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#Right now, we expect to sell the inventory in in-line channels.
Even though it's just a timing issue.
Our on-sales position to where we stand within our whole production field has not increased, certainly not domestically, over the last six months.
So, it's a timing issue of getting it in early.
I think we pushed some of our suppliers to get inventory in early because of our growth anticipated for 2016 and don't want to push out our production cycle.
So it's stuff that's spoken for.
We're trying to get in on a much quicker basis.
So I don't anticipate any real downturn in that.
It changes with all of them.
They all have different metrics, and they all have their way to count.
I will tell you, of all the people that have been through, which is certainly at a significantly higher one, there's no one upset with how they're selling or their sell-throughs or using it as a reason to change the showcasing of the brand in their stores.
People are still very, very positive about the brand and about its potential for 2016.
So we take them at their word, and we still see it selling through.
And I think if you look at our stores, the fact that we didn't get an extra turn and there was a lot of some-off price activity in September and within the whole channels, but our stores still comped up over 10%, even domestically for the quarter.
And I could tell you they were up over 10% for the month of September.
Shows you the strength of the brand, and that will manifest itself even at the wholesale level as they clean out some other things as well go forward.
It's hard to tell.
I mean, we have some out there.
We haven't booked really fully spring yet.
I think that there's some to be had, but we're waiting to see what the mix looks like.
I think overall on a worldwide basis, we'll get an increase because, like I said, we have some pricing power internationally where there was currency issues.
That could change the outlook in some of those countries significantly.
Going in reverse order, gross margin, I think, should be fairly equivalent to what it was in Q3.
There may be some slight upside because retail still has a bigger percentage there.
It has a strong quarter coming up, certainly on a worldwide basis.
As far as backlogs are concerned, it's obviously higher in international than it is domestically.
And it's higher in Europe than certainly places like South America and Canada so far ---+ the increases because they're coming into some price increases, and it's early in the season.
But where our strength is, is significantly higher.
I would also tell you that we don't really go through a backlog scenario in China since it's predominantly retail.
And now that's moving into franchising model.
We may move into some of that as we go forward, but that doesn't appear anywhere in here.
And obviously, that would be a big driver of significant upside on the international portion of the backlogs.
Yes.
The amount of unsold we have and the commitment we're making to inventory hasn't changed over the last six months.
Certainly, it's (inaudible) in the United States.
There's some increases in inventory, obviously, in the additional store count and our additional store count around the world.
And obviously, places like China that have gone at 175% and opening a significant amount of doors to have more standing inventory that they have to get ready for.
And domestically, which is obviously our bigger user, has the same; and it's just come in somewhat early.
And if he we'd have gotten an extra turn, it would have certainly looked the same as the top line.
So I think it's a timing issue.
And we don't see anything there right this minute that is of concern.
From what I remember, it was pretty consistent across the quarter.
The comps were better in July and September on a relative basis, although August is still the biggest month for us.
It still came in at, I think, very high singles or very low double digits for the month; so it was fairly consistent.
So far this month, we're seeing mid to high single digits.
But remember, this is now the fourth year.
This quarter starts the fourth year where the stores started to comp at the double-digit basis.
And it's kind of early in the month, and our forecast right now is still for high singles for the quarter.
Yes.
I mean, it's anecdotal at this point; but yes.
My understanding is that there were no issues with our sell-throughs or our margins from all the reports I've seen and people I've spoken to.
September wasn't a great month.
There was no step-up, as we've seen in the last two or three quarters to that extent.
Certainly not anything of the extent that moved from July to June.
So if you take the two quarters together, you could sort of even out some of that the flow.
And we're in pre-lines now.
We have a lot of customers rotating through.
We haven't seen that many.
It just started the end of last week, but those we've seen through here still make the same comments.
It's a timing thing, and we don't think that holds through until the first quarter.
So I don't think we've made any significant adjustments.
I mean, you have to understand the order of magnitude, what we have here.
As we close September, as we get into the beginning of October, we had somewhere between 1.5 million pairs and 2 million pairs on the dock that were ready for shipment.
Now, in some years, we'll ship 500,00; and some years, we'll ship 1.5 million.
And you're saying, in the United States, that 1.5 million is every bit of $30 million-$32 million, which we get a portion of.
We got a relatively small portion this time.
We will ship all of those through October and early November.
