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SCVL Shoe Carnival

Participants
Cliff Sifford Vice Chairman & Chief Executive Officer
Mark Worden President & Chief Customer Officer
Kerry Jackson Senior Executive Vice President & Chief Financial and Administrative Officer
Mitch Kummetz Pivotal Research
Greg Pendy Sidoti
Chris Svezia Wedbush Securities
Sam Poser Susquehanna
Call transcript
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Operator

Good afternoon and welcome to Shoe Carnival's Third Quarter Fiscal 2019 Earnings Conference Call. Today's conference is being recorded. It's 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.

also factors company's should discussion earnings statements be conjunction in Forward-looking with press of release. risk filings included SEC the in in today's considered the

only not any speak the obligation factors any the of are to statements to cautioned on or forward-looking The on events today's contained discussed reflect or press risk announce statements to place update forward-looking to Investors today's any to reliance date. undue developments. these call which future as disclaims revisions or today's publicly company of conference in release

Chief to excuse Shoe Carnival Executive I like turn would Sifford or conference for opening Clifford me comments. over now may Sifford, to Mr. begin. Cliff -- and Officer Mr. Mr. you of the Chairman Vice

Cliff Sifford

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

Vice Customer Administrative and Kerry Joining Jackson, Mark Worden, me President Executive Chief call is on Officer; and today President Chief Financial the Senior Officer. and

On review initiative, I'll and the well around on customer-centric quarter progress as third will sales questions. Kerry more outlook. results, overview up operating as brief today's the of call financial open provide to fiscal will update results the highlights, XXXX our Mark you Then call, discuss in detail. and our our a we'll take your

results. Each year. the third departments and quarter all last delivered for merchandise channels. month pleased the the X.X% athletic on increase increased across I'm comparable quarter of quarter and sales non-athletic top X.X% report the comparable of across both positive for to the increase was sales in store categories all This driven

remains comp in month shoes positive August of of We increase This demonstrating Shoe X.X% generated back-to-school on choice for the August consecutive of that store the last increase of for X.X% our of year's the season. XXth August was top during the comps year Carnival year.

year. best from to the in-depth the latest brands us throughout trust customers trends have the Our

our stores each merchandising and to focus. customer commitment demographics the has unique differentiated based Our our on store been of always

CRM communication implementation can will initial in shopping customer the on our preferences. we program, based of customize detail moment. with a greater each initiative Now, this provide our just on their Mark individual to

quarter up team ended to earlier on to shift a as We any increase inventory per basis X.X% with per-store in store continued avoid the possible future our tariffs. receipts

points percentage merchandise sales basis a to expenses year. was compared last last SG&A as quarter BD&O as XX percentage Our basis decreased was up of of sales to third margin year. a points and XX flat the

XX quarterly results positive percentage the $X.XX result a share, EPS EPS basis by give a to diluted outlook. the income our confidence increased us and fiscal points diluted of quarter year operating increase as increased history. company's in to As sales the highest for per XX.X% These

in was results. comparable weather quarter and positive mid-single-digits our performance comparable store third the single-digit generated once high dress on women's And gain department, casuals a on sales of quarter later Focusing with a the We basis. increase. more the nonathletic up shoes comp by produced sales turned produced mid-single-digit boots were seasonal which which positive sport fashion women's pleased

The men's strong comparable non-athletic results department continued store sales posting a increase. to mid-single-digit generate

footwear. our our an the have goal both building wear done merchants of work and making surplus men's for for job destination everyday Our outstanding Carnival furthering Shoe of

for athletic children's and non-athletic The including remains girl's both both on for was mid-single-digit Shoe posted quarter sales increase a a categories comparable Car footwear store boy's the product and basis. increase departments. department go-to a broad-based and The children's shoes.

more The categories. casual continues adult there performance -- from categories to shift continues athletics be a be to to

shift great in sales. store of recognizing a Our in merchant resulting this team comparable preferences slightly job done has positive

XXXX. fiscal update now financial give to would on our for expectations like an I

saw quarter the our of seasonal fiscal boots for that an through of account we expect I As seasonal all and more sales to experienced footwear channels. categories the across boot mentioned fourth total XX% positive once acceleration our earlier, approximately departments weather Seasonal and the became in for seasonal, the since the we sales continue year. arrival the balance trends we of cooler have weather

