Hibbett, Inc.
Q3 2021 Earnings Call Transcript

Published: 20 Nov 2020

[Operator:]

Greetings. And welcome to the Hibbett Sports Third Quarter 2021 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded on Friday, November 20, 2020. I would now like to turn the conference over to Jason Freuchtel, Director of Finance and Investor Relations. Please go ahead, sir.

[Jason Freuchtel:]

[Mike Longo:]

Thanks, Jason. Good morning. And welcome to the Hibbett Q3 earnings call. If you are following along using the slide deck, I am on the third slide entitled Introduction. This quarter was a great outcome from a financial perspective for the company. As you saw in the press release, we reported the 21% sales comp, our brick-and-mortar comp was almost 18% and e-commerce was 50%. This resulted in a non-GAAP operating income of almost $33 million and a non-GAAP earnings per share of $1.45.

[Jared Briskin:]

Thank you, Mike. Good morning. If you please turn to the merchandising slide. Our strong comp sales performance was driven by apparel and footwear with significant gains in sales and share of our mix. Team sports continue to be impacted by COVID. It was down low double digits. Our toe-to-head merchandising strategy is working, as we continue to see additional items in the basket leading to average transaction growth. The apparel business is up in the mid-30s. This increase was driven by gains in athletic brands and apparel, fashion apparel, licensed products and accessories. All genders were significantly positive. From the athletic brands we saw acceleration in our performance business, as well as the lifestyle business. Consumers responded positively to our fall assortment upon delivery and early selling of fleece, jackets and athletic bottoms were very strong. Our fashion brand performance was exceptional, as our focus on denim and fleece and our fall assortment were strong performers. Quick turnkey is also performed well as our vendor partners worked with us on securing additional inventory.

[Bob Volke:]

Thanks, Jared, and good morning. If you will please refer to the third quarter results slide. As a reminder, we treat City Gear is an extension of the Hibbett business and these results are reported on a combined basis. For the third quarter, total net sales increased 20.3% to $331.4 million and consolidated comp sales increased 21.2%. This compares to third quarter fiscal 2020 sales of $275.5 million and a comp sales increase of 10.7%. Brick-and-mortar comp sales remained strong and came in at 17.5%, e-commerce sales grew at over 50% in the quarter, representing attractive expansion in our omnichannel platform. For the quarter, e-commerce sales accounted for 13.2% of net sales, compared to 10.5% in the third quarter of last year. Our GAAP gross margin expanded significantly to 38.3% of net sales, compared to 32.7% in the prior year third quarter. This approximate 560-basis-point improvement was due to higher initial sell-through, a low promotional environment, a reduction of inventory reserves and leverage of store occupancy costs that are included in our gross margin calculation. There’s a slight offset due to the higher volume of e-commerce sales, which carry a slightly lower margin due to the incremental shipping costs associated with the sales. Excluding the reduction of inventory valuation reserves in the current period, adjusted gross margin was 38.1% this year to adjusted gross margin of 32.4% last year. Store operating, selling and administrative expenses were 26.1% of net sales in the third quarter, compared to 29.1% in the third quarter of fiscal 2020. This decrease of approximately 300 basis points was primarily due to the leverage from install -- from the strong sales performance, as well as lower cost of acquisition integration activities associated with City Gear. Excluding certain city gear acquisition and integration expenses, adjusted SG&A was 26% of net sales, compared to adjusted SG&A 27.2% in the prior year third quarter. On a GAAP basis, we generated $33.2 million of operating income, which compares to last year’s operating income $2.6 million. Excluding all non-GAAP adjustments for the quarter, adjusted operating income was $32.7 million or 9.9% of sales, compared to operating income of $6.9 million in the third quarter of last year. GAAP earnings per share were $1.47 for this year’s third quarter and non-GAAP earnings per share were $1.45. Primarily as a result of improving our inventory position over the last three months, we generated an operating cash outflow of $33.6 million during the quarter. We also spent approximately $8.3 million in capital expenditures, which were largely related to new relocated and remodeled stores. In the prior year third quarter, operating cash flow was approximately $900,000 and capital expenditures were $5.2 million.

[Operator:]

Thank you. Our first question comes from Sam Poser with Susquehanna. Please proceed.

[Sam Poser:]

Good morning, gentlemen. Thanks for taking my questions. Well, let me ask you this. You have about $10 a share in cash right now. Can you give us an idea are you looking at any M&A right now, and if so, what can you tell us?

