Q3 2020 Buckle Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Buckles third quarter earnings release Conference call. We will begin todays call well be safe Harbor statement.
Members of Buckles management on the call today are Dennis Nelson, President and CEO, Tom Heacock, Senior Vice President of Finance Treasurer and CFO.
Kelli Molczyk Vice President of women's merchandising, Bob Kohlberg Senior Vice President of men's merchandising and Brady for its general counsel and corporate Secretary of their review the operating results for the third quarter, which ended October 31st 2020, they would like to read.
At a rate their policy of not give me of future sales for earnings guidance and have the following safe Harbor statement.
Safe Harbor statement out of the private Securities Litigation Reform Act of 1995.
All forward looking statements made by the company of all material risks and uncertainties and are subject to change based on factors, which maybe beyond the companys control accordingly, the company's future performance and financial results may differ materially from those expressed or implied and any such forward looking statements.
Such factors include but are not limited to those described and the company's filings with the Securities and Exchange Commission. The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied.
Right, there and will not be realized Additionally, the company does not authorize the reproduction or dissemination of transcripts or audio recordings of the company's quarterly conference calls without its expressed written consent consent any unauthorized reproductions or recordings of the calls should not be relied upon.
On the information may be an accurate at.
As a reminder of this conference is being recorded I would like to now two of the converts over to our host Mr. Tom Heacock. Please go ahead Sir.
Good morning, and thank you for joining us today.
For November Twentyth 2020 press release reported that net income for the 13 week third quarter ended October 31st 2020 was 41 point Sixmillion for 85 cents per share and diluted basis compared with net income of 26 million for 53 cents per share on a diluted basis for the prior year 13 week third.
Quarter ended November 2nd 2019.
Year to date and net income for the 39 week period ended October 31st 2020 was 64.5 million for $1.32 per share and diluted basis compared to net income of 57.5 million for $1.18 per share and a diluted basis for the prior year 39 week period ended November 2nd 2019.
And.
Net sales for the 13 week third quarter increased 12% to 251 million compared to net sales of $224.1 million for the prior year 13 week third quarter.
Comparable store sales for the quarter increased 12.4 per se in comparison to the same 13 week period in the prior year and online sales increased 72.5% to 46.4 million.
Year to date net sales decreased 7.4% to 582.4 million for the 39 week fiscal period ended October 30, Onest 2020, compared to net sales of 629.3 million for the prior year of 39 week fiscal period ended November 2nd 2019.
Comparable store sales for the year to date period were down 7.1 per cent in comparison of the same 39 week period in the prior year and our online sales increased 67.3% to 124.4 million.
For the quarter, you P.T. and increased approximately 1%.
Average unit retail increased approximately 3% and the average transaction value increased about 4%.
Year to date, you P.T. has increased approximately 2% the.
The average unit retail increased approximately 2%.
And the average transaction value increased approximately 4%.
Gross margin for the quarter was 46.6% of 490 basis points from 41.7% and the prior year third quarter for.
The year over year increase was the result of 160 basis point improvement and merchandise margins and 330 basis points of leverage occupancy buying and distribution costs given the strong top line performance for the quarter.
For the year to date period gross margin was 40.7% of.
For 110 basis points from 39.6% for the same period last year.
The year over year increase was the result of 130 basis point improvement at merchandise margin.
Partially offset by Deleveraged occupancy buying and distribution costs.
Selling general administrative expenses for the quarter were 25% of net sales compared to 26.9 per cent for the same period a year ago.
The year over year reduction is the result of of 220 basis point improvement and store labor related expenses and.
At 50 basis point reduction and travel costs, along with leverage across several other EPS DNA expense categories.
These savings were partially offset by a 70 of that 75 basis point increase and shipping costs due to our continued strong E com performance.
And an 85 basis point increase and expense related to incentive compensation accruals.
<unk> expenses for the year to date period were 26.4% of net sales compared to 28.2 per cent for the same period a year ago.
For the year over year reduction is the result of at 275 basis point improvement and store labor related expenses.
And at 45 basis point reduction and travel costs. These.
These savings were partially offset by a 105 basis point increase and shipping costs due to continued strong E com performance.
And at 35 basis point increase and expense related to incentive compensation accruals.
Our operating margin for the quarter was 21.6 per cent compared to 14.8 per cent for the third quarter of fiscal 2019.
For the year to date period or operating margin was 14.3 per cent compared to 11.44% for the same period last year.
