Earnings Call: Q2 2017

Aug 31, 2016

Earnings release

Good day, ladies and gentlemen, and welcome to the Oxford Industries Incorporated Second Quarter 2016 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the floor over to Ms. Anne Shoemaker for opening remarks and introductions. Thank you, Don, 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 and 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 operations 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 fiscal 2015 Form 10 ks. 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 ockfordinc.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. Also on April 19, 2016, the company acquired Southern Tide, which is presented as a separate operating group. And now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO and Scott Grafmeier, CFO. Thank you for your attention. And now I'd like to turn the call over to Tom Chubb. Good afternoon and thank you for joining us. Our consolidated results for the Q2 were very good with a meaningful sales increase of 13% and earnings above the top end of our forecast. In a retail environment that is still not particularly strong, we are proud to have achieved these results with strong contributions from each of our lifestyle brands. I will start with Tommy Bahama. We had a solid performance from Tommy Bahama with an 11% increase in sales over last year and 7% comp store sales growth. While the Tommy Bahama 2nd quarter results were strong, we are not immune to some of macro challenges such as reduced mall traffic and lower spend by international tourists in key resort destinations. The Tommy Bahama team has taken specific actions to address the current retail environment. First, our Tommy's operating disciplines. At Tommy Bahama, inventory levels decreased 3% year over year as the team focused on more integrated inventory management between its retail, e commerce and wholesale businesses, while maintaining a level of inventory adequate to support growth. In the current environment, we think this is a commendable achievement and demonstrates that Tommy Bahama is not only a great brand, but also a business that can execute. 2nd, Tommy Bahama continues to engage our customers in a multifaceted way through direct mail, email and our beautiful stores and restaurants. This quarter, several successful marketing events drove meaningful business. Our friends and family event, Flipside Awards, loyalty cards and other promotional events held throughout the year have worked well. While none of these are new events, the timing of the loyalty gift card shifted from the Q1 of last year to the Q2 of 2016. Success of these events demonstrates our ability to activate our very loyal Tommy Bahama customer base. In addition to specific marketing events such as those outlined above, in an era when many retailers are struggling to remain relevant, our restaurants are a powerful point of differentiation for Tommy Bahama that provide an enhanced level of guest engagement. With an upscale but relaxed atmosphere and exceptional food and drinks, the experience at our 16 island inspired restaurants indelibly etches Tommy Bahama's lifestyle message in the heart and mind of our guests. And last, but certainly not least, is the incredible product that the Tommy Bahama team continues to create. Make no mistake about it, our ability to deliver compelling, innovative and differentiated product is absolutely critical to our ongoing success. Lilly Pulitzer's remarkable strength continued in the Q2. The talented team at Lilly Pulitzer recognized that growing against the incredible Q2 of 2015, which included a 41% comp was going to be a formidable task. The team rose to the challenge with a beautiful product offering and exciting marketing events. They were able to achieve top line growth of 8% and an impressive 32% operating margin. Lilly Pulitzer appears to have unlocked the ability to extend summer. While we were head to head with the impact of the Target collaboration, we stayed strong and returned to positive comps in June July with fresh new buy now, wear now product. As always, Lilly's colorful original prints were important to the collection, but we also introduced a pop up print event offering our customers a limited time only chance to buy new product in a favorite Lilly print from the past. Lilly's marketing emphasizes that it is a year round resort brand. In June, Lilly hosted 120 fashion editors in New York to showcase the Resort 2016 line. This was an important step in further establishing the brand as resort with the fashion crowd and we are seeing great sell through in August with the resort fall product. I also want to give you an update on the after party sale, Lilly's 2 day clearance event held last week. With over a 1000000 visits to our site, this was our biggest event ever with approximately $19,000,000 in online sales. This online event, coupled with coordinated promotions in our stores and Signature stores is a fantastic clearance vehicle that generates a lot of excitement about Lilly and ensures our inventory levels are clean going into the back half of the year. Moving to Southern Tide, the Q2 of 2016 was the 1st full quarter where we have owned the operations of our newest brand. They contributed $9,000,000 to the top line in the 2nd quarter and are on a $30,000,000 pace for the 41 weeks we will