Tile Shop (TTSH) 19 Feb 192018 Q4 Earnings call transcript

Good day ladies and gentlemen and welcome to the Tile Shop fourth quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode.

Following management’s prepared remarks, we will host a question and answer session and instructions will be given at that time. If during the conference today you require operator assistance, press star then zero and an operator will be happy to assist you.

As a reminder, this conference call may be recorded for replay purposes. pleasure IR. the my Ken over now with Cooper is to conference hand to It may you Sir, begin.

fourth Brian. on welcome Shop’s the you, call, earnings Thank Good and to morning the to everyone quarter call. Tile

our call today’s Geadelmann, Rucker, Cabbie and on me Chief Financial are Officer; Officer. Joining Executive Chief our Bob Founder; Lolmaugh, our Kirk

of made provisions Securities pursuant update of to the today do Litigation XXXX, issued constitute date call the our our a remarks, over prepared are turn opened filings and our risks the could the will Those materially of and and Act statements as Bob. be the Today’s differ are Harbor SEC. for for as statements. described that in today call include statements also measures. release earnings this forward-looking press during Please will of forward-looking of call reconciliation made undertake with Reform non-GAAP earnings unknown are and the analyst amended. uncertainties Private and subject the call cause uncertainties Following call measurements. known non-GAAP to such our that, questions. made we any statements obligation certain let of Such see not The financial within to the in earlier release meaning actual results to With both me Certain from Safe risks forward-looking those statements these statements. and forward-looking

I’ve a and our him new into quarter that Thanks introduce as to I Executive the pleased Ken. today. watching today Officer. am formally is joining us to discuss Good and results. enjoyed known our long fourth for he morning grow thank for you Cabbie leader time Cabbie Chief very

their of has our knows Shop of home rest This he year, customers back me board includes The through lead business helping our we had our vast business, to importantly getting this business. to can instrumental maximize clear their he was It on the that what customers homeowners Tile more company he and and on as understands we doing year a Cabbie He his way profitable give that us. the early showed through that and and the romance he us track actions been last knowledge, transition growth in tile options in and clearly us confidence are our the pro Over that XXXX. need.

would to Moving initiatives. each on call of company will I detail be now in greater the with into the forward, Cabbie? our to Cabbie, good over will turn hands Cabbie. who like go

excited Bob, morning and given I’m Shop. good Tile opportunity everyone. lead very Thanks this to to have been the

continued the to quarter. good make fourth during progress We

and Plymouth, solid distribution have in business center trucking together, of pretty XX the strategy for built term. and consistent over high nationwide new enterprise rewards signage team We trucks, last team website Our stores products platform, successfully on I X,XXX enabling our a Working years. developed Minnesota new months, of completed a and not new transition foundation a compete believe list has here our store we scale resource designed implemented new strategy, impressive using XX quality new now successfully in January accomplishments associates, a we trained a system over us. our a with XX sales could CRM to and the converted will the a truly re-merchandised and our proud planning to compensation company-owned pricing distribution over talent, to pro and be teams, new executed brand hired outbound to us year for converted added our center end to for caps, structure a new the capability, new pro long for and our implemented that new program, assortment, next and website was developed of X implemented what a more including managers, enable over office. a market teams, all

into delivering presentation, and our be the focus head to in the industry. will best assortment, on As continue best service the XXXX, the we best

Our top be priority our in the to best product continues assortment industry. offering

full introduced During and include of floor, of the new pieces. fourth stone quarter, these we wall, beautiful a new collections trim natural number collections. Many of a assortment

In add new SKUs manmade ceramic and to hundreds addition, of to continued we’ve our porcelain assortment.

fashion and unique are products new these focused. of All

fabric. with These line unique You a new additions can’t it exclusive products kitchen, that Selke our bath, Annie closely are or but mimicking projects. products. pretty else. full The of the These room is representing cool, include our can of soften XXX really the help retail new consumers’ laundry find them is technology product appearance several collection of most important very anywhere over appearance

As under you rug feet. a walk these it’s if tiles, your on some as have you of

Finally, we’re and very excited color about manmade introduced. collections the glass we’ve ceramic

serve other will retail have choices key other in and available close these influencers water pro in during some we total still and our offer confident can as first customers. are that come a that already X,XXX all over to now These stores, key represent retail designer, customer, of our no With competitor to for the partners who her in offering many products. we’re often SKUs the While others are be collections quarter. of additions, stores these the

very on checked comfortable now XXXX the box our product initiative. that we’ve We’re

the upscale have and will our from and that also We competitors our us all pro believe all of that both the partners stores right to differentiate we in we channel appeal consumers products all now serve.

