DICK'S Sporting Goods (DKS) 28 Nov 182018 Q3 Earnings call transcript

Company Profile

Participants

Jennifer Mejia	Manager, Investor Relations
Edward Stack	Chairman and Chief Executive Officer
Lee Belitsky	Chief Financial Officer
Lauren Hobart	President
Michael Lasser	UBS
Simeon Gutman	Morgan Stanley
Chris Horvers	JPMorgan
Seth Sigman	Credit Suisse
Kate McShane	Citigroup
Robert Ohmes	Bank of America Merrill Lynch
Peter Benedict	Robert W. Baird
David Schick	Consumer Edge Research
Brian Nagel	Oppenheimer
Tom Nikic	Wells Fargo
Omar Saad	Evercore ISI
Jonathan Livers	RBC
Sam Poser	Susquehanna
Joe Feldman	Telsey Advisory Group
Matt McClintock	Barclays
John Kernan	Cowen
Adrienne Yih	Wolfe Research
Peter McGoldrick	Stifel
Chris Svezia	Wedbush
Steve Forbes	Guggenheim Securities

Call transcript

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Operator

Good morning and welcome to the Dick's Sporting Goods' Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jennifer Mejia, Manager of Investor Relations. ahead. go Please

Jennifer Mejia

Lauren and be our everyone, at will for us on Officer. Relations Executive joining Ed Belitsky, Investor and Good Chief our for our quarter thank approximately XXXX investors.dicks.com. discuss Financial Officer; Chief and third our call call located our results. to President; Stack, Lee will morning, Today's Chairman you Hobart, archived On website be days today's XX

XX-K to forward-looking a differ and and various cautionary with we release dicks.com find Any risk earnings Form now of update to subject cautionary SEC, be be which today’s refer to As turn Relations with and no referenced our our I measures during materially to in in should considered over Ed. our filings or statements. Please risks the call. the statements including making that of any assume We results statements, factor cause reminder, in With these could this such discussions to will uncertainties statements information. our our to on that, last statements Investor conjunction are will Report the actual at from in Annual reconciliation call. non-GAAP obligation financial these call statements forward-looking made website

Edward Stack

eCommerce share our morning, our X.X% and share week last diluted of per This Jen, $X.XX $X.XX Thanks sales the shift business consolidated XXrd good quarter year. GAAP morning earnings same-store declined due last the earnings per calendar $X.XX XX%. diluted we earnings compared per third reported of everyone. year Adjusted and diluted to non-GAAP to share increased for of and

the the period $XX quarter. were approximately approximately for the online to our XX% which by percent range a including declined in approximately impact to sales, same expectations the million. Revenue compared of the to Comp shift increased negatively sales the year. to calendar of billion total impacted X.X% XX% $X.XX in As business last net sales

the points decline. As expected, on electronics, continued higher business margin these comp of challenges, contributed weakness sales impacted and profitable the decline driving XXX we from we points our focused in to which electronics managing hunt by the benefited improvement in low-margin and Merchandise Despite earnings. were quarter sales negatively deliver to products merchandise expanded drove and as XX promotions, categories, and basis mix sales which approximately are in of margin margin during an hunt the points. basis basis gross XXX cycle. This increased by expansion improved fewer

with stronger items the of Looking many ahead, pipeline and remain enthusiast we assortment a we're products focus our are into optimistic key partners and our emphasis a the on on will the encouraged from renewed continue seeing year. optimize to We by improved next about athletes.

will stronger we continue relationships never Our work these and the have DICK'S. to partners many been and elevate of to assortment at together presentation with

Our great are our that part existing priority in expanding going private be categories brands continued and seen in our into an new forward. success brands We've will of exclusivity our integral differentiation drive strategy assortment. to and grow a and to

launched we quarter outdoor pleased Design early have very this Earlier and the been brands. new the brand launching be success. also apparel will We Alpine with

expect well us for future. to We to private the deliver brands our into continue growth

it's adapt outerwear. I'd third where our strengthen the athletes serve like to growth our quarter, of categories to Late it believe confident communities. in our going discuss business from and closing, the future in compelling the changes space will in can and forward. In DICK'S these better continue these turn better categories optimistic we key offering the and we're our thank athletes leadership efforts floor I'd all we're we over virtually underperformed during products licensed products, dedication performance, have Finally, like their teammates holiday we the reallocate too their to such to Lauren. with with for removed company stores and to call brands product season. work in category now upcoming align hard Though for categories XX this the of to the early demand. as to baseball, more our all in and to assortments hunt replaced and position

Lauren Hobart

good Thank you, Ed and morning everyone.

capabilities we leveraging As initiatives. enter athletes a optimized stronger key focused days of working and expert we look of improving tasking opinion business experience to labor These and within our our our costs. The robotics York investing experience and are the dedicated we our facility for we the invest driven orders delivery presentation, deliver processes To to we're providing spend majority assortment to by that a eCommerce platform. customer York state-of-the-art have time the and shortening fulfillment three will we reduce more to include are our centers season and creation California. our fulfillment omnichannel delivery including less stronger drive the our In year, the our athletes. holiday toward merchandise increasing better and in We're our and building stores, two core servicing and strategic be the our allowed an significantly as with experience time which execution online across in our delivering the enhancing our a on efficient New also through eCommerce we've highly automation in within New remain improving next estimated our execution, Beginning productivity. teammates in providing to of athletes functionality deliver in website power this, We're omnichannel future. time. achieve efficiencies of

focused all customer enabled store online to recently centers our also orders. We regional fulfill of distribution

customers continue our our to shipping our leverage from stores. by proximity to all we Additionally, of

which brand through focused family Year-to-date, sport site. continue presentations, that the the families on a our the this to showcases marketing, and that incorporated Team point we've and to a we strong brand continue Sports product through vast points all of scorecard athletes in aspects have athletes targeted to many marketing example actually a many growth the our we HQ powerful pleased a stronger utilize building marketing, power that merchandising product and perspective, sales our And for our holiday drive of these strike key to display expert right giving brand. resulted their eCommerce with joint way messaging. guide From to new key leveraging a a traffic throughout will very our has an traffic be with of together. We're datasets which currently season, also connection to through efforts leverage growth. deliver campaign the we our ping-pong bring power driving with holiday impactful drive for store. and opinion double-digit gift digital our our athletes to running to them. we're transformation to across the we show Yeti assortment lifetime with many lasts driving emotional our in vendors. and Next featuring presentation partnerships the strong stores to inform items select a responded of and and continue strike table is stores of which and of We're timely In in of An have of is how our

our remain eliminated year-end, $XX focused we which growth we will expenses approximately by of productivity. million reinvested strategic the have of drivers. on has Finally, Across increasing in much company, our been

advantage support and detail. that areas in optimistic business, in continued be remain drive make the long-term to We the and to growth competitive statements major our strategies we of review closing, growth priority HQ, call stronger key will to help outlook as Sports brands. to eCommerce, In turn a critical to to our particularly going the forward. I our these will of Improving execution more investments the offset will now some such financial private of will over in marketplace. productivity continue lead Team the results and Lee these investments

