Q2 2021 Tillys Inc Earnings Call
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I'll now turn the conference over to your host Gar Jackson Investor Relations. Thank you you may begin.
Good afternoon, and welcome to the Tilly's fiscal 2021 second quarter earnings call, Ed Thomas President and CEO and Michael Henry CFO will discuss the company's results and then host the Q&A session.
For a copy of Tilly's earnings press release, please visit the Investor Relations section of the company's website at <unk> Dot com from.
From the same section shortly after the conclusion of the call you will also be able to find a recorded replay of this call for the next 30 days.
Certain forward looking statements will be made during this call that reflect tilly's judgment and analysis only as of today September <unk> 2021, and actual results may differ materially from current expectations based on various factors affecting tilly's business.
Accordingly, you should not place undue reliance on these forward looking statements for a more thorough discussion of the risks and uncertainties associated with any forward looking statements. Please see the disclaimer regarding forward looking statements that is included in our fiscal 2021 second quarter earnings release, which was furnished to the SEC today on form 8-K, as well as our other filings with the SEC.
You see referenced in that disclaimer today's call will be limited to one hour and will include a Q&A session. After our prepared remarks, I will now turn the call over to Ed.
Thanks Scott.
Good afternoon, everyone and thank you for joining us today.
Fiscal.
2021.
<unk> has been a record setting year for us thus far.
Our second quarter results included a record level of net sales and earnings per share.
For any quarter since 2012.
Oh.
On a year to date basis. The first half of fiscal 2021 produced earnings per share that exceed the results of any fiscal year since becoming a public company.
We believe these results were driven by considerable pent up consumer demand compared to last year aided by government stimulus payments compelling merchandising offerings.
And excellent execution by our store and corporate teams.
Compared to fiscal 2019 second quarter.
Total net sales increased by 24, 9%, which was driven by a total comparable net sales increase of 18, 3%.
Operating 15 net additional stores.
Store comps were positive in all markets and was strongest in our two most recent primary expansion areas, New England, and Texas, each of which posted comp sales.
Increases.
Over 20% compared to 2019.
In terms of merchandise a men's and women's apparel were very strong led by our proprietary brands rescue and full tilt.
Which were our number one and number two overall brands in both the second quarter and first half of fiscal 2021 as well as with.
Strong performance from our curated assortment of iconic global and specialty brands.
<unk> growth has been driven by new trends in bottoms.
Surging graphic T shirt business and a high adoption rate on newness generally.
Comparable net sales of accessories and girls increased by a single digit percentage relative to 2019, while boys in footwear decreased by a single digit percentage relative to 2019.
Hard goods, which we did not have as immaterial part of our assortment in 2019 produced $3.0 million and total net sales during the second quarter and portions of this assortment.
Now in nearly two thirds of our stores, we anticipate that all stores will have at least a portion of our hard goods assortment by the coming holiday season.
We expanded our sustainable merchandise program during the second quarter, ending the quarter with over 1000 items from over 40 brands and our sustainability shop on our website that contains features.
Such as the use of certified recycled materials.
Certified organic cotton.
Usable accessories.
During the third quarter, we have launched over 40 styles under our rescue brand.
That featured similarly, similar sustainability attributes.
We also just launched a collection of vintage in up cycle product.
With over 200 unique pieces, along with selected product and 25 of our stores.
These collections currently represent roughly 4% of our total inventory.
Outside of merchandise, we are continuing to reinvest in our business.
We have opened eight of our planned nine new stores for fiscal 2021 and continue to seek attractive opportunities for additional stores.
2022.
We have also launched several initiatives this year designed to improve convenience and efficiency for our customers. These customer experience initiatives include an upgrade to our website platform.
From our current version of Salesforce.
To their latest mobile response of SF are a version upgrading our mobile app from a simple wrap of our website to a version that offer us greater mobile functionality, including loyalty and in store experience features and continuing to improve on.
The channel capabilities, including in store pickup curbside pickup.
MDA delivery and ship from store.
We're also reinvesting in.
Distribution efficiencies to expand capacity for anticipated future growth. We do not currently expect total capital expenditures for fiscal 2021 to exceed $20 million.
Do a strong cash position, resulting from the strength of our business performance and our disciplined inventory and expense management through the pandemic.
Our board of directors approved a special cash dividend to stockholders of $1 per share.
During the second quarter, which was paid on July nine.
