Q2 2025 Shoe Carnival Inc Earnings Call

September 5, 2024

Speaker Change: Good morning, and welcome to the issue of carnival's second quarter of 2024 earnings conference call.

Operator: for Erning's conference call. Today's conference call is being recorded and is also being broadcast via webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited.

Speaker Change: Today's conference call is being recorded and is also being broadcast via web, via webcast.

Steve Alexander: Any Reproduction of Reblogcast of any portion of this call is expressly prohibited. I would now like to turn or introduce Mr. Steve Alexander, which, for Carnival Investor Relations, Mr. Alexander, please go ahead.

Steve Alexander: I would now like to turn or introduce Mr. Steve Alexander, which you Carnival Investor Relations.

Steve Alexander: Mr. Alexander, please go ahead.

Steve Alexander: Thank you and good morning. Thanks for joining us today. Earlier this morning, we issued our Earnings press release for the second quarter of 2024. If you need a copy of the release, it is available on our website in the Investor section.

Steve Alexander: Thank you, and good morning. Thanks for joining us today. Earlier this morning, we issued our earnings press release for the second quarter of 2024. If you need a copy of the release, it is available on our website in the investor section.

Steve Alexander: Joining me on today's call are Mark Worden, President and Chief Executive Officer of Shoe Carnival; Carl Scibetta, Chief Marketing Officer; and Patrick Edwards, Chief Financial Officer. Management's remarks today may contain forward-looking statements that involve a number of risk factors. These risk factors could cause the company's actual results to be materially different from those projected in such statements. Forward-looking statements should also be considered in conjunction with the discussion of risk factors included in the company's SEC filing and today's earnings press release. Investors are cautioned not to place under reliance on these forward-looking statements, which speak only as of today's date.

Speaker Change: Joining me on today's call on Mark Worden, President, and Chief Executive Officer of Sheet Farm, Carl Scibetta, Chief Merchandising Officer, and Patrick Edwards, Chief Financial Officer.

Speaker Change: Management's remarks today may contain forward-looking statements that involve a number of risk factors. These risk factors could cause the company's actual results to be materially different from those projected in such statements.

Speaker Change: Board-looking statements should also be considered in conjunction with the discussion of risk factors, included in the company's SEC filing and today's earnings press release.

Speaker Change: Investors are caution not to place under a line on these forward-looking statements, which speak only as up today's date.

Steve Alexander: The company disclaims any obligation to update any of the risk factors or to publicly announce any little visions to the forward-looking statements discussed on today's conference call or contained in today's press release to reflect future events or developments.

Speaker Change: The company disclinced any obligation to update any of the risk factors or to probably announce any little visions to the forward-looking savings discussed on today's conference call or contained in today's press release to reflect future events or developments.

Operator: for Erning's Conference Call. Today's conference call is being recorded and is also being broadcast via webcast. Any reproduction or read broadcast of any portion of this call is expressly prohibited.

Steve Alexander: Today's call will reference non-gap measures. The non-GAAP measures or adjusted results reference exclude the purchase accounting, merger, integration, and transaction costs related to the acquisition of Rogan's Shoes. A reconciliation of gap to non-gap results is included in this morning's release.

Speaker Change: Today's call will reference non-gat measures, non-gat measures or adjusted results reference exclude the purchase accounting, merger, integration and transaction costs related to the acquisition of robin shoes.

Steve Alexander: I would now like to turn or introduce Mr. Steve Alexander, which you Carnival investor relations. Mr. Alexander, please go ahead. Thank you and good morning. Thanks for joining us today. Earlier this morning, we issued our Erning's press release for the second quarter of 2024. If you need a copy of the release, it is available on our website in the investor section.

Speaker Change: Reconciliation of Gapton on Gap Results is included in this more of the release. And with that, I am the Call of the Mark.

Steve Alexander: And with that, I am the call over to Mark.

Mark Worden: Thank you, Steve, and good morning, everyone. I'd like to start today, if I can, congratulating our 6,000 team members on achieving a new sales record for the second quarter and on the COMP sales growth delivered during our most important event of the year, the back to school season. Well done, team.

Mark Worden: Thank you, Steve, and good morning, everyone. I'd like to start today if I can congratulate our 6,000 team members on achieving a new sales record for the second quarter, and on the comp sales growth delivered during our most important event of the year, the back of school season. Well done, Steve.

Steve Alexander: Joining me on today's call on Mark Worden, President and Chief Executive Officer of Shoe Carnival, Carl Scibetta, Chief Marketing Officer, and Patrick Edwards Chief Financial Officer. Management's remarks today may contain forward-looking statements that involve a number of risk factors. These risk factors could cause the company's actual results to be materially different from those projected in such statements. Forward-looking statements should also be considered in conjunction with the discussion of risk factors included in the company's SEC filing and today's Erning's press release. Investors are cautioned not to place under reliance on these forward-looking statements which speak only as of today's date.

Mark Worden: Based on these strong results, today we are raising our annual sales and ETS guidance ranges. During the quarter, our digital first marketing approach worked and our brand focused product assortment resonated with customers across our banners, geographies, and demographics. This drove customer engagement to levels that exceeded our expectations and sales and EPS that exceeded our Q2 guidance. But once the back to school season was in full swing at the tail end of July, cost sales growth rapidly accelerated. We once again gained significant market share, and we achieved a net sales record in the quarter, exceeding all previous second quarter net sales in Shoe Carnival history.

Mark Worden: Based on these strong results, today we are raising our annual sales and ETS guidance ranges.

Mark Worden: During the quarter, our digital first marketing approach worked, and our brand-focused product equipment resonated with customers across our banners, geographies, and demographics.

Mark Worden: This drove customer engagement to levels that exceeded our expectations and sales and EPS that exceeded our Q2 guidance.

Speaker Change: But once the back of school season was in full swing at the tail end of July, Cost sales growth rapidly accelerated. We once again gained significant market share and we achieved the net sales record in the quarter, exceeding all previous second quarter net sales in shoe carnival history.

Steve Alexander: Today's call will reference non-gap measures. The non-gap measures or adjusted results reference exclude the purchase accounting, merger, integration, and transaction costs related to the acquisition of Rogan's shoes. A reconciliation of gap to non-gap results is included in this morning's release.

Mark Worden: During the quarter, net sales reached 12.9% to $332.7 million. Our sales growth surpassed our expectations for the quarter, and there are several key drivers that I would like to highlight. First, shoe station net sales continued to grow faster than planned, increasing double digits as we continue to grow share in our existing markets, bring new customers into our shoe park CRM platform, and drive growth in expansion markets. Shoe Station has continued to deliver profit and creative results as our growth banner, and as I briefly mentioned last quarter, we've identified significant additional growth opportunities going forward with our new banner-switch strategy that we are in test-barkets with now.

Speaker Change: During the quarter, NetSales reached $12.9% to $332.7 million. Our sales growth surpassed our expectations for the quarter, and there are several key drivers that I would like to highlight.

Speaker Change: First, shoes station that sales continued to grow faster than plan, increasing double digits as we continue to grow share in our existing markets, bring new customers into our platform and drive growth in expansion markets.

Steve Alexander: And with that, I am the call over to Mark. Thank you, Steve, and good morning, everyone.

Mark Worden: I'd like to start today if I can congratulating our 6,000 team members on achieving a new sales record for the second quarter and on the COMP sales growth delivered during our most important event of the year, the back to school season. Well done, team. Based on these strong results, today we are raising our annual sales and ETS guidance ranges. During the quarter, our digital first marketing approach worked and our brand focused product assortment resonated with customers across our banners, geographies, and demographics.

Speaker Change: Tuesdays and has continued to deliver profit of creative results as our growth banner, and as I've briefly mentioned last quarter, we've identified significant additional growth opportunities going forward with our new banner switch strategy that we are in test markets with now.

Mark Worden: I'll cover this topic in more detail in a few moments. Second, Shoe Carnival trends continue to strengthen, with comparable store sales sequentially improving versus Q1 and turning into growth during the back-to-school season. Store traffic improves sequentially versus first quarter 2024, and both conversion rates and average transaction amounts remain strong. Third, our digital first go-to-market approach works beyond my expectations. This was the first back-to-school season where we fully-tivided from a traditional marketing campaign heavily focused on TV to the digital first targeted marketing approach we have been testing for the past year. This approach gives us increased flexibility to invest in real-time behind the products that are resonating with our customers during the season versus the old school way of being locked into whatever best from the hot product were made at the time of the TV shoot and media buys.

Speaker Change: I'll cover this topic in more detail in a few moments.

Speaker Change: Second, two carnival trends continue to strengthen with comparable store sails sequentially improving versus Q1, and turn into growth during the back-to-school season.

Mark Worden: This drove customer engagement to levels that exceeded our expectations and sales and EPS that exceeded our Q2 guidance. But once the back to school season was in full swing at the tail end of July, cost sales growth rapidly accelerated. We once again gained significant market share and we achieved a net sales record in the quarter exceeding all previous second quarter net sales in shoe carnival history. During the quarter, net sales reached 12.9% to $332.7 million.

Speaker Change: Door traffic improved sequentially versus first quarter 2020-04, and both conversion rates and average transaction amounts remain strong.

Speaker Change: Third, our digital first Go to Market Approach works beyond my expectations.

Speaker Change: This was the first back-to-school season where we fully pivoted from a traditional marketing campaign heavily focused on TV to the digital first targeted marketing approach we have been testing for the past year.

Mark Worden: Our sales growth surpassed our expectations for the quarter and there are several key drivers that I would like to highlight. First, shoe station net sales continued to grow faster than planned, increasing double digits as we continue to grow share in our existing markets, bring new customers into our shoe park CRM platform and drive growth in expansion markets. Shoe Station has continued to deliver profit and creative results as our growth banner, and as I briefly mentioned last quarter, we've identified significant additional growth opportunities going forward with our new banner-switch strategy that we are in test-barkets with now.

Speaker Change: This approach gives us increased flexibility to invest in real-time, behind the products that are resonating with our customers during the season. First is the old school way of being locked into whatever best on the hot product we made at the time of the TV shoot and media vibes.

Mark Worden: This added flexibility allowed us to amp-off messaging in real-time for brands that our customers were responding to during the season. The customer engagement with our social and influencer content was very exciting to see in Q2, and results spiked as we turned on the full weight of the investments during back-to-school. Bottom line, this new approach contributed to a record-setting Q2 sales and comparable sales growth during back-to-school without spending additional marketing dollars versus the prior year. The effectiveness of our spend and added flexibility to react immediately to the customer are exciting to me, so we intend to continue building our expertise in this area going forward.

Speaker Change: This added flexibility allowed us to ant off messaging in real time for brands that our customers were responding to during the season.

Speaker Change: The customer engagement with our social and influencer content was very exciting to see in Q2 and results spiked as we turned on the full weight of the investment storing back to school.

Mark Worden: I'll cover this topic in more detail in a few moments. Second, Shoe Carnival trends continue to strengthen with comparable store sales sequentially improving versus Q1 and turn into growth during the back-to-school season. Store traffic improves sequentially versus first quarter 2024, and both conversion rates and average transaction amounts remain strong. Third, our digital first go-to-market approach works beyond my expectations. This was the first back-to-school season where we fully-tivided from a traditional marketing campaign heavily focused on TV to the digital first targeted marketing approach we have been testing for the past year.

Speaker Change: Bottom line, this new approach contributed to a record-setting Q2 sales and comparable sales growth during back-to-school, without spending additional marketing dollars versus the prior year.

Speaker Change: The effectiveness of our spend and added flexibility to react immediately to the customer are exciting to me, but we intend to continue building our expertise in this area going forward.

Mark Worden: In fourth, Rogans, which we acquired during the middle of February 2024, delivered second quarter net sales in line with our expectation and continues to be on track to deliver approximately $84 million in annual sales as we expected when we announced the acquisition. The integrations progressing smoothly on the accelerated schedule previously discussed, and we continue to be on pace to deliver the increased synergies in fiscal 2025, as discussed in each of the last two quarters. We're now about six months post-acquisition, and our team has become very efficient at identifying synergies, integrating rapidly, and building the skill set internally to capture profit synergies.

Speaker Change: and fourth, Rogans, which we acquired during the middle of February, 2024, delivered second-quarter net sales in line with our expectations and continues to be on track to deliver approximately $84 million in annual sales. As we expect it when we announce the acquisition.

Mark Worden: This approach gives us increased flexibility to invest in real-time behind the products that are resonating with our customers during the season versus the old school way of being locked into whatever best from the hot product were made at the time of the TV shoot and media buys. This added flexibility allowed us to amp-off messaging in real-time for brands that our customers were responding to during the season. The customer engagement with our social and influencer content was very exciting to see in Q2 and results spiked as we turned on the full weight of the investments during back-to-school.

Speaker Change: The Integrations Programming smoothly on the accelerated schedule previously discussed, and we continue to be on pace to deliver the increased synergies in fiscal 2025 as discussed in each of the last two quarters.

Speaker Change: We're now about six months post-acquisition, and our team has become very efficient at identifying synergies, immigrating rapidly, and building the skillset internally to capture profit synergies.

