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SCVL Shoe Carnival

Participants
Cliff Sifford President and CEO
Kerry Jackson CFO
Mitch Kummetz Pivotal Research
Chris Svezia Wedbush
Sam Poser Susquehanna
Steven Martin Slater
Call transcript
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Operator

Good afternoon and welcome to Shoe Carnival's Second Quarter Fiscal 2018 Earnings Conference Call. Today's call is being recorded. It is also being broadcast via webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited. Management's remarks may contain forward-looking statements that involve a number of risk factors. cause those actual projected could materially to factors from different in risk the results company's be These such statements.

or any risk be call any Shoe included as statements date. any contained SEC Mr. remarks. on these should to factors announce call of discussed Mr. Sifford, of on cautioned not press developments. go in today's statements considered statements, please of undue with release are to over conjunction Sifford, obligation Forward-looking forward-looking publicly reliance to the place the the release. Cliff or President to risk Investors revisions factors press now for events disclaims today's and which in or The filings reflect ahead. company's of and Carnival, forward-looking the company to the update opening today's earnings in turn to Officer I'll Chief discussion speak conference future today's Executive only

Cliff Sifford

to quarter and you XXXX Carnival's call. welcome Thank conference earnings Shoe second

me as is Chief call Kerry highlights as provide second open Senior results a our results operating XXXX call of to outlook. the up brief well sales more detail. On fiscal questions. Officer. will updated overview financial the Jackson, we'll today call, a today's quarter Kerry discuss the review in and Financial President, of Then, Operating take and Vice your our Executive Joining on I'll

a value. of overall on Strategy this Marketing brand years to perspective and Executive I take started, our personally newest Mark Vice get I enhancing Shoe brand bring Before Worden. to experience marketing has Officer, our and to hiring Chief Carnival will announce want fresh opportunity and the Mark President, XX of

and we the opportunities customer a identified our have for journey customers’ centricity, where Over toward improvement. we have mapped year, journey past undertaken

us available special with a the family most of on to brands channel. best We footwear loyal to shopper counts have a the our offer selection who relationship live

him existing him Carnival experience Shoe that and branding message family and September at We to person the executive adding latest styles to communicate have look value to is new great to to the both make brands happen. Mark believe of challenge makes Our that and great markets. in customers Mark’s on Evansville our just and already forward XX. team his the we moved to new

call. resulted to week in XXXX that shift on calendar. Now our XXXX week fiscal the fiscal Please in a XXrd one remember of the

sales near as quarter Our a store fiscal fiscal quarter-end XXXX second XXXX, presented later second if year. may are the seasonal comparable XX-week there comparisons influences second year-over-your quarter are impacted last ended quarter compared the for all days. on In week one be quarterly sales Comparable our to respective basis. of the

our for quarter. operating comparable report second performance. very a We're sales the review we’ll X.X% pleased Now, increase store to

As I were store were first mentioned start expectations. with the quarter on exceeding of pleased we quarter the May’s second comparable sales call, our our as

key increase performance of With posting items our The non-athletic the and through was footwear double accelerated, seasonal arrival warmer the digit women's immediately quarter. women's non-athletic sales comparable store in sales driven brands. weather, throughout a

month X% school to Our was trend this year. for digit season, you increase categories continued sales most based, for store where for comparable top the the performance through a comparable on has product the reported as into increases. have of tell store increase month X.X% that excited the broad last we important major quarter August of to I'm produced yesterday, the we August generated sales of back mid-single

was was product strong XXX% higher digit, margin the ended see points improved to to high-single categories. basis average to management. quarter year. as digits flat margin, down performance in with low-single of were last inventory to quarter strong was a diluted to our XX primarily with due the and operating per The margins and tax basis which in per BD&O EPS on up transaction we last declined sales units inventory our and net dollar continue Traffic leveraged focus low-single XXX points, store SG&A combined seasonal Merchandise increase points for by merchandise year. increase per compared digits. result expense second income, due due a on down also was $X.XX increase produced XX% the of per sales quarter the of when transaction up we percentage performance. Average improved the X% basis. share, basis XXX% We XX Conversion to an of

