Oxford Industries Inc (OXM) 2015 Q3 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Oxford Industries third-quarter FY15 earnings conference call.

Today's conference is being recorded. At this time I would like to turn the floor over to Ms. Anne Shoemaker for opening remarks and introductions.

Thank you, Catherine. And good afternoon, everyone.

Before we begin I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees and actual results may differ materially from those expressed or implied in the forward-looking statements.

Important factors that could cause actual results of operation or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our FY15 Form 10-K and our second-quarter FY15 form 10-Q. We undertake no duty to update any forward looking statements.

During this call we will be discussing certain non-GAAP financial measures. You can find a reconciliation of GAAP financial measures to certain non-GAAP financial measures in our press release issued earlier today, which is posted under the investor relations tab of our website at OxfordInc.com.

Please note that all financial results and outlook information discussed on this call, unless otherwise noted, are from continuing operations, and all per share amounts are on a diluted basis. As a reminder, the results from the Ben Sherman business are reflected as discontinued operations for all periods presented.

And now I would like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO; Scott Grassmyer, CFO; Terry Pillow, CEO of Tommy Bahama; and Doug Wood, President and CEO-Elect of Tommy Bahama.

Thank you for your attention. And now I would like to turn the call over to Tom Chubb.

Good afternoon and thank you for joining us. We are generally pleased with our results for the third quarter which, due to the seasonality of our brands, is our smallest quarter.

Our bottom-line loss of $0.08 per share was at the top end of our forecast. Across the Company we went into the quarter with inventories in excellent shape, and that, combined with good execution, allowed us to leave the quarter with inventory still in excellent shape, while driving a gross margin expansion.

Lilly Pulitzer had another outstanding quarter. Sales were excellent as the customer responded well to our Resort 365 strategy and its ample offering of buy now/wear now product during the third quarter. Lilly was able to deliver growth of 22%, driven by an amazing comp store sales increase of 27%, while at the same time expanding gross margin.

We have opened six Lilly stores this year including our Coconut Point location north of Naples which we opened in September. We are delighted that all of these stores are exceeding our expectations to date.

As you know doubt recall, our twice-a-year e-commerce flash sale at Lilly in January and August is our primary vehicle within the brand for clearing residual inventory. The August sale has historically been a three-day event, but this year we shortened it to two days, delivered a record $13.4 million of sales, and fundamentally cleaned our inventories out at a solid gross margin. Not only is the flash sale an excellent clearance mechanism, but we believe it also helps actually reinforce our connection with our loyal consumer by creating a high level of excitement and social media chatter.

There were many positive developments at Tommy Bahama during the quarter, but, with its broader footprint, the Tommy Bahama business was not immune to the impact of the softness in the consumer marketplace this fall. Tommy's 5% comp store sales decline during the quarter was highly correlated with the decline in traffic in our retail stores. That said, we were pleased to return to solid positive comps in November and to date in September.

We are also encouraged by our spring order book where we are seeing increases over last year. Important highlights for Tommy Bahama during the third quarter were they moved to Tommy's the new office space in Seattle and the completion of the long-awaited Waikiki retail-restaurant island. While both of these items had a heavy impact on expenses, we believe they will help fuel growth in the brand going forward.

The new office space gives Tommy Bahama much needed additional space, allows departments that partner frequently, such as marketing and e-commerce, to be adjacent to each other, and provides our design team a highly functional space that will allow it to work more cohesively across men's, women's and all other product categories. We believe this will help us in our efforts to build a bigger and stronger business, particularly helping to fuel growth in women's.

The new Waikiki retail and restaurant island is absolutely gorgeous. This is a major location for us in an incredible tourist destination. We believe we will do a lot of business here, and it should generate excellent returns for us, while also being an excellent brand builder for the hordes of tourists that visit Waikiki every year from around the world.

Moving to our Lanier Clothes group, as we expected, sales for the quarter were quite a bit lower compared to last year as 2014's third quarter included significant shipments to a warehouse club customer, which we did not anniversary at the same level. Excellent expense control and gross margin expansion due to the mix of business combined to help Lanier deliver a more than 200 basis point improvement in year-over-year operating margin for the quarter. The team at Lanier continues to execute at a very high level.

I would like to make a few comments regarding two very important announcements that we recently made. The three elements of success in our business are excellent strategy, excellent people and excellent execution. I want to talk to you for just a minute about the people element of our business.

