Shoe Carnival Inc (SCVL) 2013 Q4 法說會逐字稿

Good afternoon and welcome to Shoe Carnival's fourth-quarter earnings conference call. Today's call is being recorded and is also being broadcast via live webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited. This conference 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. These forward-looking statements should be considered in conjunction with the discussion of risk factors included in the Company's SEC filings in today's press release. Investors are cautioned not to place undue reliance on these forward-looking statements, which speaks only as of today's date. The Company disclaims any obligation to update any other risk factors or to publicly announce any revisions to the forward-looking statements talked about during this conference call or contained in today's press release to reflect future events or developments.

I will now turn the call over to Mr. Clifford Sifford, President, Chief Executive Officer, Chief Merchandising Officer of Shoe Carnival for opening comments. Mr. Sifford, please go ahead.

Thank you and welcome to Shoe Carnival's fourth quarter and fiscal year 2013 earnings conference call. Joining me on the call today are Kerry Jackson, Senior Executive Vice President, Chief Operating and Financial Officer, and Tim Baker, Executive Vice President of Store Operations.

For today's call, I will review the Company's overall performance and provide some insight into the current quarter. Then Kerry will review the financial side of the business. We will then open the call up to take your questions.

After a high single digit comparable store sales gain in October and November, which also included record sales for our Thanksgiving and Black Friday event, Mother Nature decided to give us the snowiest and coldest winter in more than a decade. With that, we experienced declining traffic throughout most of December and January in most of our geographies. At one time or another during the months of December and January, we experienced over 500 instances where individual stores were either closed for an entire day or had to close for a partial day due to inclement weather. This contributed significantly to our comparable store sales decline for the quarter of 2.5%. Other than traffic, which was down mid-single digits for the quarter, all other metrics we measure ourselves by were in line. Conversion was basically flat, average transactions were up mid-single digits, which was driven in part by average unit retail, and an increase in units per transaction. Fashion boots for men, women and children were our best categories with a comp store increase in the midteens. Gross margins for the quarter in our fashion boot categories ran 855 basis points higher than the same time period last year. This provided an opportunity for our merchants to be more aggressive in liquidating the categories of merchandise that do not normally perform in harsh winters like we had this year. As a result, our per-door inventories at the end of the quarter were down 2.4% with merchandise margins down just 20 basis points.

As mentioned on the last two calls, we initiated a strategy to increase inventory turns in our stores. We feel this strategy, along with our strategic initiative to raise our women's percent to total, will give us the ability over the next few years to not only improve cash flow but merchandise margins as well. Our strategy includes flowing seasonal product into our stores on a timelier basis and aligning our lower volume stores' inventory closer to customer demand. We are pleased with the way our merchants are managing our overall inventory.

Unfortunately, we were not able to leverage our expense structure under this slower than anticipated fourth-quarter sales volume, and reported earnings per diluted share of $0.03, which was at the low-end of our most recent guidance. For the year, sales on a comparable basis were flat to last year. We experienced slow single digit comp store sales increases in both the women's nonathletic as well as children's shoes and a low single digit comp store sales decline in adult athletics and men's nonathletic departments.

Moving on to merchandise highlights for the fourth quarter, in our women's nonathletic department, comparable store sales for the fourth quarter were up low single digits. As I mentioned earlier, fourth-quarter 2013 was all about boots. With the harsh winter weather beginning early in the quarter and continuing throughout the quarter, we experienced comp store sales increases in our boot categories in the midteens. Riding boots, fur-lined boots and weather boots all produced robust sales growth.

After the past several years of declining boot sales, it was nice to see this category perform at this unexpected level. We ended the quarter with boot inventories down in the midteens on a per-door basis as compared to last year. In our men's nonathletic department, we ended the quarter with a mid-single-digit decline on a comparable basis. Once again, it was all about casual boots, which experienced robust sales growth in the midteens on a comp store basis. Our children's nonathletic business ended the quarter with a low single digit comparable store sales decrease. As in the women's and men's nonathletic departments, kids boots were the story for the quarter, producing a comp store sales increase in the 30s.

