Big 5 Sporting Goods Corp (BGFV) 2010 Q1 法說會逐字稿

(Operator Instructions). Good day, everyone. Welcome to the Big 5 Sporting Goods first quarter 2010 results conference call. With us today are Mr. Steve Miller, President and CEO, and Barry Emerson, Chief Financial Officer. Today's conference is being recorded. At this time I would like to turn the conference over to Steve Miller. Please go ahead, sir.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2010 first quarter conference call. I hope everyone is very relaxed after watching today's stock market. Pretty wild day.

At any rate, today we will review our financial results for the first quarter of fiscal 2010 and provide general updates for our business, as well as provide guidance for the second quarter. At the end of our remarks, we will open the call for questions. I will turn the call over to Barry to read our Safe Harbor statement.

Thanks Steve. Except for statements of historical fact, any remarks that we may make about our expectations, plans, and prospects constitute forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in current and future periods to differ materially from forecasted results.

These risks and uncertainties include those more fully described in our annual report on Form 10-KA for fiscal 2009 and other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements that may be made from time to time by us or on our behalf.

Thank you, Barry. Given the challenging economic conditions across the markets in which we operate, we are very pleased to deliver a strong first quarter performance with an 82% increase in net income and earnings per share at the high end of our guidance range for the quarter.

Our same store sales increase of 2.4% represented our best quarterly comp store growth since the fourth quarter of 2006. Our team's solid execution and careful expense management enabled us to, again, improve margins, generate strong cash flow and meaningfully pay down debt.

Now, let's talk about sales. In the first quarter, we rang the register to the tune of $218.5 million, up 3.9% from $210.3 million for the first quarter of fiscal 2009. This was our fourth consecutive quarter of same store sales growth.

For the quarter, we experienced improvements in both customer traffic and average ticket. Our gains from traffic were slightly more significant than our gains from ticket. We performed solidly across a broad array of product categories with particular strength in our winter business which benefited from favorable weather conditions in January and February across many of our markets.

As anticipated, March was a more challenging month as we lost a day of sales due to the shift of the Easter holiday when our stores were closed into the first quarter this year. We also faced more difficult year-over-year sales comparisons as our trends began to improve significantly last March in part due to the strength of firearm and ammunition sales last year.

For the quarter we posted positive low single digit increases across our three major merchandise categories of apparel, footwear and hard goods. Our apparel category was the strongest performer for the quarter, driven largely by sales of winter product, but all three categories performed within a relatively tight range of one another.

We are pleased to report that along with our improved sales, we were able to, again, improve merchandise margins which increased by 15 basis points during the quarter over the prior year period. On the expense side, we continued to maintain tight control of our expenses and were able to leverage SG&A by 55 basis points.

Commenting on store growth. During the quarter we opened two new stores and relocated one store. We expanded into our 12th state with our opening in Cheyenne, Wyoming. We also opened a new store in Tehachapi, California and relocated our store in Oxnard, California.

We ended the first quarter with 386 stores. We have two stores slated to open in the second quarter, including one which is intended to replace an existing store that is expected to close at a later date. We continue to anticipate opening between 10 and 15 new stores net of relocations during fiscal 2010.

Turning now to the second quarter. We believe that we are well positioned to continue to grow our top and bottom lines on a year-over-year basis. Same store sales are currently running in the positive low single digit range for the second quarter. Although we had the benefit of the Easter shift early in the quarter, April sales comparisons continued to be impacted by strong firearm and ammunition sales in the prior year period.

Additionally, April sales this year were impacted by unfavorable weather comparisons in many of our markets. This April has been much cooler than last year when our sales benefited from an early heat wave. I should point out that April is a relatively low volume period for us. The key period of the quarter lies ahead with Memorial Day, Father's Day, and 4th of July.

Due to the calendar shift associated with transitioning from a 53- to a 52-week fiscal year, most of the benefit of the 4th of July holiday will favorably impact our second quarter this year. Last year the entire benefit of that holiday fell into the third quarter.

In sum, although macro economic conditions in our market certainly remain challenging, we are proud of how we are responding to the challenge. We believe that our focus on providing compelling values and an exciting product assortment to our customers will continue to serve our business well as we head into the summer season.

Now, I will turn the call over to Barry who will provide more information about the quarter as well as speak to our balance sheet, our cash flows and provide second quarter guidance.

Thanks, Steve. Our gross profit margin for the first quarter improved to 32.7% of sales from 31.9% of sales for the first quarter of 2009. The increase was mainly due to a 15 basis point increase in merchandise margins and increased sales leverage on distribution and store occupancy costs.