Lee Belitsky

like I'd the and to Transactions increase shift in of ticket business. third sales negatively of billion. X.X%. million sales you, shift, good declined brief for impact by average consolidated calendar X.X% the quarter. XX% results. declined X.X% with a and sales by a overview decreased $X.XX share Thank which our a $X.XX by This X.X% increased approximately quarter or our reflects the Lauren Consolidated $XX including calendar impacted in to start eCommerce morning the Adjusted same-store everyone.

last contributed Within and costs. during believe as electronics decelerated the most approximately was strategic in basis well Data. promotions million for as a point was which the of declines Background to hunt higher fulfillment we net occupancy in the third made expansion remains to equipment. our was positively shipping be with The mix, comp or During by deleverage by for merchandise the basis included and and the apparel combined and as favorable outdoor which $XXX.X to saw sales athletic this to penetration industry the categories negatively decline improvement comp profit versus year, Check offset decline merchandise XX and mid-single-digit hunt, improved increase the comp margin partially National continued in by Notwithstanding Specific best earlier a performing continued also quarter XX.XX% gross basis as weakness higher firearms by broader points regarding weak We increased year. product. quarter. a decisions these outdoor and our to double-digit fewer brands quarter private evidenced sales well. our margin sales, margin recent XXX primarily points we and and addition and Gross to has freight XXX strengths merchandise driven impacted contributed this

expense also the reductions the higher profit investments during timing timing our fourth million shift gross last than offset year from scorecard expense by recognition negatively compensation. made benefited the were loyalty quarter. year This SG&A incentive during Additionally, we amounts $XXX.X changes to gross last dollar as decline profit shift approximately in million, program a in dollars to strategic expense impact $X X.X% related will the favorable same for by more quarter.

of percent points per non-GAAP total share we $X.XX of delivered $X.XX of earnings basis to a and share to per diluted sales, share In earnings $X.XX quarter third diluted compared of GAAP deleveraged XX.XX%. earnings XX last diluted per As SG&A year.

$XX balance facility. revolving the equivalents looking with Now our and $XXX and ended quarter approximately of on sheet, cash to credit million our of cash we million borrowings third

basis Additionally, quarter one on a week our to down than the inventory last year. levels increased by ended in as quarter X.X% shifted our or Thanksgiving closer X.X%

repurchased We quarter and $XX.XX. of $XXX prospects These million. Goods. million were are proximally to DICK'S net at expenditures average our X.X long-term capital Sporting our third $XX.X price indicative an for Turning repurchases for shares million capital confidence allocation,

$XX paid million dividends also quarter. approximately during We the in

our on move weekend, briefly to as comment I'd to financial given relates to we like Before our call on the our it outlook, timing of XXXX performance. the fiscal holiday

our on guidance. our incorporated both online we Thanksgiving results reflect As our with the in pleased are in have shopping the and results of very and the we weekend weekend we stores

we For to year comp approximately by and gross last to year. X% to full year to the decline X% versus continue margin expect be sales flat

earnings are that of we a strong a in versus $X.XX full-year for $X.XX QX guidance time earnings our As third the result this of raising we per represents this $X. year the to guidance original to to share $X.XX our year which increase results gave high-end $X.XX to our

clean fourth and positioned at the Our throughout inventory and build year last this quarter the enter of fourth levels ready inventory be inventory season well holiday expect we executing the end we the will businesses. over to Upon to the is important year. as spring increase fully versus expect for quarter last strategy we

you concludes our now our line this fiscal quarter Sporting March open your prepared questions. guidance interest operator, the for provide fourth in you and on XXXX may will call We Thank DICK'S for and comments. Goods in

Operator

first ahead. UBS. The go is from Please of Lasser Instructions] question [Operator Michael

Michael Lasser

shopping about are holiday were for Lee, fourth being or performance the my for Good lot – fourth X% holiday question. the and so guiding so decline your far that that’s calls that X% morning. to online quarter, a at for in least that are with or the period pleased you what with to comp last your is in the shopping comments week an you seeing taking quarter? indication in comments line you stores can with about guidance a Thanks basically results reconcile your

Lee Belitsky

X% gave you So negative for for guidance to the year full X% to X% that year. of our and we third negative quarter we're full X% out the that the sticking know, was coming with

that's but way favorable -- us the not pleased have helped are which the hold did favorable results if up through weather-sensitive for going very weekend, We of our businesses. of some Christmas coming the drive very with now. week weather to I'm sure out right we all

So, there we're the pleased way but is long with to results, a go.

Michael Lasser

comp in category a the little outdoor half hunting of weakness is reasonable answers the to know on accounted for my decline did was early, Okay, based the and and driving totality? your but bit positive expect question how business followup in the the perform, it's activity that to more is, that what equipment in than trackers and I can so XXXX and and footwear it comp quarter,

Lee Belitsky

even with respect was footwear the about the quarter. for to Well, the footwear business business, overall

outdoor as weather it some the Some driven so hasn’t of of customers they during and particularly our some the and outdoor quarter started as well. on equipment and to with also on that a for camp involved by equipment business see changed of third the were Again, have equipment we sales firearms the next categories that. by bit and really slowed year into that comp view businesses, that second down we bit that driven of a little some down, the probably – the

be is Footwear electronics business the you Our the a last we vast made business, drive favorable from these now, and will majority of pieces changes Under know apparel momentum. the of that Armour been we'll better diminish, in headwinds of we hasn’t year, and some to think right part position the and has changed the comps. there, the business we hunt and decent more as more gathering anniversary business, early view our

Michael Lasser

you the holiday. with much thank rest the very good of luck Okay, and

Lee Belitsky

Thanks.

