Shoe Carnival, Inc.
Q3 2020 Earnings Call Transcript

Published: 18 Nov 2020

[Operator:]

Good afternoon and welcome to the Shoe Carnival's Third Quarter Fiscal 2020 Earnings Conference Call. Today's conference is being recorded. It is also being broadcast via webcast. Any reproduction or a rebroadcast of any portion of this call is expressly prohibited. Management's remarks 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 filings and today's earnings press release.

[Cliff Sifford:]

Thank you and welcome to Shoe Carnival’s 2020 third quarter earnings conference call. Joining me on the call today is Mark Worden, President and Chief Customer Officer; and Kerry Jackson, Senior Executive Vice President, Chief Financial and Administrative Officer. On today’s call, I'll provide a high-level review of our fiscal third quarter 2020 results as well as an update on our business operations. Mark will then provide an update on how our strategic initiatives are driving growth followed by Kerry who will discuss the quarter's financial results. We'll then open the call for your questions. Our fiscal third quarter results clearly demonstrated the strength and dedication of our team and their ability to execute on our strategic initiatives as well as our enduring competitive differentiators. When we last spoke, we had successfully reopened all our stores welcoming our loyal customers back to satisfy all their footwear needs in-person. Since then, our corporate offices have also reopened, and we were excited to welcome our dedicated team back. With that being said, the health and safety of our customers and employees remain our number one priority, as such we are diligently watching and adhering to each state's COVID-19 developments and any subsequent policy change. For the fiscal third quarter 2020, we delivered exceptional results. In fact, the third quarter was our most profitable quarter in the company's history. As we had anticipated and communicated, we achieved same-store sales growth in spite of the extended back-to-school season, an achievement you are unlikely to hear from other fashion retailers. We believe our continued strong performance in an incredibly volatile operating environment is the direct result of us putting our employees first and making a decision not to implement furloughs during the mandated shutdown. Instead, we kept our employees engaged, which has proven to be a tremendous competitive advantage allowing us to reopen our stores quickly and efficiently. Back-to-school played out largely as we had thought with sales occurring later in the fiscal third quarter due to delayed start dates for nearly all of the schools within the markets we operate.

[Mark Worden:]

Thank you, Cliff. The Shoe Carnival team achieved incredibly strong results in the third quarter despite a macro environment that continues to be unpredictable. At the same time, we advance our core strategic initiatives, we acquired new customers, we grew our market share, and achieved record quarterly profits. I'm very proud of and so thankful for our 5,000 plus employees' commitment and their customer focus during this challenging macro environment. During Q3, we achieved our 18th consecutive year of sales growth for the back-to-school sales period. During our last earnings call, we shared that we anticipate the back-to-school selling period to start later than it has historically and extend further into early October. This is precisely what happened.

[Kerry Jackson:]

Thank you, Mark. As Cliff and Mark both mentioned, we saw another strong quarter in an unpredictable environment, thanks to our team and their continued commitment to delivering on our strategic priorities. We delivered sales of $274.6 million in the quarter with comparable store sales of nearly 1%, driven by e-commerce sales. This quarter's comparable store sales growth was on top of a 3.5% comparable store sales increase in the third quarter of fiscal 2019. Our e-commerce business sustained triple-digit growth, while our brick-and-mortar store sales during the quarter were negatively impacted by delayed back-to-school shopping and COVID-related uncertainty in the quarter. Our gross profit margin for the quarter increased to 32.0% compared to 30.9% in the third quarter of last year, making Shoe Carnival's most profitable quarter ever. Our merchandise margin increased 160 basis points, while buying, distribution, occupancy expense increased 50 basis points as a percentage of sales. The increase in the merchandise margin was primarily due to lower promotional activity during the quarter, an increase of 260 basis points in our product margin offset 120 basis point increase in e-commerce shipping expense. The increase in buying, distribution, and occupancy cost as a percentage of sales was primarily due to higher distribution expense.

[Operator:]

Thank you. And your first question comes from a line of Mitch Kummetz from Pivotal Research. Your line is open.

[Mitch Kummetz:]

Yes, thanks for taking my questions. I wanted to start by digging into the merch margin a little bit. So, merch margin up 160, product margin up 260, Kerry is the difference in e-comm shipping was at 100 bps of pressure on the merch margin?

[Kerry Jackson:]

It was 120 bps of margin pressure for the increased e-commerce shipping.