These back because ago now of these again incorporate to design some served we bathroom home. want the they good. and new over product features trends new into to their of year Some retail already a are that are their remodel products customers

discussed call. XXXX complete product QX briefly in initiative key we Another on will to our the earnings source work be

This our other from parts half to the includes and As planning we sourced have America, leaders work Turkey, XXXX. suppliers our India, Southeast on some and the ordering supply world in at Asia. of of demand been of merchandising, for discussed, China work chain hard including planning, South shifting and back products

steady ensuring good are unique maintaining base. the our drive a diversifying We’re supplier high benefits, this above that of many and product, and confident margins industry quality good average, work including supply should and

addition, supply help well In chain team tools added to new and other our of stay trends. we’ve new the ahead resources products

Our goal is toes, as new product to trends emerging, our anticipate they use emerging adjust stay to to on and our quickly trends. are nimbleness

best will goal well curve. the to assortment having ahead one number ensure the have stay key overall the we best Our our in we model want the to and of to The industry. product, be always is

merchandising best stores and The on on in in ensuring our we quarter showcase products of our enhance the focused our majority our new was product presentation of our Our second website. top to these across priority all continues attention to be entire fourth to in-store store continuing have the base.

store of comprehensive and are plan touch every in a midst will We still the executing that each in chain. the

of of of explore work approximately now will of our stores today, over the fixtures the new these fully stores As received next have fixtures. receive half by course this various The to anticipate completed several customers We new our being remainder product their display our the effective months. assortment ways, for fixtures new April XX. in to enable it our The us options customers more make project. easier for home all and present tile and efficient our shop, will help

our to highlight better of product will enable and systems of lines. several us new these addition, new certain In feature merchandising

Finally, platform that does presenting we product job converted effective efficient believe in we new a to a of more website January and our great a in manner.

access ability our to platform goals this was our One to website we’ve new of mobile their customers’ enhance for believe that our goal. devices. We achieved with

product our enhance intuitive speed a website. organize to more was enhance content, content our in usability and goal second manner, logical and Our and this the of

six on website with to were our our of powerful and images developed signage months. and content brand refined goal marketing ensure our in-store consistent and The the the third over messaging and ours was very last

over have now the invested content capability creative team visual year photographers, in and designers We specialists. content full in-house last that a and includes have our

is catalogs, really one website, opening now we of achieving of whether our to in objective product or on experience do our seamless they catalog, stores their new great is project the inspiration, offer and website, customers our a our our that a of ultimate Our provide but and job product shopping researching objective. to for our are stores, one our believe objective

is priority top service. third Our

leaders, During conversion. substantial increase retail investments satisfaction, made new rewards pro increase XXXX, stores, pro sales of store new managers, long our frequency to key the our a pro we customer making CRM, our adding relationships, designed market term overall in launching a regional their and investments and new center to build compensation, and enhance other launching customer visits adding distribution program,

with closely on expect regional sales increase our focus we leverage primary improve our these a presidents, in pro return. our vice I will to divisional market of and goal pro to Our sales and fully service continue to work traffic, conversion. managers all XXXX to see and two leaders, director excellence, our be investments

had place we all we are top pieces sustain optimistic XXXX, As in the to have necessary performance. we line into better

comp and Our that pro sales customer continue retail in the goal conversion several the improvement over sales growth, to will seen be satisfaction growth, we’ve last quarters.