[Mike Longo:]

Certainly, we always -- Sam, this is Mike. Good morning. Great to hear from you.

[Sam Poser:]

Good morning.

[Mike Longo:]

Certainly, we’re always going to look at strategic alternatives and what we’re doing capital in allocation is always a subject of great debate. Bob?

[Bob Volke:]

Yeah. Good morning, Sam. Again, as you heard in the prepared remarks, we are continuing to build our inventory balanced. We still feel that there’s an opportunity for us to continue to get that to more of an optimal level. I think, again, as Mike said, we’re always kind of keeping our options open. We’re looking at how we can best deploy capital to get the return for shareholders. I think, again, there’s a lot of options on the table, whether it be potential M&A, share repurchase, investment in new store units. So we’re going to keep kind of our options open going forward.

[Sam Poser:]

Okay. Thanks. And then you’ve got a situation where, I think, as of March, Belk and Dillards are no longer going to be carrying Nike, and you mentioned, that you’re already seeing some benefits from Stage stores and J.C. Penney closings. If you think about that on top of, I guess, your new customer retention and so on how -- what -- how does that -- how do you think about that going into next year? How might that help you?

[Jared Briskin:]

Hey, Sam. Good morning. It’s Jared.

[Sam Poser:]

Hi, Jared.

[Jared Briskin:]

We certainly believe it’ll help us. There’s certainly disruption continuing to go on in the market. We obviously have our work to understand based off that timing and based off on hand inventories when that will occur. But our team without question is focused on our ability to take advantage of that disruption.

[Bill Quinn:]

Hey, Sam.

[Sam Poser:]

And then…

[Bill Quinn:]

Good morning. This is Bill.

[Sam Poser:]

Okay. Hi.

[Bill Quinn:]

Just add to that. We have been testing marketing programs to target displaced customers in those area. So that is something that we’re prepared to do in the future.

[Sam Poser:]

Thanks. And then -- I mean, and then, you’ve had two fairly significantly strong quarters -- the last two quarters. You -- we sort of talked about it, can you give -- can you say something that, why you’re confident that, well, there’s probably going to be some headwinds just because of the extraordinary comps in Q2 and Q3 next year, that you feel comfortable that a lot of the business you’ve done so far is going to be sticky, where the new customers are going to stick next year or not? I mean, I think that’s, what gives you the confidence that you’re going to be able to build on what’s going on this year?

[Mike Longo:]

Thanks, Sam. Mike, again. So, certainly, we have had a very good experience this year. We all understand the challenge of an comp Q2 next year and what that two-year comps going to look like. But for the full year, we do have confidence and that confidence comes from a combination of factors. One, the experience that we’ve gained this year and the playbook that we’ve written and been executing against. For the tactical side, the strategic plan, the broader scope of what we’re doing. We have a great deal of confidence in what we’re executing against there. And as this quarter goes by, we’ll gain additional visibility, and as you’ve noted, and we said, we have the confidence to give guidance for Q4, which is unusual, I think, for retailers in the recent past, and currently, many retailers are neglected -- are opting not to give guidance. We at least have the confidence to look ahead 90 days and while we didn’t do a perfect job forecasting this quarter and this is a miss whether it’s high or low, regardless we had the confidence to put something out there and we did it again. So to your central question, what makes us feel good about next year, you hit on some of those points, and certainly, new customer retention is a big deal, and our experience and our capabilities. Bill, would you like to add anything to that?

[Bill Quinn:]

Yeah. Absolutely. So in Q2, we surveyed our new customers and they said they had a great experience and they will shop with us again. We looked at their behavior in Q3 and they did what they said, they came back and shopped. A lot of that really is about providing a great in-store customer experience and a great online customer experience. Also, part of that is having a loyalty program that naturally incentivizes them to shop and we’ve got a great loyalty program. And also what we’ve learned with new customers is, it’s critical that you communicate to those new customers within that first 90 days, it’s all about getting them back into the store and online to shop. And that shopping experience with online and the pressure testing we’ve had from the pandemic has never been better. Also, we’ve made great strides with our in-store shopping experience as well. And I’ll turn it over to Ben to comment.