[Mitch Kummetz:]

Okay. And then the 260 increase in product margin, I would imagine that there was a little bit of pressure with athletic, comp being up I think closer to high singles, so that was better than your overall comp, did that -- was that not the case?

[Cliff Sifford:]

Mitch, the reason that merch margins were up had everything to do -- we became less promotional during the quarter. What we found was that -- we had a tremendous selection of athletic product, we had a good selection of sandal product that customer was looking for, and there was really no reason for -- I have to say, I don't want to talk about competition, but I think we had a superior selection of those kinds of products that the customer was looking for. And really, we looked at each other and said, “Why in the world are we going to promote this?,” The customers are coming in and buying this. Let's get every penny of margin we can out of it, and that's the decision we made. Sorry to interrupt. Just one second, the grand part about Shoe Carnival, we can make those decisions on a daily basis as our systems are such that if business had turned sour any time during that time period, we could have added all of those promotions pretty much the very next day.

[Mitch Kummetz:]

The reason I asked about athletic is because I would have guessed that that was a bit of a drag, which the reason I wanted to get that answer was because I would think from a like-for-like standpoint, your product margin was up even more than 260 basis points. Do you see what I'm getting at?

[Cliff Sifford:]

I'm trying to go with you. What --

[Cliff Sifford:]

Well, I would have thought with athletic up more than the overall business, typically that's a bit of a product margin drag. So, if you were sort of to adjust for that, that would suggest that the product margin was even stronger than the 260. Does that make sense?

[Cliff Sifford:]

Yes, I hear you. I think it all had to do -- it could have been -- so let me say it another way. Sandal margins were really strong, athletic margins were very strong because we weren't near as promotional as we were a year ago. We actually canceled one of our back-to-school insert because we just didn't need to do it. And that allowed us to max -- to get additional margin out of the product than we sort of would have gotten.

[Mitch Kummetz:]

So, what's the takeaway for Q4 on the product margins? Again, I think some of the reason why you were able to avoid the promotions was just because you guys had great product, and channel inventory is pretty lean. I would imagine you feel equally good about the product and channel inventory going into Q4, although I don't want to put words in your mouth. Would that suggest that you would expect a strong fourth quarter for product margins?

[Cliff Sifford:]

Well, as I said in my prepared remarks, I'm very pleased with the merchandise selection that we had today. I'm pleased with the level of seasonal product. I'm pleased with the level of athletic product, but we're not going to get -- there's just too many unknowns going into Q4, and we just can't give any guidance.

[Mitch Kummetz:]

Yes. Let me ask you just a couple of things. Cliff, on boots -- you made a few comments on boots, it's been warm. I know that those things kind of even themselves out, and I would imagine I think December was warm last year. So, maybe there's an opportunity there, but can you kind of just speak to if I recall correctly, that's about 25% of your Q4 typically; I think you were encouraged about boots going into the holiday season. Although, I think as an overall category, you have planned down, I think casual up and dress down. So, just anything more you can say about your outlook for boots and the importance of weather to kind of really get that going?

[Cliff Sifford:]

I'll say this, you take good notes. That is about 25% of our total volume for the fourth quarter, and we've experienced the warm beginnings to fourth quarter in the past, and what we found is that when the weather turns cool and the customer can't get out and walk the neighborhood because it's just too cold to do so, at that point they buy boots. And the boots we have this year and the selection boots this year are a little different than years past not near as many dress, but those people aren't in their offices, very casual and very warm -- cool-weather driven. I was going to say warm to wear, but cool weather driven.

[Mitch Kummetz:]

Okay. And then, I guess lastly speaking of good notes, I think we all -- a few of us asked you on the last call if you could comment on any benefits that you saw from some of the bankruptcies out there. I think you said that you'd be better prepared to address that on this call. So, I don't know if you have any new information to provide there.

[Cliff Sifford:]

I'm going to pass that question over to Kerry or Mark so I won't have to answer it. don't have anything to add to that. There are -- what we saw is that early in the quarter, as I said, everything was -- everything turned on as soon as the schools were announced, that when they were going to open. We had a pretty tough August as we related in our last call, but once schools started to go back, things popped everywhere not just in the markets where we lost competition, so I don't really have a lot to add to that.

[Mitch Kummetz:]

Okay.

[Kerry Jackson:]

Mitch--

[Mitch Kummetz:]

Yes.

