SCVL - Earnings call transcript Q1 2019

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Operator

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

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

Cliff Sifford

you. XXXX earnings Carnival’s conference first And quarter Shoe call. welcome Thank to

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

weather more the warm know first sales in quarter As from seasonal shift most who our boots retailers, sandalized of like represent other Carnival to that categories. Shoe cold years you weather followed a over footwear

sales refunds, tax of a in quarter, we and timing ended inventories to best the quarter. is spring, believe April resulted the per first store the which March growth March our combination view X.X%, sales change also Average store the transaction quarter per that were sales positive and refunds, for at digits. experienced results, store With warmer a conversion up wet combined. and low-single and impact mid-single the experienced February. tax which the low-single can in single-digit the were decreased selling which up April. mind, March the refunds and Traffic declined transaction compares addition had a some we That in sales high tax the of on while We our to in average delay flat. units weather size and digits, April way a sales first for This of X.X% once look quarter’s season in a customers very with increased comparable and the Easter down essentially in increased quarter cold comp start digits. very a the for We In rate comparable said, per were digits low-single and dollar to basis.

BD&O increased Our in merchants were points did merchandise softness basis of to XX net in SG&A flat athletics percentage sales XX job keep the by a to we basis which due the us February. allowed controlling though even seasonal great relatively more inventory, a deleveraged margins points. sales aggressive as and of

you in last share, our XX points. more his compared EPS an the result, was financials by remarks. basis income per Kerry $X.XX of prepared year. As will one quarter for operating to on quarter a decreased detail X.X%, diluted approximately increase give

quarter sandals boots one and first department. comparable women’s basis. last our on quarter compared were non-athletic on by up digits Women’s sales Focusing higher on digits year. a margins mid-single basis Women’s up comparable comparable low-single was at a store to

strong footwear. April, up performance Women’s basis posting due performance comparable women’s continued mid of strong to time Easter mid-single digits period March sandalized comparable combined its store the a sales the increase. and a on of was non-athletic non-athletic single-digit For department

were Just categories. women’s primarily the sandal department and from boot increases driven like non-athletic the

a store on men’s single-digit The a and single-digit We comparable produced non-athletic combined comparable in For basis. Easter decrease produced quarter was the sales slightly a down high non-athletic department mid single-digit the increase. the in for shoes low athletic. Children’s

For combined progressed period sales are posted well-positioned was mid-single The April mid our shoes results We based up advantage Children’s produced believe to trends sales footwear for store the tax a through we the We a digits time Puerto down XXX remainder have increase athletic store mid-single months the that positive up double-digit stores digits. ended increase. low single-digit with non-athletic Easter March non-athletic comparable and also combined footwear season. on of XX take for and athletic sales primarily the a have merchants footwear combined on sales of and in basis the slightly of comp result basis. The were a March states April family year. On comparable the our athletic comparable quarter adult lower in we as that as first a in identified February the Rico. with of key

store During no and we opening. the new two stores we quarter had closed

move nicely. Our continues to CRM forward strategy

the shopper team We us market year. be our areas remain calendar sales will and CRM initial that real We specific better lives. of to expect driver estate implementation typical to convinced our our our to a holistic identify to allow will be end complete by where approach the align

the Over deal processes spent achieve our plans the years. have time growth sure the for all a next have systems aggressive make to great to of analyzing our capabilities years year five we to we three and past

in tools online chain will Carnival customer is and improving of both level and addition continue of changing to Shoe to process growth. to now in are investments CRM the building capability, the in capabilities Shoe ever next both in In analytical Carnival investments world supply and our drive make order class necessary management in through the engagement a Retail we will which brick-and-mortar, and software takes and that technology sales

our on an expectations for financial XXXX. to update like Finally, fiscal give I’d

result some through our additional a we process, this are been we As our I seen wins from positive are that pleased customizing promising. experiencing are have personalizing have we the we way gain messages capabilities with implementation quick CRM initiative. and and

of goal the lapsed, and Our finding reactivate our new loyalty any have Carnival to member retaining CRM while process loyalist. from been that Shoe has may beginning

