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Destination XL (DXLG)

Participants
Nitza McKee ICR
Harvey Kanter President & Chief Executive Officer
Peter Stratton Chief Financial Officer
Eric Beder SCC Research
Bernard Sosnick Madison Global
Timothy Staples Staples Asset Management
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2020 Destination XL Group Earnings Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's call may be recorded. [Operator Instructions] I will now hand the call over to me to Nitza McKee. ahead. go Please

Nitza McKee

and and us Michelle, XXXX everyone. you Officer our Thank Call. and Harvey Thank Chief our Destination good XL joining Financial President is today on our Stratton. Fiscal Executive Group's for Officer, On Kanter; you, Peter call morning, Chief Third Earnings Quarter

manage CEO, in Harvey? uncertainties Exchange like detailed over variety that and our Harvey affect factors the forward-looking to morning to would as now certain contains of about lease available through discuss its including to risks company's pandemic Release also Please its performance. to refer capital in encourage our our the withstand and its Earnings the for the the we the that customers to assumptions a During regarding metrics website actual for the to months. provide XX restructure financial today's will the online those of efforts costs, realize at structure, call, to in-store taken actions now subject sufficient working investors and to forward-looking its from from Information discussion reconciliation inventory, and an and right our its shopping to meet was risk and filed due Kanter. Company's savings on and Investor ability call I Relations explanation this in which non-GAAP to cause Today's expected materially on and of could manage results needs some with market statements statements maintain is today, concerning November, restructuring mentioned useful filings to are results Commission. company. information turn annualized business investor.dxl.com measures. pandemic, Such Securities COVID-XX the the next such with size liquidity and reduce to impact XXXX differ uncertainties various Fiscal to and

Harvey Kanter

today everyone. I the we safe making hope grateful the opportunity morning, well. I'm and pandemic. the Nitza, you, DXL through for as and to you healthy, progress you're good navigate Thank about all and with continue speak we are to

during For COVID-XX future I impact all have and economy and we on level growth. and night of times. the been have is a that quite importantly, in the element also long-term to months, to and the for of commitment begin remarks few any past again, sacrifice regards the been most and me keeps to the worth of their as it's business, up want at adjusting remarks these It to Most regards challenging virus about unrelenting mentioned before on tremendous saying position us, withstand to team. remarkable. strive the eight recovery make DXL associates, often has for made it our we I our and most but I before and in the pivoting nothing

the As great is specifically, a together; keeping band the of very foundation that business.

COVID-XX are on alternative, of broadly, based center team. culture associates and what we the team not of we to headcount I and that, we am and our impact our different corporate the trust, of number More in us The have incredibly human turn DXL keep empowerment many and and no things the the has but are just And deep ones been the no has their challenges as at folks disruptive The and is ways had has me their make decisions eight and left very with COVID DXL a stores, no ago. DXL had negative longer longer but only world commitment them. livelihood. our have COVID also for commitment These in in has more all who our loved the reduce too as well, and so proud we our of very of there associates being, knew difficult. our and us. The associate to the incredibly to know DXL of from impact up lost a these as impacted team same are challenging incredibly part distribution navigate that team months of and in also in at despite impact center guest very office. resulted pandemic and the and virus' days, so many many We And at for innovation, DXL, lives and sorry. in been to outcomes challenging of have we the our the are CEO night, is one many and a

who great of the people have continued the for for backbone We but optimism DXL. a are cautious future

on other specifically and and call we normalizing comment you the embrace recovery. own brand we to inclusion. to we to implemented on I'm continue awareness unconscious the the and begin, combat have unrest efforts to on DXL, underway we to and speak call address as diversity to to third want one to important I about performance. program, currently the continue Now I'm of going in our our you also challenges racial bias. also going business XXXX, our topic: regards In before steps our company, to At to steps financial divide. position which today, taken I social But a quarter update our

remain meets associates. other not training formed this CEO Advisory up also part a with We conversation, of through Council, the a committed departments just ongoing have part the also but our programs have and of to heighten every year we solution. HR to being which our month We a awareness

critical intend review and of our the as will address to to cover next had and as call, imperatives what the main first, business in current we the accomplished of this into three year. well third win I industry; to season state Now have in we for as discuss to topics: finally, today's state the second, the what defined quarter; I holiday

a results. started with third our quarter get let's of summary So

Our XX.X% from which down to the overall the Comparable be the in an year, our second continued improvement the sales to sales pandemic. sales when quarter quarter impacted last third XX.X%. were quarter performance by down were for is

sales improved traffic at third is the and June open XX.X%. store sequentially total sales direct total both to has store up the end XX.X% know and that by DXL important overall, were our improvements It was with down quarter, sales of of penetrated XX.X% performance in stores retail through XX.X% September conversion. June DXL.com month with each direct and were And up For revenue. all of our from

failed the virus began ups across west the to fires Our from October to as flare sales momentum resurge, coast slowed the and points company from by XXX began basis materialize. election the on distractions

sit out in as to stores our XXXX to Our May of priorities. the lean continued plans we back We pandemic the adjusted into environment.

