Q3 2022 Genesco Inc Earnings Call
Good day, everyone and welcome to the Genesco third quarter fiscal 2022 conference call.
<unk> and answer session will follow today's formal presentation if.
If anyone should require operator assistance during the call. Please press star zero on your telephone keypad. As a reminder, today's call is being recorded I will now turn the call over to Garo Macquarie Senior director of F. P&A. Please go ahead Sir.
Good morning, everyone and thank you for joining us to discuss our third quarter fiscal 2022 results.
Participants on the call expect to make forward looking statements.
These statements reflect the participants' expectations as of today, but actual results could be different.
Genesco refers you to this morning's earnings release, and the company's SEC filings, including the most recent 10-K and 10-Q filings for some of the factors.
The impact of Covid, 19, and supply chain issues that could cause differences from the expectations reflected in the forward looking statements made during the call today.
Participants also expect to refer to certain adjusted financial measures during the call.
All non-GAAP financial measures referred to in the prepared remarks are reconciled to their GAAP counterparts in the attachments to this mornings press release and in schedules available on the company's homepage under Investor Relations in the quarterly earnings section.
I want to remind everyone. We have posted a presentation summarizing our results is accessible on our website.
With me on the call today is Mimi Vaughn Board Chair, President and Chief Executive Officer will begin our prepared remarks with highlights from the third quarter and discuss progress on our strategic initiatives.
And Tom George Chief Financial Officer, who will review, our Q3 results in more detail and provide guidance for Q4.
Now I'd like to turn the call over to Mimi.
Sarah Good morning, everyone. Thank you for joining today.
As we announced last month and you just heard I'm very pleased to be permitted interim from Toms title.
Tom brings almost 30 years of CFO experience and deep roots in brands in retail most recently at Deckers brand.
He has been a tremendous asset to the organization since joining us a year ago, helping guide the business to a period, a significant recovery and growth.
We're excited he's part of our leadership team and will continue to benefit from his knowledge and expertise as we grow genesco going forward.
Now onto recent performance.
Building off an extremely strong first half of the year, we delivered another record EPS that well exceeded our expectations fueled by a very successful back to school selling season.
As expected sales were up considerably from last year, but what's most exciting is the double digit increase over pre pandemic level.
We entered the pandemic in a position of strength are navigating the pandemic well and will enter the post pandemic phase even stronger.
While the current market conditions have presented a number of external challenges, including supply chain disruptions labor shortages and wage increases elevated freight expense and other cost pressures, we are managing through them indefinitely.
This quarter's performance highlights the differentiated competitive positions of our retail and branded concepts strong consumer engagement and the strategic advantages delivered through our footwear focused strategy as we work to transform our business.
In particular, our result, spotlight journeys and schuh as the leading destination for teen and youth fashion footwear.
Customers view them as unparalleled fashion authorities validating whatever brands, they're currently selling and are increasingly turning to our concept for their branded footwear needs.
Back to school is a major driver of Q3 sales in a normal year and we prepare for an experienced very strong seasons in both the U S and U K as students largely return to in person classes in the U S for the first time.
Sales at journeys and schuh exceeded pre pandemic level and while sales volumes typically moderate after the back to school Rush, we were very encouraged that demand accelerated throughout the quarter and remains strong into October.
I'll call out for Q3 overall with a robust consumer appetite for in person shopping even as the number of Covid cases, spiked, which allowed us to drive a 30% increase in store sales over last year.
Although traffic is still below pre pandemic levels and improved across the board to the best levels, we've seen and thanks to increased conversion in our full service environments like for like store sales were up in the quarter for the first time since the pandemic began.
Our ability to capitalize on the increased demand would not have been possible without the commitment and drive of our store teams, who worked tirelessly to prepare and execute a successful back to school.
Congratulations to our entire field organization on a job well done.
These results reinforce our view that kids like to shop in person, even if they begin their shopping journey online, making our stores a strategic asset working in tandem with our digital capabilities.
I'll now provide some key highlights from this important back to school quarter.
Third quarter revenue of $601 million increased 25% versus last year, and 12% versus two years ago and revenue growth better than expected gross margins and expense leverage resulted in an operating income increase of almost 70% over pre pandemic level.
And record EPS of $2.36 compared with 85 cents last year on a dollar and 33 two years ago, all on an adjusted basis.