priority unit to fourth is growth. resume Our store

business feel our quarters, XXXX. four stores we opening begin sequential the Given we the now positioned last new to over in are improvement in well

continue openings over the We next to will XXXX. some will our open careful impacted not two a get negatively opened of some stores focus the assortment of with be challenges be promotional That in the historically to and years our have are were two of these will new newer still sales the and by three majority hurry some to returns make regional methodical We last we’ve our a stores; take existing stores leaders a the we for primary The instead, Many product store improvements to markets. years to enjoyed. in of in generating strategy. also approach. type new over of XX

store training. continue we addition, pipeline, for will development new opening Historically, factor the store key store our the of on success talent the a leader manager. and In strength our is focus

teams. people this and a gives regional managers additional confidence and are store growth. full training, network sales we promoted sales pro sales that we of our and It’s in our Last ready manager unit managers new to store manager resume bench store store not As store managers. the better the continued strength. several our is of same we we and market to also to of system local growth, new their manager support At them has trained, help invest centralized from the store new tapping new and will each market in have recruitment to into managers we managers resources grow only our suite resume support strong business training but development. talent us strength faith time, Today a strongest pro and manager be our also regional store be new of year,

we’ve Finally, real continued work the to strategy and XX estate over distribution our last months. on

a of financial have for brokers to ready We Kirk? are locations with over you each We’ve who turn We feel now years. working next the these Kirk, through markets. take list the actively we of like to call go. three would to the I target will been in results.

Thanks Cabbie. Good everyone. morning

mentioned, progress the Cabbie we we have indeed made quarter. during As believe fourth

sequentially during four growth sales Our now same improved store including store straight for sales quarters, QX. have X% same

We gross call quarter also like points. a key margin again by a We to dollars XX% from additional increased another last gross profit year gross three over I’d and XX.X% nice perspective. once profit rate. out had achieved

in recently quarter nice entered First, that to see stone during we category. our contribution began the particularly products a the from our assortment, fourth new

products, Our stone both significantly. sales is new includes up from manmade, and overall mix which

encouraged Second, four XX% of to continue quarters. by we our margin gross last sustained be the over

support strategic easier of sales and lapping performance, results, despite absorbing are EBITDA a of margin initiatives. and improved our also As profit, store comparisons, increases result XXXX increased same expense year-over-year per SG&A to share, sequential gross continuing levels in to we earnings see adjusted gross our

somewhat continued while strategies our than continuing our show Third, like. product measurable pro investments traffic are assortment customer customer designed we’d in softer signs and remains to improve traffic progress, to the of

until call, during QX fourth lapped quarter fairly were December we our XXXX. promotions place on price X, mentioned we aggressive that the in As

promotions the Friday weekend. Black in traffic did price over these lower particularly without place, expected, As experience we holiday

continue to improve We the for be believe traffic threefold. to will that key us

our to new First, customers we marketing highlight that assortment. and our will continuing be retail communications to focus on product pro

CRM we leverage and to to our work new market rewards Second, our with managers program pro be will new pro fully capability. continuing

brand Third, of new our that specifically increase brand designed awareness, initiatives stores. our to marketing traffic website, we variety a our have are to traffic to and

last encouraged Net and fourth XX outlook we Some driven quarter now of months over are in to take continue required. these take average by like $XX.X of increased to of for initiatives sales time, brief current up and same million the Comparable patience in objective degree discuss time fully At is the X.X% a progress hold progress. our and X% increase of our overview a a the were to is certain store I’d that ticket. XXXX. financial performance year-over-year. strong provide our quarter by sales our

We markets see vintages, good across signs encouraging. continue progress and certainly many our that to of store and across of is

We stone the each for during a that an positive the store sales financial average square and vintage price Several foot our foot twice comparable one XX-plus of have delivered SKU Cabbie markets see growth average square the it’s manmade excited particularly the improvement every store fact, nearly of collections mentioned to significant were our store In that has quarter comparable per and generated per our new sales customers. growth to sales growth. price of every the is average store product a a positive made category. stone important and immediate designers note with perspective, SKU. From impact stone roughly in retail

quarter gross over be foot of square stone higher tend increase $XX gross the last the all of approximately the consistent last in last in the per products. and of quarters. $X.X the XX.X% of the price Gross with ticket advertised XXXX, profit quarter gross of improvement of was result same basis year an much for or year-over-year profit XX.X% to margins The was profit for points and promotions primarily million Gross was from online eliminating are three slightly fourth million XXX the While quarter lower, fourth dollars year. typically the average stores. margin of