by canvas categories. store second the the on in teens, Focusing sales comparable driven our by department, increased non-athletic women's and quarter sandal

the for also Our up The the Again, shoes from sandal identifying digit Adult digit paid on comparable This men's men’s comp high-XXs. were us. was mid-single increase double-digit comparable categories. which and a the a comparable categories for up department offering in on key strategy broad category depth digit basis. sandal we quarter. was performance increase a the off driven The mid-single of primarily a sales in comparable sandals, was of on mid-single athletic drove non-athletic the pleased store up store basis. a with alone canvas Children’s assortment gain and drove basis. were

from over our have continue past offer athleisure and experienced styles Our that drive buying the new team athletic brands years. several fresh to colors continues great customers the we trend to and

spend initiatives few to key minutes XXXX. like for I'd to update you Now, our a on

originally performance to those that We slated we improving the of continue work this stores to year. close at are

positive some sales of see landlords. through and stronger combination to in a terms better continue some cases We our results from

reduce closures we a XX to XX were to of to on metrics those range from a XX of the of XX. range number With store projected the locations, to able improving particular

complete strategy the implementation the in as allow down. of Our we estate real settle remains CRM and to estate total our initiative conservative, market real

initiative us value a our CRM are will our high percentage Our of overall who help high driving customers identify sales.

stores. remainder year, approximately For of three this the will up open we new

store strategy. and income operating our realize to performance opening closing of result EPS improved as a expect and We

us, level and benefit do experienced we have specialty look the the closures. ahead and opportunities as we We not XX the We states continue stores XXX retail of evolving quarter For with store from believe to retail estate second we ended closings real the Rico. store including consolidation to fiscal of in better over landscape, several years. Puerto past are expect XXXX,

the During stores quarter, had no new we closed three and openings. store we

key is the a Our CRM implementation understanding is is by initial the in one-to-one This moving our them. customer we be element strategy calendar and initiative end forward expect complete our and creating nicely a with who of relationship to year.

brands our our our loyalty. team runway categories improve journey, of estate. will our We selection they part along from valued data how to the Shoe make incentivize Although on in loyalty their program, our can Perks gold give the not By This that it offers Carnival the future. of and though where and rewards we that our the operations high site purchases. family I'm of basis new our for to program we choice July, some customers their that merchant new selection understanding have announce value points By encouraging comes believe identifying for a stores to footwear version new back-to-school. prefer, newest and Carnival with holistic store improve Gold, a a will program. loyalty and is have and our now store-to-store improve customers’ live, XXX,XXX the Even growing is online. Shoe to can large shop they Since just designed a this just customer we them happy was us by a merchandise understanding Shoe new high about they program members embracing clear we to are prior the in in brick-and-mortar pain customers CRM real approach program in was added already launched re-launch, tier all the this seen launched signs customers the to program. and

perk more XX% more average and transaction XX% on non-members. per than members shoe spend member gold than transaction per basic Our

We In advantage a that pleased for styles we us This vendor and offer allows are a in to evolving get the broader currently to next we're without the and in improve expand is program. also ownership. engagement landscape investments enhancement inventory launched test making are carried order stay assortment growth. Carnival to retail with ever styles, The changing of sizes incredibly Shoe we our Carnival we online us not level innovate. customer to and brands and continuously the of Shoe risk technology must the consumer, take the store. The important of e-commerce announce drop-ship relevant we as

XXXX. on financial our I'd give fiscal for expectation you Finally, an to update like

time As latter I believe third X.X%. us the quarter at very gotten that to earlier, up element right periods weather value. styles our are the said we a have sell, off and of back part Once nice depth October, a sales We categories. shops start September to key to to currently as into fuel they because get seasonal to school, brands like press August to important customer we an at us the of have the sales and compelling in becomes

low remember, will price. driven boots. This reduced on our low As booty we price purely and be dependence styles our promotional you great sales year, year, last by not by

the this we excited been offer in is comparable We’re our forward-looking these sales weather boot in Based fiscal of sales have boots X%. winter. increase have The and we the on selection dependent. to fall cautious year booties the of for of Therefore, customers store acceleration our we the guides. about category factors, expect approximately and

overview. result of call range concludes Kerry. of to over my $X.XX to per a are expectation turn sales raising $X.XX. to we our our the $X.XX of As now $X.XX earnings to share revised like a That would I guidance, to

Kerry Jackson

Thank you, Cliff.