Our selling and administrative expense as a percentage of sales was 28.8% in the first quarter versus 29.4% in the first quarter last year. Our higher sales levels enabled us to leverage expenses during the quarter. On an absolute basis, selling and administrative expense increased $1.2 million year-over-year, mainly due to the increased store count.

Now looking at our bottom line, net income for the first quarter, was $5.0 million or $0.23 per diluted share compared to net income in the first quarter of 2009 of $2.8 million or $0.13 per diluted share.

Turning to our balance sheet, total chain inventory was $240.1 million at the end of the first quarter, up approximately 8% or 6% on a per store basis from the prior year. Although this increase is a shift from how our inventories have been trending over the last few years, we are comfortable with our inventory position for several reasons.

First, because we had experienced several quarters of negative sales leading up to 2009, we had reduced our inventories to levels that turned out to be less than ideal for the increased sales that we began to generate during 2009. Our current inventory levels also reflect increased purchasing of opportunistic buys that we believe will benefit sales and margins during the course of the year.

Additionally, we have purposefully brought in certain spring and summer products earlier than usual in an effort to stimulate early season sales and to avoid any potential delivery issues, chiefly out of China. Keep in mind that our per store inventories were down 8% in the first quarter of 2009 from 2008, and down 5% in the first quarter of 2008 from 2007.

Therefore, we are still well below historical inventory levels. I should further point out that our sell down of winter products was outstanding. And we believe our overall inventory is very fresh. Looking at our capital spending, CapEx, excluding non-cash acquisitions, totalled $2.0 million for the first quarter, primarily reflecting expenditures for two new stores and one relocation.

We continue to expect total capital expenditures for the full year, excluding non-cash acquisitions, of approximately $14 million to $17 million reflecting the opening of at least ten new stores plus five relocations.

From a cash flow perspective, we generated cash flow from operations of $16.3 million for the first quarter of fiscal 2010 compared to $26.6 million for the comparable period last year. The decrease was primarily due to our strategic decision to increase inventory this year. In the first quarter, we also used our cash to pay our quarterly dividend of $0.05 per share and further pay down borrowings.

Our debt at the end of the first quarter decreased to $45.5 million versus $76.5 million at the end of the first quarter last year and $55.0 million at the end of fiscal 2009. During the second half of fiscal 2010, we expect to negotiate a new revolving credit agreement to replace our current financing agreement which expires on March 20, 2011.

Since the remaining term is less than one year, we were required to classify our outstanding debt associated with the existing revolving credit facility as a current liability at the end of the first quarter. Also, earlier this week, we elected to permanently reduce the line of credit under our existing credit facility from $175 million to $140 million as a cost savings measure.

Now, I'll spend a moment on guidance. For the second quarter, we expect same store sales to be in the positive low single digit range. As Steve mentioned, our second quarter sales will benefit from certain calendar shifts. The second quarter picks up an extra sales day due to the shift of Easter, and the majority of our 4th of July business will shift into the second quarter and out of the third quarter.

Additionally, our outlook for the second quarter reflects some expense pressures that we are beginning to experience, particularly in the areas of health benefits and fuel costs. Taking these factors into account, we expect earnings per diluted share in the second quarter to be in the range of $0.24 to $0.30. For comparative purposes, earnings per diluted share for the second quarter of fiscal 2009 were $0.22.

For added clarity, we want to point out that we estimate that the calendar shifts I discussed a moment ago will benefit our second quarter earnings per diluted share by roughly $0.03 relative to the prior year and will negatively impact our third quarter earnings per diluted share by roughly $0.06 to $0.07 relative to the prior year.

The primary reason for the estimated greater impact on third quarter earnings is that the pre-4th week that moved out of the third quarter last year and into the second quarter this year is a traditionally strong sales week. And the week ending October 3 that moves into the end of the third quarter this year is traditionally a low volume sales week.

Operator, we're now ready to turn the call back to you for questions and answers.

(Operator Instructions). Rick Nelson with Stephens.

Thank you. Good afternoon. The gross margin improvement that we've seen during the quarter, do you think that's sustainable in why the opportunistic environment and the mix shift away from firearms?

Well, we do feel it is sustainable. We're seeing positive product margins to date in Q2. Still early in the quarter but we believe our opportunistic buys, cleaner inventories, and as you mentioned some shifts in the product mix, give us a chance for continued point of sale margin improvement in Q2.