continue levels to time, gross to the of deliver pursue going in in-stock strong to with plenty the continue strategy, flexibility provide position our present rate and inventory our us methodically XX as a to range to forward. expect margin We discussed. sourcing XX% Cabbie At

elasticity, continue products. particularly we believe have price we to addition, In with non-comparable

also of Finally, average confidence with the recently products gross These higher us all our have in have new than margins gross provide going entered average higher many forward. but not prices that the only profiles. assortment margin factors selling

leaders, distribution center were managers, redesign from compensation, of costs in of pro relationship general due market selling, increase quarter new regional The administrative our the was $XX.X Our last our and $X.X of for planned million build-out to website, management primarily store million. QX $X.X of year million investments sales the new and customer strategic increased wages, capabilities.

expired these at closed we year, a million with tax the asset quarter Income fourth for quarter. deferred one City stores. employee quarter a $X was approximately $X included XXXX in concluded For million invested stock of store million its in associated with of tax that and end we XXX was during that the of for write-off the We initiatives. expense the expense In the January, Kansas options lease. $X.X

was fourth fourth will second on half of markets. be focus fourth XXXX stores. basis point these existing stores million in and quarter. margin XXXX, was $X.X quarter we million to ahead open Looking earnings EBITDA in year majority a of quarter. opened XX.X%, improvement of last during to five plan seven continue the to Adjusted will we compared $X.XX. and Adjusted loss to $X.X The the a the EBITDA per for to loss was share the Net XXX was

$XX balance debt. our million $X.X to quarter cash Turning the of sheet, million we term with of ended and long

from approximately to assortment. quarter or million expanded by increased X.X%. of $X debt million Inventory third $X the product Our quarter third approximately from $XXX due the million increased our

begin levels XXXX. we to substantially complete product we move as normalize Our expect now assortment inventory will through and is work

new to quarter enable X. store on industry-leading live some our the in-stock system. and which of communicate tools an system were our with our resource the primarily final enterprise planning our a maintaining including more January and better flow, expenditures optimize remodel tools good suppliers, available assortment key nice investments, phase related receipts to have of and while the opportunity reduce $XX fourth during went will million new investment resource enterprise us inventory Capital planning new and leverage We levels. merchandising, with technology work store These approximately to our levels inventory effectively

normalize We new various total merchandising $XX website In specifically also to million million CRM and investment platform. expect our to a we $XX level our XXXX, assortment, product XXXX of capex, strategies, store support enterprise in a expanded the planning invested a approximately and new in remodel system, to capability, of including fixtures merchandising XXXX. accommodate resource new

ahead planning XXXX, maintenance is in $X million approximately $XX store this in Looking to and of to is of capex. level our new we’re begun of openings work store primarily more million of complete remodel estimate XXXX. comprised a was that investment normal and remerchandising that investment Included approximately capital

levels, run In SG&A nominal capital also do investments new primarily increases spending normalization expect of addition store rate any during a inflationary. at and expect only not continue material strategic XXXX. to inventory openings, our we than to Other current we the new that are with

return to guidance, the activity to will in Our is goal generate It to not grow we on growing a color January. provide that provide unique expenses. business the on will be on factors bit focused we have and intra-quarter revenue I’d faster our to a like than added baseline, a impacted be SG&A standard practice our comment few quarterly on of or but we

high First, of the we experienced the number in midwest upper weather-related northeast. store and an closures unusually

platform in mid-January. Second, converted we new to a website

sales; to POS digit product with shipments and improvement quarters low that conversion These after for X, particularly three the we subsequent after stores, on single factors negative we year. the in sales conversion. growth impact a quarter several the throughout on comp accordingly, first experienced all normal and new impacted January first traffic, our in days had expect the to January several Third, system processing issues converting ERP our

Our continues we adjusted integral years. we we target within growth. for sales believe single can long and to margin growth sales those at term are be several able mid EBITDA next comps levels, the If ROCE sustain to our digit achieve goals

strategic the Brian, XX serve at highly now and retail we level. we to last happy be made of background, high With months, customers capital that necessary expense, pro believe very and our investments competitive that the are all to to Over needed questions. we and a had we take inventory