Operator

Simeon ahead. question Gutman of Stanley. Please comes go next from Morgan The

Simeon Gutman

you'll was to you Thanks, hunt on guys. specifically, impression think I'm in second don’t because business the territory. good the the is, first us but somewhere say Armour, positive in ex-the the not electronics it morning running ex-Under sure with comment and My I question brand I quarter, want and that left

it number, take – that's piece if and hunt know I the think take I categories rate on out Armour done think, hurt electronic then what the Can so have or get core trying the and does Michael not, compare and drag would similar take third to. share a maybe out is, quarter, run you it’s this in quarter, to Under we if what a you that how you basis? the

Lee Belitsky

this we outdoor the -- portion to although We is portion hunt our Under spillover what athletic been that between we Armour said for the and the offset pretty outerwear think still were hunt for able out said Under this of had category, the and big talked a didn’t plan businesses in we that accounted and – of We the that We which call soft comps in the as were third that. comps they about the Armour. a sales to piece had we the a too. were were apparel in We the time is categories. quarter categories mid-single-digit categories apparel categories

Simeon Gutman

of were pleased that pleased things traction? some the it's are better be but what And granted impression underlying okay. little shows business the like you of with include assuming fair about the be looks complexion it Friday, a slightly leave it you're same Black an of over Got a promotional sort to happened and doing sounds may gaining would and with the if it weekend, what I I'm that you're

Lee Belitsky

That would be accurate.

Simeon Gutman

kind good, the last and business looks followup, the it's of inventory right, almost will be okay. to and my the question, hunt of look margin profile Okay out electronic similar way, of looks pretty

As margin you the sales of feel we Lee, the business head profile the do position? year, into stronger Ed next or about or about

Edward Stack

your our forward, going said my But in consistent the in Simeon, said so I as I done business. optimistic we’ll we've hers, about and and to to next want as You comments we're said guide year call. fourth past I is our never quarter in at that I with commented Lauren know question, indicated don’t mean what what be dodge we've Lee just

Simeon Gutman

No Thanks good luck. problem, and understood.

Lee Belitsky

Thanks.

Edward Stack

thanks. Okay,

Operator

of Chris go question comes from next JPMorgan. The Please ahead. Horvers

Chris Horvers

morning. Thanks, good

a that got or side, worse the So questions, the as industry the to publicity but remembering mean same around business being the first of the couple more impact business the of that process maybe hunt the decisions stayed function worse? spring such you are guess got a where know is the that and comes customer the the relative on you I back how I was they thought thought,

Edward Stack

difficult were anticipated. the in we and in Well, and going industry can NICS things the the other but the is the kind zone overall, of of on see from checks of comps of kind some that the industry, you what

So sales it have way, we a didn’t standpoint, from put this surprise. it, didn’t let's have a we

Lee Belitsky

And the fall the spring, third the one the it thing has spring. the to even, the hunt fall of is about quarter the the so what quarter it's doubled fourth and on and the fall, hunt about in side penetration doubled in second in over and about in first of even business

it the on QX business. QX just So, has the size and in based of drag the on bigger a business

Chris Horvers

up quarter, and relative a the the then Yes, in on goes the year. to presumably up electronics basis quarter went fourth mix rest the of fourth in

combined this sort that versus of hunt is XXX points the that more So quoted on is basis and XQ? just headwind, you electronics significant in

Lee Belitsky

little A bit.

Edward Stack

we a is I bit be negative X% mean a more, little to that to guidance. going but guidance raised EPS little said still as bake our it's yes think it our we into negative and all X% and we Yes we bit,

Chris Horvers

at versus mean then last and sequentially like it you a the sort SG&A what – to SG&A of look year-over-year, is, a this we the trend, relative dollars a have history was I the would big Got shift expected. piece looked if

trend there So forward? was is there of that and should anything we going out also this build the sort unique new in SG&A

Edward Stack

is, expect that You on new like that marketing payroll strong is and to lot into have some have that what due in we answer when it bit better on, lot continue expense management performance believe reduce the driven gets of saw a are when expense a the bit management working less it there we third in expense due less expenses little it we our negotiate that of tail a but a year onetime longer go will and is better so forward SG&A involves negotiations very short away. hard forward. little of know, the quarter in by shift to bit of expense from period we're of they little a calendar a overall and the items going of to a bit little expenses shift, calendar is going implemented been the contract we but There and we've a going not throughout to to that

Chris Horvers

a Understand. holiday. great Have

Edward Stack

you. Thank

Lee Belitsky

Thanks.

Lauren Hobart

you. Thank

Operator

The Sigman Suisse. next ahead. question from Seth is go Credit of Please

Seth Sigman

Hey guys, the thanks for questions. taking

question first XXX prior is last my you offsets recouped than points, a So, year, but decline be this the merchandise seemed on and basis fulfillment up over the the quarter occupancy through margins it to greater from costs, lot obviously of quarters.

the Now seeing next are Thanks. gross saw couple greater that that merchandise the that margin from wondering out? looking less lap I'm lower imply comps, this just recovery fulfillment? wondering eCommerce but I'm pressure you quarters as so may year, of or upside does I as from be coming of then just you margin out and over look And we some

Edward Stack

to we've in million expenses. less and sales distribution QX we our looking against we of expense leverage that's the and due calendar the one consider lost $XX million occupancy the at fixed that kind Yes, shift thing again in have is calendar because gross the it's our shift can $XX to profit once in

have similar concern XX another that that's be in coming to So weeks the well in. as will reduction against we and and in continue weeks we sales have it of quarter fourth piece a as XX a

penetration eCommerce the that's sales lower that other penetration the margin at business. So that's for primarily it expenses with delivery piece XX%, business XX% eCommerce so because associated the and about the higher from of us of a gross affecting of is

goods structure there So a of in lower and sold it's it's SG&A higher a eCommerce. structure cost

So penetration will as do dynamic the as in higher of on business the P&L that we eCom, change well.

Seth Sigman

much And specifically? shift Lee, impact quantify the did gross can how week just you margins that

Lee Belitsky

mostly there the in bit dollars, profit still SG&A gross overall was $X.XX gross is and that's profit So dollars. it a mostly there was impact is which share a little

Seth Sigman

away square too demand footage from around Okay that is giving lift, just the I'm testing you’re reallocation early I categories is up to footage? that and higher it's footage my enough here, think I stronger, to the strategy follow more about you know but of it about are what those how square just Thanks. it margin, talk those you're taking curious is guess have outdoor. that did question space to, sales categories, in the space square about reallocate we categories the trends do not previously they the or

Edward Stack

It's of a everything. little bit

the pretty baseball up. talked opportunity we standpoint business the business, business we about think that So a from there's baseball a talked big business. outdoor We also business primarily significantly the football is picked that's business the of and license significantly team the the hunt are about licensed business business growing a that's the margin all businesses the there of as soccer at in higher football business. It expense these in than has baseball declined, that has

out Now you're a I if look taking it's outdoor semantics you bit business were it sports, hunt, space of paddle we're a it's not you of just out categories, out that business look the taking taking category. take hunt those when only categories oh the said to but camp, at want outdoor of of they at we

Seth Sigman

Got it. you. All right, thank

Edward Stack

Sure.