Since our last call in September, we have announced two major leadership transitions. First, in Tommy Bahama, Terry Pillow will be handing the reins over to Doug Wood at the end of the fiscal year; while in Lilly Pulitzer, Jim Bradbeer and Scott Beaumont will be passing the baton to Michelle Kelly at the end of March. Terry, Jim and Scott have all been terrific leaders of their respective businesses, great contributors to the broader success of the overall enterprise, and excellent partners to me.

I would like to thank them each, both personally and on behalf of the Corporation, and say how much I genuinely wish them well and look forward to working with them in an advisory capacity going forward. Among their many successes, perhaps their greatest accomplishment is in succession planning. Both Doug at Tommy Bahama and Michelle at Lilly Pulitzer have been with the Company for more than 10 years.

Each was identified early on as a potential leader of their respective businesses, and each has been groomed over any multi-year period in preparation for their new roles. In them we have two strong and forward-thinking leaders. And I am highly confident that they are ready and capable, together with the teams that they have helped build, to lead us forward to future success in these two great brands.

The strength of Tommy Bahama and Lilly Pulitzer is evident in the results that they are posting so far for the fourth quarter. Both brands comped up in November and have continued to post positive comps into December.

While we are pleased with these results, we still have a long way to go and are cognizant about the market conditions facing all retailers this holiday season with decreased mall traffic and a highly promotional environment. Because of this, we moderated our guidance for the full year and are now expecting adjusted EPS for the year in a range of $3.53 to $3.63.

While the environment is no doubt quite rocky, we have differentiated ourselves with two of the most distinctive brands in the marketplace that connect with our consumers extremely well. It is important to note that with Tommy's island relax positioning and Lilly's resort chic positioning, both brands are offering their consumer, not only innovative differentiated product, but product that provides a tangible connection with and reminder of happy experiences and happy places. More and more we believe these are the kind of brand experiences that customers are looking for.

Thanks for your attention. And I will now turn the call over to Scott Grassmyer to discuss our consolidated results.

Thanks, Tom. As Tom mentioned, our third quarter is our smallest sales quarter and, as planned, we reported a moderate loss for the quarter. I will walk you through some more detail on sales, gross margin and SG&A, but please refer to our press release for the complete results by group and for the Company as a whole.

Consolidated net sales were $199 million compared to $201 million last year. Lilly had a remarkable quarter and increased sales by $8 million, with increases in all channels of distribution. This was offset by $9.7 million sales decrease at Lanier Clothes, with the year-over-year decrease coming primarily from the private-label business.

Tommy Bahama sales declined 1% in the quarter with a decrease in wholesale sales primarily due to lower all-price sales from last year. With a reduction in traffic in our retail stores we saw Tommy comp store sales decline by 5%.

On a consolidated basis our gross margin expanded over 260 basis points with improvements in all operating groups. Lilly Pulitzer, which has higher gross margin than the other operating groups, represented a greater proportion of sales in the quarter.

Both Tommy Bahama and Lilly Pulitzer had a change in sales mix towards full-price direct consumer sales. For Lanier Clothes the change in sales mix reflected a higher proportion of branded sales.

In the third quarter SG&A as adjusted was $112 million compared to $102 million last year. The increase in SG&A was primarily due to incremental cost associated with operating additional retail locations.

For reference, in the quarter there was $1.3 million of pre-opening expenses associated with Tommy Bahama's Waikiki retail-restaurant location. The increase in occupancy cost associated with Tommy Bahama's move to new office space in the quarter was $1.6 million.

For the quarter, interest expense decreased to $449,000 from $730,000 last year. We also recognized a tax benefit of 13.9% against our pretax loss. The resulting net loss was $0.08 per share, in line with our previously issued guidance.

We continue to see strength in our balance sheet. As Tom mentioned, our inventories at $121 million are very clean and at the right levels to support our fourth-quarter sales plan. We have a solid capital structure to support our growth plans and ended the third quarter with over $160 million of availability under our revolving credit facility.

Our capital expenditures for FY15, including $63.2 million incurred during the first nine months, are now expected to approach $75 million. Fourth-quarter capital expenditures are tracking slightly higher than our original plan due to the timing of certain IT initiatives. Of the $75 million of capital expenditures, approximately $13 million is expected to be funded by landlords through tenant improvement allowances.