own them this year. The initial phase of integration is fundamentally complete and we are working hard on some of the transitions that take a bit more time such as product development and sourcing. We are very enthusiastic about Southern Tide and look forward to nurturing and growing this great addition to our portfolio. To varying degrees, each of our businesses has been affected by the struggles of our wholesale customers who are also contending with a tough retail environment. Because their business is entirely wholesale driven, the greatest proportional impact is to our Lanier Apparel Group. In Lanier, we saw reduced volume in both their private label and branded businesses in the Q2. We have a strong management team and have taken appropriate actions to manage expenses and inventory, but we expect this business to remain challenged in the second half of the year. That summarizes our results by operating group. So I'd now like to take a few more minutes to talk about business, the business by channel of distribution. Distribution is simply how we connect products with consumers. If we are going to win the consumer, we need to be able to deliver product to her when and where she wants it, While not losing our focus on our important wholesale partners, our strategy has been to grow our direct business, which now represents approximately 2 thirds of total Oxford revenue. We have fantastic retail locations with about 40% of our stores in A malls and the rest in lifestyle centers or street front locations. We are very selective about door openings and operate only 146 full price stores in the U. S. New properties such as Disney Springs in Orlando appear to be absolute home runs for Tommy Bahama and Lilly Pulitzer. We are proud of our track record with stores and we will continue to be prudent in making these investments. The other arm of our direct business is e commerce, representing 17% of Oxford's revenue. Success in e commerce has been and will continue to be essential to Tommy, Lilly and Southern Tide's future growth. We will continue to make significant investments in technology and talent to support our e commerce initiatives. Finally, our wholesale channel distribution represents about a third of Oxford's revenue and about half that number is associated with mall based department stores. Recent announcements have made it clear that there are important structural changes happening with department stores. There is and will continue to be ongoing rationalization of store counts. Retailers will also be using various tactics to manage inventory much more closely, including more conservative pre bookings and reducing model stock levels for replenishment programs. While we believe these changes will ultimately be healthy for our industry, there is no doubt that they are having an impact on some parts of our business. It is important, however, to consider how Oxford is positioned from a distribution point of view. We have a well balanced multi channel distribution network. Oxford is not overdoored and we are not overly reliant on department stores. We believe this is one of our most strategic advantages that combined with our powerful brands will be critical to our continued success. With that, I will now turn the call over to Scott Grassmeyer to discuss our consolidated highlights and plans for the remainder of the year. Scott? Thanks, Tom. Please refer to our press release issued earlier today for complete results for the Q2 of 2016. I'll now walk you through a selection of highlights from the Q2 as well as our guidance for the Q3 and full fiscal 2016. In the Q2, consolidated net sales increased 13% to $283,000,000 compared to $251,000,000 in the Q2 of 2015. As Tom mentioned, Tommy Bahama saw an 11% increase in sales with a comp sales increase of 7% for the quarter. Lilly Pulitzer was up against a very strong quarter last year, but delivered an impressive 8% top line increase and Southern Tide contributed $9,000,000 of sales in the quarter. On a consolidated basis, gross margin in the 2nd quarter was lower than the Q2 of 2015, primarily due to Tommy Bahama and Lanier Apparel. At Tommy Bahama, we stayed focused on keeping inventory levels in check and offer deeper discounts primarily in footwear and women's apparel in our off price channels of distribution. As Tom mentioned, we and we discussed in detail in June, we also shifted a key loyalty gift card program at Tommy Bahama into the second quarter. This gave us a sales lift, but also as expected impacted gross margins in Q2. Finally, our Lanier Apparel Group's inventory markdowns were higher year over year. SG and A increased primarily due to incremental costs associated with operating additional retail stores and restaurants as well as SG and A associated with our newly acquired Southern Thai business. In the Q2, our consolidated operating income increased 11% to $39,000,000 Earnings per share were $1.44 compared to $1.27 per share in the same period of the prior year and adjusted EPS was $1.48 compared to $1.32 in the Q2 of 2015. Now to the balance sheet. We continue to carefully manage our inventory levels. The increase in our inventory balance at the end of the quarter reflects the addition of Southern Tide and inventory to support anticipated sales growth in our other businesses in the Q3 of 2016. We ended the quarter with $106,000,000 