[Kerry Jackson:]

The back-to-school was so unusual, we were so delayed for the quarter, it's really hard to tease out what were the various changes other than the big picture that they schools went back to later and a lot of our sales are shifted, like Cliff said in his speech, into September, October.

[Mitch Kummetz:]

Right. Okay. Thanks guys. Good luck.

[Cliff Sifford:]

Thank you.

[Operator:]

Your next question comes from the line of Sam Poser from Susquehanna. Your line is open.

[Sam Poser:]

Good afternoon everybody. Well, let me just follow-up a little bit on the margins. I mean, you just put this to bed, you guys chose not to be promotional, because your inventories were clean and you didn't need to be and you had items people wanted to pay regular price for?

[Cliff Sifford:]

Our inventories are always clean because we're very conscious of keeping clean inventories. But what we saw Sam and you're -- so the rest of your answer is correct. The customers were coming in. They were very focused -- incredibly focused on what they wanted to buy and there was just no reason for us to give margin away on that product.

[Sam Poser:]

Okay. And then you mentioned that -- what were the store comps down in the quarter? You sort of look into that one Kerry I think?

[Kerry Jackson:]

We're only given the overall comps and not the individual components.

[Sam Poser:]

Okay. And then -- yes, I know that you said they were down, you gave us direction, but I wanted a little more direction. You talked about the stores, given how well you're doing, it looks like the CRM is working, you're driving, you're gaining share as you put it. Where does this leave us thinking into next year about store open -- net store openings, being more aggressive with store openings and so on and so forth? Do we sit -- are you going to step on the store opening -- are you going to step on the store opening, so you're intending to do so?

[Cliff Sifford:]

But well, there's -- one good quarter and going out to the real estate market and saying, okay, now ready to open a lot of stores; that just doesn’t happen? Those are long-term, slow processes. So, I'm not going to comment on whether we're going to choose store opening. Well, I'll comment on this, you can't make a decision on the third quarter of store opening next year and that actually happened. So --

[Sam Poser:]

I'm not asking you that. I'm saying like he had a much better than everybody else's Q2 also. So, the evolution over this year so far, has that driven any increase in your store opening plans over the last six months? For next year, do you anticipate you'll have net openings next year, if so how much?

[Mark Worden:]

Hey Sam its Mark. We're going to continue to think conservative capital viewpoint at this moment of time with all the volatility going on in the macro environment. So, at this point, we're not putting guidance out there related to store count. But as we previously shared, it's -- we do not envision having a net new store openings in the 2021 perspective. But the world is evolving very rapidly. So, we're not ready to put a firm line in the sand. We're staying nimble, we're evaluating the markets, we're evaluating going out of businesses, competition and markets are strong and we'll continue to evaluate to get more clarity in the COVID-19 evolution over the months ahead.

[Sam Poser:]

Thank you. And then two more. One, can you give us the comps by month or at least the general direction of comps by month-

[Mark Worden:]

Yes, August was down in the mid-teens, September, in the high 20s, and October as up mid-singles.

[Sam Poser:]

Okay, and then lastly, Nike has made some decisions to close a number of retailers, including a lot that sort of overlapped, area, regions that that you have stores. Do you do you foresee this as an opportunity? I know you've talked about -- you have a bunch of Nike shops in the stores. Do you foresee this as an opportunity for next year? And how many of these shops do you have now and are you planning on opening?

[Cliff Sifford:]

Sam, we are so excited about our partnership with Nike and continue to train, we have over 100 Nike shopping shops currently within the Shoe Carnival fleet. And our plans over the next three years are to have over 100 more rolled out across the fleet, to have -- north of half of our overall store footprint at Nike shopping shops. They've been a wonderful brand statement, the tremendous assortment that our merchandising team has with Nike Company and we think our opportunity likely to continue to connect he phenomenal assortment we have with Nike, with our family of footwear shoppers. So, we think we're really in a good shape.

[Sam Poser:]

And as far as the other retailers, Nike being pulled from a number of other retailers that you overlap with, I mean, how is how is that impacting -- you don't need to be specific, but how's that impacting the way you're planning forward in general, because I should help drive some traffic to you to buy theoretically Nike as well as other stuff?

[Cliff Sifford:]

Sam given -- considering the strength of Nike to our overall sales, actually be giving guidance, I'll tell you that we have an incredible relationship with Nike. We've been -- we've spoken with them many times over the past -- this past quarter, so I filled fill our relationship has never been stronger, and the opportunity that presents itself will be addressed by both companies.