In athletic for adults and kids combined, comparable store sales were down mid-single digits for the quarter. As we have always said, our customer buys today what they're going to wear tonight or tomorrow. The winter weather patterns kept outdoor activity to a minimum, and we experienced declines in most categories of athletic. We believe based on store scan data that this was a trend felt throughout the family footwear channel as the only athletic gains in the quarter came from marquee launches in the athletic specialty stores.

Turning now to store expansions, for 2013 we opened 32 stores and closed seven, ending the year with 376 stores in 32 states and Puerto Rico. In addition to new store growth, we also relocated nine stores to stronger centers. Next week we will celebrate the grand opening of seven new stores and the relocation of two stores as we execute our strategy of opening 30 to 35 new stores this year. Two of those grand opening stores are in the Detroit market where we will open an additional three stores during the second half of the year, giving us a total of six new or relocated stores in this market. The other five stores opening next week will be infill stores as we continue to fill out existing markets where we are underpenetrated. Our management team will continue to review our annual store growth rates based on our view that the internal -- external opportunities and challenges in the marketplace. Our goal over the next decade is to double our current store base serving markets throughout the United States.

Moving to eCommerce. I'm very pleased with the continued progress with our eCommerce business. As you all know, we had a leadership change in this business during the second quarter of 2013. Our first challenge centered on the performance of the site and the customer experience of the site. We initiated major enhancements to the site in time for back-to-school, and we saw immediate results. We continue to tweak key elements of the customer experience through holiday, and with each change came improved sales results. Although we don't report eCommerce sales separately, we are pleased with sales increases we are experiencing.

For 2014, we will be moving away from our third-party fulfillment arrangement and transitioning to shipping from our DC in stores. This is beneficial in many ways, but most importantly it will allow us to increase the overall selection on the site, and it will better utilize our overall store level inventory.

Turning now to marketing. As we previously announced, we will launch our first ever national cable television ad campaign in two weeks. Our marketing team, along with our agency, has put a great deal of effort into our overall marketing strategy. As we go forward with our long range -- our long-term growth plan, it is vital that we reinforce the Shoe Carnival brand, not only within our existing markets but also to create namebrand recognition with potential customers in new markets. National cable TV advertising should also increase our exposure in our existing markets where we don't currently advertise on TV, along with the exposure it gives our eCommerce business on a national scale.

In addition to national cable TV advertising, we are very pleased with the progress of our Shoe Perks customer loyalty program. For 2013 we doubled our membership, and we are looking to double it again in 2014. Shoe Perks customers accounted for more than 20% of our overall sales in 2013.

Importantly, our Shoe Perks members shop us more often and on average spend almost 40% more than non-members.

Moving to current sales trends, for the first quarter to date in 2014, we continue to experience cold, wet weather across our store base. During the first two weeks of February, we lost 199 store selling days due to snow and ice. Traffic for those two weeks was down in the teens. However, once roads were clear and customers could get out, we saw a rebound in traffic sales, which resulted in a low single-digit comparable store sales loss for the month. Unfortunately we experienced similar weather issues the first week of March, and currently our comparable store sales are down 4% for the quarter. However, we entered this year very clean on fall and winter seasonal product, which allowed us to produce merchandise margins that are significantly higher than the same time period last year. We believe once spring weather patterns begin and we get closer to Easter, we will see a more positive trend. This belief is driven by the fact that even though we have experienced one of the most challenging winters in recent memory, through this past Saturday our sandal business for the family is up in the midteens on a comparable store basis.

In addition to sandals, we are also seeing robust sales of our fabric casuals and canvas categories. As I said earlier, our customer is definitely a buy now, wear now consumer. Our inventories are fresh and trend right, and we are well-positioned for spring selling.

This completes my prepared remarks, and now I would like to turn the call over to Kerry Jackson for details on our financial results.

Thank you, Cliff. We reported net sales of $200.3 million for the 13 week fourth quarter of fiscal 2014 as compared to net sales of $205.7 million for the 14 week fourth quarter of 2012.