And Rick, we also expect to continue to be able to leverage our distribution and store occupancy costs in the second quarter as well.

Okay. The favorable weather that you made mention about in the first quarter. If you pulled out winter goods out of the calculation, can you look at sales I guess ex winter goods?

It's still been a positive -- a positive quarter. Winter was certainly helpful to us, but it wasn't the whole story. We have strength across a broad array of categories, aside from winter.

If we look at the Q2 comp a year ago, you put up positive 0.3. I think you mentioned April is a very tough compare. Can you give us a feel for the cadence of sales during the quarter a year ago?

I don't know that I mentioned that April was a tough compare. You know, a year ago, the quarter, I think, started off well. We did perform reasonably positively in April and stronger in May. June was soft. I think our Father's Day business was slightly below what we would have hoped for last year. Additionally, the weather was very contrary to our business in June. And we had positive weather, I know, for Memorial Day. But June, as I recall, was an extremely gloomy period for us.

And you called out the EPS impact of the calendar shifts. Are the comps -- do they get reported on an apples-to-apples calendar? Is that also going to provide a swing?

We report the comps on an apples-to-apples comparison, but our calendar year, as we report the comps is offset by a week from our fiscal year. So when we report the comps, we're doing it on a same day to same day basis.

So that will be impacted then by the 4th of July shift, for example.

That's right.

Exactly.

Not the comp comparison but the fiscal revenue comparison, yes.

Got you. And what is the magnitude of that from a revenue standpoint?

Rick, we really quantified it from -- we've estimated from an EPS standpoint. As we mentioned, we expect that to be somewhere in the $0.06 to $0.07 range -- of a negative effect in the third quarter.

Okay.

I think revenue, it may swing approximately $6 million to $7 million of sales out of Q3, but, again, into Q2, the benefit is because of a calendar change, close to $2.5 million to $3 million. You have a week going out of Q2 into Q1, it is a little slippery.

Understand. Thank you and good luck.

Thank you.

Sean McGowan with Needham.

Thank you. Could you comment on new store productivity in the quarter?

We're very pleased with our new stores. Stores we opened in 2009 and 2010 to date are performing very positively for us.

Okay. Barry, the tax rate may be a little lower in some quarters. What's your outlook for the full year?

Oh, Sean, I would estimate probably 38% or so as of today.

For the full year?

For the full year.

Okay. Can you comment on depreciation amortization in the quarter?

Well, because of our lower capital expenditures last year, if you recall, they were down. They were roughly a quarter to a third of what we had spent on a more traditional basis when we're opening 6% square footage growth. So our depreciation is down this year. It will be down the full year because of not having the CapEx last year and then just fully depreciating certain assets.

Okay. Can you say what it was in the quarter?

Yeah. Sean, do you have another question? Let me pull it (multiple speakers).

Yes, I do. Steve, in terms of real estate, this has been something we hear from a lot of companies, availability of decent real estate has been a little tight. Are you seeing anything open up on that? Is your confidence in that 10 to 15 range getting any better as we move through the year?

Yeah, we feel pretty good about the opportunities to certainly hit our goals for store openings this year. I think there's -- new developments certainly aren't happening in the same manner in which they have in the past. There's a reasonable availability of second generation space. And all in all, we think it is a pretty interesting and positive market for us.

Okay. I had another question, but it's probably also for Barry, but maybe you can handle it. The inventory days understandably went up as a strategic decision. Do you expect that to be the case throughout the year? Should we look for it to go back to maybe two years ago?

Yeah, I mean, our inventory was up into Q1. Certainly different from how it has been trending the past few years. But, again, we're very comfortable with the inventory position. I don't know that we're in a position to make a precise call on how the comparisons will play out over the course of a full year. I anticipate that the levels will be higher at the end of Q2 than last year; I think we have enough visibility there.

But ultimately the reality is that we making buying decisions on an ongoing virtually daily basis. Some of the variables that will affect our inventory levels are the decisions we'll make regarding opportunistic buys, decisions that we make relating to fast forwarding inventories as a hedge against potential shipping or delivery issues.

There are certain issues in getting product out of China these days that we're trying to stay ahead of the curve on. We also see some potential inflation coming at us in the latter part of the year and we're evaluating decisions to stay ahead of that as well.

Sean, depreciation for the quarter was $4.5 million.

Okay. Thank you very much.

You're welcome.

Kristine Koerber with JMP Securities.

Hi. If this question has been asked, I apologize. But can you just comment on the merchandise margins and what we should expect going forward?