$X.XX. our XXXX. for Based an results are compared to guidance actual a raising and EPS we of on our year-to-date high $X.XX represents guidance to to range XX% XX% of of of fiscal increase $X.XX tightening year from a EPS $X.XX updated our to This

the the our $X.XXX continue we year. at fiscal to sales to addition sales net guidance. for the store a total single-digit $X.XXX increase end which expect be now year billion to stated low for of expect previously full In the of billion we high is in range comparable Further,

that overview, turn Mark to call Worden. to now the over With like Mark? I'd

Mark Worden

the Cliff. getting be with community you you, meet pleasure speaking It's call and Thank I've enjoyed to my on company a XXXX. of Kerry. in joining earnings with to Cliff you from investment first since the many

years. over has several results Shoe Carnival consistent generated

As family for Cliff deliver we the needs. we most believe what beginning. looking consumers or occasions, count they're us We for. strong consumers just as mentioned, the on everyday And with have footwear when special on seasonal foundation

past the team our year, our strategies. has made Over on progress significant long-term

fueling sustainable, four long-term real is on second on growth: brands; our an share strategic Today, of third to for channel on our I'd update organization imperatives customer-centric CRM; core first and e-commerce; delighting Our our growth the focused and estate. like shopper family shareholders. fourth creating

to we our building about CRM the world-class Over ahead are has CRM we completed shared been phase enthusiasm the implementation schedule. XX I'm the past excited and months share that platform of

our our and merchandising, teams with provides real and our estate enhanced capture platform analytics to marketing, of a Our holistic view customer shopping consumers. behaviors. team has already value for insights begun new The actionable

this us customer CRM building wins to XX% membership most identify customer has with tomorrow's build customers to our loyalty that engagement and in early loyal turn helps over able year them. toward with resources we XX This loyalty deploy million A were members. new insights, grown include program plans few valuable long-lasting

on up over Shoe more XX% generating transaction sales member are activities, transaction our over $XX this in per is valuable membership value. marketing Perks average grew loyalty focused gold group year-to-date. lifetime basic And with With gold than QX, we XX%. by over member Our most customers

Our shopper our profitable confidence giving years CRM insights, for is that multiple us capturing fueling ahead. teams growth new capability are

core strategy build is brand preference A Shoe Carnival footwear second to family awareness and channel. the within

of with During consecutive store our first launched of campaign combination growth in fully agency strong our year our marketing resulted back-to-school. campaign QX, we integrated XXth with comparable This in McCann merchandising new during Detroit. our record

resulting the and shopping single-digit a continues driven by every single-digits the was for Carnival in store QX. platform, Growth in buying e-commerce growth Store Shoe growing our conversion year be high both and success our of driver during bricks-and-mortar quarter, of stores customers organizations. excellence long-term to operators a increased our growth demonstrating at traffic low with rate

third is The today e-commerce. strategic update I on imperative would to provide like an

to growth have proud XX% net with growth and growth plan our capabilities in today. to the over of business rapidly been XXXX. our that our Our have acceleration grow online from short-term online are sales since business for X% approximately objective in conversion achieved online. online of we I'm and is driving our traffic XXXX building then total We launched customer

customer growth capture to opportunity. stores preferences core shopping repositioning and opening is Fourth, a strategic

the by opened Indiana; Illinois. in and we City a we rebuilt Panama in in repositioned new store XXXX; store a a was Jeffersonville hurricane we Florida in store Peoria During destroyed QX, that

performance our three new at we're now for are early CRM new growth. leverage and phase Customer responses able profitable insights all mine implementation very to sales store completed, stores encouraging. to With and resume

to confirm pleased are of our focused plans and eight six initiatives, our to open stores XXXX. strategic are part our footprint. new in within we As to The on new XX growth geographic stores XX-state eight plan in XXXX existing strategic to

our in per progress share delivering the and during Cliff XXXX focus customer-centric increased with outlook, earnings confidence you. our reinforces Finally, strategic shared annual

provide performance. into turn to I Kerry to insight financial Jackson will now over more it our

Kerry Jackson

you, Thank Mark.