of borrowings outstanding and $157,000,000 of availability under our revolving credit facility. On May 24, 2016, we amended and restated the facility increasing its size to $325,000,000 extending the maturity to 2021 and other favorable modifications. Looking forward, I would like to walk you through our guidance for the Q3 and full year. We have initiated our guidance for the Q3 of fiscal 2016, which ends on October 29. As in prior years, we expect the Q3 to be the smallest sales and earnings quarter of the fiscal year, which reflects the normal seasonality of the Tommy Bahama and Lilly Pulitzer businesses. For the Q3, we expect net sales in a range from $220,000,000 to $230,000,000 and a loss per share in a range of $0.12 to $0.02 Adjusted earnings per share is expected to be in a range from a loss per share of $0.05 to earnings per share of $0.05 This compares with 3rd quarter fiscal 2015 sales of 199,000,000 and a loss per share of $0.08 on both a GAAP and adjusted basis. For the full year, we have affirmed our guidance of net sales in the $1,030,000,000 to $1,050,000,000 range and adjusted earnings per share in a range of $3.65 to $3.80 Due to LIFO accounting income recognized in the Q2 of 2016, we increased our GAAP earnings per share guidance to a range of $3.43 to $3.58 This compares with fiscal 2015 net sales of $969,000,000 and earnings per share of $3.54 and on an adjusted basis, $3.64 For the full year, interest expense is expected to be approximately $3,500,000 and our effective tax rate is expected to be around 36%. Our capital expenditures for 2016 are expected to be approximately $55,000,000 primarily related to information technology initiatives, including additional omni channel capabilities, new retail stores and the relocation and remodeling of certain retail locations, including a significant remodel of Time Bahamas store and restaurant in Scottsdale, Arizona. Before we take questions, I also want to mention that our Board has declared a cash dividend of 0.27 dollars per share. Don, we are now ready for questions. Thank And we'll take our first question from Ed Yruma with KeyBanc Capital Markets. Hi, good afternoon and thanks for taking my question. I guess first on Tommy Bahama comp, obviously impressive performance. Would the business have comped positively if you didn't have that gift card promotion? And then I guess second, you kept your adjusted guidance consistent. Have you baked in a more conservative assumption around wholesale, which I know you called out during the call? Thank you. Ed, with respect to your first question, I'm not quite sure how to answer it, because the loyalty gift card event is a huge part of the Q2. And if you take it away, there's no way we're going to comp positively. Scott, I don't know if you Yes. It certainly had an influence on the 7% comp. It's really hard to tell without it if we would have comped positively since last year. It was in the first primarily in the Q1. Business did certainly pick up and I think business would have certainly picked up without the event, but whether we have been positive comp or negative comp, it's really hard to dissect. But certainly, we wouldn't have been at a comp as high as 7 without the event. And then the wholesale piece? I'm sorry, will you repeat the question on the wholesale piece? I didn't follow you. Sure. You maintained your guidance for the year on an adjusted basis. You had some cautious commentary around wholesale. I guess, have you incorporated that view into your guidance considering that you did speak for the Q2? Thank you. Thank you, Ed. And yes, 100%. The reason that we're maintaining guidance instead of raising guidance is really because our view on wholesale for the back half of the year is lower than it would have been a quarter ago. So the whole erosion, if you will, is in the wholesale business and it has really nothing to do with the way that we're performing in those accounts and has everything to do with the way that they're approaching the market and their inventory planning. And it's like we said, we think it's probably a pretty smart move for them and hopefully a healthy thing for the industry, but we can't escape the fact that we are feeling some impact from it right now. Great. Thanks so much. Okay. Thanks, Ed. We will take our next question from Pam Quintilliano with SunTrust. Great. Thanks so much for taking my question guys and congratulations on such great execution in a really challenging environment. Thanks. So I have a few for you. Starting with Tommy, you mentioned Scott and I gross margin commentary performance in women's and shoes. Could we just go a little bit deeper about what was going on there, specifically as it relates to the women's business given the relaunch that just happened, not too long ago and just how we should be thinking about that? And then also related to Tommy, Hawaii and Waikiki and how that was doing as well as Japan? Okay. So let me start and then I'm going to flip it over to Scott. And so I'll go in reverse order. In our Asia business, I mean, the bottom line is that we're performing according to plan. I think we're actually a bit ahead of our plan for the year. So as you know, the goal was to reduce some of the infrastructure cost, reduce the operating loss over there, grow the businesses, focus on Japan and Australia and look for