This represents the fifth consecutive year, we have provided a direct return to stockholders in the form of a special cash dividend.
Turning to the third quarter of fiscal 2021, the back to school season is off to a strong start.
Total net sales for fiscal August.
We're up 94, 4% compared to last year, partially due to operating 39 additional stores.
At this time last year.
33 of our California, Endo Indoor mall stores were.
Closed throughout August of last year, we opened six net new stores in the past year compared to 2019 total comparable net sales for fiscal August increased 24%.
Despite ongoing concerns about the current resurgence of COVID-19 cases across the country.
Retail supply chain disruptions labor challenges and increasing costs generally we remain cautiously optimistic about our business prospects for the second half of 2021.
I will now turn the call over to Mike to provide additional details on our second quarter operating performance and to introduce.
Third quarter outlook Mike.
Thanks, Ed Good afternoon, everyone details of our second quarter operating performance compared to last year's second quarter were as follows.
Total net sales were a record $202 million, an increase of $67.0 million or 48, 7% compared to $143.0 million last year.
Due to the impact of the various periods of government mandated store closures, we experienced during last year's second quarter, which resulted in only 65% of total store operating days being available to us during that period, but also due to strong consumer response to our merchandise offerings. This year.
Total net sales from physical stores were $170.0 million, an increase of $88.0 million or <unk> 96, 3% compared to $92.0 million last year.
Net sales from physical stores represented 81, 5% of our total net sales for the second quarter compared to 61, 7% of total net sales last year.
E Commerce net sales were $40.0 million, a decrease of $21.0 million or 28, 2% compared to $52 million last year, which.
Which we believe was primarily due to going up against our peak triple digit E. Comm comps in May and June of last year, when consumer spending shifted online during the period of significant store closures.
E Comm net sales represented 18, 5% of total net sales compared to 38, 3% of total net sales last year.
E Comm comps had been negative since the second week of April but turned positive for the final week of the second quarter and it remains double digit positive since then.
We ended the second quarter with 244 total stores compared to 238 total stores of which 205 were open at the end of the second quarter last year.
During the second quarter of fiscal 2021, we opened six new stores in May.
Total comparable net sales compared to fiscal 2019 second quarter increased 18, 3% with increases from physical stores of 11% with positive comp sales growth across all markets and from E. Commerce of 63, 4%.
In the second quarter of fiscal 2019 net sales from physical stores represented 85, 9% of our total net sales while net sales from E. Commerce represented 14, 1% of our total net sales.
Gross profit, including buying distribution and occupancy expenses improved to $81.0 million or 37.0% of net sales compared to $48.0 million or 37% of net sales last year.
Buying distribution and occupancy costs improved by 800 basis points collectively despite increasing by $8.0 million in total due to leveraging these cost against higher net sales.
Product margin decreased by 170 basis points due to going up against last year's strong full price selling upon the initial reopening of stores relative to certain valuation reserves taken on idle store inventory at the end of the first quarter last year when our stores were closed.
Compared to fiscal 2019 second quarter product margins improved by 190 basis points, primarily due to reduced markdowns.
Total SG&A expenses were $51.0 million or 23, 9% of net sales compared to $34.0 million or 25.0% of net sales last year.
SG&A improved by 110 basis points as a percentage of net sales, despite increasing by $17.0 million due to leveraging these costs over higher net sales.
Primary causes of the SG&A dollar increase were higher store payroll and related benefit costs of $12.0 million, primarily due to operating all stores for the entirety of the quarter and serving significantly higher net sales compared to last year and.
In corporate bonus accruals of $9.0 million due to our strong operating performance thus far in fiscal 2021.
Operating income improved to $30.0 million or 13, 1% of net sales compared to $14.0 million or five 7% of net sales last year, primarily due to the significant increase in net sales.
Income tax expense was $14.0 million or 22, 5% of pretax income compared to $10.0 million or 34, 3% of pretax income last year.
The reduction in income tax rate compared to last year was primarily due to deferred income tax benefits of <unk> 9 million derived from employee stock option exercise activity. This year and the prior year impact of the cares Act, which allowed for operating losses in fiscal 2020 to be carried back to earlier tax years with higher income tax rates.
Net income improved to $24 million or <unk> 66 per diluted share, which are records for us as a public company compared to $8.0 million or <unk> 18 per diluted share last year.
Weighted average shares were $32.0 million this year compared to $36.0 million last year.