Small come instructions] with [Operator Geoff will question of line from Citi. Our first the

now line open. Your is

you Thank to gentlemen. morning, good sales I Yes, taking comparable trends. ask wanted on questions. first for my

that if three in noted a being I’m You toward saw January. trends pressured results just your target. level long-term factors that the in snap growth mid-single February just out back digit as you called curious early you in

Cabbie. a is we question. back pretty this happy good with we’re in February seen got so January, Thanks in this as for the results we Geoff, Hey Yes, and have our hurdles the through early month. bounce far

thank upon margins Understood, touch Wanted as to you. well. gross

to maintain XXXX impact able does or that’s You’ve be I’m guiding XX% a trends, just the the would curious mix of strong sales? conservatism level, there stone that tariffs turned reflect are possibly top it as if rate suggesting around giveback. color some line obviously but or possibly been at you’ve of to stronger the XX% appreciated. Any impact

years, main our range Geoff. We we’ve last we Hey, like product comfortable assortment. what it’s good with be over really should thing. thing just the is The been five range. our We very primary that in morning historical feel done so that’s the

the we’ll XX but mix has of going we’ve so carry lower a is setting accelerated obviously. the One that lower of in that months, rates, so and back dollars, some last very were thinsets really of the couple grouts that, the profit like things take XX we of years things you our growth or growth in typically proud over categories, continued margins, the margin and that

a you’ve in the stone little we’d the our it love out carries As we called what and mix carry but SKU thing for for manmade thing bit margin an a opening that’s not great line slightly, as again but has. remarks, to it’s it’s It Xx talked a in great average well. because back lower our lower does rates, our materially and customers bottom ASP slightly

are those the really. So, key factors,

the guys. for first quarter. color, on the promotion and of best in congratulations Understood, this Cabbie, thank you luck

Thank you, Geoff.

you. Thank

line question next Securities. Our come of will the from Moore Daniel with CJS

is line open. now Your

that you to levers questions. on in the and obviously Good trying out of maybe about, forward that terms any much drive there we in spoken you for I quick morning, thanks already follow-up. the some improved of have are traffic wanted of those have this some I levers those you the conversion higher elaborate it’s you of as talked remarks with traffic. start as and additional and look perhaps prepared haven’t called terms taking numbers - one Can in to

Hey, good morning Dan.

over you our that I we here and months, as thing heavily think primary the last were pros the XX influence really on know business.

XX% is that’s substantial our to pros sales traffic pro continued influence retail well, last relationships direct that as Our to amount pros the but is XX% around decline impact business XX% so say range. years, addition several of mix with - a to our overall probably in in the, over from our the

our stores website looking them and prominently as into of they the implementation a retail of market one managers of trying that team thing is projects, them. we’ve in the it presented, and are during customers the additional focused rewards pro those that we’re out that talked great working of CRM very that’s XXXX and The worked catalog. through inspires little bit it’s hired, on to isn’t pro customer. really but retail here to the program the and example giving it on we certainly folks something a addition part start that build their product the new tools, was traffic new that our with only so, We’ve excited our on, on about of part big work come into That still stakeholders and our And we back latter pro of and gets is happy more that been and with a that progress. our ’XX researching

improve both are pro traffic on of those types things And lines. so, along and we’re to that retail working the

possible just jump offer customers, all Hey Kirk this to things as along well. them things on retail the on drive of months, without time say, all that Dan, quarter in these past, like is new this. the I’d help to that that has the we increased focus quarter. assortment, is With after these what our to none opened could SKUs takes for mentioned people of pros six to trickled be It I’d eyes and see and our really over nine have with all

with Annie assortment that so here, forward doing of all has with our with see product everything a a new awareness confident now. the rise with the up it opened that catalog, ramp we’re touches new wow, continue our styles, really our new looking website, design back Now Selke Tile pretty we’re collection, really eyes on industry come across so level our has really excited right to assortment, Shop we’re and to

out that And some we’ve changing got the gears and Helpful. glitches elaborate kind confidence the implementation, way basis. then go-forward there those ERP not typical on of of probably just the to yours -my a of word, -

