CAL
#Hi, <UNK>, how are you.
What we said for the year was that we're going to be flat to down low single digits was what we had forecasted as part of the guidance.
And one thing to know, if you take out those planned exits, in Healthy Living we were only down 1.6% in the first quarter.
And down 1.2% on the Contemporary Fashion side, so we expect to continue to see steady improvement throughout, consecutive really, throughout the next couple of quarters.
With Contemporary Fashion really being the one, <UNK>, that's it is going to be the outperformer, not unlike what its really done over the last couple years.
You could almost think about it as Contemporary Fashion being up mid single digits for the year, and the Healthy Living business as being down low to mid, and all in it really comes to flat.
That's kind of how you probably should think about it.
It was interesting, first of all, the one, as you would expect, that was very good was the Vince brand.
And not surprisingly, with Lifestyle Athletic being so important, the way a very, very successful sneaker business within the Vince business and that took off to the point that it almost represented 50% of our total retail business during the first quarter for that business.
So that was significantly up, our Via business was up, Franco was up, Ryka was up and so overall we think pretty good.
Our Sam business had terrific retail performance.
We really saw him gaining market share in the quarter and he opened four stores.
We are going to have 11 open by ---+ now I think by the end of the year.
He's not immune to what's going on in the environment, particularly with sandal sales being tough, but he's really managing the balance of his core and his new items in this business.
We are seeing the consumer really responding very well to new items.
All in, <UNK>, you're never ever completely happy with things, but given the first quarter and the environment and everything that was going on, I think the team has managed quite well.
Because our inventories are lean, we are down 4%, 4.1%, <UNK>, that actually that's really not going to be the case.
For sure, in the first quarter, they were that channel and they will continue to look for off-price product.
But for some of our brands it was a positive because we did have some inventory and resold them for others, we didn't.
So I don't think it is going to have a material impact for us as we move throughout the year.
I think is going to be pretty much a similar balance and total.
Yes, it was about 5% of our total business.
It has historically been in the 3% to 3.5% range.
I think last year it was probably about 3.5%.
It grew significantly: obviously 80%.
The margin impact, our total margins were off basically forty-something basis points.
That's pretty much all attributable to the impact of the business at the dot com.
Mix of two things: shipping is in that, because that would be gross margin we are talking about.
And then there was also a slight deterioration on the merchandise margins as we've been able to now move more sale and clearance products out of our stores because we have the ability to ship from store to satisfy that customer.
And we look at that as being somewhat of a positive in the sense it won't be goods that will sit in the store and not sell.
It will turn our clearance faster.
So about 40 basis points or so, <UNK>, basically the entire decline was because of that, that's the two components.
Yes I can.
Give me one second.
Last year, 2015, May was up low single digits.
June was flat and July was down low single digits.
So yes, they got progressively worse through the quarter and we just went through the hardest part, the first three weeks of May.
Quarter to date it was probably ---+ I would have to ---+ probably half of what we are down would be relatable to the quarter to date, the shift.
Some of those sales are actually going to fall into June because our quarter ends on Saturday.
So we'll have Sunday, Monday, which are part of the event, which last year weren't in May, will fall into June.
But I think when we get the whole thing done, I think its going to be about half of where we're at, so we'll be down, call it, low single digits as we go into the first week of June against a down month and against the rest of the quarter being basically down on a comp basis.
So that's why we're all pretty confident we can still hit our low single digit comp number for the quarter.
Yes, very much so.
The weather, it was really odd, okay, because if you looked at first quarter our business in the Northeast, upper midwest was very good in February and early March and really poor end of April into the first part of May.
Our first part of May, I'm referencing in our current comp trend, is being driven down greatly by the weather in the Northeast this year versus last year.
And so that's gotten better as New York, Boston, Philly, Washington have gotten better weather in the last five to ten days.
The trend has reversed enormously.
We showed a first quarter increase in the northeast because the weather.
Business was so strong in February and March when they really had some poor weather a year ago, and it was better this year.
It is this kind of significance in timing of sales that we have to relate to because, I think it did shift the business quite a bit first quarter and early May.
And we expect to get a lot of that business back, we're getting a lot of that business back and we expect that to continue for the next several weeks.
I think we're talking about it being up high single digits, <UNK>, for the second quarter.
Hi, <UNK>, its <UNK>, how are you.
It was really all over the board, the mix in terms of the performance in the quarter.
There was some brands that were up substantially, there were businesses like Dr.
Scholl's and Naturalizer that we knew that they were going to be planned down.
It was kind of all in, as you heard - Contemporary Fashion down 1.2% and without those exits 1.6% on Healthy Living.
You have to balance all of that because you can't always look at it just on a quarterly basis, right.
You've really got to continue to view through the entire season.
You've got to look at the retail performance and sell-throughs and the inventory at retail.
And when we look at the performance of our brands at retail, and you run through them, its clear that]we've gained market share as a total company out there in the first quarter through [FPD] and the POS channels that we monitor.
So it was really ---+ I wish I could draw a line for you and say that its going to be exactly the same going forward - it isn't.
But we're confident.
As I said a little earlier, that towards the end of the year is the best way to describe it, that we really see Contemporary Fashion really ending up in up mid single digits and our Healthy Living business being down somewhat in low to mid single digits.
So all in, back to the guidance of flat to down low singles.
