenation, Mark and Graham, and GreenRow.

STORE DATA

			Store Count																														Average Leased Square Footage Per Store
			July 28, 2024						Openings						Closings						October 27, 2024						October 29, 2023						October 27, 2024						October 29, 2023
Pottery Barn			185						2						(1)						186						191						15,000						15,000
Williams Sonoma			158						2						—						160						163						6,900						6,900
West Elm			122						—						—						122						123						13,200						13,200
Pottery Barn Kids			45						1						—						46						46						7,800						7,800
Rejuvenation			11						—						—						11						10						8,100						8,200
Total			521						5						(1)						525						533						11,400						11,400
Store selling square footage at period-end																																	3,886,000						3,905,000
Store leased square footage at period-end																																	5,972,000						6,061,000

GROSS PROFIT

Gross profit is equal to our net revenues less cost of goods sold. Cost of goods sold includes (i) cost of goods, which consists of cost of merchandise, inbound freight expenses, freight-to-store expenses and other inventory related costs such as replacements, damages, obsolescence and shrinkage; (ii) occupancy expenses, which consists of rent, other occupancy costs (including property taxes, common area maintenance and utilities) and depreciation; and (iii) shipping costs, which consists of third-party delivery services and shipping materials.

Our classification of expenses in cost of goods sold may not be comparable to other public companies, as we do not include non-occupancy-related costs associated with our distribution network in cost of goods sold. These costs, which include distribution network employment, third-party warehouse management and other distribution-related administrative expenses, are recorded in selling, general and administrative expenses ("SG&A").

			For the Thirteen Weeks Ended
(In thousands)			October 27, 2024						% Net Revenues						October 29, 2023						% Net Revenues						October 30, 2022						% Net Revenues
Gross profit 1			$	841,715					46.7		%				$	822,360					44.4		%				$	910,526					41.5		%

1**Includes occupancy expenses of $195.0 million, $200.4 million and $202.3 million for the third quarter of fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

Third Quarter of Fiscal 2024 vs. Third Quarter of Fiscal 2023

Gross profit increased $19.4 million, or 2.4%, compared to the third quarter of fiscal 2023. Gross margin increased to 46.7% from 44.4% in the third quarter of fiscal 2023. The increase in gross margin of 230 basis points was driven by (i) higher merchandise margins of 130 basis points and (ii) supply chain efficiencies of 100 basis points, including reductions in returns, replacements, accommodations and damages as well as limiting out-of-market and multiple shipments. Occupancy rate was flat compared to the third quarter of fiscal 2023.

Third Quarter of Fiscal 2023 vs. Third Quarter of Fiscal 2022

Gross profit decreased $88.2 million or 9.7%, compared to the third quarter of fiscal 2022. Gross margin increased to 44.4% from 41.5% in the third quarter of fiscal 2022. The increase in gross margin of 290 basis points was primarily driven by (i) improvement in input costs resulting from lower ocean freight, detention and demurrage, (ii) lower customer shipping and other inventory costs, including reductions in out-of-market shipments, multiple shipments, returns, replacements, damages, and accommodations and (iii) higher pricing power of our proprietary products and our focus on full-price selling, partially offset by (iv) deleveraged occupancy costs resulting from lower revenues.

									For the Thirty-nine Weeks Ended
(In thousands)																																							October 27, 2024						% Net Revenues						October 29, 2023						% Net Revenues						October 30, 2022						% Net Revenues
Gross profit 1																																							$	2,470,556					47.1		%				$	2,254,986					41.2		%				$	2,667,883					42.9		%

1**Includes occupancy expenses of $588.3 million, $606.3 million and $581.7 million for the first thirty-nine weeks of fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

First Thirty-nine Weeks of Fiscal 2024 vs. First Thirty-nine Weeks of Fiscal 2023

Gross profit increased $215.6 million, or 9.6%, compared to the first thirty-nine weeks of fiscal 2023. Gross margin increased to 47.1% from 41.2% for the first thirty-nine weeks of fiscal 2023. This increase in gross margin of 590 basis points was driven by (i) higher merchandise margins of 330 basis points, (ii) supply chain efficiencies of 170 basis points, including reductions in returns, replacements, accommodations and damages as well as limiting out-of-market and multiple shipments, and (iii) an out-of-period freight adjustment of 100 basis points, partially offset by (iv) the deleverage of occupancy costs of 10 basis points resulting from lower sales.