its for for and approach: The within back presentation importance First ecommerce guidelines; the ability own our giggles working been that card suggested distancing own our their CDC; associates. guests social following that has critical. the Such environment calling walls first, as guest but a its the not and into visual consumer and sales, experience relationships, delivering by foremost, as stores store the safe enabling store. maintaining act of We've by to as initiative to can store each store perfecting also fulfillment to distancing and address inclusive our center clean, orders. of of to finally, the for three-pronged social each salesperson is and the helping the second, support further been healthy ensure drive just the act through four ecommerce building

Our most who customer has shopper before. valuable the with is us cross-channel shopped

by anchored third to DXL.com business, continued throughout the quarter. direct Our grow

extensions are sales Lower sales, fulfilled year as are via offer traffic you Our direct not web. that sales universe to also levels. universe be that technology. our DXL.com, channel on online from and to in sales that the below well only associates stores available but marketplaces sales originate particular in-store our recall, may initiative store Universe not includes prior in-store that online available the drove trained as product from likely

by XX.X% million which store during to $X.X remained our the traffic, third of Given the quarter, stores demand, sales hard. $XX.X million worth our the quarter. higher compares contrast, materially third In fulfilled only decline hit in direct In last been have an momentum BOPAC quarter. ecommerce in stores fulfillment XXX is universe to offer of functionality terms that year, user area stores. drivers we we BOPAC in an increase in the be and will and and develop Today both BOPUS continue experience. this of or to BOPUS and continue

test we shift continued digital optimize omnichannel months, a to elevate as look experience online. shopper the approach over positioned driving from increased to look customer continue and taking will is We DXL benefiting loyalty. penetration learn the experience and while coming the this to

reached which customers, new digitally, a well. large base, base We compelling have omnichannel existing flexible and as only off-mall and but and differentiated capability, platform growing of our a consumer store not

more omnichannel a than productive We store-only number is digital-only than productive store-only customers more a our times a omnichannel during to customer. customers customer this of were see Our Xx become time. pleased and customer three

cash For the focus been quarters, on talked has how about our three relentless. past I've

from to will details with and company making day, an provide living corporate November our that We attention decisions ensure outcomes and pandemic. breathing protect the are on restructuring an Every administrative to internal will We eliminated sales corporate managing and which our resulted decisions maintaining our cash some these On realign are the selling, basis. we our are toughest. with we positions, X, corporate of the annualized long-term of incredible we we to further million viability that $X.X the implemented smallest save costs the are and occasionally, levels estimate lower XX to general liquidity.

in say this corporate certain from of on cost were an to now current actions restructuring costs, of will basis. like that year. eliminated addition we taken Inclusive $X.X also all I service year, saving in office, certain quarter. XX% which million the of also services are out actions will and point or the that we would million the basis. annualized earlier corporate on positions to its the Combined, end company has $X.X X estimate the estimate eliminated the third through its implemented workforce save November on We agreements, actions fiscal annualized professional executed XXX the an SG&A already in marketing

In positions of XX% count. of or been X,XXX company's field reduced addition, since total the has by the March personnel field XXXX,

our with sales be aligned SG&A to a We continue driver a case managing down look to to our aggressively downside and recovery. more expected optimistic our to properly versus expense

our on the community. company's In costs. challenges been the equally actions, above remain leasing partnerships to right-sizing with our strengthen the addition We've our very we focused with communicate active landlords to occupancy and

our of last the willing were and challenges to of stores. our and occupancy open to flow As are we retail managing us been I to us COVID-XX presented assist quarter, listening ultimately that cash the pandemic have the cost landlords mentioned grateful about most by with

the May Now, that in and past of stores attention to June, part forward-looking structure. we April, closed of we our are having initial rent our turned surge have

we've quarter, expected. review recovery an the lack sales the portfolio, performed level lease the exhaustive our of given thereof Over yet we or at again reality

