Earnings Call: Q4 2016

Mar 23, 2016

day, ladies and gentlemen, and welcome to the Oxford Industries 4th Quarter and Year End 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the floor over to Ms. Ann Shoemaker for opening remarks and introductions. Thank you, Shannon, 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 2014 Form 10 ks and our Q2 fiscal 2015 Form 10 Q. We undertake no duty to update any forward looking statements. During this call, we will be discussing certain non GAAP financial measures. You can find a reconciliation of GAAP financial measures to certain non GAAP financial measures in our press release issued earlier today, which is posted under the Investor Relations tab of our website atoxfordinc.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. Oxford Golf results are combined with Lanier Close results and the combined business is now referred to as Lanier Apparel. We previously included Oxford Golf in Corporate and Other. As a reminder, the results of the Ben Sherman business are reflected as discontinued ops for all periods presented. And now, I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO and Scott Grassmeyer, CFO. Thank you for your attention. And now I would like to turn the call over to Tom Chubb. Good afternoon and thank you for joining us. As we begin our new fiscal year, I want to take just a few minutes to recap our 2015 results and then spend some time elaborating on Oxford's strategies for growth and success in the future. 2015 was quite a good year for Oxford with solid growth on the top and bottom line. For the full year, consolidated net sales increased 5% to $969,000,000 and adjusted earnings from continuing operations also increased 5% to $3.64 per diluted share. While both of our principal brands, Tommy Bahama and Lilly Pulitzer made positive contributions to our results, 2015 was clearly a year where Lilly Pulitzer made its mark. Lilly's resort seat brand message was supported by beautiful product, excellent distribution and best in class marketing. The combination proved very powerful, driving an impressive 22% growth in sales and an operating margin of 21% for the year. So what do we see for the future? We firmly believe in Oxford's strategy to own and use powerful brands to drive sustained profitable growth. We have the capital and commitment to add to our portfolio and at the same time, we believe strongly in the future of the 2 major brands we already own. I'll start with Tommy Bahama, our largest business. With its solid men's business and the opportunities we see with our women's strategy, we believe that Tommy Bahama has a positive growth trajectory for many years to come. In the near term, Tommy Bahama has been affected by the macro environment, more specifically by the decline in retail consumer traffic. Like many of our peers, we dealt with soft traffic and comparable sales in existing bricks and mortar stores through much of the second half of fiscal twenty fifteen and that weakness has continued into the Q1 to date of fiscal 2016. In the absence of at least moderately positive comparable store sales, it is difficult to gain operating leverage. In response to the weak traffic, there are several important actions we are taking in the near term. First, for the Q1 of the year, weak traffic is an unpleasant reality and we have factored it into our forecast for the quarter. 2nd, for fiscal 2016, we are paying extra attention to trimming expenses where we can, while being careful not to make cuts that would limit our future growth opportunities. 3rd, during the year, we are refining and enhancing our marketing campaigns with the objective of spurring traffic, customer count and top line growth. Finally, we are continuing our retail store remodeling program this year to give customers an updated look and an enhanced in store shopping experience. Several of the stores being remodeled this year are in key locations. With judicious planning, we believe we will be able to balance short term necessity with appropriate investment in the future of the brand. We remain bullish on the long term growth potential for Tommy Bahama. At the same time, in recognition of recent market conditions, we are planning relatively modest top and bottom line growth for fiscal 2016. Now turning to Lilly. Lilly Pulitzer's strategy is to build on the amazing growth momentum it has generated over the last few years, while at the same time maintaining the mystique that makes this brand so special and appealing. For 2016, this means increasing our investment in marketing to attract new customers through both social media where Lilly is already an industry leader and the addition of traditional advertising such as print magazine ads and commercials on Amazon TV. We will also focus on retaining our very important Lilly loving customers through direct mail and our gift with purchase promotional events. We made important investments in our design team to ensure continued growth in our print business, knitwear and sportswear. We believe in these value creating investments and expect to generate solid growth on the top and bottom line in the Lilly business in 2016 and beyond. Over the last several years, both Tommy Bahama and Lilly Pulitzer have worked hard to develop a strong omnichannel environment for their guests, and we believe this provides an important avenue of growth for these brands. For fiscal 2015, Tommy Bahama's e commerce business was 15% of sales and crossed the $100,000,000 mark for the first time, while Lilly Pulitzer's web business totaled a remarkable 30% of sales. We are really