[Ben Knighten:]

Yeah. Thanks, Bill. We’re laying the groundwork, obviously, to make those customers stick, as you mentioned, Sam. Jared talked about our store remodels in our refresh project where we went out there and touching and refreshing every location. In the stores, it’s all about blocking and tackling, right? We’ve doubled down on sales culture in stores and we’re taking all of our team members through extensive training there. In the quarter, we also conducted leadership training with our entire field management team and it’s our intention, obviously, to give that in-store experience to make those customers and those new customers that we think come in our doors stick for next year.

[Sam Poser:]

Thank you. And then lastly, how has your relationships with key vendors changed throughout this year? As far as, just I mean allocations plus just general -- just I guess…

[Mike Longo:]

We are extremely confident in our positioning with the vendors support. Throughout the years has continued to improve. We continue to see numerous opportunities with a large portion of our vendor partners. And they’re mobilizing against opportunities they have with both the Hibbett brand, as well as the City Gear brand. So we’re very confident around how we are positioned and we’re very confident about our opportunities, in particular as there are some marketplace disruptions that we believe will be occurring.

[Sam Poser:]

Thanks. Thanks very much and everybody stay safe. Have a great holiday.

[Mike Longo:]

Thank you, Sam.

[Bob Volke:]

Thank you. You as well.

[Operator:]

Our next question comes from Alex Perry with Bank of America. Please proceed.

[Alex Perry:]

Perfect. Congrats on a great quarter and thanks for taking my question. I guess, just first, what gives you confidence in the high single-digit to low double-digit comp outlook in the fourth quarter, especially in the absence of any stimulus programs? And then just separately on that point, how do you see sort of the recent surge in COVID potentially impacting the business in the fourth quarter?

[Mike Longo:]

Thanks for the question. This is Mike. I’ll lead off and then I will give to Jared to follow up. We do have confidence in this quarter and some of that is an extension of trends and experience that we see today, and obviously, you’ve got the results from Q3. While there was a, I believe that Ben will cover this in a moment, there was a slight a small amount of stimulus that eked out into the market. In Q3, we don’t have any visibility reasonably that there will be any stimulus in Q4 and did not model that in our guidance. This is simply an extension of our current experience. Our -- the math that we’re doing around the new customer, and Bill, we’ll touch on that in a minute. And what we’re seeing in trends in brick-and-mortar and e-commerce. Jared?

[Jared Briskin:]

Yeah. Good morning. I think, most importantly, the quality of our inventory is exceptional at this point. So that gives us a lot of confidence in our ability during the fourth quarter. Our ability to enhance some trends that we’ve seen during the third quarter, our team has really done an incredible job of securing the right inventory, and in particular, not only what we have on hand, but also in our order book. So we’re very confident in our opportunities in fourth quarter, we’re very confident around the cadence of launches and very confident about the position we’ll be in with inventory.

[Bill Quinn:]

Yeah. This is Bill. I’ll add to that. So from a customer perspective, we do have more new customers, those new customers are shopping more frequently than us -- with us than prior new customers. If you look at last year, they’re also buying more during those visits. So we’re encouraged by their behavior. We’re also seeing just a huge increase in omnichannel activity, which is very positive for us. so that is customers who are buying both online and in-stores and those customers are worth more than any of our other customers and we’re seeing that improvement or increase in behavior there. Also I will add from an online perspective, we are seeing large increases in traffic as a result of gathering customer information. So all of our files, whether it’s email, text, push, et cetera, we can market to those customers easily. We have a best-in-class omnichannel offering, which also drives traffic and sales. And lastly, our online experiences better than it ever has been. I’ll turn it over to Ben to talk about the source.

[Ben Knighten:]

Yeah. Thanks, Bill. As Mike mentioned earlier, we did see some additional state unemployment benefits in a few markets. But that was quite honestly limited to September timeframe and kind of had a minimal impact. The quarter obviously was strong, absent many meaningful stimulus out there and our focus is obviously on increasing our sales through the culture in our stores that won’t go away in Q4. I’m very confident in our team to execute at store level. And partnering with Jared and obviously, Bill, I think, we can continue that in the quarter.

[Alex Perry:]

Perfect. That’s really helpful. Thanks for that. And I guess, just my last one here. Can you give us an update on sort of unit -- how are you thinking about unit growth across both banners both for this year and then maybe longer term? I think you sort of last quarter move that cadence of unit growth from being sort of a net closer to a net opener and what’s driving that. Is some of that being helped by your vendor partners cutting their number of distribution partners or just whitespace you see in the market? Just any other color there would be really helpful?