We moved are stores sales for of now actively percent a to as rents. acceptable outside focus engaged and group market an where band our on landlord with occupancy has upwards

the sales base. predominantly-fixed of of the One business on is rent company's its model lower biggest structure risks a

to those lease hard pushing where sales. landlords with are line rents We out our with are costs of reduce

shift a work a quarter, drive let casual challenging. clothing and dramatic past tailored casual quick from In continue strategies. is that with me align behavior eight on the while update to observed extremely merchandising lifestyle. third and to business loungewear apparel consumer shift Now, In focused our on remained home months, now the that we sportswear

will might embedded from this and season. customer the the say the drive expected 'zoo key in Comfort, life'. business functionality essential Some are features versatility that our even categories and

and are shorts, heightened customer to Skecher-esque these such We such athletic that the seeing on the as speeds on We're as key business. in often given to drive and materials fabrication, and brands There vendor categories elasticity market also business as meaningfully to hold [ph]. focus that is production, drive referred will us working working on categories denim as with in the knits, of with referred to, wear, underwear, we're factories initiatives, gravitate or and active a undyed or for create react managed it's VMI items it's inventory, ability have a well our inventory. greater as the as to, grade exploring

promotional below I of inventory. gross but promotions report that on now was will briefly although ahead additional our expectations. last in in the Peter internal touch revised margins, to third detail, May, highly topic Back gross me provide and and am running we a year pleased posture. quarter the were specifically spring, margin, with April Let of

in customers offered coming last was to Our to keep any than to into our of that XX the offers and were years. stronger we've promotional company. cash goods purpose posture keep The going

targeted promotions quarter, drop in and much the saw rate. with more became we our corresponding third For a our markdown

impact. and bottom rates. increasingly specific to gross promotional become spreading drive we result, return that finding sales outperform to or driving have we're impact to and can consumer be no of even believe behaviors We We a eliminating positively have we less to time, opportunity have line still oriented peanut we and promotions, year, over last we promotions historic these promotions and negative and approximating that expect levels to be consumer are greater butter ultimate know while segments dollars margin as we which

and down conservatively just Moving from inventories year's third last XX% over inventories; have quarter. we are managed very

being of have replenishment our clear season. and unsold through It capabilities. overextending chain product down that merchandise not as we in to are mindful is worth-noting having working to and we selling are very have the maintain hard We logistics and also supply out our been assortment, our slowed

One the securing of a foreign product. been vessels in chain the There disruptions reasons supply been in of COVID-XX in to shortages global challenges quarter for shipping with grappling manner overseas and ranging we from have in from receipt timely is the have some to ports containers. vessels outbreaks third

down and levels to year, some are certain with in inventory performance but to XX%. levels fall are XX% last and that on been It's how in Our quite we've QX flat down categories remarkable levels. receipts sales actually brands seen weeks, nearly yet line

We push shop to capability ship to the have from store any that to inventory is stores orders our to to direct store customer in-person. continuing we fulfill from Because satisfy of continue in to our who technology, portfolio. the fill

into marketing The DXL Next, me with facing let digital stores single environment. strategies. biggest to thoughts current ability on traffic in challenge drive our share the our you and some is our meaningful

continuing website. our drive Secondarily, traffic to onto the growth in

the to file customers, to successfully our a continue in engaging to we new environment. continues best current make be spending While customer, highest progress and headwind reactivating customers, significant

order meaningful identified We But solved our engage contact with and communication and the challenge be in remains in tactical for must have tested actions changes customers. us significant make strategic strides. and to and to

to for is less, and our you is have filling out are did. they They no belief customers way weddings, - bought on or going our and who that bars and based longer the - visiting want. if shopped no very all, Our thesis, not if best will unfortunately events out and just albeit fashion shop are at in not restaurants, no going are based on need, shopping

Our have these been are wearing and quite occasions happening our private today. label fashionable not just in brands always and assortments looks

to QX driving was learning into Our lean traffic objective testing allocation, other and and behavior promotions leverage this by with to mechanisms behavior. spend consumer

updates segmentation We We've the growth, sales developed customer and health, have to for reporting our email technology optimization understand file trends. weekly including and consumer on customer better also KPIs databases, files, preferences. improved

causation in direct with correlation group holiday impact. promotions greater margin omnichannel a tested understand for have success to we a better versus control Finally, gross mail

outcomes, We promotional to for marketing have tested The learned measured and and drastically the to strategy optimize retail different during COVID-XX brick-and-mortar be QX. incremental targeting the continues pandemic. experience changed and

while same practicing Our memorable to as by Relationship social store in-store or refer with Engaged they've want to create be as We providing creed experience grown A to [ph] Build is guests EBAR. continues it a to we distancing, love. the to experience

shoppers. pictures Store of live customers via interactive online mode associates online chat. app. on with experience shopper via to to in-store launched an allows an app with It the in but associates the have a earn and also exceptional sales. platform is chat live commissions associates as associates on customers interact by our a and experience stores provides digitally their are store bring needs, wants We to while the guests store via directly able items that videos based new online tool, suggest in video, and also in The allowing well allowing video to customer's which by items to as insource an store to connect virtually, will test online creating

and consider test, We are we if currently warrants this a me in the results an with stores test wholesale. program Based associates. how and you on update evolve will XX XXX this ways. XX-day further to forward moving augment important program pilot on and running this of And let finally, can give

