Boot Barn (BOOT) 1 Nov 192020 Q2 Earnings call transcript

Good day, everyone, and welcome to the Boot Barn Holdings Incorporated Second Quarter 2020 Earnings Call. [Operator Instructions].

Now I'd like to turn the conference over to your host, Mr. Jim Watkins, Vice President, Investor Relations. Please go ahead, sir.

you. Thank everyone. afternoon, Good joining XXXX to Earnings for Second Boot Quarter Fiscal Results. us you discuss today Barn's Thank With me Financial on and Chief today's call are Officer; Greg Jim and Hackman, Chief Officer. Executive Conroy, President release A copy section Boot website Barn's available the bootbarn.com. Investor of is at of Relations on press today's you call the like XX Shortly the days end the Investor a certain Company's as would available that Relations recording call we be will remind statements. a this of website, we on to I are after presentation of section make this will statements replay for in forward-looking These judgment differ of materially as reflect affecting a forward-looking may expectations today current factors statements business. on based Boot and analysis Barn's from results number Barn's and actual of only Boot

not filings of our events otherwise, to any Chief statements, regarding with the over forward-looking the call call this in update XXXX place our these of Boot and I on President first statements, Officer. now refer Conroy, alter discussion Barn's thorough quarter webcast. SEC fiscal a should during for to that disclaimer. referenced as and that future more Executive We any do to risks or well as forward-looking reliance as and turn the whether obligation release disclaimer associated earnings forward-looking new the We conference forward-looking in information, included be statements made undue you is not uncertainties a result undertake statements the with will or to Jim Accordingly, you Jim?

call, I strategic of of update the afternoon. initiatives. Thank and on X you each you, joining our provide good On results highlights for Thank discuss Jim, today's an us. will our second quarter and

performance will then Greg more the call Following review and financial up that questions. for detail our we'll open in

consolidated Same-store growth X.X%. in increase quarter of locations with our year second ago. increased X.X% X.X% sales across broad-based and strength sales which pleased sales accelerated the a very top of an top-line are We XX.X% to continued while same-store e-commerce reflect business increased results, our on physical sequentially

strong of execute brand $X.XX. growth. the in combination growth basis second EPS The strategic of for against margin with totaled initiatives. X XXX% of very selling, the a earnings quarter highlights quarter price grew continues of beginning share significant normalized a Resulting strong review another in leverage points XXX and EBIT tax versus in basis exclusive year. would last I In our per team SG&A On of expansion by to full increase each our quarter, in a and like initiative, sales same-store well to second driving now each penetration

could categories. store solid The we tenth consecutive which such represents sale that positive of than solid of We quarters. model, that launch cycling strength last all our has XX and fantastic were geographies eliminating with September Lambert with several our business anniversary for team. top-line particularly second of product comps, more gains of pleased execution result, despite We by Idyllwind the been quarter virtually a our entire Miranda part and past in the quarter saw reflects a consistent major by the our coupled the drive years

consecutive the in an perspective. coming We it nice categories from apparel, the while merchandising as continued with apparel, third a second all work hats our biggest average, We boots, business from product in extremely below year the to grew slightly growth for major last chain and growth continue Texas ladies quarter quarter. cycling western saw see strength work strong

positive. boots western business ladies Our was

in-store categories. merchandising selling and Our compelling space merchant enhancing drive continues team delivering growing more in to growth product assortments these to categories by devoting our

those administrative businesses. apparel streamlining to the investment work to see work inventory growth store and a the perspective boots certain Most team systems. space in their floor We've expand time both From more to the notably, results also in opportunity amount operations to on in-store floor from and important we of our driving selling service upgrades continued our the continued made focus stores have our through fuel we of benefit X in POS of the initiatives. enhanced giving and tasks improved sales

ability First, Pay. additional we now store have the payment to options in accept including Apple

XXX and we Secondly POS registers upgraded the have than more legacy stores.

drive speed greatly and sales growth. accelerate look-up help busy transaction which the should could customer increase selling during Moving checkout further and process comp periods holiday registers store

process also media with we our to continue constant and social rooted efforts in we've customer not but the radio. expand through current marketing been in media, refining and years. segmentation to reach doing with that television are to be our customer catalogs our mix work past customer Accordingly, Our of a the connect over only email

This our approach growth. same-store driving sales been a important has ingredient to base ability our customer an in to key grow and

Moving to our second initiative, strengthening leadership. our omnichannel

of our cutting e-commerce activity, and promotional Our months from pay-per-click reducing the by improving online focus past on over margin back the business contribution assortment. has XX advertising removing EBIT low our SKUs been on our

efforts, now a in of top-line nice pickup we've As trends. these have many we lapped seen

