SCVL Shoe Carnival

Clifton Sifford Vice Chairman and Chief Executive Officer
Mark Worden President and Incoming Chief Executive Officer
Carl Scibetta Senior Executive Vice President, Chief Merchandising Officer
Kerry Jackson Senior Executive Vice President, Chief Financial and Administrative Officer
Mitch Kummetz Pivotal Research
Greg Pendy Sidoti
Sam Poser Williams Trading
Call transcript
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Good afternoon, and welcome to Shoe Carnival's First Quarter 2021 Earnings Conference Call. Today's conference 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.

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

Clifton Sifford

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

me financial provide today's are in Carl, Executive record-breaking fiscal margin call Officer. call our by will as call, EPS will Chief a history. Administrative followed of results. an Mark provide will of first with our Merchandising thrilled operations. highest in then the quarter's business On initiatives, more who finally, strategic and quarterly Executive as an We'll President The open review sales, update President, an first and high-level more be trends. Executive fiscal results our Senior and Kerry not Kerry Worden, our today could President, overview results I on the discuss Officer; XXXX questions. team the a delivered with on your Vice quarter company's Vice Mark the quarter detail. the for our quarter Carl business And I'll Scibetta, Chief well update Jackson, then Officer; Financial Incoming Senior and Joining on Chief provide

EPS $XXX of fiscal reported record EPS million in our XX.X%. sales quarter set quarter year by first our $X.XX in XXXX of first was our XXXX. previous highest eclipsed fact, reported In of the beat importantly, which more $X.XX, annual But

of in colder last a The refunds. versus started slow year combination weather delay weather, quarter XXXX due out of February in a and to first tax relatively

new as became However, Sales more tax confidence again. COVID-XX and comparable sales and reach arrived of off. The customers payments stores spring as begin COVID-XX seasonal number quarter. to employees sales support pandemic The many our their e-commerce to fulfillment decisions our while to focus competitors. in enable to to we us and early back and the our faster Shoe of welcome Allowing customers than Carnival the customers product E-commerce both brick-and-mortar shop decrease customers. existing made redirecting of were the nurture reopen the stimulus new we our customers by weather further the with our of vaccinations were opportunity in us which our refunds the cases. the a up to rollout and bolstered sales first of stores credit our for for took sales time. successful events growth initiative posted to combination the to our double-digits store concept get gave triple-digit an experience goes these brick-and-mortar loyal to allowed CRM our Much bond had

shoppers. will months is us that the membership sign long-term to and loyal opportunity turn We also believe last time truly what to set up us such them great customers into the Shoe into them first the serve future. We well XX for up success took new for with over Perks

and simple best make the loyal their the Our trust to Carnival experience to shoppers shopping Shoe have continue enjoyable. trends and to brands latest

team's quarter. execution first to the for merchandising continue Our impeccable be

the the despite chain vendors with of line kept partnership key we is flowing our and relationship our and facing. our with the with our inventories in brands retail and industry issues have definition supply merchant key ongoing partnership. believe I true the is vendors Our trends

on Additionally, quarter. we in known and deliver eliminated focused the had categories Shoe with have and brands, categories always depth all low-margin they would things global breadth promotional certain BOGO Carnival half events, remain we and those including Customers brands for. the been for

promotions. Our led team's desire decision Shoe this That brands, items are which to to record product led our eliminate recognition compared with margins, customers the last for were these the up year. that focused decision our headquarters to basis product, along Carnival make and retail to on to global XXX points key

to program it grows continue Perks overall technology increased continue Gold the loyalty a drive as Shoe members of significantly the achieved double-digit happy during also shop our our Gold active XX% who goal in often who major quarter into average sales to by E-commerce category ticket grew This comparable Our store and and led dive higher departments metric increases, our store by Carl very members seasonal posted yet XXs. critical categories. low deeper trends status not sales. comparable active increase a investments throughout business performance, that helped is along also our the and at strategic that CRM I'm toward members. serve and us to but Perks well. program, sales I industry-leading the as in report confident rates department will more the am drive quarter, sales very members for than Gold with initiative positive our pandemic. at those royalty looking trends are Shoe sales athletics our strong of

footwear having all earlier, ports. is seeing then the once significant supply factories, there are and product product just getting delays at are As still factories I through mentioned through across All are board. issues chain issues the the not we retailers, segment,

chain calendar to supply a issues expecting second will with the we are the on constant communication inventory in season have stream for of we our with the and vendors Based to our for our we product back-to-school ensure we sufficient are year. However, steady our and partners, beyond. confident during normalize of that stores, vendor half are conversations

strength our to our as area financial last invaluable in prioritize and proven flexibility has be this to discipline XX continue over the We months.