Turning to our balance sheet, we ended the second quarter with total cash and marketable securities of $153.0 million and no debt outstanding compared to $157.0 million last year, which included an aggregate of $43.0 million of borrowed cash and withheld store lease payments.
We ended the second quarter with inventories per square foot up 25, 6% over last year's second quarter and up 14, 3% over 2019 second quarter as we support the current momentum of our business.
Total capital expenditures for the first half of fiscal 2021 were $13.0 million compared to $7.0 million last year, the increase being primarily due to new store openings. This year.
Turning to the third quarter of fiscal 2021 total comparable net sales for fiscal August ended August 28 increased by 24% compared to 2019 comparable period with increases from physical stores of 11, 6% and for e-commerce of 81%.
Based on current and historical trends and assuming all stores and E. Comm remain in operation throughout the third quarter, we would expect our third quarter net sales to be in the range of approximately $187 million to 100.
Third $93 million and earnings per diluted share to be in the range of 30 to 34.
This outlook range assumes an estimated income tax rate of 27% and weighted average diluted shares of approximately $33.0 million.
We expect to have 243 total stores opened at the end of the third quarter compared to 238 at the end of last year's third quarter and 232 at the end of fiscal 2019 third quarter.
Operator, we will now go to our Q&A session.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad I'll call for making the time line to take your line is in the question queue. You May press star two if you'd like to remove your question from the queue.
Participants using speaker equipment and may be necessary to pick up your handset before pressing the sake.
Our first question comes from the line of Jeff Van <unk> with B Riley. Please proceed with your question.
Hi, everyone and let me say congratulations on terrific results.
I guess my first question. If you can just touch on supply chain, because obviously it's been.
Topic.
Think of concern for a number of companies.
You guys don't at least youre not seeing in the numbers so.
I guess are you seeing any bottlenecks I'm sure there are some but maybe if you could touch on kind of particular categories, how supply chain for private label looks for you for a SKU and then maybe if you could touch on how Youre planning receipts for second half if you're pulling forward, how much you're pulling forward or any sense of that.
Sure, Jeff I'll start and Ed can add in if he has anything to augment what I, what I have to say so.
We've been dealing with a supply chain issue all year long.
Even going back to last holiday to some extent.
And as you noted it hasnt hurt our overall results all that much there.
There have been.
Particular instances, where we might run really low or sell out of an individual style of an individual item here and there, but it hasnt been so prominent so as to really hinder the performance of the business.
We are trying to do everything we can to.
Secure inventory for the holiday season.
Best we can so we are pulling forward to.
To some extent.
But it shouldnt be anything that.
<unk> any kind of unusual distortion relative to the.
The level of business that we expect to do again, we've been dealing with us all year long and had been adapting to it on a week by week and sometimes a daily basis. Our merchant team has worked very hard with with all of our key brands.
Third party or proprietary.
To make sure we're just in constant communication with them to understand what to expect we really had a constant level of inventory that's been delayed anywhere from two to six weeks again, all year long and we've been having to make adjustments for that for that as we've gone. We expect to continue to do that to continue to adapt through the holiday season.
Okay.
But seeing how back to school has has behaved very similar situations in back to school is the key season for us.
There have been instances of particular items, whether it's the backpackers some footwear things like that that we might not be able to get quite as much replenished as fast as we'd like.
But again the results speak for themselves. So it's not so much that we think it is going to cause a major issue for us.
Okay great.
Let me just ask you kind of as a follow up to that qualitatively do you feel like the inventory our inventory, but the kind of the supply chain timing.
Our receipt.
<unk> are getting better or getting worse or about static of that 2% to six weeks.
What's really interesting is right now it has gotten better for a little bit.
Here very recently.
But we are anticipating that it's probably going to go back the other way as we go over the next several weeks into November.
But again nuts to such a huge extent that we think it's going to affect the overall season.
Just may temporarily impact our ability to replenish some of our best selling items, it's hard to get an accurate read Jeff yes, absolutely.
In terms of.
But.
I think the way it might explain very accurate.
Okay great.
<unk> that and then if I could just.
As you guys did touch on the gross margin thoughts.
I mean, your gross margins were phenomenal.
Q2.
I guess, how we should think about gross margins going forward or how we should think about.
GAAP operating expense line.
<unk>.
As far as you guys right.
Yeah in Q3.