to and cold as toward we X,XXX will in buy holiday there and the addition, fewer look boots school back serve. weather shoes be In stores markets to we back-to-school

have a with CRM Shoe for early for year. of that confidence looking poised values. share the have the selection successes that our of combined in footwear we in family and remainder the continuing large of With shoppers at We our Carnival new to win is a offers mind, home compelling those confidence that activation,

we net with We raising outlook of expect comparable in range sell first of digits. the turn the to benefit the sales now like $X.XX up billion continue I a overview. fiscal reflect to XXXX $X.XX same Kerry. quarter tax the earnings $X.XX. to over time, to and $X.XX range At That stores our my are billion, concludes would to be call expect year to in EPS now to low-single

Kerry Jackson

Cliff. you, Thank

the decrease quarter first Our $X.X million, a comparable offset decreases $XXX,XXX sales XXXX quarter May stores store was of decrease $X.X of the in due net the at beginning from partially for opened and three of new loss first compared by were decreased the million X.X% the The first in XXXX. $XXX.X May net in the X, the sales closed increase million sales decreased fiscal sales of for Comparable in primarily fiscal to XXXX. store $X.X ended These sales. $XXX.X since for ended million XXXX. to quarter XXXX million a stores $XXX,XXX from since an XX to beginning

XX.X%, higher deleveraged expense, by was due expense in our year. at landlords reduction the for Our buying, $XXX,XXX tax XX.X% This driven XXXX quarter. pass a the higher SG&A our quarter in XX-basis-point adjustment for the quarter increase expense CAM to in from XX-basis-point of a through first quarter gross decreased in of profit offset million. to margin, from distribution first increase margin merchandise a as quarter the and in property our fiscal and a occupancy by occupancy sales. expenses percentage $XX.X for We the compared sales of the as primarily a was last

first in changes increased same expense and incentive compared wages Drawing quarter expense included As quarter. a reduction the $X XXXX closed quarter decreases period last on XX.X% stores Other quarter in a the a significant earnings plan. had the year. compensation The to have in quarter the expense in million first SG&A for savings increases and expenses tax for for of fiscal was compared the to that of the sales, for percentage during resulted year. for and decrease rate in retirement these SG&A XX.X% effective controls last XX.X%, in income to in our XX.X%, depreciation

year. this share Net in year. a $X.XX of share, diluted quarter expect XXXX our we the equity to year the For diluted for be tax based QX the $X.XX fiscal to the XX.X%, quarter from the related rate of first equity increased last of benefit $XXX,XXX quarter. of result $X.X rate the to XXXX, benefit year reduction based compensation per income divesting compared was Diluted year $XX.X XX.X% million. compensation approximately full for tax to of divesting last tax during increased million QX fiscal to The over which per in EPS a $X.XX and includes

diluted or earnings For we the per reported first net quarter of share. million last year, at $XX.X $X.XX

liabilities ASC adopted first the balance our guidance averaging the the lease adoption lease of amount X%. Now lease us rent crude to information balance our deferred the remaining asset liabilities. XXX, on recognize of in to We guidance, of accounting of at million. upon cash a right leases of in corresponding form amortized payments assets right we required new XXXX. in on same on based reduced lease flow, the we quarter sheet value by and Based the using turning rate for incentives sheet balance assessment borrowing sheet on the recorded the fiscal the a lease use at an record million to use approximately standard present $XX.X incremental This new of $XXX.X your affecting operating

reduce million incurred for million $XX we our corporate $XX $X for and to With $X.X today the $XX fiscal $XX the $X.X common the remaining standard. was at capital for activities are and to actual of of a which are adding from million. Capital our store quarter million begin our no new year. shares final total repurchased purchased quarter. a year, be earnings million -- share to full various will this reported to and first be continued costs qualify little of our of longer between in million remodels of expenditures under approximately and investment of retained used first expected this repurchase remained quarter to $XX million expenditures relocations, available capitalization cost the stock for other the upgrades the be we the quarter in and investment million for fiscal expense earnings Depreciation we capitalized expect XXX,XXX on million. asset a we normal including quarter Depreciation $X in replacement technology authorization. year. expenditures Additionally, expenses which the the color one in XXXX, headquarters, improvements, In for in at million new this My related first would expected repurchased second $XX.X chain. reduction The first quarter including lease store, under be end the supply focus approximately during to comment expectations in year. first on