First Thirty-nine Weeks of Fiscal 2023 vs. First Thirty-nine Weeks of Fiscal 2022

Gross profit decreased $412.9 million, or 15.5%, compared to the first thirty-nine weeks of fiscal 2022. Gross margin decreased to 41.2% from 42.9% for the first thirty-nine weeks of fiscal 2022. The decline in gross margin of 170 basis points was primarily driven by (i) higher input costs resulting from ocean freight, detention and demurrage in the first half of fiscal 2023, which improved in the third quarter of fiscal 2023 and (ii) higher occupancy costs resulting from incremental costs from our new distribution centers on the East and West Coasts to support our long-term growth, partially offset by (iii) higher pricing power of our proprietary products and our focus on full-price selling.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SG&A consists of non-occupancy related costs associated with our retail stores, distribution and manufacturing facilities, customer care centers, supply chain operations (buying, receiving and inspection) and corporate administrative functions. These costs include employment, advertising, third party credit card processing, impairment and other general expenses.

			For the Thirteen Weeks Ended																								For the Thirty-nine Weeks Ended
(In thousands)			October 27, 2024						% Net Revenues						October 29, 2023						% Net Revenues						October 27, 2024						% Net Revenues						October 29, 2023						% Net Revenues
Selling, general and administrative expenses			$	521,072					28.9		%				$	507,283					27.4		%				$	1,536,169					29.3		%				$	1,468,884					26.8		%

Third Quarter of Fiscal 2024 vs. Third Quarter of Fiscal 2023

SG&A increased $13.8 million, or 2.7%, compared to the third quarter of fiscal 2023. SG&A as a percentage of net revenues increased to 28.9% from 27.4% in the third quarter of fiscal 2023. This increase of 150 basis points was primarily driven by (i) an increase in employment expense of 160 basis points due to higher performance-based incentive compensation and employee benefits costs and (ii) an increase in advertising expenses of 20 basis points; partially offset by (iii) lower general expenses of 30 basis points from timing of administrative expenses.

First Thirty-nine Weeks of Fiscal 2024 vs. First Thirty-nine Weeks of Fiscal 2023

SG&A increased $67.3 million, or 4.6%, compared to the first thirty-nine weeks of fiscal 2023. SG&A as a percentage of net revenues increased to 29.3% from 26.8% for the first thirty-nine weeks of fiscal 2023. This increase of 250 basis points was primarily driven by (i) an increase in employment expense of 150 basis points due to higher performance-based incentive compensation, which does not include a benefit from the out-of-period freight adjustment and (ii) an increase in advertising expenses of 110 basis points, partially offset by (iii) exit costs of $15.8 million and reduction-in-force initiatives of $8.3 million recorded in the first thirty-nine weeks of fiscal 2023 which did not recur in the first thirty-nine weeks of fiscal 2024.

INCOME TAXES

The effective tax rate was 24.3% for the first thirty-nine weeks of fiscal 2024, and 25.8% for the first thirty-nine weeks of fiscal 2023. The decrease in the effective tax rate was primarily due to (i) higher excess tax benefit from stock-based compensation in first thirty-nine weeks of fiscal 2024 and (ii) the tax effect of earnings mix change, partially offset by (iii) the expiration of the statutes of limitations related to uncertain tax positions in fiscal 2023.

Since the Organization for Economic Co-operation and Development ("OECD") announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting ("Framework") in 2021, a number of countries have begun to enact legislation to implement the OECD international tax framework, including the Pillar Two minimum tax regime. To mitigate the administrative burden for Multinational Enterprises in complying with the OECD Global Anti-Base Erosion rules during the initial years of implementation, the OECD developed the temporary “Transitional Country-by-Country Safe Harbor” ("Safe Harbor"). This transitional Safe Harbor applies for fiscal years beginning on or before December 31, 2026, but not including a fiscal year that ends after June 30, 2028. Under the Safe Harbor, the top-up tax for such jurisdiction is deemed to be zero, provided that at least one of the Safe Harbor tests is met for the jurisdiction.

In the regions in which we operate, Canada, United Kingdom, Netherlands, Italy and Vietnam have implemented Pillar Two frameworks effective January 1, 2024. The Company's subsidiaries are not subject to Pillar Two minimum tax in the first thirty-nine weeks of fiscal 2024 under the Safe Harbor rules.

Pillar Two minimum tax will be treated as a period cost in future periods when it is applicable. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, and monitoring legislative developments by other countries, especially in the regions in which we operate.

LIQUIDITY AND CAPITAL RESOURCES

Material Cash Requirements

There were no material changes during the quarter to the Company’s material cash requirements, commitments and contingencies that are described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2024, which is incorporated herein by reference.

Stock Repurchase Programs and Dividends

See Note G to our Condensed Consolidated Financial Statements, Stock Repurchase Programs and Dividends, within Item 1 of this Quarterly Report on Form 10-Q for further information.