proud of the progress we have made in creating an omni channel experience for our guests and believe it has created a competitive advantage. Within our capital allocation hierarchy, preserving this competitive advantage ranks very high. We have made in the past and will continue to make significant investments in this area. Lanier Apparel, our smallest operating group representing about 11% of total Oxford sales will enter 2016 with some changes in place. While the Lanier team has been able to deliver respectable results through disciplined management, expense control and outstanding execution, opportunities for growth in the tailored clothing business, which is the historical foundation of Lanier Apparel have been minimal. To create a broader set of opportunities for growth, we decided to integrate the sportswear talent within our Oxford Golf Group into Lanier. We believe this strategy will over time enhance our ability to generate profitable top line growth in this operating group. We believe our plans for capital allocation are well balanced between prudent, carefully vetted investments in organic growth, a reasonable dividend policy and our willingness and determination to add brands that have the potential to create long term value for our shareholders. With that, I will now turn the call over to Scott Grassmeier to discuss our consolidated highlights and plans for 2016. Scott? Thanks, Tom. Since Tom covered the full fiscal year, I'd like to walk you through a selection of highlights from our consolidated results for the Q4 as well as our guidance for fiscal 2016. Please refer to our press release issued earlier today for the complete results for the Q4 and full fiscal year. In the Q4 of fiscal 2015, consolidated net sales increased 4% to $260,000,000 with mid single digit percentage sales increases at both Hyatt, Alma and Lilly Pulitzer. The increases were partially offset by a $2,800,000 sales decrease at Lanier Apparel. Breaking the quarter down by month, we saw good sales and traffic in November December. However, in January, our Tahoe and Bahama business began to soften, impacted by declines in traffic. This trend has continued into the Q1 of fiscal 2016. Consolidated gross margin in the 4th quarter on an adjusted basis was 36 basis points lower at 55.9%, and we saw a slight improvement in SG and A leverage. Our consolidated operating income in the 4th quarter was flat with the Q4 of 2014 at $29,000,000 and adjusted earnings were $1.09 per share compared to $1.08 per share in the same period of the prior year. Now to the balance sheet. Our balance sheet remains strong. We have a solid capital structure to support our planned growth. We were pleased with our inventory level, which ended the year at 129,000,000 dollars a level which we believe is appropriate to support the growth in our store base as well as Q1 sales. And as of January 30, 2016, we had $44,000,000 of borrowings outstanding and $186,000,000 of availability under our revolving credit agreement. Our capital expenditures for fiscal 2015 were $73,000,000 primarily related to new retail stores and restaurants, investments in our facilities, IT initiatives and retail store remodeling. Of the $73,000,000 of capital expenditures, dollars 14,000,000 was funded by landlords through tenant improvement allowances. I'd now like to walk you through our projections for next year. For the Q1 of fiscal 2016, we currently expect net sales of $265,000,000 to $275,000,000 Adjusted earnings per share from continuing operations are expected to be between $1.30 1 $0.40 On a comparable basis, sales were $260,000,000 in the Q1 of fiscal 2015 and adjusted EPS from continuing operations was $1.30 For the full year, we currently expect net sales of 1 $200,000,000 to $1,040,000,000 Adjusted earnings per share are expected to be between $3.75 $3.95 On a comparable basis, fiscal 2015 sales were $969,000,000 and adjusted EPS from continuing operations was $3.64 We expect interest expense in 2016 to be approximately $2,000,000 and effective tax rate for the year to be approximately 37.5%. Capital expenditures are expected to return to a more normalized rate at approximately $55,000,000 in fiscal 2016. This is expected to include expenditures associated with opening new retail stores and remodeling existing retail stores as well as investments in information technology initiatives. In fiscal 2016, we expect cash flow from operations to significantly exceed our capital expenditure and dividend requirements. Now I'll move to our fiscal 2016 plans by operating group. As I mentioned earlier, our Q1 Tommy Bahama is off to a slow start due to decreased traffic and we have baked those results into our outlook for the Q1 year. We believe we have great product and our distribution is very clean with beautiful stores and great locations. We're working hard to deal with the macro headwinds affecting the business, particularly the decreased traffic we are seeing. We believe that by executing well and leveraging improvements we've made in our marketing, we will have a good year. Here are some details of our plans for Tommy in 2016. We expect Tommy's top line to grow in the mid single digits with increases in all channels of distribution. While we expect comparable store sales to increase modestly in the year, we are not seeing comp increases in Q1 to date. Tommy is planning to open 7 to 10 new stores in 2016 in the U. S, Canada and Australia. We also have several remodeling and relocation projects of existing stores planned for the year. We also expect another improvement in our Asia Pacific with losses