increase low We to expect QX store comp single-digit. sales

our SG&A While This the do deleveraging our our the expense QX expected expect than Puerto and the million. last like year where year, compensation concludes in SG&A of compensation equity make flat benefit a offset we to we buying, by I’d result are and margin. call of in last strong relatively leveraging margin stores expense expect this increase and landlord be and on earnings due small review. in QX check distribution be $X.X in two incurred year. deleverage operating year incentive The merchandise occupancy QX a of million as we QX we recording occupancy for This for financial expense. more our lease open moderately cannot resulting in will expecting more more our QX cost $X our the to increase last to a incentive contractually now compared deleveraging of our of expense. terminations to required The of leveraging an to time. questions. In the of in typical this is hurricane of during equity level allotted repairs within year, Based Rico,

Operator

Mitch from We Pivotal Research Group. Instructions] question first [Operator take our you. Kummetz Thank will with

Mitch Kummetz

I questions. jump then a my a Yeah. in. I and Thanks for got taking few bunch. will ask back

quarter into was your the am when you QX. on the miss know are guys was -- at far a March did that was reported last curious at Just I bad. April plan I trending pretty point I obviously, you expectations. think, itself, February, quarter just

Cliff Sifford

April Easter was positive because

Mitch Kummetz

Yeah

Cliff Sifford

moved into April. Easter

April was So positive.

it So our did not expectations. miss

just… we As

Mitch Kummetz

you am Okay. surprised comp at unless… single-digit I are guiding I a guess, that to point low

Cliff Sifford

Not…

Mitch Kummetz

… will be… to we seem

Cliff Sifford

was for year I single-digit even fact I believe of the said half and at we the Mitch, the loaded comp, what were we believe, would be that toward year. the a -- low mentioned it that guiding that, Kerry, back

Mitch Kummetz

say QX like. looks what you date Can to it. Got

Cliff Sifford

No.

not QX today. going to are We about talk

Mitch Kummetz

how it’s percent and in big guys sales Can to… QX Okay. it Fair know enough. you of I remind to maybe sandal QX, say, I on is a Sandals XX% in planning And that us then is range quarter. what are you want

Cliff Sifford

and range XX% between is XX% It

Mitch Kummetz

Yeah

Cliff Sifford

get but it a in between XX% full we XX%. that So report that second year just is and a just

Mitch Kummetz

be a And the Nike can last strong you mean new side single-digit in are thinking from start thinking product or athletic lapping are really I guiding of the coming am wandering as more it to you of low that year was those expecting you sandals? flow comp you you on quarter that. you that on are standard comp QX, how are some to to about just I

Cliff Sifford

sandal giving want in don’t one to-date the has earnest to believe We are coming back-to-school, and early -- we even Well, product see which we we about with really comp June coming brands, we to or the July. talk in truly slightly that in into expect sandals can a but and about we flow however, are in get just do, season from will excited and that’s begun, quarter-to-date in not on unhappy number our without be we a don’t you performance. and

about excited about that excited received far. what have and very So so we

Mitch Kummetz

That queue. Thanks. the good. Okay. back sounds in I will jump

Cliff Sifford

pleasure. My

Operator

you. Thank

from question We Sidoti. will our take of next Greg Pendy

Greg Pendy

is fewer guys. I picture for taking wave back out question. serve? seen that of markets X,XXX context, mean be just, sort closings. what bigger biggest Can this have big going kind I in you I maybe two you the stores. experienced this there the in terms I Hi, reduction of is think, of maybe years my to of was Thanks XXXX you or to a a earlier put store guess, similar maybe maybe competition there you wave you in of into mentioned