us investments on these strategic our market combined exceptional to sheet, balance ever-changing despite allowed progress has and execution our conditions. goals long-term incredible solid with make Our

We remainder looking more for and this Many forward of back-to-school having it not guidance are period. yet which our difficult season. quarter about a have their markets time for of are normal makes to the to provide back-to-school excited that particular posted plans

should out we our leadership financial provide back-to-school initiatives. the announce I'd remarks. our more position on turn continue an Mark vaccines I we more to his historic our are of population, over to begin as serve. more roll the normalized continue like a schools opening However, as believe prepared plan. to Mark? positioned to well more headquarters strategic to color Worden expectations will in from footwear and update the markets now to provide call Kerry to on the and

Mark Worden

everyone. brand and is ever. stronger Today, Cliff, afternoon, the than you, good Shoe Carnival Thank

to records. grow resoundingly plans shopping prior our for experience Shoe a the their preferred family exceeded any footwear expectations. outpacing Carnival in as strategic Our profits are And are quarterly once needs. shareholder deliver QX consumer again value internal choosing and Consumers far sales and our result,

company sale comps per gross in footprint, Shoe the QX across surpassed share divisions value In during spanned Total we sales more grew quarterly full earnings store level up with the to sales with company's shareholders XXX% history. growing for fact, XXX.X%, total Carnival year achieved all any Cliff QX. This provided record geographic store our in as or shared, XXX%.

Our quarter, XXXX. by low first XXX% grew the double-digits e-commerce the achieved sales growth in comping successfully in QX

begun year. plateau. We to the we past with the progresses. trajectory will our year e-commerce of normalized thrilled believe rates sales the positive growth over triple-digit business are move We XXXX online more experienced growth has into in in the as And

as live restrictions anticipate reengaging continue consumers this to ease. are will So experiences Shoe far, COVID-XX in shopping XXXX, trend Carnival continue. resoundingly with We

home. outpace store and brick-and-mortar for growth to sales family outside continue seek experiences Our consumers growth activities the will XXXX as e-commerce in-person

As online deliver versus for versus year-over-year sales to XXXX triple-digit and a result, XXXX. single-digit expect sales declines growth XXXX moderate we to

be years, sales X of customer next the key for strategic profitable us. e-commerce to sales driver will new growth acquisition a and Over X

in-store and XXXX to double-digit planning we're sales that new growth XXXX, disrupt low our again. norm, looking example, not e-commerce shopping For assuming COVID-XX does at be

transforming As to consumer shareholder we we margin and accelerate needs, way drive to part growth are best to about promotions of our meet value. go-forward the think strategy,

During drive to transformational for results building of Building the for points. QX away we entire all from half for improvement promotions from half grow we Results quarter, average and stronger on discount anticipate over Conversion BOGO our And XXXX. up eliminated successfully XXX fuels we continued and so we've eliminated investments. shift basis of doing and QX been seen date the we mid-single-digits. over the and first rest exceptional. the to promotions X,XXX points. transaction BOGO deep growth have merchandise loyalty-building QX, chain-wide explosive, strategy momentum quarter. margins The promotions, was the increased basis saw in have promising brand margin to We

to QX, in double results continue digital posting with gain. our a records. XX CRM million to strategic pleased We with marketing climbing in and members investments Loyalty be exceeded digit new

we continue We capabilities. marketing, expect our as strategically invest to see enhance digital analytics growth CRM to and

growth acquisition customer is achieving during New accelerating, double-digit QX.

resulting rapidly see in growth strategy growing team's for into progress, this personalization by a efforts, new energized customers' continued response enhanced repeat enabling buyers. are significant And analytics and and converting and insights our more customer Our our runway customers ahead.

of to of driver our plan known includes fleet last in X discussed X the over quarter, we our for to store Carnival As years. modernizing and an consumers, X/X major forefront for next footwear strategic is already continuously innovating of online our Shoe a shopping at bring the in-store experience. unique remain We in-store consumers into industry, family the stores providing enticing a experience.