Looking ahead, as Tom mentioned, we revised our prior guidance for the fiscal year. We now expect adjusted earnings per share in a range of $3.53 to $3.63 on net sales in a range of $970 million to $985 million. On a comparable basis, FY14 sales were $920 million and earnings per share were $3.46 on an adjusted basis. The effective tax rate for FY15 is expected to be approximately 38%.

Thank you for your attention this afternoon. Katherine, we are now ready for questions.

(Operator Instructions)

Ed Yruma, KeyBanc Capital Markets.

Hi, good afternoon. Thanks for taking my questions.

First, on the guidance revision, I am just trying to check a little bit on where 4Q may be coming in softer than plan. You ended 3Q with earnings that were in line or ahead. 4Q, you said you are comping positive in both brands.

So, with the reduction in guidance, is it a top-line weakness you are embedding? Are you anticipating or observing that margins are coming in weaker than you would've hoped? A little bit of color there would be helpful.

Ed, thanks for your call today. And I think our concern really is just that we see risk to the top line, as we stated in the call or in the prepared remarks. Our comps have been good so far. We were pleased with what we saw in comps in November, and its continued into December.

Our concern really stems from what we see happening in the external environment just with some of the traffic issues that are being reported, the amount of promotion and discounting that's going on in the marketplace. And then some of the reports that you see of people getting back up on inventory, which is going to lead them probably to promote even more and discount even more.

So, we are concerned that at some point the level of distraction out there from all that could -- to the consumer could end up impacting our top line a bit. So, it's really the external factors, not really so much what we are currently seeing in our business.

Got it. And on the promotional environment, what's your openness to execute on promotional contingencies should maybe some retailers that sell your profit execute those?

And as a follow-up, in terms of wholesale inventory or inventory in channel at both Tommy and Lilly, how would you gauge it maybe versus where it was this time last year? Thank you.

Ed, with respect to the first part of it, as you know, we are very committed to our full-price selling strategy. We do do some marketing all year long, and particularly during the holiday season, that's designed to spur sales. But in terms of us going to 30-off the whole store or something like that, as you see with a lot of other retailers, I just don't see it happening.

With respect to performance at wholesale, I think we are all seeing the same reports from some of the big retailers of third-party brands, department stores and others, and I think those guys have had some difficult times compared to a year ago. But it is still relatively early, and I think time will tell. As you know, we are not overly dependent on that channel of distribution in either brand.

Great. Best of luck for the balance of this holiday season.

Rick Patel, Stephens Inc.

Thank you. Good afternoon, everyone. And very nice momentum at Lilly.

Can you give us, just to follow up on Ed's earlier question on the guidance -- can you give us some general context as to how much of your quarterly sales have already occurred for the fourth quarter to date? I figure we're almost halfway through the quarter here so I'm wondering if the bulk of your sales have already happened or if they are still ahead of you as we think about that positive comp in November and December and how much weight that should carry from a modeling perspective?

I don't know that we have the exact number handy for you, Rick. It's a good question, but I think we would be fairly safe in assuming that we still have more than half to go.

Yes, we do. And remember, Rick, we've got the important resort travel business. So, our holiday rolls right into a really strong peer for us, which is resort. So, it's the post-holiday shopping is much more important to us than it is to many of our competitors.

So, I don't think we're halfway through yet. I think we've got more ahead of us than behind us.

Can you update us on Tommy women's, perhaps a little more color there on the performance relative to your expectations? And any initial reads on the spring product based on what you're seeing in your order book given some of the merchandising efforts there?

Yes, I will let maybe Doug elaborate on this a little bit.

Look, it's really early. The resort product that's on the floor now is really the first product that's been designed by our new women's design team. But we are seeing some positive things there.

And then, of course, in spring we will have a good dose of it, and I think get a lot more insights. But Doug may want to elaborate on that a little.

Yes. The first two deliveries of holiday were really our new design team, us actually getting it on for retail. It's been successful. There's some directional things, especially it's about ready to hit the floor for December, is going to tell us what's going to happen in the spring.

With regards to the order book for spring, our women's sports group is still pretty small. We did book the product well, but until it gets on the floor in retail, that'll be something we watch in spring. Overall, women's has been actually performing very well in November and beginning of December.