Other income for the quarter was $1 million compared to $1.1 million for the third quarter of fiscal 2019, and other income for the year to date period was 2 million compared to 4.4 million last year.
Income tax expense as a percentage of pre tax net income for both the current and prior year of fiscal quarter was 24 and a half first at bringing third quarter net income to 41.6 million for fiscal 2020 versus $26 million for fiscal 2019.
Income tax expense as a percentage of pre tax income for both the current and prior year year to date periods was also of 24.5% bringing year to date net income to 64.5 million for fiscal 2020, compared to 57 and a half million last year.
Our press release also included a balance sheet as of October 30, Onest 2020, which included the following inventory of 118.7 million, which was down approximately 14.5% from inventory of 138.9 million as of November of second 2019, and total cash and investments of 350.
6.1 million, which compares to $249.4 million at the end of fiscal 2019, and 261.5 million as of November seven 2019.
We ended the quarter with $102.3 million and fixed assets net of accumulated depreciation.
Our capital expenditures for the quarter were 1.2 million and depreciation expense was $4.7 million.
For the year to date period capital expenditures were 4.7 million and depreciation expense was $15.7 million.
Year to day capital spending is broken down as follows.
$3.6 million for new store construction store, Remodels and technology upgrades and $1.1 million for capital spending at the corporate headquarters and distribution Center.
During the quarter, we completed two full store Remodels, which brings our year to date counts to three new stores, three full remodels and five store closures.
We also still have one additional full store remodels scheduled for completion and Q4.
Based on current store plans, we expect our capital expenditures for the year to be in the range of six to 8 million, which includes both planned store projects and IP investments.
Buckle ended the quarter with 446 retail stores and 42 states, which compares to 449 stores and 42 states at the end of the third quarter last year.
And now I'll turn it over to Kelli Molczyk, Vice president of women's merchandising.
Thanks, Tom I would like to start by highlighting the performance of our women's merchandise category.
Moving merchandise sales for the fiscal quarter for approximately 12% against the prior year for.
For both at current and prior year fiscal quarter, our winning business represented approximately for 48 and a half a percent of net sales.
Average denim price points increased from $73.35 and the third quarter fiscal 2019.
At least $5 15 and.
Third quarter of 2020 and.
Overall women price increase of about 5.5% from.
$41 of 70 cents to $44.
We are pleased to report another nice quarter for the women's business with key categories being our denim sweater and knit tops footwear.
And you do evolve our assortment of building upon at sea this space.
And broadening our offering and rises and bottom openings.
The expansion of the flared bottom opening within our mix has been and position and well received by our debt.
And then the footprint of our private label brands continues to build.
As back to school and delayed for a large part of the country later traffic along at the delays and gas readiness for fall apparel align well with our release of key fall category soft average use of wear fashion net graphic Tees and statements sweaters drove top purchases of farewell with our debt.
Our casual footwear assortment and continuing to drive our shoes and net.
We expanded our exclusive collection and added several new silhouettes in for Matt.
For our industry fragrance fashion and branded handbag helped drive dollar Department and.
Addition, our youth business has gained momentum as we evolve our many of the assortment operating smaller versions of adult key item for you, Dan and knit tops continue to drive the majority of our business.
We continue to me and our inventory and carplay, allowing us to react and season to best sellers for.
Our consistent flow of newness to our GAAP and respond.
And the market as we move into holiday. This team continues to do an amazing job reacting and changes in the market and working alongside our vendors to build and deliver unique exciting and exciting product fit for our debt.
And with that I'll turn it over.
For <unk> senior Vice President of net merchandising.
And then.
Great.
Thanks, Kelly men's merchandise sales for the fiscal quarter were at 13% and comparison to the prior year fiscal quarter for both at current prior year fiscal quarter, our men's business represented approximately 51.5% of net sales.
Average selling price points increased from 82.95, and the third quarter fiscal 2019, $84.60 and the third quarter, while overall men's price points decreased slightly from 49 65 to 49 55.
For Q3, denim and accessories footwear and you led the way with strong increases markdown inventory is down substantially and overall and inventories and good balance guessing teammates and responded well to our new and unique product for fall both graphic tee shirts and had have been especially get as we've expanded our brand selection along with two of our private brands and east and depart.
West Dennis.
Yet and continues to grow with our private brands, providing the majority of our business footwear also had good success with our casual shoes, leading the way, although one of the comment about our new BK you boots, along with our private outflows for this brand of been well received.