interesting launch days and an January. believe the was it had we Shop, few Tile weeks. our our few first ERP of few conversion first I in first Yes, impacted to the that hurdles in for the

and customers have a It at lost believe told I we to may about levels thing this back planned we just relationship don’t right that that’s business, but said, was launch. what our hey, due nice conversion nice pros we normal coming pros pro was ahead. - it’s any few hiccups, the now. and a We’re We

with quite are actually it’s right some I how pleased now. reacting think

we’re conversion all that’s impact So for yes, the forward. we and few had weeks, first moving up been buttoned some but

it. Got you. in Thank back I’ll queue any jump with follow-ups.

Thank you.

line will Chukumba the question of Capital with Markets. Loop from next Anthony come Our

open. is line Your

based my sort gave Good direction going get just for given--you and EPS well? said taking bit right, and didn’t sort we your morning, on and why there specific little how not did terms for you you’ve opening new guess given we’re lazy, of as why just can guidance? stores, question. guess but margin, I guess of I stores cadence in comps SG&A. you’re just a some open thanks so provide those many of you’ve guidance on gross I stores, us, what I’m EPS was wondering, with you question, I my EPS, you first to have the wondering

Anthony. morning, Good

key main You next XXX% the single years I several EBITDA digit that over sustaining on target well is, margin to but targets: to making certainly focused those next our you do XX% on long know years, the That and term lazy ROCE, we’re - those we’re are to objectives. reason the over and goals that, really certainly able is progress not just XX% mid be know, hit is as comps. several if able we’ll internal the and

Got it, okay.

going kerfuffle provide You EPS stopping I year. your guidance? more not want to the you thought because then just like forward, specific confirm. provide intend just guidance, that guidance to to or I do specific and had for just of EPS used you the reason was in business last It sounds

time this long focused be to on we’re correct, term at Anthony, Yes, yes. the going That’s goals.

comps from to more comps the perspective of surprised you low are guiding of that you the about had enough. getting I fair in compares it, quarter and quarter was you guess a improve better. back expecting some half, comps, sequentially difficult the so half, on Then first obviously then and difficult with digit the little compares you’re more single sequentially by first Got the throughout year? the real get the just that even in just the back talked to quickly much disruptions in I the in

easy--the assortment the with proceed that of QX, as feel good we With and all on, been other correct. and for really is answer in our XXXX. Yes, remarks key we our the should our initiatives limits but well, in upside we strength prepared of improvement as thing see that about QX product key talked we working the is we’ve Cabbie through that’s these that things it short to some the just just alluded

Got helpful. Thank it, very that’s you.

You’re welcome. Thanks Anthony.

Thank you.

will question with Peter Jaffray. next Keith Our come from line the Piper of

Your now line is open.

everyone. growth term longer wanted I to . touch on morning the store good Thanks,

about think X% talk your growth, how here X% your re-accelerating annual X.X mid to when higher store margin certainly and are it should like comp, digit to you seems be getting it we than term growth EBITDA single longer You to about but that should opportunity. given target long rate, because whitespace

Yes, all - show off year. of lot We to, want a this all, revenue Yes, this investments first our we want to definitely pay drive hey of Peter Cabbie. of that thanks, is track want to we get this We’ve way guaranteed and guidance higher to so to can give five store we openings for back do on three going our business that forward. year seven.

quarters pan see next out. Let’s these few how

to percentage, the continue single digits increase the low will--should or next giving so comfortable with open growth, grow mid we that to business. single for store stores going feel now that few our and but We’re right years

- we’re XX% unit And back could it--in I you look just one focused could to you seven additional we’re largely X on growth, a the clarification at way, five think opening so at half, there, look stores. Peter in still to stores

hopefully If beyond. half to to and you expectation. into year half at to That’s year, look in next XX% year get going the beginning then as back our carry and back we’re a the that it that o X in

retail a some for. brand Okay, too bit you that’s helpful. That’s about I more intrigued, awareness the initiatives customer. what talked and brand I to and was pivoting was looking -

specifics, or nice, to pushing footsteps you lot you’re in it’s with looks got talk, the some forward drive traffic? things You’ve experimenting with agree I there. to of some start which of a the matter getting maybe Could great a store, the just that product of going in