Second bootbarn.com double-digits quarter our operating e-commerce outpacing growing sales growth. sales our growth e-commerce margin accelerated to in X% with

to focused effort While sheplers.com traffic remain which online reduced profit profitability. contribution negative, marketing an planfully the to be growing spend of have appropriate e-commerce with significant by for paired growth sales on an a maximize a in We on the for our loss erosion of ad driving top-line that of return brand we dollars. channel remains portion attributed can paid

option X received provide will well Recently, expanding our now been This online season. holiday sites. installment all for customer has option many the We upcoming customers business. during flexibility service and by we've been our additional options e-commerce payment an online offer on

online, in item buy meaningfully our choose the bootbarn.com to product local across have have a for online both to We Historically, buy a from that pickup. upgraded pick-up also initiatives could customer our these store for ship a DC chain. store and

orders across country our customer but allowing drive now online additional online our a season. focus within this hours. increased was launched traffic Today pick-up be also functionality month, store and This customer's only should fulfilled couple this in of inventory sales not holiday capability, the can drive with the our stores of successfully by will newly any launched

right we team on This and or the Additionally their innovative store experience delivering season our and for Finder gift customers a find the customers to touchscreens, digital feature will loved exact quickly every digital right focused stores. Range will our new as will have holiday one. hub them ability for provide the truly inside all a a certainly thing our which act

becomes we associates add and the in-store leading the our conversion holiday The seasonal important of goal season. and additional expertise. to increasingly into further as sales This is shoppers provide rate increase product to information

and integrate Finally, provide manage purchases, seamlessly the stores online the with and very with could same returns online technology our a to loyalty omnichannel will transactions, program. customer all platform efficient

Now onto our exclusive third brands. strategic initiative

penetration sales XXX quarter, an nearly increase exceeded to second points brand XX% of the period. exclusive of the compared basis year prior total During

of product Our and of in we design team continues the best brands to merchandise. our evolve industry the exclusive deliver product each to strive for expand as each category

we Cody Idyllwind traction assortment built. the Cody ongoing marketing and categories the Paisley in the and low boots is to about from and into broadened the to very While we Lambert new have by growth and we Brad. Moonshine their and of apparel. and with the in additional From a build Hawx fueled Brad grow introduced Barn. Spirit continue Boot The new to of perspective work reach both excited across continue markets are country customers gaining benefit continue association Shyanne Miranda to James partnership that launch we've that cycled Which momentum have with believe James brand and has by

brand to expansion initial an finally the of sell-through Notably, to now margin structure of merchandise the for due assortment business, markup power our purchasing we merchandise are seeing. China will despite our by resistant And contribution given the with business, sharp impact just our and acceleration is planned new early flame stores are tariffs exclusive sourced goods. or exclusive we encouraged over-deliver the our our in on of the brand FR coupled delivering our

We a the footprint store over believe of double that will years. expanding Finally, stores to operators our building the national local our combination new current fourth store from count allow us and several stores next develop initiative, our acquiring and base.

add To in G&L and operate Clothing of XX year. fleet openings second Indiana, the during with volume Oregon, new X the during quarter, on large plus XXX fiscal added we states, in store pace in our acquisition end We Oklahoma a in stores stores Des now to we remain to XX current California, the this Iowa. store Texas and Moines stores

acquired our Importantly on targeted X faster or new the paid payback. X-year stores during opened years than back have the average past we've

business. our Turning to current attention

year-over-year. from accelerated trend month stance Business sales our consistent promotional second during has with quarter the our of October

across including are consistency chain is quarter-to-date Once growth sales slightly slightly accelerated categories all virtually the channel and quarter product has Texas we which same-store with average. third consolidated growth again, below regions, all e-commerce. the just store and the is Our in XX% outperforming seeing across

importantly we of this we important during time More positioned to are look great about we as holiday forward feel how year.

have over X,XXX planned business levels ahead will or appropriate the in additional now Hackman. to hire the that to call hiring have seasonal in of need carefully turn we business. build like the We mix Greg I'd associates our secured And fuel inventory the growth, approximately to media holiday are of schedule and to handle to

to of rate $XX.X afternoon, margin X.X% $XXX In by past basis prior-year in from a quarter increased XXX Sales added second increased and increase period. everyone. Good buying occupancy Thank the over sales, in from of XX.X% million. million basis months. costs. point a XXX in XX.X% sales or you, in million compared XX.X% stores increase profit or gross growth was sales the to profit gross offset of Gross basis profit increase XX.X% partially to by XX increased The merchandise $XX.X point of net resulted same-store points sales and the sales driven Jim. XX

result exclusive costs of our increased with selling as of buying full price and Merchandise margin result in brand a largely of growth was the better The a penetration. growth. in brand occupancy acceleration increased associated deleverage exclusive and rate

development in product year up and compared $XX.X design invested shipments. our in and period. labor for have the We have or prior XX.X% the receipts handle in to we to of million Operating XX.X% headcount sales million ramped and or sales, increase $XX.X team of quarter the the in was expense

XX.X%. of sales cost and sales points result a basis primarily result decreased was for stores. acquired operations additional expenses of in the expense was tax quarter, of was a of $X.X point period, operating higher tax an percent prior-year on of to $X.X by million in improvement on and expense quarter the expenses XXX or as higher a in support margin. both compared as to Operating million representing X.X% $XX.X effective Income based income in leverage a increase basis new XX rate or X.X% sales sales operating sales expense The million of in the

compared expect million tax income of for Net $X.X in be per balance share, million $X.X share year year rate or period. or $X.XX per the the $X.XX prior the diluted We to diluted our to XX.X%. was

$X.XX year includes tax exercise Net options. share respectively year in income stock and prior in current $X.XX of per and the the the from of benefit

Excluding to $X.XX compared current this the tax net diluted period. in grew year benefit, year share the to prior per $X.XX period in income XXX%