We're not expecting the overall gross margin rate to be quite as high as it was.
In Q2.
I think the SG&A range that we're looking at is probably 49% to $51 million just to give it a nice tight tight area there for you.
Still comparing back to 2019, we think our product margins will be no worse than consistent with 2019, and perhaps a little bit better maybe not to the extent that we just saw in Q2, we still will have some leverage on occupancy and distribution, maybe not quite as much just given it.
It's looking to be a.
Little bit lower sales volume quarter based on everything we know right now than what Q2 ended up being.
So hope that can help you triangulate your model a little bit better.
It does okay. Thanks, so much for taking my questions I'll jump back in the queue.
Alright, Thanks, Jeff.
Our next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question.
Hi, good afternoon.
A couple of questions I guess, given the success that youre seeing with some of your proprietary brands like rescue on full tilt where are those proprietary brands now as a percent of your mix.
It's gotten just over 30% now.
Currently looking at Q2, and what we've seen in August so far so it's it's inched up a few percentage points from where it's been in recent years and that's just the customer voting it hasnt been anything.
Overly intentional trying to drive proprietary up to a targeted percentage of their customers just been voting.
We really don't have any plans strategically to increase the total percentage.
Private versus external brands.
Okay.
And then on the sustainability shop are you seeing any kind of <unk>.
Increased price elasticity of demand there, where you are consumers willing to pay up for that product.
So I'm wondering if there's any margin implication and on the.
Vintage and up cycled product and how are you sourcing that and I've seen some of it online and you are doing some interesting things with that.
I mean, how big could that ultimately be.
Well I think thats just on the sustainability product I think it's too early in the game to get a really accurate read.
How good how big it can be.
But.
I can't say, we've seen any major price resistance.
But educating the customer is a challenge for sure.
In terms of that product category.
Vintage we just launched this week and the initial read is excellent it's really good we.
Our sourcing that.
Through at locally.
Southern California and.
I think it has.
Potential to become.
A pretty good part of our business going forward. So.
Just out of the box.
The demand looks really good.
Okay. Thank you.
Okay.
Thank you. Our next question comes from the line of Nik Kumar with pivotal research. Please proceed with your question.
Yes, Thanks for taking my questions, Let me add my congratulations on the quarter.
Inventory I know that the number you're reporting in the balance sheet is just a snapshot in time, but Europe, 14% per square foot.
From two years ago, I don't have any other companies I cover that.
Out of an inventory increase so I'm just curious like how well situated argue with that number does that number or I should say how meaningful is that number in terms of.
Yes.
How do you feel like Youre able to service the demand in Europe.
Seeing for back to school and further end of the quarter.
Well we've run with.
Decreased inventory per square foot for a couple of years now.
Consistently and.
I think the inventory level as we reported it is.
Adequate enough to meet the demand and what we're seeing in terms of traffic.
Still below the sales run rate right.
<unk> always managed our inventory level beneath the sales comp run rate and that remains the case, even at this level of increase.
Okay, and then Mike on <unk>.
Product margin I think Jeff asked the question about about margins.
And you mentioned that you don't expect product margin to be a strong on a two year basis. As you just experienced in Q2 and Im curious why youre, saying, there is that because of higher freight costs or.
Or are you not expecting channel inventory to be as lean and the promotional environment not to be as good what is sort of factored into that those thoughts.
Yes.
Acknowledging that there probably will be some actions that will need to take at some point on on certain things.
If the rate of sales begins to.
Slow down where we're thinking about the fact that relative to 2019 Q1 comps were up 22 Q2 was up 18, we've had a nice start to August during the peak of the back to school period, but we are anticipating that that rate of growth probably will slow down to some extent.
Product margins are still going to be.
As good or better than 2019 so.
Shouldn't get misconstrued as though it's a negative.
We think the product margins are still going to be better than 2019, they just might not be 190 basis points better as Q2 was.
Okay, and then and I think you said the rescue is your number one brand in the quarter.
And to think of that as a denim brand I know that that's not.
Fair characterization, but I'm just curious how good denim was in the quarter and how much of an opportunity that might be into the back half.
Denim is primarily a denim ran not exclusively.
Dominic exceptionally well and I am expecting.
Denim.
Sales to continue strong through the balance of the year.
So.
It should be good yes, traditionally rescue was more of kind of solely a denim brand, but we really have.
Fairly recently expanded into other product categories, some fashion tops and Tees.