Additional highlights include the robust store sales I've already talked about plus another quarter of strong digital growth.
Digital sales, which come with double digit operating margins increased 11% year over year, and 79% compared to fiscal 'twenty.
With this our e-commerce business now represents 18% of total retail sales and is approaching a half a billion dollars.
Next increasing gross margin by 210 basis points versus last year, driven primarily by higher full price selling and price increases.
Being flat with fiscal 'twenty in spite of the changing mix of our business and some freight expense expense pressure.
Leveraging adjusted SG&A by 260 basis points compared to pre pandemic levels as we make progress on efforts to reshape our cost structure and finally restarting our share repurchase activity by buying back $31 million of genesco stock demonstrating our strong financial position.
<unk> and our future and commitment to a strong track record of returning capital to shareholders.
As excited as we are about this quarter, we are even more excited about driving our strategy forward to deliver additional growth profits and shareholder value.
So turning now to discuss each business in more detail.
Strong consumer demand for a variety of brands and styles drove continued momentum as journeys achieved record third quarter revenue and operating profit, marking the fourth consecutive quarter of record profitability, even while operating with inventory almost 30% below pre pandemic levels.
Leveraging its industry, leading vendor partnerships and deep talent and experience journeys merchants selected and secured a compelling assortment of footwear most desired by its teen customer.
The current fashion cycle, which I've been describing as shifting more into casual plays into journeys strength with a nicely diversified assortment. However for this back to school performance was strong in several categories across both casual and fashion athletic.
Nine of the top 10 brands experienced year over year growth in the quarter.
In addition, the in person back to school also drove a big pick up in non footwear sales like backpacks with non footwear up over 50%.
With consumers willing to spend more for full priced items, coupled with higher footwear asps.
<unk> also experienced a nice lift in gross margin.
Direct sales held onto most of last year's very strong gains as journeys increased social media and digital advertising driving an almost 30% increase in online conversion versus two year ago results.
Recent market research validated that our strategies are further building the strength of the journeys brand as journeys share of teen footwear purchases and likelihood to be considered as a go to place for shoes have both increased nicely since the last time the research was conducted.
Shifting now to the U K. We were also very pleased with shoes back to school performance as Q3 constant currency sales increased almost 20% above pre pandemic sale.
Although students attended school in person last year. This year shoppers increasingly returned to physical retail and our store teams drove higher conversion and more multi sale on the best traffic of the year.
The return to stores did not impede the growth of online with direct sales notching large gains on top of last year's meaningful growth as the E Commerce channel more than doubled on a two year basis.
Fueling this growth with several back to school key marketing campaigns and increased spending.
The fashion trends driving shoes business are largely the same ones driving journeys and several of shoes top 10 brands experienced growth in the quarter as well.
Additionally, shoe success managing through Covid strengthened its key vendor partnerships boding, well for the future with even better access to product.
Turning now to our branded side, our plan to re imagine Johnston <unk> Murphy for a more casual more comfortable post pandemic environment is delivering tangible results.
Hardest hit by Covid Jan N is tracking well ahead of its turnaround goals.
Sales improved further in Q3, both online and in stores, but are still below two year ago levels due to the extended delays of return to the office and lower inventories from supply chain disruption.
Delayed deliveries and much stronger than expected demand put Jan EMS inventory, almost 50% below to year ago levels.
We are especially pleased with the performance of Jane and new athletically inspired casual product casual footwear now makes up more than 70% of DTC footwear product sales with casual athletic increasing 120% versus last year.
Jane EMS marketing strategy in which we highlight innovation and technology features new products such as the banks, which was presented in the September advertising campaign and resulted in an 80% sell through by the end of the month.
In addition, <unk> apparel business highlighted by printed woven shirts, and knit increased by over 30% versus two years ago endorsing efforts to position GNL as a modern lifestyle brand with broader consumer reach.
Rounding out the discussion licensed brands. Unfortunately saw the biggest challenges from supply chain disruption, which led among other things to much higher than expected freight costs.
On a positive note there was strong demand for both Levi's and dockers footwear and value in full price channels, which positions the business for improved profitability and supply challenges subside.
Turning now to the current quarter, we have trend right Assortments and are well prepared for the holiday season, which many will celebrate together for the first time in two years.