sales ended to net net $X.X November opened sales third beginning since quarter $X.X compared to of third of comparable sales XXXX quarter attributable new was X.X% the the for decreased increase increase to the last of Our this Of $XXX.X million four in stores fiscal X, in the $X.X to million million year. attributable the was third store XXXX. and million the quarter

from by loss non-comp This over XX period. was the stores same a partially $X.X stores the other and in closed million of sales offset

margin quarter year. quarter gross was Our for the in the XX.X% last profit third compared to XX.X%

basis XX increased as a margin while buying occupancy expense, during merchandise the and distribution basis XX points sales. Our quarter percentage points decreased of

a distribution non-athletic the The percentage decrease higher expenses primarily especially products, our result of carry of in the increase as of The against margin women's an expenses sales occupancy the increase in buying merchandising which non-athletic a result lower leveraging of and distribution than category. sales in and a base. the athletic costs sales higher margin was of was

XXXX $X.X third SG&A quarter the expenses of million. increased million fiscal $XX.X in to

fiscal operating of quarter. to changes Significant percentage compensation, employee increases by included equity SG&A decreases these flat the stores advertising were in closing the quarter sales, were net a and fewer in store of benefits As XXXX. impairment expenses compensation, payroll, compared incentive and which charges partially third offset in in QX during depreciation, and

period to The was for same that quarter allowances reversal certain of XX.X% to last the utilize. third year, NOLs related effective we income XXXX compared expect primarily valuation now tax rate the XX.X% on to of the fiscal for

annual XX.X% a compensation XX.X% rate full equity year. quarter this rate of tax and based expect tax fiscal to year reversal a our of the to vesting related year first the tax of million this last the The result For approximately XXXX, a $X.X the allowances in year. valuation we of to QX in benefit reduction of be was compared

diluted to Net diluted increased the of outstanding the compared net income for Weighted last $XX.X per share quarter for this per share. $X.XX of year $XX.X average year. to quarter third quarter million $X.XX third was decreased for shares the third X%. income diluted million, Earnings

months the Now is million are cash the stores, quarter. be approximately remodels $XX XXXX, and Depreciation our and expenditures for of for $XX third to purchase position expense Capital during the our and year. was million expected with flow. relocations, between $XX expense information expected year new the corporate of million expenditures nine million for the be million affecting $XX full actual Depreciation approximately in headquarters. fiscal fiscal turning to used to including cash first $X.X

$XX.X we total quarter year, share this under of our million. third at shares stock of common a cost program repurchased the our XXX,XXX of In repurchase

three repurchase first the quarters remaining We this $XX.X million approximately share shares sales currently at $XX.X of XXX,XXX total repurchased a $XX under have we available cost our million year, authorization. million. have For of

approximately We diluted continue shares. shares be full the fiscal year weighted to million year XX.X average to expect for outstanding

with Implicit final of expectation QX the sales $XXX My our a expectations fourth compares million on million. will from color $XXX quarter. financial of in sales guidance year the QX our little for range is $XXX.X last comment sales adding million. our today be to annual This to

the our and gross QX, addition, healthy our range are end guidance, single-digit QX earning In This of expectations earnings profit comparable store our sales SG&A. compared a year. a to $X.XX leveraging at to our of to financial margin high QX for low concludes a include in earnings expected review. Diluted $X.XX $X.XX per share last from in flattish increase,

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

Operator

first Mitch [Operator Instructions] ahead. from comes question go with Kummetz Please Our Pivotal Research.

Mitch Kummetz

taking for on Thanks be congrats quarter. I just on the the ended questions, you let Yeah. start Kerry, want also me my to guide. where and clear.

flat the – of there is if your leverage. QX those to you assumptions that on care low us? a share margin there low-end? SG&A do range single-digit with saying and you're are embedded correct, are, substantial comp there the that's high-end And, is If So gross

Kerry Jackson

of could you little a – take Well, things. a few bit

as up high not and flattish with of SG&A margin, a still slightly we'll end the sales, So a could down be to profit our would the leveraging leverage. as have because won't low but you as expecting. be they the of end on quite we're high as we up comparisons, probably end gross We'd quite

Mitch Kummetz

I'm few low Okay. going of for raised, comp something guide Is to you full seeing low is are you single you raised why raised say maybe – like so sales a now your digits? you're you towards sure outlook the but more is. comp then the reason So X%. a higher – do the And year, I'm the you kind single-digit you by of now end the the to Are – expect the for definition guys range what right? the not year? that still of on so single-digit expecting of year sales low million X% a the