As a matter of fact, we've already shipped in excess of a few million pairs in the first week-and-a-half that were here.
And we still have 2 million pairs on the dock.
It looks like our shipping will start to pick up and hold up as we get to the end of October and early November.
At least that's what it looks like now.
So we really haven't changed any production cycles for the time being.
Like I said, we don't have any more uncommitted inventory in production than we had six months ago.
It's higher this year than last year.
That's a part of the growth.
But we also have somewhat more in-house because we didn't get the extra turn this year.
We're getting down into real nitty gritty now, but I'll give them to you this one time so we don't have to worry about it.
Domestic is about 24%; the balance is international.
And now, remember that domestic has a much bigger base.
So international is up ---+ all that I would think, international is up probably somewhere between 35% and 40% in backlog.
And does not include China.
Absolutely.
Yes.
It means there's significant upside.
Well, if you look at the year, the year has somewhere on the street of a 15% or so growth.
I think we could grow that rate and then top of that rate.
So I think it can grow significantly in the first quarter, certainly over the 15% rate.
But a lot of things still have to break.
I mean we're too early to commit to any of that stuff.
But it certainly is possible from where we stand.
Well, it's difficult to paint with such a broad brush.
But it depends on the time of the year as well.
You wouldn't anticipate anybody going through that philosophy as you go into back-to-school.
And certainly wouldn't anticipate that going into holiday season at the end.
But in months like October and like May, you can't see that because you have to clear, certainly for quarter-end, and because you to clear up and get ready for holiday.
And it's not a big selling season anyway.
So you would switch those things around and not bring full-price and sell off.
But you certainly wouldn't continue that strategy going into holiday.
Yes.
But remember, fourth quarter is not historically our strongest.
But they'll open it up, and we should perform well through that and set a very good stage for going into spring.
Thanks.
It includes flows as we and our customers anticipate them.
You'd have to define for me what initial and fill-ins are.
I mean, obviously, no one has tested it yet.
There's some repeat business.
There's some styles that they're trying to comp year on year.
There's some new stuff they're testing moving in their flows to the best they can see.
But it's just the beginning end.
We're not out too far.
I mean we haven't finished booking spring yet.
Yes.
It includes everything that we have out six months, which is historically our norm.
For Dicks, it's not an outrageous piece.
Remember, they're only testing; they're getting started.
And while it's nice and we anticipate and they anticipate some great results in movement, it's not enough to move the needle.
To my knowledge, no final decision has been made on the Super Bowl.
The marathon is in.
We will amoritize it over the life of the contract.
I'm not sure what date it begins.
It might just begin in spring.
But that's all calculated into our marketing spend, so I don't anticipate any wild fluctuations in that.
Well, right now, it's the only one we have and the only one we're talking about.
There's always some conversations going on, but we're such at the early stages of Star Wars.
Remember they haven't even released the new characters yet.
So it's hard to tell even what it would be as we get through the end of the year into first quarter when new characters becomes available, So it seems to have a very positive vibe now.
But it's very, very early in the game.
It's hard to tell exactly how successful it's going to be.
They're a little bit higher in domestic, simply because we haven't changed pricing there; and there's the currency differential.
I think you'll see them balance and actually maybe be higher in international, certainly in our subsidiary with ---+ certainly not the distributors, but the subsidiaries, as this pricing goes through first quarter.
The dollar amounts were pretty equal through August and September.
Historically, September is the bigger booking month for us than August.
But August came in as strong, so obviously a higher percentage increase in August.
I think it meant that people are coming in earlier and getting their orders done earlier, both internationally and domestic.
It turned out to be our biggest booking quarter ever.
And that goes back even to some pretty wild swings we had in the Shape Up days.
So without a doubt, it's been our biggest booking quarter to date.
That is correct.
Nothing significant.
With somebody our size and what happens, there's always something that could be.
But there's nothing that comes to mind right this minute, certainly.
Not that I know of.
We could have gotten more turns.
We are certainly running better.
We anticipate having 50% of our additional space done and operational by then.
So I would anticipate that we would have significant growth in Europe, and a bigger portion will flow through to the operating line.
Yes.
That's the way we're think about it, although there certainly can be switches and changes for domestic as we get through November/December, depending on the holiday period ends.
But that's the way we have it modeled right now.
I think that would be a benchmark and I would tell you that I think there are certainly possibilities of upside from there.