Comparable store sales for the 13-week period ended February 1, 2014 decreased 2.5% as compared to the 13-week period ended February 2, 2013. The components of the change in our third-quarter net sales included an increase in sales from new stores, net of store closings of $11.5 million, offset by declines in sales of $4.2 million in comparable stores and $12.7 million due to the net effect of one less week in the quarter. The gross profit margin for the quarter decreased 0.8% to 28.5%. Our merchandise margin decreased 0.2%, while volume and distribution occupancy costs as a percentage of sales increased 0.6%. The increase in volume distribution occupancy was primarily in our occupancy costs. Typically we need 2% to 3% comp increase to leverage our occupancy cost at our current rate of new store growth.

Selling, general and administrative expenses increased $1.2 million in the fourth quarter of fiscal 2013 to $56.1 million or $28.0 million -- 28.0% as a percentage of sales. The increase was attributable to expenses related to new stores partially offset by one less week of expenses due to the shift of the calendar, along with lower incentive compensation expense. As a percentage of sales, SG&A expenses increased 1.3% as we were unable to leverage the increase in expenses due to a decline in comparable store sales and one less week in the quarter.

Store closing costs and non-cash impairment charges included in SG&A expenses of Q4 this year were $809,000 compared to $139,000 in Q4 last year. Net earnings for the fourth quarter of fiscal 2013 were $598,000 or $0.03 per diluted share. For the fourth quarter of 2012, we reported net earnings of $3.2 million or $0.13 per diluted share.

I'd like to transition to our fiscal 2013 fiscal financial results. Net sales increased $29.8 million to $884.8 million for fiscal 2013, a 3.5% increase from net sales of $855 million for fiscal 2012. Comparable store sales for the 52-week period ended February 21 remained flat compared to the 52-week period ended February 2, 2013. The increase in sales for the year was due to 49 net new stores, partially offset by $10.7 million decrease in sales due to the net effect of one less week in the fiscal year. The gross profit margin in fiscal 2013 decreased to 29.3% from 30.1% in the prior fiscal year. Our merchandise margin decreased 0.4%, while buying, distribution and occupancy costs as a percentage of sales increased 0.4%.

SG&A expenses increased $6.7 million for the year, due in part to a $10.6 million increase in expenses for 63 new stores net of 14 stores closed since the beginning of fiscal 2012. These increases were partially offset by a decrease in incentive compensation of $4.5 million as compared to the fiscal 2012.

As a reminder, included in fiscal 2012, SG&A expenses were $1.2 million of net expense related to the retirement of our former President and CEO.

Total preopening costs for fiscal 2013 were $3.4 million, a decrease of $700,000 over last fiscal year. Of the total preopening costs incurred in fiscal 2013, $2.1 million was included in SG&A and $1.3 million was included in cost of sales from preopening rent and freight. We opened 32 stores during fiscal 2013, at an average cost of $66,000 as compared to 31 stores last year at an average cost of $88,000. The decrease in the average expenditures for new store was primarily a result of decreases in expenditures for onsite training and support and advertising. New store closing costs and non-cash impairment charges included in SG&A expenses for fiscal 2013 were $1.2 million compared to $646,000 in fiscal 2012.

Now turning to our cash position information affecting cash flow, during fiscal 2013, we declared and paid in each quarter a cash dividend of $0.06 per share to our shareholders. The cumulative amount returned to shareholders in fiscal 2013 was $4.9 million. No purchases have been made this year under our share repurchase program. We currently have $20.3 million available under existing our repurchase authorization. Depreciation expense was $4.6 million in Q4 and $17.4 million on a full fiscal year basis.

During fiscal 2013, we expended $31.0 million for the purchase of property and equipment, of which $26.3 million was for the construction of new stores, remodeling and relocations. These incentives received from landlords were $8.1 million. We opened 32 new stores, relocated nine and closed seven stores during fiscal 2013. We remodeled approximately 9% of our store base. Capital expenditures are expected to be $32 million to $34 million in fiscal 2014. As Cliff mentioned, in 2014 we expect to open between 30 and 35 new stores, which will account for approximately $15 million to $18 million of our total capital expenditures. The remaining capital expenditures, $8.3 million, will be used for store relocations and the remodeling of approximately 8% of our existing store base. These incentives we received from landlords are expected to be approximately $8 million to $9 million.

