DBI - Earnings call transcript Q3 2017

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Operator

Hello and welcome to DSW’s third quarter, 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I now will turn the conference over to Christina Cheng. Ms. ahead. go please Cheng,

Christina Cheng

October in morning and today, to release we operations the period results Good various note conference made of remarks detailing and third to materially by these call. of indicated public about ended XX-week company the forward-looking Earlier issued expectations, various including for XXXX. and the you. assume the Please factors, those SEC. DSW’s constitute release that these statements. update plans welcome no future quarter the from XX, Results prospects statements. today’s Thank those with a press filings obligation listed statements our or may due press forward-looking differ We forward-looking revise to

Jared Financial us Poff, Chief Joining Roger Officer; are today Officer. Rawlins, Chief and Executive

to call now me the turn Let Roger. over

Roger Rawlins

good Thanks, and to pursuing am I we our brands. encouraged differentiate initiatives the progress morning. Christina and on are grow DSW the by

us track. are Our we on results quarter right give the third confidence

Let me share a few highlights.

drove comparable entire DSW country. a the Our low across in team sales footwear challenging conditions single-digit merchandising weather despite increase

power the our balance are outpacing Our chain. of significantly stores

exceeded kit our sales DSW Our expectations.

services lab part to-date, of has in results the their our performance At to and Our amount quarter for we have post clear This based new new store the Ebuys. continue continues moving long-term new expectations on robust inventory. of pressured design center of during completed store and to fulfillment consolidation out tempered a DSW’s testing slow sizable and our the we started loyalty validate of to re-launch we results Columbus programs. the our Ebuys, as

as liability. goodwill value and have we intangible the assets carrying such, As well as the earn-out remaining of reduced

and third for to discuss our our remainder the the Jared floor of over quarter Let me year. outlook turn the to performance

Jared Poff

Thanks, good morning. Roger and

driven comparable quarter flat revenues at to segment. DSW by by sales the $XXX million increased X% Third

comp decline partially $X.X line X% exit and X% Gordmans. planned store modest revenues from performance acquisition Our and revenue top third year-to-date ABG our offsetting billion, our expansion quarter to a at brings a with increase lower

includes Third net with of primarily quarter goodwill to related Ebuys. share the associated intangibles reported $X.XX totaling charges per non-cash earnings of impairment $X.XX and

adjusted per earnings Excluding to to last compared rest compared these of last share $X.XX The adjusted were will year. results. per year’s earnings per our GAAP share share Year-to-date, $X.XX of to share. refer were $X.XX items, comments adjusted per $X.XX

the closed which a start with on X by sales Hurricane flattish were opened where Accessories total at two important quarter as quarter. with in Shoe boots for September Comps due October We and the the to our low-teens. Designer segment, end XXX exclude of temperatures Rico, locations Warehouse low warm Footwear consistent Mostly the in during comps X% middle warehouses the of range. of during period. and Let’s remain comps selling the unseasonably Maria. softness increased comps. our the two locations in increased turned declined closed warehouses new Puerto single-digit

of With back sales the of the seasonal onset more October. have with improved starting conditions, half

hours readiness quarter at of Outside inventory to gave incurred net estimate associates our program the XX per field Puerto to foot damage Rico, We storms. year. XX approximately the quarter. receipts the the of we our weather-related our within of to While disruptions per X% amounted minimal conservative share and disappointed fortunately Success team for this to of of account all position emergency slowdown basis we impact property XX liquidity for enabled and impacted with last us comps leadership the hurricanes various boot square points. below flexibility manage negatively and by end $X.XX our were first

of progress we encouraged key with quarter, initiatives. some posed several in challenges the weather our While were the growth during

and demand in quarter the better assortments. non-athletic for with target we women’s business women’s athletic our second achieved our a row, the balanced For between

to have strategy. transition and in receipts footwear chase pleased We the of with started seasonal our are women’s results

a demand digital rate. continued with XX% growth to accelerate Our

drop-ship inventory records redesign, a this to site digital in recent quarter. in Our mobility for and growth online enhancements demand and conversion drove significant set new increase

our rate active with balance the XX strong closing in sites the exceeded In the quarter. on number this grew Power chain, users the at After addition, app of to a mobile monthly gap year. of chain demand balance very of our last group with tripled the the performance

will our on disproportionate this focused Power momentum. are driving importance these with XX and of group, the Given we remain excited results keenly

categories year. delivered kids Currently, our exceeded plan comps kids and strong positive Our anniversaried roll of have to X across customers. by warehouses from this even all to was both business and new the the of XXXX. DSW we and back-to-school Demand this strong plan existing balance Phase rollout chain we as our XX%