Our the included the XX.X XXXX. stores Comparable the due of for increased August compared net closed increases year. to we ended X, with million primarily to million compared XX, quarter last XX, in of an the since the offset the million XX-week sales These period opened was for second quarter sales an of sales were July million million the stores beginning base XXX.X XX comparable X.X beginning of along the in quarter for store the second XX of from ended XXXX. by XX-week in ended have of XXXX since to X, last year. period second $X.X loss partially second August from XXXX August stores the net XX.X quarter increased our X.X% sales increase The increase store million $XXX.X the sales increase to for ended

our back discussed was year, QX net a end year. stores comparable year This last X to our $XX.X to week in that QX The to to included approximately year in effect compared this sales school QX million. this year. shift of by in increased the an last year QX in week due last later important last than year year and week QX, of this one moves earnings X As fiscal being XX-week shift during call, calendar

the and of profit occupancy Our primarily in landlord's two as the decrease our with a fiscal result make and SG&A to second was buying, cancelled will last the percentage cannot a allotted gross than compared margin increase XXX basis the margin leveraging in lower on quarter last required in point and a the Occupancy driven expenses higher where expenses closed benefit XX.X quarter This stores Based occupancy termination percentage to or sales. The landlord the rents the in of year, within and due expenses a contractually XX X.X the XX.X% sales quarter Rico non-compliance effect basis million in leases. the of and was terms, increased two by the sales. second year. was million. lease XX.X% $X close in XXXX for accordance during quarter stores repairs Puerto in for million was lower as distribution of for we buying, expense point quarter occupancy reduction primarily QX expenses in a the lower to distribution of store lease have from merchandise time. we

expense advertising incentive As year. increases quarter these compared million a stores along quarter expenses percentage expenses sales, to closed quarter. closing, compensation in advertising for affected expenses. have earlier. for the discussed based were the These second included a expense. X.X% the new of of of back-to-school shift in both support in stock with for and sales shift that X.X offset are by expense decrease Significant incentive second in increase I for to net to advertising increase partially store increases X.X The quarter was The million XX.X% calendar X.X or compensation million changes last decreased and SG&A in

the year store between Given QX There the no the significant due The and openings for in XXXX was in fiscal of over last QX increases quarters, Store year. concentrated five second of expensed over have year that effective compared were this QX and the QX in in expense decrease closing year. in quarter XX.X% stores expense same sales in were first is XXX,XXX annual of elevated SG&A compared expectation costs openings earnings. last year. costs included to compensation in were shift tax been growth of a year expense to year. this QX income half. and in this we last in period a expect compared Three XX% quarter shift and incentive QX rate was The approximately this QX closed both this is advertising the calendar closing in year. stores on the the X cost first second closing of the is with QX last in store corresponding compensation year both Incentive last this of growth in store guidance our Included last through year to year. earnings the compared sales in new to for XX.X% minimal half

For the rate fiscal expect to tax our of we full be XX%. XXXX, approximately year

below quarter. adjustments year during favorable was expected rate to recorded period Our rate annual the QX tax the this due

in enacted, for to XX% tax second reminder, the million statutory XXXX, December from XX%. earnings US the Cut reduced share. of or XX.X Net corporate was and our Act diluted Tax per a fiscal As Jobs quarter were $X.XX XXXX rate approximate which

or of quarter share. $X.XX reported For of X.X we second net the diluted per XXXX, million earnings

are XX outstanding optimistic year, shares to QX. the cash this repurchase remainder year. be with guidance. under expected for Depreciation we relocation than QX year, approximately is our we're share flow. be the over average and fiscal to available a during million further million this due accelerated focus our million the for was our My any repurchase quarter. XX.X shares our currently little including information $X diluted to remodels. million the X.X projecting and year the fiscal be our in In approximately XXXX, of anticipated $XXX,XXX guidance. previous to XX.X approximately in experience million of Now for We expense our used projected will and a of outstanding. did our stock not affecting third expenditures the million stock be viewpoint to cash Capital now half to actual on expense shares color Depreciation is more authorization. $XX year. the have XX.X million, for the turning Based price to not common for earnings repurchases of expect second XXX,XXX position an to earnings be increase expenditures in approximately final weighted We stores, during about new today quarter for This year are full this expectations little These year. the incentives quarter comment on adding on QX