[Sam Poser:]

Thank you. I'm going to vote for you for President in four years and thank you guys very much.

[Cliff Sifford:]

Thank you, Sam.

[Operator:]

Your next question comes from a line of Greg Pendy from Sidoti. Your line is open.

[Greg Pendy:]

Hey, guys, thanks for taking my question. Can you just remind me, I know for a while you had 10% as your long-term progress for e-commerce sales. Did you up that recently and what is the new target if you did? Is it -- when you spoke earlier on the call, Cliff, I think you mentioned getting to your long-term e-commerce target, is that 10%?

[Mark Worden:]

Hi there, it's Mark. Our multi-year goal was to reach 15% in our strategic plan. With the strength of the consumer switching to e-commerce, we have increased that and we are aiming for a 20% plus objective in the next three to five years. We consider you to see great reaction, some conversion once consumers engaged with Shoe Carnival's online business and traffic is surging with CRM activity. So, yes, we have significantly increased our expectations.

[Cliff Sifford:]

The only thing I'm going to add to that -- and Mark mentioned it, our CRM program, the -- I think the most positive thing we've done over the past three to five years was implement in my opinion, the best CRM program as a family channel. We have the ability, and I've talked about it many times, ability to talk one-on-one with our customers and drop them to either our e-commerce site or to our stores. So, we didn't see it and we think that with the one positive coming out of the COVID-19 is the fact that our customer has discovered our website. And we think that this gives us tremendous opportunity to execute our long-term vision in the short-term.

[Greg Pendy:]

Right. Then I guess going out to Sam -- on prior questions about the store growth. If they are becoming -- if you're going towards 20% e-commerce and they're becoming sort of shipping centers, how important is it to get sort of closer to the customers and be sort of nationwide because it seems like you are strong a bit on the store growth and your presence on the West Coast might be a little bit lag. I mean, how important is it to be closer -- to get more stores out there to lower your shipping costs?

[Cliff Sifford:]

If you look at strategic target we have out there to achieve 20% in three to five years, we can surpass that within our existing footprint of the 35 states we operate in. They've got significant whitespace within those states as highly profitable, strong brand awareness and great affinity. Longer term, there are certainly opportunity for nationwide growth and significant penetration in the years beyond that three to five year window. So, we really see this as a tremendous mid-term growth, both revenue, share, and profit engine as then moving into a long-term growth as the customer moves more and more online.

[Greg Pendy:]

Okay, great. Thanks a lot.

[Cliff Sifford:]

Thank you.

[Operator:]

Your next question comes from a line of Chris Svezia from Wedbush. Your line is open.

[Chris Svezia:]

Good afternoon, gentlemen. Nice job on the quarter.

[Cliff Sifford:]

Thank you, Chris.

[Chris Svezia:]

Mark, first question for you, e-commerce digital up 150%, seems like that accelerated coming out of August; just what was the trend line throughout the quarter. And any reason we should step back and say that should moderate it all going into Q4. Just any color about the trajectory in store process broadly as we think about Q4 the comparison versus last year, et cetera, would be helpful?

[Mark Worden:]

We saw triple-digit growth on our e-commerce business growing throughout the Q3 period, particularly as the back-to-school dates became live later in the September timeframe and continuing onto October. We -- as we said on the call, we intentionally shifted our activities to engage with the customer assets back-to-school they happen, so they're quite nimble being able to move day-by-day, week-by-week to adjust to the schools when they went back-to-school. It continued to generate 150%, but as I was saying, heavily weighted in the higher triple-digit growth towards the back-to-school dates from September onwards. In terms of go-forward, as Cliff said, we're not going to give guidance, per se, but we remain very confident in our position for e-commerce. The customer's engagement from a conversion perspective continues to meet our strategic goals. And I think we're quite optimistic that we have a right to continue to grow our market share here now and in the future.

[Chris Svezia:]

Got it. Was fair to say October was pretty similar to September in terms of overall growth on e-comm?

[Mark Worden:]

It would be fair to say September and October were very similar, strong triple-digits, yes.

[Chris Svezia:]

Okay. With regards to the margin shipping expense, 120 basis points headwind, I think that's down relative to what it was last quarter, correct me if I'm wrong, but as we roll forward with everything you're doing from targeted promotions and providing CRM on the digital side in addition to this new warehouse update, does that pressure point moderate, so that as we roll through Q4 and into next year, that pressure on shipping expense lessens, obviously, because of growth next year, but just curious about your thoughts on that.

