Pacific Sunwear of California Management Discusses Q4 2012 Results - Earnings Call Transcript

| About: Pacific Sunwear (PSUN)

Pacific Sunwear of California (NASDAQ:PSUN)

Q4 2012 Earnings Call

March 20, 2013 4:30 pm ET

Executives

Craig E. Gosselin - Senior Vice President of Human Resources, General Counsel and Secretary

Gary H. Schoenfeld - Chief Executive Officer, President and Director

Michael W. Kaplan - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Analysts

Alex Pham - Wedbush Securities Inc., Research Division

Stephanie S. Wissink - Piper Jaffray Companies, Research Division

Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division

Jane Thorn Leeson - KeyBanc Capital Markets Inc., Research Division

Andrew Burns - D.A. Davidson & Co., Research Division

Corbin N. Weyer - Robert W. Baird & Co. Incorporated, Research Division

Operator

Good afternoon. My name is Aliya, and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter and full year 2000 (sic) [2012] Earnings Conference Call. [Operator Instructions] Thank you. Mr. Craig Gosselin, you may begin your conference.

Craig E. Gosselin

Thank you. Good afternoon, and welcome to the Pacific Sunwear of California conference call announcing our fiscal fourth quarter and full year 2012 financial results. My name is Craig Gosselin, Senior Vice President, General Counsel and Head of Human Resources. This call is being recorded, and the playback will be available starting today, approximately 2 hours after the call, through midnight on March 27, 2013. It can be accessed at (855) 859-2056 or (404) 537-3406, passcode 19468762. The call will also be archived on the PacSun website at pacsun.com through midnight on May 28, 2013. Your speakers today are Gary Schoenfeld, Chief Executive Officer; and Michael Kaplan, Chief Financial Officer. [Operator Instructions]

Before I turn the call over to Gary, I'd like to note that statements and discussions during today's call will contain forward-looking information about our future financial performance and prospects. Our actual results could differ materially from those contained in our forward-looking statements. Risks and uncertainty that could cause our business and financial results to differ materially from those in the forward-looking statements are included in our Fiscal 2011 Form 10-K and our subsequent filings that we made with the SEC, as well as in the earnings press release we issued today.

These documents can be found on the Investor Relations section on our website at pacsun.com. All information discussed on the call is as of today, March 20, 2013. Pacific Sunwear undertakes no duty to update this information to reflect future events or circumstances. This call, the webcast and its replay are the property of Pacific Sunwear. It is not for rebroadcast or use by any other party without the written consent of PacSun.

With that said, I'll now turn the call over to Gary.

Gary H. Schoenfeld

Thank you, and thanks for joining us. Throughout fiscal 2012, we've talked about the progress we've made with respect to our overall business and certain key financial metrics such as our sales comps, gross margins, merchandise margins, operating costs and our pre-tax operating results. I'm pleased with our progress over the past year and want to highlight some of these major accomplishments.

Comp store sales were up every quarter as were our merchandise margins and gross margins. Our loss from continuing operations for the year improved by $30 million on an as-reported basis and $15 million on a non-GAAP basis. We launched our Golden State of Mind brand platform at beginning of the year, which focuses on redefining PacSun and California Lifestyle, and is tied directly to the creativity and diversity and optimism that is the essence of our brand and our company.

We gained significant traction in our Women's business, which is evidenced by 4 consecutive quarters of positive comps and merch margin increases. We continued to partner with highly covetable emerging brands that are beginning to make PacSun, once again, the brand destination in the mall. We continued to capture market share with healthy growth in our Men's footwear business. Our gross margin for the year was up more than 300 basis points. We launched our new e-com platform in Q3 to further support our online business. We improved our field leadership team with an increased focus on selling and merchandising strategy and execution. And we exited approximately 90 underperforming stores consistent with what we had previously articulated the year before to help better solidify our real estate portfolio as we move forward.

With that brief recap for the year, let me now speak a bit more to our financial results for Q4, and full year 2012 and then a few comments on 2013. Total sales for Q4 were $228 million versus $219 million; for the year, we were $803 million versus $777 million. Excluding the 53rd week, our full year sales comp on a continuing operations basis for 2012 was a plus 2 comp, which included a plus 1 comp in the fourth quarter. This was the first time since fiscal 2007 where we had positive comps in all 4 fiscal quarters. Earnings per share from continuing operations for the quarter was negative $0.33 versus negative $0.39 on a GAAP basis and negative $0.17 versus negative $0.19 on a non-GAAP basis for the quarter.