to recapture new this for sales Hurricane X% stores the this impacted X locations XXX year-to-date and closed by QX X% ABG by and ABG X performance We are comps of keep Turning increased the and last Revenues markdowns total XX locations against X% adding group exit planned we sales, decline. Group, inventories Gordmans. at by quarter. with in XX% opened quarter. encouraged year’s declined by while profit even lost gross points clean basis a to activity incremental the driven

acquired operations XX wind year. through the the operate and year down were Stores to end the at locations We the of Stage end the will remaining by Gordmans of to expect continue that

inorganic inventories. around this as the slow however we for growth, through me year-to-date. to X% increased negative profit substantial XX% Turning Ebuys, Gross took Ebuys quarter amounts with markdowns move by and quarter of was begin moving revenue let discussion to from sizable a

we During sustainably economics of the the the encountered at support that have its legacy right sourcing goods cost XX model. business challenges and months, last

best believe valuable simultaneously have still we end, of business. Ebuys We how To almost that net to intangible assets the strategy, $XX globe consideration the growth expectations new acquisition million fits multiple assumed go the which have losses up non-cash and DSW’s go across growth it moderated simultaneously in and unique. leadership forward model of experience we and on deeply within of evaluating time our impairs the have this our installed revised contingent are impairment Ebuys business. such, at remaining As resulted all for marketplaces expertise and and This and expectations liability. of shore operating aiming forward serving at operating as the customers while and this goodwill

Finally, we in $X.X from Town income equity this of investments recorded million quarter. Shoes

Shoe operate of the locations We XX total have banners. Company under a Warehouse XXX Canada addition Shoes to in DSW warehouses Town and Shoe that

Ebuys more for points XX this share last basis for than total me financial XXX basis of QX details gross generally expected accounting decline. with Total as lower company our the Let in company. margin points came about performance year,

omni-channel our driven to disruptions point gross fall, and which promotions invested planned a with performance by contracts This driving quarter. was our marketing was promotional expenses marketing XXX largely Our activities and shipping to margin last pullback to higher strategy more due weather on in ground this the focused increase core maximizing events We from in profitability share which gross basis ultimately positioned at quarter greater during margin most lost extent and makeup year, a significant in to business. this market drop-ship. fulfillment lesser capture of

On the growth and increase and last Our mid expenses and and We QX due increased basis in while first DCFC expenses lower basis, our this gross costs EBuys. single-digit leveraged to fall rotation this during existing a expenses year-to-date margin XX members the in was past technology clearance marketing new expenses a low points XX remained by last activated flat transactions the integration due year. ongoing spring. to basis occupancy single-digit to selling, elevated by X% campaign compared quarter, to more points, of the marketing incremental shipping the investment marketing. planned Operating drove

our of few X% driven like marketing expenses increased points. savings I and by rate on SG&A our offset cost expenses benefits by sheet. As a XX from an increase percentage by to initiatives. a our spend basis would IT balance sales, minutes partially de-levered our by operating Year-to-date in

Our inventory from season. weather us absorb gave choppiness cushion the this positioning to the

react position liquid, risk. Our chase wear which buy goods will now with demand now, us remains to markdown better to capacity less open-to-buy and

and are we $X distorting cycle new balance the other new chain for million. and for a we supply CapEx IT, market to are entering includes $XXX spending Cash fashion inventories million $XX equivalents to the and Our tells forward. and warehouses cash of experience appropriate opportunities million go business us our increased projects.

We are year authorization. our this $XXX million expenditures back dividends in to we the spend levels. We $XX share XXXX, Since and capital quarter on for of repurchases. brings XXXX repurchase and track in form remaining XXX,XXX million million back $X over $XXX have million on shareholders which shares us share to to approximately bought have returned this

perspective on our our outlook. share me let Finally, XXXX

the in that weather advent more cents us can While of opportunity gives we our confidence EPS have we the disruptions, back traction with miss. $X.XX to seen weather recent chased seasonal in of much experienced earn related boots approximately impact of we women’s and

for hand, other earnings $X.XX our represents drag on during incremental the quarter. that don’t the recover we believe On fourth can we projection revised an Ebuys

to As such, excluding nonrecurring to per our year $X.XX by $X.XX we guidance $$X.XX revised share have items. full

in in full X% previous low to This flat X% to quarter Our the fourth guidance single-digits. guidance up assumes growth flat year the comps. with is comps revenue from range with unchanged