Turning to to was ago. work increase comp to approximately Inventory to On in XX% this basis, consolidated compared investment with on last $XXX year store increased approximately million sheet. a the our a supporting compared inventory half balance the a basis business. of XX% year

increase exclusive XX This brands, in increase growth stores inventory our driven last inventory in months. new inventory by and distribution an Fontana for store added the support the acquired was comp of the to primarily center and at

quarter of had million million As leverage of XXXX, $XXX including X.X. total our facility. our on $XXX $XX of with $XX to at million than At cash like debt I'd outstanding, credit on million tariffs. this second an on hand end point, September and ratio XX, the We update net had of of drawn a provide less you the we revolving debt was

effective items our to and announced that tariff outlined our brands. tariffs offset products List ability be quarter List as XX% was assessed XX. XB would the a Jim to Earlier, December effective it exclusive September After these XA it on relates first X, on call,

X, successful they us have with situation will continuing concessions For Two but branded not the product, from been vendors that that price the cost XXXX many vendors increase their our X Chinese of our be February have of getting to are earliest. a informed at top evaluate there partners. until larger

do the As of not algorithm. process, and intend current the fiscal such, Further, for the in tariffs we planning long-term we updated XXXX be fiscal we our impact begin believe year is fiscal as earnings that negligible to XXXX contemplated guidance. our will change

fiscal Turning to our outlook for XXXX.

approximately share expect count and per average X.X% to estimated We to an in and based have range the diluted share per increase a now shares. weighted be XX.X same-store $X.XX $X.XX of earnings guidance on million to sales our share of updated

This guidance the represents previous $X.XX more compares over last I'm XX% tax to sorry, When to of share. earnings-per-share the midpoint of excluding benefits, compensation updated per more -- our guidance than than year. $X.XX growth $X.XX stock this

operations Our $XX.X is We between be expected million income income expected approximately XXXX $XX.X million. now expense $XX be Interest million. now and be is expect to $XX to to fiscal from million. net approximately million for to $XX

per in and X% $X.XX million, range to look $XXX we and sales the As same-store diluted to $X.XX $XXX per be we of million total increase approximately expect share. to income to between third net quarter the with sales share

to would like remarks. closing for turn I Jim back call some Now the to

Greg. Thanks,

pleased positive of as anniversary shopping efforts momentum We has Barn into and is quarter associates are numbers entire the our more than we results to IPO. holiday it Boot marks of want quarter continued extremely up, nationwide. team the that wrapping I today second current worth approach season. recognize X,XXX the In with the noting X-year that that the the our

store the unique truly am a created states next and double the have to physical We presence count. X store XX looking a our brand lifestyle to ability forward one for years. I with in

I would like questions. open to Doug? your to call up the Now take

the question. line Please with Matthew first question Boss JPMorgan. your [Operator Instructions] with Our proceed from comes of

guys, to a western the congrats maybe work citing continued the and quarter, the and at IPO, think market. Thanks, at momentum. wear I time $XX -- Jim, the take so a the I step -- back, remember billion guess I you on of

I maybe growth higher that annually. low time the industry so relates think rates your driving the mature it strength more markets? I guess and you're view increased single-digits outsized across the the to -- any growth is mid to particularly update consistency topline your to rates seeing some in were of you as level, believe the your seeing you're business what regions, do now that at of

Sure.

headwind piece, a of first whether we're there's as facing been or the to tailwind. debate On lot a a

order I think $XX the of less billion $X overall still We're magnitude we're about so industry X%. is still billion. than approaching

ahead So of there us. is plenty us for of growth -- opportunity

It's the things growth we there is this and secondary I say I everything probably In then real look to think X% industry underlying attribute company. I the a of working to can standpoint underlying terms difficult and rate, about think the that very initiative of research from we growth on. the get if have at would some industry, that whole is anecdotal. an I within

it think across said the characterized in of good it's other news the I that essentially of think consistency has every you any bad bad the news industry visibility. of while lot where consistency news been terms serve. in part country A in good X we've read right X of growth, I you regions, might patch day oil quarters or or more any or growing. in news or given farming And we can on that or

of of be the I of stores a think the in to in stores it's states, we tailwind the company do the approximately another with face part XX -- today diversification XXX offset likely part if a in one headwind by country, XXX country.

us a and team all growth. together has getting together into put great think promotion and growth both the And you And nice the with to when channels. of all when been periods you continues it feel put be consistency growth coupled pretty about way puts we're position. unique sale that with I The that we the executing, fewer in the

maybe running term great. follow-up: just a And That's comps up XX%. quarter-to-date near

in to actually Looking the the currently that guide back just maybe you're have conservatism relative last X holiday comparisons XX% I year November, days than in selling X% calendar, the the to you running? December faced maybe versus in what easier on tap guess for anything just anything you other account fewer October.

Sure. question. good conservatism. Very Certainly

our our of about balance way routing, days little of a only down in bit terms irrational of -- quarter X While total of quarter we higher quarter-to-date. click and EBIT. the about of XX% and but through weeks that sales our in the have is is what same-store becomes put into this that a the We're other does feel impact holiday sure go will it to where period. sales same-store will year, by sort thanksgiving couple index we're And the spending XX-week volume. great that if the the the it QX impact, e-commerce on are and sales. for ad may paper us or I not EBIT think for if we if not we're sideline Not where we'll just later chase is any the thing hurt on traffic sales quarter going sales it's does driving after than or and our probably a up

we set I quarter. that so the feel But that if we've think good built about very you aside into the far momentum

You're number strongest the our a up from inventory it. here has we're marketing how standpoint move that solid last or by readiness October a out month about some forecast we standpoint, while is be could pretty I of same-store little And standpoint. was of the in down feel And a from course in think from -- for our an or bit conservatism and sales EPS calling there quarter positioned great accurate year. of

again. Great. luck. Best Congrats of

man. Thanks, Appreciate.