$XX million. approximately to negatively we calendar the be shift $XX Q from impacted by benefited by expect While shift sales that the million, sales calendar QX

to expect result, sales QX compared comparable in comparable year. to a X% increase expect we low QX. digit to X% week decrease As a last store our mid-single basis, in to a On QX sales we net

de-lever occupancy Our the margin de-leveraging and sales. is SG&A compared last despite year. gross approximately points expense single will digit of distribution to SG&A also QX expected low profit buying, basis the our from in lower expected to decrease due costs XX to decline a

financial Our compared to year. concludes for XX% approximately QX review. to the This quarter tax rate expected be in is last our XX%

up I'd the for questions. Now, open call to like

Operator

Pivotal will come [Operator Mitch Kummetz Instructions] question from Research. with Our first

Mitch Kummetz

figure comp and taking am month. just the out I I weeks because questions. three being, conservative biggest the are are for comp how weeks at guide, guys three the my Kerry, Yeah. running you're to through you X.X on trying Thanks think of those

So year mean, I’m figure just in at of the then low-to-mid rest at in that out range, the like again X% looking you're QX? of sort you about What kind in a flat full X, are guys of kind running I somewhere think for single-digit terms what X does third and in you’re to a imply to you of plus thinking through of there. just I comp. first half. quarter of something trying the comp the are

Kerry Jackson

when low-single-digit opening and It we loss, comp depends. in at actually and affected up then small stores because September, we're rebounds, hurricane a In going again some Puerto started expecting expect we’re decline; had nice then a October, the we where primarily Houston area. particularly against really saw Rico the

last comp saw rebound we we're So, don't the strong of from those we know We numbers against are how to year cautious. comp large going that. being

Mitch Kummetz

QX, you’ve kind very do for still your I'm very, is of slightly just math guessing category? trying of in it Is that again, positive I'm But a the tougher into for QX. the a again, expectations fourth just you're And to tougher Again, boot comp looking in visibility compare. or the of get a function quarter. got the to a lack to compare

Kerry Jackson

quarter, it year-over-year strong with a not for is basis. that, the knowing a is cautious year, sales also, against on boot It weather will respond low-single-digit and booty -- we last be to and and we comp how how the are going had sales the is that being

Cliff Sifford

is Mitch, Cliff. this

turns once us this, I trending booty well -- nicely cool. very booty is very right shops time that sales our need proven any because turn especially we're bodes this weather now, obviously initial call, and on and does have -- our visibility the again say cautious will which boot at weather. the this always time somewhat customer category, we of for the which very, do cool, sales happy, to we’ve have weather to accelerate. the Our and don't We're happy our when We're with

is cautious, being it are weather we dependent. but So

Mitch Kummetz

far then you say calendar of how of gross much some obviously in Kerry, that the And then calendar think guide the function that of Got just line was BD&O And week have helped helped versus on a bps, negative versus you terms leveraged I as school? as bps. BD&O set you stores margins you XXX fact it on thinking shift closed particularly are XX on impact that you losing item? gross that lastly, shift, margin, it. the you by on QX, that down obviously in guys the to by margin merch QX Could the you the of back how goes,

Kerry Jackson

expense Well, talk I’ll first. about the so QX in, occupancy

the was it And those contractual and quarter. Half benefit for we So, was, landlord canceled less we actually of -- termination to time number. that about to was approximately it to it We occupancy Puerto Rico a we’re able the close, half the us half the other due in that them million benefit in combination. frame closing us will we turn or for incurred over received rebuild was where two lease. expense and $X a to was to stores received due of stores, therefore not just lease

was So a BD&O basis. overall, on our down year-over-year

X.X% that for combine quarter, the leverage BD&O the helped that comp the with You nicely. very

Mitch Kummetz

on about how And margin bps pressure, thinking versus you BD&O XX merch QX, of the are de-leverage.