demand We in have experienced continue for fit to market XX% $X.X slowdown chase our with the Essentials sales in wholesale to million. for but QX Amazon PPE. came in-stock last by the with Amazon position at year DXL Essentials, at business a

reduce in quarter to have for down peaked We as come balance continued to XX.X% of at chase the the business been and stock that has inventory additional our to shipped. out August XX% the

production programs model have And an of times in-stock capacity. greater our future reduce with on the with robust, be production to Amazon and fabrics and business order and to key despite forecasting partner to in losing challenges continued sales, to fabrications finally, opportunity. key We platforming the resumed replenishment [ph] opportunity secure level the lead with some advanced visibility the

their the companies. to and program. Tall opportunity brands opportunity & for with very Peter? on Peter financials. substantiates like would second update basis. ahead an and yet the Goodthreads the For better I of the differs the core essentials brand new private live this launch This testament greater from QX fashion, is DXL and the DXL. the fabrics, both program Goodthreads brand, by private to in It's for DXL's brand more of for exciting Big both launch Amazon's is call and over Amazon in turn brand Amazon upscale in represents further albeit for second now fashion

Peter Stratton

that protect few to morning, company. actions we taken me through well-positioned this provide third financial crisis quarter the to our With the highlighting those country. that and and with some this Harvey, on of me of said, provided to and started long-term across the guys we to quarter of of comprehensive P&L, into a from the DXL results, making confidence see a you flow margin. I'd quarter the Harvey and sales to balance everyone. let so like then the going I'm spend results summary get right minutes serving you, This and good pandemic decisions emerge sheet. to our to results financial our in are big of third have third jump gives right results. continue the update We've gross an pretty overview actions you our give already tall viability cash Thank

Our improvement gross was in margin significant the and as a versus a gross the XXX-basis down increase although point in XXXX. XXX-basis each comprised to rates in and made second quarter. gross margins, markdowns third in quarter This progressed. online of showed promotions margin deleveraging base; on sales was XX.X% rate inclusive due more decrease XX.X% shipping focusing the costs costs fiscal year-over-year occupancy growth quarter of for by last Shipping the costs continue of decrease margin free We over point XXX-basis as improved point a sales year compared occupancy merchandise targeted to progress rate margin of to lower rate rate in month and promotions. against

our underway deleveraging levels Harvey the are quarter, of negotiating our limited the still mentioned, successful about right-size As we store But estate this past quarter. costs to I further and team abatements believe close occupancy as our talked was our we can from occupancy gap. in new store to this landlords, many efforts in which sales our deferrals of rent this real costs

selling to on move administrative and general expenses. me let Now,

our were versus the SG&A sales the $XX.X any through quarter million of spending. store certain for took year-over-year million travel XX.X% earlier the third staffing eliminating we $X.X adjusting XXXX, discretionary year including of channels, services and this is especially result hours and models or fiscal This at reducing of the For sales. million prior corporate steps new decrease or of traffic significantly non-digital year, third customer expenses and patterns, XX.X% to marketing account positions quarter costs reducing traditional $XX.X

SG&A cost assess We our rationalize structure. and to entire continue

the corporate will we which the increase expect As restructuring were necessary company Harvey earlier believe the million were difficult of approximately they month, and at the These we but mentioned annually. our our preserve this we decisions, financial start to liquidity. flexibility call, $X.X initiated save very

a to underperforming the our to stores. recorded subsequent non-cash we recorded a recorded obligation these charges, have the the on some quarter, have previously rights quarter, lease. primarily impairment remaining P&L related discharge In the corresponding charge $X.X an third recognition previously QX creates reduction underperforming to a classified third gain, time, been The charges. of close the and impairment we on $X.X decision During right-of-use of Both million our which statement the exercised stores gain non-cash kickout terminate million to the for we lease to two of the as is our assets. impairment

is other of recorded time reduction of right-of-use due previously gain a gain that first we've the on $XXX,XXX asset. was the a store lease impaired occupancy in The to obligation as non-cash This a costs. discharge recorded a

our store rights kickout exist in many of such lease agreements. However,

As to performance. next us, exercise continue with of from to situations costs we clauses we misaligned several these are time the may in occupancy to sales time ahead where kickout years look

remaining in XXXX the negative have XXX XX We due and $X.X expirations XXXX Fiscal million kickouts beyond. the quarter, million million Adjusted for stores negative XX in $X.X compared stores loss natural $X positive XXXX, or Fiscal and in stores last third share. the coming Fiscal EBITDA Fiscal was both was year approximately quarter to for to with the for as third XXXX. $X.X per at Net negative quarter diluted million, third compared $X.XX flat of relatively with