Cliff Sifford

reduction what was have closing This in Basically a this that several a we that I a of the was stores bring compelling we I a have this we in over and is have retailer ‘XX. fact this is and stores one-time past is retailer, larger ‘XX the store. area believe the where which in America -- the shoe within are up a department seen reason closing big reason news shoe them X,XXX years has the been and a a are and happens market

Greg Pendy

maybe going are I competent. impacts ‘XX QX in clothing from you something from and that on? thinking the guess, stores? in mentioned Are then, guys had that ‘XX, liquidation about the competitors you just Is And just

Cliff Sifford

the we end one at shop that thinking that area namely that will of in the gone that’s stores retailer and stores Well, key I quarter-to-date. X,XXX of X,XXX July. didn’t closing are be The a want our that fewer QX to by about is talk to really market about June, come reasons

Greg Pendy

That’s Yeah. helpful.

Cliff Sifford

quarter they makes as process, that product the throughout X,XXX By if into so a stores building that other are sense? stores and we the way closing the consolidating see

Greg Pendy

is thinking is you I right XXXX of opportunities now of that’s come waiting actively or are of kind about a to the real mentioned lot. makes that are the CRM, returning now. looking you for think real is completion but team you probably I terms store I growth, that now? in target CRM know helps that That But Yeah. that. your the something estate for you are for know with And you sense. something data That’s kind place estate -- are combining taking from more

Cliff Sifford

But, they asked likely real open today, forward find find if to these XXXX. find going estate the have today won’t were most sites. our they sites the and unfortunately, team We site until

say, I it we for like openings until are store all sites. we we store to have start well, learnings felt to a we now to-date some incredible customers can CRM unfortunately, our unfortunately, put that strategic am So, was and continuing program along move our far enough got we and implemented looking on

out growth us from a year. store perspective see -- will next you So new of store beginning

Greg Pendy

That’s helpful. Thanks guys. lot a

Cliff Sifford

you. Thank

Operator

you. Thank

from Svezia We Chris will question take of Wedbush. our next

Chris Svezia

with I quarter can want was? second afternoon. Hey, month, just that just start what by comp first, to you guys. just Good remind is guess, us cadence year the last -- I

Kerry Jackson

low in single a low had in So year June a single high last teens we July. a in and increase May,

Chris Svezia

at And any pulls areas are out to Payless you or have are seeing some business affecting effect these anything any trading no, Are all negative as did stores. that of in you liquidations liquidate are you seeing your these of -- negative not? or effect

Cliff Sifford

We that in a a would further Payless within have distance, fact, low affected concept where much, X our comps head-on stores as stores not miles, been -- single-digit are it -- have have affected been than And there X slightly. compete miles where Payless comp. are conversely with we short been

Chris Svezia

just your is that your characterize that for premium that price athletic biggest sure Okay. tax a just to I go comments spend function for With is I to of urban I that regard having money mean that that to the not pressure rebate improve… business area for how I of athletic am and not with back February February was business athletic therefore shoppers

Cliff Sifford

out. the and reason as are checks It you number improves was get one it, on the quarter, one reason we did the not Yeah. move but number through

We are affected.

affected are moderate refund beginning checks tax and income definitely by of they customer is the year. at the Our

Chris Svezia

your sure, comments And on am are just refer there. really back the I then guidance, just Kerry, to, just go to you out want I QX, to not guess, throwing

kind possible. So I know of little bit nail just you to a down

about be So similar margin some points sort more do margin XX I about am BD&O net it are you that about to you basis observation gross so SG&A? expecting or ask QX like kind then color of of and I than much the talking you to down understand have and of down, similar or down that offsetting kind we

Kerry Jackson

like, have I qualitative that’s in XX Certainly, primarily we find flat you QX will get that received margin quarter seeing find that to the that about it’s that million trying quarter relatively see and the reduction merchandise we the as help are we for which benefit right, the last was basis if guidance about calculate some $X to but saw. occupancy it that -- calculate that year, reduced if that’s you point will about you costs, you that with

to QX. in similar So compensation expect But it we to which increase such repeat. QX last had have in will be equity incentive year, and don’t an we