Mark Worden: The capabilities that we are building set us up well for future M&A opportunities as they become available to expand shareholder value and gain market share.

Speaker Change: The capabilities that we are building set us up well for future M&A opportunities as they become available to expand shareholder value and gain market share.

Mark Worden: We're still early in Q3, but nearly all of our markets have gone back to school now, so I'd like to share some color commentary on our August back-to-school sales and margin results. In the fiscal month of August, we achieved solid, low single-digit comparable sales growth led by mid to high single-digit growth in children's and athletic. The Vecta School week before Labor Day are the largest weeks of the quarter for us in Q3 and where we focus much of our campaign investments. During this time frame, we achieved comparable sales growth at both Carnival and station banners, strong product margins, customer traffic growth, and transaction size increases versus prior year.

Mark Worden: Bottom line, this new approach contributed to a record-setting Q2 sales and comparable sales growth during back-to-school without spending additional marketing dollars versus the prior year. The effectiveness of our spend and added flexibility to react immediately to the customer are exciting to me so we intend to continue building our expertise in this area going forward. In fourth, Rogans, which we acquired during the middle of February 2024, delivered second quarter net sales in line with our expectation and continues to be on track to deliver approximately $84 million in annual sales as we expected when we announced the acquisition.

Speaker Change: We're still early in the Q3, but nearly all of our markets have gone back to school now. So I'd like to share some color commentary on our August back to school sales and margin results.

Speaker Change: In the fiscal month of August, which he solid, low single digit comparable sales growth, led by mid to high single digit growth in children's and athletics.

Speaker Change: The back-to-school weeks before Labor Day are the largest weeks of the quarter for us in 23 and where we focus much of our campaign investments.

Speaker Change: During this time frame, we achieved comparable sales growth at both carnival and station banners, strong product margins, customer traffic growth, and transaction sizing increases versus prior year.

Mark Worden: Overall, we are encouraged not only with Vecta School and the queues to improving comparable store sales performance, but also our performance on a year-to-date basis. All our key drivers of our decision to raise our full-year net sales guidance range to growth of 5% to 6% versus prior year, and our comparable store sales guidance range for the full-year to down 1.5% to up 1% versus prior year. Implicit in this enhanced guidance is comparable sales growth for combines Q3 and Q4 in the range of flat to plus 5%. I currently anticipate the lower side of this range is the most likely outcome as I look at where we stand today and the shape of the year to go.

Speaker Change: Overall, we are encouraged not only with back-to-school and the cues to improving comparable store-sales performance, but also our performance on a year-to-date basis.

Mark Worden: The integrations progressing smoothly on the accelerated schedule previously discussed and we continue to be on pace to deliver the increased synergies in fiscal 2025 as discussed in each of the last two quarters. We're now about six months post-acquisition and our team has become very efficient at identifying synergies, integrating rapidly and building the skill set internally to capture profit synergies. The capabilities that we are building set us up well for future M&A opportunities as they become available to expand shareholder value and gain market share.

Speaker Change: All our key drivers of our decision to raise our full year net sales guidance range to growth of 5% to 6% versus prior year.

Speaker Change: and our comparable store sales guided range for the full year to down 1.5% to up 1% versus prior year.

Speaker Change: Implicit in this enhanced guidance is comparable sales growth for combined Q3 and Q4 in the range of flash to plus 5%.

Mark Worden: We're still early in Q3 but nearly all of our markets have gone back to school now so I'd like to share some color commentary on our August back-to-school sales and margin results. In the fiscal month of August we achieved solid, low single digit comparable sales growth led by mid to high single digit growth in children's and athletic. The Vecta School Week before Labor Day are the largest weeks of the quarter for us in Q3 and where we focus much of our campaign investments.

Speaker Change: I currently anticipate the lower side of this range is the most likely outcome as I look at where we stand today and the shape of the year to go. But if we have a record setting boot season and holiday, then the higher side of that range is a possible stretch outcome.

Mark Worden: But if we have a record-setting boot season and holiday, then the higher side of that range is a possible stretch outcome.

Mark Worden: Moving now from our sales growth and back-to-school update to a few financial highlights in the quarter. We again delivered sustained margin performance in the quarter, with gross profit margin expanded to 36.1%, representing the 14th consecutive quarter above 35%. I'm pleased with the gross profit margin expansion achieved this quarter versus Q2 last year, and at the same time, we delivered record-high sales in the quarter. Operating income in the quarter increased 22% versus prior year to $30.1 million, demonstrating that our strategies to grow the business profitably are working. EPS in the quarter increased on the strong net sales performance and the higher gross profit margin.

Speaker Change: Moving now, from our sales growth and back to school update, to see a financial highlights in the quarter.

Speaker Change: We again deliver sustained margin performance in the quarter, with gross profit margin expanded to 36.1%. Representing the 14th consecutive quarter of a 35%

Mark Worden: During this time frame, we achieved comparable sales growth at both Carnival and station banners, strong product margins, customer traffic growth, and transaction size increases versus prior year. Overall, we are encouraged not only with Vecta School and the queues to improving comparable store sales performance, but also our performance on a year-to-date basis. All our key drivers of our decision to raise our full-year net sales guidance range to growth of 5% to 6% versus prior year, and our comparable store sales guidance range for the full-year to down 1.5% to up 1% versus prior year.

Speaker Change: I'm pleased with the gross profit-fartion expansion achieved this quarter versus Q2 last year and at the same time we delivered record high sales in the quarter.

Speaker Change: Operating income in the quarter increased 22% versus prior year to $30.1 million. Demonstrating our strategies to grow the business profitably are working.

Speaker Change: EPS in the quarter increased on the strong net sales performance and the higher gross profit margin. On an adjusted basis, EPS in the quarter increased 17% totaling 83 cents that's compared to 71 cents in second quarter 2021-2023.

Mark Worden: On an adjusted basis, EPS in the quarter increased 17%, totaling 83 cents as compared to 71 cents in second quarter 2023. And operating cash flow in the quarter of total $40.7 million. And we ended the quarter with over $84 million of cash, cash equivalents, and marketable securities.

Mark Worden: Implicit in this enhanced guidance is comparable sales growth for combines Q3 and Q4 in the range of flat to plus 5%. I currently anticipate the lower side of this range is the most likely outcome as I look at where we stand today and the shape of the year to go. But if we have a record-setting boot season and holiday, then the higher side of that range is a possible stretch outcome.

Speaker Change: and operating cash flow in the quarter total $40.7 million, so we ended the quarter with over $84 million of cash, cash, equivalent and marketable securities.

Mark Worden: Our vision is to be in the nation's leading family footwear retailer, and one of the core strategies to executing on this vision is profitable M&A activity. But to mention earlier, Rogans, which we acquired in February 2024, is delivering results in line with our expectations, and we're on track with the integration and synergy delivery for fiscal 2025. Along with profitable M&A, another core strategy is to grow our existing business by leveraging our advanced customer analytics capabilities. As I mentioned in our call last quarter, one of the primary focus areas in this strategy is to evaluate data on community characteristics, purchasing trends, product assortment, and mix at a store level.

Speaker Change: Our vision is to be in the nation's leading family footwear retailer. And one of the core strategies to executing on this vision is profitable M&A activity.

Speaker Change: But the mentioned earlier, Rogans, which we acquired in February 2024, is delivering results in line with our expectations. The wrong track with the integration and synergy delivery for fiscal 2025.

Mark Worden: Moving now from our sales growth and back-to-school update to a few financial highlights in the quarter. We again delivered sustained margin performance in the quarter with gross profit margin expanded to 36.1%, representing the 14th consecutive quarter above 35%. I'm pleased with the gross profit margin expansion achieved this quarter versus Q2 last year, and at the same time we delivered record-high sales in the quarter. Operating income in the quarter increased 22% versus prior year to $30.1 million, demonstrating that our strategies to grow the business profitably are working.

Speaker Change: Along with profitable M&A, another core strategy is to grow our existing business by leveraging our advanced customer analytics capabilities.

Speaker Change: As I mentioned, I'll call last quarter, one of the primary focus areas in this strategy is to evaluate data on community characteristics, purchasing trends, product assortment, and mix at a store level.

Mark Worden: As part of that extensive analysis, we've gained valuable insights about our Shoe Station customer, and if defined markets where Shoe Station can likely outperform. Specifically, we've identified existing Shoe Carnival locations where the customer and real estate characteristics are better aligned with Shoe Station. We've been in the test-and-learned process for several months now, and I'd like to share some of the early results from these test markets. And our observations to date on this exciting growth opportunity. Let me start by saying that it is currently only a small scale test and only a few months of in market results, but to save your early results to date have outperformed our objectives would be an understatement.

Speaker Change: As part of that extensive analysis, we've gained valuable insights about our shoe station customer and of defined markets where shoe station can likely outperform.

Mark Worden: EPS in the quarter increased on the strong net sales performance and the higher gross profit margin. On an adjusted basis, EPS in the quarter increased 17% totaling 83 cents as compared to 71 cents in second quarter 2023. And operating cash flow in the quarter of total $40.7 million. And we ended the quarter with over $84 million of cash, cash equivalence, and marketable securities.

Speaker Change: Specifically, we have identified existing shoe carnival locations for the customer and real estate characteristics are better aligned with shoe station.

Speaker Change: We've been in the test and learn process for several months now, and I'd like to share some of the early results from these test markets and our observations today on this exciting growth opportunity.

Speaker Change: Let me start by saying that it is currently only a small scale test and only a few months of in-market results. But to save your early results today have out-forformed our objectives would be an understatement.

Mark Worden: So, what have we done so far? We defined the success criteria for a banner switch test markets at 3-5% annual sales growth, which is roughly the break-even profit point for the investments required to close the existing Shoe Carnival store and open a new Shoe Station store in the market. Our first in-market test included three store switches from Shoe Carnival to Shoe Station in the core station markets of Alabama and Mississippi. Here, the Shoe Station brand is very strong with high customer awareness and decades of experience. Said differently, we expected the switch would succeed here. These three stores did more than succeed, though.

Speaker Change: So, what have we done so far?

Speaker Change: We defined the success criteria for a banner switch test markets at 3-5% annual sales growth, which is roughly the break-even profit point for the investments required to close the existing shoe carnival store and open a new shoe station store in the market.

Speaker Change: Our first in-market test included three source switches from shoe carnival to shoe station in the core station markets of Alabama and Mississippi. Here, the shoe station brand is very strong with high customer awareness and decades of experience.

Mark Worden: As I mentioned our call last quarter, one of the primary focus areas in this strategy is to evaluate data on community characteristics, purchasing trends, product assortment, and mix at a store level. As part of that extensive analysis, we've gained valuable insights about our Shoe Station customer, and if defined markets where Shoe Station can likely outperform. Specifically, we've identified existing Shoe Carnival locations where the customer and real estate characteristics are better aligned with Shoe Station.

Ted: Ted differently, we expected the switch would succeed here.

Mark Worden: They performed exceptionally well with sales for the three in total grow in over 15% versus prior, and each of the stores individually often grew over 15%. The growth achieved is widespread across athletics and non athletic categories and men and women. Again, each expanding over 15%. Even more encouraging is the profit growth of these three stores, with each store growing profit over 20% versus prior year. The financial leverage gained from the more productive sales is driving solid profit leverage gains and flowing through. Based on these compelling early results, we're expanding the scope of our test and switching an additional six to seven stores this fall to Shoe Station stores.

Speaker Change: These three stores in more than 60 though, they perform exceptionally well, with sales for this rate in total grow an over 15% versus prior and each of the stores individually off of over 15%.

Mark Worden: We've been in the test and learned process for several months now, and I'd like to share some of the early results from these test markets. And our observations to date on this exciting growth opportunity. Let me start by saying that it is currently only a small scale test and only a few months of in market results, but to save your early results to date have outperformed our objectives would be an understatement.

Speaker Change: The growth achieved was widespread across athletics and non-Atlantic categories and men's and women's. Again, each expanding over 15%.

Speaker Change: Even more encouraging is the profit growth of these three stores, with each store growing profit over 20% versus prior year. The financial leverage gained from the more productive sales is driving solid profit leverage gains and flowing through.

Speaker Change: Based on these compelling early results, we're expanding the scope of our test and switching an additional 6-7 stores this fall to shoot station stores.

Mark Worden: Our focus on the second round of testing is to further validate that switching in core markets is profit-a-creative and better meets the local customer needs. But importantly, we're expanding the test into additional southern states where Shoe Station is present or known, but not the market leader. I'm sure you share my interest in learning what the store count potential is for this strategy over the years ahead. It is too early to say today if this strategy is a winner solely in core southern markets across most or all of our southern markets or possibly even further. We'll be working diligently over the fall and early into 2025 to answer these questions in the south within market, live customer data, the guide our strategic roadmap.

Speaker Change: Our focus on the second round of testing is the further validate that switching in core markets is profit-acreda and better meets the local customer needs.

Speaker Change: But importantly, we're expanding the test into additional Southern states where shoe stationers present or known but not the market leader.

Speaker Change: I'm sure you share my interest in learning what the store count potential is for this strategy over the years ahead.