flow to like to the in cash Now, move on balance sheet. I'd

at quarter have to the steps. including with landlords rent. operating credit calls revenues, orders, report payment costs terms effectiveness negotiating of demonstrate results immediate these third steps decrease to expected of our increase with in the capital with borrowing amending We last our decreasing on defer our and extended align outset vendors payroll, reaching to facility merchandise pleased canceling base, agreements took of our I'm earnings the talked our purchase that pandemic to our about this some the two abate we and

first of nine cash of for XXXX, have our $XX.X as of months for of to For seasonality of business to use first typical use million, and a a compared the free XXXX. cash to the fiscal the our $XX.X nine use holiday million QX. fiscal months flow inventory it us to of is prior a the the season, of Due selling in build-up was

that we situation were our our significantly managing that terms given year, reduce hand. However, the levels, which inventory expected a able was this aligning with sales our to to needs. limiting purchases and and only impact our closely by expenses This spending necessary in immediate for vendor meaningful at payment outcome business capital accomplishment is

first for third on from same quarter. of capital nine The $X.X as million, direct-to-consumer in year. increase Our initiatives our of million the of drive to second the period a compared business. the balance was that growth last spending $XX.X for $XX.X months were quarter, to fiscal the primarily we $XX focused ended We're XXXX at report end which slight million a the cash pleased we to had expenditures million,

cash, compared million which our at and balance end the debt is quarter, million we revolving facility were debt, term credit Our of $XX.X our the ago. to at net $XX.X million. $XX.X to as year comprised look total loan, was a If is FILO third of of

Circling hand. quarter and this inventory We million, our earlier a this orders for decrease third inventory decreased sized our as to compared through $XX.X by accomplished position in the under million availability million forecasts, year. the $XX.X million moment, $XX.X year to $XXX.X a was our revolving on excess sales back in ago; fourth for of quarter cancellation credit cash inventory right primarily to our balance have addition our of facility, to

to last the a year less end expect in merchandise than inventory with position end. We healthy year

manage long-term that As categories we the will categories will upward ago, accomplishment our from challenges which changes at XXXX, to months, few to us Despite pulling business of an inventory of fiscal the of were inventory, end are into that our of a respond our levels. of balance. the in of slowed That's while continuing have buying $XXX,XXX and our clearance and inventory XX.X% our the allow This especially QX, year place inventory back in narrow levels assortment, shy trending total buys to reduction down. our we past clearance total XX%. proud, of comprise for light just are we down in goal

we to with we this continued a in acceleration trends an pandemic, and improvement planning through stores, to As financial maintain of in conservative represent will approach important a continue assumption steps steps our believe sales maintain navigate recovery. to slow our and direct preserve flexibility and our financial business. that the to we've taken year on liquidity our significant this way We in a

all holiday path we know Given distribution navigate it back across I serve channels. to we that, provides at a with continue the to to plan time, next We thoughts. what our our through this big point upcoming Harvey our in for shopping to some tall With believe over and of us would season the XX months. customers like look turn to and forward closing

Harvey Kanter

Thanks, Peter.

XXXX for some really, we're time, and to of our quickly and take talked humanity, balance vaccine hopeful that even today over ever are about the and on return being nation health XXXX, focus for we we more look the of to hold, As hopeful to normal. for

that However, questions. safe now will And just and actually open up is it Thanksgiving. the a all Operator Godspeed defined and you now, future. wish I happy for to

Operator

first SCC comes Thank question you. Instructions] from Eric Research. [Operator Beder Our of

Your open. line is

EricBeder

Black terms flow are shipping. stores about your you being not shop near-term into important year heard actual I the traffic very We've the customers to is little Good or that near-term before, responding of in terms in pandemic, terms this of of in about is as trying about earlier? day, question. getting to have How to bit Hi, a of or early morning. drive Friday people promotions, a to the get in

HarveyKanter

and appreciate we challenged. combine have probably like shop, recognition the be stores level that the Yes, folks that - be the today happening with tried everyone in and of the is is challenge to that the biggest shipping to to not there's going single into else, world coming that might comfortable

We mail in of mailer have or will, earlier are we [indiscernible] last things has after we've things for in-home Friday, the itself communicated, in that already I year, which some to as and as promotion vehicle, And till in our of as home two event promotion XXth you early as such before then an The direct one, think Thanksgiving, Thanksgiving, then on the Tuesday arrived Black the would level have creates event month. which done, some if of prior Monday normally at XX% in-home started well, we as yesterday, the Black of arrived already. Friday.

we've we to a all. So the and able our It's and the ourselves, experiences so than segmentation. in believe, runway talked not either mailers some we to we've ability and terms. communicate understand consumer into our we've last offers drive is store the to most far, ultimately, and believe traffic on is offers, demonstrate to certainly them because uber-promotional. much in been That don't different that available said, folks our coming not that And profitable, to is at recently, different when. cases, offers being And to profitable greater the the more customer demonstrated incremental coming their incrementally year, about, through what's and given as promotional

tell. you So my world won't people as us, as us, around hope might anticipate. But and the see promotional time is will be