Yeah, well, merchandise margins for the quarter, Kristine, were up 15 basis points. And we are anticipating them -- and that was a combination of product sales mix and opportunistic buys and those kinds of things. Our guidance for the second quarter anticipates merchandise margins to be up again over the second quarter of the prior year.

Okay. And then you mentioned the expense pressures you expect to hit in the second quarter, fuel and employee benefits. Is that something you can quantify? And should we expect expenses just -- model expenses to be higher for the year?

Well, Kristine, just to put some color on that, we are -- some of the areas that we're seeing pressure are health and welfare benefits, payroll taxes, California has increased its SUI rate by over 30%, higher electricity costs, credit card fees, fuel, legal fees. So there's a number of categories.

Also, we believe that we took the appropriate actions relating to compensation in 2009 when we froze salaries and reduced other employee benefits in response to the weak business conditions. We have made compensation rate adjustments in 2010 following a year of earnings growth for the business. We're going to continue to evaluate all of our expense categories and try to make adjustments as appropriate in the future.

I'm not going to -- I'm not going to actually quantify it for you, but what I can say is from an SG&A leverage standpoint in the second quarter, we expect our expenses as a percent of sales to be -- to approximate the prior year.

Okay. So you're doing the best you can to offset some of these higher expenses you mentioned?

As we have. And we, I think, have made very steady and concrete progress over the last couple of years in reducing expenses. But there is some inflation that is impacting us here beginning this year.

Okay. Great. Thank you.

Thanks.

Anthony Lebiedzinski with Sidoti & Company.

Good afternoon. I was wondering if you could just quantify the Easter shift as far as same-store sales performance. And also, I know you talked about the second and third quarter shifts. Are there any impacts, anything going on in the first quarter fourth quarter that we should expect?

I'll work backwards. The fourth quarter, we have 13 weeks this year versus 14 weeks last year. So there is a loss of a week in the fourth quarter. In terms of the Easter shift, we think it probably nets out at about a 50, 60 basis point impact to sales. I mean, there is loss of a day, which is more significant than that. But there's business associated around the Easter holiday that mitigates the impact of that lost space. So I think the shift would be roughly a 50, 60 basis point shift out of Q1 to Q2.

Okay. And then in terms of -- you mentioned the opportunistic buys that you have -- you've been doing more of those. Can you talk about the margin difference for opportunistic buys versus other products?

Historically, we think the margins in our opportunistic buys generally are 300 to 500 basis points better than the margin we obtained for the inline product in our mix.

Okay. Sounds good. And lastly, as far as the credit line decrease, can you quantify the impact on your expenses?

Yeah, we estimate that to be in the neighborhood of about $140,000 or so.

For the year, right?

It was for the year.

Right. Okay. Thanks.

Thank you.

Dan Meyers with D.A. Davidson.

Hi, guys. I was just wondering if you could give any more detail on the comp trends throughout the first quarter. And also, have you been seeing any particular strength in baseball or golf or any other categories lately?

Sure. In terms of the first quarter, our comp trends were strongest in January and February where we benefited from the positive winter weather. Our comp trends were softer in March, partially because of the lost day and because of the Easter shift and also faced -- really started facing the peak of firearm and ammunition sales in March. And that softened the comp trends as well.

We're real pleased with our team sport business, our baseball business year to date. That's been the positive. You mentioned golf. Golf has been a tougher category for us.

Okay. Thanks.

You're welcome.

Bill Dezellem from Tieton Capital Management.

Thank you. We've got a couple of questions. First of all, relative to inventories, did we hear correctly that you don't have plans in place to increase your inventories further? However, that may happen just depending on what you see in terms of opportunities that present themselves?

Well, Bill our inventory in the second quarter will see a seasonal increase, which it always does in the second quarter, which is planned for.

Right. I'm sorry. I should have been more clear. So outside of the seasonal increase?

No. I think you said it correctly. I don't anticipate any further increase relative to the prior year than existed at the end of the first quarter.

That's helpful. Thank you. And then the second question is, you brought up a couple of times now issues that you see of getting product out of China. I'm going to have to plead ignorance here and ask you to share, what is it that you're seeing that you think might be an issue there?

Well, I think there's been some issues that I think a number of retailers have been experiencing in terms of shipping issues primarily revolving around the shipping capacity of products coming out of China, fewer containers -- some potential gamesmanship going on there to try and control the economics of shipping.

Thank you.