My final comment today will focus on sales and earnings expectation for the first quarter of fiscal 2014. We expect first-quarter net sales to be in the range of $232 million to $241 million compared with store sales in the range of -- with comparable store sales in the range of flat to down 3.5%. Earnings per diluted share in the first quarter of fiscal 2014 are expected to be in the range of $0.45 to $0.52. Included at the high-end of the earnings estimates for the first quarter is the expectation of a significant increase in our merchandise margin, a moderate deleveraging for buying distribution and occupancy costs, and a slight deleveraging for our SG&A expenses. The deleveraging of expenses are due primarily to the flat comparable store sales expectations.

This concludes our financial review. Now I would like to open up the call for questions.

(Operator Instructions). Jeff Stein, Northcoast Research.

Good morning, guys. First question on national advertising, wondering how this will affect your ability to leverage SG&A in the current fiscal year. In other words, does the leverage point for the full year go up, and if so, what is the leverage point?

If you wanted -- we don't have full-year guidance. But if you assume a low single digit comp increase for the year, it will be difficult to leverage our SG&A. It won't be a dramatic deleveraging. I would call it more like a moderate deleveraging. But it's not only the advertising, which is a big number, but since we are going to be opening more stores potentially if we hit the high end of our range, plus we are opening in large markets, our preopening costs are probably going to be in the middle point of the store openings for next year. We're going to increase our preopening costs about $1 million.

And on top of that, if we have an acceleration, in our EPS, which we would expect with the low single digit comp increase, we will see an increase in our incentive compensation. So while we will control our expenses to the best of our ability, those three items, but most particularly the advertising increase, will cause us some deleveraging.

Will there be an increase, Kerry, by bringing your your eCommerce fulfillment into the DC into (multiple speakers)?

This is Cliff. We actually don't think that we are going to see a deleverage -- we don't believe we will see a leverage this year. In fact, next year, once we complete that transition, we will be able to leverage the eCommerce shipping.

So you would see (multiple speakers)

Let me say it this way. It's more of a benefit in 2015 than it will be in 2014.

So maybe neutral to slightly positive this year?

That's correct.

Okay. And can you talk at all about how things are going with your women's tests, expanding the better brands into 70 stores, how that played out in the fourth quarter, and how it's progressing so far in Q1?

We are very happy. I'm glad you asked that question. I was going to talk about it in my prepared remarks. But it really was all about boots this past fourth quarter. We are very pleased with the performance of our test, and in fact, we've taken it from the initial 50 store test, we've taken it up to over 100 stores today. And by the time we hit fall, I believe the number is 140. So somewhere between 140 and 150 stores. The stores really got behind it. The customers are reacting very favorably to the product. So we are very happy with it.

There are (multiple speakers) some brands obviously that are doing better than others, but overall we are happy with the test.

Okay. And Kerry, wondering if you could talk about how you see the store opening plans for the balance of the year? It sounds like maybe some stores have been pushed back to Q2 and beyond?

It is. Q2 is going to be a very big opening for us to get the stores open for back to school. It is close to that. We will be opening seven in the first quarter. We could have approximately 19 stores open in the second quarter with the remainder of the stores opening at the end of the third quarter or beginning of the fourth quarter.

So how would that affect -- can you just -- if you do open 19 in the second quarter, what would your store opening costs look like year on year?

You'll see Q1 to be relatively flat. We could be in approximately $1.8 million increase in expenses in Q2. But we will see some of those expenses come -- against the prior year, it will come down in Q3 somewhere in the range of $600,000 to $700,000, and then we will probably be down $150,000. At the midpoint of the store openings, we will be down about $150,000 in Q4.

Got it. Okay. Thank you very much.

I should say the net effect of all that is about $1 million increase in preopening costs.

Mark Montagna, Avondale Partners.

I just want to verified a number that I think you said Cliff in terms of sandals. How much did you say it was up year-to-date?