opportunities where we could perhaps to go with the distributorship model in certain markets. And what I'll tell you is that we're tracking according to plan. Japan is actually comping really nicely and our losses there reducing. Australia continues to grow and be a small, but a nice market for us. And overall, I think we're going to achieve our goals of loss reduction for the year there. With regard to Waikiki in Hawaii, as you've heard from us, we referred to it a bit in our prepared comments when we talked about international tourists and we talked about it on the Q1 call and probably at some other points that we've spoken with you, but Hawaii has been a challenging market for us for the last year or so. The international tourists are spending a lot less money there. We think a lot of that has to do with exchange rates. But overall, it's been a challenging market. Within that context though, we're very pleased with the way that the Waikiki location has ramped up. They've been in business since late last calendar year. In this summer, in particular, they've trended very nicely and we believe that's going to be a very successful location for us both as a profitable store, but also as a good brand builder, particularly with regard to a lot of international tourists. And now on the women's inventory question, I am going to flip that over to Scott and let him give you a little more detail on that. Yes, Pam, we were we had some excess women's and excess footwear inventory that we needed to clear. We did a special flash sale during the quarter of just women's and footwear centric. There was no men's in that flash sale back in the second quarter. We also got more promotional in our outlet stores to move those categories. A lot of that was of the women's was pre spring, maybe a little bit of early spring, but most of it was pre spring. And it's just we just needed to keep pace and keep our inventories clean. And as we mentioned here, our inventories at Tommy are down even though we have 7 new additional stores and have growth plans. So we're really pleased with the fact that they're focused on the inventory reduction, but it did it ended the margin a little bit this quarter and we did top up nicely at Tommy and that was in men's and women's in the Q2. So we are pleased to see that. So just to follow-up on women's, thank you, that was very helpful. The newer women's product, is that resonating with the tweaks that you have been making or are you pleased with the progress there given the challenging environment we are in? Yes. Keep in mind, Pam, that it takes us more than a year to really make any adjustments between when you sell see retail selling on the floor and when you get to anniversary that and put those learnings into use. That said, we were pleased with what we saw in the Q2. Women's sort of pulled its weight and contributed positively to that comp that we had. So it had a year over year increase in comp stores in e com, which was good to see. Overall, as you know, in the Q1, it was a little more hit and miss. And overall, I think what we've learned in the first half of the year is that we continue to be very strong in women's swim and in dresses, which have always been strong categories for Tommy in women's and we've learned an awful lot in regards to sportswear that we will incorporate into that spring. So good solid second quarter and for the total first half, I think we have learned a lot that will help us next year. Great. And then just one last follow-up on or I should say, question on Southern Tide, because you guys have historically done such a great job scaling your new acquisitions. So how many points of distribution are there currently with Southern Tide? And just how are you approaching it? I know personally out of New York area, I'm seeing a lot more people wearing it now, but it's still very subtle. So yes, just any thoughts on how you're scaling that business? I understand it's very early stages. So I guess just thinking next year It's very early stages and to be very direct about it, our initial focus, this brand was much earlier stage than other acquisitions we've made. And as we outlined in our Q1 call, we thought there was a much better, greater opportunity here than say when we bought Tommy Bahama. Opportunity here than say when we bought Tommy Bahama to really help them by providing a lot of infrastructure and back office type functionality fulfillment through an existing distribution center we have and things like production and sourcing, product development. So we've been very focused on bringing them on to our platform in the 1st couple of months and that's gone extremely well. We think that sets them up well for growth. As you know, currently their business is about 80% wholesale and that's primarily specialty stores and I think they're in about 700 doors or so, specialty store doors. And then they have a very small department store business with 2 of the better department stores there. And in total, that would be probably 5% of their business or something like that. So growth opportunities going forward, we definitely think e comm is 1, wholesale is an opportunity. They've just gotten into doing a couple of licensed stores similar to the Lilly Pulitzer licensed stores. And then a couple of years out, we anticipate that they will open company owned stores as