We the quarter. margin operating we of in excess see for our an the deleveraging expect of that BD&O, leverage in the have some increase to so

Chris Svezia

Okay.

could margin think in right somewhere I in be domain, the to operating I points, So basis XX about this am that? up basis XX points when

Kerry Jackson

your to lower It’s scale. probably end Yeah. closer the of

Chris Svezia

just you vendors. on you go athletic to, big of numbers, with things, Okay. And your the All right. Got product back-to-school, then have as off from you got go better against, last got major into just some have regards you confidence it. few some

better theme getting access. are You

some loyalty. doing be on might things You

kind the timeframe, maybe around I through just again you of guess at level to low and single-digit walk August that confidence comp hit level your ability could? stepping So just least if to confidence back July, the

Cliff Sifford

the telling everybody for on doing marketing finalizing we but achieve a -- are against -- have high Chris what best that numbers can exactly are have we process we are back-to-school. marketing our -- call Well, putting without the question way is I to that now together in putting confidence we efforts. we of that finalizing go our answer not that to can together, we efforts

Chris Svezia

Okay.

in back get the Thanks will queue. I Congrats. guys. Okay.

Cliff Sifford

Thank right. All you.

Operator

you. Thank

our will take Sam We of Poser from Susquehanna. next question

Sam Poser

afternoon. Good

the question. -- to thank So for -- taking my I wanted you year full just for

full the a first looking whole all? we year, are -- for looking what add are For questions. margin to we I got of bunch gross of

margins to are a are --is mean, I the as you full to planning a or on -- up the -- year? little going planning you gross for that be to be bit -- So, flat for

Kerry Jackson

expect be to to We down. slightly it flat

Sam Poser

you SG&A, being should QX. in again your more then down quarter, And was spent right? that for with to than Okay. I SG&A that dollars in it’s about be down other the something down likely going -- in to actually that am any down year in thinking full be again I continue mean, QX, QX dollars Is

Kerry Jackson

which guidance expect high some nice our it of will Well, line. for down in will create dollars, be to full the -- the slightly SG&A we year create leverage our on at end

Sam Poser

I degree, sort so of in of on SG&A full about like, year what To for kind what you leverage are mean, the thinking midpoint? the

Kerry Jackson

XX XX to basis basis points points.

Sam Poser

The midpoint.

And Okay. have again… this problem don’t so -- the then, we

Kerry Jackson

the Sam, wouldn’t we I -- end the midpoint, I what be our expect. end high that, sorry, just of you the that’s leverage at are that’s say, might am guidance at high of that

Sam Poser

Okay.

this So bps All to is XX bps. right. higher XX

for be $X.XX rate I XX, what was just it why is can why that range the just in have maintain again -- guidance call down. and mean is earnings So tax we problem I call to and mean, on. your on your going your shouldn’t real just that are not just explain are tax adjust rate going we problem next XX% is to then do move we then I mean forward that the it QX Why full-year avoid basis? and move one-time event. year know I you your just a with $X.XX, non-GAAP and But that. under it not

Kerry Jackson

year, we purposes, but that statement. was change ago. is will couple changes through any vesting, are the what will stock. would it time haven’t an next now quarter. be some tax bring a That don’t it. We it will magnitude is years the expense same and level we vesting income as a gets on depends one-time that in expect would QX to of It setting forward attention benefit In what be of accounting magnitude. stock there’s more we retained -- had price your took of is -- anything be earnings, there through to Up the this or till there a it to for issue, run Sam, reported -- also won’t it bring these run think

will have the vestings We will year more the there immaterial. of rest but be

we year, broken So I’d it expect to is haven’t amount. it But level material be next really this but not the to year.