Kerry Jackson

the quarter a mind year. it the flow Look and keep been what We in through what flowing through we're we through the our primarily third saw third of that's on in expectations quarter. have exceeded come

Mitch Kummetz

then, quarter. could make QX two-plus And the Okay. weeks, you guess any date? to We're I on comments into

kind Is about any boot you're You numbers the us on trending? you can how give side. trends around improving there – talked of

Cliff Sifford

me was fourth We're of of And give moves you third to November lot just tell going the that number not a to let out of Thanksgiving November. week the that week And quarter into date. the metrics. of one, reason fourth changes

So low to the stay you silent we're tell fourth that expect quarter. going and for single-digit increase we

Mitch Kummetz

Cliff, not that If I know, any to how last year? your about XXXX. I'm calendar impacted can the that as results shift? the I that was you talk quarter a saw bit recollection XXth on think time little have don't in we Thanksgiving if you mistaken, fourth

Cliff Sifford

the between less Kerry affect It has and good in have department looking as the business. I'd back effect business at no is now. much as so that which – don't I Christmas, it a go does creates at much the on pretty look doesn't shoe specifically department business, week shoes. that. right It store but there to Thanksgiving one not store and

Mitch Kummetz

Okay.

Cliff Sifford

more in shift. trends We're concerned weather calendar about quarter the we than fourth are about

Mitch Kummetz

And weather on speaking to Sure. then boots.

just said comment the the said boots you sure, then what that about you But QX I want bit little ask I about itself as quarter, were think on I there. you a that positive. or your be and to quarter want was wasn't outlook would third quarter I fashion if women's to more… in if that So, clear to third

Cliff Sifford

as Women's I turned cooler weather as positive. we what boots the got quarter. that I the think throughout said was –

Mitch Kummetz

Okay.

Cliff Sifford

Or have in it once We it buying change. show the up cooler. early said not once did positive change might customer and We the positive to the needed quarter turned in I started less boots. were weather boots. And did

Mitch Kummetz

that they quarter? there Can say boots is you for could Were the they an the of quarter? number give -- overall sort what us? you were down for just Were boot

Cliff Sifford

if Well, that But would our at men's. you was flattish. boot include overall look business it

slightly were boots fashion women's Our down.

Mitch Kummetz

Okay. on And QX. lastly for outlook just boots in then your I guess

I boots? were the that business is are that Is Is all are think like the guess weather-dependent like degree, -- to weather you some I more total. boots that? boot than your said bigger mean, seasonal that insulated of XX% dependent? I boots XX% of but just overall

Cliff Sifford

What that to say work. that I'm clean out maybe need a way and trying it up I is to in to excluding figure

Mitch Kummetz

Okay.

Cliff Sifford

our wear quarter that's at fourth you of fashion footwear boots if So look for sales. everyday of approximately XX% total

Mitch Kummetz

right. guys. the get All in I Thanks, queue. it. Got back

Operator

Pendy And question our next Sidoti. comes from Greg with

Greg Pendy

expect just The new store guidance new we that you gave was that a was net, offset… stores or the can is be going -- that that some to and

Cliff Sifford

Greg, I'm was of afraid question that the muted. first your part

I to you more get time. ask can it if So out

Greg Pendy

hear Can me Sure. you now?

Cliff Sifford

you can hear fine I now.

Greg Pendy

Okay.

and the to I was stores that. stores new new that just net of just about or wanted Sorry on understand is that stores, store the closings.

were you be in that can think eight to stores to I targeting expect we new offset six some XXXX, closings? by but

Mark Worden

Hi, Greg.

net trend early end depending range if the the that can we you to that You're are into the store to is forecasting climbing XXXX. growth for eight then And highly, XX new into new highly XXXX of we of profitable about sites markets stores if -- are look success talking productive into we're on to with. right. XXXX of look and and further a Six we finding know win eight we towards there. Those or stores,

Greg Pendy

little seeing these you're a new bit environment in you're talk that? just evaluating you can how these then estate stores stores new for about what And thinking and you're Okay. about real as the