Speaker Change: It is too early to say today if this strategy is a winner, solely in core southern markets, across most or all of our southern markets, or possibly even further.

Mark Worden: Said differently, we expected the switch would succeed here. These three stores did more than succeed though. They performed exceptionally well with sales for the three in total grow in over 15% versus prior and each of the stores individually often grew over 15%. The growth achieved is widespread across athletics and non athletic categories and men and women. Again, each expanding over 15%. Even more encouraging is the profit growth of these three stores, with each store growing profit over 20% versus prior year.

Speaker Change: We'll be working diligently over the fall and early into 2025 to answer these questions in the south. With in-market, live customer data that guide our strategic roadmap. I'll update you on how this encouraging test is progressing on our Q3 earnings call.

Mark Worden: I will update you on how this encouraging test is progressing on our Q3 earnings call.

Mark Worden: Now shifting to thoughts on the balance of this. As I discussed earlier, we encourage with the sales growth and profitability that we achieved year-to-date. Patrick will provide additional details in his remarks, but given the solid performance in both the quarter and year-to-date, today we raised our foliar guidance ranges for net sales, comparable store sales, and EPS.

Speaker Change: Now shifting to thoughts on the balance of this year.

Speaker Change: As I discussed earlier, we encourage with the sales growth and profitability that we achieved here today.

Speaker Change: will provide additional details in his remarks, but given the solid performance in both the quarter and year-to-date, today we raised our full-year guidance ranges for net sales, comparable store sales, and EPS.

Mark Worden: The financial leverage gained from the more productive sales is driving solid profit leverage gains and flowing through. Based on these compelling early results, we're expanding the scope of our test and switching an additional six to seven stores this fall to Shoe Station stores. Our focus on the second round of testing is to further validate that switching in core markets is profit-a-creative and better meets the local customer needs. But importantly, we're expanding the test into additional southern states where Shoe Station is present or known but not the market leader.

Mark Worden: As we wrap up the back-to-school season, we're entering a non-events buying period until we get into the holidays. While we have experienced improving customer purchasing trends so far this year during non-events periods, we are not yet seeing category expansion during these periods. It remains unclear if customer caution levels will continue to improve as we head into the upcoming non-events months and the elections cycle ahead. We'll continue to monitor customer buying behavior closely during this period before the holiday season starts and pivot accordingly.

Speaker Change: As we wrap up the back-to-school season, we're answering a non-events buying period until we get into the holidays. While we have experienced improving customer purchasing trends so far this year during non-events periods, we are not yet seeing category expansion during these periods.

Speaker Change: Here we make unclear if customer caution levels will continue to improve as we head into the upcoming not-of-at-months and the elections cycle ahead. We'll continue to monitor customer buying the Averclosely during this period before the holiday season starts and pay a recording light.

Mark Worden: I'm sure you share my interest in learning what the store count potential is for this strategy over the years ahead. It is too early to say today if this strategy is a winner solely in core southern markets across most or all of our southern markets or possibly even further. We'll be working diligently over the fall and early into 2025 to answer these questions in the south within market, live customer data, the guide our strategic roadmap.

Mark Worden: Before handing it to Carl to discuss Q2 category level performance, I'd like to share a few summary comments. We're encouraged by the results we achieved in the quarter, delivering record second quarter sales with operating profits and EPS higher than our guidance. Sales growth in the quarter was led by continued strength in our Shoe Station banner, improving Shoe Carnival trends, our new digital first marketing approach, and Rogan's acquisition. Trends accelerated sharply at our Shoe Carnival banner once back to school started. Our strategies to grow sales and increase profitability over the long term are working, and we have additional opportunities, including our new banner switch strategy that is currently in test markets, to drive additional growth going forward.

Speaker Change: Before Handling is a Carl to discuss YouTube category level performance, I'd like to share a few summary comments.

Speaker Change: We're encouraged by the results we achieved in the quarter, delivering record second quarter sales, with operating profits and DPS higher than our guidance.

Speaker Change: Fails wrote in the quarter, was led by continued strength in our shoe station banner, improving shoe carnival trends, our new digital first marketing approach, and Rogan's acquisition.

Mark Worden: I will update you on how this encouraging test is progressing on our Q3 earnings call.

Mark Worden: Now shifting to thoughts on the balance of this, as I discussed earlier, we encourage with the sales growth and profitability that we achieved year-to-date. Patrick will provide additional details in his remarks, but given the solid performance in both the quarter and year-to-date, today we raised our foliar guidance ranges for net sales, comparable store sales, and EPS. As we wrap up the back-to-school season, we're entering a non-events buying period until we get into the holidays.

Speaker Change: Trends accelerated sharply at our shoe carnival banner once back to school started.

Speaker Change: Our strategies to grow sales and increase profitability over the long-term art working, and we have additional opportunities, including our new banner switch strategy that has currently in test markets to drive additional growth going forward.

Mark Worden: Our long-term vision is clear. To be the nation's leading family footwear retailer. And I believe we are very well-positioned to continue advancing towards that ambition for the balance of this year and beyond.

Mark Worden: While we have experienced improving customer purchasing trends so far this year during non-events periods, we are not yet seeing category expansion during these periods. It remains unclear if customer caution levels will continue to improve as we head into the upcoming non-events months and the elections cycle ahead. We'll continue to monitor customer buying behavior closely during this period before the holiday season starts and pivot accordingly.

Speaker Change: Our long-term vision is clear, to be the nation's leading family footwear retailer.

Speaker Change: and I believe we are very well positioned to continue advancing toward that ambition for the balance of this year and beyond.

Mark Worden: And now I'll hand it over to Carl.

Carl Scibetta: Carl? Thank you, Mark. As you discussed, we achieved a record sales level for the quarter, which exceeded our expectations. A month ago, accelerated across the business as the back to school season started late in the quarter, and that momentum continued in the fiscal month of August. From a category perspective, women's boots, sandals, and adult athletics performed very well in the quarter. And in the fiscal August, as back to school continued, we delivered mid-to-high single-digit growth in children's and athletics. While competitive intensity remained high during the quarter, we delivered gross profit margin above 35% for the 14th consecutive quarter, and we remain committed to our long-term profit transformation and targeted CRM strategies to continue delivering sustained gross profit margin performance.

Carl Scibetta: and now I'll hand it over to Carl Carl.

Carl: Thank you, Mark. As you discussed, we achieved a record sales level for the quarter which you exceeded our expectations.

Carl: Well, months of accelerated across the business as the back-to-school season started late in the quarter, and that momentum continued in the fiscal month of August.

Carl: From a category perspective, women's boots, sandals, and adult athletics performed very well in the quarter. And in the fiscal August, as back to school continued, we delivered made to high single-digit growth in children's and athletics.

Carl: while competitive intensity remained high during the quarter.

Carl: We delivered gross profit margin at about 35% for the 14 consecutive quarter.

Carl: and we remain committed to our long-term profit.

Carl: Transformation and targeted CRM strategies to continue delivering sustained gross profit margin performance.

Mark Worden: Our strategies to grow sales and increase profitability over the long-term are working and we have additional opportunities including our new banner switch strategy that is currently in test markets to drive additional growth going forward. Our long-term vision is clear. To be the nation's leading family footwear retailer. And I believe we are very well-positioned to continue advancing towards that ambition for the balance of this year and beyond.

Carl Scibetta: Our merchandise margin in the quarter decreased by 50 basis points versus prior year, reflecting competitive intensity. On a year-to-date basis, our merchandise margin is about even with the prior year. During the second quarter, we continued to further optimize our inventory. Inventory at the end of the quarter total, 425.5 million, an increase of 16.1 million versus prior year, primarily reflected in impacts of the Rogan's acquisition in February 2024. Excluding the impacts from Rogan's, our merchandise inventory at the end of Q2 was lower by approximately 7% on a dollar basis than prior year, and on a unit basis, merchandise inventory was down approximately 10% versus prior year.

Carl: I'm Merchandice Margin in the quarter decreased by 50 basis points versus prior year reflecting competitive intensity.

Carl: On a year-to-day basis, our merchant nice marching is about even with the prior year.

Carl: During the second quarter, we continued to further optimize our inventory levels.

Carl: In the story at the end of the quarter total, 425.5 million, an increase in 16.1 million versus prior year, primarily reflecting impacts of the road-to-acquisition in February 2024.

Steve Alexander: And now I'll hand it over to Carl.

Carl Scibetta: Carl?

Carl Scibetta: Thank you, Mark. As you discussed, we achieved a record sales level for the quarter which exceeded our expectations. A month ago accelerated across the business as the back to school season started late in the quarter and that momentum continued in the fiscal month of August. From a category perspective, women's boots, sandals and adult athletics performed very well in the quarter. And in the fiscal August as back to school continued, we delivered mid-to-high single-digit growth in children's and athletics.

Carl: Excluding the impacts from Worldings, a merchandise inventory at the end of Q2 was lower by approximately 7% of a dollar basis than prior year, and on a unit basis, merchandise and inventory was down approximately 10% versus prior year.

Carl Scibetta: Excluding the impacts of Rogan's inventory, we continue to expect fiscal 2024 year ending inventory to be approximately 20 million or 5% lower than fiscal 2023 year end, while maintaining the freshest product disortment for our customers. Now moving to sales and categories for the quarter, total comp sales were down 2.1%, which reflected a very strong start to the back-to-school season, combined with growth in sandals, women's boots, and women's athletics. From a category perspective, total adult athletics comp sales decreased very low single digits in the quarter. Comp sales in women's adult athletics were up low singles, led by running, basketball, and court.

Rogan: Excluding the impacts of Rogan's inventory, we continue to expect fiscal 2024 year ending inventory to be approximately 20 million or 5% lower than fiscal 2023 year end, while maintaining the freshest product shortening for our customers.

Carl Scibetta: While competitive intensity remained high during the quarter, we delivered gross profit margin above 35% for the 14th consecutive quarter and we remain committed to our long-term profit transformation and targeted CRM strategies to continue delivering sustained gross profit margin performance. Our merchandise margin in the quarter decreased by 50 basis points versus prior year reflecting competitive intensity. On a year-to-date basis, our merchandise margin is about even with the prior year.

Rogan: Now moving to sales and categories for the quarter. Total compounds were down 2.1% which reflected a very strong start of the back-to-school season, combined with the written sandals, women's boots and women's athletics.

Rogan: From a category perspective, total of adult athletics, comps, so those decreased very low single digits in the quarter.

Rogan: Comp sales in women's adult athletics were up low singles led by running basketball and court. Comp sales in men's adult athletics were down low singles with a decline in running, partially offset by strength and basketball and walking.

Carl Scibetta: During the second quarter, we continued to further optimize our inventory. Inventory at the end of the quarter total, 425.5 million, an increase of 16.1 million versus prior year, primarily reflected in impacts of the Rogan's acquisition in February 2024. Excluding the impacts from Rogan's, our merchandise inventory at the end of Q2 was lower by approximately 7% on a dollar basis than prior year and on a unit basis, merchandise inventory was down approximately 10% versus prior year. Excluding the impacts of Rogan's inventory, we continue to expect fiscal 2024 year ending inventory to be approximately 20 million or 5% lower than fiscal 2023 year end while maintaining the freshest product disortment for our customers.

Carl Scibetta: Comp sales in men's adult athletics were down low singles, with a decline in running, partially offset by strength and basketball and walking. Children's comp sales were down mid-single digits, with athletic and non-athletic down mid-single digits. Children's non-athletic performance was primarily due to softness and casuals and sandals. In the fiscal month of August, children's athletic comp sales accelerated to mid single-digit growth during the back-to-school season. Second quarter comp sales in women's non-athletic footwear were down low single digit. Dress was down height teams and casuals was down low double digit. Sport was down low single digit. Sandals were strong in the quarter, growing mid single digit, and boots delivered low single digit growth.

Rogan: Children's Councils were down mid-single digits with athletic and non-athletic, down mid-single digits. Children's non-athletic performance was primarily due to softness and calories and fandles.

Rogan: In the fiscal month of August, children's athletic compounds accelerated to mid-single-digit growth during the back-to-school season.

Speaker Change: 2.4 COPS sales and women's non-appletics football were down at most individual digits. Dress was down height, teens, and casual was down low double digit.

Speaker Change: Sport was found low-syndall digits, sandals were strong in the quarter, growing mid-syndall digits and boots delivered also a digit risk.

Carl Scibetta: Men's non-athletic comp sales were down mid-single digit. Dress was down mid teams. Casual was down mid single digit, and boots were down low singles. Sandals delivered a strong performance, growing height team in the quarter. Coming out of the quarter, our inventory content is clean and in good position. We are excited about the fresh new products come into our stores for the balance of 2024. And we are in a strong position to continue providing the product assortment, mix, and values that our customers want.

Speaker Change: Men's non-acletter concepts were down mid-single-digit, Christmas-down mid-teens. Patrick was down mid-single-digit and each were down low-singles.

Carl Scibetta: Now moving to sales and categories for the quarter, total comp sales were down 2.1%, which reflected a very strong start to the back-to-school season, combined with growth in sandals, women's boots, and women's athletics. From a category perspective, total adult athletics comp sales decreased very low single digits in the quarter. Comp sales in women's adult athletics were up low singles led by running basketball and court. Comp sales in men's adult athletics were down low singles with a decline in running, partially offset by strength and basketball and walking.