& with question. Please the proceed your from comes line question next with Our Chen Oliver Company. of Cowen

like Also the the you're next been with Thank to omnichannel your What's The the has also here and inventory. a material go chapter? analysis across on remarkable. also have What brand given is And traffic are you've to you. accelerated has on model investments about mix brands we owned impact really purpose doing been new initiatives and seeing? related the sounds you want store it performance you've owned where And people performance. will as the with thoughts new marketing Congrats momentum that. really been your impressive.

thoughts your and on impacting applying demand. mix and love would that the awareness learning Just marketing things how that's and machine driving are

So several questions.

Thanks, good. Oliver. very Okay,

near will piece portfolio the place. in different for the within them term, fundamentally brands right each in X of owned of our the each And now growth brand company. a On targeted have demographic expand psychographic for or the brands they're sort of be to we

is recent Hawx year most we apparel launched shortly example year launched time we out the last So now this boots apparel. coming then Hawx this we're around thereafter, FR and work Hawx with work

some to I So brands consumer believe XX niche that market. before each you That continue you can we're within the brands for from stores. them to in we examples and if today launch part launch left and we'll time XX brand, of is through another after we'll them, in all the months a each it's the the but some of another X we'll we that. the the putting where have, for At conceptualize and brand we landscape brands of we build don't look we'll underserved brand of likely net go white interest kind our space and in have point third-party that I'll new out of future that guys spare of walk -- even months

there. nurturing we for focused stay So growing we have should out think and just I term brands the short on that the

around your of question part BOPIS. was second The

could think is one X X in things: mechanism great ship it BOPIS while the it or X for unique. another hours days a days to is to customer online it them next could over that the we same bit also certainly drive our and a and option of store days gives couple a I of it within day, and little have or buy in we couple online,

you to time lot guys a that like process Monday, With out functionally shipping Cyber have that a benefit from digital we even and us of and run online play healthy think I the store that pick-up standpoint, the later of do, brands rich Thanksgiving in gives nice a and later actually are advantage online. competitive native pure a buy going over

are traffic. really and But number this we'll was though, around able now. what in -- seen absolutely question we've Your to purchased we their in seen call it give else of can't bought measure come a leaving people store goods visit. is they pick in to store something them real they be the we've What future with online XX%, their that that of some up as portion XX% them

experience additional to from mix channels statistician because on So and I'm was traffic standpoint The laughing part art part that a question view I of and blend a I the tell marketing it's and I'm mix it's will as together. a science. X final marketing great but customer your trained just you part

art necessarily of a are believe think part and And they we the one and behind media amount value, chasing can't where has it can they that it. it part leave of of though companies things that of a is in that the fair even of the we effective lot I that prove prove we creative believe is mix media

So look all the been we've and and and store, of new driven amount number you perhaps guide producing been we've brand, on the and at it's goes that in analytics customers. and of an at we extremely bit it's when a that aesthetic them and put fair healthy transactions we producing a by of of the it's customer same-store the driven then sales that same-store we we creative upgrade add and And visits look together. because in sales the the kind by in emphasis of depth study

that's So what's great driving for company. the that's with pieces biggest the one quickly underlying the deduce been experience, customers of with in-store very we media -- that comp brand coupled and a adding the Boot coupled is to a can Barn great new assortment the mix

about question's And my helpful. digital. Very last

channel? key should the some making sales terms improve but levers of thoughts rate steps really continuing the model to in in and that in profitable also how for been around You've engaging good profitability most we growth your

initiative more those So ones efforts are of the each. a lapped XX%, and business. XX% the of high of to bit, is and out them time benefit of can then EBIT from and you little we've get that e-commerce first you lap again we're that our you view guiding What the single-digit the a now -- squeeze many

growing quick point is We the to bit that our a brand us strategic serves And in are pulled very out and erosion double-digit sheplers.com. while by bootbarn.com solidly a down in for that often EBITDA much we a is price routing. see of industry from purpose sales the very, sheplers.com good leader sheplers.com will be

of we're pay healthy not just with I'm So sidelines ad not don't sort bidding sitting up. words on on enough bidding that spend. a on back the return

out So our on our business if Barn be stores our even you business were separate to plus higher. would Boot and bootbarn.com comp report sheplers.com

comes Please with Keith question. proceed next the Jaffray. line Piper your Peter Our question of with from

the opportunity. the So context seem the gross asking I e-com to that of in last it rephrase maybe I'm I margin guess question: follow-up just want would business on a like does reaccelerating. maybe is

good message which today? So on private momentum. is that Is less gross promotions, probably it now pulling on -- really opportunity on It's the but is the label drives less more e-com there sales some growth? margin back I guess sounds inherently like has Is levers. promotional