Our sandals are up in the teens year-to-date. That is in all categories.

Okay. So then is any of the weakness pretty much all centered on athletic, or what other any comments on the other categories?

Athletic is definitely trending down. If -- and Mark, you are good at athletics, you understand what happens. You need the weather not to be wet and snowy for athletic shoes to sell. And in the weeks where we have seen temperatures moderate and the weather be drier, we've seen good results out of our athletic product. It's just that the weather has not been conducive to selling athletic shoes, nor has it been conducive to selling women's dress. We can -- women's dress or women's casual has been all about women sport shoes, actually in the south sandals in canvas and fabric product.

Okay. And then so, Kerry, it sounds like if you, with the first quarter guidance, if you comped down 3.5%, it sounds like you are -- that would imply a slight comp deceleration from where you are right now. Because I know you said you were up -- down 4% quarter to date, but it sounded like things might have decelerated a little bit.

What we're going into is Easter last year, we are approaching that. So Easter is much later this year. So what we're seeing is the comp comparisons will get worse as we approach Easter. But then post -- in comparison to last year. But then when we get past Easter of last year and we start accelerating into Easter of this year in April, we will see hopefully a strong rebound, and that's where we think that wire range is better than it is right -- where we are at right now.

Then last two questions. Just regarding inventory, do you have any sort of specific goal in terms of inventory turn for this year or some sort of rate of gain in inventory turn in coming years? And then really that's the question.

We don't normally talk about the turn as on the conference call for our goals, but I can tell you that we are looking over the next several years to significantly increase the inventory turn in our store. We believe, first of all, that our lower volume stores can operate as efficiently and produce sales results with lower inventory than they currently have on hand, and we can't actually believe our larger volume stores inventory levels are just fine. So, that along with the fact that we are going to bring our product in on a timelier basis and flow the product through the season and not front load the quarters with product, I believe you will see significant changes in our inventory turn.

That's fantastic. Thank you.

Jill Nelson, Johnson Rice.

Good afternoon. Quick question. I think, Kerry, you said for first quarter, you are expecting a pretty nice increase in merchandise margins. If you can just talk about some of the factors behind that.

The biggest factor, Jill, is the fact that we came clean on boots. We came through -- we came clean not only on boots, but we came clean on what we would consider to be fall and winter kinds of sports shoes. What we saw is when December started trending away from us and the weather, we saw the customer traffic trending down. We had our buyers take accelerated markdowns on the product that we are not selling at really good rates. And we could afford to do that because of the margins we were making in the boot categories.

Then, as we went on through the rest of December and into January, our boot business continued to be fairly robust, and we ended the quarter with boots down in the teens on a per store basis inventory-wise.

That then did not require us to take the deep markdowns that we took into the first quarter last year on boots. Therefore, that's the reason the margins were up significantly this year. (multiple speakers) Long explanation, but it kind of gives you --

I appreciate it. And then could you just talk about a bit more on athletic, I know weather has been an impact. I think in a previous quarter you talked about maybe the customer shifting away from her traditional technical athletic product. Can you could talk about how you continue to see that shift and maybe some of the catalysts that are working to replace that?

What we've seen, and when you look at our athletic business, we don't categorize some product that's selling very well in athletic where some of our competitors -- in fact, most of our competitors -- do categorize it in athletic. So fabric product, walking product, that kind of casual kinds of product for athletic, if you can't play a sport in it, we don't put it in athletic. Let's just say it that way. If you can't play a sport, it goes in our casual business, and that product is still selling. Running does not sell when the weather has been like it's been. And that really is the driver of athletic. If you're not selling running product, then you are not selling. Your sales and athletic are not trending up. At least in our stores.

Thank you so much.

(Operator Instructions). Sam Poser, Sterne Agee.