Operator

from Citi. is question Kate Please of go ahead. next The McShane

Kate McShane

taking question. for my morning. Thanks good Hi

and Just given categories traffic inventory with are your the bit approach quarter lot versus or year? tighter drivers and talk fourth lot you could promotions last holiday, about a to a regards the is a that and little healthier

Edward Stack

inventory of one cycle we product, guidance. out don't got our to shape. now, product reasons right was cycle a our great to to increase less so we there continue year it the than this year promotional. in is to which see last able being We've the terrific we're promotional that's - much product see that is needing be Yes, the exclusive see as We is more this

Kate McShane

given the basis. was Was in Thank with to it sounds like you. with plans flat how from of all that And you rest regards And service then it compared during are your on stores the Okay, that to seeing a at the of that’s line the helpful. full talk comp footwear footwear, you're the quarter brands? your about doing chains? level innovation newer can

Edward Stack

Yes.

service give because won't et Access, our the specific and primarily inventory guidance but probably too sales that cetera, flat in continuing to we’re the those gain we that, between chains, key low So pleased back-to-school footwear were the very was we're primarily momentum in full areas in with and on time.

We that and under next we’re into inventory into quarter have fixing been going there and quarter. this forward

Kate McShane

that how because planned a just Was function harder of or was period it is this get to you it footwear? of your hands inventory on

Edward Stack

It which was been a planning piece and a has rectified. strategy piece

Kate McShane

Thank you.

Operator

question next go Bank The Ohmes ahead. America Lynch. of from is Merrill Robbie Please of

Robert Ohmes

morning about up up store good if online was these that could and versus are in from two Hey, online in going how store automated you putting investments you are DCs pick maybe buy new be guys. think you the facilities only. very if shipping versus to know talk I Ed, wondering was us eCommerce the about I walk could, and through you new wondering automated

you to paint business see ultimately how maybe omnichannel us your Just shaking - of picture the where out?

Edward Stack

that this their Well, I We question this to the they to feel they just are able been to it how it, let do and the making York think wants do has of in want a and and to better consumer California working fulfillment a important gives when we all we're here. delivered it of center heading options will Lauren have up, we all that, the so on kind omnichannel get all the speed because us customer distribution investments know that. the balance they want in want answer her of job from I'm the way the that to points, and going New as customer us to product be these

Lauren Hobart

entire Robbie just say to to majority year, the customers customer vast we speed focused to I we've need been very just improving within that made days but our two and get small and leveraging we're is the speed of do goal mini to and gains our Yes, our we around would on country. this we we’ve the make sort the can the these our the right in right so to off inventory We're fulfillment place and store speed larger sure network table. that fulfillment have centers of building question take centers that

Lee Belitsky

me just it. let more to And add thing one

With stores, walk-in costs able up to a it customers. we fulfillment to from business stores so than go in amount together. more store stock continue that for a They're carry not to we the carry larger from can want stock be as those real keep as at growth and we we’re orders while these meaningful count centers, and eCcommerce of so in stores our efficient our us automated over assortment we're what growth in going in facilities efficiency that to relatively to allows and the the have orders to efficient concerned to continues kind doing grow, is with looking already keep we're stores And our than ship keeping us ship we're tremendous expect store important we labor to in business business store level our from and more to stay our significant time. are stores within eCommerce

speed quality, delivery to to number got we've efficiency, from reasons multiple are reasons of why to add in staying it, there stock in we're adding a couple got we stores, of to why distribution So centers.

Robert Ohmes

That's look is strong any thought Digital shift out? was color Cyber just store quick much on or helpful stronger kind how you any you and a and the of Friday through Black balance just to the playing when relative of traffic, on know followup, Monday less

Edward Stack

our Lee both stores. said, we've we're played pleased channels Thanksgiving very as with we're really was which and but but pleased strengths, the mean I with which said, coldest in both it Well, a into time online long

Robert Ohmes

so much. thanks great, That's

Lauren Hobart

you. Thank

Operator

go from is Peter question ahead. Baird. next The Benedict of Please

Peter Benedict

maybe thanks. about you cycle that of couple you into a just here, sustainability what guys, product talk next most and that, look out Ed, pronounced improved then expand Hi are on the you you where is year, as times mentioned can seeing?

Edward Stack

doing pleased is out we on Flask the in side it we're I on brand Nike got it's the the doing out, the one around own of with out happy with exactly Nike well think we’re we're great with which with good there with baseball still golf see with mention Tailormade to have. products there, line hard has the to going think - some doing some well, us, great and we got side pleased it's haven't products be see with And we doing I fall what Hydro for they've private going whether new we've our with what and fitness Yeti be We're what so on apparel is today. both extremely is launching - footwear we some new going products, lifecycle. side. very that forward. coming the products, what's biggest products be, Clear, we're We're a pleased be what pretty really see not going - Callaway got some just going we very just we're next innovation we a announced brands to to but there mean

So the doing from what we're about brands we're pretty both out enthusiastic and product the cycle internally. there

Peter Benedict

very That’s helpful.

sense basket XX certain a into make from questions, and that next is you allocation of is than said there you after could could space the that holiday that's you a considering just is are increase persists holiday comments, is stores, removing be, out that those out then as had that there, hunt the just that one Yeti stores Lee, on year? something two So more something or there for look

Edward Stack

how team, this smart our to it in And we on test, we under first it other XX year, assess does, reaction store want bought think We performs the all to very up continue at together that be team, is these and store a But think see significantly the So the we we'll relates it business it's replace wait it a merchandising will ends visual take if pleased team, to we something the we team business best with standpoint. whether next to Yeti categories, the thing question from have we're have to do plan and we put and worked out yes answer the is and Yeti, pleased that way. so Hunt stores XX test that. number early early make probably display any too with we're conclusions. store into to where are looking to the to as together pretty of country but our a

Peter Benedict

margin a sense, to just or the fourth be here, you should one guys to that mix be the not maybe in be for think could about a How it saw presumably in about favorable. one the relative probably third merchant Lee, as makes we merchandise the should promotional expecting here talked margin been cadence less think That should quarter, similar on quarter, favorable there's the season, much start improvement? position about last we we we improvement the