[Kerry Jackson:]

For shipping expense, our per package basis continues to escalate. The biggest driver for us is the comparison of the volume. So, last year after we started our CRM program, we increased our e-commerce penetration by quarter, which Q1, Q2, Q3 last year was about 5% to 6% and Q4, we did about 11%. So, our comparison in Q4 this year will not be as big a delta between what we did last year in Q3 to this year in Q3 so that we should see while we're seeing pressure against our shipping charges, it should not be as large just because our volume delta won't be as large it was in the prior quarters.

[Chris Svezia:]

Okay, got it. And moving -- Q4 will be down relative to what you've probably thought in Q3 because of the volume in Q4 last year. Okay, got it. No, it makes sense. I'm curious. Just on booth, click how you just remind us how you're planning for the season?

[Kerry Jackson:]

Down mid--

[Chris Svezia:]

I'm sorry; you said down, like mid-single-digits, I didn't catch what you said.

[Cliff Sifford:]

Down mid-single-digits, sorry, my bad, I didn’t put digits in there, but down mid-singles.

[Chris Svezia:]

Okay. And just on the -- I'm curious, I know you're not going to give -- I'm not going get guidance here necessarily, but I'm curious with sort of the momentum you had in October, digital, clearly being strong, you're through sort of the challenges of back-to-school. Any reason or give me the reasons why you would potentially see a positive comp, pull up low single, what are the things that you're cautious about? Obviously, stores shut down to some degree; you have the benefits of digital, so I'm just curious how you think about that in terms of Q4 and comp growth?

[Cliff Sifford:]

Well, there's been an upsurge in the virus and we have no idea what's going to happen, state-by-state, the Governors are in charge of that. So, if -- I'm not been smart here, but if we had better visibility of that, then I can get better visibility on guidance. But no, the issue is that until we get a vaccine, and customers feel comfortable getting out again, I think giving guidance any quarter until that time period is going to be tough.

[Chris Svezia:]

Let me ask this way, you don't see any store closures or any material store closures?

[Cliff Sifford:]

We do not and it does not appear at this point that that's going to happen at this point. The Illinois Governor has limited hours of restaurants, but has not to talk at all about retail.

[Chris Svezia:]

Okay, just on -- last thing from me, just on the SG&A side, just Kerry only roughly $1 million year-over-year, just anything we should think of -- is anything being delayed by any chance, or is that real SG&A growth year-over-year and any thoughts as we sort of roll forward we should be mindful of will be helpful?

[Kerry Jackson:]

Well, the increase in the SG&A was really two factors. If you remember, in our prior call, we said that we shifted our advertising to more reflect how we thought the schools are going to go back. So we shifted to advertise we saved advertising dollars in Q2, particularly in July. And we redistributed those in the September and October timeframe to follow -- to have it follow where we thought the customers can be shopping. So, the biggest increase on a year-over-year basis in Q3 was advertising and then to the other standout was because higher e-commerce level expenses associated with e-commerce were up on a year-over-year basis.

[Chris Svezia:]

Okay, got it. Okay, that's all I have. Thanks guys.

[Cliff Sifford:]

Thank you.

[Operator:]

And we have a follow-up question from the line of Mitch Kummetz from Pivotal Research. Your line is open.

[Mitch Kummetz:]

Yeah, thanks. I've got a few more. So, I guess to start with on the digital side, I'm curious to get your thoughts on whether -- how much better position are you than you were, let's say a year ago, given where the Shoe Perks membership is, the Gold membership, any CRM learnings over the last 12 months? How confident are you in the e-comm business relative to a year ago given sort of those dynamics?

[Cliff Sifford:]

Extremely confident in our progress against a strategic plan and delighted with the way the Shoe Carnival customers responding. When we look back a year ago, the e-commerce business represented less than 6% of our federal revenues. And for this latest quarter surpassed 13% We really feel a clear profitable line of sight with all of our technology infrastructure now in place, with a team that is exceptional, and with our continued world-class merchandising. We think we absolutely had a clear trajectory to get to 20%-plus of the company's revenues in the next three to five years. So, we're very confident in it.

[Mitch Kummetz:]

Got it. And then I think it was mentioned, I can't remember who said it. But that that 10% of schools, were not yet back in session by the end of October. I'm guessing that probably those schools aren't going back until maybe January. If that's so how much do you get -- how much do you think that will play into the holiday season that you'll get maybe just kind of a small back-to-school season in December? I mean, for the kids that haven't gone back in person yet, that might be going back in January for second semester, is there something potentially to that?