Good afternoon. Thanks for taking my question. As a continuation of the conversation about getting clean in boots, you are expecting -- based on the guidance on current trends, you are expecting acceleration going into April with the later Easter and so on. But how much -- if we think about into Q2 -- and I know you're not giving guidance -- but how much of the lost sales of spring so far do you really think you'll be able to recapture, and how do you avoid the risk of going things are going great and maybe buying too many sandals and then have that cut off early? You know what I'm saying? It seems to me the season may be a little shorter. How do you avoid getting ahead of yourself if the momentum just does pick up?

I'm going to take you back two years. Two years ago we had an early spring. First quarter was very moderate from a temperature standpoint. We sold sandals and spring product early, February, March and April. We reported a pretty good first quarter. This has moved from the second quarter to the first quarter, and consequently our second quarter was not as good from a sample and spring product standpoint.

Last year it was just the opposite. We had colder, more seasonal weather in the first quarter, not quite like it was this year, but colder more seasonal weather in the first quarter, and sandals and spring and summer product sold later. It came in April and May and June, and you'll remember us talking about that last year.

So what we did is we are not going to take -- we are not going to get excited and take markdowns on sandals and spring product today because weather is what it is. And we believe -- and we believe this because what we've seen and what we've already seen in the South, we believe that this is going to accelerate as we move into April and the weather gets more seasonal, and then obviously as you go into May and June, well at least hopefully as you go into May and June, we will see a more moderate trend from a weather perspective. That doesn't mean we're going out and buying more sandals because we are not. We feel that the sandal flow that we have today, and some of that is still coming in, is a good flow, and we'll just transition ourselves later in this quarter and into next quarter.

Thank you. And then -- thank you. You are trying to build up the women's business, that's a big push for you guys to increase penetration of women's. But there doesn't appear to be a lot of big trends out there that are identifiable to drive it outside of maybe items in sandals and so on. How are you planning on attacking that looking into this year? I don't need brands or (multiple speakers)

Almost entirely on price. Almost entirely by average unit retail. As we elevate the level of the product in our stores, we are seeing average unit retails escalate and especially in our women's area. And we may not sell as many pairs, because, as you said, there's not a lot of identifiable trends today other than items, but the average unit retail that we achieved out the door will be the driver.

And then how are you -- I mean how are you looking at like the boat shoes this year compared to last year and some of the big ones that we were driving? Last year boot shoes did a nice job of driving some sales in the spring? I mean how do you look at that when you're lapping that right now?

Here is the way I'll answer that is we see nice increases in our fabric and canvas product, and we do see that the young people are moving away from more traditional leather kinds of product, and I think we talked about that at back to school last year. And that continued on through the fourth quarter, and we are seeing that in the fourth quarter. We will lap that as we get closer to back to school this year. But that young customer that was buying boat shoes or leather boat shoes a year ago has definitely transitioned to more fabric and canvas product.

Thank you very much. Good luck.

Steven Martin, Slater Capital.

Hi, guys. I won't ask you the obvious question that relates to your cash balances. So you don't have to do that one.

We appreciate you not.

Canvas. There's two or three areas of canvas, you've got the BOBS, you've got the Vans kind of shoe, and you've got more of the rubber bottom sneaker Keds and Converse. Can you give us a little more specificity on what is working in canvas?

And I do appreciate you asking the question, but we won't get specific on brand. Just (multiple speakers)

Well, type of shoe.

The casual, canvas or fabric shoes for women, kids, and even men's are all selling well and whether that's boat shoes or just canvas casuals.

Okay. When you look at -- when you look out to 2014 and I know you're not giving us guidance for the full year, can you talk about ASPs? Obviously with that women's test or rollout and expansion, the ASPs for that category are going to improve. But when you look out across the rest of your categories, how do you see ASPs evolving?

We are definitely looking for ASPs to escalate in women's and in athletic. I believe that ASPs and kids will be somewhat flat, and men's will be somewhat flat. So overall I believe ASPs are going to escalate in low to mid single digits.

Okay. And in the line category, recognizing that it's been retarded by the weather, what is the new or what are the NIKE technologies or other technologies that you've gotten into help drive that business versus the last couple of years?