well. Great. Thanks so much for all the detail and congratulations again. Okay. Thanks, Pam. We will take our next question from Jeff Van Sinderen with B. Riley. Yes. Good afternoon. Let me add my congratulations on the improvement in Q2. Thank you. Maybe you can just touch a little bit on how we should think about gross margin in Q3? I know it is your smallest quarter of the year, but just anything we should be considering for gross margin? Yes. You do have the Lilly flash sale in Q3. So that tends to pull down gross margins a bit and also it's a very weak direct quarter. We should we also Lanier who has lower gross margins actually will have 3rd quarter, so it will be a decent quarter for them and then we should have 4th quarter being a little more challenging for them. All that will weigh margins down year over year, probably a couple of 100 basis points year over year with the bigger flash sale and linear being a little bigger piece of the pie weighing into that. Okay. And then your Lilly comps in Q2 were considerably better than I think, certainly better than what we expected. So I am just wondering how we should think about the Lilly business for Q3. And then maybe you can also just kind of touch on, I guess, the progression of business that you saw in Q2 at Lilly and maybe speak to the comparisons at Lilly? I know they get easier in second half. Yes. There is no question about it in the at the back half of the first quarter and early in the second quarter. We really felt the year to year difference with the target collaboration that happened on April 19th last year. So in May, we comped down in the upper teens And then in June July, we sort of roared back and had very strong comps to finish the quarter at a minus 1 comp in Lilly, which we thought stacked up against the +41 last year and I think a +19 a year. 2 years, both years before that. Yes, both years before that. So, +19, +19, plus 41 and then to be at minus 1 this year with a very strong June July, we just couldn't be a whole lot happier with that result. So hopefully that helps. I think that to be fair, I think even this time last year, we were still getting some kick from the whole target collaboration, But we have shown I think in the back half of the second quarter that we can more than overcome that. And so in terms of comp assumptions for Q3 and Q4, I'll let Scott Yes, we had strong comps last year in both quarters, but we still think we can comp positive and we think it will be a more modest rate as we are going against strong comps, but we would expect we'll comp positive in Q3 and Q4, but again more modestly. Okay, great. That's helpful. And then maybe you can just touch just one more if I can throw it in there. Just on inventory, obviously in wholesale, I mean we're hearing this everywhere that some of the major retailers, as I think you pointed to, they're ordering less upfront and they're chasing more at season. And I'm just wondering how that is impacting your planning for second half inventory, how much you're keeping sort of on hand, I guess, to chase that sort of thing? Well, we generally try to avoid being in that business of having a lot on hand to support chase. There are some areas and some specific pockets of business where we do that. But for example in Tommy Bahama that has that's part of why their inventories year to year are lower is that the orders came in a little light and we are trying to keep our inventories a little bit light as well. Okay. That's helpful. Thanks very much. To reiterate what Scott said a minute ago, we feel really good about where our inventories are and we think Tommy in particular has done a terrific job and with the flash sale of Lilly, which is a Q3 event, they came out of Q2 a little bit heavier than last year because last year they did a warehouse sale in Q2 and then the flash sale in Q3. This year we did away with the warehouse sale, which I think was about $4,000,000 last year. So Lilly's, we are in really good shape on inventories. Okay. Good to hear. Thanks very much and best of luck for the rest of the quarter. Okay. Thanks a lot, Jeff. We'll take our next question from Eric Beder with Wunderlich Securities. Yes. Good afternoon. This is Brian Caronia on for Eric. Thank you for taking our question. And I'd also like to offer our congratulations for a great result. So the first question we had circling back to Lilly Pulitzer, which obviously had a once again very successful quarter. But we were interested in if you could give your thoughts on the expansion efforts or the cadence or expectations for expanding Lilly Pulitzer away from the core East Coast region? Specifically, how have the stores and business been doing in more of your most Western most markets, whether that's in Texas or the Midwest? Any sort of commentary on sort of how we look at Lilly going forward would be great? Yes. That's a great question and very timely. We just opened a new store in the North Park Mall in Dallas about 10 days ago and that's sort of the A plus mall in the Dallas market. It's off to a great start. We're very excited about it. We think it's going to be a very successful store and we had our Lilly Pulitzer CEO and key members of our retail team been out in Texas this week and it's never been a huge market for us. We've had a couple of stores out there, but we really believe that we build