It is exciting to see the collective efforts of all our buckle teams come together for such a great quarter. I also wanted to thank our brand and sourcing partners and helped us deliver great product quickly the floors. Our guest came back strongly from the close.
These relationships a lot of debt from new product towards the end of Q3 with more to be at it for November and December.
Now turning to results on a combined basis accessory sales for the fiscal quarter of approximately 15% against the prior year fiscal quarter and footwear sales were up about 36%.
These two categories accounted for approximately 8.5, and 10% respectively of third quarter net sales, which compares to 8.5 and eight for each and the third quarter fiscal 2019.
Average accessory price points were up approximately 5.5% while average footwear at price points were down about 2.5%.
Again on a combined basis for the quarter denim accounted for approximately 42% of sales and tops for approximately 32.
At compares to 42.5 and 34% for each and the third quarter fiscal 2019.
For the quarter, our private label business represented approximately 39% of sales and with that we welcome. Your questions. Thank you for me and part of the call.
Ladies and gentlemen, if you wish to ask a question. Please press one than zero.
If you are using a speakerphone. Please pick up they had several for parts and the numbers. Once again, if you wish to ask a question. Please press one and zero now.
And we do have a question from the line of each of all Dave with huge of all investments. Your line is open.
Hi, does this at which will day of from the joint investments.
Hi question on how buckle managed and best of same store sales growth lately.
Buckle has been struggling with negative same store sales since beginning of 2014 and every year and then it has an important and negative gross rate all the way through mid July 2019.
Non of this the comes from low the three months of Love Dong for.
For last 12 months or so buckle that started reporting and put us in a good.
The spending mix should be one of the toughest we get for our mall business relative to the.
However.
And then as a buck and managed to outside of the B is.
Could you provide the insight to what has changed and buckle during last 12 to 14 months.
Two important this president of done at all.
I see that a women's merchandise has has time to showing.
Net income growth, but is there anything else that you are missing out and insight would be helpful.
Thank you.
<unk>.
Hi, Good morning, this is Dennis.
Well I think.
And the part of your question Oh, we finished.
The last third and fourth quarter last year pretty well set of solid solid finish to our year and the first five or six weeks of this year. We were had another good start and I think it goes back to continued improvement among all our different departments our sales team.
Has been doing great as improved the payroll.
The product has been excellent.
And some of those negative sales growth over those years.
There were a lot of at was brand and denim that we have talked about in the past of being very high price points and as we evolve to other brands and our own private brands. The retail difference was substantial and caused a lot of the depression and the sales.
And since then we've.
We've kind of level of that out the denim prices were actually up a little bit this quarter and we're having very good success and sell through on both our men's and women's denim.
And so on.
Non affecting the sales and the past that was probably the largest issue.
We've also improved our E com rents a site or the marketing now that.
With our teams have done at very good job of.
Giving the guest several ways to shop.
And you know sell how they want to shop as they pretty much can.
We've improved our.
Fourth quarter last year, we started doing ship from store.
ER, which expanded our inventory we kind of worked and tested on that and then through this year, we've expanded that to cover most of our categories and that's been a a plus for our ecommerce business.
And so we have a lot of good things that the teams and been working on and and.
Improving and our.
Our specialty store approach and the stores has been greatly we've we've received a lot of new gas that hadn't shopped at before this year during the change of what's going on.
There are several loyal guests that used to shop us that are now back and enjoying the experience and naturally our loyal guest.
Continue to return and responded very very favorable to our product for both men's and women's.
Hopefully that.
Answers your question.
Yeah. Thanks for the detailed answer I have one of the question, but I will go back to the queue. Thanks.
Thank you.
Yes.
Thank you and our next question comes from the line of Alan Glenn What Concord, and Maine. Your line is open.
Yes, congratulations on the quarter.
I'd like to know I noticed the inventory was down about.
20 million or so this quarter year over year and I wondered if you were having any difficulties sourcing inventory due to the challenges, we apparently internationally and domestically.
Well, there's always some challenges, but I think the teams are doing pretty well.
Yeah. There was some product at just the vendors did not make a in the early part of the year there was some.
Some orders that we canceled.
But responding back a lot of our vendors, we're having nice receipts come in and now this month you.
No it was difficult to react and time for October what the changes.
So we have a.
Nice flow of product coming to and over the next six eight weeks so.
So we think we'll be in good shape on that.
Thank you I'll go back into the queue I have another question as well.
Good day.
Once again, ladies and gentlemen, if you wish to ask a question. Please press one than zero, that's one didn't zero to ask the question.