Mark Worden

is challenging incredibly ones we our know because a opportunities, core of growth. have succeed well propensity Yeah. a on very are. find markets to states our it find We're with finding first core where to our to shoppers robust marketplace in strong we're and selective all our know We're being focusing XX shoppers where where we we

profit corporation to from finding so we're revenue to And to believe stores be focused accretive averages going for our perspective door our accretive can on the and really here, our per long-term. stay we

Cliff Sifford

that Greg who very one there it's customer stores. but brought that very that's has to out can If we're CRM a our is that have real -- -- as selective. very, the idea our I in are who's and sites we there, things exactly us if can -- and we And shopping know to of to add being is I

around sites exactly have And sure we as so brought our are. make who team sure out making us in we estate we're visit we the those match real that to that demographics profile been the to the that go and those customer and stores stores

Greg Pendy

helpful. That's a Thanks lot. Okay.

Operator

go Our in queue Wedbush next Please question from Chris with the comes Svezia ahead. Securities.

Chris Svezia

call. congratulations the conference Mark Good the afternoon on quarter and And welcome to everyone.

Mark Worden

Thank you, Thank you. Chris.

Chris Svezia

for Kerry you. I guess, first

Just QX the could? month Just again comp -- walk about think against? you're you what by if up me what's what that the when we remind through

Kerry Jackson

our year November last up So singles. was high

low and X were and up Our the at December quarter we ended up was and January December -- singles X.

Chris Svezia

Okay.

during then Okay. Thank was incremental I went the the developed the during guess incremental anything no? throughout quarter comp you and CRM. to the suddenly you acceleration -- been year. Just terms your know about quarter. program getting on live there I'm And wins gold you maybe talked the But in CRM of the you Mark when drove that growth And you've you. that that or there? just for on turning I know material just loyalty -- was you did that anything membership I

Mark Worden

that place early analytical there. use folks I'd new family was capture competitive that longer data no them used they quarter. Absolutely shoppers this exist profitable those corporations Chris. quick We very shop to to say when multiple we're were is, of footwear at understand the to alternative a try for wins. utilize at our who And longer we're space to and really a able no able one to data to to to in That shop our understand communicate used help is

Cliff Sifford

also saw from so which an I'll saw attract members, increase that in them members gold that our new size traffic but to customers, an our were -- able we add not increase We only as in are us. basket we to shopped members loyal we did most from our gold well.

Chris Svezia

QX That's great. of just outlook know slight to Okay. sort What's perspective there's casual a hear. increase. next case? shift about about you the from some whatever early you I on something QX to go Good the into talking a from about seeing as or the becomes in of product to bit about trying do just Any athletic. color athletic thoughts Are I you're expect heightened go availability certain technical maybe or to your more and you year? want a QX? of talking to sort as change product continue

Cliff Sifford

expect continue of even we've little and to over bit. a couple casual the definitely I seen trend accelerate quarters that past the maybe

However, our into XXXX encouraging. I that like the the that product and we seen as and know, brands, bulk as head very also and is seen we've product the categories but think you we've

we're to continued athletic believe, as we'll of maybe to technical growth out even well. see what out I be the to going but And, see, growth going casual the or, not you're think I think, -- see the categories, would accelerate I consider of technical, we

Chris Svezia

And just just it. category question. then, another Got Okay. -- on

I success. it's well. the have I dress category -- think you some Just there, on been recent Any know, but performing spotty

of kind you that? that? add what's Any want Just to driving color about

Cliff Sifford

shoe good. be our that have months in Well, dress quarter you the would business third not ago, I would told six

see shoe caught by Okay? the I know, as to don't But just did I'm us categories got That incredible surprised way the on are right after I'm women's our dress to competition, want selling, you, surprise. job I item. -- a to tell specific going accelerate because very the was that going our tell business merchants did. it get you, I an And going of to listening it pleasantly was to call. this you not

Chris Svezia

me. thing Okay. for Final

Just on just and a question on boot. the margin

and performs? boots And, you expectation predicated why Just Are you and the in curious, and comp, the low in and you down QX? is or margin your if well because flat gross how do what that on Kerry, fashion difficult the you assuming comp boots margin how just think demonstrating saw weather single? that's of quarter about merchandise up business boot is cold