Sam Poser

a So, theoretically I you rate rate under quarter count mean, you tax always on can so the QX, the and XX% the that in in of work that think little could take be to we as tax a a vesting? number the some is captures it like about midpoint, being way call that little first XX%, higher, the be lower, the of with, because could that

Cliff Sifford

price an expense, depends it price you problem best it you the -- additional depending benefit expense. price or Sam if that is to tax time over the increase benefit have your -- that best benefit. in would grant the price there grant If be that could the increase, a with -- on higher that price on is against then create compare Well, magnitude and the and record is than the

Now…

Sam Poser

me… Let

Cliff Sifford

see… we What

Sam Poser

It’s your better, just -- out you benefit. got just rate a Maybe Yeah. was ongoing abnormal. tax or a totally anything. something control. of It’s It’s of I isn’t have $X.XX your is understand. operations so part this

normalized the higher on that. extra then that million, assuming deleverage mean raise or the next happens And last guidance to $X going this year call the be in it out. your because are had it BD&O, also whatever the lower. tax shouldn’t at one-time You rate, you just normalized I we took $X year it because million with nobody today, happens

it’s and we sort XX% of we XX%, rates around mean, the -- of can first tax So, because understand then XX.X% look quarter? easily the rate that only in all so -- and tax it apples-to-apples this I be really not and carving rate the run shouldn’t XX.X% shouldn’t the at

Cliff Sifford

characterize Well, you laying the Sam, you that is the be of part I’d make as we not it. are is as because may will as out, simplistic it judgment it, to you which how it to let it’s What right. of in and SG&A is included cautious side expense you of side want

in to So like up all but by same itself quarter. be may it’s it’s the an expense it not not it’s matching

up So over against other. time two the it each pair

show partly we due not see there. adjusted let So as chose we to they that the characterize earnings reason it as and it to analyst will

Sam Poser

Okay. with And then, lastly, Payless. with Cliff

non-existent. your much didn’t get You held relative going is business, non-athletic that really athletic branded forward. they businesses founded nicely, tough And but was is your commented that it is seem outperform in in that they business to to athletic and Payless product athletic February

the beginning full this, middle So this products. you are fashion guidance at them this could second of into your quarter competing headwind your matter? much headwind really are in the how building really provide are headwind have that and -- really for with more on we you much of much especially could women’s fashion this, guidance I mean, how how year or

Cliff Sifford

guidance let first. consideration me question and have our year full We last your answer for that taken in

question are now first taking that, they believe still is Your right shoes. or not

closing tell they that in Now there taking us they the they are are is to going stores of June, shoes. people -- still are end but at

promotional between the lot another end is two of as a pairs sell and they now are So and today think are weeks be June. the and not will as going they by way in three I my of But weeks. to to that guess they

Sam Poser

And guiding and so, but, -- when mean, X%... with are you I low means singles that

Cliff Sifford

important year, the with that… singles low Sam, are We guiding it’s for

Sam Poser

quarter in too… but second singles think, Me expect, you too, the said did I low Kerry

Cliff Sifford

expect Yeah. when get no That’s there those July there there X,XXX due -- to for stores… to for aren’t the it bounce is that -- we less is back-to-school

Sam Poser

theoretically…. So

Cliff Sifford

…along with the better product.

Sam Poser

are saying second in quarter? you digits low low-single the really digits low-single of is The -- end

Cliff Sifford

correct. That’s

Sam Poser

of okay. Because that,

Cliff Sifford

our And Mitch XX% have I about about women’s of volume a and represent business. our sandals asked front didn’t sandals company’s of XX% in total But total and about number of us.

the in second expect that So stay business quarter. we to to strong continue

Sam Poser

right. All and luck. good very Thank you much

Cliff Sifford

you. Thank

Operator

Thank you.

from will We of Mitch our next Kummetz Research Group. take Pivotal question

Mitch Kummetz

you count letting questions. you me end. tax weighted about for buyback on it are lot sounds your that the on on the Thanks to the my stock you guide like for share the am Has the through flowing in how just year a you the take have year? follow-up just guide, of average share count, benefit $X.XX diluted view a -- are curious, taken Kerry -- I Yeah. guys earnings quarter. changed thinking your

Kerry Jackson

of a the projecting slightly the than are year. We lower number beginning did we at

Mitch Kummetz

know don’t then, I know quantify that, what Okay. slightly don’t lower… you And I

Kerry Jackson

No. Because…

Mitch Kummetz

Another XXX,XXX or? shares

Kerry Jackson

No. the And we is, cautious to choose an more than and I had within what in in year bought opportunity and QX original and may to guidance. stay for to the limit may about had want year accelerated later and We we estimate that -- buy our anticipated. the saw going be it we of are we because purchase we reason

is doing it are quarters. you shifting between all So

Mitch Kummetz

Right.