And we do have a question from the line of OGE of all Dave, but overall investments your line is open.
Oh hi.
I noticed that buckle has been spending and digital marketing at Google ads wheels book instead of interest et cetera.
Do you have any good and we're ready to measure the effectiveness of your marketing dollars and weak general has sort of one to be most effective and which has and will go too low.
I don't have any specifics on the measurement of the marketing you know, we we have a new marketing manager that's been with us not quite a year and a half now.
And we've been very excited about the product they've been putting out and the and the new ways that they've been getting buckle out to the per.
Public and they feel good and and the.
Results were seen has been very positive on that Tom do you have any metrics that you know of I don't I don't think of it wasn't one specific metric and I think as a team we're continually adjusting and adapting to what's working well and then looking at traffic drivers and response, both in store and online and then as.
You walk through each of the different buckets of of marketing and we've seen positive response to all of them, which makes it really attractive and email performed well and.
Social media at as Dennis mentioned, I mean, we've done a nice job and that's performed well search.
Search marketing has been performed well and and so you know testing a lot of new things, but always trying and have of lots of things that are working well and and dr. of driving traffic both to the side and and getting guests into the stores.
Thank you and our next question comes from the line of Jon Braatz with Kansas City Capital. Your line is open good morning, everyone.
Dennis a question for you on.
On the Buckle you stores, you have free buckle, you stores, now and and from what I gather they're doing very well and maybe there is of a void in the marketplace with all of the retail disruption that you're you're able to capitalize on it I guess my question is what's your intention with.
With buckle, you stores on a brick and mortar basis is this something that you want to expand and.
Eventually and and Kelly mentioned it she she called out Buckley.
For the use you.
Net revenues have been pretty good.
Somewhere down the road do you envision.
Of men.
And this category of women's category and breaking out use.
They use business like you do and men's and men's and women's.
And it was at <unk> any thoughts on the on the Buckle you. If you can give us that'd be great.
Okay. Thanks, John.
Yeah, we've been pleased with our youth business.
You know we had three established markets that we've opened new stores and and you.
Well we're still.
We know it can be a challenging business, but we're very pleased with our results and we will continue to evaluate the.
You know, if we're going to add stores and the future or not.
But if we do and be in a very small basis at least at this point.
Okay and end of it becomes more important we will.
Be glad to breakout the.
Ladies and girls business sure Dennis had at had it not been for the pandemic would you have opened some new stores. This year beyond the three do you think.
No. This was all planned and Ah Okay, yes, the first half of the year can be challenging and for us at least and youth and so if we open a store and we would plan for probably a back to school type opening.
Which you know we planned early last year and.
So that had nothing to do with our plans, Okay, Alright, Tom one question.
Number of companies Uh Huh.
Seeing their and gotten favorable terms from some of their vendors.
Have you gotten some favorable terms from your vendors and do you think that will reverse if you did it will that reverse in and in next year.
Yeah, and I might take that one as well.
You know, we at least deferrals and we.
Our working with.
Our renewals and and such.
So we did not have like any one time.
Cost savings or such that would.
Be different this year from going forward I mean so.
Yeah, we just will we'll be working on negotiating leases and other terms with our vendors as we go forward. We had some deferrals of payment too that we set up early on just not knowing what would happen.
But thats all working out fine.
GAAP John was your what was your question about leases or merchandise vendors.
Working capital investment that you might have to make next year.
And we have extended terms generally with a lot of our merchandise vendors as well. So you know payables is up a little bit and some of that is extension of terms and at a little bit longer to pay and most of that again was it was in reaction and the March timeframe and debt.
State and place Okay, all right. Thank you.
Thank you and our next question comes from the line of Steve Marotta with CL King and Associates. Your line is open.
Good morning, everybody did the third quarter gross margin merchandise margin and particular benefit at all from the inventory write downs that were taken in the first quarter.
No. There was there was not I mean, it was strong sell them and the merchandise margins were up 160 basis points and Q3 and end up strongly even even year to date I think at a 130 and a lot of that is just I mean reduce markdown inventory and general stronger sell through of of regular price product, but but not any reversal of of write downs or.
For those kinds of things.
Okay. Thank you and also can you talk a little bit about the online capabilities that you anticipate will be added in the next say three to nine months.
And Dennis Dennis such on at a little bit and and you know we really feel like this was a big year for us and have come a long way that's been a priority to grow our online business.
Both from a marketing and sales.