Speaker Change: Sandwich and did a strong performance for a high team in the quarter.

Speaker Change: Coming down to the quarter, I'm in the short content as clean and in good position. We are excited about the Fresh New Prouds coming into our stores for the balance of 2024. And we are in the strong position to continue providing the product assortment, mix, and values that are customers want.

Carl Scibetta: And with that, I will turn the call over to Patrick for a review of our financials.

Speaker Change: and with that I will turn the call over to Patrick for a review of our financials. Patrick?

Patrick Edwards: Patrick? Thanks, Carl.

Patrick Edwards: Moving on to our financial results. Starting with top line growth, our net sales in Q2 were $332.7 million, an increase of 12.9% versus prior year, and were a record second quarter for us. Continued growth from Shoe Station and e-commerce combined with continued strengthening trends that Shoe Carnival stores and the success of our digital first go to market approach were key drivers to this strong performance. Sales from Rogans in the quarter were in line with our expectations. Going into a little more detail on our top line, Shoe Station total net cells performed very well with a mid-teen increase versus prior year driven by cells from new stores and a comparable store cell increase.

Patrick Edwards: Thanks, Carl, moving on to our financial results.

Carl Scibetta: Children's comp sales were down mid single digits with athletic and non-athletic down mid single digit. Children's non-athletic performance was primarily due to softness and casuals and sandals. In the fiscal month of August, children's athletic comp sales accelerated to mid single digit growth during the back-to-school season. Second quarter comp sales in women's non-athletic footwear were down low single digit. Dress was down height teams and casuals was down low double digit. Sport was down low single digit.

Patrick Edwards: Starting with Top Line Growth, our net sales in Q2 were 332.7 million, an increase of 12.9% versus prior year, and were a record second quarter for us.

Speaker Change: Continued growth from shoe station Andy Commerce, combined with continued strengthening trends at shoe carnival stores and the success of our digital first go to market approach or key drivers to this strong performance.

Speaker Change: Selt from Rugged in the Porter were in line with our expectations.

Speaker Change: Going into a little more detail on our top line.

Carl Scibetta: Sandals were strong in the quarter growing mid single digit and boots delivered low single digit growth. Men's non-athletic comp sales were down mid single digit. Dress was down mid teams. Casual was down mid single digit and boots were down low singles. Sandals delivered a strong performance growing height team in the quarter.

Speaker Change: Shoestation totaling that cells performed very well with a mid-teen increase versus prior year, driven by cells from new stores and a comparable store cell increase.

Patrick Edwards: Shoe Carnival total net cells came in at a mid-single digit increase with comparable store cells sequentially improving from Q1 and turning to growth versus prior year as the first important back to school weekend started. In fiscal August, as back to school continued, we saw Shoe Carnival comparable store cells increase to low single digits led by children's and athletics. Rogans cells in the quarter approximated 22 million. As you will recall, we completed the Rogans acquisition in mid-February of this year, and consistent with previous guidance, we continue to expect full-year 2024 net cells for Rogans to approximate $84 million.

Speaker Change: Shoot Carnival total in that cell came in at a mid-single digit increase with comparable store cells sequentially improving from Q1 in turning to growth versus prior year as the first important back to school weekend started.

Carl Scibetta: Coming out of the quarter, our inventory content is clean and in good position. We are excited about the fresh new products come into our stores for the balance of 2024. And we are in a strong position to continue providing the product assortment, mix, and values that our customers want.

Speaker Change: In physical August, as back to school continued, we saw shoot carnival comparable store sales increase to low single digits led by children's and athletics.

Patrick Edwards: And with that, I will turn the call over to Patrick for a review of our financials. Patrick? Thanks, Carl.

Speaker Change: Rogan cells in the quarter are approximated 22 million. As you will recall, we completed the Rogan's acquisition in mid-Fedularity of this year. In consistent with previous guidance, we continue to expect full-year 2024 net cells for Rogans to approximate $84 million.

Patrick Edwards: Moving on to our financial results. Starting with top line growth, our net sales in Q2 were $332.7 million, an increase of 12.9% versus prior year, and were a record second quarter for us. Continued growth from shoe station and e-commerce combined with continued strengthening trends that shoe carnival stores and the success of our digital first go to market approach were key drivers to this strong performance. Sales from Rogans in the quarter were in line with our expectations.

Patrick Edwards: As a result of the 53rd week in fiscal 2023 that will not recur in fiscal 2024, the calendar weeks each quarter shift in 2024 as compared to the prior year, which we have discussed previously. On a comparable store cell basis, which excludes the impact of this calendar shift, Rogans cells and other new store growth, net cells declined 2.1% per second quarter, representing an improvement versus 2023 and first quarter 2024. The strengthening trend of total company comparable store cells accelerated into August with back to school, as comparable store cells for fiscal August were also up low single digits.

Speaker Change: As a result of the 53rd week in fiscal 2023 that will not recur in fiscal 2024, the calendar weeks each quarter shift in 2024 as compared to prior year, which we have discussed previously.

Speaker Change: On a comparable store sell basis, which excludes the impact of this cow on your shift, Rogan Sells, and other new store growth, net sells the climb 2.1% per second quarter. Representing an improvement versus 2023 and first quarter 2024.

Patrick Edwards: Going into a little more detail on our top line, Shoe Station Total Net Cells performed very well with a mid-teen increase versus prior year driven by cells from new stores and a comparable store cell increase. Shoe Carnival Total Net Cells came in at a mid-single digit increase with comparable store cells sequentially improving from Q1 and turning to growth versus prior year as the first important back to school weekend started. In fiscal August, as back to school continued, we saw Shoe Carnival comparable store cells increase to low single digits led by children's and athletics.

Speaker Change: The strengthening trend of total company comparable store sales accelerated into August with back to school. As comparable store sales for fiscal August, we're also up low single digits.

Patrick Edwards: This performance provides us confidence to increase certain guidance ranges for the full year, which I will more fully discuss in a moment. Q2 gross profit margin expanded to 36.1%, and compared to Q2 2023, gross profit margin increased approximately 30 basis points. Primarily due to leveraging our buying distribution and occupancy costs. These BDNO costs were higher in the quarter, primarily due to operating Rogans and occupancy costs associated with other new stores. Despite these higher overall costs in the quarter, BDNO leveraged on the higher cells versus prior year. For the quarter, our merchandise margins were down a small amount compared to the prior year's second quarter and were generally flat compared to the prior year on a year-to-date basis.

Speaker Change: This performance provides us confidence to increase certain guidance ranges for the full year which I will more fully discuss in a moment.

Speaker Change: Q2 gross profit margin expanded to 36.1 percent and compared to Q2 2023 gross profit margin increased approximately 30 basis points. Primarily due to leveraging our buying distribution of occupancy costs.

Patrick Edwards: Rogans cells in the quarter approximated 22 million. As you will recall, we completed the Rogans acquisition in mid-February of this year and consistent with previous guidance, we continue to expect full-year 2024 net cells for Rogans to approximate $84 million. As a result of the 53rd week in fiscal 2023 that will not recur in fiscal 2024, the calendar weeks each quarter shift in 2024 as compared to prior year which we have discussed previously.

Speaker Change: These beating no costs were higher in the quarter, primarily due to operating Rogans and occupancy costs associated with other new stores.

Speaker Change: Despite these higher overall costs in the quarter, BDNO leveraged on the higher cells vs. prior year.

Speaker Change: For the quarter, our merchandise margins were down a small amount compared to the prior year's second quarter and were generally flat compared to the prior year on a year-to-date basis.

Patrick Edwards: As a percentage of net cells, our SGNA was 27.1%, reflecting 30 basis points of leverage on the higher cells in the quarter. SG&A expense in Q2 was 89.9 million, representing an increase of 9.1 million versus Q2 2023, primarily related to the addition of Rogans.

Speaker Change: As a percentage of net sales, RSGNA was 27.1% reflecting 30 basis points of leverage on the higher sales in the quarter.

Patrick Edwards: On a comparable store cell basis which excludes the impact of this calendar shift, Rogans cells and other new store growth, net cells declined 2.1% per second quarter representing an improvement versus 2023 and first quarter 2024. The strengthening trend of total company comparable store cells accelerated into August with back to school as comparable store cells for fiscal August were also up low single digits. This performance provides us confidence to increase certain guidance ranges for the full year which I will more fully discuss in a moment.

Speaker Change: FG&A expense in Q2 was 89.9 million representing an increase of 9.1 million versus Q2 2023 primarily related to the addition of Rogans.

Patrick Edwards: We continue to expect synergies from Rogans acquisition in fiscal 2025, and we expect those synergies to lower our SGNA as a percentage of cells as they are achieved. Operating income in the quarter total 30.1 million, an increase of 22% versus prior year on a GAAP basis in 23.7% on an adjusted basis. on a gap basis operating income included approximately 400,000 of merger and integration expenses related to the Rogan's acquisition of which approximately 300,000 was in cost of sales and 100,000 was in S.G.A.N. Our income tax rate in the quarter was 26.3%, resulting in a headwind to EPS of approximately four cents per share versus the prior year second quarter rate of 22.3%.

Speaker Change: We continue to expect synergies from the Rogan's acquisition in fiscal 2025 and we expect those synergies to lower our SNA as a percentage of cells as they are achieved.

Speaker Change: Operating income in the quarter total 3.1 million, an increase of 22% versus prior year on a gap basis in 23.7% on an adjusted basis.

Patrick Edwards: Q2 gross profit margin expanded to 36.1% and compared to Q2 2023 gross profit margin increased approximately 30 basis points. Primarily due to leveraging our buying distribution and occupancy costs. These BDNO costs were higher in the quarter, primarily due to operating Rogans and occupancy costs associated with other new stores. Despite these higher overall costs in the quarter, BDNO leveraged on the higher cells versus prior year. For the quarter our merchandise margins were down a small amount compared to the prior year's second quarter and were generally flat compared to the prior year on a year-to-day basis.

Speaker Change: On a gap base, this operating income included approximately 400,000 of merger and integration expenses related to the Rogan's acquisition of which approximately 300,000 was in cost of sales and 100,000 was an SG&A.

Speaker Change: Our income tax rate in the quarter was 26.3% resulting in a headwind to EPS of approximately 4 cents per share. Versus the prior year, second quarter rate of 22.3%.

Patrick Edwards: This higher rate primarily reflected discrete benefits from share settled equity awards and a state deferred tax benefit that favorably impacted the prior year and did not recur in 2024. On a gap basis, net income for second quarter 2024 was 22.6 million or 82 cents per diluted share. On a non-GAAP basis, excluding the Rogan's acquisition related cost, adjusted net income for the second quarter was 22.9 million or 83 cents per diluted share. At the end of the quarter, we had total cash, cash equivalents, and marketable securities of approximately $84.5 million. Cash and cash equivalents increased over $37 million versus second quarter 2023, and cash flow from operations in the quarter increased approximately 18 million versus the prior year.

Speaker Change: This higher race primarily reflected discrete benefits from share-subtle equity awards and a state-deferred tax benefit that favorably impacted the prior year and did not recur in 2024.

Patrick Edwards: As a percentage of net cells, our SGNA was 27.1% reflecting 30 basis points of leverage on the higher cells in the quarter. SGNA expense in Q2 was 89.9 million representing an increase of 9.1 million versus Q2 2023 primarily related to the addition of Rogans. We continue to expect synergies from Rogans acquisition in fiscal 2025 and we expect those synergies to lower our SGNA as a percentage of cells as they are achieved.

Speaker Change: On a gap basis, net income for second quarter 2024 was 22.6 million or 82 cents per diluted share.

Speaker Change: On a non-gap basis, excluding the Rogan's acquisition-related cost, adjusted net income for the second quarter was 22.9 million for 83 cents per diluted share.

Speaker Change: At the end of the quarter, we had total cash, cash equivalents and marketable securities of approximately $84.5 million.

Speaker Change: Cash in Cash Equivalence increased over $37 million versus second quarter 2023, and Cash Flow from Operations in the quarter increased approximately 18 million versus the prior year.

Patrick Edwards: Operating income in the quarter total 30.1 million, an increase of 22% versus prior year on a gap basis in 23.7% on an adjusted basis, on a gap basis operating income included approximately 400,000 of merger and integration expenses related to the Rogan's acquisition of which approximately 300,000 was in cost of sales and 100,000 was in S.G.N.A. Our income tax rate in the quarter was 26.3% resulting in a headwind to EPS of approximately four cents per share versus the prior year second quarter rate of 22.3%.

Patrick Edwards: 2023 fiscal year end marked the 19th consecutive year the company ended a year with no debt, and through the second quarter of 2024, we have continued to fund our operations and growth investments from operating cash flow and without debt. As of the end of August, our cash and cash equivalents and marketable securities were more than $120 million. During the quarter, we did not repurchase any shares and have 50 million available under our current share repurchase program. Inventory at the end of the quarter total $425.5 million. An increase of approximately $16 million versus the prior year.