Jonathon Grass with Longbow Research.

Good afternoon. You had talked about the opportunistic buy margins. Can you maybe talk about I guess what categories you're seeing a lot of opportunities for opportunistic buys?

We really experience it across a broad array of categories. Hard goods, footwear, apparel, it's been pretty broad based, not just coming from one particular area.

Okay. And then can you talk about any exposure you have to the toning footwear in your stores and I guess how much you plan to get in the stores if you don't have a whole lot in there right now.

We're in the toning shoe business. We're encouraged by what we're seeing. We have a variety of brands -- Reebok, Skechers, AVIA, LA Gear, others that are coming in the pipeline. Some of these brands we have in all stores, others in selected stores where we feel it makes sense to have them.

We're positive and encouraged. We'll watch it carefully. Hope it continues to grow and develops into a lasting feature of the footwear business and certainly we're in a position to participate more meaningfully if the category demonstrates that it has staying power.

For you guys, has the toning footwear outsold your other footwear product?

I wouldn't go that far. I wouldn't, again, go that far. We've got a broad assortment of footwear. I don't know that we view this category right now as a game changer, but it is certainly a positive category for us.

Okay. You had mentioned the traffic was out pacing average ticket price. Can you give us any numbers behind that?

Yeah. I'm not sure I have the precise -- we're up -- our comp sales were up 2.4% and they were both up low single digits. And they are not that meaningfully different. But a little more coming from the traffic than the ticket.

Thank you.

Michael Baker with Deutsche Bank.

Yes, good afternoon. This is actually Adam on line for Michael. A couple of questions. Looking at April, when you're discussing the low single digits quarter to date, do you think it is the weather that's impacting the months so far or is it sort of coming off the peak of the guns and ammo?

Well, I think both of those have had a negative impact on the business, and it is hard to figure out which is more significant. But I think they've both been drags to April comps. Short of firearms and ammunition, we're pretty pleased with how most of the product categories have been performing.

The weather was detrimental. Last year we had a real huge heat wave across certainly most of California and some other markets that gave us a jumpstart in some of the summer products and we didn't enjoy that type of weather this year.

Okay. Makes sense. Looking at the firearms, when you -- commented that March is the peak and it obviously starts to trial off after that, at what point in the year do we get to a level where it really does not start to impact comps to this type of extent?

Well, I think it will be a challenge sale throughout the year. I mean this phenomenon of involving firearms and ammunition really began with the presidential election end of 2008. In our case, I think the absolute peak peak was March through April, meaning we just really experienced arguably the two toughest months.

So comparisons ease as 2010 progresses, but the levels of interest and demand are still beyond what we would call historical norm. And we'll just have to wait and see how it plays out over the rest of the year. I might add that the category, although it's challenging from a sales standpoint, it has a favorable impact on our product margins because those categories are below our average point of sale margins.

And also from a supply standpoint, there was restricted supply last year. And so at this stage, the manufacturers have brought more supply online. We're able to get more in the way of firearms and ammunition product today than we were last year, which should help.

Okay. Okay. Let's see. I guess that was -- relating that to March being down, is there any way to sort of look with Easter and guns sort of similar at that point as well on the impact to March comps?

March -- take out -- March comped positively; certainly without the Easter impact it would have comped positively and without the firearms impact it would have comped more positively.

All right. Very good. Thank you.

Thanks, Adam.

(Operator Instructions). Camilo Lyon with Wedbush Securities.

Thank you. Good afternoon, everyone.

Hi.

With regard to the inventory and the opportunistic buys, I know that you said that you saw opportunities across all three categories. I was wondering if you could provide some color on maybe some of the brands that you've seen more opportunities with.

For competitive reasons, we wouldn't want to be more specific than we already have in talking about the opportunistic buys.

All right. Had to give it a shot there. Maybe you could talk about what percent of that inventory increase in the quarter is seasonal in nature.

I'm not sure we can -- we certainly brought in some more spring, some spring and summer product earlier than last year. We want to try and jumpstart the season and make sure we're in a good inventory position to hedge against any of these delivery issues that I alluded to earlier. I don't think that's a number I'm comfortable quantifying and certainly not off the top of my head.

Maybe said another way, I guess if the summer weather doesn't materialize as you expect, how much of that inventory is at risk?

At this time none. I mean, we've got a lot of months of summer selling season. It is not like we brought in a whole year's worth of product to sell in the summer. Zero. Zero at risk.

We're comfortable with our inventory.