Lee Belitsky

weren’t expect margin not really we compare aggressive had much as markdowns in the QX from merchant QX would improvement is more in QX. I us year very perspective little aggressive last QX as for were we last we difficult so in as because year, a QX in

Peter Benedict

Okay, great. guys. Thanks

Edward Stack

you. Thank

Operator

Mike The go is Baker Please ahead. of from Deutsche Bank. next question

Michael Baker

your eCommerce, P&L your lot to does how Hi, going you that would guys doing Is impact investments impact it that it year? - an from you're next year? SG&A sounds preclude next like margins you growing be in of a

Lee Belitsky

for on margins not we're guidance giving Mike, operating year. next the Well

You're right, year fulfillments half of year. next in back of to in we're it in going the a continue the eCcommerce lot invest is

So open investments some SG&A those not gross side. CapEx fall, and the be on much margin in as in those the then will be mostly in up will we buildings

Michael Baker

on Okay. what any thinking regarding And hunt then stores your another fulfillment secondly, stream update now season? that you're we're

Edward Stack

is high me we're season, haven't season season hunt haven't specific decisions we ways Northeast in we fourth the the yet a important that. really the have through still game any and of here question lot a Well, an in Pennsylvania, opens hunt made quarter so season hunting through are your too Excuse is penetration the to just decision. we we in as the not to little answer we got markets and before up big go make

Michael Baker

quick Sox in that one, Series, impact Okay, one one any have the on I the Red World more there? to winning get

Lee Belitsky

so out don't but jump no not as really, years did. many of the were last of a disappointed, Well, real so was with it, to big it's championships as won getting out it get I be pleased big Boston a has We we impact. as a fan expected, you once but Boston was XX that Yankee

Edward Stack

to overall I'd though, not a the than Overall little the quarter. results material bit Houston but say smaller for

Michael Baker

Okay, I appreciate it. Thank you.

Edward Stack

Okay, thanks.

Operator

of go ahead. The Research. question is from Please Schick Consumer Edge next David

David Schick

I of morning. wanted Hi, a back go good little to and something clarify sort understand just better. I bit

back a the and about You've there baseball cycle as but the focus would top lot product and a do other opportunity things or is go margin you that mix and opportunity? talked see athlete. XXXX, on call sports of sort just into to started some that baseball want in to of you the renewed you that more the like be or with line said pathway Ed the you I of that enthusiast a

Edward Stack

hit for the with speed they both, pretty it's swing of it's athlete, can of in a to margin and come trackman stores and product attack, that they're ball. tremendous be In a and of a reinvesting bat of golf, them. for redid that first enthusiast ball with the back taking out amount kind cage the in we're or and baseball off speak, where where lost enthusiast the pleased young we've the put And bat opportunity example. place this batting bit we to and piece fit the that an bat, similar tracks back athlete about in in hunt of a woman sales young coming speed, and six could and a is best measure a some them the to bat, so actually ten them we a can we're it's off how think of their angle information gives We hitting going which and the going a were man

we've are feet gloves a display baseball the enthusiastic of the we're of year athlete these XX display display that and for categories year enthusiast more and level that feet year we in will $XXX change In for wants were $XXX, that's these year have quarter the fourth an athlete marketing we're outdoor for rough product. service standpoint going the making in linear investment to last we're enthusiast and a from will above price which hide. to that of last inventory be And going is had products we're be in better $XXX, in in next into of kayaks making linear we're we investments bat of have our, category when baseball kind to had moving forward we a the we bats the now big the this into that product kayaking of end that these because We'll And have we're this we so, some forward are the of bat will a quality talked year and about moving in bats at going this points of enthusiast these XX reduced last kayaks ready the that higher bats. going roughly to with be why the art XX,XXX enthusiast want athlete. And spring.

David Schick

there. some very of of that's out basketball Would of soccer some about and and I those you helpful. sort know in-store That's as those would technology experiences think well

Edward Stack

right now wouldn't but I'm not basketball sure yes. we soccer, in

David Schick

thanks. Okay,

Edward Stack

Sure.

Operator

Brian Nagel of The Oppenheimer. ahead. next question is Please go from

Brian Nagel

for Hi, taking my question. good Thanks morning.

my here of parts and what but with market while, wonder week Ed week, wanted standpoint least the in I particularly moving electronics just deeper track like sales so had categories? look a focus if my how your share you as and at on articulate key number you to numbers, some hunting So are sales well as categories sales would

Edward Stack

We categories. we're up market the in team picking pretty up share in picking where we're of up ones sports golf, market market forward. We we're lot actually enthusiastic in that a going think picking category. the we're share There's of a number think share, we think

Brian Nagel

clearly significant that the been some and your up overall you is physical that in within Thanks. that, right to we're now a mean I standpoint, store do with, And segment past competition of maybe with competitive environment, happening shakeout now, consumer then what's this but a lapping to how follow efforts? there's the their view competitive manufacturers direct

Edward Stack

not the I'm I Michael. understand question sure

Brian Nagel

competition while, maybe guess isn’t the subsiding. I no, more mean competition at Well how now has been it like that's issue to due I a globe it's seems stage quick, for point? somebody me this maybe been competition it's and severe right a asked an is

Edward Stack

Well, is as doing in brands that, then it like than I number was clearly maybe the doing. one competition you've the a better past. and are And brands better think and competitors, got back academy has come what is our so I'll the, competitor. but are the I it's what they competition few people competition, more gotten mean competitive so the less obviously the certainly are to that, And Amazon's but

to think branches us about because I to is a retailers majority business, they're very the what's few as know line. business of the a they're share the our drive very helpful there's with to private competitors direct, key wish is to on partnership us very trying let helpful trying but brands their on it a online will with and piece there helpful vast brands but are We other business the weren't real going our also a think going overblown the I me relates in somebody online the this, brand bit drive in information. I brands.

Lee Belitsky

market our mid we're reflect in more - the Brian, to a apparel respect of this bit some it's up I single digits cycle just little overall on share Also business want pretty being apparel quarter, but strong your Under competitors right to a With strong well, and we're apparel question. least we're have own space our holding that kind been and think that situation I in that at with. pretty Armour dealing now doing in space we're the as the of overcoming

we're front. well So we doing think the on apparel

Brian Nagel

the clarity. I for appreciate it. thanks Alright,

Edward Stack

Brian. Thanks

Lee Belitsky

Thanks.