Great. Then a question on gross margins also. It seems like a number of positive factors came together in the third quarter with the sales mix outperforming at Lilly and retail being a bigger piece of the pie.

Should we expect those same elements to stay in place in the fourth quarter as we think about the gross margin potential? Or is it safe to assume that things will moderate a little bit versus the third quarter given the promotional environment out there and just the choppiness in same-store sales?

I think you had the factors that you cited, Rick. You also had a meaningful decrease in off-price wholesale at Tommy Bahama during Q3. And then you had a shift in Lanier margins as a result of their mix that also helped with the gross margins.

I don't think we are looking for deterioration in Q4, but I think they're more flat to last year as opposed to seeing sequential gross margin improvement. But we think in this environment flattish is a pretty good story.

Great. And then just one last one, if I may.

Leadership changes going on at both Tommy and Lilly. I know that Doug and Michelle understand the businesses extremely well. But as we think about 2016, is there any potential for either of these concepts to undergo a change in strategy versus what we have seen in the past, or do you think they both continue to head down the right strategic path?

We very much believe in the strategies that we have in place in these businesses. The strategies will evolve each year, as they always have. But part of the attraction of Michelle and Doug as leaders is that they understand the strategies, they understand the businesses, they know and understand the people in the business, the customer. And they have been a big part of building the teams.

And given that these are two highly successful businesses, what we are looking for is continuity and an ability to continue to adapt to changes in the market and the environment. And in Doug and Michelle we think we've got the best leaders we could possibly have for each of those businesses. And we feel really good about that.

Thanks very much. Have a great holiday.

Eric Bender, Wunderlich.

Good afternoon. Could you give us an update on Asia and how that market has been evolving now in Q3 and how it's looking after the holiday season?

Yes, I will comment on it briefly and let Doug elaborate on that. Of course, it's still very small. And of course we still have the issue which we are focused on of an oversized infrastructure. But against that backdrop, we did make year-over-year improvement by about $400,000 in the quarter, and we have actually been comping quite nicely over there.

The performance of the business at a store level over there year to year has been very encouraging. Doug can give a little more color on that. Eric, it hasn't gone away as an issue for us, but there are a lot of things that we like about what's happening over there right now.

The only thing I would add, because we are talking about Japan and Australia, two different markets, the two markets that on a four-wall basis we are seeing some nice growth. And specifically in Japan we've got some positive signs in Japan for cold weather. There's been some outerwear that has really driven those sales. The localization piece that we knew was an issue when we started this is really coming together and really helping our results.

Then on Australia, that has been just a real success for us this year. It's still, though, a pretty small part of our overall mix.

Great. And when you look at Lilly Pulitzer you had a fantastic year. What do you look at next year in terms of store expansion potential? Where is the next level here for Lilly Pulitzer?

I think, Eric, as you've heard from us before, we love what's happened in Lilly Pulitzer since we bought it almost five years ago. It's basically tripled in sales and close to 5X, I think, in operating profit. So, a pretty impressive record, in our view, over the last five years. And we think there is a lot of runway ahead of it.

We expect to grow again next year. I don't want to get into giving guidance before we are ready to give guidance, but we think Lily can keep going, for sure.

And it will be driven by direct to consumer, so it will be driven by e-commerce and retail. But wholesale will continue to be an important part of the Lilly Pulitzer world, as well.

Thank you very much -- speaking of wholesale for Tommy Bahama, I know women's has not been a big piece of that business. Given that you're upgrading the women's line significantly, how should we start thinking about women's potential to be more wholesale driven than it has been historically? Thank you.

Eric, I am going to take that one and tell you that I think that's something that we need to be patient with. Tommy Bahama has been around, this brand, for over 20 years, and has been known, as you know, more as a men's brand than a women's brand. And we do think there is a great wholesale opportunity for women's out there.

But it just won't happen overnight. People are going to want to see results in our own stores as well as in the existing wholesale business that we have. So, I think it's going to take a while for women's wholesale to ramp up.

But I do think the opportunity is there over the longer term. You won't see it in the spring.

Okay. Congratulations and good luck on the holidays.

(Operator Instructions)

Pamela Quintiliano, SunTrust.

Hi, guys. Congratulations on executing very well in a challenging environment. A few questions. I am going back to guidance, just a point of clarification.