Full This expect to expected openings unchanged from to is margin lower year. X We year than also this gross guidance. year. last previous XX net is be rate our

expect and range. full expectations XX continue fourth our faster in quarter and and leverage Long-term, holiday the to approximately during outstanding we and rate in expenses anticipate basis a week increase line season profitability support selling the of year low maximize a margin shares we the XX projected lower power full for SG&A markdowns our from expenses range gross turns. result drive fourth events marketing the as favorable quarter XX% occupancy shares added operating with tax single-digit are of flattish fourth the Full leverage optimize have for in We year. quarter XXrd the to shipping to point to in mid-single-digit year. buying We and the million we inventory top

With the me floor any Roger. always, share our does turn not As back to guidance that, let repurchase activity. assume

Roger Rawlins

new vendor such Last self and partners Thanks, external the Street, mission Jared. quarter, with audiences inspire the shared our as retail we DSW’s to industry. expression

Our distribution environment. our all few of platforms brands tough in retail capabilities the a one across X DSW, end-to-end growth comprehensive like of

we can the progress begun retail our that are We portfolio. our scope to to an I provide elevate integrated and broader their update identify reach made working like showcase full on ways of strategies community through our missions. would market vendor we brand have our and Today, enterprise three to a on actively to have support

a early First, as purchase normal from loyalty over quarter, called offer we rewards are XX VIP, provided access our can products a we new other perks members. product making new services which members by program of Apart app, last shoe earn will trends even points and donation. to or to new and ahead be activity, customers. launching rewards reviews members mentioned Premier releases downloading DSW’s writing million will

elevated introducing rental. at excited of shoe new part comfort We experience. storage are include shoes and also repair prices, and differentiated and of a These handbags, services, custom-made be mail refurbishing installs as cushioning that to provide and services accessible

With proposition these an complementary offerings, needs. we customers’ will value our fulfils that create elevated

Our offering this new in of consumers customer research has voice a reason and new strong these uncovered interest very new believe traffic visit and a the can DSW, services aid drive give to consumer acquisitions. we

you services learnings and important will are keep on We gaining are our insights progress. under we these while in development posted

life various to design, age. in to which Second, store new brings warehouse pleased we be with heritage digital the elements our of DSW’s continue

Columbus of chain. in performing and to throughout store the warehouses lab outperform Our top one continues remains our expectations

productivity our our has top of pilot design new distortions additional We and assortment, will sales locations at service the mind destination. potential with year. drive package trends fixture out sized X and an store significant footwear and of make new that DSW will and next design to this the believe box existing We offerings unlock store new early expanded customers’

continue our allow believe proactive demands will and point-of-sale technology, DSW reducing to as differentiated fulfillment improve physical our while more unique to we for floor. This success. productivity Finally, customer operate and which of We creating associate develop engagement. warehouse the capacity future day-to-day in-store will and network are all our more strategies selling critical three the center of these efficiently to both long-term tasking the

identified ked can in DSW expand digital off warehouses to process digital we and to management started senior turning have brand to with growth. brick-and-mortar to believe Shoes, Town We shared we Town services existing has opportunities leverage chain planning with and strategic Canada supply grow capabilities. the significant unlock DSW’s the the Now, and and synergies

consumers expertise are family footwear smaller in tap In at of addition, the we U.S. how markets. stage early exploring into we in serving Town’s

closed we after acquisition share year. will We details the more next

associates Before contribute generous Red rewards affected customers industries our provided we Foundation to thank that the in Together, Hurricane our I members open it up natural to am support going million their Relief. disasters. for funds $X.XX by recent and communities to XXX enable to Q&A, the for raised teams Cross DSW for the and

hard made We business are closing, safe our long-term growth. a associates tremendous generosity progress and proud this work keeping quarter. of of that solid our went the we have this spirit for performance In and into repositioning in delivering

over holiday more As retail operator the focused the on challenging, track look confidence forward the reporting our season. With The right are us floor that, our success to me on on Q&A. grows the climate our are gives turn to I long-term let for having must vision. we ever we we executing remain the after growth initiatives in progress and

Operator

you. Thank

session. from And question-and-answer C.L. & with Instructions] the King Marotta [Operator begin question now Steve will the comes first Associates. We

Steve Marotta

everybody. morning, Good

Roger Rawlins

Good morning.

Jared Poff

Good morning.