on next moving the and stores modernization are within at completed XXX rapidly plan this this fleet on our are time that work We first year. targets

from in our Thanks disciplined brands, and make balance approach, strategy in us strength and continued the our financial convenience the strongest debt disruptions. experience still shop sheet to overwhelmingly categories and cash technology, and response robust throughout the The relates year. management equivalents. rest fiscal excited has are transformative shopping back-to-school leading for far, unknowns the love capital been investments the enabling of as we many of Carnival ever, impact the our people margin and Shoe particularly broader brand, we is stores. COVID-XX, Consumers supply progress to consumer So athletic no million of experience. in ongoing position will it our our store to global the positive. including in with modern of make our $XXX chain assortment in and the are I'm multiple athletics There cash shopping enhanced the shops, XXXX, to the

and performance confident I'll value. for now and shareholder position. headway and turn strategic while priorities, update to accelerating over on our However, an Shoe ability product Carl profitability in our our Carnival it continue inventory Scibetta on making team I'm to growing

Carl Scibetta

Thank you, Mark.

have This so you record quarter, key sales global as continue us delivering margin. and and throughout and promotion heard, period. focused This promotion on has the strategy categories reduced well our we items served far,

key continue if metrics We habits. behavior, that give monitor we their into us adjust to in see changes will our insight shopping and customers'

when the And needed impact constraints. global categories mitigate addition of strength merchandise product continue vendor continues to the and our relationships key from in our to reduced able to we ensure vendors promotional demand our secure and work our results. key strong closely first were to strategy, chain to expanding We were most. inventory very it In help this supply with quarter our organization to additional we outstanding any

increased period merchandising To XX% last up store sales As points first store All over were strength from from further Product XXXX. increased in versus of margins versus ranging QX XX% XXXX. comparable were versus sales XXX QX, the the XXX% basis and you illustrate our heard year. XXXX. performance same XXX% comparable Cliff versus over categories to Mark, up quarter

up skate s by by Turning in driven women's department continue position athletic perform. to up dress Sales to Adult we sport high our athletic to XXXX. of digits reopen, to demand quarter the begin down women's XXs this in the with shoes the like as shoes digits were and however, communities quarter. in increased. Sales for had store XXXX, grow men's mid-XX running performances and categories category, the but athletics have the dress the XXXX, basketball, categories. versus single Both to quarter were sales nonathletic first as product additional comparable compared up sales seasonal women's category. continue Women's comped compared adult our when in and drove leadership in to triple for categories for the strong the

comparable were athletic XXXX strong, seasonals categories in travel driven and and and expect in pleased with throughout in nonathletic by as performed versus quarter on boot Kids up in seasonal all middle men's were door Sales casuals, also results sandals driven families with several kids trend out of We particularly the sales athletic to major products X.X% and and with we get infant this house categories. for the every continue doing what year. to consistent in casual begin XXs. were over category nonathletic men's over up and nonathletic have XX% shoes. entertainment. the kids store Sales the Sales Both boys girls the by very and Increases were seen the per with last ended a very for quarter, the both quarters. basis. We well. down we inventory well, were were

positioned supply for approach well chain. our our with replenish As product vendor and that, believe partners categories Kerry closely our provide more are to back-to-school. will our looking diligently customers the With we year. and I the mentioned, work to the me be full call monitoring I we we quarter key performance to continue for with will insight into let be over turn Jackson as the now to financial

Kerry Jackson

record of quarter million first or million closed last you, This Recall sales quarter during XXXX, year XXXX. first the of the first compared to to of XX.X% represents quarter due the fiscal Thank XXXX. $XXX of sales compared achieved were We an quarter pandemic. of a XXX% of stores that for our record half increase the to second Carl. the nearly the fiscal number increase net $XXX.X first fiscal

will of fiscal first quarter quarter store XX.X%. the quarter sales the first store the Comparable sales we fiscal comparable quarter first quarter sales sales represented merchandise nearly increased fiscal first of the first circumstances, of first increased XXXX of fiscal compare the compared to XXXX. XXXX. the during XXX.X% of certain XXXX. total in Compared in to to fiscal such, XX% XXXX As of of XXXX, fiscal E-commerce quarter

generated sales quarter quarter As first of Cliff double-digit increase of first in XXXX. low top on increase and sales e-commerce e-commerce a in the of we Mark noted, XXXX the fiscal for XXX% in

Our total consumers’ reflecting fiscal XXXX, again. first XXX% our desire up to shop brick-and-mortar quarter stores comparable store were the the in in of sales