With Tommy and Lilly both comping positive, is that in line, above, below your internal expectations for this point in the quarter? And can you also remind us the cadence of the quarter last year as it progressed? And then, lastly, just how you planned inventories for both divisions for year end.

Okay. Starting with the first one about where we are in terms of our expectations for the quarter, I think, broadly speaking, we are happy with where we are at the moment. Our concern is just whether the environment deteriorates further -- the external environment and makes it difficult for us to maintain the level of performance that we have had thus far in the quarter.

On the cadence of events during the quarter last year, I think we were pretty strong through the whole quarter, if I remember right. I am looking at Scott. Maybe he can chime in.

Yes, we were. But the Thanksgiving weekend is not quite as important to us. It's important but not as important as some retailers. And I think when you get further in December it's very important.

And, again, when you get into later December and early January we still have some really important weeks. So, we still have a lot of holiday ahead of us counting the resort as part of that. Like Tom said, we are pleased with the comps right now, but we've got a long way to go.

And on the inventories, the plan for year end?

Inventories are in great shape. I think we're only up 2% on a consolidated basis and that's on a much bigger business.

I know at Tommy, both the full-price stores and the outlets have lower inventories on a comp basis, which means that, even if there was a little backup, if holiday went south, there is room to move goods. And Lilly's inventories are in excellent shape and Lanier's are also.

So, we're very pleased that we ended the third quarter with inventory in very good shape. We did not have to be overly promotional the way a lot of people are having to be. And we exited the quarter with good gross margins and inventories in very good shape. So, we're very pleased with the way our inventory is sitting right now.

And just to be clear, you're being conservative with your approach as we think about year end with inventories. Even though you were having good quarters, it's not as though you made bossy assumptions for year end with your inventory commitments.

Right. We have the inventory to do business but we have very good clearance channels. And we are really not worried that we are going to end somehow overstocked, that we'd have an inventory problem.

Okay. And then just a few follow-ups.

If you could give any granularity on performance wholesale, retail, e-com. That's something that's been doing very well for you guys, particularly at Lilly.

And then Waikiki -- anything you could share with us about how it is going so far? I know it's still early days but you guys have been very excited about it

Yes, I will start with the first part first and then let Doug elaborate a little on Waikiki because he and Terry have recently been over there. But in terms of wholesale, retail and e-commerce, I think you know our retail has performed well quarter-to-date. E-commerce has performed better quarter-to-date, which is the story that's been the case for the last several years.

And then in the wholesale channel, as we talked about in response to an earlier question, what you read out there suggests that some people, some of the retailers, may be having a tougher quarter so far. But it is still early for them so they've got a long ways to go, too.

Okay. And as far as Waikiki?

Yes, the great the thing about Waikiki, and any time you have a facility, expectations are, first did it meet your expectations overall. Did you do the architecture? Did it get built correctly? Is it delivering the brand message. And the answer is, we don't have a more beautiful facility than Waikiki.

Then the next thing is, are the staff ready to do business? On the first day we looked like we'd been open for years. The staff was ready to greet.

And then the last and most important thing, are we doing business. And we are doing a lot of business.

So far we are a little bit over the moon over Waikiki. And it's really early because this facility, it's our expectation not to just be talking to North American guests but international guests, and doing corporate business out of there. I think Terry and I both would say that it's really exceeded our expectations for all three areas, and we're looking forward to some good things.

Pamela, this is Terry. You know how excited I am about New York and the city of New York and so on. Doug and I just got back from Waikiki.

When I walked in there, it drops your jaw when you walk in there. It is quite incredible to see what we've built there and how much business it's doing and how happy the guest is in that environment. It is a crowning achievement for us.

And have you guys been seeing a new customer coming in? Can you tell yet? Or is the customer familiar with Tommy already?

The answer is, our biggest surprise is the number of the locals we are seeing, especially on [Kaua Kaua], right down the heart of it. It's a little bit like New York City. If you don't work down on Fifth Avenue you don't really go down there and shop. It's a little bit like that in Hawaii. But from a local standpoint, we're getting a lot of locals that are coming in for dinner and spending time at the top of the bar.

We are seeing the new guests, it's a younger guest, in that area. That's quite exciting.

It's the cadence of Waikiki. It's a time period where the Japanese aren't necessarily heavy into Waikiki. At the same time, we already are reaching out and we've got some Japanese wedding parties coming in, which is important for the restaurant.