Look, tweak promotions. as I opportunities we forward always think there's to look

very tangible example. it'll entire Historically, a clearance clearance very and we event business will So our for do of we we the a the very continue be to chain do that refine consistent. of small us events piece a and across unquote but is I'll give quote clearance some you

by Now doing we store. little markdown are a of optimization bit

heavier to other So of that sales. stores or clearance all we'll that and bit no in bit of a amounts stores do and heavier lighter little X% sale are were in a same clearance

for juice So there's ton not of there. squeeze a the

holiday offers into a as some Friday while and we we seller retailer too. period into look the we of get holiday of being Black full-priced boots and really we course period, the to apparel and on continue focus As full-price have

looking can bit we're those some see and areas there if a recapture So aggressive less some margin. be where is at to we

go as unfolds we that how see we'll forward. So

think points that I perspective, a seeing call exclusive we're of of maybe points or penetration maybe from year right out now brand brand X the than you're we to exclusive more points X and an sell X penetration, of bit penetration. thinking

We're margin a also enhancement quote seeing, of more XX X,XXX enhancement that bit while we're a margin seeing points of also. points basis or we than

carefully, brands of in So a the the beginning while exclusive quick not have from all not year course that tariff really at rate the lot original from very perspective necessarily tailwinds watching of in weren't on necessarily margin thinking a -- we the earnings. situation we're -- of and contemplated

it's added benefit. nice of So kind a

And had out that's product very the merchants and to some really really we're up the the product good that where testament a going team put against sell-throughs design there getting strong brands.

the it's Okay, related, and on a that's sheet. helpful. potentially Greg Maybe bit for balance little

of more for to inherently more inventory buying this is of -- -- which is there inventory the of like of dynamic and are therefore to ahead I that a step So handle it wonder if label you a increases tariffs or up shift in has see might more upfront, been and continued a caused while? this inventory private accelerating guess I'm to trying you

and whether great was see significantly. question latter of that a was related it's strategic We invested to in XX% Peter. about a where the Yes, it's opportunity work the we that to increase business the apparel, grow in-store it's boots more work of or business

holiday at merchandise we missed business. some out and year last thought of we some saw where frankly our back we after got looked categories also we we business We

advantage in business that could those that take so year. we inventory And this levels so increased planfully categories of we

the distribution stores are are center. that big those happening So the as two in the Fontana things it to relates

brands. the bought into We You're right. exclusive

pretty that inventory. to we've business grown we've more As sharply in had invest

if -- ship directly been we our to store. has model know, you we As have vendor something ship the the sell we

in. trying Now lastly, of the is came that element brands to we beat of need to with that And house more inventory. more there exclusive an tariffs

the was meaningful most the it one certainly about. number It's things page but the not on of we thought that

good on the That's Okay. And congrats color. results.

comes Baird. question. Robert with with proceed the your from line Please of Jonathan question Komp W. next Our

maybe trends you've what's -- any whether or just the you're and Yeah, willing I then Jim quarter-to-date not of curious: any trends on inter-quarter think kind in to thoughts noticeable reacceleration off you driven the provide seen to on you have that start any color wanted or comps?

Inter-quarter of little sales absolutely we did got sale. in second and sale quarter do last against out an our from Sure. right the we was thing while of the our as that very call gate went EPS to same-store a I we didn't standpoint slow think strongly anniversary the EBIT the this on where and out called we the kind bit

not then quite that. as pretty strong a got event year, a back good of we we were stores launch in into positive. we channels: we up both normal -- strongly an e-com. and the September, to comp so Miranda felt against And in positive outsized Lambert as of bit last Still about kind but And we got

really of turn October build. sort arriving right the the a of had As we we have the of the continued in and into things business around as a think some weather the fall calendar that's that helped in bit us with October change coupled outerwear deliveries inventory, that store new I like strong X, out Greg some perhaps of to called little and in drive month

season. about feel we us. the holiday quarter -- we now of XX%, of have the But are how great leading right into ahead it's well we positioned So still XX%

X about question of how know comparisons the I'm comparisons incremental just into you you Okay, saw tough XXXX and for the acceleration. very but as forward, think kind the especially toward back go XXXX helpful. but you've business. you a maybe end I your I And of an time, if whole had years fiscal And look then early related curious that's

all at kind going you you if or that comparison of just you how think look comparison about a and as as curious I'm at gets forward X-year tougher look So the ahead. piece

good example. it's question. learned very years Sure, October's doesn't anymore. we We've a etcetera. year And work math retailers good sometimes are back looking always as back just sort of a that a X that

in X solid in back nice went to really real fiscal storage -- back quarter far. believe up a you and If go third a if to XXXX, that fiscal you XXXX quarter wanted look our business at the too had was and the our strong with we I XXXX, a e-commerce negative quarter third to step from with fiscal you second quarter -- and

to want say a a basis you not it's solid. So stores sure but the in going our third tell X-year much if you'd do incredibly on stack which I'm X-year stack to are us again quarter

off Fiscal a XXXX was great and XXXX strong fiscal to is strong, XXXX was start. fiscal

So sometimes. and doing crazy what arithmetic ourselves terms of we we do in drive you're

feel driving it's our some across -- view really is building the was position to is what country. is not momentum all a to nice the hopefully night category across the this QX X think crazy forward year comp don't fortunate at product feel was my like and And has one up we're worried consistent have we some we'll we what in continue be and I how and driving I in year trend been we right ago business one momentum. certainly consistent categories. geography we very where way QX. or it wide not about build There product There prior going not or in at now that's it's stay comp in

Okay, you maybe I'm maybe could one. if increase. great full-year just curious last guidance then Greg, just to And the reconcile hear.

you in through the then earnings in guidance? the piece call-outs, some You modeling but maybe to of QX there if other the any source in quarters? look the upside And as is the of range of anything little buyer be a remaining couple this like for or quarter obviously margin of you else beat just occupancy and bit, next aware out the if could walk

