Tillys Inc (TLYS) 2013 Q1 法說會逐字稿

Good day, and welcome to the Tilly's Incorporated first quarter fiscal-2013 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Anne Rakunas of ICR. You may begin.

Thank you. Good afternoon, everyone. Thank you for joining us today to discuss Tilly's first quarter fiscal-2013 earnings results. On today's call are Daniel Griesemer, President and CEO, and Bill Langsdorf, Senior Vice President and CFO.

A copy of today's press release is available in the Investor Relations section of Tilly's website at Tillys.com. Shortly after we end this call, a recording of the call will be available as a replay for 30 days in the Investor Relations section of the Company's website.

I'd like to remind you that certain statements that we will make in this presentation are forward-looking statements. These forward-looking statements reflect Tilly's judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting Tilly's business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our first-quarter 2013 earnings release, which was furnished to the SEC today on Form 8-K, as well as our filings with the SEC referenced in that disclaimer.

We also note that this call contains non-GAAP financial information. We're providing that information as a supplement to information prepared in accordance with accounting principles generally accepted in the United States, GAAP. You can find a reconciliation of these metrics to our reported GAAP results in the reconciliation table provided in today's earnings release.

Also, for today's call we have a limit of one hour, so when we get to the Q&A portion, please limit yourself to one question at a time to give others the opportunity to also have their questions answered.

With that, I will turn the call over to Daniel Griesemer, Tilly's President and Chief Executive Officer. Dan?

Thank you, Anne, and good afternoon, everyone. Thank you for joining us today. On our call, I'll be providing you with an overview of our first-quarter performance and the key factors that drove our results. Bill will then review our financial results in more detail, and provide our outlook for the second quarter and revised outlook for the full-year 2013. I'll provide a few closing comments, and then we'll open up the call for your questions.

Before we begin, I want to personally thank Bill for his hard work, dedication and invaluable contributions to Tilly's during his more than six years here. As we announced in today's press release, Bill will be retiring later this year. We will surely miss him, and appreciate him staying on during the transition as we look for a new CFO. We wish him all the best in his future endeavors.

Turning now to our results for the first quarter -- our business performance was better than expected, as we achieved positive comparable-store sales and net income of $0.08 per diluted share, reflecting the strength of our business model and the diligent execution of our team in support of our growth initiatives. During the first quarter, we opened 7 new stores, as planned, bringing our total store count to 175. We introduced the Tilly's brand into four new markets in two new states that we entered for the first time, and expanded our presence in three existing markets. The desirability of the Tilly's concept to landlords is being reflected in the high-caliber locations being opened, and those being presented to our site-selection team. We continue to identify excellent locations that meet or exceed our stringent criteria, and we remain on track to open at least 25 new stores in fiscal 2013.

During the quarter, we grew comparable-store sales by 1.1%, which was above our expectations. The depth and relevance of our merchandise offering drove an improving trend in March and April, highlighting the destination nature of our Business, particularly during key selling periods such as the critical Spring Break and pre-Easter periods. This coincided with the return of more seasonable weather in many parts of the country.

In the combined March and April time frame, all categories of our Business, except boys apparel, produced positive comp sales. Our eCommerce business continues to perform well, and grew by 16% on a year-over-year basis to 11.5% of total net sales, and was driven by an even greater array of brands and a broader assortment from those brands.

Although we are not satisfied with lower profitability than last year, we achieved profitability above our expectations in a generally challenging quarter. In a highly promotional environment, brought about by a slow start to the Spring season, we maintained our historic pricing discipline and strategies, while at the same time taking appropriate steps to ensure that our inventory was properly positioned for the upcoming Summer and back-to-school periods. Our gross margin was at the high end of our expectations, and we entered the quarter with inventory 6% less on a square-foot basis compared to the same date last year. Equally important, we achieved a slightly lower adjusted SG&A rate than last year, further demonstrating the efficiency of our Organization, and the ability to tightly manage our costs even as we open new stores and continue to invest in the long-term growth of our Business.