Kerry Jackson

increase, and going will expect of to merch a we're and the more We de-leveraging occupancy to completely buying, expect don't see costs. be but our distribution So, by the dollar. offset it margin

quarter, muted more the to second costs, distribution, see quarter. primarily third expect in occupancy occupancy but to costs compared lower We much and buying, the

significant creates BD&O. of lack sales so on de-leveraging And effect the pretty therefore,

Operator

Our will next Wedbush. with Chris come question Svezia from

Chris Svezia

on Good importantly, taking thanks Congrats my afternoon, comp. more and quarter questions. everyone. Thanks on the August for

are, be color comp, that improvement, the any about any you are there August just curious performance what that So drivers in clarification year-over-year that as for CRM and/or some to what might the of or maybe products comp activities if helping about potential August how just well. there I’m add can the

Kerry Jackson

to address CRM I’m in early really first. It’s going activity CRM. our

of get In of year. CRM fact, a until the expect to rollout we don't full the end

with very our our in have athletic re-launch seen From shoes, sandles July, program although I'm we some some nice happy about as category, We're continue with loyalty is. will know August. you our customer, and opening pleased category. highest we label up However, as and business and really athletic always that up nicely, it’s throughout from which comping Chris, up nice where very, selling, reaction we improvement did back-to-school gold, tell you, a I sandal to value and is opened sell

Chris Svezia

fourth comp, plays And back seeing boot planning How quarter are the you the but – half, just we QX, low-single from slight about just how are Okay. business how clarify, when you business digit, about a in the mid-single to from think how in planning, a quarter, increase you a and for do perspective? for low-to boot that comp I’m QX. think third

Cliff Sifford

placing want point so our is large think flat. business Your a is it react able dependent, on category be that the basically it. that bed weather We little a boot seasonal to could dangerous. to to be that We

toward trend than So we would good buy strongly rather expectations. a react on into based it

So flat. sales are to to we be planning move

Chris Svezia

you think very be your boots you or that that that that by comp you improvement can a improvements go chance any are will fourth into number year, is do? that in merchandise last difficult Do margin as strong to that quarter

Cliff Sifford

hate we know, last shop the our we get And then not the customer driven, we’ll as keep is, improve but the and is get be you through don't if don't react need. through well comp the Whether believe the we weather weather saying sell We least the decent at the weather, boots driven. to I fall can as better. have if against is to fact to we keep winter margin we to we'll them seen and it year, at to weather, that inventories at remains we can that clean. sell if definitely get But does weather, improvement. if

Chris Svezia

questions couple Kerry, the just So quick a on of model. for just

one anticipate in say October QX, trajectory for comp and low-single September Just a answering digit The to clarify question. time? comp for that negative more just can you understand you or to did Mitch’s you

Kerry Jackson

and September October, single at a for the September So, a to having comp will in looking we negative come at combined which low expect a slight increase and positive smaller we're October. out comp digit --

Chris Svezia

single but you And significantly, SG&A, anticipate Okay. be dollar, low leveraged to then down correct? that you it in is

Kerry Jackson

correct. That's

Chris Svezia

Okay.

through curious, mathematics guidance of given the fewer apart. would of mathematically, a those does that low a for in to around the QX you’re fact high That to closing terms to roughly just imply end a stores, loss markdowns, to a time, walk I'm number expense there's for it getting $X.XX we’ll related ballpark. call not profitability? it lot QX the one get related thought is there's and So accelerated your savings QX fall – second, lot process closings no earnings of I'm of How that stores play the and during to those closings. into a

Kerry Jackson

guidance, on little haven't We given a hesitating I’m so QX. bit

Chris Svezia

Or [Technical Difficulty] you can

Kerry Jackson

can extrapolate the of it You guidance. off

looking EPS or a the number. quarter, the question to was, if being QX of so flattish We’re X flattish that's QX quarter for in you what your earnings back close on once into