Liquidity Outlook

For the remainder of fiscal 2024, we plan to use our cash resources to fund our inventory and inventory-related purchases, employment-related costs, advertising and marketing initiatives, stock repurchases, property and equipment purchases, dividend payments, rental payments on our leases and the payment of income taxes.

We believe our cash on hand, cash flows from operations and our available credit facilities will provide adequate liquidity for our business operations as well as stock repurchases, dividends, capital expenditures and other liquidity requirements associated with our business operations over the next 12 months. We are currently not aware of any other trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

Sources of Liquidity

As of October 27, 2024, we held $826.8 million in cash and cash equivalents, the majority of which was held in interest-bearing demand deposit accounts and money market funds, and of which $82.7 million was held by our international subsidiaries. As is consistent within our industry, our cash balances are seasonal in nature, with the fourth quarter historically representing a significantly higher level of cash than other periods.

In addition to our cash balances on hand, we have a credit facility (the "Credit Facility") which provides for a $500 million unsecured revolving line of credit (the “Revolver”). Our Revolver may be used to borrow revolving loans or to request the issuance of letters of credit. We may, upon notice to the administrative agent, request existing or new lenders, at such lenders’ option, to increase the Revolver by up to $250 million to provide for a total of up to $750 million of unsecured revolving credit.

During the thirteen and thirty-nine weeks ended October 27, 2024 and October 29, 2023, we had no borrowings under our Revolver. Additionally, as of October 27, 2024, issued but undrawn standby letters of credit of $12.1 million were outstanding under our Revolver. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs.

Our Credit Facility contains certain restrictive loan covenants, including, among others, a financial covenant requiring a maximum leverage ratio (funded debt adjusted for operating lease liabilities to earnings before interest, income tax, depreciation, amortization and rent expense), and covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of assets. As of October 27, 2024, we were in compliance with our financial covenants under our Credit Facility and, based on our current projections, we expect to remain in compliance throughout the next 12 months.

Letter of Credit Facilities

We have three unsecured letter of credit facilities for a total of $35 million. Our letter of credit facilities contain covenants that are consistent with our Credit Facility. Interest on unreimbursed amounts under our letter of credit facilities accrues at a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio. As of October 27, 2024, the aggregate amount outstanding under our letter of credit facilities was $0.8 million, which represents only a future commitment to fund inventory purchases to which we had not taken legal title. On August 16, 2024, we renewed two of our letter of credit facilities totaling $30 million on substantially similar terms. The two letter of credit facilities mature on August 18, 2025, and the latest expiration date possible for future letters of credit issued under these facilities is January 15, 2026. One of the letter of credit facilities totaling $5 million matures on September 30, 2026, which is also the latest expiration date possible for future letters of credit issued under the facility.

Cash Flows from Operating Activities

For the first thirty-nine weeks of fiscal 2024, net cash provided by operating activities was $726.7 million compared to $1.0 billion for the first thirty-nine weeks of fiscal 2023, and was primarily attributable to net earnings adjusted for non-cash items, partially offset by higher spending on merchandise inventories as a result of timing of seasonal receipts and a decrease in income taxes payable. Net cash provided by operating activities compared to the first thirty-nine weeks of fiscal 2023 decreased primarily due to higher spending on merchandise inventories, a decrease in accounts payable (as a result of supplier payment timing) and a decrease in income taxes payable, partially offset by an increase in net earnings adjusted for non-cash items.

Cash Flows from Investing Activities

For the first thirty-nine weeks of fiscal 2024, net cash used in investing activities was $154.0 million compared to $134.4 million for the first thirty-nine weeks of fiscal 2023, and was primarily attributable to purchases of property and equipment related to technology, store construction and supply chain enhancements.

Cash Flows from Financing Activities

For the first thirty-nine weeks of fiscal 2024, net cash used in financing activities was $1.0 billion compared to $538.7 million for the first thirty-nine weeks of fiscal 2023, primarily driven by repurchases of common stock, payment of dividends and tax withholdings remittance related to stock-based awards. Net cash used in financing activities for the first thirty-nine weeks of fiscal 2024 increased compared to the first thirty-nine weeks of fiscal 2023, primarily due to an increase in repurchases of common stock.

Seasonality

Our business is subject to substantial seasonal variations in demand. Historically, a significant portion of our revenues and net earnings have been realized during the period from October through January, and levels of net revenues and net earnings have typically been lower during the period from February through September. We believe this is the general pattern associated with the retail industry. In preparation for and during our holiday selling season, we hire a substantial number of additional temporary associates, primarily in our retail stores, distribution facilities and customer care centers.

CRITICAL ACCOUNTING ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. These estimates and assumptions are evaluated on an ongoing basis and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ significantly from these estimates. During the third quarter of fiscal 2024, there were no significant changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2024.