We were very pleased with our results in November as sales track nicely ahead of pre pandemic level and the boots season is off to a good start with boots is a key part of our fourth quarter mix.
For the Black Friday weekend itself. We were also pleased with the results, but unlike pre pandemic times, most many retail venues and almost all our stores were closed on Thanksgiving day.
While supply chain issues will continue to require close management, we have taken many actions to best prepare our businesses to meet our holiday sales expectations.
Given the recovery in confidence we have we are returning to giving guidance. We expect adjusted earnings for fiscal 'twenty two to be between $6 and 46.
$6 90 per share.
We regard this guidance as a range, but somewhere close to the middle reflects our best current belief of where we would come out representing an increase of about 45% over fiscal 'twenty.
Tom will give more guidance details later in the call.
Our footwear focused strategy is delivering results COVID-19.
Covid has provided the real opportunity to transform our business at a more rapid rate and we are on a very good pace delivering growth and improved operating margins and EPS.
This new direction Leverages, our strong direct to consumer capabilities across footwear retail and brands and the synergies between platforms.
Well I think the strategy our six strategic pillars that emphasize continued investment in digital and Omnichannel deepening consumer insights driving product innovation reshaping, our cost base and pursuing synergistic acquisitions, all to transform our businesses and exceed the expectations of two.
Days consumer whose needs have advanced.
I'd like to give a brief update about some of the work underway.
We have rolled out at Johnston <unk> Murphy in the U S. New point of sale hardware and software along with new tablets advancing efforts to further digitize our stores and enhance the omni channel shopping experience.
For consumers tablets allow easier access to the full merchandise assortment anywhere in our network mobile checkout allows consumers to skip the checkout line. The new software enables new payment methods like venmo, and we are able to upgrade our client telling effort.
For employees, the new technology creates efficiencies across in store tasks, such as visual merchandising and new higher on boarding.
After the holidays, we will roll out this technology at journeys and will benefit from these capabilities in our next fiscal year.
Journeys research shows that while our digitally native Gen Z customer interacts with us across several digital touch points up to 75% intend to make their purchases in store requiring investment to provide a compelling store experience.
Journeys also brought online a bespoke e-commerce packing module with carton on demand capabilities, which is helping speed fulfillment of online orders. During this peak holiday period, and keep up with the much higher digital demand.
Not only is the speed of fulfillment faster, but this new technology enhances efficiency as we can now fulfill a greater portion of our web orders from our distribution center instead of from our stores evidenced over Thanksgiving week went over 80% of web orders were fulfilled from the D C.
An added benefit as we are able to keep our stores well stocked for in person shopping.
Finally journeys piloted honest website and pleased with the conversion results plans to rollout augmented reality software, which enables customers to virtually try on and visualize what a pair of shoes would look like on their feet.
Building deeper consumer insights is another pillar, where journeys is dedicating substantial effort starting with first party data.
Our methods for capturing first party data and being able to identify journeys customers continue to improve.
The cause of the trusted relationships, we have with our team consumer and their parents.
<unk> of our people to collect customer information in stores combined with our notable online growth has improved visibility and we're currently able to identify 80% of journeys customers.
Identified customers and toward the journeys marketing ecosystem and depending on their preferred method of communication receive a combination of digital email S. M S social and direct mail marketing.
In parallel we're in the process of moving our customer database in house cleansing, our existing data and populating a data lake.
Along with the customer segmentation from our primary research this will enable us to invest in differentiated marketing content that drives consumer engagement, whether we're speaking with a consumer who love shoes and wants to stand out or the consumer who cares a lot about fitting in and wearing shoes their friends wear.
In a fragmented industry and knowing our teens enjoy wearing a variety of footwear brands. Our aim is to drive loyalty further consolidate their purchases and take a larger share of our customers' closets.
Touching now on ongoing initiatives of giving back to our communities.
In the fall journeys ramped up efforts across North America in partnership with nonprofit candid.
Journeys employees in 73 cities came together to build and donate 1500 skateboards to underserved youth.
It was the largest employee driven give back campaign in our history with more high impact events to come.
We're advancing our ESG program at on this and on other fronts.
A key milestone being the start of an enterprise wide carbon footprint assessment as we work toward publishing a comprehensive ESG report next year.
So to close I'd like to acknowledge and thank our employees for their outstanding work and diligent efforts, which have delivered such positive results this year and positioned us so well for the holidays.