Cliff Sifford

work Chris, for I'm work, fashion all really between easy question, know an is, fashion going the ongoing is or I'm When that's and the say take business other. boots difference excluding doing don't seasonal that you what to because boots, I want us. about guys which what's to

is You how to fashion know the all which where is. business, the want risk

just excluding So when seasonal fashion boots, work. talked is I boots or about it really

Chris Svezia

Okay. two between difference like there them, is like a something fashion, of any that? which boot between or a But is the

Cliff Sifford

– just probably I would cold cold could leather crossing -- -- you don't from simply fur weather cold you That foot? no, as I dampness because work away just is strictly what I cold know. probably that’s I boots No, include include mean, line. into I get that say keeps the your that, leather weather,

that's boot So category. what is work, fashion we anything do that's our not

Chris Svezia

it. Got

And Okay. on margin?

Kerry Jackson

So, margin. Chris, our we profit are able gross our to expecting -- flattish to said, I as leverage be

on We occupancy before, on having a than base cost year the expect buyer's that to more fees sales comp costs the store leveraging plus our increase. see little some of out and

there's one you we the also shoe. have of into the accounting expect of of margin; into the some shoe. to them add put We actual two to we cost and it. And is the have our cost of have then sale costs adjustments merchandise capitalized But parts though

are those As increasing it. reserves your increase along inventories with

stores down We of at year. versus are actual offering the have inventories -- to year putting dollar our inventory, due lowering and this total to expecting fewer store per end last

though the had capitalized prior reversing be we expect so accounting of that profit on those -- the basis. pure will be we in because margin merchandise and That's year-over-year sale of a on the to be to shoe adjustments, periods some causing QX of even a down into accrued overall out those up costs that

Chris Svezia

Okay.

think I it. I got

best it. hear. great the got I Thank you. It's to All Okay. guys.

Cliff Sifford

Chris. Thank you,

Operator

with Kummetz we'll ahead. And Instructions] question. [Operator our Please from take Pivotal next go comes Research. one Mitch This

Mitch Kummetz

Yes. some I've follow-ups. got

what you said athletic. didn't I all, did So, first about because hear -- adult I of

up you the What it the up quarter. -- said in it maybe think up was it quarter? was just slightly was in I

Cliff Sifford

athletic basic was Adult flat. on was -- dead

Mitch Kummetz

it It I'm was sorry, flat? -- was

Cliff Sifford

flat. It correct. That's was

Mitch Kummetz

okay. Okay,

last that's So, right? last quarter think, quarter, down think was slightly. I a I slight from improvement

Cliff Sifford

What?

Mitch Kummetz

guess, on wrong, I feel you on and isn't kind I'm side the me question. if I you're it like you well product-wise of going year find athletic side. the bullish my about product -- but like that you're into were what were for you what XXXX Correct this pretty talking I really my interesting seeing seeing on this guys as XXXX.

seems like athletic it do your going don't into as if anticipated expectations? quarters to important And so, want why? more two play year. not up And just of would I did your QX if wrong, as could out you what have a this and that went you live say I'm to QX really that. well didn't postmortem wondering, like but on maybe

Cliff Sifford

great the but the that expected year No, be We were the that we for as to second to year, we We into strong into other not and that's half strengthen, coming second knew headed brands we question. strengthen. we unscathed first going entered we of brands as year, a expected, half excited of were certain for the of year. brands the the have half the the into to

what happened that concept of of on can don't along. think advantage I and really our flat we shift to us I other category honest get brand we and from that the take strength fact with whether believe am But you, we was I for that I store disappointed want to quarter did. showed the as -- a or to customers the athletic that X.X% specific be And to shows comp one increase the came

Mitch Kummetz

it dumping product Is of to but of much and away an Okay. of guys impact the of that, comp of versus you on And you Payless, wondering talked about then come way -- because buy they how were have have Payless this could bit talk bunch any kind Payless. impact much was you because their went kind stores to expecting of appetite then overlap didn't of your really little back to that if break kind last I of weren't a kind about an think didn't after customer quarter. maybe a quarter there I'm out for them

Cliff Sifford

that comps X-mile you that within out and closest radius were break or a Payless to you to those our the overall was between But that comps sales Payless had near the so than lot. got I'm I has store. stores of our sure a to store -- a than were lot away stores from tell can more the of you -- X were a I within a where miles stores better But will I a not tell a Payless lot results think stores. non-Payless. got I'm Payless stores remember, that mile going