Kerry Jackson

had That’s Now, if what in left we we level that seen. we what our QX we QX achieve as it originally buy guidance, to in is and had over be expected the expected. QX, had put we to

be expecting be. shares that around want it’s it’s outstanding, original our don’t how So but lower now was guidance are I to slightly XX than much will to say to that, left we really million fair -- likely seen

Mitch Kummetz

bullish Got well. it. are of I year, really I know you guys as Cliff half that the on the on mean, back

side, starting following. categories order back-to-school I pulling for of particularly bullish for some in might be I that product just it’s hasn’t you or from given about dress boots, away some are that the are and athletic wondering, something expecting in that you on of are or? -- how working like curious, boots, am athletic from finding I think am fund the taken to you that the the that non-athletic to you thinking -- other whether are dollars you to the you are you go business athletic, increases some are dollars some you well there

Cliff Sifford

talk vendors about you specific the nice expect top -- the on we that I what due our And call. vendors us. really back-to-school athletic from don’t shown right are You our standpoint of some to as know see an and they have a to

expect the into to of As especially we October different leave going August lot September accelerate categories. will to start October out and timeframe, absolutely of it’s boots in and a and that come we move

You of boots the me, and one of that second, see quarter latter quarter. fourth we the to an acceleration expect part excuse true and is third throughout mentioned and

Mitch Kummetz

just your anything how my back what be year. your And know you how much tariffs thoughts are don’t then your on raise helpful? the having and you don’t with the Cliff, know what last bought know any vendors, -- thinking ability are to you I are there? your for I conversations question about on don’t is, prices exposure I half tariffs would

Cliff Sifford

Board they the be the Well, with I have on to heard and of very to of business tariffs and footwear represent try happen through. in you hard don’t organization if the but called working FDRA, go and don’t make know retailers to along sure wholesalers, Washington that I we other these are

already are know industry… you if this tariffs the highest know don’t we I is, are We apparel

Mitch Kummetz

Yeah.

Cliff Sifford

makes just are. just no And are that absolutely we happen sense. But changes back making sit we doesn’t it wherever so hope and can’t it

of away begun athletic the you good of China We Asia. product to is then from the and other And product been the and our has there already moved move by news have that Southeast much brands. out to countries know

it and So through FDRA through communities. approach taken our a we proactive winter have -- very

sit just can’t and doesn’t that it hope back we happen. So

Mitch Kummetz

Got luck. it. Thanks All guys. right. Good

Cliff Sifford

you. Thank

Operator

you. Thank

Svezia will We our is your And line take Svezia, question next of Chris Mr. Wedbush. open. from

Chris Svezia

Yeah.

my taking call. Thanks Sorry for about that.

curious, Mitch’s the it’s of kind in year, just last locked inventories on planning weather levels up performance of kind you inventory actually question, following how given fashion cold versus -- Just this seasonal. business guys

that? about about from to anything planning or perspective that or are comp color be you that give any thinking business want around how you Just

Cliff Sifford

hey, I really but where our my hesitate given you to just given we talk that. with to to of that inventory -- one am the I you increases. going how the competition, street where you, thing, will that’s talking talking -- I really, I also is our increase plan are

Chris Svezia

All right.