Chris Svezia

mathematically just Okay. I���m QX and is a saying, number. somewhat like like your to talked flat QX getting guidance. low It like you being concerned, you're for If and looks $X.XX about

Operator

next will Sam with Our come from question Susquehanna. Poser

Sam Poser

Good afternoon.

follow on Just I wanted a to that. just couple, up

you're lose going to -- still and XX of in in then correct? $XX -- another around QX. that going million Is on the lose planning Just to extra week you're about QX you're because million

Kerry Jackson

extra Yeah, week. of million XX because the in QX. about So,

Sam Poser

this comp. $X.XX I assume, the And the this I then is XXXX, What would in the question fourth [ph] -- negative are had earnings? guess Why single to in go is, I earn is guess, a an quarter these zero comp, when this -- managed to low digit you quarter. on even fourth one is, SG&A in issue the you two

Kerry Jackson

There It’s things SG&A. are QX. that affect a two less of

our higher have BD&O one leverage loaded of of it growth thing the the to a lot we to compensation. your but That's incentive if in items will of comparison, we combination EPS And and won't expect numbers, those with does higher of though, year-over-year margin a difficult have quarter, year-over-year margin didn’t a equity higher, some expense merchandise little opportunity hit as we're obviously it on has margin So declining question. looking pressure, extra we on that the SG&A, income, than create leverage, a difficult in will creates QX of basis. create of even a one the basis, that be that compare we standout first for it quarter, of sales natural front also a did leverage ‘XX. The half, other merchandise also. the a bit at, it more just and in on we some from week, week, structure SG&A coming see strong the QX is which extra create and out this on the The on

Sam Poser

merch that you’re And good, not margin fourth so quarter it just again? was pressure last because on is counting happening

Kerry Jackson

push we against talked had of right we about, have a combination it. weather, some around, if It's like Chris boot cautiousness can that there factors and we really good margins the year last

with see do some of opportunities drive pressure CRM to to some in to store with customers the initiative that coupons and you expect the discounts. also We against and

we're that a And low athletic you’ll standpoint expect lot item also. that pressure And also there's we too. quarter, on fourth shift, pressure pressure closing There's some closing with things see athletic the year-over-year a that with will inherently of a basis. stores. seeing shift therefore putting and be seeing stores from So against is some a we're mix sales, strong stronger margin on pressure another anticipating a

Sam Poser

SG&A? let’s to on, -- some and of say, comp So would kind see be we BD&O quarter, wanted so in leverage what what needed fourth the if

Kerry Jackson

anticipated like I We quarter Sam. that. now. guidance right hadn’t fourth haven’t I really don't know, calculated giving

Sam Poser

through this QX by a last last so you year? can what comp three doing you you're very looking in Well, were like nice year, walk job month you're of guess I when had [Technical Difficulty] the it. comps at

Kerry Jackson

was low comp were year, In about August digit September, single far month. the and we basically back by came just October with the standout a Last then up was flat. We X.

Sam Poser

And with hurricane? that help the of that the was recovery from

Kerry Jackson

Yes. But being stores also. after not we saw the effect of open the

Rico whereas for rather back was So, Rico then down Houston yes. Puerto down was longer, a bounced And quickly then Puerto while.

Sam Poser

you year and if are Cliff, mix – mix scale how trends you then of of a year that just them, a year rank compared you with to would one stores at how expect last look And I mean, the in now such -- to XX, why the X we the deceleration. kind thing. ago versus and would merchandise should the on overall Okay. of last mix the this going

Cliff Sifford

going I'm -- where or But that rate not the season. tell happy the with I this at a mix athletic the rest is the through not, I’m whether will really mix. women's the some with the concern, there fall continue I'm stores. happy scale, performing. happy but current will I'm is we with the of give on to trend business you our

So trend we see women's trend. throughout booties. cautious part little outlook and But concerned strong that athleisure that of fall the boots with on the a the continuing period, is especially a is

Sam Poser

pause you giving What's a there?