reduced by approximately $1,500,000 We're continuing to explore opportunities to partner with local operators in certain markets. Gross margin is expected to be comparable with last year and we expect SG and A and operating income to grow at a similar pace as top line growth. Lilly Pulitzer is expected to continue to deliver strong top line growth while maintaining a solid operating margin. For fiscal 2016, Lilly Pulitzer is expecting a low double digit net sales increase compared to fiscal 2015 with growth in all channels of distribution. We expect to open 6 new stores in 2016. With a comparable gross margin and modest SG and A leverage, we believe Lilly's operating margin will span slightly in 2016. For Lanier Apparel, we're expecting low single digit percentage increases on both the top and bottom line. Finally, the operating loss in our Corporate and Other segment is expected to increase by approximately $2,000,000 As you think about how the year plays out, this is a good time to remind you of the impact of the seasonality of Tommy Bahama and Lilly Pulitzer sales on our Q3 earnings. Because our Q3 is a significantly smaller sales quarter than the 1st, 2nd, 4th quarters, the fixed expense structure of our retail businesses results in a lower operating margin compared to other quarters. Our plans for the Q3 are close to breakeven on the bottom line. Before we take questions, I also want to mention that our Board has declared a cash dividend of $0.27 per share, representing an 8% increase from the dividend paid in the Q1 last year. Shannon, we're now ready for questions. Thank you. And we'll take our first question from Ed Yruma with KeyBanc Capital Markets. Hi, good afternoon. Thanks for taking my question. I guess first, on Tommy Bahama, you cited obviously some of the macro related weakness. We also noted though that it seemed like you were running, I know you did friends and family during the quarter. How would you think about kind of offsetting some of the natural traffic weakness with promotions? And I guess then how does that flow into either your assumptions for comp or for gross margin? Thanks. Well, I think we did run the friends and family program, Ed, like we have every year for the last 10 or more years. It's been a staple of that time of year. We did do it again this year. We communicated a little bit more rigorously than we have in the past, but it was basically the same program in terms of other promotions that we have pending and this very much factors into our Q1 forecast. Last year we pulled a lot of our spring gift cards that we do typically in connection with Father's Day, we pulled them forward into April of last year, so they were in the Q1. This year they will be in the Q2. So, our soft forecast in Tommy for the Q1 includes not only the impact of traffic, but also the fact that we are moving that promotion out to the second quarter. Got it. And you guys obviously are going to begin a cycle of some very strong Lilly compares. I guess anything you could highlight that you're planning to do from a marketing front or product front that will help you lap those compares successfully? Well, first of all, I think the biggest point I would make and I've said this numerous times I think on these calls and in other venues, but it's very important to remember that we grew sales as much as we did last year, primarily because we added a lot of new customers to our customer database. And those customers don't go away just because there is not a target collaboration this year. So, we've got them in the database. We're speaking to them. We're communicating with them, we intend to retain them as customers. The second thing I would tell you is that we are doing some different marketing things this year in Lilly Pulitzer. We're spending more dollars in absolute dollars in part because we've got a larger business, but we're also spending a bit more as a percentage of sales and some of the things that we're doing that are different are that we're doing some print advertising in magazines, which is something that has not been a part of the Lilly playbook in a long time. And then we're experimenting with some other things, some commercial spots on Amazon TV. I think we've done some promoted pins on Pinterest and some other things. So, two key points is that we are doing more on the marketing front. And the second thing is to remember that we've got all those customers that we added last year or in the database. And so far year to date, I can tell you that we're doing a really good job of playing to all that. We're comping up nicely year to date in Lilly Pulitzer and continuing to grow the customer base. Got it. And one final one for me. Obviously, a lot of major department stores had a relatively weak holiday and they're cutting inventory. I guess, how would you characterize the level of Tommy Bahama in the wholesale channel inventory level wise and how should we think about that business for the remainder of the year? Thank you. Ed, our current forecast in Tommy Bahama actually has wholesale sales for the year going up very modestly. And we, of course, have sought reassurance from all our great wholesale customers on where they stand on orders and have been assured that they still want everything. But to be candid, we are wary of what's going on. A lot of those guys have very challenging businesses right now. So we're watching it closely, but the current forecast does have wholesale going up slightly and that's based on bookings that we have in hand. And we'll take our next question from Rick Patel with Stephens. Thank