Sure.

the of interest slightly $X.XX $X.XX the and us and then QX, decreased then There about expense roughly obviously that that half. was of we $X.XX. internal took and back helps in SSS worth for our comprised So $X.XX $X.XX is was QX up

XX terms basis of geography, we XX QX points to In points, grow between deliver exclusive will percentage or you that X increased should margin. in basis merchandise if see X and expect of points the brands percentage points and

headwind In guys. terms from of a bit occupancy line of and continue and little development design we'll the product to buying the see

So bps. XX call that maybe

we to exclusive We etcetera. brands stores, and DC see up ramped won't the DC site handle see the to don't we cost that expect ship the to additional to cost the so

to quickly system merchandise We also also to to our -- with the helps a more us installed it brands light for a truck pick that system sorry, to out pick allows and pick and get us on that exclusive I'm efficiency. light shipping it and stores labor

So that that going be a headwind won't be. to forward; we at least project don't

we to each up a in roll terms store. continue We will costs see in of of bit headwind a little as occupancy

expansion then XX SG&A. basis occupancy offset buying XX points. to points de-leverage some merchandise of get and QX to leverage basis little XX us margin XX in a points a And So the to points margin would of expect gross of bit we by in basis basis think I gives in or

will think update to And QX for leverage our our for on but sales round that's we math you. or so mean of And this that that would it. call I Kind nothing earnings you recommend then terms point, I of in specific points didn't QX, QX out I at model out. how

very helpful you. color. Thank Okay

you Thank

from comes with question. question next Janine proceed the with of the Our Please Stichter Jefferies. line

Everyone, congrats.

you and some like they when what looks accessories that come on more you? a that price of So do to and raise plan on immediately. a with at year your the of your kind bit you've did vendors of not next sell to really little tariffs. can if of if ask bit provide price decide hear price a I decide B on Good you maybe little just least on take history the kind color to you taking to B the planning wanted what that they But do raise price, is the give plan bit aren't seen

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boots, western be in to price X% sold it XA ladies modest so are relates our our As boots have which they're whether List think or boots increase those X%. they're men's a our we will both items that largely work performance could boots or and

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this Republic a be have we to of and of Myanmar, -- going increase. China, to moving Dominican modest other lot we know of really that countries. -- whether to a But got -- price that along we've actively I'm or again, or are we'll able some vendors again, butcher And pass out confidence the

private about said expand of points XQ XXX are XXX Is Okay, somewhere you by basis about great. And margin, merchandise margin points. XX we've of the thinking being would lines in or been that gross guidance? up the then basis just a on in basis be brands the assuming the range that it more and you How that? what's bit points it rate along of like kind historical seeing run below

basis is points percentage by and basis XX the guidance it margin translates XXX of the brands roughly or merch penetration, percentage that's growing X XXX points call to guidance. points that or of X XX to points or points in percentage exclusive points Yes, that basis

from proceed with next your Citi Paul of question. comes Our from the Lejuez question line Please Research.

do I seen about work environment there you in any and it's Thanks, how could is bit you in business. customer if wondering your Paul. a Tracy the guys Have feeling? think talk filling competitive changes more was the little you for

Sure.

store that from There Perhaps, business some We haven't there really at of this think decline out picture the competitive country would some mom and do are Tractor a against work independent you'd But wear work big the be sell standpoint we probably think on competitor formidable Supply, is same where seen in and product the much number of some Sears the today. fronts. Supply that I very our course very sells industry players some see a single store chain product. change a environment. and pop compete Tractor good of in is biggest biggest job that and the I product. across a that sells competitive for wear they

a growth boots. It's we We're by seeing boots our in in X But apparel. solid and now non-FR in and been work large, in that work been quarters lace-up feel probably solid FR pull-on growth seeing and boots apparel. We're business in row. has and for work

down think that'll stores the for do just little bit added we've to the business and states is which that doubled why business for we constrained engine growth in -- for great a space -- been a We've it's a on high volume ongoing So an us. us, inventory. be were

business? cannibalizing the or existing how work work Any your customer And a there? you are work business? branded about are on you private there is have your that you really What it -- label seeing versus branded business -- your color new

It's probably a both. of little bit

no partners the entire we exclusive different. branded excited the success strong also sell-throughs, -- very have are work Our and we across while performance, about store and and extremely is brand

typically most work think brand, brands into on that our a customer new actually and western western side brand the store. example probably and taking work were that's the bring from or a boots you work share I to been cannibalize more targeted of is I that's if us, Hawx also apparel was in to And both a could to that in already launched, a the of So to certainly products give business or and probably new a shopping get necessarily was buy a doesn't footwear. Cody the secondary work try apparel not James I illustrative is may western have tertiary store customer aesthetic. would customer customer say