Peter. bet, You

Facebook, end say, editorials social some our magazines, last You’ll business getting syndicated every for reaching editorials in had With year every we last, targeting having Targeting working the new alone, I’d quarter, in end managers, at time five response, the and of better a retail same and higher the pro they we’re every week I our it - quarter. week the of with tremendous and a we’re side big the market been customer are we’ve on with assortment. so and Pinterest, so high focus nationally more retail magazines, end customers. been events work lot has higher at mean, more done pro lot those. out We’ve more those a them seen notice the of experimenting the

test. response but We’re we’re to far, to pretty the happy continue going with so

We’re testing look to retail customer drive stores, if in we once get in if get but know we’re not ride. good at job we levers not doing get a us, our to for pro we our different and the methods a different the traffic we’re and

very helpful. Okay, luck. that’s and Thanks good a lot,

you. Thank

Our next question will Baugh John Stifel. come line from the with of

now open. is line Your

morning. good had a you, I few questions. Thank

those? did traffic I and/or know First, last QX? the QX up in in can against traffic ticket you the the promotional provide the but year, average quantify was traffic you

not driver No, that continues will I very John. four for for morning, strong been but reinforce be growth to a last ticket quarters. us specifically, average has Good the and

a including we that trends also some with stone little on, like new to for our that We provided tailwind color coincides that be business uptick natural of continuing continue the with us. We collections. see a feel the the in that product should

be with things What and drive are Okay. the ballgame programs and exactly to that SG&A done A all loyalty about sound where of like lot I you in? the Where going it ’XX, inning pro, of any, if there’s initiatives? did a so number pro doesn’t managers ’XX, incremental, we? these initiatives talked and we much with does including are in know we’re of we? we’ve are in traffic, of mean to spend

year, year. feel last leverage like ready that We’ll our I’ll in our into content could of is feel of customers our our able in the gave we’ll that examples big that’s and on additional brand develop. being pro we’ve it’s XXXX. our lot on to good content of resources in to and inspiration, retail and think a taken social and I media, both them. substantially examples share We of talked back the good spent increase There’s complete strategies. we’re part offer product course as highlighting about continue we’re but is half Cabbie our more example of get is website, Cabbie and provide. our awareness with One as so are be about, initiatives that time of catalogs, they’ll our just to We that on expectation head we the to a investments now time next ongoing, throughout we of a that out the of these more working some we complement some that made particularly really and Yes, just and lot

easier move that other XXXX, related lapped we I certain we as key think traffic the so through is degree us a point to traffic comparisons also gives of confidence.

Okay.

you in Lastly, gross XX XX% impact margin, in other to to Is or don’t XXXX? than any anticipate at the from source China any any impact expected that all? trying from way places in

from any is John, not none Hey I do anticipate at flowing this Cabbie. other countries, all. impact

them. questions answering for taking luck. and thanks my Okay, Good

Thank you.

reminder, gentlemen, phone, over to a your on ladies if and and like ask one keypad. a telephone would then please you as Just press question star the

Benedict the next Peter with question line of Baird. Our come from will

line Your open. now is

for question. guys, Hi taking thanks the

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you. Thank

Telsey line Advisory. next with from Our of the come question Feldman Joe will

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Yes, the for taking guys, thanks hi question.

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fully and leveraging those we’re that for helping accountable So holding we’re leaders us.

we and incentives We’re to some as XX see in progress expect here providing good some extra the next well, months.

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Cabbie. it’s Hey Joe,

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luck with and guys, Got this Thanks it. good year quarter. and

Joe. Thanks

Thank I’m at time. questions you, showing and this further no

any Now the remarks. pleasure Ken or conference it closing comments IR over Mr. with for to Cooper my back hand is to

listening to Thanks our call. earnings for conference

We we are Shop look day. Thank for to of in year investor Tile looking forward you to interest another providing our in forward your have great outreach and update April. strong next and a

program our your Ladies and conclude today’s for you day. conference. participation and on This you have gentlemen, thank may a disconnect. does all Everybody wonderful