[Mike Longo:]

Yeah. You’re correct. We did tell you until the market that we intended to go back to net double-digit new store growth net of closures. In the recent past, there were multiple quarters where the closures were more than the openings. We expect that to -- we are reversing that. We have confidence around our new store model and we have confidence in where we’re opening those stores and how we’re opening those stores. So the where we’re opening the stores is a fair amount of math and science around the new model that we put in place and new ways of looking at how to approach that and taking some of the best practices from other retailers that we’re in contact with and then, frankly, we’ve worked for. And then how we open the stores, I think is as important. And the efforts of Jared and Bill and Ben on top of our best-in-class IT support inside the stores and the supply chain changes that we’ve made to improve our speed to market, meaning this is product that’s fashion, it has a shelf life, the faster it gets to the street the faster we begin to turn it and the lowers the likelihood of other markdown. We like all of those things that we’re doing and so when you combine them all together, it gives us a great deal of confidence to go back to net openings in the double-digit range. We have a lot of whitespace on the Board across the country. We won’t go into any detail as to where that whitespace is. I would also say, we’re also going to be judicious in how we do it. There will be a combination and this is just retail one-on-one will be a combination of targeted markets where we go in and do backfill and add to a market density where we’ve got an underserved customer, whether that underserved customer is in the middle of Houston or in Alexandria, Louisiana, the value -- the economic value of that underserved consumer and the economic value of that net new door can be equivalent, whether it’s in a dense urban market or a relatively rural market, we are picking those sites very carefully. And the unbelievably good work that Ben and his crew are doing are how to change the culture in the stores with a laser focus on the consumer and the consumer experience that then supports the laser focus that Bill Quinn’s area has on the omnichannel experience. Those things go hand-in-hand. And as Bill said, and I’ll repeat the brick-and-mortar consumer is a great consumer and worth a lot. The pure-play e-commerce consumer is a great consumer and worth a lot. The omnichannel consumer, however, is more valuable in terms of their total spend and that’s the consumer that we have the best relationship with. They are in our markets, our brick-and-mortar markets, and they’re on our website and they’re participating in BOPUS and ROPUS and buy online, ship to store, curbside delivery and all those services that our team have put together. And finally, I will tell you that Jared and his group have done a terrific job on selection of product and where that product goes. Because a market -- a store is not a store, right? And so every store has a micro merchandising slant. There is commonality of inventory between stores. But one of the examples that we give often is we have a store on Bullard in New Orleans and a store on Clay Board in New Orleans and they couldn’t be more different. They’re different in terms of the consumer taste. They’re different in terms of the brands that we should carry. And they’re different in terms of sizes that we should put in those stores by style. So that math and science and all that goes into that goes through Jared’s team and they’ve done a fantastic job with that. So I’ll pause and let you redirect the question where do you want it to go?

[Alex Perry:]

No. I -- that was a very comprehensive answer. Thanks. Thanks a lot for that. And yeah, I think, I’ll pass it on and best of luck to your holiday.

[Mike Longo:]

Thank you. You as well.

[Operator:]

Our next question comes from the line of Peter Benedict with Baird. Please proceed.

[Peter Benedict:]

Hi, guys. Thanks for taking the question. Mike, you mentioned that mess is a mess, but I think we can all agree a high mess is better than a low mess.

[Mike Longo:]

Absolutely.

[Peter Benedict:]

Well done.

[Mike Longo:]

Thank you.

[Peter Benedict:]

Well done. So I guess the first question just maybe Bob around the cross margin improvement in the quarter. I don’t know if you can untangle kind of the product margin contribution there relative to the fixed leverage occupancy and warehouse distribution and how you’re thinking about the profit margins clearly going to be strong again in the fourth quarter? But just maybe the sustainability of those, when we get back to maybe a more normalized promotional level, what are some of the puts and takes as you think about product margin longer term? That’s my first question.

[Jared Briskin:]

Hey, Peter. Good Morning. It’s Jared. Yeah. I think, first and foremost…

[Peter Benedict:]

Hi, Jared.

[Jared Briskin:]

…as we mentioned, we’re at historic lows on aged inventory. So that without question is having impact on the product merchant positively. The rate of sale based on our assortment has certainly accelerated, which is translating into limited markdowns. That along as well the work that Bill’s team and Ben’s team have done, product is being sold faster than we have historically without question. On top of that, with quality of our inventory, our ability to limit our promotions is something we’ve been able to take advantage of without question. And then lastly, as we continue, we’re really confident in the quality of our upcoming deliveries and that’s where we feel that we do have upside from a product margin perspective as we head into Q4.