Speaker Change: 2020-threates this school year and marked the 19th consecutive year the company ended a year with no debt and through the second quarter of 2024 we have continued to fund our operations and growth investments from operating cash flow and without debt.

Speaker Change: As of the end of August, our cash and cash equivalents and marketable securities were more than $120 million.

Speaker Change: During the quarter we did not repurchase any shares and have 50 million available under our current share repurchase program.

Speaker Change: Inventory at the end of the quarter total 425.5 million dollars.

Speaker Change: An increase of approximately $16 million versus the prior year.

Patrick Edwards: The increase reflected Rogan's acquired inventory, partially offset by continued efficiencies in Shoe Carnival and Shoe Station from our ongoing inventory optimization improvement plan.

Rogan Sells: The increase reflected Rogan's acquired inventory partially offset by continued efficiencies in shoe carnival and shoe station from our ongoing inventory optimization improvement plan.

Patrick Edwards: As Carl discussed, we continue to expect inventory will be lower by approximately 20 million on our business excluding Rogan's by the end of the year.

Rogan Sells: As Carl discussed, we continue to expect inventory will be lower by approximately 20 million on our business, excluding Rogan's body into the year.

Patrick Edwards: At the end of the quarter, we had total cash cash equivalents and marketable securities of approximately $84.5 million. Cash and cash equivalents increased over $37 million versus second quarter 2023 and cash flow from operations in the quarter increased approximately 18 million versus the prior year. 2023 fiscal year end marked the 19th consecutive year the company ended a year with no debt and through the second quarter of 2024, we have continued to fund our operations and growth investments from operating cash flow and without debt.

Patrick Edwards: Moving on to our 2024 outlook. Based on second quarter and year-to-date results, inclusive of a strong back-to-school performance and comp positive results in fiscal August, today we increased guidance ranges for full-year 2024 net sales, comparable store sales, and EPS. We now expect full-year 2024 net sales in a range of 1.23 billion to 1.25 billion, reflecting growth of 5% to 6% versus 2023. We now expect full-year comparable store sales in a range of down 1.5% to up 1%. And we now expect gas EPS in a range of $2.55 to $2.70, in adjusted EPS in a range of $2.60 to $2.75.

Rogan Sells: Moving on to our 2024 Outlook.

Rogan Sells: Based on 2nd quarter and year-to-date results, inclusive of a strong back-to-school performance and comp-positive results in fiscal August.

Rogan Sells: Today, we increased guidance ranges for full year 2024 NetCells, comparable store cells, and EPS.

Rogan Sells: We now expect full-year 2024 net sales in a range of 1.23 billion to 1.25 billion reflecting growth of 5% to 6% versus 2023.

Patrick Edwards: As of the end of August, our cash and cash equivalents and marketable securities were more than $120 million. During the quarter, we did not repurchase any shares and have 50 million available under our current share repurchase program. Inventory at the end of the quarter total $425.5 million. An increase of approximately $16 million versus the prior year. The increase reflected Rogan's acquired inventory partially offset by continued efficiencies in shoe carnival and shoe station from our ongoing inventory optimization improvement plan. As Carl discussed, we continue to expect inventory will be lower by approximately 20 million on our business excluding Rogan's by the end of the year.

Rogan Sells: We now expect full-year comparable store sales in a range of down 1.5% to up 1%.

Rogan Sells: And we now expect gas PPS in a range of $2.55 to $2.76 in adjusted EPS in a range of $2.66 to $2.75.

Rogan Sells: Going into a little more detail on a revised guidance in what it means for the back half of our fiscal year.

Patrick Edwards: to achieve these increased blue-year sales guidance ranges. We estimate a range of comparable store sales in the back half of the year of flat to 5%, which includes the fiscal August low-singles comp sales increase. While we see a path to achieving the 5% high-side comp sales increase, we anticipate the more likely outcome is the lower end of the range. And less, as Mark pointed out, we have a record boot season in holiday to close out fiscal 2024. With respect to Q3, we currently expect total net sales for the third quarter to approximate 320 million. Our expectation for third quarter sales includes the impact of the retail calendar shift, which resulted in approximately 20 million in net sales moving primarily out of the third quarter of 2024 and into the second quarter, as compared to the prior year.

Rogan Sells: To achieve these increased blew-yourself's guidance ranges.

Rogan Sells: We estimate a range of comparable store sales in the back half of the year of flat to 5% which includes the fiscal August low singles comp sales increase.

Rogan Sells: While we see a path to achieving the 5% high-side consoles increase.

Patrick Edwards: Moving on to our 2024 outlook. Based on second quarter and year-to-date results, inclusive of a strong back-to-school performance and comp positive results in fiscal August, today we increased guidance ranges for full-year 2024 net sales, comparable store sales and EPS. We now expect full-year 2024 net sales in a range of 1.23 billion to 1.25 billion, reflecting growth of 5% to 6% versus 2023. We now expect full-year comparable store sales in a range of down 1.5% to up 1%.

Rogan Sells: We anticipate the more likely outcome is the lower end of the range.

Mark Worden: and less as Mark pointed out we have a record boot season in holiday to close out fiscal 2024.

Speaker Change: With respect to Q3, we currently respect total net sales for the third quarter to approximate 320 million.

Speaker Change: Our expectation for third quarter cells includes the impact of the retail cow undershifts, which resulted in approximately 20 million in net cells, moving primarily out of the third quarter of 2024 and into the second quarter as compared to the prior year.

Patrick Edwards: We expect the combined total of Q2 and Q3 sales growth in 2024 versus prior year to be on the high side of our full-year sales growth outlook, with sales growth at or perhaps just ahead of 6% over this six-month period. We currently expect Gap EPS of about 70 cents in the third quarter 2024, with an income tax rate of approximately 25% of pre-tax income.

Speaker Change: We expect the combined total of Q2 and Q3 cells growth in 2024 versus prior year to be on the high side of our full year cells growth outlook with cells growth at or perhaps just ahead of 6% over this six month period.

Patrick Edwards: And we now expect gas EPS in a range of $2.55 to $2.70 in adjusted EPS in a range of $2.60 to $2.75, to achieve these increased blue-year sales guidance ranges. We estimate a range of comparable store sales in the back half of the year of flat to 5%, which includes the fiscal August low-singles comp sales increase. While we see a path to achieving the 5% high-side comp sales increase, we anticipate the more likely outcome is the lower end of the range.

Speaker Change: The currently expect gap EPS of about 70 cents in the third quarter 2020-24 with an income tax rate of approximately 25% of free tax income.

Patrick Edwards: With respect to thoughts on the fourth quarter. In Q4, 2024, the loss of the 53rd week and the retail calendar shift will result in the loss of approximately 20 million in net sales compared to the prior year. As a result, our sales growth in the fourth quarter is expected to be less than our full-year guidance range, with a likely outcome of flat up 3% compared to the prior year. Further, we estimate the calendar shift and the loss of the 53rd week will be a headwind to EPS of approximately 10 cents in the quarter, compared to the prior year fourth quarter, when we earned EPS of 57 cents.

Speaker Change: with respect to thoughts on the fourth quarter.

Speaker Change: In Q4 2024, the loss of the 53rd week in the retail calendar shift will result in the loss of approximately 20 million in net sales compared to the prior year.

Speaker Change: As a result, ourselves growth in the fourth quarter is expected to be less than our full-year guidance range.

Speaker Change: with a likely outcome of flat 3% compared to the prior year.

Patrick Edwards: And less as Mark pointed out, we have a record boot season in holiday to close out fiscal 2024. With respect to Q3, we currently expect total net sales for the third quarter to approximate 320 million. Our expectation for third quarter sales includes the impact of the retail calendar shift, which resulted in approximately 20 million in net sales moving primarily out of the third quarter of 2024 and into the second quarter, as compared to the prior year.

Speaker Change: Further, we estimate the calendarship and the loss of the 53rd week will be a headwind to EPS of approximately 10 cents in the quarter compared to the prior year for a quarter when we earned the EPS of 57 cents.

Speaker Change: Our increased fiscal 2024 EPS guidance range of $2.55 to $2.70, reflects this 10-cent fourth-quarter headwind, as well as some de-leveraged an SGNA as a percent of net sales from Rogans until synergized in fiscal 2025.

Patrick Edwards: To close in the second quarter, we were thrilled to deliver a record level of net sales in growth of 12.9% versus the prior year, in operating income growth of nearly 24% on an adjusted basis. Trends across our business continue to be favorable, and Rogans is performing in line with our expectations. We have seen those favorable trends on the base business accelerate into the peak August back-to-school season, and we are excited to update guidance ranges for the back half of the year that include the cost-positive growth at the midpoint.

Speaker Change: To close in the second quarter we were thrilled to deliver a record level of net sales and growth of 12.9% versus the prior year and operating income growth of nearly 24% on an adjusted basis.

Speaker Change: Trends across our business continue to be favorable and rogans is performing in line with our expectations.

Speaker Change: We have seen those favorable trends on the base business accelerate into the peak August back to school season and we are excited to update guidance ranges for the back half of the year that include comp positive growth at the midpoint.

Steve Alexander: This concludes our financial review.

Steve Alexander: I'd no like to hand back the floor to Mr. Steve Alexander. Thank you, operator, and thanks again for everyone for joining us today. I wanted to let the audience know that, due to an unforeseen personal matter, our CFO, Patrick Edwards, is unable to participate in today's Q&A session. Thanks for your understanding, and now I will ask the operator to open up the call for questions. Thank you.

Speaker Change: This concludes our financial review.

Speaker Change: I'd no like to hand back the floor to Mr. Steve Alexander.

Steve Alexander: Thank you, operator, and thanks again for everyone for joining us today. I wanted to let the audience know that due to an unforeseen personal matter, our CFO, Patrick Edwards, is unable to participate in today's Q&A session.

Steve Alexander: Thanks for your understanding and now I will ask the operator to open up the call for questions.

Patrick Edwards: Our increased fiscal 2024 EPS guidance range of $2.55 to $2.70 reflects this 10 cents fourth quarter headwind, as well as some de-leverage in SGNA as a percent of net sales from Rogans until synergized in fiscal 2025. To close in the second quarter, we were thrilled to deliver a record level of net sales in growth of 12.9% versus the prior year in operating income growth of nearly 24% on an adjusted basis. Trends across our business continue to be favorable, and Rogans is performing in line with our expectations.

Operator: We are now opening the floor for question-and-answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. That's Star 1 on your telephone keypad.

Speaker Change: Thank you. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. That star 1 on your telephone keypad. Our first question comes from Mr. Ms. Moon.

Mitch Kummetz: Our first question comes from Mr. Mitch Kummetz from C-Port Research.

Mitch Kummetz: Your line is now open. Yes, thanks for taking my questions. I've got to be a handful.

Speaker Change: Mitch, comments from a C-port research, your line is now open.

Mitch Kummetz: Let me start on the second quarter. Your same store sales were down to one. I think he said, maybe in the press release, June was flat. Can you give us the cop by month in 2Q?

Mitch: Yes, thanks for taking my questions. I've got maybe a handful. Let me start on the second quarter. Your same source sales were down to one. I think you said maybe in the press release June was flat. Can you give us the cop by month and two cue?

Patrick Edwards: We have seen those favorable trends on the base business accelerate into the peak August back to school season, and we are excited to update guidance ranges for the back half of the year that include the cost positive growth at the midpoint.

Mark Worden: Hi, Mitch, Mark. The month didn't vary greatly. We're not going to break out the exact numbers, but I'd say the month didn't have wild swings within them.

Mitch: Hi, Mitch, Mark. The most didn't vary greatly. We're not going to break out due to that numbers, but let's say.

Mark Worden: What we did see that was encouraging was two things. We talked last time about not event periods, and are concerned with them being down like they were last year in the mid to high singles. We didn't see that occur again this time. We saw in that June, early July period that the not events were slow, category contracted, but we were not seeing wild swings.

Speaker Change: and the months didn't have wild swings within them. What we did see that was encouraging was two things. We talked last time about not-of-act periods.

Patrick Edwards: This concludes our financial review.

Steve Alexander: I'd no like to hand back the floor to Mr. Steve Alexander. Thank you, operator, and thanks again for everyone for joining us today.

Speaker Change: and are concerned with them being down like they were last year in the mid-to-high singles. We didn't see that occur again this time. We saw that June early July period that not events were slow, category contracted, but we were not seeing wild swings.

Steve Alexander: I wanted to let the audience know that due to an unforeseen personal matter, our CFO, Patrick Edwards, is unable to participate in today's Q&A session. Thanks for your understanding, and now I will ask the operator to open up the call for questions. Thank you.

Mark Worden: Second, once back to school kicked in at the very tail end, it turned July towards the end turned into comfort.

Speaker Change: Second, when it's back to school kicked in, it's a very tail end, it turns July towards the end, turned into Comfort Road.

Mark Worden: But the poor messages are worthwhile differences between the months; the life from the overall quarter down to two. Okay.

Speaker Change: But the core message is for more wild differences between the months of the life from the overall quarter down to two.

Operator: We are now opening the floor for question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. That's star 1 on your telephone keypad.

Mitch Kummetz: And then on the third quarter.