Now, I'd like to turn the call over to Bill Langsdorf. Bill?

Thank you, Dan. Good afternoon, everyone. I'll begin by reviewing the details of our first-quarter results, and then provide our outlook for the second-quarter and full-year 2013. For the first quarter, net sales increased 13% to $109.1 million, driven by 30 net new stores opened since the first quarter of 2012. Comparable-store sales increased by 1.1%, with a single-digit increase in men's and juniors' apparel comps, slightly negative comps in footwear and accessories, and a single-digit decrease in comps for kids' apparel. Our eCommerce sales, which are included in our comparable-store sales, grew 16%. As a reminder, our first and second quarters have historically generated lower revenue compared to the third and fourth quarters of the year, which include the back-to-school and Winter holiday shopping seasons.

Our first-quarter comps reflect an increase in the average transaction value, largely offset by a decline in the number of transactions. Gross profit increased 5.9% to $32.2 million, or 29.5% of net sales, compared to 31.5% of net sales last year, reflecting product margins below last year, as well as about 90 basis points of deleverage in buying distribution and occupancy costs. As Dan mentioned, our gross margin rate was at the high end of our expectations, despite the highly promotional environment in the quarter.

Selling, general and administrative expenses totaled $28.3 million or 25.9% of net sales, which compared to $24.4 million or 25.3% of net sales in the 2012 first quarter. The higher SG&A rate in the 2013 first quarter reflects the $890,000 of non-cash, stock-based compensation charge in the 2013 first quarter that was not incurred in 2012. On an adjusted basis, assuming a pro forma non-cash, stock-based compensation charge in the first quarter of 2012, similar to the ongoing charges in the other three quarters of 2012, our SG&A rate in Q1 2013 was slightly lower than the rate in Q1 of 2012, reflecting stringent cost control, even as we opened seven stores during the quarter. Our operating margin was 3.6%, compared to an adjusted operating margin of 5.5% in the first quarter of 2012, reflecting the lower product margin, and deleveraging in buying distribution and occupancy costs in this, one of our lower sales volume quarters.

Income tax expense was $1.6 million, and reflects an effective tax rate of 40.3% for the quarter. This compares to an expense of $68,000 in the first quarter of 2012, with an income tax rate of 1.1% when we filed as an S Corporation. Net income was $2.3 million or $0.08 per diluted share, based on a weighted average diluted share count of 28 million shares. This compares to first-quarter 2012 net income of $5.9 million or $0.29 per diluted share, and first-quarter 2000 (sic - see press release "2012") adjusted net income of $3.2 million or $0.15 per diluted share, based on 20.5 million weighted average diluted shares. Adjusted net income for 2012 assumed an annual effective tax rate of 40%, and adds back a charge for ongoing non-cash compensation expense for stock options similar to the charge in the other three quarters of fiscal-year 2012.

Turning to the balance sheet -- our financial position remains strong, and we ended the quarter with cash and marketable securities of $48.6 million, and no borrowings and no debt outstanding under our revolving credit facility. Cash used for capital expenditures during the quarter totaled $11.4 million, compared to $7.5 million in the first quarter of 2012, and were primarily related to new stores opened during the quarter, and new stores under construction during the quarter that are scheduled to open in the second quarter of 2013, as well as our new eCommerce distribution center. Inventory totaled $49.7 million at the end of the quarter. And as Dan mentioned, compared to the same week 52 weeks ago, inventory declined 6% on a per-square-foot basis.