Operator

go of Fargo. question next from Please ahead. Nikic Wells Tom is The

Tom Nikic

bit. of Under updates that a is us couple follow seeing just any on a wanted Under of bit about my how thoughts Hey your coming your around like, think differentiation Ed on you good the you've last little Armour pipeline Baltimore everyone. morning that on better. sort give spoken your calls for out thoughts you to and and of the Could little on Thanks brand also you're up the for if I taking questions. differentiation just channel you better there? Thanks. pipeline Armour feel

Edward Stack

the Armour, Under Armour worked are as with better we things of to our forward We're We’ve relates it with getting think seeing about us. stores in we're some going better. think enthusiastic Under Armour I going we first quarter as us headwind be the year. and vast plans we've forward or of of majority think Under of this the got out with we next will come behind

So business. of Under about some we're enthusiastic the Armour meaningful parts

Tom Nikic

cost and you know of one on followup years inflation your business? inflation wage should for side been retail last lot levels about in-store you obviously general labor just the for you and guys staffing just of and and how costs couple there's we wages the the of in right think a know All sort there

Lee Belitsky

We've holiday. we're what in There to and pressure the for it and our quarter going baked fourth talking year the end we'll next continue. for which for pressure. - Nikic that of there's thanks layering got talk we're sure much. Tom obviously budget of about Alright, is about for Q into but the wage at to Best very luck definite it's quarter, wage

Edward Stack

you. Thank

Lauren Hobart

Thank you

Operator

Saad is Evercore The Omar go ahead. next of from Please question ISI.

Omar Saad

and the opportunities some Last you've changes and of guys have these technology digital. opportunities I to need announced made. a made questions lead efforts ask kind wanted with couple question. offer Thanks and the of for you tech on you you my on update taking love of the new year to changes

maybe I recently the of just going web app, platform, digitally to are the Thanks. you relaunched new you're the what kind help us update how understand of think what's on on maybe into some new you guys? capabilities there, deeper tied

Lauren Hobart

of is make Paul's we which has think under an checkout experience. been leadership better giving still last We improved we're customer and that in standpoint we year. QX doing had, the we to in stable issues new the from a standpoint that and site to resilient worked volumes much of both had year had platform, experience, speed mentioned go site from how that technology and site with we hard the technology has last then were you have the had incredibly digital a on QX terms gift runway team are know keeps peak digesting in a in incredibly launched January we we we to some even more incredibly The had pleased of of terms and last make

say where digital approach mentioned we I we're team, the the of and an and working to marketing As eCommerce digital company system still entire aspect entire significant beyond set. it the spending with drive on working marketing it’s a help the pleased that's and the we're enormous is digital in first the channels brick the in mortar team eCommerce so and in technologies we’re investment on product the both filming of would our and is focus sites, amounts very

Omar Saad

digital I content may, any Okay, that’s about talking it's you update update but give followup a Under helpful Armour if the you an us in how lot ecosystems of one seen for shoe, could the you're and guys, think on just exclusive maybe Shoe? that doing Rock thinking We've I about product?

Edward Stack

that pleased product there but in runway to rock. so think not we to is particular that the specific going of a in like that and Well, with give lot that shoe we're a we're

Omar Saad

Is it Ed? exclusive

Edward Stack

It other big mean has Armour that. we're is people in completely site, there some player but it, Under not on a are it have that their I exclusive,

Omar Saad

Got it. good Thanks, luck holiday. for

Edward Stack

Thank you.

Operator

Ciccarelli ahead. Please of is question Scott RBC. next The go from

Jonathan Livers

next the then wondering if the about has how guidance Hey, thanks was significantly, your down strategy wondering color Scott. could actually it given Livers was store going I CapEx my and is come morning. This for XQ into just some generally thinking Thanks. maybe on I for taking Jonathan around question. you Good give you're year?

Edward Stack

around latter is CapEx get there million in fulfillment our bring to technology we space, did that into the that most that we going ago to kind down that eCommerce had to into next of year as our openings, about next look of the into store about to it's we and differences year, fourth of the so like going well of refix There slow quarter openings forecast where respect around stream CapEx thought be were guided Well $XX technology there. going they're timing stores. now kind some new generally may from we have we programs of eCommerce continue store expect more With pace and some are savings quarter first we new as the million. $XXX and $XXX of part to time of the $XX the going items some in million would do of those continue we to million in

Jonathan Livers

and always eCommerce you on there are is point could is scenario for That is it. Thanks. a always from be no mix? the orders the around some making a just going very you're stores longer in or there followup if eCommerce is to helpful I fulfillment, where quick Got perhaps future it shipping

Lauren Hobart

is have so Lauren. we inventory our and some up open going maximize - to all We Yes, important. this our us will mix is always see to entire is not something balance availability, that customers right of getting it's allows away. we and It that believe

Edward Stack

us or out all allows the Also shipping as the the couple these to we Thanksgiving allows having customers faster. big to into shorter that maintain so holiday and surges we handle get of orders get all Monday seasons, windows Cyber shipping locations of business peak get a to it XXX it's to between hard of the buildings, having seven

Jonathan Livers

very Understood, thank you and much this season. good holiday luck

Lauren Hobart

Thank you.

Operator

from Poser ahead. is Sam The question Please of go next Susquehanna.

Sam Poser

to have more the Thank wanted Heritage participating a in do that? function, answered. been in if some are these how some of of about back see you questions, apparel, apparels, handling coming I because ask lot want most were sort fashion you're sort you my your of to of but you more like of taking brands the for versus

Edward Stack

we've got know lot some that got that a a We grow fashion not has that of forward. we're the we're going talking brand is now champion are and right in. play component Fila, champion will pretty I doing brand it's We've work doing with so that this with there Puma. been team we is we think I the significantly with but terrific, some, will the been mean great, so

we a side, enthusiast in forward. product be that been, will with really the on going we've are from see Nike bit are fashion for the And athlete that we've Nike, looking We we that happy brands. assortment about then always from it but that focused that little coming as careful more we're really authentic athletes got fashion Adidas, those

Sam Poser

sort have in do just just guidance? housekeeping, that's have what you the share now the and count you. secondly other Thank you in And that then of rate the guidance two assume what's tax

Edward Stack

call on later. moment. Sam, with and we follow that little I'll Hold up a a could on bit you

Sam Poser

thank Sure, you.

Edward Stack

Yes, no problem.