And police and so it does have an expanded offering compared to what you might remember from 234 years ago and longer.
Okay and then just lastly, as you think about the balance of the year, particularly going into the holiday season, and I know that youre going to be better positioned in hard goods than you were a year ago, but beyond that I'm just kind of curious.
What are some of the things that you might be most bullish on as youre heading into this holiday season.
Well there is nothing thats.
Sticks out obviously.
We're concerned.
With making sure that we don't run and tomorrow headwinds.
Like with the Delta Marianne.
So far in <unk>.
Hasn't been.
And a big impact on our business, but certainly we are.
Sensitive to the fact that I could occur in mice.
I might pay enough things a little but.
The consumer seems to be a hungry for newness.
Which I'm very positive about and we haven't we have a lot of newness coming in.
The balance of the year, so that's pretty exciting for a potential.
I think the headwinds will be.
What we've talked about the port delays to certain extent.
Maybe some tail off in <unk>.
Customer demand however, lastly.
Our conversion rate is really high.
It's really improved quite a bit so far this year and I think what we're finding as even though traffic is down and is off.
Our prior years.
The customer is shopping is buying so thats a good thing.
Got it alright, thanks, guys.
Thanks, so much.
Our next question comes from the line of Matt Koranda with Roth Capital Partners. Please proceed with your question.
Hey, guys, thanks, and congrats on a great quarter.
Just wanted to talk about the trends quarter to date I think you said up about 20% on a.
On the two year stack in August I think the midpoint of your guidance.
Something similar or maybe a slight acceleration from there I just wanted to see if you could kind of comment on your views on the rest of the quarter and sort of how that transpires are there.
There's some calendar shifts we should be taking into account on the top line guidance.
No I think.
Sure.
We're acknowledging the 20% start we've had for August it's the largest month of the quarter.
Usually represents a little over half of the quarter historically looking at the last several pre pandemic years last year being an anomaly of course.
As I just mentioned in response to one of Mitchell's questions.
So cognizant that now that we're going to be entering the post peak of the back to school season, the rate of growth could moderate to some extent in looking at the trend line of again Q1 comps to 2019 were up 22 Q2 was up to was it 2018, we had a nice 20% start in August.
But as you think about the lower end of the guidance, that's us thinking about well if if.
If that trend line does cause some moderation in the start that we've had.
We're getting a little bit of room for that but.
But really pleased with how things have started off.
Certainly has been a much more normal back to school season, this year than what we experienced last year.
<unk> response to what we've been doing has been great. So we're hoping this can carry right on in through through the rest of the back half of the year.
Okay. That's helpful. Mike. Thank you and then just one more on the gross margins maybe attacking it from a different angle here.
So.
I guess the commentary you've made implies a pretty decent sequential dip in gross margins.
To get to your EPS guidance and using some of the.
The Opex commentary that you gave there Mike so.
Maybe you could you could you put a finer point on what's hitting gross margins on a sequential basis, because it looks like the promotional environment, probably hasnt eroded a whole lot inventory position looks pretty good so product margins, probably done a rollout erode a whole lot of occupancy costs look pretty good here is there some more significant erosion in distributions are buying costs or any other elements.
It should be taken into account there.
No Theres no theres no big issue here.
We are saying is that we don't think product margins are going to be up as much as 190 basis points, we think theyre going to be up relative to two years ago.
They might be slightly down relative to last year, because as stores reopen the level of full price selling was extraordinary last year. It was unusually high.
So there is not a problem here as it relates to product margins.
Sure.
If theyre down to last year, it's going to be very modest down its not like were expecting.
Triple digit.
Basis points or anything like that it would be relatively modest and it's likely to be up relative to 2019. So.
I don't think people should be reading too much into the commentary, it's just that it might not be up 190 basis points it could be up something less than that but it's still going to be up relative to two years ago.
Okay fair enough I'll leave it there thanks guys.
Thank you. Our next question comes from the line of Janet Kloppenburg with J J K Research associates.
Please proceed with your question.
Hi, everybody.
Hi, Janet.
And I got on a little late TTS slowdown in July.
<unk>.
School outlook vis vis <unk>.
Back to school outlook, and then a nice pickup.
In August and what are you seeing regionally in August and others are complaining about later back to school.
Impacting some of the late July early August trends and just wondering what you guys saw.