Well, the good part about NIKE is that they continue to bring innovation to the family channel. But they are giving us -- and I don't really want to get specific with that as well because I got to remember our competitors listen to this call, and I don't want to tell them which way we are headed. But they give us new technologies. And with those technologies, some are exposed, some are lightweight in nature. But they are all new -- and not all new, excuse me, I didn't mean to say it that way. They are new and exciting, quite frankly, when you look at them. Very sellable and very commercial. And they are by far the leader in that. Everybody else seems to -- well, everybody else in the performance arena. Some of our fashion brands in athletic continue to bring innovation as well.

Okay. And in the basketball category? Obviously you guys would love to get some Jordan launch product, but (multiple speakers)

Jordan knockoffs. But the good news --

What is NIKE doing (multiple speakers) in that area?

Again, I'm not going to get specific there, but I will tell you this. Any time athletic performs in the mall and has a halo effect and eventually it comes down to our channels and all the major brands take what works in the mall and they try to interpret that as best they can for the family channel, we usually benefit from that.

One last one since I was the last question anyway. Have you seen any change improvement in J.C. Penney?

You know, I'm not really sure where you're going with that. We shop them often, but I am --

I meant in their footwear assortment, obviously.

I just can't go there right now. I'm not going to talk about my competitors on a conference call.

Okay. Thanks a lot.

Mark Montagna, Avondale Partners.

I didn't want Steve to have the last question, so I figured I'd have to sneak in here.

Mark, we appreciate that.

Yes, yes. So is the rise in average selling price in women's, is that solely related to the new higher-priced line in women's, or are you seeing it across the board?

Actually, three reasons. One, the newer price lines, the newer higher in lines are obviously delivering higher ASPs than we have had in the past. What we've learned from that, Mark, is that we don't have to -- if we are developing a standalone or something even in our private-label program, we can build that up. Our customers understand and have shown us that they understand value and better product. So we have even taken some of our private label or un-branded products and moved that up in quality. And I think that the customers recognize that and have bought into that.

And number three, and as importantly, is we came into the new year so clean in our inventory that we haven't had to clear product, which obviously drives price average price down. And so the three of those combined will drive average price this year.

Okay. And then in the pockets of warm weather, is it more pockets, or is it like a region when you say the South, and is the strength in these regions, is that more than just sandals, such as perhaps athletic in these areas where it's actually perked up in terms of weather?

It's more pockets than it is regions because our regions are kind of -- somewhat broad. But what we have seen -- and it's not just the South where we have seen pops in sandals. Anytime we get a warm weather trend in any of our regions or any part of the country, we see a pop in sandals. And that's a positive thing. It is one of the things that we are -- one of the reasons why we are guiding flat to 3.5% down instead of where we are currently.

As far as athletics are concerned, in those pockets that we have seen that has continued to have warm weather, the athletic business is okay. I'm not going to tell you it's great, but some of that has to do with the fact that, again, we track certain shoes that are canvas and walking. If it can't be played in a sport, that's the best way to say it. If it can't be used in the sport, it reports to our women's business.

Okay. That's really helpful. I'll let you guys get ready for other calls after the NIKE call, and your other analysts will call you.

All right. Thank you now.

On that note, we have a follow-up from Jeff with Northcoast Research.

Just a couple quick ones for you. What were preopening costs for the full year, and what were they in the fourth quarter? I'm sorry if I missed it.

For 2013?

Yes.

$3.4 million for the full year, and we are at for the fourth quarter preopening costs in -- in both (inaudible) and SG&A were $477,000.

Okay. And do you have that number broken down just for SG&A for the year and the quarter?

SG&A was $286,000 for the fourth quarter and [$2.1] million for the full year.

Okay. And you're expecting them to be up $1 million this year, and that's across both SG&A and buying in occupancy?

Yes.

Okay. So the $1 million increase covers both, right?

Yes, it does.

And depreciation and amortization estimate for this year?

We will be in the $20 million range. That would be up from about $17.4 million this year.

Okay. Thanks a lot.

With no additional questions in the queue, I would like to go ahead and turn things back over to our speakers for any additional or closing remarks.

Well, I want to thank everyone for participating today, and I look forward to speaking to you again in May. Thanks, again.

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