Now, I'd like to turn to our outlook for the second-quarter and the full-year 2013. For the second-quarter 2013, we expect comparable-store sales growth in the range of flat to a positive low-single-digit increase, compared to a 5.1% comparable-store sales increase in the second quarter of 2012. As we mentioned on our fourth-quarter call, the 2013 fiscal calendar shift will cause the first week, peak week, of the Company's back-to-school season to fall in the last week of the second quarter this year compared to being the first week of the third quarter last year. As a result, we expect an estimated $8 million to $9 million in sales will shift into the Company's second quarter from the third quarter, when compared to the 2012 fiscal calendar. We do not anticipate the calendar shift to have any meaningful impact to other key selling periods in fiscal 2013, other than the shift between the second and third quarters.

SG&A in the second quarter is expected to include an ongoing, non-cash, stock-based compensation expense of between $700,000 and $800,000 before tax. As a reminder, SG&A in the second quarter of 2012 included a one-time, non-cash compensation charge of $7.6 million to recognize life-to-date, stock-based compensation. Net income in the second quarter is expected to be in the range of $3.2 million to $3.8 million, or $0.11 to $0.14 per diluted share, which assumes a 40% tax rate and a diluted share count of 28.2 million shares compared to 27.3 million diluted shares in the second quarter of last year. This compares to net loss in the second quarter of 2012 of $1.2 million or $0.04 per share, and adjusted net income in the second quarter of 2012 of $2.6 million or $0.09 per diluted share, which excludes the one-time non-cash compensation charge to SG&A that I just mentioned, as well as a one-time net tax provision benefit at the time of the IPO, and includes a 40% effective tax rate to make that quarter comparable.

Now moving on to the full year -- factoring in the better-than-expected results achieved in the first quarter, we continue to expect comparable-store sales growth in the low-single-digit range for fiscal 2013, on a 52-week versus 52-week basis. As discussed on our fourth quarter's call, this reflects gradually improving trends as the year progresses, and as we cycle easier comparisons in the second half of the year. Using an anticipated annual effective tax rate of 40%, net income for fiscal-year 2013 is expected to be in the range of $21.5 million to $23.3 million, or $0.76 to $0.82 per diluted share, and assumes a weighted average diluted share count of 28.3 million shares compared to 26.1 million weighted average diluted shares for the full-year 2012. This projection for fiscal 2013 compares to net income for fiscal 2012 of $23.9 million or $0.92 per diluted share, and adjusted net income for fiscal 2012 of $22.9 million or $0.88 per diluted share.

Adjusted 2012 net income includes adjustments to have four quarters of ongoing stock-based compensation expense totaling $2.7 million, and a 40% effective tax rate for the entire year. Adjusted 2012 net income excludes the one-time charge of $7.6 million to recognize life-to-date, stock-based compensation, and the one-time tax benefit of $3 million; both of those were recorded in the second quarter of 2012, as I mentioned above. We continue to expect capital expenditures for fiscal-year 2013 to be in the range of $40 million to $45 million, with the majority, approximately $23 million, related to the opening of our new stores, as well as for remodels and refreshes of our existing stores. As previously stated, this estimate also includes approximately $14 million for the completion of our new eCommerce distribution center. The balance of our expected capital spending in 2013 is related to expenditures on IT and other infrastructure improvements. As always, we remain focused on tightly controlling our expenses to capitalize on margin expansion opportunities.

Now I'd like to turn the call back to Dan for some closing remarks.

Thanks, Bill. We feel very good about our Business as we head into the Summer season. Our inventory is clean and well-positioned with a dominant assortment of brands, fashion and styles that are resonating with our target customer. While not losing sight of the fact that the economic environment remains challenging, our focus remains on executing to our strategic initiatives in order to drive quality, sustainable sales and earnings. We have complete confidence in the fundamentals of our Business, which is strong and generating cash resources to continue to expand the Tilly's brand.

I'd now like to open up the call for your questions. Operator?

(Operator Instructions)

Lorraine Hutchinson, Bank of America-Merrill Lynch.

I just wanted to follow up on the gross margin commentary. You said product margins were down this quarter. Are you comfortable enough with the pace of business quarter to date that you'd expect product margins to increase in 2Q? What's the outlook for the rest of the year? Then, what's your leverage point on both the fixed piece of cost of goods and also SG&A?