Steve Marotta

couple of first. a questions Just

you call, little mentioned fashion and you in cycle the through competitively go would seeing be anything can a of all, are without what the disadvantageous? of disclosing that bit that you new middle First a obviously

JaredPoff

This is Jared. Steve. Sure,

of I pants very lot right towards where was bit had resurgence kind seeing landscape can what denim resurgence by non-athletic we now lifestyle. little are look apparel and of dressed of a think see type back of than the which far yoga across casual more much you this up very heavy seen, you and a

that’s the what even we from at things So, at that and that, that see seeing some to comps you like of Abercrombie when point the Gap are and point. comments

Steve Marotta

I that that you these understand. the roll XXXX, be there four can that as additional also quickly rollout, earlier out how would forego you mentioned store you might And about in able test anticipated? talk assuming to be

RogerRawlins

think, I this Yes, Steve, is Roger.

first four we next I and it. is the some year then time goal read of for got our to take think half to have the

results store, single day. every great in honestly, our here had have we are lab We there in but all

see know this certain we can want two at operationally, take the we stores engaged we to So, ability same to of all markets kind then the are that open because quickly have in we the make one, to. but remodel capital, need we how we have where over when time is and we quickly and have something we been move not results pretty to everyday also we and

Steve Marotta

Okay.

that, exactly quantify if EPS the XXrd Lastly, didn’t week in my get is and I apologies can you it? please much how sales you did

RogerRawlins

generally our assume typically that given have some comes specificity. we we you we that that that take some than other there. haven’t benefit relatively of and by leverage the said can pretty is flow will Steve, fixed rate you Yes. What average through if fourth divide it’s through a there quarter XX, on see and similar cost

Steve Marotta

Thank Okay, you. great. jump into will queue. I back

Operator

from Thank you. B. comes Jeff question And with Van next FBR. the Riley Sinderen

Jeff Van Sinderen

strength in I last are given athletic that the fashion of can Good same with just like wondering and how the morning. am this the although penetration it little bit versus that sounds year it’s of the time a you a spring? Maybe cycle. and just shifting you planning give year for us sense athleisure category

RogerRawlins

there have see I to think think exact we? here. we Jeff disclosed I and percentage continued we have the don’t Do penetration growth

Jeff Van Sinderen

we we again was a few percentage for higher were of are Yes, a third the but we than ticks said where a That’s penetration? year, few there quarter. points and third about it that’s third are a higher, around the we last

RogerRawlins

the share continued because our assortment. next here market we are compared as under-penetrated we of into we one, But there think head year, way is balance to to growth

there is us. we headroom for believe So, there – still is still there

Jeff Van Sinderen

that share is you eventually staying about big there and as if think strong, of is then next penetration the how Okay, wondering term more that just you then longer where a I has how are overall as become of guess part growing could can kids year, do your of you business? that sort business, anything that now really great. that on And business

RogerRawlins

We the think so next highly are that accelerating phase. we

the started this have to we in chain or goal our that our of with journey. not for when this exception was two maybe doors back-to-school. one So, have roadmap is And the

really time our customer this their footwear provides us I see than of feel are that window we opportunity we but when far an purchases incredible in but see old to their bring when a we as start a penetration, world. the relationship direction, significant lifetime, when And have past. they in with a journey dip years they consumer DSW, to adult children XX in in for before, into about this So, and it XX over we a good we way different with think the build as shared

it’s yes, off consumer paying entire work us. so throughout but that this is the and kids that And their seeing that’s kids, keeping lifetime are about about growing also we for

Jared Poff

and have to I have would shared seeing have we quarter, we to this space. kids where that footwear are not last we fund play out add the hypothesis that that adult removed we stores and

We rollout. and buy will comping Phase are excited overall category. in are anniversary are but mention basis high-teens what those we products our adult for I stores we Roger the kids the were kids just X to the of that’s seeing the continuing because that to the they using and see with also the the very were said with store, kids lift an product, rollout, same that to product

So, we upside think stores are stores more is and the there is similar a new that maturity even for curve there to laughing.

Jeff Van Sinderen

Thanks for questions taking holiday. for and my to luck of good hear. best Okay,

RogerRawlins

you. Thank

Operator

Blair. comes from Thank you. Dylan the next And William question with Carden

Dylan Carden

management and weakness you prices you? to just footwear? that is merchandising to in the in same category speak strategy accessories certain for inventory me remind Yes. not whether or and Hi, how are subject same Can

RogerRawlins

Yes.

accessories area, handbag results kind we hosiery getting. kind categories pleased very leather small late the with challenge of are stock we are in around real of has actually good and been the Our of

mentioned organizational do there year. there. have see some that around some the as We the So, call we is work changes until do to not turning have we on we half made next of first last this

are lot we it there of to work handbag is, some softness. the a we improve really that the in doing So, where direction, but experiencing are is it’s that areas

Dylan Carden

in DSW then on outlets that another of more of to of you it unpacking being a something of as or sort of that scalability like, is sounds fuel And the Ebuys there capacity that weakness business sort the kind great. that are taking with questions sort viewing? at Okay, sort just fund product. Is foreign