Guest experience on the site at and making that better, but then also our capabilities.
We started with with ship from store. So you don't really expanded at inventory and being able to ship those orders from the store.
To get those of the gas quicker or.
Again, just give them give them access to a broader and broader selection of inventory. So we test of that last year and holiday with a limited skews and expanded at starting this year and continue to expand it and build on that through this year just last month.
We added by online pickup and store capability.
And buy online and get it today capability, so again, exposing that store inventory at a guess, giving them that selection of.
They can shop their local store they can buy the product.
If it's available they can they can pick it up that day. So again goes real it really goes back to given the guest choice, giving them access to all of the inventory that we have and the company and giving them choices as far as how.
How they did at whether it gets shipped of their home, whether they can pick it up and store or how they want to get at so made a lot of progress the buy online get at today.
It is new so just in the last month, we have launched at I've seen a nice response to it and and I think just will continue to evolve, but but feel like a lot of the foundational.
Pieces are there now so it's it will be smaller changes going for.
Regarding the pickup and store can the customer no at the moment that they ordered that it is available in their nearby store and also how many stores have that capability right now.
Yes. They are I mean, they have the ability to toggle and and search there and and shop their local store and so.
So they'll they'll know that that parts available of they'll get a confirmation from the store and and get a confirmation that it's ready for pickup and they can go to the store and pick it up and.
That is available for all stores.
Helpful. Thank you.
Thank you and our net comment comes from the line of Matt see gross wet and wrap of asset management. Your line is open.
Good morning, and thank you for taking my question.
First of all congratulations on your impressive quarter.
Thank you you're currently having a higher than usual cash position and I think this is prudent but here in Europe. We thought we had coming under control and then he broke out of getting the second wave. So my question is how do you think about capital management, and particularly dividend going forward.
And we had.
And in March at and deferred our dividend or stopped our dividend for a period time. We were pleased to you know what trends and strong cash position reinstate our dividend during the quarter and at the rate at was.
Our our approach has always been to to managed conservatively to have a strong balance sheet, we like the flexibility that gives us and certainly operating and and a pandemic with all the uncertainty that brings that that's certainly a benefit to play from a position of strength.
Dividends are and capital allocation as part of the Board's normal review at their their board meeting, that's coming up and the summer they'll review that but but no plans now, but but we have reinstated our dividend.
Okay. Thank you.
And our next question comes from the line of Kyle Kavanaugh Palisade capital. Your line is open.
Hi, good morning, everybody.
Well the question of that.
Okay can you give out your at the percentage of sales at our online.
Is that something you're willing to provide.
Yeah, we did break out and disclose in the press release of the dollar value of online sales and so I think for the quarter. It was was 18.5% and and I don't remember the exact number for the year to date period, but it was it was over 20% which are both of those are up pretty significantly from where they were a year ago, which it was closer to 12 12.
And a half per cent for both the quarter and year to date a year ago.
Okay. Thank you and then you know obviously this year as a tremendous year of change and.
They are you at.
Uh huh.
All of your stores are in malls and just wanted to understand from a strategic standpoint, how you're thinking about low positioning versus online sales.
Are there any malls that are that you're looking at but you know for.
So to sensitize from sort of for two.
Apart for you know.
There's a malls have issues vs stores and things like that too.
As we come out of this I mean, the consensus is obviously, the you know the malls, either and weaker position and it was going and.
So you know, we're pretty significant number of stores at your head of won't base.
Just wanted to understand how you guys are adapting to the environment.
And to whatever strategic changes I'm sure you've talked about and a lot of just trying to understand what those conversations to hill.
Kyle we have been reviewing.
As we always do.
Each of our store.
By location and.
We've estimated that over the next 18 months, we will have.
Maybe close to 20 locations that we will.
Well move the majority of those would be per.
Probably and models right now that we would and moved to lifestyle or strip center type locations.
And we feel like we've got to and good start on that.
There are still several malls that maybe would be classified in the industry as a C mall, but still might be the best location or set up a.
For that particular community. So we review each one on its own merits and.
Phil you got a good handle on that and certainly working we've we've done this already and a number of locations at has worked out very well and so we continue to continue that process and feel good about what we have going on.
So just so I understand so you know from my point of view of an hour and wall Street's point of view for your assumption is like C. Malls are pretty much going anywhere, so you're saying and kind of and.
Your case, there are certain C malls that are viable longer term store not only as of store you know economic for from law itself through period.
Yeah, well too.
Survive.