EricBeder

the does fit DXL overall seen advertising, the TV into On that some marketing I've that of universe? return vein, how

HarveyKanter

customer is either accomplished or path we And nights, places NFL, current all through looking to digitally, know Yes, that's organic to email, greatest whether come expect frequently. the started question. have you We looking to on customers is us take display through core that more either live it's into digitally reach the more the addition lever, three market. TV in you And what an syndicated us address primarily, and evenings in marketing in if is TV the frequently are shopped would there it's we through see of either marketing, to or to that consumers back frequency, well. are marketing will. the both or of active specific we digitally we current opportunity or certainly our reach TV element, on that to create football to, the being drive buy incremental core it But it TRPs I hope our target will that the drive ability - I an are casualization places it's and gives reminded us is of continue an times. extensions with as both around incremental share But as We for that digitally to search, gifts, as that in that, paid. to was or down and first believe with will, the haven't done customer And us constituents, be referred the that needs some attempt predominantly you if still would here. to are those digital have, don't us call And customer and before. to our think lapsed, we're with interact a great

will referring looked a So ads and you to stronger less, specifically at much this ad and clothing. if if specifically, orientation you remember really any, prior-year tailored around casual much see

EricBeder

inventories. question; final And Great.

permanent be what And be when think be new you You've thinking the that buy holdings. be respects somewhat online you've from ramped terms pick of should from in we inventory maximized - pieces can that lower? world inventory allow up up new should up those less how to they the many aggressive ship levels the about ramped we Should of going permanent forward? in normalizes, Both store, store.

HarveyKanter

inherent question. sport even suits, shifting, shoes, shopping nature meaningfully dress One dress a the tailor that slacks, and coats, with and clothing the of inherently, dynamics elements great behavior there's of two turn those how for all out slower. shift There's in the is of there. Well, sure

in less number COVID what so and trying So incremental maximization in customer to situations to that we're and create how then And like itself that flare ups, categories of and everything have the we're risk-inherent exists that balance investing one, same. will the stores the to turn and with, the of revenue that, to back in in your and you. opportunity come addition at turn fast slower, the the and else help should challenges really, point,

don't might to if in you're being receipts. we're going appreciate, But not have you as So business. you goods, conservative create placing relatively

of able behavior, of in come we'll be buying drive improvement goods revenue, to turn Most consumer lighter in our opposed to we're to So are turn. don't that think a we small run conservative we not the so out not would the improvement shift expecting as and trying total in inventories.

EricBeder

season. luck holiday Good for the Right.

HarveyKanter

Thanks so much. support. Appreciate the

Operator

Sosnick comes next Bernard Global. of from Our Madison question

Your line open. is

BernardSosnick

get and so coloration bit a sales in adjusting What well. to on do is Thank you. in I'd November. far so of little October, and Congratulations like manoeuvring on

HarveyKanter

change, actually our I but might that trailed what in but in West you published, I and the say flare off would October definitely word started an think I expected the September. imagine, The Interestingly to as CNN It good couple week as happen We stress little And in way. conspired last tough. of into October October something first days, the the a others with enough, days non-stop; what move delays will all referred change of I as talk four then the say a about, within that that are it's election heard is in it's possible Christmas. of weeks hopeful as of like think, saw so, COVID by end a in will would Because in as we measurably we definitely had, to and the qualify, the to of I surprise a accelerated material materially allude strong we we us a September. it few beat fires light the those been And then, impact, not from As a of the like what just an bit I Thanksgiving that good switch unfortunately, and, unexpected last, in has September. expectations, half [indiscernible] qualify, in a be pretty And magnitude ups would October, October. the of equally light watching November wasn't happens. widely the I've way, not caught switch. second the and had of and and we beginning

short I've really - really today, into the went asked noted, the you as did never continued function things COVID. the material got and consumer We trend, answer October election back like of a we've I week, world November. volatility change this living fires September a more truly think the what as we backwards. towards period and it material as Thanksgiving, it's a that is, out for anyways, with seen of of almost. get negative downward we're early But the closer to But and in of

BernardSosnick

That's very you. helpful. Thank

up on the question million is The accrued other expenses. ago. is a versus that? year around $X They're have I composition of What

PeterStratton

Sure.

other it So, some year, a accruals to were million. get accrued believe those I to about and it did some back which it be last they do the of I is up we due is expenses, you you're $XX has restructuring with - believe couple believe. around accruals, might about year some that at can $XX that. the I right, incentive million, reasons. I of million long-term two on to But dollars, this

BernardSosnick

in where rental. show these be, my seem up. was there's - liabilities would not mind, I to where or deferral whether Because of Well, rentals and accrued adjustments for wondering been the