So, there's a lot. It's such a crossroads of people that we are touching, so you are getting a little bit of everything.

And then just very last question, I promise, on this -- are you seeing similar types of conversion in New York? It seems like people come in, they have a cocktail, they like walking around the store, sometimes it inspires them to spend when they're in the stores higher than they would in the standalone. Are you seeing similar types of conversion thus far?

You actually see, the good news about Waikiki is that, because of the restaurant, you've got to walk right through the middle of the floor. So conversion is better than what we have in New York. We're happy with what we have in New York. Any time you have a restaurant where coming and going you're pretty much forced to go in between what we are selling is always what we prefer.

That sounds great. Thanks so much for all the detail and best of luck this quarter.

Pam, you need to get out there and see it in person.

You need to do an analyst day out there.

Raghav Nayar with Sidoti.

Hi, everyone. Nice job at Lilly's.

My first question is, I know you can't give guidance about 2016, but, first, going to Tommy Bahama, how should we think about the changes that you have made with the assortment and full-price stores as it relates to comp and gross margin, wondering if you (inaudible)?

Specifically how we're looking at it, Raghav, in 2016 is we are first focused on, if you look at our stores right now and why we've put so much effort into women's, is that we haven't been happy with the sellthrough, with the performance in our full-price stores. And we haven't been necessarily happy with what we are getting online.

So, we're being very conservative in our 2016 projections and just really focused on first sellthrough in our stores. I wouldn't say that we are doing anything in 2016 other than really expectation-wise being fairly conservative but at the same time knowing that what we are putting on the floor should sell through better than what we have ever had before.

Okay. Great.

And just also on Hawaii, just some thoughts in general about the market. How does store productivity fare versus other warm weather locations or Bahamas?

Raghav, you are speaking Hawaii in general?

Right, Hawaii in general, yes.

Yes. I will tell you that Hawaii is a terrific market for us, and some of our best stores are really in Hawaii.

Doug, I don't know if you want to comment more on productivity levels versus other warm weather markets. I think, Raghav, a lot of our warm weather markets tend to be very strong markets for us, as you would expect. But, Doug, I don't know if you've got a little --.

Yes, I think the only thing I would add that makes Hawaii special to all other markets is that, we're always talking about our women's initiative and what we're focused on in sportswear, where we have a very strong women's swimwear business. And in Hawaii you are in the women's swimwear business 12 months a year. So just the fact that we can sell women's swim around the year in Hawaii makes all of our stores more productive than what I typically can do in the US.

If anything, it has also led us to be probably over -- as we really push on sportswear, is that confidence of what we're seeing going on with swimwear in Hawaii, is that we can sell women's sportswear as well, and this is the type of impact it can have on your business.

Okay. Great. And my last question is on Lilly.

Can you just talk about in general the marketing strategy in third quarter what you did and then fourth quarter and what you have on deck this spring. Anything that you can share with us would be helpful.

I think the big thing in the third quarter that drove a lot of the business, the communication and marketing throughout the year has been outstanding. Product throughout the year has been outstanding.

I think the key to the third quarter and Lilly Pulitzer was this year we did what we called Resort Fall as opposed to just fall. So, it's really fundamentally resort product offered during the fall selling period.

While traditional fall product is not a strength for Lilly Pulitzer, resort product very much is. And then when you think of the time frame that that product is actually on the floor, hitting in July, August, September, in much of the country it's still quite warm, including Lilly's key markets.

So, what happened was the customer responded very well to it. It's almost like it's an extension of the spring-summer season but it's a time of year when that product can still be worn -- a buy now/wear now type of product. And it really worked as you can see in the results.

It is still a small quarter for Lilly, but when you compare it year to year, the sellthrough that we got on fall 2015 product was significantly better than what we got on fall 2014 product. And I think that's really the product strategy as much as anything that drove that.

Great, thank you. And the best of luck for the holiday.

Thank you. And with no additional questions in the queue I would like to turn the floor back over to Tom Chubb.

Thank you again for your time this afternoon. We are looking forward to an exciting holiday and resort season. Appreciate your interest in our Company and look forward to speaking to you again next year.

Thank you. And ladies and gentlemen, again, that does conclude today's conference. Thank you all again for your participation.