Carnival XX.X% margin and increase XXXX gross of an quarter high the was XXXX. of First record represents profit of a first over quarter Shoe XX.X% fiscal for

of expenses sales. Our decreased X.X% merchandise a margins distribution increased buying as XX%, and and percentage

To a Our the which our activity significantly low-margin further, promotional effect were home drive a decision XXXX, significant a point to the normal during also margins little eliminate above had quarter quarter more on margins. first is considered quarter.

fiscal $XX.X marketplace. quarter, when XX% Merchandise the gross sales First as percentage expense XXXX quarter disruptions the full the open first margin decreased of million. X.X%. and increased significant occupancy quarter tremendous distribution over increased and X.X%, there stores the This in were were a quarter less SG&A reflects expenses million for in XXXX to of $XX.X increased profit margins improvement buying over XXXX. first of XXXX and

net the sales, in this increases quarter increase XXXX. compensation. expense fiscal expense XX.X% credit and quarter SG&A to first further nonqualified to deferred plan. quarter for charges the earnings compared was the in Approximately An decreased year compensation, last in of additional XX% to of on in percentage incentive XX% the performance-based and increase of of compensation card were compared our of SG&A year first XX.X% first a XX.X% As of in the

all the of Our expected performance first annual was rate for record tax the this fiscal performance consequently, annual year the in performance-based the incurred income year. target the first first expense effective in tax first The quarter implementation quarter The primarily and quarter prior exceeded impacted for pretax quarter virtually effect lower rate in Act the XX.X% CARES income of of permanent quarter deleveraging year the and the in our XX.X% of was XXXX by XXXX. differences. the higher on was first compared compensation to

of was compared tax full to the our Net last fiscal per income to per diluted the For increased of tax the share recognized be XXXX, increased Compared quarter the effective first of $XX.X year, of $X.XX net per we for XXXX in for diluted rate $X.XX comparable million income $X.XX. loss first to a first XXXX expect quarter $XX.X XXXX. million income share. to the quarter share rate XX.X% Diluted to year.

to basis. affecting and We on year. of XXXX ended a first per-store compared prior quarter cash million, or information down last in was quarter inventory to which was compared year million Depreciation $X.X amortization the the $X.X flow. Now expense first turning in with million million the quarter to $XXX of the X.X% $XX

As aggressively capital of Mark be and relocations the range to used are million million million $XX store. remodels, planned that $XX the modernize to fleet and we million, expenditures working $XX on our $XX of to mentioned, with in new to store expect

We our spent on with spend various additional on million $X distribution the improvements, technology to center normal expect store to replacements. investments million upgrades platform, $X and e-commerce remainder and to asset

expenditures remain planned chain quarter, $X.X the we the Through Our on of have changes capital approximately with majority with first on million ongoing projects pandemic associated subject to disruption. those near-term spent supply remodels. and

had of XXXX, $XXX cash we million. As X, May and of outstanding equivalents cash debt no and

Our will $XX.X at end million outlook free final the borrowing on quarter. was for the the cash $XX.X our million. second quarter, capacity of we flow of and today be comment My generated

merchandising May of into the in with for the up have sales continued weeks margins our comps the mid-XXs strong second Our first and quarter. X.X

we our we the May stores expect comping turn the sales reopening this year. sell start last pace strong However, we and June sales to when after moderate

opening June year and began our late in April, by X. You opened may were last recall stores almost all

last sales Our XX%. June year in was store almost increase comp

dates were quarter years, this Unlike of we fall Additionally, start prior question the a in in X sales have time. very the in semester. the serve sales the areas few which of schools weeks typically the last for drive back-to-school announced strength the at

will most appears at least sales earnings, a in-person traditional have and the and learning, will August July openings, schools date. benefited school which likely part-time to or normal is will less it later at late QX understandable a as While commence as it whether early resume

and of and our sales accounts this diluted We majority range have for factored expectations. this into of the guidance, EPS

Now for the specific guidance.