Cliff Sifford

Just the the it's streak this, a year of the think we seventh booty now judicious strong Athleisure, as to into of But, year. been athletic enter complete category. we for that seventh the I has trend. straight boot and concerned get as little

right think seven years. I I'm on

Operator

to Steven Martin Slater. [Operator Instructions] We’ll with go next

Steven Martin

Yeah.

of that forward? number going enough? implications to going Have you the scared going you open? are to opens, you Now Rico, And up end the -- Puerto landlords that's got the What rent talk second everything when all, expense of year you you've reduced closes, and that on a closings can stores of close. were about and next going doesn't better visibility where vis-à-vis

Cliff Sifford

not if landlords. working a is I’m to some scared -- to kick that trend our willing allow X will sitting very the reduction the of the to out accelerate. will see current with done good has of a to couple us sometimes of done team what X estate real landlords job continue and sure year now with extension or store I'm extensions, a rent out we've What we’ve say year

to want many want where save we of can, So, save these, we possibly sense. makes as it stores we to these as

our we the in So up. an accelerating, stores our if stores, we've ramp well, our them and but legacy opportunity in sales not new only to to want trend seen, with current as give

continue we as with to combination sales a a reduce of the these the in closures. reasons of of number myriad it's store of So, why working increased productivity stores, landlords,

Steven Martin

’XX implications out going what ’XX? And are for and in the that

Cliff Sifford

correct we we I far announce as have Well, we ’XX. ’XX closures ’XX that this store now, we haven't released I’m store And, me Right any wrong, if anticipate out closings not of for the really for point. don't at ’XX. Kerry, doing for but increased really – or don't don't and number number as

Kerry Jackson

Steve, it’s early to too say.

find Just for still of that’s are year list on a ways performance the off get enough where to give going stores our that's and on we that we're us radar were in stores lot closing that. this working next just to take like guidance to able on don't to, and to of year, you early we know for stores savings too

Steven Martin

are to a guidance place possibly, you to ’XX, ready minus stores not but plus for you're basis, net along give know don't couple? I close And we you're or a reach going just or a

Cliff Sifford

customers stores exactly and are of have said We CRM We've start again and who and shop. all year how where our and we our program understanding live once opening a we better get that long. they anticipate to they up running

the again. of that up running start to point, at end by is open we're stores and every things year, up that be the and new to So learning will supposed day, and we program

expect net XXXX. I to yes, So, growth stores by of see

Steven Martin

And Puerto Rico? Okay.

Cliff Sifford

in a keeping performing to the Rico [indiscernible] and very nice but now. continues -- seen in that very It’s rebound very that right we a there, early six in we're and closed on Rico nice way yet. eye a the with we We've opened stores Puerto island on is Puerto really rebound have expect sales happy we’re the Puerto Rico,

Steven Martin

Okay. some competition a of away? possibly going function that’s maybe you think Do

Cliff Sifford

-- I a things. there was less of competition is than today it’s there it before. Competition has combination think several

lot was to don't a fine [ph] on Puerto to that say the landed of no want stay only and BMO Rico see island. and to of these and closing progress. lot we're how money six insurance there island continues we plans a think runs have I there That's in the because have – and we I And money opened. this going everything we’re insurance as BMO once dandy cautious stores have at year. the why six and Today, stores we is that money the out, money to

Steven Martin

go six the viable added there? the travel expenses stores and market down and transportation of and shipping to But is with

Kerry Jackson

to the left where level sales It’s be seen out at.

too it's early to So say.

Operator

follow-up a Kummetz. We’ll from take Mitch

Mitch Kummetz

ups a quick follow got few I Yeah. hopefully. just

function there is of obviously way buoyant versus you're of look business favorable So especially and weather which Cliff, that much strength say consumer, seeing kind the when you kind to you would strength that maybe is has sandals quarter, just August, more a just at a any of the how sandals, aggregate the that. particularly product of into this you're continued of seeing in in trends, that strength

Cliff Sifford

I think it's both.