August was stronger than July Janet So, we're consistent with what you're hearing there.
And generally I would say it was kind of interesting in that.
It did seem like it took a little longer for our back to school waves to kick in but once they did they were really good.
So and they've stayed good yes, they've stayed good post their peak so that's the dynamic we're seeing.
Do you think it won't be an elongated season in other words, you might get some strength.
We to September September I mean, I know you have strength, but something above and beyond what historically you would have expected.
It's possible.
Especially in thinking about the fact that it seem like entering into what we thought was going to be the starting point of the way it did seem to be a little slower than anticipated that maybe there is something to that.
Truth be told as we as we get through this period, but.
I think thats, a possibility here and some of the early really early back to school.
We have been strong have continued strong yes.
Palestine going back to school, so I'm, hoping that translates into the rest of the balance of Jan.
Hi.
Other than.
I've talked to.
First just a question.
On that access northeast.
The northeast since the latest market to go back to school what are you what.
What are you seeing <unk> company average on productivity.
Well, we don't have that many stores in the northeast.
I've been getting is going to say.
I don't want that client with that yes.
Answer the question before you ask it.
Can you just help me with that.
Yes.
We really don't question reads, we're getting from the few stores that we have a good.
So okay.
And moving on.
How should we think about e-commerce E com sale piece of the last year given the time.
What does that mean for margins and the second question is.
Companies that I talk to that.
Okay.
Hardly vendors likely to.
Feeling that.
Yeah.
AUC, so calling out because that incremental <unk> and then the plan.
Land and building in that incremental freight and to their past can you just interest.
Please.
Yes.
Adjusted income and I'll talk about the brand as it relates to E com.
We've seen actually a resurgence to stores relative to E com.
Here for the last few months.
E comm sitting right around 18% of the total business.
We're really rather agnostic these days about whether it's a store sale or E. Comm sale, our E com business has gotten so much more profitable.
Through the Covid period, and then the things that we've learned through that and have carried with us.
Going forward he comes much more profitable than it ever was.
And it's pretty in line with with what the average four wall of stores is maybe just slightly below but nothing meaningful so.
With all the things that we've done whether it's shipped from store curbside pick up same day delay all these things that we've invested in to just be as convenient as possible for our customers. We really truly are.
Other agnostic about which which channel they choose to buy from us.
Okay, and then you asked about.
Yes, we are hearing that you are seeing in here.
We are seeing from and hearing from some of our brands about expected cost increases.
Really more talking about 2022 at this point than in the immediate term, but we are we are starting to hear those kinds of things as well.
And will you be able to absorb that with some select price increases.
Yes.
Yeah, I mean, we'll have to do some select price increases.
But we can definitely absorb it yes.
And do you guys have any outlook as to when these pressures and logistic supply chain issues may start to wane do you have any visibility there.
No no not at all.
And as you know we did we're dealing with a lot of different brands and big brands and smaller brands.
They're.
A little loss in terms of <unk>.
We're not seeing a lot of.
They're not getting a lot of visibility utility.
Something that we're on.
Every day.
<unk>.
We don't really see anything yet.
Hi, good morning.
Got it.
We still have productivity add something you and I talk about.
Kevin can get back to pre pandemic levels, what do you think.
Yes.
<unk>.
Yes.
I definitely think it Kevin I mean, we have this.
<unk>.
More consistency in traffic.
Sure.
<unk>.
Continued declines in traffic throughout the industry.
It's like I said earlier conversion is good so we have a traffic of.
The traffic, we're getting as a quality shop or they are actually buying.
So that's encouraging and I think that we'll see over time, we'll see traffic increase does it get back to what I used to be.
Thanks Budd.
Yes.
Q2, just to give you a sense our traffic was down high single digits.
<unk> 2019, but the conversion rate was significantly better and the average sale was significantly better.
Through the August period.
The peak back to school traffic was actually slightly positive for the first time in a really long time. So that was a that was a good thing to see we hope that's something that we'll continue don't know if it will or not.
But it was at least nice to see in the August period that traffic was slightly positive for us relative to 2019.
Thanks, Hurricane and something I haven't heard.
Congratulations.
Thank you.
Thank you ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Ed Thomas for closing remarks.
Thank you all for joining us.
On the call today, we look forward to sharing our third quarter results with you in early December have a good evening.
This concludes today's conference and you may disconnect your lines at this time.
You for your participation and have a wonderful day.
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