to to second of margins, $X.XX. higher from $XXX all-time the expectation, to our sales to sales million; diluted low on For in between to double-digits. sales high EPS are and quarter, single-digits merchandise $XXX from high Implicit QX, range $X range decreased very we expect based comparable the million

increase However, low when was comp QX compared XXXX, digits. year, EPS to sales $X.XX. million million QX store QX sales and a mid-single were In diluted to last $XXX.X XXXX we of expecting results, are sales sales $X.XX. $XXX.X were and EPS diluted was In

this uncertainty of Cliff and business in continued the in-person only consumer will fall. timing Mark is directional there the the uncertainties, to both supply including we environment, and behavior, half disruption ongoing Due at As the in mentioned be time. guidance earlier, the chain spending second for giving learning

second to we the second aggressively performance. with the of and and year's results increases diluted in comparable with government our record the year store year focused last half Our sales and assortment stimulus, customers direct half second these significant in change be $X.XX. this This of merchandise government stimulus, along and We flattish the in results expectation last EPS down. half and a slightly last half reducing diluted record are X.X% EPS increase of return in our merchandise drove Based sales focus, communications margin a low on our and second to decrease anticipating of merchandise a promotions included the in year significant on margin gain instead our began CRM. in through

of concludes review. would XXXX, to half both merchandise second the when this year. of This increase to sales margin financial the the in our second However, results and compared half of we expect

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


Instructions]. [Operator

question Pivotal Kummetz first comes with Your from Research. Mitch

Mitch Kummetz

the guidance. quarter. you, Kerry, with questions me on start just Congrats some let around the

start. me let So

comp? think that correctly? you hear Did to a that May I that date up is said Or sales? Was mid-XXs. that is I

Kerry Jackson


Mitch Kummetz


you X-year could a Or say X-year that on is what So sales a basis? quarter-to-date comps up on you Can basis? the give mid-XXs.

Kerry Jackson

that I year, I as part Mitch, we're into tougher to we're me. But weeks as sales up expect up front why progress. as going the to we of our that that putting coming quarter. trend, we And we we point in guidance that's was that were that moderate but stores opening be last was don't the a about now, positive progress have important a through have

Mitch Kummetz

to basically your the noise I for normalize why asking to Right. a last the in your I ago. is Yes. I'm currently Because at your you quarter Because was ago. guys guide, guide years just basis, X around The of is it on up things. other business just And the trying maybe how think the cautious guide sales X-year being cautious some it was just end I mean, high I like for back-to-school guess from from the reported, when X% understand on XX% X that's trying I quarter, year. the assumption up sounds and it some of business look years you're flowing?

that's I'm that the asking So way. of question why kind

I So know don't add? anything you if there's can else

Kerry Jackson

for you, I I'll No. see that get number can though. if

Mitch Kummetz

Okay. could. helpful, That if would be you

the guys' started the any You any the your trend still numbers? you you if there's that all could way kind trajectory? there way stimulus think sort since you talk maybe Is in at And when to about know difficult is you look stimulus Or that? any do there to in in to I business as to the date, hit, to is there of called you of mid-March those of that's May out even speak sort quantify but -- that way do, stimulus comments.

Clifton Sifford

my prepared difficult -- was not not positive. quarter as in because to had conducive really call doing was to out in remarks, the first stimulus business. I February the spring we -- weather And very mentioned February we it's Mitch,

and hit time. at weather the both same stimulus However,

quarter. helped or was record it both both. us just And that So thankful it for tougher was or the and it's produce weather it it the us bit, in with to whether we're rate happened was quantify a stimulus a

Mitch Kummetz

-- being I months mean, some seeing still, X.X the went there the of out stimulus think, a in but I majority Cliff, ago? do cut, you're checks money you think still are

Clifton Sifford

out. the Yes. and The that's you right majority be where the live. tax of that still customer will credit, hits -- they money is that have children's then But come, our to

Mitch Kummetz

And up margins, then, basis QX said I was from think merch X ago. XXX years the Kerry, you on points

should year? mean, So think flowing the the on about do the BOGOs I and of some way number is a promotions. through to we that? -- a kind that Is you that expect being that think of given back the the kind up? cutting and also as of of just other do you elimination number good Or think give of that that to kind permanent of

Kerry Jackson

Well, progress we'll it. we through as see

third Now affected we in the merchandise think be by achieve shutdown. row had basis. last Obviously, -- third margins. higher was we're will the to year-over-year higher a that higher This we've a COVID quarter on significantly going the was margins -- permanently year quarter

in percentage little probably in QX. a to the built in BD&O higher we're We QX increases We're our take the our So deleverage point which guidance were margins once of have margins. in expecting merchandise increase bit will again expecting our higher. off will nice -- we