Hi, Lorraine. It's Bill. The product margins in the first quarter were certainly impacted by the selective markdowns we took on the spring merchandise that got off to such a slow start in February with very weak comps in that month. What we're seeing in the second quarter when we're building our expectations, we're building our second quarter comp expectations on including the -- what we see May doing so far. We're certainly off to a better start than what we saw in Q1. At this point, our expectations are for a more normalized product margin in Q2 that's more similar to last year. In fact, for the other quarters of the year, it should continue to be more similar to last year on a rate basis.

When you talking about buying, distribution and occupancy costs, quarter 2 will have the benefit, if you will, of that shift of sales from Q3 into Q2. Q3, of course, will have the detriment of that shift in sales, so you would likely see a little better than you'd expect buying, distribution and occupancy costs as a percentage of sales in Q2, even though with the very modest comp number that we're showing, and a little bit worse than you'd expect in Q3 because of those sales shifting, even though the comp percent of course doesn't reflect that. Overall for the year, I think we talked before about meaningful leverage in the 3% to 4% comp range, but of course last year we had leverage even a little over 2% comp. I think for buying, distribution and especially occupancy costs you need to see a little bit more leverage than that 1% comp that we had in the first quarter. Certainly, in the lower volume quarters of first and second quarter, generally you're going to need a little bit higher comps than that to start leveraging any of those costs. Overall for the year, it's going to be 2%, 3% comp to start even getting any leverage in those costs. You may get it in G&A before that.

Betty Chen, Wedbush Securities.

Very nice quarter in a tough environment. I was wondering if you can talk a little bit about fashion newness, without sharing too much for competitive reasons, if the teen feels like they continue to be able to identify some of the new fashion, new brands and able to incorporate them well into the stores? Then, I also was curious in terms of regional performances, if you can help us quantify, if you can, any difference between hot versus colder climate regions and whether you are still seeing some of those differences in early May so far? Thanks.

Okay, Betty. I'll take the first part of that question and, Bill, you can take the second. In regards to fashion newness, brands, kind of things that are happening, I've talked about this before. The action sports industry is vibrant. It's ever-changing. There's newness evolving all the time. Our business model, our dynamic business model, is built to ebb and flow, adapt and to take advantage of those changes, of newness and trends, and to do it quickly. We have a very rapid response and the team remains encouraged by the newness that exists out in the marketplace for our business and for our customers, as well as the newness coming from brands, established and new brands. We're very encouraged.

Obviously, online carries an even broader assortment of that newness and a more dominant assortment of brands. The stores being the size that they are, because of the diversity and breadth of the customer and the categories we carry, constantly reflect this newness flowing into the store, almost on a daily basis. We have deliveries to our stores five days a week. In there is the newness. As we get it, it gets right out into the customer's hand and creates that engaging experience that the Tilly's brand is known for.

And, Betty, to answer your second question, regional differences. Certainly, we saw regional differences in Q1 that was highly correlated with weather patterns in both the east and the west. In Q2, the weather seems to have normalized more in these first three weeks of Q2. So, the differences between the markets, due to weather, is far less variable on a daily, weekly basis than what we saw in Q1. Certainly, there's differences in the penetration of certain parts of the business as you'd expect. If it's a cold weather versus a warm weather market, just because of the timing of when the product starts to sell for summer versus in some warmer weather markets versus summer for colder weather markets, but that's just seasonally normal differences. Overall, the difference between hot and cold or between east and west is much more normal in the first three weeks of May than what we saw in Q1.

I had a quick follow-up, if I could, Dan? Are there any product color you can share with us of what did well during the first quarter? Then last quarter, I'm sorry, a year ago Q2 we believe was another very healthy comp. Thinking back, were there perhaps opportunities that the team can pursue this year that we could start to look for in the stores?