Mitch Kummetz

I But so how in not bit, see you it athletic I real you work? you think a stores of the comped you sure. could you'd Maybe in stores only about that on know much that you sides? said some side could you overlap. price maybe was Did other difference see in you do little point I So I'm that there from benefit standpoint -- you? thought those by help you you -- terms yes those that overlapped did any category? think when were talking a

Cliff Sifford

that was We business up. dress us our think think We shoes. Payless asked were I benefited in dress a earlier effect. shoes it's dress why lot shoes. They of the sold

Mitch Kummetz

Yes.

vendors? off if I just goods was And year. what are you inventory? boots, carrying? do in what need be? for you of in push sort your channel know sort more curious the Do of on sounds Could weather terms probably guys like had boots thought feel the like I there's know of broadly back kind are things you How -- do a I'm a of the about outside to tough Okay boot helpful. comp you doing. worse you quarter. your little shut any last can feel or that's spigot what it you just you then you just then about how of risk, probably think inventory And than

Cliff Sifford

think asking I That's promotional. if if gotten it's promotional. it's me a way maybe you're me more Well asking of more

We haven't seen that yet.

The reason they what shape. for take that we we Our then are don't And going originally our we way need is run were to if and buy business is we cancelable. boots in that, the thought great upfront boot inventory way we place the backups. backups those off then the is sell right

And go as we aggressive we're that through. on

-- my I all and give merchants So is the the inventory world. great credit shape the I in in

-- be quarter and I boots, had -- flat we And boots you having third boots. in a we to I fourth good shape. decent had third because decent If quarter think we're actually pretty quarter in a a going in we're in

Mitch Kummetz

And then Kerry. October. don't last know us I'm standpoint. that August. October you comp or a than were October Okay. said I'm can tell I know for a stronger September sorry X.X% if But... just guessing September you I -- from that question weather and was in maybe guys you

Kerry Jackson

increase. in digit What mid single a saw increase. No. was was September comp low to comp we we single-digit And October accelerated

Mitch Kummetz

Okay. Great. thanks guys. right, All again

Cliff Sifford

Thank you.

Operator

Our Sam in queue Susquehanna. next Poser from question with comes the

Sam Poser

moving. some net or net year going we idea? an year to I just were you give you opening to opening us But expect from next How in planning -- new went us going are keep XXXX. mean anyway follow ever bank quarter Could to guys. Can the You you guys. seen net to work Could let's give quarter. you you're and up. be for I Yes. I've just close? stores flat following next you're net can Phenomenal year? on to -- closing probably a want Best idea? going be you Congratulations you maybe But apparently. said many I

Cliff Sifford

as really Sam be growth next to our going And net for we we've store actually to is show now about because haven't a It's that because date much year. talked working been... are thoughts flat to hard we're where

Sam Poser

if to model point, model we're in you -- not if But following were and the would it's improvement. it going modeling for I then we what going be an And it we're or to mean net to then year, a get starting think…. open close probably it X like than will mean I better flat it flat good

Cliff Sifford

I little tell following somewhere than a be to it the net now you Right X. lower would flat year that,

Sam Poser

and the but like stores, learning what productivity expectation those about the the I'm open you you garnering? be given that get new going CRM that to with it stores that you talk talk -- can Okay. with in for new you given you're And given you're new to what the -- then from CRM the about will a can can information you're and second,

Cliff Sifford

We average. expect within year time. would that -- around in the the let's company X say store a point at be new X between fully a to year reasonable And

Sam Poser

the So and the of new the stronger the open don't outperform given and you're by like taking to manner... faster which those you because information manner new patience expect open and

Cliff Sifford

current What where Sam it's know our outpaced stores depends this where stores, we up because difficult they many where we they're the question but upon they -- open found a is already outpacing we you comp….. store. open it opened and haven't us year

Sam Poser

you Got are, you. If they know itself more Fair? the shows quickly. work

Cliff Sifford

right. That's That's fair.