RogerRawlins

what exactly That’s we are doing.

figure today that to end that of that trying we DSW, through do at excess we that’s we and Town not inventory and or So, take engage out the just out the goods at ways Company, our liquidate that other can are we its Shoe Warehouse but in selling with day marketplaces. the growth brands of inventory Shoe how day all lifecycle

rather there And large and we to way so efforts the risks focus that had we trying going out the than are in taking our half. inventory first

Jared Poff

we or for our better comments, footwear future expectations. obviously the positive his comp they what And Dylan. our working kind look what Roger growth piece quarter I those to of I up when challenges subjects, assess of and on in do we initiatives was all would than I at brought had of our that get mentioned and core Yes, mentioned, we comps at performed positive, can as the point Roger what two fact am strategic you are as counting add And strategic glad the I with.

trying medicine and have with two and and few on on that it GMM and now our that is ago Ebuys that the we have got as a biggest have with started a and are DSW EBuys new business that balance fits how get know you months accessories tackling the right-size to challenge as mentioned accessories and the we to some and she is overall we we areas We right portfolio. back the it sheet into head taken Inc., that’s

footwear what’s I pretty in the the side. on two tale going a excited for am but core which of kind So business, of is cities,

Dylan Carden

Thank Great. very much. you

Operator

Thank Bank. you. Paul Trussell comes with from And the question next Deutsche

Unidentified Analyst

on Hi, Paul. [indiscernible] this for is

prospects speak about into and moving temperate what to XQ the the improvement besides business. always you that with weather seen moving and colder kind business Could you see So cold in into the improving XQ the have boot for other see you you more businesses weather for next you that growth and do do spoke of year? just weather,

RogerRawlins

question. great That’s

our make weather business. the part when business really in time us for is And part more driving – really in I early October late So, that that that’s mean, was really seasonable of October when something that the became that period and our holiday. was make we our progress. August of

the that was in negative the hits was the it early September two there way for Throughout we warm compared relatively positive and that October comps we day-in weather. time could volatility period, driven and by had see – that’s weather weather actually comps that us embedded the we that remain and performance was third the of category we those strong quarter, late is we had but in fourth right as have and saw significant now clearly the So, running to that month the quarter. were to continues opportunity tale sort we the creates with real flat, real months, it performed was within how where in boot we very When day-out cities. each September, upside that quarter of

Unidentified Analyst

Thank you.

RogerRawlins

welcome. are You

Operator

McKeever you. Partners. from And next with Patrick the comes MKM Thank question

Patrick McKeever

everyone. Good Thanks. morning,

the where just on of or the my the and and second you is quarter as is side are stores sales some are just liquidation the opportunity the how am there Just the a sensitive if is much now we with third the thinking I in the the much way side, the question business an either on one on specialty the terms And perhaps – on side right trends? And Thanks. then market in the in to weather of closings had are in how you as some on department of store some the sales also fashion about share boot positive think cycle competitor of question wondering what the do space also there is think store some you store other footwear, and both in more fewer it and closures. fashion-driven stores on say that all business impact fewer with or there? the you are of in much the call-outs of would but how negative out

RogerRawlins

Patrick, with competitive I Yes, will start the landscape.

that I of think we people I think all you of actions months, the have pressured data that and our transparent ice the have over temperature think to we retail, share get I but have. being that at think impacts last, very footwear of say melting. I has grabbing that in been not the yet the we XX the continue taking see we continues – are growing least has been and challenged view to give but seen analogy we been would That we some ice have market category are we and rolling we and and are churned in do up

you so And warehouse it capabilities though vision tell that the good feel have others strategy how us we do do and and technology customer-facing our about for not do pretty our comes re-launch with mission, with that we the deliver consumers. that capability we the mentioned allows we take us of differently kind I in rewards leverage to direction, and our opening engage our will our comments, leverage offers our I brand how then on, to program do to that how back

we landscape. regardless DSW, are the our in results of We brand headed We And believe the demonstrate core in what’s direction with those for DSW are think I the brand. that the things. competitive doing happening

So, are weatherproof season, boots it and given our From perspective, fall headed DSW. boot how how I think you to they good business, that’s fall category sales the differently the perhaps out are still feel differently challenge when it we spring in periods during the both and that figure you we weatherproof largest the going get figured sandals you to category also we have think fall margin the is boots completely see us weather how highest merchant our got got I with all but both we about despite we the are team is and can’t on have pretty to can that say out and a direction season. our and do we in about in these we think engage

Patrick McKeever

Thanks.