Very, very comfortable. Our inventory is fresh. Our sell down with winter product was very healthy. We're real pleased how we came out of the winter season. We feel terrific about our inventory situation.

Very good. My last question relates to the toning category again. Maybe you can talk about some of the ASP trends you are seeing amongst the various brands. I know that there are some different price points with the shoes that you carry and maybe you can talk a little bit about the demand across those different brands.

I mean, again, we're not going to be very detailed about our specific product movement. I mean, we've got -- we have shoes that we're selling that -- at $100 a pop and others that we're promoting at more attractive price points.

And there's no difference you're seeing between those two types of ASPs?

Again, we're not going to discuss our particular product movement. We don't speak to individual product movement as a matter of practice.

Okay. Maybe would it be fair to say that the toning category is helping your overall ASPs?

That's fair to say. Absolutely. Our average ticket is in the low $30s. Our average ticket and our ticket is comprised of typically a couple plus items. And the least expensive toning shoe that we're selling is more than our average ticket. So as I do the math it's got to be helping.

All right. Thanks very much. Good luck.

Thank you.

Michael Baker with Deutsche Bank.

Sorry, just one follow-up, not to belabor the point. On the toning, I guess, have you ever discussed what your customer mix is between male and female? At any point being -- with California being considered as a health conscious state, it is a little bit interesting to hear that the category has not performed similar to what we've heard out of some other companies for to date. And I was wondering maybe if there is a difference in the mix on your customer base versus some of your competitors.

I don't know that there's a material shift. I mean, most surveys that I've seen suggest that we're pretty even split male-female in terms of our customer base. We're reasonably encouraged by how the toning category is performing. So we did not say that it wasn't performing well. We're -- I can't speak to how others are commenting, but we're pleased with the product category.

Okay. Just one maybe last if I could. Did you notice a pickup in the category as the Reebok was rolled out, being the dominant national brand at the moment?

Again, we don't speak to individual vendor and item movement and won't begin here.

Okay. Thank you.

Sean McGowan with Needham.

Hi, just to circle back on the comments regarding shifts in the calendar, to make sure I understand. So did you say, Barry, that this $0.03 just from July 4 -- in other words, Easter and July 4 together, add about $0.03 to the second quarter, but the shift on timing of the third quarter detracts by $0.06 or $0.07 in the third quarter. Is that the way I'm hearing it?

That's the way you're hearing it. That's right, Sean.

And why again is the impact in one quarter that much bigger than the positive impact on the other?

Let me try that. Because in -- the impact to Q3 is that the week that includes 4th of July and certainly the bulk of the 4th of July business shifts out of Q3 into Q2. That week is replaced by a week in Q3 that ends on October 3rd. The differential between those two weeks is very significant. That 4th of July is traditionally a very strong week for us. The week that ends October 3 is one of our lowest weeks of the year. It is between all seasons for us; it is a low volume week. So that's a big hit to Q3.

So now we know that the 4th of July week shifts into Q2. The week that shifts out of Q2 into Q1 is a week that sort of straddles March and April that is a pretty good week. Not as good as the 4th of July week but a good week. So it is really the differential of the week shifting in and the week shifting out that creates the difference in the impact.

So it is a comparison of the beginning week with that end week of the two quarter period really that explains it then.

Exactly. All weeks are not created equal.

Right. Okay. So then the impact on the first quarter, there was some benefit of ending of the calendar then in the first quarter as well.

Well, there was a little benefit there. Again, a week shifted out of the first quarter as well. But the best way to look at it is we look at the first quarter. The relatively small benefit of the week shift there was sort of offset by the Easter -- loss of the Easter day.

That's always a weekend. Now, the week that we're talking about at the end of the year, comparing to the end of last year, how significant is that week typically? Depends on the weather?

No. The week -- this is where it is a little tricky, but the week --.

It is only every seven years, right? Or five years or whatever.

I hate it. The week that -- it is not very significant in the fourth quarter, because the week that will not be in the fourth quarter this year that will be in the fourth quarter last year is a low volume -- it is a low volume week.

Unless we get a lot of snow, right?

No, actually not. Because the week -- it is that week in October that goes into the third quarter (multiple speakers).

Not at the end of the quarter. You're right. Okay. Thank you.

You're welcome.

And that's all the questions that we have. I'd like to turn the conference back over to Mr. Miller for additional or closing remarks.

Thank you, operator. We thank everyone for their participation today and we certainly look forward to speaking with you again soon. Have a great day.

That does conclude today's conference. We do appreciate your participation.