Yes, we did.
It was ---+ no problem, happy to do it.
It was at Wal-Mart, a fairly sizable category at Wal-Mart that we were getting out of.
They were transitioning to lower price points and was really not a place where we wanted to play, so that was the big one.
Then, in our Naturalizer business, we had some old school, old margin border stitch sandal business that we really needed to evolve and we exited that business too.
Those are really the two big ones.
And again, all in, if you came back we would have been down just 1.6% on Healthy Living without those.
Yes, no problem.
I would say I think the pressure is everywhere, <UNK>, really, when you think about it.
Doesn't matter really what channel it is, I think everyone is looking for inventory productivity.
Period, over and out, the consumer shifting in terms of how they're buying ---+ from brick and mortar, online.
So everybody's trying to figure out how they get the most inventory productivity possible.
Everybody's goal is the same and in terms of the pressure, I see it across the board.
It really depends on the brand, and the channel, but there's no particular one area that is concerning.
Yes.
Canvas, as of itself is doing fine.
We're actually now spanning that category to talk about Lifestyle Athletic, because I think its gone beyond canvas to a degree.
The canvas business is performing at low double digits for the quarter and we think that will continue.
But that whole Lifestyle business is more robust than that and will actually be a bigger part of our assortment going forward too.
You're welcome.
Hi <UNK>.
If you look at it in context, one thing to keep in mind is, in the 111-basis point improvement, 90 of that comes from Famous, even though Famous was down 50 basis points.
Just because of the mix.
Their overall margins are higher than the Company average, where the branded is lower.
As we said here today, the mix impact, and we believe we're going to be able to see similar trends across the business for the rest of the year.
I think it really comes down to the mix piece and how much growth do we get on the branded business and what is that overall impact.
So we took the total up and I think as we get further into the year, we'll be looking to adjust that accordingly.
We're very happy with the team's ability to really manage product costs, manage inventory, really manage the markdowns and allowances as we've seen initial orders come down.
We have seen the associated benefit and reduced allowances and things like that.
So I think we're very encouraged based on what we've seen today, and we reflected that in an overall increase in the guidance.
The current retail environment would suggest that we don't want to get too far ahead of ourself here.
Well, we did open four new stores of Sam, there was five open year to date.
Those carry some big SG&A increases ahead of the sales and consumers that flow to that business.
As <UNK> mentioned earlier, Sam at retail, his same store sales on the few stores that he had open was very positive, high single digits.
So we believe that these are investments that are part of securing the long-term growth.
But they do happen ahead of the sales.
We also, as we've talked about in the last couple quarters, we're developing two new brands - George Brown, the men's business and also DVF.
So those teams and the ramp up of product development, come ahead of seeing the revenue.
When you go through and look at the SG&A excluding those investments, the team's done a great job of really managing their overall expense.
The revenue really leverages those expenses in that business.
You're seeing directly the impact of decisions we've made to invest in that area.
You know, <UNK>, its been so far so good.
Not a lot of business out there right now yet.
So we're in about 200 doors, growing as we move into the back half of the year.
But so far the sell-throughs have been very good.
We're actually quite excited about a new appointment they made, because they've had a little bit of turnover at the design level.
They have a new gentleman coming in, Jonathan Saunders, who has a fantastic track record and along with the new president they hired, we really think as that all stabilizes, too, it is really helpful in terms of generating even more momentum in our footwear business.
But so far, so good ---+ pretty small and really not material to the total yet.
Thank you, appreciate it.
Thank you.
Very small, not too much, <UNK>.
Tiny ---+ a million, something like that.
I think that's fair to say.
Fantastic question.
And you're so right.
With this current environment, and with the initial orders down, speed is really going to be very critical.
And I'm happy to say that we started this project, I would say the middle of last year, so it's about a year.
And we piloted a speed-to-market program in the first quarter of this year, <UNK>, with our Sam and Lifestride businesses and then we've kind of tested it with a number of our other businesses.
And basically if we have a shoe that has been in the market, we can reorder that and have it at retail in about 45 days.
Well, I should say 45 to 50 days, let me make sure I get the right range there.
We're looking at ---+ and that assumes that you have all the materials, there's no changes to the shoe and all of that.
We think speeding up that supply chain is going to be a critical part of the future.
Its almost going to be a necessary capability that we need to have and I think you should expect to see it be a more material - its very early yet, but a more material part of our business in 2017.
But it is a very important part of what we're focused on right now.
Well we weren't doing that kind of rapid replenishment a year ago.
A normal shoe that might have been in the market, was probably 120 days out.
And we're talking about cutting that in half.
We piloted this first quarter, started it with Sam and Lifestride.
We did test it on a few of our other brands.
I think we're going to be ---+ its also about our factory partnerships, and working all of that through too, so this is not just because we want to do it.
It happens, we've got to really work with some of our strategic partners in the Far East.
So we're working our way through all of that as well.
I would say 2017.
I couldn't tell you any more than that today, until we really work our way through in getting a better understanding of what the total impact is going to be.
The spirit of what you're talking about, we feel we're totally (inaudible) on that and we think that's a critical part of our future.
Thank you very much for joining us this afternoon.
We wish everybody a wonderful Memorial Day weekend, and we look forward to seeing those of you that we can during Market Week in a couple weeks.
Take care.