I am continually inspired by the drive and the dedication of our people and saw so many examples over black Friday weekend have you all going the extra mile to serve our customers so well.
Now I'll turn the call over to Tom.
Thanks, Mimi, we continue to execute well on our strategy.
Third quarter results exceeded our expectations and pre pandemic.
Year 'twenty levels.
We achieved better than expected sales.
Margins and SG&A leverage on significantly lower inventory levels.
Before I get into the details of the quarter.
Want to remind you we believe that comparing to our pre pandemic fiscal 'twenty.
Two years ago provides the more difficult and often most meaningful assessment.
Our business.
However, when comparing to fiscal year 'twenty keep.
Keep in mind, how our strategy has changed our business.
E Commerce has become a larger percentage of sales along with wholesale sales for licensed brands.
These changes come with an overall lower gross margin rate due to the impact of direct shipping expenses.
And the expansion of our wholesale volume. However, this should be more than offset with lower SG&A from these businesses.
While these changes are reshaping the P&L.
We have a net positive impact on operating margins.
And an added benefit of a less capital intensive business model.
In terms of the specifics for the quarter.
All of the revenue was $601 million.
12% compared to fiscal 'twenty.
Journeys grew 7%, while schuh grew 17% on a constant currency basis.
We doubled our licensed brands business rig.
Regarding Jan M.
We are pleased with the continued momentum we are seeing.
We were 8% below fiscal year 'twenty levels, and we continue to narrow the gap.
From a channel perspective, we experienced increases in all channels.
E Commerce was up 79% for fiscal year 'twenty and.
And accounted for 18% of total retail sales.
Up from 11% in fiscal year 'twenty.
With stores opened 99% of the possible days during the quarter, we were going back to providing comparable sales information versus last year for.
For the stores open in both periods.
On a year over year basis.
Journeys and schuh drove positive overall comps or.
A 15%.
23% respectively.
Jan M comps were positive.
77%.
We were very pleased with gross margins, which were up 210 basis points to last year and flat at 49, 2% versus two years ago.
Strong full price selling and price increases offset the channel mix impact of increased e-commerce, and wholesale and increased logistics costs.
Increased logistics costs put approximately 70 basis points of pressure.
Q3, gross margin, where the greatest drag in our branded businesses.
Journeys gross margin was up 140 basis points.
For fiscal year, 'twenty, driven by more full price selling.
And higher footwear asp's well.
Well shoes gross margin was down 180 basis points to fiscal year 'twenty due to a higher economics and higher shipping expenses.
<unk> gross margin was up 230 basis points to fiscal year 'twenty.
Benefiting from strong full price selling which also drove the release of slow moving inventory reserves.
For Jan M. Additional logistics costs put 240 basis points of pressure.
On January of Q3 margins are.
Finally licensed brands gross margin was down 150 basis points to fiscal year 'twenty.
Cause we experience.
740 basis points of pressure on Q3 margins.
Some additional logistics cost, which more than offset margin improvements in the business.
Adjusted SG&A expense was 41, 6%, a 260 basis point improvement compared to fiscal 'twenty.
As we leverage from higher revenue and ongoing actions to manage expenses.
We experienced significant leverage in occupancy cost driven.
Driven by both permanent reductions in some temporary rent waivers and government relief in Canada, and the U K.
In addition, we experienced leverage in selling salaries in depreciation.
Partially offset by deleverage in marketing expenses.
As part of the SG&A discussion I would like to provide a brief update on our $25 million to $30 million cost savings initiative.
I am pleased to report we have identified the full amount of the target for this fiscal year.
A significant portion of the savings is from rent reductions with the remainder in several areas, including travel conventions inner store freight compensation and other overheads.
The full effect of these savings will be realized by the end of fiscal year 'twenty three.
These savings are part of the ongoing multi year effort.
A reshaping our cost structure by improving store channel profitability.
Regarding rent reduction reductions.
Year to date through Q3, we have negotiated 129 were renewals and achieved a 19% reduction.
And rent expense in North America on a straight line basis.
This was on top of a 22% reduction.
Or 123 renewals last year.
These renewal renewals are for it even shorter term averaging approximately two years compared to the three year average.
We have seen in recent years.
With 40% of our fleet coming up for renewal in the next couple of years.
This remains a key priority.
In summary.