Please from of next line with question. Morris D.A. Our your proceed Davidson. with the question comes John

in not about of just classification that got that talked also the Jim, you of would a color in I performance the remarks or surprising. you call beginning it terms if board terms talk performing. bit noteworthy across more women's prepared right was classification. Tell missed think more that My congratulations a maybe to or in generally at whether on call out your everybody I me I and quarter. boots any great was that about Maybe the of little performance

often the growth great side something had been And on We the is male that. and buys nice double-digit and of essentially perspective growth a something and business so we to boots demonstrating good which the and been believe a growth a work across has seen combined, from store, female apparel size has every the high store, about great. department apparel. which rate in Sure. of given we big we've for herself are their really growth mid The felt comes really oftentimes the also drivers some in work store. And our single-digit into portion shopper that that really, nice also and ladies

to add good store. So that to traffic is the the traffic a -- for overall just

nice or our started baseball you perhaps been I reason that. and so And quarters a The bigger a The the but comp we nice last and hats, standpoint. business still business more business was silhouette it's very dollar we've cap negative been guess recently eroding -- be the a and get for caps eroding. comp like company a felt if boots thing. that been to strong. the X as is from would includes slightly and average quarters -- called actually hats business, out still still up positive driving seen growth that hats mathematically ladies more standpoint X has still boots continuous, will a from traditional comp Cowboy for while. a last our last straw is hats XX has cowboy something growth well could this over we pickup good making called we really ladies below out turn both If thing It's in of in very as it's ball

part boots and But the -- and for of we're headwind great has of reason one strength and that nature tailwind or it's has cycle a we fashion offset does additional is would if that a are tailwind that business great businesses a isn't the That called business us business. shrinking. some the saw. was thing ladies other out the in and that that the that business we that be build Perhaps that portion cyclical would only performing

So we'll so work section the kids that a expand to for sometime apparel little work business shrinking work take we're and make apparel. -- boots bit shrinking into home a out and ticket and like and apparel gift we're room or higher items

the item store, is $XX part the And wouldn't into trading the the much for item. of AUR literally feel $XX of walked inventory you the if value in growth a product. fuller, an out we're store So the but

mostly and are it's work kids in and home per favor square what's dollars lower that So going categories like occasionally boots. square that's on foot, higher some foot gift, work are and foot, of kind categories we and apparel and of higher in per dollars smaller margin per square forfeiting dollar it's apparel

am you perform follow-up was sorry, for year categories color helpful that you that's not and or the the be or -- mostly That's a the reading to in that QX? got where I on Greg under you're that up Is under that categories outerwear Yes, for it, that's this year. great. were correctly this want were inventory and better what building my I'm did that other index -- inventory categories position last quick this

certainly I'd and a There of that, one some to elaborate but are of them. call-out. was was on probably Outerwear couple, a prefer not outerwear

question next with Please Poser line Sam Susquehanna. with of from comes proceed the your question. Our

up -- to last I the you called on question. -- want follow just to I was going know

your what and some missed up I has last comped not it, holiday up work and 'XX, you So you mean here. already outerwear reduce? so and to to categories that. be know takes; ramping being one is in business were there XX XX those My and for you some Because said you what inventory of question year puts make to incremental you could didn't everything's

So gift and category even sales. part great comp, with -- though besides some you that even the something selected kids and missed work businesses, didn't

of the the So sort on can flow you the how some think with that balance give balances? about balance inventory or that you of how me color in

for point But And a and like sometimes we quite up to inventory in and goes to what Of a course, a AUR to Sam. are yes. your goal that bit shirt don't have our kids inventory. us an shirt you exchanging we the reduce are, increase work a we

past, And walks our of strategy that seem when stores to want, someone into the ensure one working. they we've stock. As we it products have that in our is the does in in their discussed size to be

ended then last QX, and this year with million I you've appreciate doing got million you $XXX QX that. But about $XXX of did I you're mean to year, of $XX in $XXX more. cost and million you $XX talking million, goods million

it's $XX bit million year. were this $XX do million lot million inventory to time bringing more. $XX when higher, you're a you in selling more that's It's last So more a little a in million still comparable at $XX of inventory

a more store and have as distribution carry wind to then replenishing housing put business vendor we and that we we've sells. didn't our to when model be That is center our Before branded the it content it it in the exclusive in in we inventory used brands, when our a now to change up and grown except we that right? store

in to branded the on trade-off very is have everything very, But again, make for label room be much that? it's -- are should product rate be -- I of your -- reduced mean on think. have many your to private the being would to of sale I good. Because How branded -- margins a how you

replenishment and we we've brands, algorithms the can some success Well -- time that where there's their vendor very to migrate the one have certainly down third gotten longevity party have to more brands easily exclusive businesses of been vendor than whether we inventory and likely in more another some and change trade-offs, in that where our faster. our to inventory and it's turn start come have

in was exclusive to One well. merchandise and strategies fall it any third-party But we brand underperformance that in some work way the there, we to bring of it didn't with models this particular hedge meaningful selling be to sell would on against very that for replenishment well, the our hopes followed the change seems our brands.

listening other next has get brands you And that it of newer and than you others of our boot our work but if as majority and cover sell-throughs story and third-party discussion and work of product months reminder product turn to our slower where turn like little risk, up just the bulls-eye in or business. vast for will any, than it most evaluate we the vast The through majority pick a But for of for of little our brands. we a investors is that very the on and you're I have the the markdown know brand the slower replenishment. couple you the can sell-throughs is absolutely basic nature, to is of we while it -- apparel may would has as

store. change lower part time. margin the color replenishment any in we'll into the view in think we're size in I future, but a We we're business. units need significant is change to highest-selling rather to need year. markdown size than a you'll not over But And algorithms X X of we all in have of the out think the play our don't store of units actually replenishment in color algorithms, do work and unit. risk to our agreement, have We see So it I to inventory don't going going particularly have

an you the lastly seeing part western a of that then business. trend of about sort And in the of And talked fashion of now? are emergence you about cyclical women's women's business, sort

are that than matrix how So that? are seeing that your would And and are business. that? has you I you work risk assume And different a you addressing on where

you you there it's a would discuss how if is different the manage there can a that how that business work -- trend if from business? manage So you differently say business