[Operator:]

Our next question comes from Jim Chartier with Monness, Crespi, & Hardt. Please proceed.

[Jim Chartier:]

Good morning. Thanks for taking my question. Just kind of following up on the previous question, I guess, there’s been limited supply in the marketplace and everyone’s been kind of chasing athletic product. So as we get into next year, you had -- you expect to have to increase promotional activity. And then, in terms of categories, how has gross margin this year benefited from a sales mix away from team sports and to apparel and footwear? Thanks.

[Mike Longo:]

Yeah. Thank you. I think, first and foremost, our focus on maintaining a clean inventory position is incredibly important as we think about how we go forward into next year. From a mix perspective, obviously, we’ve seen significant acceleration in both footwear and apparel. But our team sports margins in normal years is very strong as well. So I don’t really see that being a dramatic impact due to mix. The big impact that we’re seeing now is the health of the inventory, the limited clearance, both from an in-store selling and an online selling and the quality of our inventory.

[Jim Chartier:]

Great. And then in terms of store remodels and refreshes, how many stores do you think you’re refreshing fourth quarter and then what’s the remodel and refresh plan for next year? And then can you help us understand, what kind of sales lift you’re seeing in those stores or what kind of payback period you’re expecting for the remodels and refreshes?

[Mike Longo:]

Yeah. So we will complete the refresh project in all Hibbett Sports stores during the fourth quarter. We’re very excited about that project. As mentioned, it’s the economically, it’s significantly lower than the cost of doing a full remodel, but gives us a strong impact in the look and feel of the store. From a remodel perspective, the new store designs, we are seeing significant comp acceleration over and above our overall comp. And we have a similar plan for next year with regard to the number of remodels that we did this year.

[Jim Chartier:]

Okay. And then just I want to understand, have you seen any change in your sales trends or mix between e-commerce or stores, given the recent spike in COVID cases or is that just something you think is a possibility or likelihood later in the quarter?

[Jared Briskin:]

Yeah. I think we’ll see. It’s probably too early to talk about that.

[Jim Chartier:]

Okay. Thanks and best of luck.

[Operator:]

Our next question comes from Peter Benedict with Baird. Please proceed.

[Peter Benedict:]

Hey, guys. Sorry about that. But not sure what happened. My phone just went down. But anyway, the other question I wanted to ask was just more around your supply chain and systems. How they fit today, I mean, obviously, you’re experiencing an elevated level of demand. Hopefully, that’s going to continue. Are there investments that need to get pulled forward here to support that in the next few years and how should we be thinking about capital investment around supply chain systems, anything else that you might need to support the higher level of sales in the business?

[Mike Longo:]

Yeah. This is Mike. I’m intimately involved in what we’re doing on the strategy and supply chain. So I’ll take that one. We have a very good distribution center and it is completely outfitted. I would say, what we’re doing today is less about capital and more about re-engineering processes. So we’re going through the process. There’s a modest amount of capital needed, but it’s in 100,000 here and there range, not millions at a time. Moving from a process that was more focused on loading trucks and having once a week deliveries and transitioning from that more into a fluid load, live load, dispatch multiple times a week to a store. Those changes don’t actually require tons of capital equipment. It’s more about the application of knowledge and re-engineering resources. And so far, all of the investments that we’ve made our expenses and those expenses, you can see in the P&L today. So they’re paying out. They have high ROIs and we really like what we’re doing. I would say, we’re in the early innings of those improvements. But I don’t see any material impact to cash flow or to the balance sheet or to the P&L as a result of it, except adding to sales. And the faster we get -- again, I’ll repeat something I said earlier, the faster we get that product to market, the higher ultimately our gross margin will be and our sales.

[Peter Benedict:]

Excellent. And I guess one follow up to that, Mike, maybe just how you’re thinking about the store labor model. I know you’re changing the culture in the store a lot on the merchandising front hat. How is the store labor model evolving, if at all and how are you thinking about kind of compensation there and any changes to that structure?