that. And then we opened the store in Chicago, I guess that was a year ago now and we have been really pleased with the way that that one's worked. So as we build into these markets, we want to be careful and make sure we're building very carefully in supporting these stores well with marketing and other supported markets where we're not as well known, but we believe that we can be successful and we'll continue to build into those markets. Great. And if I could just circle back to the maintenance of guidance for the full year. Obviously, you had certainly this is something we've been hearing from many of your peers in the space that the majority of the wholesale driven retail customers have been pairing back their initial shipments or orders of inventory buildup and having a higher cadence of replenishment inventory in the back half of the year. Could you perhaps in terms of obviously with or you may have seen the Q3 guidance being a bit higher than what us and most of the market has been expecting in terms of bridging that distinction between seemingly perhaps a little bit wider than what many may have been expecting in the Q4 and what we've seen in terms of the cadence of department stores and wholesale retailers driving their cadence of inventory build? Yes, it's really wholesale driven, the Q4, maybe not being as having quite the year over year growth that some would expect. As mentioned earlier, Lanier, we are expecting a fairly weak Q4. Q3, we're expecting to hold okay, but Q4, we're seeing a little lower order patterns and we're just seeing holiday bookings, people booking more conservatively. I'm sure hopefully there'll be some chasing going on. Hopefully there'll be an opportunity to capture some of it. But as Tom mentioned, we're not going to have a ton of inventory to support a ton of that, but it is wholesale driven. It is the maybe the lightness you might feel in the Q4, it is wholesale driven. Okay, great. Once again, congratulations on a great result and best of luck for the rest of the year. Thank you. Thank you. We'll go now to our next question with Rick Patel with CLFA. Good afternoon, everyone, and thanks for taking my question and I'll add my congrats as well. Thanks, Rick. Just a question on your promotional cadence for Tommy. So did your gift did your loyalty gift card event have the same duration and level of discount this year as it did last year? And given how successful it was in terms of driving the comp, how should we think about the back half in terms of promotional events compared to last year? We are curious if there is anything new or incremental to highlight in order to drive traffic? On the loyalty gift card event, I mean, we are very pleased with the way it works. I think it was maybe a few more cards than last year, but roughly comparable to last year. And we just it worked extremely well as did the other 2 second quarter events. We actually had an additional event last year, the Polo promotion that you may remember that we actually dropped this year. So on a combined first and second quarter basis, we actually had one less event, not one more or not the single event. And actually the event sales themselves, we actually drove a little bit higher gross margin year over year, but we had a more concentrated volume within the event. So the event people responded more to the event, but we were able to drive a little higher gross margin in the event. We went with $175 hurdle on the flip side, which worked well and we tend to get a little higher average ticket during that event. And can you also talk about the outlook for your Tommy outlet stores? Clearly, it's been a challenged area of the industry. So I'm curious if you can provide some more color there and any signs of a rebound in tourism in that channel? In outlet stores, that world is changing a bit and I think it has everything to do with the amount of off price that's available all over the place. So as you will have noticed, we haven't opened an outlet store in a while and we're really revamping the way that we merchandise those stores. We've tested it in a couple of markets and have been very pleased with what we've seen so far and anticipate that will probably do that more broadly within our 30 some odd outlet stores that we have at this point. And as you know, there is a number of aspirational luxury brands out there that are deemphasizing the wholesale channel, pulling back on inventories across various categories. So despite the near term challenges that department stores pose this year in terms of less upfront buys, do you see the vacating of these other brands as a growth opportunity for either Tommy or Lilly as you think about 2017? I think not so much for Lilly, but because of their strategy, which is really not they are not into the department stores much at all. In Tommy Bahama, I do think it possibly creates some opportunity to do some more business. Thanks very much and all the best in the back half. Thank you. That concludes today's question and answer session. At this time, I will return the conference back to Mr. Tom Chubb for any additional remarks. Thank you again for your time this afternoon. We very much appreciate your interest and look forward to speaking to you again next quarter. This does conclude today's conference. Thank you for your participation. You may now disconnect.