Operator

comes Thank from you. question And Research the Scott with Buckingham Krasik next Group.

Unidentified Analyst

only for on Scott. is This guys. Mike Hi,

points So, XQ? down expectations your XXX guess core how basis margins you compared now for merchandise original quarter expect that for and the what so roughly in were then margins the and to I merch drivers

RogerRawlins

Yes.

So, I in mentioned with line did bit category. very would and in was important when Matt a we marketing was gross mostly down reactionary saw margin that We some have say as promotions of I little slowdown boot expectations. of add-back that the

an was of somewhat with at hit, overall expecting. came that but incremental So, it relatively line in were what we

the to in are up the third flattish bit are for we about to quarter. margins be fourth XXrd again little half decline a last saw so we leverage as year but expecting actually also week we down are to expecting and quarter, occupancy gross probably a we some merch slightly fourth have quarter, we margins For expecting that net-net

Jared Poff

I more we think to planned shopped had while. I margin challenge also to in in because that, the we faced share aggressive had us to wanted LY that consumers not will a we who Yes, than get QX much communicating

e-mail mail of in campaigns the that or with DSW out get would back drive So that result going direct real into out with either we I happy that. am the customers there brand, different active

we transactions that, we QX, QX to margin but single-digit hit our for took compared in progress in had or were the some we QX. in actually mid range, increased Now, so where was that

that challenge what So, not the really marketing we again shopping customers but the that margins, had investment drove made is us. in had we in been two

Unidentified Analyst

Okay, going then you business kind great. to comment I sales for guess of to long-term forward, your guys able Ebuys another on a one would margin and more have be constructive you business? And expectations spoken the

Jared Poff

Right kind quarter. the dramatically assuming are fourth still things don’t that, change we that now, of for

no – sales projected at quarter got relatively margin and gross have we flat operating therefore gross again flattish So, slight a fourth for it and so loss. basically

think the be them infrastructure we that, are longer best operating that that right said, are term assess to something looks different as you what trying at know DSW overall can what and fit we way really I Inc. now. to the Roger different, feels than into

why but feel I as assumed moderated uneasy really on long-term views, obviously, we which the we originally have get what the balance to had actions is we sheet. took a little we did So trying

Unidentified Analyst

when then performing you delay business wasn’t start expectations category weeks squeeze if at you the and I the And spoken what of as few the have Did a back quarter? well more, to boot September. guys beginning from seventh, could they been cancel that’s Okay. to the for good, these just little the in just your one late here, wondering in October, past aside are orders guys half kind of of doing for or XQ bit

RogerRawlins

reacted our the has appropriately. Matt, think team business to I

inventory across we is positioned just I on square good the boots, our a as was per head which of in Our not roughly think into business, inventory based but place X.X% is and outlook our very for why QX sort down QX, in foot.

open despite category we clean are to our boot pretty of some buy. inventories in So, had I and the think even the kept challenges actually

are in mode sit done a really and how as more around I our of has here would that today. it mode is So, I job we through good other I we the and chase prefer than managing describe the inventory team in way think would us now

Unidentified Analyst

Okay, Good luck the great. year. for Thanks guys.

Operator

next Thank Svezia Chris you. question with comes from Wedbush. the And

Chris Svezia

everyone. my morning, questions. for good taking Thanks Hey,

saw into capability that in when QX how maybe maybe Just weather that that’s categories Roger that compass you able and chasing into where on in favorability, you are about little a and or to what in to not churn are we have it just follow-up be your category that pertains comp a thought as talk chasing the more or some is fourth outlook? can or question, chase for color you talk still to chase you given mode, chase might boots, margin about the to you build still to classifications on and that and some quarter prior being

RogerRawlins

critical trying because be to boots are would spring in or chase as right more two seasonal there the plays about every areas one for the sandals, top we for brand three now, into and how boot aggressive two say we in part most they business our are category. we would I where the major be to retailers obviously, are head so of categories, that boots of and we success just one the are or

when of our to partners look, vendor us get in our ways product, can product conversation one warehouses have we So, put get have opportunity we they to product. say us with an find more a and

is able be team So, I that chase. to positioned merchant to our like the fact

expectations. kids. I boots our one. we then the I outperformed say in on because category one kids table sales So, And would know other the it’s left is is have the

I one its to think find a been have and size. have little I challenged also home at we

for our closed have that we our we consumer lots and are of certain merchants I those conversations had we that looking in part an to depth of think that product buying doing. So, with are are of kind to outs important categories that for is ensures of in there what we make both the keep able

Chris Svezia

is some factored comp that quarter? chase process around to to of for single-digit just clarify as low thought into the fourth the And Okay. flat