Third quarter adjusted operating income was $45 2 million.
7.5% operating margin.
Compared to $26 7 million or 5% for fiscal year 'twenty.
This quarter's profitability provide strong evidence of the operating margin expansion opportunity, but achievable with our footwear focused strategy.
Our adjusted non-GAAP tax rate for the third quarter was 23%.
Turning now to the balance sheet too.
Q3, total inventory was down 28% compared to fiscal 'twenty on sales that were up 12% as we remain vigilant in keeping pace with consumer demand in the face of delivery days delays.
Our strong net cash position of $267 million and our confidence in the business.
Enabled us to repurchase 522000 shares of stock for.
For $36 million at an average price of 58.
Dollars and 71 cents per share we currently have $59 million remaining on our share repurchase authorization.
Regarding capital allocation, our first priority is to invest in the business.
And then continue to return cash to our shareholders through.
Through opportunistic share repurchases.
Capital expenditures were $15 million.
<unk> amortization was $10 million.
We closed five stores during the third quarter two into quarter, one with 1434 total stores.
Now turning to our outlook.
Given the recovery in confidence we have we are returning to providing annual guidance.
Based on the strength of our performance this year to date.
Current Q4 visibility.
And expectations for a more normal holiday selling season.
We expect fiscal year 'twenty, two sales to grow 9% to 11% comp.
Compared to the pre pandemic fiscal year 'twenty.
For adjusted earnings we expect a range of $6 40 to $6 90 per share.
Our best current expectation is that earnings will be near the midpoint of this range an increase of 45% over fiscal year 'twenty pre pandemic levels.
Note that our full year guidance does not anticipate any further significant supply chain disruptions, nor increased negative consumer or economic impact from COVID-19, including new Covid variance.
Although our plan going forward is not to provide quarterly guidance given.
Given the current timing of restarting formal guidance, we would like to provide insights into Q4.
Please refer to our summary results presentation on our website.
The complete fourth quarter and full year guidance input.
Note that all the comparisons we make our two pre pandemic fiscal 'twenty Q4.
Implicit in the annual guidance.
There's an expectation expectation for Q4 sales growth.
Versus fiscal 'twenty at the midpoint to be in the mid single digits.
Q4 adjusted EPS.
Would range from $2.22 to $2 72 per share and again, our best current expectation is for earnings to be near the midpoint of this range.
We expect gross margin rates for Q4 to be relatively flat versus fiscal year 'twenty levels.
With a possible 30 basis point swing in either direction.
We believe the promotional environment environment will remain favorable in this range represents the degree of full price selling we could achieve.
Similar to Q3, we expect channel mix as well as increased logistics cost.
To pressure gross margins.
The increased logistics cost are expected to pressure gross margins by 130 basis points and will offset to some extent these improvements in full price selling.
We expect Q4 adjusted SG&A as a percentage of sales to deleverage in the range of 180 to 200 basis points compared to fiscal year 'twenty.
This is driven primarily by increased advertising and marketing costs, particularly particularly in brand advertising and digital marketing related to cost per click.
And higher performance based compensation associated with the expected improvement in annual results.
Partially offset by leverage in occupancy cost.
As a reminder, fiscal year 'twenty Q4 performance based compensation was relatively low.
And this year's level reflects the improved performance that we've experienced.
On a year over year basis.
One more factor worth mentioning on the Q4 SG&A rate as we are not expecting the same amount of onetime government government relief or rent abatements, we experienced in Q3 this year or last year in Q4.
Our guidance assumes no additional share repurchases for the remainder of the fiscal year.
Which results in Q4 weighted average shares outstanding of approximately $14 3 million.
Furthermore, the Q4 Q4, we expect the tax rate.
To be approximately 28%.
In summary, this all results in unexpected Q4 operating margin below FY 'twenty levels in large part driven by cost pressures unique to the fourth quarter. This year.
In conclusion, I would like to thank all our employees for all their great efforts driving our business, we have the right team and the right strategy to continue to drive shareholder value.
This concludes our prepared remarks.
Now I'd like to turn the call back over to the operator for questions.
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Good morning, Mimi and Tom Congratulations on a terrific quarter and a post pandemic performance. Thank.
Thank you thanks, Steve.