you. Good afternoon, everyone. Can you just talk about your long range targets for store openings? And I guess in light of what you're seeing with slower traffic, has your thinking changed at all in terms of how many Tommy and Lily stores make sense over the long run? Yes. Thank you, Rick. I think the one thing that we like about where we are with the stores, store counts and the opportunity for future stores is that we are in no way over stored in either brand. So, we're not in a position where we've got too many. I think that we can continue with our store opening plans as we've outlined for several years. I don't think there's huge changes. You know in Tommy Bahama, more recently, we've been focused on some what tend to be a little bit smaller stores and some more fill in type markets. So, we did a couple on the West Coast of Florida within the last year or 2 that were smaller stores in the Naples area that sort of complemented and supplemented our existing Naples store. Still think there's room to do those. And then Lilly, I think our store count is 34 at this point. We've been adding 5 or 6 a year. So I don't think there's a big change in our store opening plans. All that said, the business landscape is evolving rapidly and we're being very mindful of that in evaluating these plans all the time. We're also quite glad as we think about these things that we've got as strong an e commerce business in both brands as we do. As I highlighted in the prepared remarks, Tommy's ecom was at 15% of total sales last year, Lilly's at 30% of their total sales, and Tommy went over the $100,000,000 mark last year. So, we're prepared to play however things evolve over time. Thank you. And can you also update us on the rollout of the new women's product for Tommy Bauma? I know that quarter to date traffic trends aren't ideal, but any read on how that's doing versus the older product and perhaps any opportunity in the wholesale channel for women as we think about 2016? I don't think we're going to see much in the wholesale and women's in 2016. For the most part, that's already booked and we're not expecting a lot of growth in wholesale. In our own retail stores, obviously this is as you pointed out in your question, it's not a great environment to get a good read because the overall business is fairly soft. We're sort of down across the board in Tommy Bahama right now. So, it's hard to see whether we're getting a lot of traction in women's. We are getting a lot of good feedback on it. However, I think the reaction to the imagery that we've had in some of the marketing pieces in our windows and in the stores themselves has been quite strong. People like what we're doing and we have had some styles that have sold through extremely well. And then we've got some other things that haven't done as well, but we've gotten some very good constructive feedback on how we can fine tune that going forward. The bottom line, Rick, is I would say we're pleased with our efforts there, but it's very difficult to get much of a commercial read on it in the current environment. And last one for me that's helpful. Thank you. And last one for me is on the changes going on at Lanier. Is the goal here to improve profitability as you bring the golf team over or are there going to be changes going on either in terms of merchandising or distribution that also present a sales opportunity? Well, both, hopefully. The benefits of the combination, which will take a year or 2 really to realize are that Oxford Golf was part of the Oxford Apparel Group that we sold a little over 5 years ago now. And when we sold that business to Lee and Fund, we retained Oxford Golf, which was really the one part of that business that was an owned brand within the whole Oxford Apparel portfolio. So, it sort of sat out on its own as a less than $20,000,000 business, really is sort of an orphan on its own and it's hard for it to be as efficient as it could be from an operating leverage standpoint when you're that small. So from the if you look at it sort of from the Oxford Golf side, putting it in as part of a larger organizational will help with profitability over time because they can leverage off of Lanier's platform and infrastructure. From the Lanier side, what it does is more and more of their customers just want them to be a private label resource. Their product skills historically are all in the highly constructed tailored business, real dress, trousers and tailored sport coats, more and more their customers are asking them for sportswear type products. They were slowly developing those skills on their own, but by adding Oxford Golf into the mix, they immediately have a high level of confidence in a wide range of sportswear products. So, it should help develop sales opportunities as well as help with profitability, but it won't all happen over time. Obviously, in 'sixteen, we're not planning on seeing a whole lot of that, but we think that, that will develop and help on both fronts. Thanks, Tom. Good luck, Esther. Thanks a lot. And we'll take our next question from Pam Quintiliano with SunTrust. Hey, thanks so much for taking my questions guys and congratulations on the execution in the quarter. Thank you. So I just have a few questions. First, start with the caution on Tommy. Just what do you think is going on with that consumer that's caused this recent step down in traffic? And then how do we think about your online traffic conversion in January and quarter to date relative to the stores? Obviously, you had the improvement in your online sales last year, but are you seeing less visits or