DSW
#We have not provided specific guidance around the actual Q4 margin rates, but I think if you do the math implicit in the fourth quarter margin rates, is a total decline in the 400 basis point range.
We do think we have taken a fairly conservative approach to that.
We think that there may be some upside as we see the success of the events, but we will have more to come on that in our fourth quarter as we see the fourth-quarter results reported in March.
Sure, <UNK>.
Thank you.
The incentive comp benefit in the full year is approximately $16 million, of which just over $11 million of that benefited the third quarter.
The balance falls into the fourth quarter.
The other areas that we have looked at in terms of expense reductions includes open positions, holding on certain headcounts, looking at areas of variable expenses that we could control, that we can reduce easily and quickly.
We've also looked at flexing our storage expenses appropriately with the sales declines that we are seeing.
Those are the primary areas that comprise the balance of that $27 million.
And as I mentioned before, one of the areas that we are increasing in using some of that savings for is to reinvest in some marketing to ensure our messaging is resonating with our customers.
In terms of future guidance, I'm going to defer on that, as we are in the process preparing our plan, and we will have more information in terms of our outlook at a future date.
Okay.
So I think ---+ I think year over year is $8 million in Q3 and what, $6 million in Q4.
If you're asking how is it going so far, we don't comment on intra-quarter performance.
But if I misinterpreted your question, let me know, <UNK>.
Okay.
Thank you.
Well, we have learned a lot.
I think I have said before that when a customer is within driving distance of a 25,000 square foot store, but they're closer to a 10,000 square foot store, they end up gravitating to that 25,000 square foot store.
That was very instructive to us as we go forward, in terms of locating these small format stores.
So yes, there's definitely real estate learning.
Well, I think there is countervailing influences.
There is some spin-up, particularly right now, in terms of the competitiveness, and obviously the transparency of pricing, that causes us to need to be sharp and on our toes, and continuously assessing our value proposition compared to the relevant competitors.
We've already ---+ we have been doing that every quarter, but next year, we will put in place a tool that will allow us to do it dynamically, which is just going to give us much greater information with more frequency, so we can react more quickly.
But I think the things that worked in the other direction, are things like assortment planning.
Things like order routing optimization, and it is those kinds of systemic technologies that are going to help us offset whatever there might be, in terms of competitive pressure.
We don't think that we are in a shrinking margin situation.
We think that right now it is taking more compelling value to get the customer to get up off the couch and either go to her computer or go to the store and we are reacting to that situation that exists.
And hopefully we are reacting strongly and it will have the desired impact.
I don't think the current situation is necessarily indicative of longer-term trends, and we do have some things that will fight whatever that competitive impact is.
We are taking a look at it right now, and it will be part of our next year planning process.
It is possible, but we may need to tweak that, but we have not made that decision yet.
<UNK>, can I just tack on something.
When you think, <UNK>, about fourth quarter, we have said we're going to get more aggressive, and that is true, compared to last year.
But a different perspective on what we are going to do in fourth quarter is that we are going to use our promotion and marketing plan to take advantage of an opportunity that we've always had in the fourth quarter, and let me tell you what I mean.
Just like other retailers, as we move from October to November, and November to December, customer traffic increases.
However, unlike other retailers, our capture rate, our conversion rate tends to decline.
And if you actually look at our weekly sales, our October weekly sales are greater than November, and November is greater than December.
So it's an anomalous situation, that we should take advantage of.
That's why, when you go into our stores right now, you will see a much stronger set of collateral to support gift giving.
Not just accessories, but shoes, as well.
And so we're going to take advantage of that additional traffic that naturally comes into our stores, and we are going to convert more of those customers by virtue of our offers and by virtue of our holiday gift giving stance.
And so yes, we're ramping it up versus prior year, but I think what we are doing is taking advantage of an opportunity we have really had, and haven't taken full advantage of.
Hopefully that helps.
Yes.
It certainly does.
I think the advantage, or the opportunity that we have in Q4 is somewhat unique.
But, we are going to take the learnings that we get from this Q4 and apply to those other parts of the year where it makes sense to.
And so hopefully that helps you understand where we are in our thinking.
Okay thanks, <UNK>.
<UNK> what I would tell you is for the past two years I've been working with our leadership team to build our strategy.
So, frankly, very much aligned with what we have been communicating.
And our goal would be, when we have our Q4 earnings call, to give you some updates on some tweaks that we would likely make to our strategy but I don't see it as any material change from the work that we have already been doing.
Thanks, <UNK>.
Sure.
The CAD80 million investment is in long-term investment.
And the short-term investment shift to long-term during the quarter reflects a shift of our investment management to an external third-party, and the intention at the end of the quarter for those investments that were moved to a third-party to be held long-term.
Thanks very much, and thanks to all of you on the call for your interest and your attention today.
And I hope that you and your families all have a very happy Thanksgiving holiday, and I hope we all have a successful Black Friday weekend.
Thanks again.