[Mike Longo:]

I’ll take the first part of that. The compensation, we think we’re in the right range, there might be -- an underlying might be an upward bias on wages in the future. But we’ll see. Certainly, there are some statutory changes that we’ve experienced. Those are all well chronicled in the news. And generally, when those happen, doesn’t have a material impact on us. So we don’t see a spiraling out of control of wage inflation, nor do we see the other side of the ledger on compensation on the benefit side. We don’t see that spiraling out of control either. So while we’re not sanguine about it, we are watching it, we don’t have deep and grave concerns about it. To the first part of your question about the actual labor model and how we run the stores. I will tell you that Ben Knighten and his staff have a deep knowledge on labor scheduling and we’re going through a process now of putting in a best-in-class labor scheduling system. Ben?

[Ben Knighten:]

Yeah. To Mike’s point, we have begun the process rolling out electronic labor scheduling to all stores to replace an existing system that we had in our Hibbett locations and that whole effort is really about maximizing the in-store experience of the customer. Obviously, labor is our largest controllable expense in the stores. But it’s how you use that labor and how you can maximize that labor and I think we’re in an environment to where we can make sure that we get the right people in the right place at the right time. And from a labor scheduling standpoint, actually increase our ability to service that customer with the process changes, Mike’s talking about, with frequency of delivery to stores, that actually aids us at store level, not only to get the product in front of the customer quicker, but even from being able to stock those items on our shelves and display them in the appropriate way and actually helps us there. And so our efforts around a labor model are really focused on the sales side of things, trying to take those friction points away from customers, minimize the task that we have to do and put the person in front of the customer more than in front of a box or before the stores open doing those types of tasks. We think that’s much more valuable having that interaction with customer and so the more things that we can streamline in that way the better and the labor model that we put in place and we continue to refine that’s the basis of it.

[Peter Benedict:]

Okay. That’s great color. Thanks so much, guys.

[Operator:]

Our next question comes from Sam Poser with Susquehanna. Please proceed.

[Sam Poser:]

Thanks for taking my follow up. Your inventory, like, you say you’re going to bring your inventory levels up, but your inventory levels at the end of the third quarter are the lowest they’ve been since the third -- in the third quarter since 2000 -- since Fiscal ‘13 and your revenue you did in the quarter is -- was 60% above that inventory level -- the revenue you did back in Fiscal ‘13. On a like, what in the quarter had you had it the way you wanted it? Where would your inventory be? What is the optimum inventory level, that’s sort of your building back to or you feel you should have been at at the end of Q3.

[Jared Briskin:]

Hey, Sam. It’s Jared. Our expectation on inventory, we’re about 10 points away from where we’d like to be from a year-over-year perspective. I think we absolutely believe we can turn our inventory faster and that’s part of the reason why our margins are improving as our ability to keep our inventory clean. We also feel that our sell-through during the third quarter was a little bit too fast in certain places and we potentially left some opportunity on the table. So that balance is what we’re really looking to strike is, how do we ensure that, we capitalize on as many of the opportunities as we possibly can, while continuing to improve our rate of sale. As you mentioned, there’s a lot of disruption from a marketplace perspective. And we want to make sure that we balance our ability to take advantage of all of those things with inventory, while ensuring that we turn our inventory faster than we have in the past.

[Sam Poser:]

Thanks. Hold on a second. So that means you should -- you think that like you should have been around $240 million at the end of the quarter, that would have been sort of where you would have liked to have been if -- an I thinking about that right?

[Jared Briskin:]

Yeah. A little higher than that, but you’re not terribly far off.

[Sam Poser:]

Okay. And then secondly, have you -- did you guys see any difference or what was the difference in your performance -- in your brick-and-mortar performance from your mall-based stores versus strip center?

[Jared Briskin:]

Yeah, Sam. It’s Jared. I mean our mall stores performed very well. But they were not as strong as our non-mall locations. The non-mall stores absolutely performed better than our mall locations as a whole.

[Sam Poser:]

And were you up double digits at the malls too, just not to the degree or was that a single-digit number?

[Jared Briskin:]

Yeah. It was approximately there. Again, sales were very strong in the mall, just not at the levels of the strip center stores.

[Sam Poser:]

Thanks again. Continue success.

[Mike Longo:]

Thank you.

[Operator:]

Mr. Longo, there are no further questions at this time. Please continue with your presentation or closing remarks.

[Mike Longo:]

Well, thank you so much. We appreciate everyone’s time and attention today. We are proud of the team that delivered these results and I can’t say it enough. We thank them for what they do each and every day. We appreciate everyone being on the call today. We love talking about our business. The only thing we love more than that is going out and doing business. So I hope everyone has a great holiday season and we’ll see you again very soon. Thank you.

[Operator:]

That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day everyone.