Yes, sure. I said in my script there that what we saw when you look particularly at the March/April time period, which includes the Spring Break and pre- and post-Easter time periods, which are very important for us in the quarter. We saw all merchandise categories, except the boys apparel business, positive comping, which is a very encouraging sign. It's always encouraging. Bill's remarks, when you hear that both men's and junior's are positive comping and the other large components of the business of accessories and footwear only just flattish, basically. That's encouraging given the stability and it's in evidence of the stability of the business. I would have to say it's across the board, which, again, is evidenced by the success of the dynamic merchandise model and how we're able to ebb and flow through the season.

In terms of opportunities, I am more confident than I've ever been in the future of the business, the strength of the opportunity, the things that we have going in the pipeline, in works. Not going to share a whole lot. I hope you can respect wanting to do that. I'll be happy to talk about it when the results are delivered from it. I'm very encouraged by the opportunities we see in the business going forward.

Great. The stores look terrific. Best of luck for Q2.

Thank you.

Dave King, ROTH Capital.

I guess in terms of a question, Dan, I appreciate the update on the store growth plans and encouraged that you continue to find good locations. I guess how are your conversations going with landlords these days? I think there's been a lot of commentary in the market about how some of their -- what they're seeing has changed a little bit. Have those conversations changed at all in recent months? Is there any other color you could provide on that subject, would be helpful?

Sure. Poignant question given the fact that last week was the ICSC conference in Las Vegas. Was there, meeting with all the major developers and I referenced this in the script. We continue to be shown a tremendous amount of respect by the landlord community in terms of the quality of the locations, the venues, where we want to have stores, where we believe we have an opportunity. The specific locations in those venues and the economics to make sure that we can proceed over the long term and be profitable and deliver on our very stringent requirements. I would say that as the landlords continue to see our expansion and the quality of the environment and experience that we create in the either malls or off-mall venues, we're establishing even further what was a stellar reputation. Now, nationally, and I'm very bullish on the quality of the pipeline going forward and our ability to partner with the landlord community to get what's right for the long-term investments for the shareholders. So, it's very positive.

Okay. That's helpful. Then, nothing in terms of rising lease expenses or anything like that, that you guys are seeing flow through at this point? No, sir. Thanks so much. Good luck to you, Bill, and whatever your future plans may be.

Thank you, Dave.

Jeff Van Sinderen, B. Riley.

Let me add my congratulations on navigating a tough environment with a positive comp. By the way, Bill, we will miss you. How should we think about inventory down 6% per foot? Should we expect you to end this quarter with inventory down per foot again or is that shifting? Just trying to get a sense of are you in a position to comp positive on negative comp inventory? Then, I have a follow-up question.

The short answer is yes. We're in good shape from an inventory standpoint, being able to deliver the results that we expect in the quarter. I think what you should -- what everybody should be looking at us to do is keep the relationship of, generally, the revenue and inventory keeping in step. A few percent here or there is not meaningful. This is just really a signal about the effectiveness of the dynamic merchandise model and our ability to solve the problems as we've always committed to in season, not carry forward into future seasons, so you know we begin each quarter with inventory that's clean and current and ready to do business for the forward season. You go into our stores, you see stores that are filled with compelling brands and fashion and styles and inventory that's ready to create a great experience for our customers. That's really what you need to keep paying attention to.

Okay. Dan, maybe you could talk a little bit more about the performance of your newer stores in Q1 versus some of your more mature stores, maybe touch on mall versus off-mall, that might be helpful?

Yes, okay. Well, let me start by saying we're completely comfortable with the new store model, with the long-term commitments that we've made in terms of what we're expecting of those stores over the long term. We did see an interesting phenomenon in the first quarter that was really almost magnified in the early part of the first quarter and that was that those new stores are mostly in places that were negatively affected by weather. Secondarily, newer stores that had a less established customer base to benefit from our marketing efforts or from the peak selling periods. Recently we see them returning to their normal rates of performance and we are very encouraged by the seven openings that we have in the first quarter of 2013. So, the new stores remain intact. The new store model remains intact. We're very optimistic about the pipeline.