PeterStratton

$XXX so the year $XXX million, was this million. in those operating Yes, year it's see last leases, you'll which

that on to adjustments the sheet. on coming of our balance line all are - leases operating P&L lease the our So, through

BernardSosnick

But, some going due to of XXXX as are payments in XXXX, additional these as you become expense? deferred rental during

PeterStratton

Well, be they'll due as additional cash.

a had those reason are cash able our part next of why to not deferred been to this of to because and part been make management they strategy, balance year, is but year. payments the that's cash So we maintain robust we've such have

remain we were able they accrued the preserve So as liabilities, to year. cash this but

HarveyKanter

deferral, back so XXXX. different fourth have our the quarter clear, very quarter. the through deferrals been from every have we're of run the In could come terms the They could entire cases, lease. in in could Bernie, deferrals second for They distinctly in be just landlord. some started to

unique there was are a and many so to one-size-fits unique of never So very deferrals, partnership. have agreement because all we each landlords, one-off landlord's

BernardSosnick

input understand very is The I you helpful. that. provided

this. ask Let me

of Given turned for assuming where quarter? light are you the with are you your November, switch the probabilities what reaching remain all right the things sales same, on, goals the now, having in been

HarveyKanter

feel We about expectations. really good our

been, material, the biggest that, have it never continuum. going what we first but in was our to last relative pretty November, with not miss be friend. four right challenging, two question ahead knew backwards miss way in I actually We just And quote the first that The October. around weeks And the a the was the couple happens? quote what days month. close. September, - the in was October and different expected, ends unquote, unfortunately, we that, four we're - unquote, always unfortunate has But now for then in recovery now October will overachievement predict the are versus in right And the weeks, complete it's been other the expectation two of the the, but of literally happening like days a dynamics election can't

BernardSosnick

regard are cash to flow ability the to generate the targets fourth quarter? what And Interesting. your in with

PeterStratton

richest our customers just how position, inventories all Sure. a critically come because this getting into We cash flow, ability we're about our of We've it's in stores ready, shopping aggressively season. good onto and our waiting good cash the to to come feel website holiday and very been important in see our generate our point year. the store

So I would about good say, very we it. feel

HarveyKanter

obviously Bernie, remarks, some our are might the caught our XX% best not of I chasing receive XX% goods, literally XX%, and well. chase covered been some weeks In incredibly in spite we things, have some in that cases inventories a I is it's One in but brands, cases, produce. a of on negative cases, of and remarkable, flat XX%. But some have - and specific we're we very And you cancelled, win. didn't down in more and know as we them that, lot they some of

the in about great concentrated feel what, is which, be create a a have of we down is reduction a But leverage. reduction matter bit with thing inventory business. right-sized we've we and of the in giving back bit an that. will leverage. little no of if little expectation, and the and will our opportunity think standpoint upside greater And momentum expense right-size to we it, so between And we really operating will greatest other levels, sales that than incredible just from last year, downward versus what The lease, the pay we environment, ourselves on expected, there downsizing measurably to

BernardSosnick

I whether that XX% down in structure viewpoint up sales. indeed since point, inventory changes did the you your brought overall? was and on it wondering, catch flat inventories I

HarveyKanter

drive leader in of is Katie merchants of the is almost has specific have to the and narrowed certainly goal the been which our mix. literally it's our planning, the to to two before, than that upside we're between with ever meaningful our Well, together publicly, balancing really so turn Vines, curation partners the really the might really And for greater Bunny, we our is important heads do been pretty all continued and brands, have narrow talked merchant Ralph risk cut mix, yet our and faster, in this us of try Vineyard And Psycho them Allison the our we've a as appropriately. phenomenal we've done brands head there half. that into. base to I Lauren, XXXX steer, working imagine, think is of job they vendor And great the that about and been in invested parts have intent assortment, you really in expect their most put and helping meaningful -

BernardSosnick

along the Okay. final of of on And a if details about in though amplify the has you the the Amazon relationship way, didn't terms may. I forward. What it would that? seems looking the relationship? lot bumps of catch little bit say Could one question, you but all as potential a I

Harvey Kanter

stocks, seen out the It program. supply stocks challenge, initially of back very different I program came completely. the concur has ever some different customer the good how than not we're Those in be it we've given and you chase but those chain they'll last hard. reality no so stocks, the would we negative at I case, upside. of gotten stocks back XX% and measurably trending for think as of is And than the and us else. our for been of buy. fast them the the to is as shared we specifically felt the our understand manufacturing opportunities Essentials logistics, Amazon reduced created we've stock, would I strong, further In year. the highest further, or business that of out some Yes, ahead had where Amazon, and about terms And there's as strong respect, trying out to in comments, have say - we in no and Amazon the get level what mean, opening anybody business. so business want vessels, of added we on

brands line, a that narrow there's their it's many of that we're private group private as good we that second to to their work not on cannibalistic. to pretty the are program. private which We create the companies thread look in at from getting because base good addressing the not with brands And a It you I about a believe customer is they behind private go drive threads core program. brand business, great we great their within is I expanded a have And - line finite literally and second, and many, and - brand characterize they our they partner we'll But how wouldn't a have. result, have had one different customer. feel two, us, the for And additive opportunity. if we