Sure.

participate flared And are healthy. right? want trend; in. there very you our hawk be our snake skin could fastest problem turning high-waisted You're and turn there. trend. is We our apparel aging we watch don't piece of that we when that jeans things major very apparel. to of risk ladies The right. that or that There have you And with ladies there But inventory all up a and seeing is today a seeing animal of a trends, freshness put very, department of piece markdown our do -- course wind is some small and at continues believe because inverse, we're there a exactly our a prints in all we our be We're very business. company be to plenty small fast it together is our extremely business. It's the very, of like

boots cycle, that than a place is nature. bit jeans boots fashion What basic Yes, even of products right is turning, more ladies but ladies are close where apparel product. to apparel we have fast But of of fresh and business we in one half is most basic you're and more drives ensuring portion business that a pretty much basic our part. has it little basic for is and there the

apparel can't You the and in spring versa. winter sell ladies vice

to changed But at looking bit or work have XX manage has supply of not steel I my little of all. a a at weeks boot we XX have So differently. brown supply that weeks if and risk I'm business lace-up toe, markdown do

Thank holiday you very have and much good a

comes question with next of Stephens. the Rick line from Nelson Our

retail. Are Like target of What stores here at you're given today. XXX of checkout to you real terms seeing some ask in market on color quality stores? provide XXX or to the the you rethinking in that all at Jim, long-term better estate rents locations

we're stores that first our dollar bit few the model our getting consistent years. question, than the we've would seen last new be on same model perhaps So is new new store real revenue. better little pretty the and your store of say better for for I part estate a our

consistent So -- second of What for or rate part years. few but for of of total a was our the particularly occupancy his question? new sales your last store a been was question? What pretty rate second the occupancy part has the as

The long-term your potential for looking Mid-Atlantic. there? XXX far are the for stores. the And you How Northeast, out we if discuss could plans

We that your Northeast. we doubling team, good number called very defend to into out could work still. we and feel over of hit of fair correction aggressively looking that that of number: started studies Minor more We've different the would a a recently about XXX we've a Sure. amount the couple stores. done

or well just that have performing kind And migrate South as new we'll see part of up centers of of so New we'll of the there. and the Virginia. rural X-year more agriculture in paybacks the a expect York. be new already: Pennsylvania when enter in of some paybacks time to There's we places. outskirts lot Carolina, a And some of be oil there's at that a North city or some most we of there, least We East the Carolina, some on clear state stores country better Central those Coast of the we same stores. industry crystal the lot There's for Central

Pennsylvania, and So some Ohio there feel that next And quarters. be and hope stores we over work in New the is York, customer about western. our few the to core delivering good potential

could across boot that the all country, that Also the business. you. works Curious weather into West rain, We've business. lots Got recent how size snowy your you conditions, the Coast. cold, how fires of seen up if the impacts on weather

question. a It's Sure. good

bit drier or neutral last a frankly, little bit than perhaps year. was little quarter, second a I either a little in It's it think headwind. was the bit and weather of warmer a probably

As well the in in we as third seen dropped there's temperatures the South. have Denver; quarter, -- in have snow

extinguished. people it good frankly unfortunate. every and live fires We that's our has and our day for here. California -- impact and The season us we actually a strengthened business zero little get So minimized any com. XX we I bit. with impact it way zero on has keep these on fires that our mean luck we the that fall virtually or It it's with know off season it had overall extremely And feel as outerwear strongly. kicked let's in

Our with proceed with the Please from Hamblin next your question Craig-Hallum. comes question. of Jeremy line

my I add the I'll thanks Thanks. time and of the here wanted to the for congratulations question. dynamic last making SG&A take the to of half ask about year. in

investment fewer off paid advertising. And going the last a launch private coming you've click that in you're of for made lot label You're QX. that you have year, noted to QX, or potentially fewer also of

dynamic to you're how that QX, is made that ago? about these think lapping play we in year as SG&A SG&A As especially here, investments out a going you now

grow basis business somewhere mean little X investment I we're said I get you Jeremy comp. an plus we're XX bit around a other the pay-per-click we'd earlier of in that appropriate the for while requiring and back places of pulling thought leverage ROAS, as SG&A. Yes, points on I there are

a leverage line full-year X%, SG&A expect that X.X% we in or we get full of year as to this is look cycle. of in So kind with and on

more was in QX. some points leverage takes So like really little at something But look had and we puts trade a or decent quarter try the year do advertising that something those there buckets whatever like this I return fungible or best we for print example media quarter. the is as we nice spend. basis we leverage. that. pay-per-click by extent dollars to to And believe and on bit that We nice had for we leverage XX the things some as or it get within well

Okay, great.

trading to just on So getting really guidance? the is you're your buckets answer how then

will. investment expense to for return Right. best Try get you if our Yes. the

taking for long. questions. the running we're Since luck. Good Thanks

very you Thank much.

like comments. hand management no to are There the to questions back further in I'd the queue. call for closing

today. Very on you care. We third thank good. earnings the joining with our to Well Take call. everyone, call quarter look forward for you speaking

does teleconference, you this conclude your gentlemen and Ladies participation. thank for today's

and time this at lines your disconnect may You day. a have wonderful