anything like that going on? So, I'll start with the first question about what we think is going on. I think there are a couple of issues. Obviously, Tommy is very has very big presence in some markets that have a heavy foreign tourist element. So, a place like Hawaii in particular has a lot of Canadian tourists, Australian tourists, Japanese tourists, other tourists. Most of those places and take Canada as an example, the currency is devalued significantly against the U. S. Dollar over the last year. And so when those folks either they aren't traveling or when they come, all of a sudden things feel very, very expensive to them. And we think that's a significant part of the issue. Beyond that, Pam, I think it's while we do think the tourist part of it is a big piece of it, there is no doubt that it's also domestic guests, the U. S. Guests that's not showing up as much as they did. And we believe it has to do more with sort of what's going on in the financial markets and in the headlines than it does the actual economy. As you know well, I think if you look at most of the key economic indicators, they are really sort of where they have been for the last couple of years, we're in this mode of a painfully slow recovery, but a recovery nonetheless. Particularly at the beginning part of this year, we saw a sort of a disconnect between the economy and the financial markets where we had huge drops in the financial markets and we think for our customer those kinds of events matter a lot and have impacted their willingness to spend money right now. We don't think we're alone either in what we're seeing in traffic. And then online, is it similar in terms of what you're seeing when you talked about January and quarter to date with the retail traffic, there's similar decline online? It has slowed down, but it's online is better than stores. Okay. And then as far as just performance on your restaurant retail concepts, the combo concepts, how have those been doing? And in terms of traffic versus just your pure retail locations? And then also, is there any meaningful regional differences that we should be aware of performance and on mall versus off mall? Okay. So starting with the first one on the restaurant retail combos, I think you have to remember that we've got a big exposure there in places like Hawaii, Palm Desert. So, some of those places have been among our toughest regions in terms of overall performance. If you look at the retail island combos that are outside of that, some of those regions, I think they probably are performing a bit better. So New York, for example, is actually having pretty strong performance year to date. Actually, we're quite pleased with the way that New York has done. Regionally, I would say that the Northeast is the best region probably followed by the Southeast. And then as you get further West, it gets it tends to get tougher. So, the Northeast has been the best and the East generally has been better than the West. Some of that could be attributable to better weather this year versus last year. And then I know you've spent a lot of time talking about some of the tourist locations and some of the issues there and highlighted Hawaii. But given the Waikiki location just opened and the pictures look quite beautiful, how is that doing? Is there any are there any early reads that you could provide for us or any learnings? Yes, well, certainly we're doing a lot of business there. It immediately jumped to one of our top locations in Hawaii. All that said, it's not in any way immune from this sort of general downdraft that you have going on in Hawaii. So it's a bit like women's situation, when you're in a down market, it's a little hard to know how you're doing. We are doing a lot of business there, it's not quite as much as we'd like to be doing, but we're not doing as much business anywhere in Hawaii as we'd like to be doing right now. And Scott, I don't know if you can add anything. Yes. And also, we think we are seeing Japan, we're seeing some good pickups in Japan, which we think Wafi Ki is helping that. So that's encouraging. It's a very small base, but it's encouraging to see good comps in that market. That's great. And then my last question is just on Lilly, do you think that the early Easter and the warmer weather have been benefiting trends over there quarter to date? The calendar for the month of March, which is a big month for us, is really significantly different than it was last year. So, Pam, I'm sure you're familiar with the Lunch at Lilly promotion, which was almost 2 weeks ago now on Saturday, that was a week earlier this year than last year. Easter is shifting that for some school systems ends up shifting the spring break. So, the year to year comparison is a little tough to fully get our arms around, but we think we're doing quite well this year. Yes, so the product looks lovely. Yes, we think we're we believe we're doing quite well. And of course, as you get closer to the end of the month, the timing differences during the course of the month become less meaningful and month to date, we're looking really good in Lilly. Excellent. Well, best of luck and thank you again for taking my questions. Thanks a lot. And we'll move to our next question from Eric Beder with Wonder Lake Securities. Good afternoon. Hey, Eric. Hey. When you look at potential uses of capital, whether it's share repurchases or buying other companies, what are you seeing right now in terms of the potential acquisitions? And what are you looking at in terms of what you want to see for a deal? Well, I think the characteristics of