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Lids’ gross margin decreased 80 basis points, 50 of which was due to higher shipping costs, principally from higher e com sales. While the total decrease was less than Q1, we had expected gross margin to improve in Q2, given the actions we are taking with shallower markdowns earlier in the season. Increased promotional activity as we work diligently to keep inventories clean, contributed to the lower gross margin in the quarter as well.

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