Mitch Kummetz: You guys, actually, let me start with August. So August is a positive low single digit cop. Can you say what percent of the third quarter is August? I assume it's your largest month. I mean, is it like half the month or half the quarter? Don't have that exact number in front of us, but it's not half. It's not more than half. So it's less than half. So, and again, on three key, you're giving the sales range, but not cop. It sounds like your cop was strong in August. Can you talk about kind of what's the cop expectation for the quarter?

Speaker Change: Okay, can that on the third quarter?

Mitchel Kummetz: Our first question comes from Mr. Mitch Kummetz from C-Port Research. Your line is now open. Yes, thanks for taking my questions.

Speaker Change: You guys will actually let me start with with August. So August is a positive and a little single digit comp. And you say what percent of the third quarter is August? I've seen mature your largest month. I mean, is it like half past the month or half the quarter?

Mark Worden: I've got to be a handful. Let me start on the second quarter. Your same store sales were down to one. I think he said, maybe in the press release, June was flat. Can you give us the cop by month in 2Q?

Speaker Change: Don't have that exact number in front of us, but it's not half, it's not more than half, so it's left than half.

Mark Worden: Hi, Mitch, Mark. The month didn't vary greatly. We're not going to break out the exact numbers, but I'd say the month didn't have wild swings within them.

Speaker Change: So, and again, on 3Q, you're giving the sales range, but not cock.

Speaker Change: It sounds like your comp was strong and august, and you talk about kind of what's the comp expectation for the quarter and what do you need and September and October to get to your expectations for 3K.

Mark Worden: And what do you need in September and October to get to your expectations for three Q?

Mark Worden: Right. So we're guiding to about 320 million in Q three. And that already has baked into it. The low single digit achieves in the fiscal month of August. We're given the second half of the year as comp positive, flat, you know, flatish to up 5% would be what we're guiding for for the back half of the year.

Speaker Change: Right, so we're guiding to about 320 million in Q3, and that already has baked into it the low single digit achieved in the fiscal month of August.

Speaker Change: We're given the second half of the year as compositive.

Speaker Change: Flash, you know, flat-ish to up 5% would be what we're guiding for for the back half of the year.

Mark Worden: But the poor messages are worthwhile differences between the months, the life from the overall quarter down to two. Okay. And then on the third quarter.

Mark Worden: We do anticipate, if I said in my speech, that this period between back to school ending now and holiday starting and Thanksgiving, we're not expecting comp growth meaningfully during that period of time or category expansion. is implicit in this guidance. But, as I said, we anticipate, if I look at the shape of things right now today, I would expect the back half of the year has to last to, you know, mid-single increases, which would be a really nice pivot from where we've been for many quarters and another sequential improvement. But if, however, as I said in my remarks, we have a great food season and a healthy holiday season, we can see the higher end of that range with mid-singles, up to the 5%.

Speaker Change: We do anticipate if it's in my speech that this period between back to school ending now and holiday starting and Thanksgiving. We're not expecting a comp broke meaningfully during that period of time or category expansion.

Mark Worden: You guys, actually, let me start with August. So August is a positive low single digit cop. Can you say what percent of the third quarter is August? I assume it's your largest month. I mean, is it like half the month or half the quarter? Don't have that exact number in front of us, but it's not half. It's not more than half. So it's less than half. So, and again, on three key, you're giving the sales range, but not cop.

Speaker Change: is implicit in this guidance.

Speaker Change: But as I said, we anticipate if I look at the shape of things right now today, I would expect the back half of the year has to fly to, you know, mid-single.

Speaker Change: in crisis, which would be a really nice habit from where we've been for many quarters and another sequential improvement.

Speaker Change: If, however, as I said in my remarks, we have a great boot season and a healthy holiday season. We can see the higher end of that range with mid to the singles up to the 5%. But we can see that as a stretchy ambition at this point.

Mark Worden: It sounds like your cop was strong in August. Can you talk about kind of what's the cop expectation for the quarter? And what do you need in September and October to get to your expectations for three Q? Right. So we're guiding to about 320 million in Q three. And that already has baked into it. The low single digit achieves in the fiscal month of August. We're given the second half of the year as comp positive flat, you know, flatish to up 5% would be what we're guiding for for the back half of the year.

Mark Worden: But we do see that as a stretching ambition at this point.

Mitch Kummetz: And on that note, can you remind us, you know, what percentage of the business is boots in the back half? If I'm not mistaken, boots were a tough category last year. Can you just kind of remind us what happened with Boots last year?

Speaker Change: And on that note, can you remind us?

Speaker Change: You know, what percentage of the business is boots in the back house? If I'm not mistaken, boots were a tough category last year. He just kind of reminds us what happened with boots last year. And kind of what are maybe Carl? What are the early read on boots?

Carl Scibetta: And kind of what are, maybe Carl, what are the early reads on boots so far and kind of how are you planning that category for the back half? Sure, sure, Mitch, boots in the back half of the year in our women's non-athletic business, kids non-athletic business, which is roughly half. It's about 40% accelerates. It's about 25%, and the third quarter accelerates in the fourth quarter to around 50. Boots last year were down high singles. We're planning boots this fall up low singles with in a position to react if needed to drive that number towards the higher range of our guidance.

Carl: So far and kind of how are you planning that category for the back-out?

Carl: Sure, sure, Mitch. Boots in the back half of the year and our women's non athletic business, kids non athletic business.

Mark Worden: We do anticipate, if I said in my speech, that this period between back to school ending now and holiday starting and Thanksgiving, we're not expecting comp growth meaningfully during that period of time or category expansion, is implicit in this guidance. But as I said, we anticipate, if I look at the shape of things right now today, I would expect the back half of the year has to last to, you know, mid-single increases, which would be a really nice pivot from where we've been for many quarters and another sequential improvement.

Speaker Change: Wooden Rush, Roughly Half, is about 40% accelerates.

Speaker Change: It's about 25% in the third quarter, accelerates in the fourth quarter to around 50, boots last year were down high singles.

Mark Worden: But if, however, as I said in my remarks, we have a great food season and a healthy holiday season, we can see the higher end of that range with mid-singles up to the 5%. But we do see that as a stretching ambition at this point.

Speaker Change: We're planning boots this fall up low singles with in a position to react if needed to drive that number towards the higher range of our guidance.

Carl Scibetta: And any early reads on boots so far? I know it's early. You know, the early, early reads, the early reads we have, which really were second quarter and into third quarter, is Western's performing very well. Traditionally with us that slows down as you get into middle late third quarter, the boots that would be early reads that we feel would continue through holiday.

Speaker Change: You know, they're only early reads, the early reads we have which really were second quarter and in the third quarter is westerns performing very well.

Speaker Change: Traditionally with us, that slows down as you get in the mid and late 3rd quarter. The boots that would be early reached that we feel would continue through holiday. Either just being delivered and really, really not a lot of data there.

Mark Worden: And on that note, can you remind us, you know, what percentage of the business is boots in the back half? If I'm not mistaken, boots were a tough category last year. Can you just kind of remind us what happened with boots last year? And kind of what are, maybe Carl, what are the early reads on boots so far and kind of how are you planning that category for the back half? Sure, sure, Mitch, boots in the back half of the year in our women's non athletic business, kids non athletic business, which is roughly half.

Carl Scibetta: Either just being delivered, and there's really, really not a lot of data there.

Mitch Kummetz: And then any of my last question on the guide. I'm not mistaken for margins; you're previously guiding I think around for gross margin 35.8 and SGNA at a 28.2. Are we still looking at kind of those rates for the year, or has any of that changed? Yeah, Ms. Smith, Steve, you're spot on and think about the gross margin of gross margin percentage for the year. So we got it to was last year; last year was 35.8. Then on the SGNA draft around, we got it up 45 versus last year. It puts in that low 28 range.

Speaker Change: and then maybe my last question, on the guide.

Speaker Change: I'm not mistaken for margins you're previously guiding I think around for gross margin 35.8

Mark Worden: It's about 40% accelerates. It's about 25% and the third quarter accelerates in the fourth quarter to around 50, boots last year were down high singles. We're planning boots this fall up low singles with in a position to react if needed to drive that number towards the higher range of our guidance. And any early reads on boots so far? I know it's early. You know, the early early reads, the early reads we have which really were second quarter and into third quarter is Western's performing very well.

Speaker Change: and SGA at a 28.2. Are we still looking at kind of those rates for the year or as a new that change?

Speaker Change: Yeah, Mr. Steve, you're spot on and think about the growth margin of the growth margin, for the year. So we've got to do a flat the last year, last year was 358.

Speaker Change: and then on the SCNA, you're absolutely got it up 40 bits, first of the last year, I'm pushing that boat 28 range. I'd certainly, as you think about that, full year of dialing on the SCNA.

Mitch Kummetz: I certainly, as you think about that for your guide on SGNA, I would think about where we are today on our year. You'll see we've got some leverage in the first part of the year. So probably fair to expect some D leverage on that SGNA that year today.

Speaker Change: I would think about where we are. Today, on our year's view, we've got some leverage in the first part of the year, so probably there to expect some deep leverage on the SGA that year to date SGA on the press week two forward this year.

Mitch Kummetz: I'm impressed with you for this year.

Jim Charter: Our next question comes from Jim Charter on this question.

Speaker Change: Our next question comes from Jim Charter, from Monus Crest Pete, your line is now open.

Jim Charter: Your line is now. Good morning. Thanks, stigma questions. So, it tells us the most likely outcome you said for second half sales is the low end of guidance. Should we infer that EPS also then trends towards the low end of guidance?

Mark Worden: Traditionally with us that slows down as you get into middle late third quarter, the boots that would be early reads that we feel would continue through holiday. Either just being delivered and there's really really not a lot of data there.

Jim Charter: Good morning, thanks for taking my questions.

Jim Charter: Um, see?

Jim Charter: Sounds like the most likely outcome you've said for second half sales is the low end of guidance. Should we refer that the EPS also then trends towards the low end of guidance?

Steve Alexander: And then any of my last question on the guide. I'm not mistaken for margins, you're previously guiding I think around for gross margin 35.8 and SGNA at a 28.2 are we still looking at kind of those those rates for the year or as any of that change? Yeah, Ms. Smith Steve, you're spot on and think about the gross margin of gross margin percentage for the year. So we got it to was last year, last year was 35.8.

Mark Worden: Hi, James, Mark. Yes, I think it's a good assumption to be thinking through. Again, with the upside potential clear, as I called out for the great food season holiday, the mid to high end is possible.

Mark Worden: Hi, James Mark. Yes, I think that's a good assumption to be thinking through, again with the upside potential clear as I called out for the great food season holiday, you know, the mid to high end as possible. But with a normalized season, I would say that mid to low side is what we should anticipate.

Jim Charter: But with the normalized season, I would say that mid to low side is what we should anticipate. Okay.

Mark Worden: And then, you know, any change to kind of your marketing spend in the second half, and I guess particularly now holiday, given how well it performed for the spring season and about back to school? Yeah, we were very pleased with the way it worked out our first year through trying this new approach, and it delivered come sales right out of the gate, and we spent no more money than we did last year.

Speaker Change: Okay. And then, you know, any change to kind of your marketing spend in second half. And I guess particularly now holiday, given how well it performed for the spring season and back to school.

Steve Alexander: Then on the SGNA draft around we got it up 45 versus last year. It puts in that low 28 range. I certainly as you think about that for your guide on SGNA, I would think about where we are today on our year, you'll see we've got some leverage in the first part of the year. So probably fair to expect some D leverage on that SGNA that year today. I'm impressed with you for this year. Okay, thank you.

Speaker Change: We were very pleased with the way it worked out our first year through trying this new approach, and it's delivered consoles right out of the gate, and we spent no more money than we did last year, so...

Mark Worden: So, as I said in my speech, I'm so excited about the efficiency and the flexibility our new digital first approach are driving. The back half of the year builds in that continued approach. We're going to continue to do that for the holiday season, and amp up what winning products, column and team brewing, and what messages working. In terms of the specific cost, now you shouldn't anticipate increased cost, as we're getting better efficiency on the same level of spend. Okay.

Speaker Change: As I said in my speech, I'm so excited about the efficiency and the flexibility our new digital first approach.

Carl: are driving. The back-after-the-ear ability in that continued approach, we're going to continue to do that for the holiday season and amp up what winning products Carl and his team bring and what message is working. In terms of the specific cost, no you shouldn't anticipate increased cost.

Jim Chartier: Our next question comes from Jim Charter from on this question.

Jim Chartier: Your line is now.

Mark Worden: Good morning. Thanks, stigma questions. So, it tells us the most likely outcome you said for second half sales is the low end of guidance. Should we infer that EPS also then trends towards the low end of guidance? Hi, James, Mark. Yes, I think it's a good assumption to be thinking through. Again, with the upside potential clear, as I called out, for the great food season holiday, the mid to high end is possible. But with the normalized season, I would say that mid to low side is what we should anticipate. Okay.

Carl: as we're getting better efficiency on the same level of spend.

Speaker Change: Okay, and then I'm on the source which strategy, just give us a little more color of what's driving the improved sales, is it coming primarily from existing customers or are you attracting new customers?