Mark Worden

promotion significantly We Hi, and pandemic. and learn, started it's Mark. reducing Mitch, during QX in QX test the to intensity

about we're into into get we lap as back-to-school. So those to

gravitating around. year to QX, guide, profits. anticipate benchmark think of As I continuing the a potential of of a gross remain have the I last QX If think we with those said, good were where elimination the we to low is margins of

Mitch Kummetz

from because prepared merch that's, in question out his X-year ago. Kerry X I think guess why called remarks I on years again, asked margins the up a I it. XXX Got basis bps

even of the would down why to for it doing those question you Where for And on some maybe started was of business even still So are BOGO and I trying be and you slightly before just that or question X across elimination. dress you worse? this again, did ago, years when the on You flip from the get X the would of, you my incrementally am but really to seeing could that just normalize better last like again around the year, to out social right and kind on that. those compare are I half inflection the That’s Carl. that getting back -- years now? guess be is last people ago way changes. But opens it I out if categories getting to in maybe are things ask seeing and I benefit order from -- where elaborate margin things, guess as the kind year. the side maybe up triple-digits you called you about market just I’m up And -- of categories

Carl Scibetta

getting Sure, different as the Mitch. life, during categories their coming that as consumer that is drove quarter been a seeing we're back we business into for product much early he severely peak seeing that first but happened, second she out functions to categories we're going buy COVID, definitely into though, bought see that now, categories got continuing XX categories the all hurt and the vacation. going We're all and were to up quarter, on not that, of the we've all customers during has on more Not goods seeing of weddings months. What or the expansion that seeing along. we're lot late diverse consumer out, right a buying a social wants frankly, greater There's back, COVID. for -- movement back into hadn’t much


Sidoti. Pendy from comes next And Greg your from question

Greg Pendy

XXXX if just I absolute X%. to least on but to basis, inventory, you’re back per go in on just into the you a down think mentioned still dig the I down an basis wanted door X.X results was inventory at I as Kerry

running levels? maybe quarter? just out within that level color color were So on context, wondering if you whether on And you inventory could little a then just bit of high the stock provide any during a

Clifton Sifford

important were end first we able inventory want the door quarter, And basis to critically up during the it's a of in XX% on to pick inventory we -- products the to said, to that and a the to quarter it you versus down needed the XXXX, on levels per again X.X%. lower you're XXXX, if where is consumers' the I in the match XXXX the to the of X.X the maintain on XXXX, able of Greg, get at lower, based for product up And were lot as a categories timeframe. able some you frankly into -- response COVID. where versus back were be --

Greg Pendy

across I very when is of could margins. little then just merch start the less you the being Do color board. your chain helpful. just to you -- eliminations half? work helping in your trying margins? little bit bit. inventory merch the And the Okay. think supply the on a wane But on mentioned that a promotional that second Is -- lower any That's provide to through you maybe impact maybe also where guidance having Just understand will

Kerry Jackson

the effect as believe do we're better, problems I be the products in that get there'll choices. margin supply And chain better have the to marketplace, there's on to more in marketplace. out running more continue products there's And get Greg, same and an if levels today. it could more out base the

Clifton Sifford

they what is build there's that give focused brands want is, product. is if What ahead. the merchants And The that certain call. on to the planned is to customer I to talked maximize that -- categories did. margin us they The customer about this for very are going buy. certain not and categories can. really the way have very, And do to our performing of there we're then by just get customer I and over-performing. that want the and items focused fact well, I that on are that incredible product, margins just that we recognized buying the mean are that's -- that that we categories very credit to last And we that allows too that the got early, very on proud those make I said, exactly And if And on the to everything that. can we they reason that's promotional on on very,

in our and that probably and were a get biggest won we the So, stock just But promotion and fact issue, is the grabbed hold that them selling that the with. the thing opportunity promoted, product one categories was them that's the and factor. merchants after also went kept of that biggest


Instructions]. [Operator

Trading. next comes with Sam from Williams question Your Poser

Sam Poser

I've I that start -- a off stuff. you the these all did the that of I after is got did as guess, I'll imagine. a years, hire silly lot merchants. proved you handful guess thing, it one you and hire with can out

Clifton Sifford

that You Sam, I that merchants the what credit know and together, we all reported. hired we

Sam Poser

in back Mark like move your -- back-to-school in any was see March with did that around? -- hard really all business the person push when going see decide kids then? there couple any a another Or towards to of Were -- in congratulations. things. Anyway, just change is Did you kids a you others?