In terms of mall, off-mall, no meaningful difference there. It really would be a difference when you say of new markets that were influenced by weather versus anything else. That has more normalized here as we -- in most recent weeks.

Okay. That's helpful. Thanks very much and good luck for the rest of the quarter.

Thank you.

Thank you, Jeff.

Steph Wissink, Piper Jaffray.

Bill, I will extend our gratitude as well and wish you all the best into retirement.

Thank you, Stephanie.

If I could just follow up on Lorraine's earlier question on product margin? Dan, if you could, or, Bill, as well, if you could just talk about the biggest opportunities, if you think about the merchandise margin specifically? Is it the improvement in markdown rates, scale in the private label business, or mix of categories? If you could shed some light on how we should see that trend here over the balance of the year, maybe even into next year? Then, Bill, just a housekeeping question. If you could just give us a quick update on the comp metrics for the first quarter, that would be great? Thank you.

Great. I'll take the first part of that, Steph, in terms of how to be thinking about the product margins. Our branded business remains a vibrant and dominant part of our business. Those margins are fairly fixed. We see some scale and some opportunity to scale slightly. As we've talked about our long-term plans of only slight improvement in IMU associated with the overall product margin, due largely to the fact that so much of our product is third-party branded. The opportunity, if I look back on Q1, would be to see better or improvement in the markdown rate that we chose to do in order to make sure our inventory remained clean and current. We had a challenging February. We talked about it on our last call. That caused us to need to take some markdowns to keep the inventory fresh and current, particularly on the juniors side. So, that's where you would look to us to see some improvement.

Then as we scale, we are seeing that our ability to negotiate sharper prices, particularly on our own proprietary product, when all of that's said and done we're not really baking in -- there's no fundamental sourcing strategy here that's going to move. We're not going to increase the percentage of our private label or we're not doing something meaningful to deliver hundreds of basis points improvement. This is more about scale, as you reference, and fine-tuning small parts of the opportunity.

Stephanie, you touched on comp metrics in Q1. The overall comp, as we talked about, was a plus 1.1%. As you know, historically, our eCommerce business has been about 2% of that. Therefore, removing that, you'd know what the brick and mortar comp was approximately at. That 1.1% was driven by average ticket, largely average-unit retails and offset by transaction count, which is largely traffic. Our conversion was still very decent. Is that what you're looking for with metrics?

Exactly. Thank you. I appreciate the color. Best of luck, guys.

Richard Jaffe, Stifel.

Bill, my best wishes. I guess a couple thoughts about working to drive traffic. Obviously, that would be wonderful on all metrics if you could get more people flowing through your store. I'm wondering if you have thoughts regarding your marketing initiatives, whether it's more print, more TV, more social media, a loyalty program in store? Any of those kinds of things, do you have percolating or do you feel the store base is too disperse for some of those initiatives?

Thanks, Richard. There's a lot going on in that regard. As we've talked about our omni-brand initiatives, making sure that the Tilly's brand experience is represented across the broad portfolio of touch points that we have and it's put in place over the last 12 to 18 months. The biggest and most meaningful thing that gives me comfort is the significant growth we've seen in the mailing list, in the name and addresses that we have, having grown significantly over the last 12 months. That gives us the ability to appropriately mail into the key time periods with our, what do you want to call it? Our catalog, our look book, our lifestyle book, that really showcases the entire product collection from branded to private label. We see that remaining as a very successful tool in driving traffic to the brand, whether it be to our stores or online. That remains vibrant, as well as a whole host of other things that we're doing around social media, around the website, around our brand partnerships. Things we've talked about before, be it at the local level around stores and grand openings to national campaigns and major events like the Vans Warped Tour or whatever that might be. We have a lot of things going on and I look forward to updating more in the future as we're able to show some of the performance.