RogerRawlins

Yes. positive And has delivered consecutive core for think about business the you quarters. two comps women’s when now

everything in say women’s. category, So we just I am to not the it’s are going boot it’s that doing

success X last had the had in We haven’t with we years. like have

are comps. all pursue we So, through fourth be things those going able as be going that we are to drive to of to go to really

Chris Svezia

– what’s XX, Power those and that? on I how what’s that add just the color performing overall the about base is and guess DSW some are QX can question the around thought between delta or stores if Final you I spread guess Okay. the

RogerRawlins

Yes.

where say doors you really in to one replay time back this we performing and I we were And was stores really power X chain. to after year worse those ago, it were those than areas. So, got the balance of if X two points would

where job best it talent time second were looking organization we got the product fourth X headed really The manager on, and went in kind did we were at those And the non-power the also they the improvement say where retail power first looking And into entire them merchant heck and field basis. to through visited was with in the those regular point were are going That whether the was to our that now there customer out quarter about in significant I have and of of that really third doors average the us we the we team upgrading not than have or doors better equal points was – And see our locations. quarter of the this to to it and a talent teams have foot those was that as of into locations forward there. would in We all started was on when took through balance. at locations product. X we the around in transferred and unit one and and in could we locations talent that performing markets, consumer. a those within did get to seen see that quarter while those was each

So, it’s XX-month that delivered. point time. XX gave they a exactly and of It’s period swing challenge the the in ago year essentially about a a we team

additional because And we DSW talk good head business, of to also which are on feeling some taking are take will what our be we when the approach that’s to are drive. going we core going into help we the our think as about we so XXXX, Power that those learned why it’s marketing, and and balance so with we have we XX us about turn organization to

Chris Svezia

to you Thank all. very and much Thanksgiving Okay. happy

RogerRawlins

you. Thank

Operator

comes Lyon Genuity. question from the Camilo with you. Thank Canaccord And last

Camilo Lyon

Thanks. everyone. Good morning,

RogerRawlins

morning. Good

Camilo Lyon

here. questions few A

down on Clearly, I have key turn the planned supplies than partners you ability Just was sticking and off the product across chase boots to finishing that fulfill boot in can topic, most? that finding that quicker think that started slowly. the that up or of the to industry. many Are kind general you chase

RogerRawlins

– decision hold product again, we and that we because out product is there available have can and community, might have get are calls vendor in phone are those intended is and mean, being and right working I or player vendor one that number the with support that vendor someone partners. make our two that been that’s the us. the that smaller we We have there will with that that’s make of vendors those found for a strength expectation we brands pretty when our position strong much

Camilo Lyon

happening the Is your going to shift that seeing base geographic comment, in the and you unfold that great. a from you the more Okay, on are within across this most what was an where broad-based just And now? that fashion guess thought country areas then from of middle perspective, the a fashion out comment. impacting of filter starting and then that assortment your perspective to types Could are back coasts to you interesting this through first? are store you seeing parse ship or I full I is the

RogerRawlins

don’t the want it’s I really get located. geographic to into where

women’s are but we we We a are retail our again average across and seeing to categories where unit the our it’s in one really within really non-athletic significant results not indication, are going and impact there increase seeing doors an again way, say power margins having is bit And strong to on chase seen we going about frankly last years that in turn the better have the like a and after we are to because well. that’s non-athletics, more we X that. that, are result as little not by we excited the be the is

Camilo Lyon

view very very in of what your incremental your services everything in like services you got them you share, days but I lab from margins new into you might am base, to I now, and think can’t what from your services initiative a the then talk about you store I about potential can sort we And perfect. to that as interesting, early incorporating of tell you've every how think that store, I testing Right, the think assuming know it��s only see is do store. any fulfilled and you longer can you term

So, the services what is expand this? as there to to do can a kind many how like and to really timeframe of you these of would thought around base

RogerRawlins

Well, great it’s question. a

landed Camilo with have the So, and I of start I want here with started how to voice we first our customers. really

should Bar. what said services I store, base our we from additional like and would our member So, to our event rewards a storage, brand we say we to last and ready where the looking repairs, evening orthotics actually at DSW Sunday and where getting attended went we Nail or are on rental be out you that’s an landed open for W opened

toward for opening consumer with what essentially share next pedi to our the our that different so. services react a I will if how in to your you there when here and other see week is purchases that think earns to be us footwear in program way And do rewards stations into incredible upside operates discounts is we I familiar an or rewards you points at what an it And opportunity footwear you or does and so that have think in setup you exciting that that us. mani will with that So, we has industry, that, we very merge rates you. would favorable are margin

that like. we how too to we early now, the can exactly operationally I to and others, will highlight started the have base it’s actually than for first it the more those shop what we Right December, our trying are than all DSW. execute with rather historically take associate the it thought facing think reason to early out in public to can we different just On DSW provide then look of financials think we you but and consumer figure you services of internally, brand a

Camilo Lyon

that with and luck happy Thanksgiving. Good Fantastic.