[Cliff Sifford:]

I think anytime you have a school opening, especially the one that's going to open -- we do have a few schools that are going to go back to in-class learning the first part of January. I do think that you'll see in those particular cases, the athletics business, and maybe even the boot business pick up for those kids. But it's such a small percentage overall of our stores, we chose not to even talk through that other than mentioning that.

[Mitch Kummetz:]

Yes. And then just Cliff last thing on just on the product side, there's been a lot of talk about kind of what -- how COVID has impacted the business and obviously, the dress business will largely be covered -- athletic businesses is good. I'm just curious when you guys -- when you gave your numbers on the products, I think you said adult athletic was up high singles, but then kids athletic was down mid-singles. I assume that there's adult athletic that's flowing into the back-to-school business, I guess, my question is, to what extent can you disaggregate in the quarter what was back-to-school versus just, you know, a rising tide from the strength of sort of health and wellness? And how much do you think that that's a real thing that should continue to drive your business in the fourth quarter as well?

[Cliff Sifford:]

That's a tremendous question and on that, but we asked ourselves the same thing. Here's what I know is that our athletic business took off when businesses started shutting down, and customers started -- or people started getting out and exercising more. Our athletic business in the second quarter was terrific. And then in the third quarter, we got a little concerned, especially in the kids arena, because the kid's business was not good. And we felt it was due to the later back-to-school and that proved itself out as schools began to open late September, early October. It just wasn't -- there wasn't enough time for us to breakeven as we look in kid's athletic from the time that schools began to go back at the end of the quarter, if that makes sense. So, the kid's athletic business, the only thing I'm going to say about fourth quarter, continues to be to be good as kids are returning to school and finding a need to replace their athletic shoes.

[Mitch Kummetz:]

All right. Thanks again, guys.

[Cliff Sifford:]

Thank you.

[Operator:]

And we have another follow-up question from the line of Sam Poser from Susquehanna. Your line is open.

[Sam Poser:]

Thanks again. So, with all your e-comm, what are -- how is curbside pickup working for you? How many stores do you have that in? And as you evolve and as -- whenever the vaccine comes, which would then theoretically -- it helps more store traffic, what are you going to do in your communication with the consumer to drive more people to the stores going forward?

[Cliff Sifford:]

Sam in our current model our focus is on buy online pick up in store, and we are messaging and engaging with customers, so they understand they can have the product right to their home in many different fashions, or they can come in and have a great Shoe Carnival experience. And so we've focused a message on the buy online pickup in store. In terms of a go-forward basis, we think that's incredibly important lever because the Shoe Carnival experience brings so many advantages when you do come in store that our focus is trying to convert that customer to be an omnichannel shopper. They're the most profitable, they're the most loyal, and they get to have that experience which is a delight for 5,000 plus passionate employees who care so much and give that great service, as well as the convenience of 24-hour shop online, delivered right to your house, in any fashion you like. We make great strides on buy online pick up in store during the last six months and significantly growing as a percent of our online orders, particularly as shipping becomes more and more expensive during the past year for all retailers.

[Sam Poser:]

Can you give us some idea of what percentage focus is to your sales and are you going to do a reserve online pick in store feature as well?

[Cliff Sifford:]

It's still less than a quarter of our orders and it's growing at a very rapid pace. So, we think there's a lot of upside for us to have that ongoing customer engagement. We absolutely have communication with our nearly 26 million CRM members to have it, like I said, right to their doorstep as quick as they like to long, highly efficient value deliveries or help them at the store later on that day.

[Sam Poser:]

Thank you very much.

[Cliff Sifford:]

Thank you.

[Operator:]

And there are no further questions at this time. Mr. Cliff Sifford, I turn the call back over to you for some closing remarks.

[Cliff Sifford:]

Thank you. I would again like to thank everyone for joining us today and hope you all stay well. I continue to be proud of what our Show Carnival team has been able to accomplish in this ever-changing environment. Our commitment to financial strength and flexibility will ensure the continued success of our business. We hope you and your loved ones are staying safe and healthy and that you have a happy Thanksgiving. And we look then -- holiday time period and we look forward to speaking with you again in March. And once again, thank you.

[Operator:]

Ladies and gentlemen, this concludes Shoe Carnival's third quarter fiscal 2020 earnings conference call. Thank you for participating. You may now disconnect.