Sam Poser

know I much I kicked -- helped know this Okay. CRM you the know comp of you sort think your this How with CRM much improved but you -- be help in to communication how scientific, the just the But this and quarter? vis-à-vis going in could do I the -- customers earnest quarter. isn't if off

Mark Worden

gold Hi and I Sam, earlier, diagnosis contributor growing if we XX% a Perks times two grew we our that shared year. our more I as the it's for growth, comp Shoe is, rate look just at give plus a membership that you look rate than the at you they're at faster comp company a And material total than did. if with members could

highest us insights allowing comps valuable loyalty program most are excited to So, to their said differently, our bring trade and with. a into extremely growing at our our rapidly the pace location we're up are tier them consumers

Sam Poser

after have you And buy be a would did back few that One, since quarter end reported -- any stock more. Q? I the Cool. in

Kerry Jackson

No, because we've been up in earnings. released we're until locked after -- we

a So, after in we're we period -- release earnings. of the weren't until blackout

back. we're allowed not So to buy

Sam Poser

meantime? brought athletic up The turning coming expectations gaining what you the into a business, in momentum of when the Cliff. learned sort basis do Do the that as and year-over-year Mitch you on Okay. around year sort foresee given you've of

Cliff Sifford

things I our looked as at seeing excited about We're from -- the of say this. of think top for -- XXXX, me Yes, vendors. spring new some that let we're we're we product

Sam Poser

the chance? vendors those Northwest of by one Is from

Cliff Sifford

you and as point, we've know we not -- into athletic. Mitch's To all flattish about unexcited But XXXX. were been entering with year

you increases possible. really with happens in about as move people their I where in that customer the sales quickly customer that feel many in with XXXX, about we'll the I can increases right not whatever And the Carnival it. traffic and tell fact of I we'll be spring good So, Shoe and as now on good is feel way we reporting have. the and are prepared based

Sam Poser

the And mentioned traffic stores you up the not? were your just or quarter for in

Mark Worden

Traffic in the both online. were are both our We and Sam traffic up, was bricks-and-mortar and successful conversion. on

Sam Poser

it them? more are I cool. some some weather. Furry that. with that you fashion How questions. on does Two look? had Okay, boots. know How Congratulations doing

initial any boots? read So on furry

Cliff Sifford

that's unhappy as talking furry So far in fact as get categories. I'm to product we're not probably to with and boots going about close

Sam Poser

Okay. right. all -- And then

tariff making so additional magnitude and next an can to tariffs of -- in and us those idea So tariffs. the to you progress and factories offset at the to happen. they quarter you when ones increases waiting brought looking and XX if the find that still the vendors in But don't, some December out the be impact year into you're we're hard partially so earlier the going offset give you're happens, with seeing product and assuming if to it's you're prices But of on XX% or forth?

Cliff Sifford

far So this internally. talked quite we've a about bit and

increase the somewhat did we seen and mitigate have that We haven't of we with far, to did major a a board vendor bought. lot price institute by that So we able were you're increases. price the that product across familiar

others. Some product worth is than more

able mind think were increases. we but price that to increase, a so, mitigate in haven't of And lot my seen price able we I

in I think athletic within not that in the The goods majority majority is athletic of the exactly news vendor what the of the happens. Vietnam community to are is waiting good China. made see

lot the Not than lot a a other increases. total of XX% seeing a seeing seeing lot so not about. volume, I'm So of there. that's our not out brand talked I

Sam Poser

the on And mean dress of your product by I would XB and most I of dress by tariffs. that non-weather impacted most that women's mean be is --

of is is think of that about holding sort everybody how to so sort it? on breath And their

Cliff Sifford

cost at given. They're orders holding And it been with their point. this breath on have placed

Sam, no going time period in with to fact myself I to the we're going think that be -- don't affected So, we're Carl expect nor at in spring tariffs. least

Sam Poser

Well, and right. very All continued much you success. thank

Cliff Sifford

All right. Thank you.

Operator

questions the for speakers are turn There over to like I remarks. queue. no this to closing call At time, would further back in

Cliff Sifford

thank for you a participation Thanksgiving for We our in. also full and look And call. of in today's announcing great your on you thanks happy to like March. wish results I'd great again a I very a all earnings each fourth quarter holiday season to forward year to evening. and tuning want

Operator

Thank today's concludes presentation. you, This and ladies gentlemen.

may You disconnect. now