RogerRawlins

you. Thank

Jared Poff

you. Thank

Operator

Susquehanna. from Poser question the you. with Thank Sam And next comes

Sam Poser

I improve question a Thank it isn’t Good mean, guess, a you talk taking your questions. picture? little core starting the really you do Ebuys business kind guess you or first core one about -- move here. right I beat just of about point, I decision-making it to been bigger bit table more. morning. for you is mistake, good this my my picture have the on in on now competency everything decide big what a is in thing At to may want being

RogerRawlins

really as our would I when carry product XX%, focus that to that mix that we end lifecycle aggressively profit the process see those you say will Inc., of I are we in went DSW this of business. thought we it works, product aggressively within in head, we that I of that, where goods Yes, going can say our again because think our the that XX%, was drive have and liquidate bear we to for at that XX% DSW say bringing that, of in more could the we grow seen and product the end brands kind could with think make Sam that mix marketplaces and a life And forward. into that’s more we the that range those move I

Sam Poser

about it’s think of business more really and need to need late earlier you to now, period And talked have about so when Okay, how the Can And to get in that the stores and with you the doesn't when in and until that in your trying just boots talk you look earlier this me business. time now the you really south, your October exception you how sandals planning to then at into basically March then bring rather thank until is than business more sneakers this or mid-October boot the don’t that. you to about sandals you to a than of or need switching it, don’t you. that holiday boot wear match convert back-to-school the consumers more buy like than February?

RogerRawlins

great Yes, think Sam, its question. I

fall think even season, we significantly the a actually September. into and a I that as planned August think of was I I we headed bit throughout early mistake. boots had And think down frankly

what call the and that’s how we in our front made, but planning chain is and those area and just but do line you it deep you get it hit there that it those work too to boots, sell described, the season opportunity you for is were without do we windows, we think for the I to the line is into edits team have full that’s the smile how sandal allocation doing. earlier taking in

digital out it now, in there. a think some putting buy to getting are front that and retailer I more to markets as the our using help yes is but there responsibility and in it’s the make I now, certain drive demand there wear of So, think we consumer right

Sam Poser

you Thank lastly, a as categories are but us inventory been is accessory you. competency to to give clean, with you the business doing testing your within forward Is has footwear? things, new to just quite services. the other and stores situation a breaks again some your And idea then lab and you look can these due out optimize basis and that a challenged be of new then how on and experience lot a of new the need accessories across it where you business your footwear core the this improve have exception

RogerRawlins

answered we use I think just a question, but and focus talked yes, words about you been having. your – no, lot. tempo exactly have I this, that you Sam, have that’s the the conversation we

the footwear have about momentum righted, right on got the footwear. we continuing focused within very will now merchants that the it’s very, accessory and get but thing our We have we

Sam Poser

well today So, services your as I righted business up as so is that that it half of your real is what question on? mean some guess the accessory of eats the size footwear and and estate business is

RogerRawlins

I Yes, think…

Sam Poser

right, guess? is I What mean it

RogerRawlins

And area reduce lab of see the do about store. have some also XX,XXX and I one we services is how the cubic over opportunities, I When That kids. we of about warehouse in half, why handbag in work it’s it’s I but has we and product with the there. do space in – create we units some didn’t remember doing look, the their still in Sunday XX% are of embedded we And think in see embedded location only don’t choice got being capacity just there and And don’t now excited still evening kids so that’s to how count there this being are say utilized loaded we our I warehouses. we do accessory we particular. had enough

between versus trying to right the footwear. are which competency, what’s is So find our handbags yes, core we accessory balance

Sam Poser

going give be stores are those you Can spring? in us some idea X where the of to

RogerRawlins

I’ll you but haven’t person announced be first yet tell. will Sam, that We the

Sam Poser

a giving. very Thanks Thank so Have much. happy you

RogerRawlins

Thank you.

Operator

And to Thank return was to management for the that closing call as I would comments. you. question, like any last

Roger Rawlins

Just we in done on you have going know everyone associates have call. happy you I week it’s this be for a quarter a Thank everything to giving. and week have and lot of third great the Thanks

Operator

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

You disconnect. may now

Designer Brands (DBI) 21 Nov 172017 Q3 Earnings call transcript