Operator

Feldman Joe from is go Advisory question of next The Please Group. ahead. Telsey

Joe Feldman

wanted are would accelerate Yes, and did impact hi be ask guess, you planning or inventory Good you you some I there anything guys. are your constraints any I for why tariffs to seeing to you it freight morning. that of that how because on related overseas coming or is about inventory the helpful? the

Edward Stack

a freight of much is It’s speak November of for really coming anything bit to quarter. for January, not in of accelerated little the

kind of that and vendors cases it's to and with announced are prices will devaluation As areas we're and the negotiating play our profitability on it out we attack got to absorb our be ways, over year of have now, point. to at and what some hard been some right a in impact to or hard in there's offset number next better China can out tariffs But Yuan get we've different year of we tariffs some that sales the got of in come or have the right the that we'll determine this since some customers course will of of now of will bit will little that have our concentrated some lines we our to through of some the way. have that and and going pricing to along raise

Joe Feldman

next we've A And going brands private for tariffs are to place and the current negotiations in respect with got are the going of but brands brands to forward right impact. what to with We come it's to the our it's and again Edward on your tariffs? what meaningful handle determine in down the there it, guided factories the do year about now, haven't has not to us that, based it's for can to that obviously not remind with we lot us how know own Stack a you going our exposure that is it to to specifically -

Joe Feldman

you That’s other what I one And if are the you team have or helpful, and to license comfortable at are categories box the hunt and the productivity box expansion of terms one, maybe size too or box? sports could and the baseball would of and different that category still you you with it with normally say this, of flex you still fill guys and those of followup given apparel understand been removing of to thanks. I pretty the rethinking with still out it maybe other get you like get early that in the all some but the just it

Edward Stack

to we pretty that the with category sports comfortable there in feel weather with big we the upside as such northern have this, haven't we've of right category. that the space a markets cold better baseball We we take box categories we the offering that there another to box feel that think the got area, and provide we got particular, in size hunt and that of category the just business were outerwear were enough provide that markets able test we've is now one license the ability we a the constrained that out piece felt have to as athletes team to is and expand been key we

well size box. the comfortable question, answer the So of with your to we're

Joe Feldman

thank and Holiday this luck Okay, you period. with good Thanks.

Edward Stack

you. Thank

Operator

go McClintock Barclays. is of question from Please Matt next The ahead.

Matt McClintock

or several main is of better for it growth thanks been it's assortment, yes, Hi CALIA that to for brand, that is new of and is and because as given are just drivers or Thanks. couple now of Ed, years was the years you've brand positive is we type focus a question. second comments increased we style pretty could now expanded for my if the brand it a several morning after years forward what I taking awareness? everyone good growth, it look innovation, on the of wondering it

Edward Stack

to I'm about There's genesis continue the kind let her her of from answer be really to whole going and CALIA excited you. the of that Lauren bunch question a CALIA team we was and for really of

Lauren Hobart

going it new in we Yes, keep it's finding drive of an and CALIA its and wear future the it's brand fabulous and plans grow getting job that and new relevancy we it incredible driving of the grow. also to we we loyalty own should doing people have product, about just so and product. story the we the loved has keep think expansion has been in continues been to product is been categories, into And have who ways gift of incredible to you product brand, a as user type been a give success products terms the the itself see, fabulous you it heavy it will myself just a of so by of it's as talking

Matt McClintock

you Thank for very the color. much

Operator

Kernan The Please ahead. go of Cowen. John question next from is

John Kernan

morning right, Thanks and good squeezing for me my taking All guys. question.

Edward Stack

No problem.

John Kernan

what as driver, other part in there business margins for stores make profitable? investments little become gross higher opportunity drive of wondering more the Lauren, the margin and just growing operating fulfillment can you is the an a line its eCommerce in I'm rapidly more to would talk know to you on in with areas point. business your at this We this

Lauren Hobart

gross between have a where look for do indifferent versus at when we taking absolutely other goes grow There we and really experience overall look increasing store there in margin part the profitability was Yes, sales preference get as maintain that very and where are that control more we this part so in. for we was business terms are reason of the they profitability eCom come as as of sales, don't eCom we highly into we profitable, a focused site is in-house mentioned the on we leverage shift we're but earlier working much we our in look we on and profitability. expense and SG&A, and

John Kernan

you're just up follow sounds then from into the like free cash but some there boost CapEx maintenance question, growth because and steady going it's flow. rate a us where you year forward a obviously where on slows last you big can guiding shifts Okay help what to think year run it a or are year going next year, to out is were you understand this Lee store of CapEx as level this

CapEx You rate more run sustainable? could for so I'm going million be of generating wondering $XXX year, this almost over forward this cash is just for

Lee Belitsky

Yes, levels it’s certainly probably a year's little bit last low this year, but it's closer much year. than this

John Kernan

thank you. Got Alright, it.

Operator

Please Adrienne is Wolfe The of question Yih next ahead. Research. from go

Adrienne Yih

quarter similarly with on much. seeing, morning. if actions line increases Good many trade as estate and you general to real three on taking well. into just wondering first portfolio are how years then fourth real you over rent year, coming quarter trends actually rates?. you so just Thanks question do for And and over the have the my shipping cost the the during very that actually item? inflation you Thank I air was lease pressure next could in heading then up regard next talk in about

Edward Stack

costs increases increase, seen Okay, increases freight so got the fleets rate. so of side respect that lot to to on, we've have those options but next really inbound the side XX do and have those so doesn't seen much stores carry rates experienced there. down a outbound we many process air not with have in we impact year XXX required very those We dedicated we freight store because we got opportunity have manage meaningful With we've due on coming leases little aggressive to so in the freight we that year. very each in particularly to expect it a inbound we on us much, there, have into freight, have but

Adrienne Yih

Okay, quickly great you what free on thank orders really are very shipping and the currently ? percent of then day much two

Edward Stack

significant Yes large we than very half. got a amount, more

Adrienne Yih

Thank and much very of best you luck. great. Okay,

Lee Belitsky

you. Thank

Lauren Hobart

Thanks.

Edward Stack

Thanks.