Clifton Sifford

stimulus because The Mitch and refunds happened fact time. said I I tax that the as or the to the same the weather checks turned, -- Craig, think at all

this our and can you we began, great disappointing So pinpoint when through, stand Kerry March what continued where told that month. the business from almost and you, day just a was then February a in turned has until

it's just continued. So

Sam Poser

little helped you margin? Kerry, happy of couple I that -- a reversals with -- your basis kidding just did any reserve you're the -- what how like I'm then ones to gross going And question. know did The be answer -- points inventory you. inventory here. to many Got

Kerry Jackson

And had that wasn't before, material. never. There question is we've very never a it

sales that, by the each against sales up, higher look -- the other increase year big QX. kind substantially, business, other other. shipping netted all That of the in in then So we else was deleveraged stores so if closed charge QX, even in at margin, was up charges sales were our though biggest the the on And in. last item. merchandise Everything only our that product we all the margins the had item dollars e-commerce were you almost were the leveraged against because the the we driven were overall

Sam Poser

Got mean, within your talked then at well, you. all was now, And no I how you there much mean, guidance back-to-school right last I of year. -- back-to-school?

QX say, -- of -- put idea into guidance, give on what like, there? are of you -- isn't give versus to have some can going So XX%? XX% guidance, Can into in 'XX? as let's you how I you mean, me you happened in it you your much you some is of 'XX, what what's us is put it your idea

Kerry Jackson

recovering -- were in we down that July of last looking just our teens, year, most comps and into we're the at guidance. In July in were our

in the So low double-digits. very comp having a increase

Sam Poser

'XX. Versus

Kerry Jackson

'XX, sorry -- versus I'm again, And 'XX. Sam, sorry. I'm Versus

Sam Poser


for us again. So just the walk this through quarter, quarter

next May. in up fall you're the not expect assume be That in XX% up may off or June, you're So I down. to and may And that then few weeks. the against XX, you

Kerry Jackson

We do.

Sam Poser

last for QX... versus So your expectation this -- year comp

Kerry Jackson

double-digits. and high in We just low the said single-digits,

Sam Poser


Kerry Jackson

just coming May, my said think we we're the up, issue get real get in more we I stores that is The that, speech, comps. -- as open to comparable like

So increase July had looking We the XX% to big in That's the year. now go because et demand, in is just comp it as a the they're June in the when obviously significant cetera. pent-up we decline reopening to to the actually we're in XX% to comp decline have had year. going recovering we stores not had didn't because that near from driven rebound happen. going And pretty of comps and increase in saw, the last by schools July unknown sustainable back. right us a do -- still that seeing most -- June expect we against weak back-to-school was moderate not committed We're at It's last to we have then going May. of

So we don't know...

Sam Poser

-- to you're did in going positive that I $XXX this and less be last than a us year year mean, you're understand. But I you comp. telling million on QX, do

Kerry Jackson

is XXXX. Sam, more typical So though, what we're against looking at,

on our the end, the nice more that. growth XXX high XXX So guess, XXXX guidance expecting to we're At was normalized. a we in top and XXX, did I of

Sam Poser

be in mid about, you're comp to to your is you're this going increase -- So comp comp against down of be the double-digits 'XX, talking low last is going down, the year. versus

Kerry Jackson

Against last against 'XX, we year, but be... would

Sam Poser

up], [That's Yes. yes.

making that's mean it where mid-singles going get be sort you're to. to year, just down of I'm last because sort coming versus I correct. I sure that's of if I'm your Okay.

Kerry Jackson

the against on a -- in down focused high period really that was were 'XX a and of to which big be has the June, single kind with we quarter is guidance double-digits. X-week low our strength that on Well, effect comp. in QX, we're It's going to

Sam Poser

your of year last anything higher this rate, much which expecting year? wasn't you return to go Are much

Kerry Jackson

of returns. a seen haven't We change material the in percent

Sam Poser

two besides then items? well? or -- and gone how deeper you more these the attracting much narrowed Isn't everybody, keeps other sort how CRM, the may which I then might may It as for the working assort not is that the you isn't much -- improvement a with -- on key back-to-school we And that customers. it. things. probably more mean, And I this happen keep in that said revenue whatever July? of have driver One, you have narrowed assortment in on couldn't profitable you --