after consumer it into more on out that categories we do things is to for. conference our not think large I and year particular, decided categories. to to that, category, have entering right decision wanted that all the and taken good we're want sandals. truly -- lot a the And that We’ve does in money Shoe in have what fact stores the definitely a and certain have I We were apart And And be afraid pocket bought a going the this are sets to category we've go made that the faith selected spend There buy that the they seeing from we of one the as the as We we think bit to their through believe categories see destination be and have [ph] spending do season in -- same we're think to but for and I sandal going with key sandals, depth we're school. I them, shop we that's has continuing don't our in certain and categories long it. the to and we philosophy successful. I of call, to of all. depth. have sales Carnival to competitors. have a into decided But, buyers get particular back driven to own has they're

and items. categories key So

Mitch Kummetz

the mentioned on you on little -- have inventory weather you you able starts inventory a with to that then to bit, seeing of to to get are want chase how at then grow, you caught can opportunity you sort hand get of leverage the that sandals, of what that? continuing point, some don't you're you currently? too get And about to kind How and are change, concerned just let of because much kind more that, you've season to still have you momentum made to about inventory, the enough long promotional. thinking as of sort this I go seen sort category to you are you mean, particular where

Cliff Sifford

Yeah. From have we category, that bought the season. for

to think have into we product us we weeks October. the I we're carry at believe of So time And actually, September, the of end that September and that done warmer it's and point, more see categories, it’s the booties, and go to time especially booty into our transition you’ll product transition and of fall that category. away stores, category in as from the sandal booted and you transition

Mitch Kummetz

and correct into but and that that margins. help stand, of our you would lastly Is then I the particularly a that the Kind don't sort going year provide know promotional things reasonable inventory, guys? out a I last QX. that guess up QX? in category a would more on side, pretty lift might out are possibly to were that category, to would and of probably bit about on brought there of deal environment sandal it? boots, inventory I kind about to packaways more think the me given I guess And that there the were And then discounted that where margin merch channel even merch clean have with a on Difficulty] for I'm versus of margins, of the maybe ago some When year you wrong, would of maybe this were kind if that guess [Technical maybe a starts already way being year, off, the think also tick transitioning boot – merch I as strength

Cliff Sifford

way clear bring anything on one it, me reasonable about We back thing. to don't away let a it and pack season. but for It’s think next really be

end focused season. very of product on being clean of We seasonal are the at the

Operator

We’ll take a from follow-up Poser. Sam

Sam Poser

back stock I capital decision through you trigger this, buy stock what to buy you’re about Kerry, you building to the that not allocating and are given going for mean, out else, how back I something in you walk can can those dollars is you mean, or talk using to regard.

Kerry Jackson

a back to foregoing not we view, used buy our didn't point business, past and point at anything Well, in better -- in gone just use that higher stock. so always from time. need of that haven't we capital the We invest excess -- we're foregone that have in can that that

to opportunistic to position a stock models, let on It the QX. than not, – strength few we redeploying share on see market would if that stayed -- $X.XX do of our the out go on want shares that previously about when of and our it count for raising triggers shares those raising had repurchasing. than of second your the it not we're be XXX,XXX take we’re it, more better competitors out we're to large our We opportunity. So, and we've not some higher you in a uplift half, we on shareholders at by we are, balance sure in that run the we’ll of take we've years, cognizant not we do the on our it take what what ahead share those the out -- as spend weren't opportunity took planted take and sheet that's saying we that's you'll in don't We be is why had we it the if going in flow. may guidance, little that going that find better we buy basis repurchases, as were to but we don't our If impeding really just past strong them have that back that to and get guided we're years. if saying it trying be we price, it accumulate out it’s guidance stock. bit if We into point to in we likely time the second and find see and an why thought be right we're not an half might of strength see to make we a we're to and prices stock won’t, buy the and we concerned we this have would

Operator

and ladies you, will Mr. for or to I our Sifford, turn back comments. call question-and-answer will any gentlemen. additional Thank for you over today. session closing conclude That the

Cliff Sifford

take you. we unique opportunity Carnival thank to to results in and to Thank announcing our Shoe and themselves Thank for call you. our quarter third this buying Also, our Carnival Shoe dedicate in to experience. November. forward making exciting look participating you want thank who to shopping want I associates shoe

Operator

That again conclude now for disconnect. today’s conference. Thank once all you joining will may and you