In our Men's business, we had a flat sales comp in the fourth quarter, ending the year with a full year plus 2 sales comp. Strong growth continued within our emerging brands and in our footwear business, which was driven by the strong performance by both Nike and Vans but was offset by continued declines in some of our heritage brands and the decline in some of proprietary business as the makeup of our brand mix continues a pretty significant shift and in a direction that we are excited about.

The Women's business continued to show a sustained momentum by driving a plus 3 comp in the fourth quarter, which marks a full year of quarterly positive Women's comps and a plus 2 comp for the full year. During Q4, we saw strong performance within Women's tops, particularly wovens, a category that was strong throughout the back half of the year, as well as casual pants, dresses and accessories were other categories that also performed well.

Overall, we enter 2013 focused on the same strategic priorities, which include remaining focused on working closely with our brands, improving speed to market and continuing to enhance the customer experience across all channels. As we announced last month, we launched a new exclusive to PacSun fashion line designed and inspired by Kendall and Kylie Jenner. The collection reflects the optimism, creativity and diversity of our California heritage, and features an assortment of on-trend young women's tops and bottoms that reflects the personality of these 2 talented girls who have grown up very quickly here in our backyard of Southern California. This has been an exciting new launch at PacSun and we believe another reason for new customers to come and give us a look. Kendall and Kylie's social media following is pretty extraordinary, and we look forward to working closely with them to build their brand.

We are also excited to partner with Brandy Melville, which launched in our stores 3 weeks ago in approximately 100 stores. While Brandy Melville originates from Rome, it takes inspiration from the casual California Lifestyle and mixes current trends with everyday essentials, creating a line that has proven to be successful with our customers. Brandy Melville has been very selective in their relationships, with PacSun and Bloomingdales currently as their 2 key wholesale accounts, and we look forward to expanding our business with them in the months ahead as well.

Similarly, the Men's business continues to add more emerging brands to our mix as evidenced by the launch of Neff in early February. Neff is targeted to the snowboarding, skating and surfing lifestyle that aligns well with PacSun's heritage. The brand is off to a very good start, selling well in printable tees, sunglasses and beanies, and with more brands coming back to PacSun, which we will continue to see in the months ahead.

So for the first time since I joined PacSun, we go into the new year, still will a lot of work to do and a very competitive climate, but without any huge obstacles to overcome and with tangible evidence that our strategies and efforts are beginning to take hold. Although Q1 has gotten off to a slower start, similar to what other retailers are indicating and is reflected in our guidance, which Michael will discuss more in a moment, I continue to believe we are taking the right steps towards reestablishing PacSun as a coveted destination for 17- to 24-year-old guys and girls who value great brands and have a confident sense of their own style. We remain focused on the turnaround of our own business by driving increased sales, improving merchandise margins, and appropriately managing our operating costs. We're excited about the 3 new brands that have joined us to help kick off this year as they are consistent with our 3 main strategic tenets: Authentic brands, trend right merchandising and reestablishing a distinctive customer connection that, once again, makes PacSun synonymous with the creativity, optimism and diversity that is uniquely California.

I will now turn the call over to Michael.

Michael W. Kaplan

Thanks, Gary, and good afternoon, everyone. Today, I will discuss our Q4 2012 operating results, our full fiscal 2012 operating results, and then close with comments on our Q1 2013 financial outlook. As a reminder, our fiscal 2012 calendar includes a 53rd week versus 52 weeks in fiscal 2011, and therefore, net sales for the fourth quarter of fiscal 2012 and fiscal year 2012 include the additional week, while comparable store sales exclude the 53rd week.

Our fiscal 2012 fourth quarter financial results were as follows. Total net sales from continuing operations were $228 million for the fourth quarter versus $219 million for the same period last year, primarily driven by a plus 1% same-store sales increase and impact of the 53rd week in the fourth quarter. This marks the first time we have had a positive Q4 total sales comp since 2007. Average sales were up 8%, offset by a decline in total transactions of 7%. Gross margin as a percentage of net sales is approximately 21%, which marks a 180 basis point improvement over the same period a year ago. Contributing to the improvement in gross margin was a 120 basis point increase in merchandise margin combined with the decrease in other costs, primarily occupancy.