what we're looking for in a potential acquisition really haven't changed over time. We've been very consistent with these really for the last decade. So, we'd like a strong lifestyle brand, a good management team that we're or the type of people that we'd like to continue with, distribution that sort of if you think of it as sort of Nordstrom and up type distribution, that's what we're looking for. And finally, something that's got a got the potential at least over time to have its own retail stores and e commerce business. So that hadn't really changed. In terms of size, we think anything up to $200,000,000 or so in revenue would be a good size for us. If you get much below 25% or 30% in sales, you get into a zone where you question whether it's big enough to spend the time and energy necessary to get it done, but somewhere in that zone is a good zone for us. And there are actually a lot of privately held apparel companies that fit into that size range. So, does that help? Yes, sure. In terms of can you look excuse me. Yes, that helps. When you look at the I forgot my question. I have no other questions by now. Okay. Thank you. You know where to find us. I do. And we'll move to our next question from Jeff Van Sinderen from B. Riley. Good afternoon. Just a follow-up on Lilly in 2016, maybe starting with Q1. Should we think that the comps are going to be 16, maybe starting with Q1. Should we think that the comp might accelerate in Q1 or into Q2? I was just wondering if there's any timing things associated with the calendar shift or kind of how you're thinking about or planning that business? And maybe any color on how we might think about the comp progression at Lilly throughout the year? We had an awfully bodacious comp in Q1 of last year. I mean, we really ended up having it through the whole year. I think the I'm trying to help you out here, Jeff. The first half certainly will be much tougher comps from given the momentum we had last year where last year we comped up 20% and then we comped up 41%. So, I mean, those are certainly tough numbers to go again. I think these shifts Tom talked about pretty much flush themselves out by the end of the Q1. It's just within the quarter. There's a big shift within the quarter, but by the time we get out of the quarter, shifts in the bunch with Lilly and Easter kind of flush themselves out. But the first half are definitely difficult comps. But as Tom mentioned, we have a bigger database. We've got some great marketing plans and we've got great product. We certainly don't expect to match the comp level of last year, but we do expect positive comps even though we're going against a difficult period. And then it will we although we had very, very good comps in the second half at 2015, they're not quite the level they were in the first half. And they're also off of smaller numbers, so they don't drive as much in terms of dollars. Got it. Okay, that's helpful. And then also to follow-up on Tommy, for the Q1 comp expectation there. Any more color you can give us maybe on the order of magnitude of the declines you're running at Tommy so far? I think you guided to if I heard you right, you guided to positive comps for Tommy for the year, if that's correct. Just wondering what you're seeing as far as being the drivers to get the comps positive at Tommy for the year? Okay. So, first, where we are right now is we're comping negatively sort of in the mid single digit range and that's basically what we've got baked into our Q1 forecast. And there are 2 parts, as I mentioned, of what's driving that. First, we don't necessarily see traffic picking up, and secondly, we had a loyalty gift card promotion that hit the end of Q1 last year that won't be in Q1 this year. As to Q2, we have the full loyalty gift card promotion in there this year, whereas we didn't last year. So that should help a good bit with the comp in the Q2. And I think that's part of our assumption of where we're going to get to a positive comp. And then as you get into Q3 and Q4, we were having negative store comps in 2015, so the comparison gets easier. But to be very direct about it, Jeff, things do need to get a bit better from a macro standpoint in terms of this traffic issue or it's probably going to be hard for us to achieve our plan. We think we've got the best we balanced all this appropriately in our forecast and we're playing it straight down the middle, but it does need do need to pick up a little bit. Understood. That's helpful. And then one more quick one if I could squeeze it in. Did you mention what the e com growth rate was for each brand in Q4? And then maybe any thoughts on how much we should think about e com growing this year? Thanks. I don't think we mentioned it, but we can give you a little color on what the e com growth rates were for the quarter. So bear with us just a second. Don't want to give you long route out of 12% at Tommy in Q4 and just under 25% at Lilly. Okay, great. That's helpful. Yes. So Q4 is such a strong e commerce quarter for us. Okay. And then any thoughts on what we should expect for e com growth this year? Yes, we've moderated both comps, some going forward just because they're going against a bigger base, but we still see comp being the stronger comps than our working quarter. Got it. Okay. Good luck for the rest of the quarter. Thanks. Thanks a lot, Jeff. And as there are no additional questions in the queue, I will turn the call back over to management for any additional or closing remarks. Thanks again for your time this That does conclude today's conference. Thank you for your participation.