That you are not providing guidance for next year of course, but I just have a couple of very very high level questions and I'm sure that there's probably more than would be the last time here on this call, but from a margin retention standpoint in the coming fiscal year can you talk a little bit about strategies and tactics associated with maintaining that margin.
And not reverting to mean.
Sure at it it's a great question and I.
Think that we are really pleased with the progress that we have made on our margins. This year. We had a you know come out with our 6% target initially with our five year plan and we had a chance over the summer to take that up to a.
Six plus percent and if you look at our current strategy. We are driving the business by first of all increasing the growth of E Commerce, which has double digit operating margins and so that adds nicely to the bottom line. The second thing that we've done is significantly.
Improve our store economics by getting rent reductions and other cost reductions and so those are certainly will continue to bear fruit for us and the last thing is that we have been growing the branded side of our business and that is both an in licensed brands, which with some very nice growth this year.
And we know that Johnston <unk>, Murphy's turnaround will be successful and add as well and so when we look at all of that we are optimistic about the market share that we've picked up in the underlying growth drivers I think as you look to next year that the pandemic accelerated the.
The improvement opportunities that are that we had and that we knew that we had and as we get into next year, we're optimistic about being able to hang onto some of that certainly too much of that market share growth in a couple of things will help us next year, certainly we've had a lot of freight pressure Tom.
Talked about that freight pressure and we also this year have had a a performance incentive compensation bonus and if we don't improve over this year's earnings and the way our bonus plan works is that that bonus falls back out of the P&L until we have those opportunities.
Is to really pick up some profitability in our numbers next year, Tom would you add anything to that no I think I'd just reinforce we are really pleased with the results I think if you look at this year's.
Our guidance implicit in that guidance is roughly a five 5%.
Operating margin in that absorbs about 50 basis points of freight for the year. So you can see adjusting for the freight were about a 6% operating margin now which was our target for fiscal year 'twenty Fives were obviously pleased with those results, we like a lot of momentum in the business.
We're really excited about the branded business really excited about the traction we continue to get in our digital business as well.
We gained volume will get better.
Better pricing over time, and our branded business, that's going to help the branded business gross margins.
Cited about the turnaround with Johnston <unk> Murphy and everything we're doing there.
So we're feeling good we're in a good situation here going going forward.
That's great Tom you sort of actually answered my follow up question, but I'm going to ask it anyway.
Has the.
Aggregate logistics costs associated with the current fiscal year I think you said it was 50 basis points is that really all encompassing of all incremental costs associated with this year with supply chain and then the follow up to that is what would you expect to say for the first half of next year and really what I'm driving at is the.
Expectation again from what is known now and I know that its variants the delta in those two numbers between what was experienced this year and what was the experience next year from incremental freight.
So that was yeah, yes, youre right. The 50 basis points was the entire incremental freight and logistics costs for this year and and you know regarding the crystal ball into the supply chain for next year.
We've done a lot of research on that everybody's done some research on that and try to make a call on that but we can see that.
That's probably going to continue for most of next year and not necessarily just the first half of next year, but.
There's the exposure so to speak but we have done a lot of work in terms of you know.
Mitigating our risks there not to say there is still some risks there and theres still going to be some pressure so.
It's a little bit too early to make a call on how much of the freight pressures will continue for for next year, but.
And in the scheme of things I think I could say, it's mainly a branded business concept for us.
And in the scheme of things freight and logistics costs aren't the biggest cost in the cost of goods sold line. So I think that that can help put it in perspective, and we have a lot of ever other levers to work with and structural momentum in the business that we feel probably in the end is going to be able to mitigate a lot of that.
Freight and logistics cost pressure I think that's right I think I would just underscore what Tom said is that in.
And the vast majority of our business. This year, we have been shielded from some of that freight and logistics costs because.
We are well diversified across a vendor our vendor base and agreed to pricing several months ago, and I think that you.
You know to the extent that the cost pressure continues we have been successful in taking price increases to absorb some of that cost pressure and anticipate that we will continue to be able to do so and so we've been managing through that quite well it will be an issue for the first half of the year, but with a little bit more time, there there's more opportunity to manage.
It.
Super helpful. Thank you I'll take the balance offline.
Yeah.
Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Okay.
There are no further questions at this time I would like to turn the call back over to Mimi Vaughn for any closing comments.
Alright, Thank you for joining us today, and we wish everybody a happy holiday season.
Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time have a great weekend.