Mark Worden: This is probably the most exciting part of it. We are capturing the new customers in these three test markets that did not previously shop at Shoe Carnival, and our insights in our data showed there were a variety of customers, north of 50,000 household income, that Shoe Carnival, which skews largely below $50,000 household income, that we were not capturing. And what specifically they're liking, the shoe station product assortment is better meeting their needs, high end performance running, fashion women, and a variety of the month half brands throughout America, Shoe Station has them, the customers coming in, or capturing new customers, like I've never seen before, Shoe Carnival store.

Speaker Change: This is probably the most exciting part of it. We are capturing the new customers in these three test markets that did not previously shop at shoe carnival. And our insights in our data showed there were a variety of customers north of 50,000 household income.

Mark Worden: And then, you know, any change to kind of your marketing spend in second half, and I guess particularly now holiday, given how well it performed for the spring season and about back to school? Yeah, we were very pleased with the way it worked out our first year through trying this new approach, and it delivered come sales right out of the gate, and we spent no more money than we did last year.

Speaker Change: That shoe car in a bowl which skews largely below $50,000 household income, that we were not capturing.

Speaker Change: and what specifically they're liking, the shoes station product, the swordband, is better meeting their needs.

Speaker Change: High End Performance Running.

Speaker Change: Fashion Women's in a variety of the must-have grounds throughout America. She's stationed has them, the customers coming in and are capturing new customers, like I've never seen before to shoot carnival store.

Mark Worden: Thrust to have delivered sales growth above 15% in all three of the test stores, and across every single category of athletics, women, men. I couldn't be more excited.

Speaker Change: Drought to a delivered sales growth above 15% in all three of the test source and across every single category of athletics.

Mark Worden: So I'd say it's a product that is largely doing it, but the whole aesthetic is different too. The whole shopping experience of this, our store design, our look, our feel is geared towards that more affluent, higher-end customer, and they're coming in and saying, wow, this is a great place.

Speaker Change: Women's Man, I couldn't be more excited.

Speaker Change: So I say the product that is largely doing it, but the whole aesthetic is different too. The whole topic experience of this is really our stored design, our look, our field, is geared towards that more of a fluid higher end customer and they're coming in and saying, wow, this is a great place.

Mark Worden: And then, on the store switch strategy, do you give us a little more color of what's driving the improved sales? Is it coming primarily from existing customers, or are you attracting new customers? This is probably the most exciting part of it. We are capturing the new customers in these three test markets that did not previously shop at shoe carnival, and our insights in our data showed there were a variety of customers, north of 50,000 household income, that shoe carnival, which skews largely below $50,000 household income, that we were not capturing.

Mark Worden: And are you retaining existing customers too? We are. Yeah, we've been really pleased.

Speaker Change: and are you retaining existing customers, too?

Mark Worden: Carl and his team are working really hard to ensure the things we're great at, we're still doing. And an example would be our children's business. Yeah, Shoe Carnival has been growing back to school in kids for decades. is one of the things we've, and that's not the same for Shoe Station, it's not a core kids business, but throughout this test and learn we've been ensuring we keep the right assortment to capture the former Shoe Carnival back to school kid shopper during back to school, and coming out of this back to school we were very pleased that these test stores perform strong in the kids categories very well.

Speaker Change: We are. Yeah, we've been really pleased, you know, Carl and his team are working really hard to ensure the things we're great at, we're still doing. An example with the our children's business, you know, if you're carable, has been growing back to school and kids for decades.

Speaker Change: One of the things we've, and that's not the same for shoes station, it's not a four kids business.

Speaker Change: But throughout this test and learn, we've been ensuring we keep the right assortment to capture the former shoe carnal back to school, Kid Shopper, Doring Back to School.

Mark Worden: And what specifically they're liking, the shoe station product assortment is better meeting their needs, high end performance running, fashion women, and a variety of the month half brands throughout America, shoe station has them, the customers coming in, or capturing new customers, like I've never seen before, shoe carnival store. Thrust to have delivered sales growth above 15% in all three of the test stores, and across every single category of athletics, women, men, I couldn't be more excited.

Speaker Change: and coming out of this back to school, we were very pleased that these tests stores performed strong in the kids' categories very well.

Mark Worden: I think it's an opportunity to just, without switching banners, take some of these learnings and then some of the assortment changes and bring that to some of your better performing Shoe Carnival stores.

Speaker Change: and I guess there's an opportunity to just...

Speaker Change: with outs switching banners, take some of these learnings and some of the sort of and changes and bring that to some of your better performing shoe chronicle stores.

Mark Worden: I don't think so; I think there's two completely different banners. As I said, different aesthetics, different surface, different products, and an overall different communication message. And we sell a very different tier of product in the Shoe Station business at a much higher average ticket price, particularly in athletics and women's non-athletics than Shoe Carnival. So I really don't think it's as simple as that; we think it's the brand Shoe Station that is resonating, and the brand Shoe Station is what we're very excited about continuing with this double-digit growth.

Speaker Change: I don't think so. I think there are two completely different banners that have said different aesthetics, different surface, different products, and an overall different communication message.

Mark Worden: So I'd say it's product that is largely doing it, but the whole aesthetic is different too. The whole shopping experience of this, our store design, our look, our feel is geared towards that more affluent higher end customer, and they're coming in and saying, wow, this is a great place. And are you retaining existing customers too? We are. Yeah, we've been really pleased. Carl and his team are working really hard to ensure the things we're great at, we're still doing.

Speaker Change: and we saw a very different tier of product in the shoes station business and a much higher average ticket price, particularly in athletics and women's.

Speaker Change: Non-Atletics, then shoot carnival. So, I really don't think it's as simple as that. We think it's the branch, the branch you station is resonating and the branch you station is what we're very excited about, continuing with this double-digit growth.

Mark Worden: I had a lot more to learn though, like I said in my remarks, Rowdy three test stores in a few months and it's wildly exceeded our success criteria, and we're going to expand six or seven more in the next couple of months. We're going to learn a ton more, and we'll be able to update folks on the length of this strategic idea in our November call when we talk to you next.

Speaker Change: They had a lot more to learn though, like I said in my remarks, Brody Threeth.

Mark Worden: And an example would be our children's business. Yeah, shoe carnival has been growing back to school in kids for decades, is one of the things we've, and that's not the same for Shoe Station, it's not a core kids business, but throughout this test and learn we've been ensuring we keep the right assortment to capture the former Shoe Carnival back to school kid shopper during back to school, and coming out of this back to school we were very pleased that these test stores perform strong in the kids categories very well.

Speaker Change: have stored in in a few months that it's been.

Speaker Change: Wildly exceeded our success criteria and we're going to expand the six or seven more, you know, in the next couple months. We're going to learn a ton more and we'll be able to update folks on the light of this strategic idea in our November call when we talk to you next time. Great, thank you.

Sam Poser: Our next question comes from Sam Poser from Williams Trading. Your line is now. Thank you. Good morning, everybody.

Speaker Change: Our next question comes from Sam Poser from Williams Trading. Your line is now...

Sam Poser: I have a handful of questions. Hello, can you hear me? Good morning.

Sam Poser: Thank you. Good morning everybody. I have a handful of questions. Hello, can you hear me? Yes, I am.

Mark Worden: I think it's an opportunity to just without switching banners take some of these learnings and then some of the assortment changes and bring that to some of your better performing Shoe Carnival stores. I don't think so, I think there's two completely different banners, as I said different aesthetics, different surface, different products, and an overall different communication message. And we sell a very different tier of product in the Shoe Station business at a much higher average ticket price, particularly in athletics and women's non athletics than Shoe Carnival.

Sam Poser: I guess just some housekeeping. You mentioned Steve on the digital, I'm sorry, on the SGNA that you saw expected more of a headwind into four than Q3, but you're losing a similar amount of sales in both quarters. Why won't you feel some SGNA pressure in the third quarter as well? You will, Sam, except for you have to keep in mind that the advertising moves around a bit based on the way the business is running.

Sam Poser: Good morning. I guess just some...

Sam Poser: How's keeping you? You mentioned Steve on the digital, I'm sorry, on the SGNA. They saw expected more of a headwind into four than two three, but you're losing a similar amount of sales in both quarters. Why?

Speaker Change: Wong-Chief Field semester in a pressure in the third quarter as well.

Speaker Change: He will stand except when you have to keep in mind that the advertising moves around a bit of base on the way the business is running. So we'll see some pressure on SGA and Q3 but it won't be as a parent as it accused for is where I think you'll see it principally.

Patrick Edwards: So we'll see some pressure on SGNA and Q3, but it won't be as apparent as in Q4, is where I think you'll see it principally in terms of the pressure on the SGNA.

Mark Worden: So I really don't think it's as simple as that, we think it's the brand Shoe Station is resonating, and the brand Shoe Station is what we're very excited about continuing with this double digit growth. I had a lot more to learn though, like I said in my remarks, Rowdy three test stores in a few months and it's wildly exceeded our success criteria, and we're going to expand six or seven more in the next couple of months.

Carl Scibetta: Back to that three year God, you know, a 28 to the percent of sales, and you look at where we are here today. I think our God implied, you know, some delivery to again. I think you're principally seeing Q4. Gotcha. Okay.

Speaker Change: In terms of the posture on the SC&A, back to that three year guide, you know, a 28 to the percent of sales. And you look at what we are here today. They got a guide and flaws, you know, some D-level to again, I think you're principally seen it Q4.

Mark Worden: We're going to learn a ton more, and we'll be able to update folks on the length of this strategic idea in our November call when we talk to you next.

Carl Scibetta: And then Carl, to what degree is your overall assortment narrower, or are they narrower this year and deeper than they were? How has that evolved over the last few years? I would say our assortments are narrower than they have been. The improvement in supply chain has enabled us to really jump into big items like we have in the past. In addition, based on owning the product right, we've been able to tighten it down a bit, be more meaningful and shed to share products and brands.

Carl: Okay, and then Carl...

Speaker Change: To what degree is your overall sort of an narrower, or are they narrower this year and deeper than they were, you know, how's that evolved the last few years?

Mark Worden: Thank you.

Sam Poser: Our next question comes from Sam Poser from Williams trading. Your line is now. Thank you, good morning everybody. I have a handful of questions. Hello, can you hear me? Good morning. I guess just some housekeeping, you mentioned Steve on the digital, I'm sorry, on the SGNA that you saw expected more of a headwind into four than Q3, but you're losing a similar amount of sales in both quarters. Why won't you feel some SGNA pressure in the third quarter as well?

Speaker Change: I would say our shortments are never, and they have been the improvement in supply chain. Has enabled us to really jump into big items like we have in the past.

Speaker Change: In addition, based on owning the product, we've been able to tighten it down a bit, be more meaningful and shed tertiary products and brands.

Sam Poser: Thanks, and then Mark, good morning.

Mark Worden: You talked about the non-event periods of being, you know, things tend to drop off during the non-event periods, but you've also talked about how good your digital marketing is and how that's working.

Speaker Change: Thanks, and then Mark, and good morning. You talked about the non-event period, you know.

Sam Poser: You will, Sam, except for you have to keep in mind that the advertising moves around a bit based on the way the business is running. So we'll see some pressure on SGNA and Q3, but it won't be as apparent as in Q4, is where I think you'll see it principally in terms of the pressure on the SGNA. Back to that three year God, you know, a 28 to the percent of sales and you look at where we are here today.

Speaker Change: again.

Mark Worden: You know, it's things tend to drop off during the not-a-vent periods, but you've also talked about how good your digital marketing is and how that's working. So how are you going about activating that digital, more personalized targeted marketing during the not-a-vent periods to better engage your customers?

Mark Worden: So how do you activate, you know, how are you going about activating that digital more personalized targeted marketing during the non-event periods to better engage your customers? June would be a good example where, in the last call, we spoke about the lack of vision and we could share at that point of time. And throughout June and then in early July, we did just as you said; we ran our social and digital program, and it worked really well. It got towards flatish during that time for him. Before I would be transparent, July was less than that as before we got into back to school.

Sam Poser: I think our God implied, you know, some delivery to again, I think you're principally seeing Q4. Gotcha. Okay. And then Carl, to what degree is your overall assortment narrower or are they narrower this year and deeper than they were? How has that evolved over the last few years? I would say our assortments are narrower than they have been. The improvement in supply chain has enabled us to really jump into big items like we have in the past.

Mark Worden: Jim would be a good example where in the last call we spoke about the lack of vision, we could share at that point of time.

Jim Charter: and throughout June and then in early July we did just as you said, we ran our social and digital program and it worked really well. It got towards flat-ish, during that time for him. Before I would be transparent, July was less than that.

Mark Worden: So we're going to take those learnings, and we're going to apply them now to September, October, and early November to ensure we're getting that digital message out there. We're engaging with them, and we're trying to drive them in. But historically, the volumes and units go down significantly as soon as the back to school season, which is very strong, and, you know, we find our particular Shoe Carnival, the lower end customer has spent most of their discretionary income for Q3. Once we get past Labor Day and we find those volume numbers are small. Right, but that also means that any incremental could be large.

Jim Charter: as before we got into back the school.