Cliff Sifford

going pass. am I to

Chris Svezia

All right.

bit something You just doing, need would like more for color about be new maybe a does it curious? the supply little on sounds and order are helpful, elaborate effect you what just so that chain on that, management just when that you any just take

Kerry Jackson

a and to in in system achieve have to beginning growth supply order our sales place We that have chain management in company, become our put long-term digital accelerating better goals recognized system. of to need order a we

So June we system. a management will multi-year that program being our chain major program be -- many in our our kick-off are will going our to that and basically replace components warehouse of supply

on our we going center that leverage our replace show manner pride system more efficient We able functionality to going and and program. stores to costs costs those top And bring help to in get control of we by as into greater to are new will a to management sophisticated distribution reductions and to accelerate be your the time system to over us we in get the give more more us transportation management order cost efficiently. will a able cost be better it to a

yield if it’s growth some So long-term stage for exciting, also program, set any long-term it’s with some really we a to benefits dramatic systems. it’s not But world find going it year. class this the

Chris Svezia

Thank you much last of it. about just too that thing, any their kind color And you. Perks that? thing on about purchasing customers talk Got didn’t habits, e-commerce Shoe just

Cliff Sifford

No.

on a customer first very stores getting program, Perks up. XX% emphasis are digits. of revenue sales our our signed sales Shoe with non-member But we our Unfortunately, -- quarter to continue We customer The are up Perks happy fell. of our actually lot of and we our came. put mid-single Shoe

the very, working have Our and about strong is excited Golf we growth I program very am there.

and Perks my am patterns Chris, the prepared have has to is happier way around their what pleased in are look with based on taking mentioned one-on-one building we very I the Perks that for shopping based allowing and Shoe us, with been all we how we strategy is and data going which we -- it, how CRM the are customer Shoe with So are happy what’s data on even about to briefly and us the it they talked working. customer, I remarks with the customers talked on

Chris Svezia

All Okay. Thanks the best much. very guys.

Cliff Sifford

you. Thank

Operator

Thank you.

our question Sam Poser We of will take next Susquehanna. from

Sam Poser

one just back-to-school thus do of have the forward more. to holidays far? two, due you have and with tariffs, the pulling orders free you the on and second any information into I are One, tax threat quarter

Cliff Sifford

to your answer first The is, question yes.

the We sensitive price product. are especially

possible. pulling as are We of much forward that as

been working But weeks. very small past market went have the are this that There’s they several And much on we fairly tax-free away. overall comp year hard are comp. holidays pretty over So versus year. one that last

Sam Poser

to on inventory on then, orders And pulling the the follow up forward. -- just

mean, are I levels how I good reason the inventory I up, going far how, of high quarter. high, to how we see So end expect to mean, the for a mean, Kerry elevated at

your in going doesn’t look going So happen we what I down that’s sound but at, degree do mean, inventories year-over-year in that QX, to to you were think are QX? like

Kerry Jackson

It up specific difficult a store trying what in per see low-single answer forward. it’s because are we of the to a on very basis, do be move but digits can still will more give we to process to

it’s are -- So to that. determinant able be going how it’s about how much do to we

Cliff Sifford

into September will And the of and and much as product forward forward August. moving are October move we that

higher levels I we So end fully be our had originally that won’t do August of planned. than that second show the up inventory at the quarter. in expect would

Sam Poser

the Speakers] end of But end not [Multiple the the at quarter or July at of

Cliff Sifford

okay. that -- Well, part you. for reason Thank of the

Sam Poser

Go ahead. Go No. ahead. ahead. Go

Cliff Sifford

it we we as right of product in there. to a distribution hit. that, Well, way, But dramatically stores. don’t is sum for product we we out hold lot our by a the before our back-to-school in can more center, much that the build we tariffs to -- whole part really call put Sam, center a product distribution Obviously inventories of is their now because the the so the for bring but before as so lot August our that move reason a is because call that reason can’t into

Sam Poser

we If they hope which they don’t? had

Cliff Sifford

That’s correct.

Sam Poser

Thank you.

Cliff Sifford

you. Thank

Operator

time this to have will further for I questions. at speakers closing remarks. turn back we And no it

Cliff Sifford

that All you very look in right. us talk for hope and have Thank about a quarter second Memorial August. forward today we you We to to enjoyable results joining Day you all weekend.

Operator

Thank you. gentlemen, today’s conference. Ladies concludes and this

disconnect. now may You

Shoe Carnival (SCVL) 22 May 192019 Q1 Earnings call transcript