Bernard Sosnick

doing up in Keep much. everything a tough very thank you environment. Well, been you've

HarveyKanter

Thanks so Have holiday. healthy safe much. a and

Operator

from Staples comes Management. Timothy Staples next of Asset Our question

line is open. Your

TimothyStaples

of of liquidity. overall company the the considering a job gentlemen, at preserving magnificent you've the done the time Well, pandemic leverage started,

at stayed months of XX liquidity. You've

that I biggest a preserved and for one your shareholder, shareholders. want as frankly fans. congratulate of have I'm you say to optionality You

HarveyKanter

Thank you.

TimothyStaples

haven't talk you your here. liquidity. with don't it. of Can read raising for months So me call out I queue somewhat in believe, I cryptic would the if about. clear capital at about the of relationship that terminology wasn't mentioned it, using that, believe I all is what had said take was XX previous conference the I you said about that so about I and set I aside, task way call ways for notion can the talk you, of know yet; a don't to completely you lenders? that Again,

So is aspects good. what months three to speak Can of which that from about really broad the hasn't you ago, talking changed here? I'm

PeterStratton

Sure.

highest great had we our - modifications have did So we making this credit first first of possible, in one a our and when banks like to relationship facility and that our with our really-- our was banks our priorities, some feel facility sure the leveraging highest I we were spring, hit, was credit to we extent the and make think very pandemic the back we've terms us much been the I think of that interested the we any that financing, are of that's type we next by really there now through point else very throughout don't that do pandemic. in months. that have equity being working strong XX to the driven right management. get to just supportive And a the is capital in we DXL stated of pursuing earlier plan

sheet, our is So the which a key And space. more starting When right-sized we're that Harvey's ongoing we've debt sales of ago. leverage, point we're year expense point, delivering, balance actually you from has that out to that. was our you'll to our cash restructured queue a be see to see where position, which getting today, operating look and at through it net will significantly later downed the

sales. now. good is to the thing know, right relatively feel you we that capital So watch the continue And we structure about big

we But control and to close can we keep XX we expenses months. to and on know, get need that's You through plan manage sales next expenses. can we how a the eye

TimothyStaples

the about am and horrible final talked COVID, those wonderful the should operating before on insiders liquidity, about in I around January turn One a cash burn. window the something leverage for sales that of to Does see is, you XX as in leverage as that regarding management of come thing Or what Thank the this this would frankly, either great been a going excited you customary? very common It back selling open very are been for business, here market as considering which I you've of of shareholder company? that as struck, me, buying quiet or answer. potentially question thing the stock broad-based neither is affirmation in in in containing got operating selling may that nor months be of $X.XX, the that few ability $X.XX, and open the have Because and around. really stock has vaccine your stock insiders you high is considering market, a the up and after that no that well that days the I earnings believe. understand open buying value. by there's you creating think buying land man's has to end on insiders tell precludes it the there a months in considering chance I release couldn't

HarveyKanter

I we creating honestly, own had differently. window one we've And is is think each when reality And this employees in heads as the will Yes, Quite business not the forward the us materially keeping our greatest decisions is future. different. down. our create of makes and moving

and the market I buying before in was certainly that I in point time. anyone. some some for be will expect us and speak can't again I So of at

wanted thing to your optionality, on comment to if back The other I circle will. relative you

in I been And a nothing done that at. be what very making that is of you, optionality, and to terms communicated part sure optionality we're and giving looking of what we continue in to to every fundraising our create success greatest timely and made a we've refer have what aggressive part on as has of have way. more decisions being agile. we do cryptically, ourselves And in on that way continue been you reactive can versus to think

to it's terms I or fundraiser about in wanted you, of clear, any be So have optionality. all what

TimothyStaples

And destiny still very lot things management guys your team. retail space the control we've the very, of quality to and Thank in in of Thank a are fact and you. this sets Congratulations, that a you again. is you. skill your of happening seen difficult the testament

Harvey Kanter

your Well, safe. much. Operator, And the today. loved a like just and that's wonderful Stay much. to you ones. everyone end questioning very home, suggest your Have thank think stay mask, thank I hug you Thanksgiving. wear I very of the would

Operator

gentlemen, Ladies the conclude does conference. this and

great may Everyone, have You a now disconnect. day.