Look forward to hearing about it. Thank you.

Sharon Zackfia, William Blair.

Most of my questions have been answered. First, I want to say we're going to miss Bill. Secondly, Bill, since I'll put you on the spot now. The guidance still implies, obviously, some operating margin decline this year roughly in the realm of 100 basis points. Can you break out for us, kind of bucket that, gross margin versus SG&A? Is that just a function of the sales being up low single digits, or are there investments there that are a little bit less obvious from the outside?

Yes, Sharon. First of all, part of that certainly is from the first quarter, because the other three quarters together are less harmful to the operating margin, certainly. What we see going forward is a product margin that is similar to last year for the rest of the year. What we'll see is some deleverage in occupancy, buying, distribution, more mild than what we saw in the first quarter, but for the next three quarters combined we'll see some deleverage assuming that very low, single-digit positive comp. The SG&A side should be continuing to be similar to last year or slightly favorable. Third quarter will be under some pressure, just because of the shift to the sales into the second quarter and the second quarter will get the benefit of that. Overall, SG&A should be more similar to LY as well for the rest of the year.

Okay. Thank you.

At this time we have one name remaining in our question queue.

(Operator Instructions)

Lindsay Drucker Mann, Goldman Sachs.

It's Tiffany Hagge on for Lindsay. We were just wondering, in terms of the eCommerce business, if you could shed some light on what you saw there during the quarter in terms of ticket, traffic, conversion trends online? Just to update us, are you still seeing a substantial portion of your eCom sales come from markets where you don't have brick-and-mortar stores? Bill, what was the cadence of store openings in the quarter? Did most of those come early or were they more back-half weighted? Thanks.

So, eCommerce sales in the quarter, certainly, eCommerce, as did everybody else, started off a little more softly at the beginning of the quarter and firmed up as the quarter progressed. The brick-and-mortar openings that you're asking about, the timing was spread fairly evenly throughout the quarter. There were a couple stores near the end of the quarter, but otherwise we had in March and early April are most of the openings for the quarter.

I think there was one more question around -- wasn't there one more question, Tiffany?

Yes. We were just wondering if you guys -- I don't know if you have the metrics available, but on ticket traffic conversion trends online and how those differed from what you saw in the stores?

It was the percent you were saying, are we still seeing the same thing with growth in markets where we don't have stores. Those metrics remain the same in terms of the percentage of business coming from markets where we don't have stores. We also see, and are seeing the same thing, that as we put a new store in market, we're seeing the eCommerce revenue grow. That remains fairly constant.

As regarding ticket traffic conversion, the conversion rate continued to be strong. The traffic in eCommerce, unlike throughout the brick-and-mortar chain, the traffic was better than last year and that's obviously what helps drive with a similar ticket.

Okay. Thanks, guys and good luck, Bill.

Hey, thank you.

Thanks, Tiffany.

Betty Chen.

A housekeeping question, if I could, to follow up on the earlier question. Bill, could you tell us what the cadence will be for store openings for the balance of the year by quarter, if you could?

We're expecting -- now, of course, with timing of exact openings, it's always -- could be moving. We're expecting second quarter to be somewhat similar to the number of stores that we opened in the first quarter. We opened seven in the first quarter. Then, in the back half of the year, there will be more opened in the third than in the fourth, and if they do open in the fourth, likely to be before Thanksgiving. So, it would be early in the fourth quarter.

Thank you. Again, best of luck and we'll miss working with you.

Hey, thanks, Betty.

At this time I would like to turn the call back over to Dan Griesemer for additional and closing remarks.

Thanks again for joining us. We look forward to speaking with many of you at the Stifel Nicolaus Consumer Conference in New York on June 4 and discussing our second quarter results in late August. Thank you and have a good evening.

That does conclude today's program. Thank you all for joining.