Clifton Sifford

So can we assortment spring Sam, on several or because planned for years. been went drastically into our in season, planned -- this. we planning -- fourth we've you we on the assortment, have this path as the not again, on the additionally I lowering third that year, it tell that we're been as

have. COVID. we on closer more in even down based what wants it item increased the into got key strategy tighten we that We've as did category it consumer every we on However, the significantly

Carl Scibetta

fuel QX. we we versus too, them our 'XX because question. of tremendous for to key in and our low just XXXX. single-digit can past million history. then declines contributor sales that Yes, of versus me strength consumer in our growth talk a going record guidance, take we to to growth Kerry now CRM, on to, XX comp delivering profitability enable profitability, in Great the earnings one. XX delivered that it's having we our any knowing about It's going more and the let on QX in or will, anticipate as the year weeks of than And or is expectations over and QX normal growth drive profitable $X And on total talked

we're excited energized on members customer consumers it. a I value shareholders our to create we really to are Perks journey. personalization I'm and to ultimately, about about ahead. ahead those Perks We in convert Shoe as into our So into said messages our we And get Shoe new most the most then profitable ability for growth Gold new And we utilizing the last, acquisition, this way based long think in have ongoing on ones. significant members have CRM on years speech.


next Kummetz Research. comes Your Pivotal from with Mitch question

Mitch Kummetz

hopefully, Just had a quick follow-ups. few,

comp is nonexistent in I you think that what the was I up last nearly guys store on was X-year? mentioned would But a year. quarter. comp store it you triple-digits say could imagine the

Clifton Sifford

Yes, go ahead.

Kerry Jackson

up were we XXXX, Mitch, to Yes. comp XX.X%.

Mitch Kummetz


sandal maybe, sandals Great. that's quarter? on terrible, well. you quarter. sandals I know important last And All how in then I you think are right. remind -- year. think don't they're kind think of don't said second biggest Carl, it were your the that. were And Can what I just QX, versus but -- your sounds outlook that there great is trending I they like us

about in of some to quarter? how that early weather. thinking good do think having the are I you second Now with sandals some But

Carl Scibetta

a we see -- think going get the out first people break to in of for did there's think strong and looking we the be going tremendous going We to are in spring Mitch, to year are that to quarter, some go first channels the We're be quarter. vacation as the second season beach time. this around

just experienced seasonal into we've that do quarter categories. we seasonal longer and like continuing selling the period on anticipate So second a

So there. we feel we are good --

Mitch Kummetz

Okay. to And benefits you back Have in tell Can then that and when me kind thought on guys? distribution. about wholesale really you Nike you you talked their that? scale kicks through of

Clifton Sifford

ahead. Go

Carl Scibetta

-- of is place XXXX, Nike take take would which deliveries fiscal consider what a Nike forward. The typical the Nike place have which adjustments their holiday Okay. we October latest to that heard in round XXXX,

Mitch Kummetz

of sheet. cash to have noticed you can as you year. remodels just and like Okay. maybe -- you allocation next of size about That's the great. then up growth lot But guys just think a that, I some just on just and balance of ramp got you capital want your us And know given I you've priorities the stands lastly, think especially and it remind how balance cash today? unit the the kind things there,

Kerry Jackson

we're where CapEx and Well, that's to And our our be stores, a growth. our with our always is going be through this investment modernizing for putting always -- lot first year. is that of to cash going

-- and buybacks we excess -- we capital the of as dividends will and it piece come buybacks from as it. While the is, we have other when

a we level cash... is the higher that Now one things to of of carry do wanted

Mitch Kummetz

Just talked last Yes. time.

Kerry Jackson


think have you we're sheet to these fortify be an that our more unusual account I also. So that to into in will during of it that, balance take order piece that in times important


Your with comes from Greg Sidoti. next Pendy question

Greg Pendy

Just one quick follow-up.

trend better closings. If Just trend just anything wanted What changed? on Was terms? with store color lease that get the to kind Or overall? there on those? any it of was is business

Mark Worden

planned down expirations year. And for remaining we've been year about lease X this more X and that, were Those to the store this we're natural during more opening. are talking there closings

that on topic. changes unexpected no So


are turn I further There no questions presenters. at will call back to time. this the the over

Clifton Sifford

appreciate joining today, August. I to in us really look everyone I talking you and do we again. Thank to appreciate. you, forward


concludes conference call. today's for you Thank This participating.

may You now disconnect.