Jim Charter: So we're going to take those learnings and we're going to apply them now to September, October and early November to ensure we get an additional message out there, we're in cages with them and we're trying to drive them in.

Sam Poser: In addition, based on owning the product right, we've been able to tighten it down a bit, be more meaningful and shed to share products and brands. Thanks, and then Mark, good morning. You talked about the non-event periods of being, you know, things tend to drop off during the non-event periods, but you've also talked about how good your digital marketing is and how that's working. So how do you activate, you know, how are you going about activating that digital more personalized targeted marketing during the non-event periods to better engage your customers?

Speaker Change: But historically, the volumes and units go down significantly as soon as the back of the school season, which is very strong, and...

Speaker Change: We find our particular shoot carnival, the lower end customer has spent most of their discretionary income for Q3. Once we get past Labor Day, we find those volume numbers are small.

Speaker Change: Right, but that also means that any incremental could be large and you have some predators out there, you know, that are...

Mark Worden: And you're up and you're and you have some competitors out there. You know, that are that work with exactly the same consumers.

Mark Worden: So, you know, how long, I guess the question is more predictability, how long will it take for you to be able to really be confident in measuring the impact of the work. You had success early, you know, in June and early July, but how, you know, has this evolved? How long till you have confidence that, you know, you might be able to take some of the moderate customers from some other retailers with whom you compete and, you know, turn them into Shoe Carnival customers during those, you know, jury, both the event and not event periods.

Speaker Change: that work with exactly the same consumers.

Speaker Change: So, you know, how long, I guess the question is more predictability, how long will it take?

Speaker Change: for you to be able to really...

Sam Poser: June would be a good example where in the last call we spoke about the lack of vision and we could share at that point of time. And throughout June and then in early July, we did just as you said, we ran our social and digital program and it worked really well. It got towards flatish during that time for him. Before I would be transparent, July was less than that as before we got into back to school.

Speaker Change: We confident in measuring the impact of the work, you had success in June and early July, but how it's evolved, how long till you have confidence that you might be able to take.

Speaker Change: Some of the monitoring customers from some other retailers with whom you compete and, you know, turn them into a shoe-quantable customers during those, you know, but Jerry both the event and not even periods.

Mark Worden: Yeah, our confidence is high.

Sam Poser: So we're going to take those learnings and we're going to apply them now to September, October, and early November to ensure we're getting that digital message out there. We're engaging with them and we're trying to drive them in. But historically, the volumes and units go down significantly as soon as the back to school season, which is very strong and, you know, we find our particular shoe carnival, the lower end customer has spent most of their discretionary income for Q3.

Mark Worden: And that's why we're raising our guidance today and saying, you know, will be flat of 5% come for the back half of the year. Implicit of that is absolutely taking market share throughout Q3 and Q4. It's also balanced and pragmatic, right? We were down to and now to get the flat plus five in the back half of the year.

Speaker Change: Our company is high, and that's why we're raising our guidance today and saying we'll be flat of 5% come for the back after the year. Implicit of that is absolutely taking market share throughout Q3 and Q4.

Speaker Change: It's also balanced in Pragmatic, right? We were down too, and now to get the flat to plus five in the back half of the year, we think is absolutely achievable from the strength of the plan, strength of the products, care of the market share, but we think that's probably the upper end of it also at this point of time.

Mark Worden: We think is absolutely achievable from the strength of the plan, strength of the product, gathering market share, but we think that's probably the upper end of it all flow at this point of time.

Sam Poser: Once we get past Labor Day and we find those volume numbers are small. Right, but that also means that any incremental could be large. And you're up and you're and you have some competitors out there. You know, that are that work with exactly the same consumers. So, you know, how long, I guess the question is more predictability, how long will it take for you to be able to really be confident in measuring the impact of the work.

Sam Poser: And then lastly, when we think about, could we assume that you're expecting Q4 from a comp perspective to be significantly better than Q3. Is that an accurate way to think about it? No, I wouldn't say that. Again, you know, Q3, you know, is low single digit fiscal August, and then the balance to achieve is zero or up to five percent. And so I think the right way to think about it is we're looking at the shape of the business right now is I would think at that midpoint, so the lower side is the right way to think about that, from flat to two and a half percent for the back half of the year is the most likely outcome.

Sam Poser: You had success early, you know, in June and early July, but how, you know, how has this evolved? How long till you have confidence that, you know, you might be able to take some of the moderate customers from some other retailers with whom you compete and, you know, turn them into shoe carnival customers during those, you know, jury, both the event and not event periods. Yeah, our confidence is high. And that's why we're raising our guidance today and saying, you know, will be flat of 5% come for the back half of the year implicit of that is absolutely taking market share throughout Q3 and Q4.

Speaker Change: Looking at the shape of the business right now is I would think that that mid point to the lower side of the right way to think about that from flat to two 5% for the back half of the year as the most likely outcome, but as I said, we had a tough boot season last year I'm really excited about the products of the current organization has and we're ready to go.

Mark Worden: But, as I said, you know, we had a tough boot season last year. I'm really excited about the product that Carl's organization has, and we're ready to go. So, with a strong boot season and our campaign's working for the holiday season, the higher side is absolutely possible.

Speaker Change: So with a strong boot season, and our campaigns working for the holiday season, the higher side as absolutely possible, but we should.

Sam Poser: That wasn't my question. My question is, regardless of what it is, do we, like for instance, let's just say two and a half as the midpoint, would we expect, let's say you did two and a half, would we expect two and a half in Q3 and two and a half in Q4, or would that more look like flattened Q3 and up five in Q4? I'm trying to understand a balance regardless of what the number is. Gotcha. Good clarification. I'd assume the same Q3, Q4, Sam. You know, for a simple point to use the midpoint, if we're going to say two and a half or simplicity in Q3, same for Q4, with, you know, the downside to that being more likely than upside, equally in both quarters.

Speaker Change: That wasn't my question. My question is regardless of what it is like.

Speaker Change: Like for instance, let's just say two and a half.

Sam Poser: It's also balanced and pragmatic, right? We were down to and now to get the flat plus five in the back half of the year. We think is absolutely achievable from the strength of the plan, strength of the product, gathering market share, but we think that's probably the upper end of it all flow at this point of time. And then lastly, in when we think about, could we assume that you're expecting Q4 from a comp perspective to be significantly better than Q3.

Speaker Change: The midpoint would we expect let's say you did two and a half would we expect two and a half in Q3, and two and a half in Q4 or Mike or would that more look like flat in Q3 and up five in Q4.

Mike: I'm trying to understand the balance regardless of what the what the number is not you.

Sam Poser: Good clarification I'd assume the same Q3 Q4 Sam.

Mike: For simple point to use the midpoint.

Speaker Change: We're going to stay at two and a half for simplicity in Q3 same for Q4 with the downside to that being more likely than upside equally.

Sam Poser: Is that an accurate way to think about it? No, I wouldn't say that. Again, you know, Q3, you know, is low single digit fiscal August and then the balance to achieve is zero or up to five percent. And so I think the right way to think about it is we're We're looking at the shape of the business right now is I would think at that midpoint, so the lower side is the right way to think about that, from flat to two and a half percent for the back half of the year is the most likely outcome.

Speaker Change: Equally in both quarters.

Speaker Change: Okay. Thank you very much thank you Sam.

Sam Poser: Thank you, Sam.

Mitch Kummetz: Our next question comes from Mitch Cometz from Seaport Research. Your line is now open. Yeah, just a couple of quick follow-ups for me.

Mitch <unk>: Our next question comes from Mitch <unk> from Seaport Research. Your line is now open.

Mitch <unk>: Yes, just a couple of quick follow ups for me one on the three Q.

Mitch Kummetz: One on the three QEPS guy, I think you said that's a 70 cents, but that's a gap number. What is that on an adjusted basis? Yeah, so, you know, you can see sort of what that gap did not yet adjustment has been for each of the first two quarters, and you can see what our full year of God was, right? Spots and stuff.

Speaker Change: EPS Guide I think you said.

Speaker Change: 70, but thats a GAAP number.

Sam Poser: But as I said, you know, we had a tough boot season last year. I'm really excited about the product that Carl's organization has and we're ready to go. So with a strong boot season and our campaign's working for the holiday season, the higher side is absolutely possible. That wasn't my question. My question is regardless of what it is, do we, like for instance, let's just say two and a half as the midpoint, would we expect, let's say you did two and a half, would we expect two and a half and Q3 and two and a half and Q4, or would that more look like flattened Q3 and up five and Q4?

Mitch <unk>: What is that on an adjusted basis.

Mitch <unk>: Okay.

Mitch <unk>: Yes, so Steve I mean, you can see sort of what that net GAAP to non-GAAP adjustment is that each of the first few quarters and you can see what our full year guide was right it's not fair to.

Mitch Kummetz: Fair to think about that differential being about the same call out of any. Let me finish that. Okay. All right. I don't know.

Speaker Change: Think about that differential being about the same.

Speaker Change: App.

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: Alright.

Mitch Kummetz: It seems like it'd be easier to just give us an adjusted number, but I'm not going to push that.

Speaker Change: I don't know it seems like it would be easier to just give us an adjusted number but I'm not going to push that.

Mitch Kummetz: And then on the third quarter, again, I just kind of want to be clear as to sort of how you expect the balance of the quarter to play out. You guys aren't giving comp on the quarter. You're giving sales, but August is running plus low singles. Market sounds like you expect September and October to kind of dip from that since it's a non-event period. I mean, are you looking for sort of flat to down comp in September and October to kind of get to your sales guide on the quarter? Is that how you're thinking about it?

And then on again on the third quarter.

Sam Poser: I'm trying to understand a balance regardless of what the number is. Gotcha. Good clarification. I'd assume the same Q3, Q4, Sam. You know, for a simple point to use the midpoint, if we're going to say two and a half or simplicity in Q3, same for Q4, with, you know, the downside to that being more likely than upside, equally in both quarters. Thank you very much. Thank you, Sam.

Speaker Change: Just kind of want to be clear as to sort of how you expect the balance of the quarter to play out.

Speaker Change: You guys aren't you guys arent, giving comp on the quarter Youre, giving sales, but August is running plus low singles.

Speaker Change: Alright, it sounds like you accept.

Speaker Change: September and October to kind of dip.

Speaker Change: From that since it's a non event period I mean are you looking for sort of flat to down comp in September and October to kind of get to your sales guide on the quarter or is that how youre thinking about it.

Mitchel Kummetz: Our next question comes from Mitch Cometz from Seaport Research. Your line is now open. Yeah, just a couple of quick follow ups for me. One on the three QEPS guy, I think you said, that's a 70 cents, but that's a gap number. What is that on an adjusted basis? Yeah, so, you know, you can see sort of what that gap did not yet adjustment has been for each of the first two quarters, and you can see what our full year of God was, right? Spots and stuff. Fair to think about that differential being about the same call out of any, let me finish that. Okay. All right. I don't know.

Mark Worden: Close. I say flat to very low single digit for the balance of this quarter is how the numbers work out to get to, you know, the 320 approximate to flat to slightly increase for the balance of this quarter. Okay.

Speaker Change #100: Close I'd say flat to very low single digit for the balance of this quarter is how the numbers work out to get to the 320 approximate flat to.

Speaker Change #100: Slight increase for the balance of this quarter.

Speaker Change #101: Okay. Okay, alright. Thank you good luck.

Operator: All right. Thank you. Good luck.

Operator: Thank you, Miss.

Mitch <unk>: Thank you Mitch.

Operator: As of right now, we don't have any pending questions.

Speaker Change #102: As of right now we don't have any pending questions I'd now like to hand back over to the management for your final remarks.

Steve Alexander: I'd no like to hand back over to the management for the final moment.

Hey, this is Steve. Thanks again for joining us today. We're available all day. If you have any follow-up questions, please let us know. Thank you very much.

Speaker Change #102: Hi, This is Steve Thanks, again for joining US today, we are available all day. If you have any follow up questions. Please let us know thank you very much.

Speaker Change #103: Thank you for attending today's call you may now disconnect have a wonderful day.

Speaker Change #103: Yeah.

Mark Worden: It seems like it'd be easier to just give us an adjusted number, but I'm not going to push that. And then on the third quarter, again, I just kind of want to be clear as to sort of how you expect the balance of the quarter to play out. You guys aren't giving comp on the quarter. You're giving sales, but August is running plus low singles. Market sounds like you expect September and October to kind of dip from that since it's a non-event period.

Speaker Change #103: Yeah.

Speaker Change #103:

Mark Worden: I mean, are you looking for sort of flat to down comp in September and October to kind of get to your sales guide on the quarter? Is that how you're thinking about it? Close. I say flat to very low single digit for the balance of this quarter is how the numbers work out to get to, you know, the 320 approximate to flat to slightly increase for the balance of this quarter. Okay. All right. Thank you. Good luck. Thank you, miss. As of right now, we don't have any pending questions.

Speaker Change #103:

Steve Alexander: I'd no like to hand back over to the management for the final moment. Hey, this is Steve. Thanks again for joining us today. We're available all day. If you have any follow-up questions, please let us know. Thank you very much.

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