Yes at at least for the near term and like I say, we have a lot of short short term leases.
And.
And and we would see those particular spots being the best location in the center in that community at this time.
And as as I mentioned, you know every year, we look at those and if we see something changing or a better situation opening up we'll be ready to move.
Gotcha, and then and it was kind of debt.
Yes understood that previous question you were talking about deferrals were you talking about then the deferrals and do you currently have rent deferrals on and your stores.
I think that was what Dennis was referring to was rent and deferrals.
The couple of deferred items. There are some of payroll tax deferrals that are that are significantly smaller than the rent deferrals that are of that are on the balance sheet that we took advantage of but then.
For certain.
Certain number of our landlords and.
April and May I think if I remember correctly, we did defer that ran and we'll pay that back some of it before the end of this year and some of it into next year.
Okay, how many stores are in deferral.
I don't know the number of stores exactly the total dollar amount is.
It is less than 10 million Bucks at close to 10 million and deferrals.
Okay. So you're just kind of you're going to catch up you're not going to extend the lease.
For the deferral of Mount and just kind of a catch up for years.
Correct. It will essentially just of payment holiday that we didn't pay rent for those months and again, we'll pay of back later and and that's really just a cash and a balance sheet item had no no impact on on lease expense both for those periods or for the rest of the year.
And just one last question about online and <unk> you guys have ramped up your online significantly this year I think that's the numbers are different.
Just wanted to understand your learnings a herd of skin and somebody asked for the you know your customer engagement and.
You know online advertising and sort of so maybe just kind of kind of like maybe your top three structures of priorities and developing.
Online again and.
So kind of how you view that surgery from your point of view, what you put in them and top one or two per day.
I think I mean, I think we mentioned it earlier, it's really about choice and and giving our guests choice, though and making it a fantastic experience online just like it is in the stores.
I think we've come a long ways in terms of choice and giving them choice and access to all of our inventory.
Broader selection, I mean, making sure and and as we expand the inventory selection, we're reducing stock out of stock outs online.
So that's been of big driver.
Giving our guests choice about how they at how they want it delivered to them.
I think the next piece and what we want to continue to do our teammates and the stores are an important differentiator and a big driver of our business and the relationships that they have with guests.
So so probably our next strategic finish.
The initiative would be to do utilize teams and the stores utilize our managers and the stores.
And have them interact with guests and and drive direct traffic again, both to the stores and and in store business, but also online traffic and online sales.
Thank you and our next question comes from the line of Alan Glenn, What's Concord and Maine. Your line is open.
Hey, Thanks. My question was just answered regarding E commerce.
Capex. Thanks.
Thank you.
Thank you and our next question comes from the line of old of all Dave will give all investments your line is open.
Thank you.
A question on the capital allocation.
Buckle of what has been broadening special dividend for last few years I don't see at using cash and buying back its own shares.
That low small threem and then buy back in 2016, but nothing since then.
I think at this three year for you on the board. So wondering what rational board of users behind deciding on special dividend or buybacks.
No I think we just review that at each board meeting.
Of of Whats going on how we look at the future and.
Several several points of discussion to make make those decisions I think we did have one buyback since 16 right. We did earlier this year right right in March we started the buyback and saw the the the stock.
I mean.
Attractively priced and and started buying back and then you know as store shutdown and we put that on hold.
I see and is.
Literally smaller flow does one of the factors in non going for and get us at buyback.
Yes, you are correct that.
Has always been part of the discussion.
Okay. Thank you.
Thank you.
And we do have another question from the line of Jon Braatz with Kansas City Capital. Your line is open debt.
Yes.
We're seeing and a lot of new restrictions emerge state and local and restrictions the merger over last couple of weeks.
Are any your stores.
Being affected.
They are operating hours being affected at this point.
At this moment, we have five stores in new Mexico that are closed.
For traffic they can do curb side, which is not a real big.
Big part of our business, but.
Those are the end and there is reduced occupancy.
You know levels for the stores right now, but thats kind of where it's at.
Okay, Okay, nothing from California, given the new new things from the Governor.
We.
Nothing new thank you all right. Thanks.
Yes.
And we do have a question from the line of Cow Cob and all with Palisade capital. Your line is open.
Oh for the prior question was the questions and also thank you.
Okay.
And at this time, we have no further questions.
There are no questions, we'll wrap up the call and and thank everyone for your participation and wish you a wonderful holiday next week.
Ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using 18 T. executive teleconference. For services you may now disconnect.
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