Operator

from is Please ahead. Duffy of next question The Stifel. Jim go

Peter McGoldrick

You was for with to improvement traffic, detail sequential any further on McGoldrick my between split able Thanks you Hi, on store taking there I for questions. and traffic the is this give eCommerce? and retail curious is pleased Jim. mentioned here? ticket Peter any the had breakdown, are between being

Edward Stack

we so that We haven't in doing today broken past, either. down the won't that be

Peter McGoldrick

driver traffic traffic marketing to story enough, benefit is well Fair of as or that driver you traffic about as a in invest how the digital site a site on that primarily does the as marketing

Lauren Hobart

are both to site to Absolutely things research omni a and different we returns an we on look our people up the in doing digital all so points very of funnel and to ultimately ends return store that on are shopping and different in doing stores omni basis, traffic we the of focused to the of are purchase channel. drive them and measure that the some digital in at

Peter McGoldrick

if hunt I products could on electronics? could this margin this or pricing further detail that against in you Is called merch a you future? something the is thank Okay, and any expansion, and for out improved you excluding driver the on give on compares is more function easier build can there and just one the you of

Edward Stack

We so we think product cycle forward. build on think forward, can good going going it's something the we is very

Peter McGoldrick

you. Alright, thank

Operator

The question Please from comes next Lyon Camilo Canaccord of Genuity. ahead. go

Unidentified Analyst

any you Hi, on since taking your consumer? have have [indiscernible] questions. brand and floor outdoor thanks response and brands space is in of based launched you own from our is for stores the This available this the Ed, have on number shifted the brand positive you for initial seen that Camilo. between the

Edward Stack

XXX footage those be to year. primarily so, is will we didn't launch pleased with or were exactly all stores, limited so Yes, mostly of there. stores to to sure or so stores next We're and roughly stores. easy seen we're I'm how business kind test, move XXX bigger it a part think XX far. the response It's many, not and very the with square so some, This number of this to was it's and but they our a pleased a in going forward we we've it it to of bigger in

Unidentified Analyst

of launch product the private provide can any on second can any you'll more next for the provide category the fitness label that color and Thanks launching? for brand is and question you on type you mentioned you think that I color then my be more mentioned you on earlier year,

Edward Stack

more but at call. or first either Not this we'll at quarter second quarter talk call about time, the

Unidentified Analyst

Thanks the and good rest for holiday of the luck season.

Edward Stack

Thank you.

Lee Belitsky

Thank you.

Operator

Please from go next The is Svezia ahead. Wedbush. question of Chris

Chris Svezia

everyone. out headwind category, quarter the, electronic or no taking a longer that to question. still next the just you the clarify good of at going true? to end I anticipating for the Hey, fourth so are on year the that of it's morning guess first Thanks just is

Edward Stack

It significantly. will be really small, but the headwind will subside pretty

Chris Svezia

your specifically just specific maybe more how bucket we rank isolate other or to I merchandise on merchandise Okay, and in to you can margin hunt or for in that something, the clarify related what to mix the any just clients clients you Lee is the that's the the dynamic just and to in component that way maybe to electronics, one merchandise can doing guess quantify priority margin against you, margin?

Edward Stack

us I that's merchandise and driving reduced for aspect of margin what's that's the growth in that margin. an important between mean really merchandise promotions

Lee Belitsky

I those last basis average. below though is hunt company roughly talked category quarter that about the XXX points that

Chris Svezia

fair merchandise so Okay, say it's it's margin significant year. of the so piece this that to a pretty far improvement

Edward Stack

that know categories. categories significant margin go number are we've of but a if in don’t it's had lot had expansion say meaningful I I pretty would piece, a but we've forward

Chris Svezia

and occupancy okay I leverage I to in pieces we that metric question forward? be kind look we I is remember sales positive, the the have growth occupancy, can leverage of that here, That the think is and Right, two changed as last a or comp and but how one day at what point we is move has back what helpful. metrics know here, it should lot look just you business, but or when on or comp used back of point a there is should about leverage at at will be the SG&A you XX% of kind how I in just, lot know step moving

Edward Stack

won’t to it's, down see I we're every much, the you I expenses say down that be low but know still for single can quarter, the would it's low were digits them You expect SG&A range. in quarter.

Chris Svezia

total you it leverage the single low in So to SG&A of occupancy fair? comp begin is positive in company the digit

Edward Stack

yes. in total, Company

Chris Svezia

alright Okay, understood.

best Okay, holiday. thank you very and much around the all

Edward Stack

you. Thank

You too.

Operator

is And last question Steve go ahead. Securities. Guggenheim the today Please of the from Forbes

Steve Forbes

to on wanted focus Good gross the morning. implied I margin. XQ

so can or the will what think some for offsetting we as maybe flat if helpful? XQ just speak quarter merchandise think the to would magnitude the year, color and of on right be the in I ongoing you anticipate you any that the change mentioned be you pressure expansion or margin

Edward Stack

we cost week calendar in those we've as $XXX have well. and fixed in working within and and have we a what million us, rent to Well, the so got we due quarter shift as network factors fewer fourth offset to about have both less sales against distribution two the one our

has becomes profile So overall significant to then a that's well we de-leveraging. for drag us. much the were business forecasting be down margin and bigger quarter comps due the business which a eCommerce fourth of us expense. kind part the for in lower the piece And are obviously of last the as And is delivery to that a primarily

they So three quarter work in a factors in those way us did earlier all bigger than against much fourth the the in year.

was from a for profit. was perspective of fact calendar the a six As shift regard cost gross to with leverage favorable in the year that months favorable first fixed matter the us of

around biggest quarter being the item. turning fourth with that's the So

two, then of piece rewards, us - So those the last we've the in against got timing working of the those change there. main are the drags the scorecard that the expiration are it And the is there. the of is points

other in merch reverse $X way. about be to about million QX margin and million going that's picked $X there QX of the in we up So going and

quarter we kind of So kind of to fourth year of picked again that which benefit quarter. anything we've them of benefit kind forward called call up headwinds items structural in we sort out and got lot we've some third and picked the a don’t - of, are of are I'm got. They of going really had up of the the not of some going indicative calendar that we've half only that the in first

anything So has structurally margin the to we quarter, for rates there's with fourth it's timing. think just the wrong don't with all do gross

Steve Forbes

you where brand if that penetration, it quarter a how on remind private is can private then penetration help us and penetration does? rate brand quick followup just the by And then us rate, differs with just running year-to-date

Edward Stack

but we're to penetration continues more our private to to get going We're to not not increase. go happy that, our of going brands, we're So into by that competitive reasons into granularity than with for granular too level it. quarter, but much get

Steve Forbes

you. Thank

Edward Stack

thanks. Great,

Operator

question-and-answer Stack session. concludes like Ed over remarks. back to This our I the conference for turn to closing would

Edward Stack

forward the on today quarter I'd to results. like our fourth joining call us and for about look thank Thank to to you. everyone talking you

Operator

The conference presentation. has for now attending concluded. today's Thank you

disconnect. now may You

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