Our ending inventory was up versus last year due primarily to timing of a 1-week-later end to the fiscal year, combined with an earlier spring floor set, leading to increased in-transit inventory. Store inventory per square foot at fiscal year-end was down 11%.

SG&A expenses were approximately $63 million or 28% of net sales for Q4, which is flat as compared to the same period a year ago. SG&A expenses during the 53rd week represented approximately $3 million. Adjusting for the impact of the 53rd week, SG&A expense as a percentage of net sales in the fourth quarter would have been 100 basis points lower than last year. We continue to actively manage our cost base and remain pleased with how these trends align with our declining store count. We recorded an income tax provision of $0.3 million for the quarter, which reflects the continuing impact of the valuation allowance against our deferred tax assets.

On a GAAP basis, we reported a loss from continuing operations for the quarter of $22 million or a 33 -- or a negative $0.33 per diluted share. This compares to a loss from continuing operations of $27 million or a negative $0.39 per diluted share for the same period a year ago. On a non-GAAP basis, excluding onetime store closure charges of approximately $0.6 million and the current period loss on our derivative liability of approximately $4 million and using a normalized annual income tax rate of approximately 37%, we reported a loss from continuing operations of approximately $11 million or a loss of $0.17 per share versus a non-GAAP loss of approximately $13 million or a loss of $0.19 per share last year. This favorability is a direct result of delivering a comparable store sales increase of 1% for the quarter and higher gross margin.

During the fourth quarter, we closed 78 stores, ending the quarter and fiscal year with a total of 644 core and outlet stores versus 733 a year ago. Looking ahead, we do not have plans to prematurely exit additional stores. However, we continue to evaluate individual store performance as leases come to their natural expiration, to determine whether it's advantageous to extend those leases. This evaluation process could lead to closing up to approximately 20 to 30 stores during fiscal 2013.

I will now provide comments on our full year fiscal 2012 results, which have been reported on a continuing operations basis. Total net sales from continuing operations were $803 million this year versus $777 million last year, primarily driven by our plus 2% same-store sales increase over the prior year. This marks the first time we've achieved the full year positive comp since 2007. Average sales were up 6% offset by a decline in total transactions of 4%.

Gross margin as a percentage of net sales was approximately 25%, which marks a 310 basis point improvement over the same period a year ago. Contributing to the improvement in gross margin was a 220 basis point increase in merchandise margin, combined with a decrease in other costs including occupancy, which was favorable by 70 basis points, and distribution, which drove the remaining 20 basis point improvement. SG&A expenses were approximately $239 million or 30% of net sales for 2012 as compared to 31% as a percentage of net sales for 2011. We recorded an income tax provision of $0.8 million for the fiscal year.

On a GAAP basis, we reported a loss from continuing operations for the year of $52 million or negative $0.70 -- $0.77 per diluted share compared to a net loss of $82 million or negative $1.23 per diluted share for the prior year. On a non-GAAP basis excluding onetime store closure charges of approximately $0.6 million and using a normalized annual income tax rate of approximately 37%, we reported a loss from continuing operations of approximately $32 million or a loss of $0.47 per share versus a non-GAAP loss of approximately $47 million or a loss of $0.71 per share last year. This favorability was a direct result of delivering a comparable store sales increase of 2% for the year and improved margins. As of year-end, we had approximately $49 million in cash and did not have any borrowings under our credit facility during the entire year.

I will now shift gears and talk about the financial outlook for the first quarter of 2013. Like many other retailers, we have been experience a challenging -- we've been experiencing challenging economic headwinds and unfavorable weather in parts of the country, which have negatively impacted customer traffic into the first quarter. Our central and northeast regions are experiencing mid-single-digit negative comps quarter-to-date, while the remainder of the country is delivering low to mid-single-digit positive sales comps quarter-to-date. We are cautiously optimistic that traffic and sales will pick up as temperatures warm up in the impacted regions through the remainder of Q1.

As of today, we expect to close approximately 7 stores during the first quarter to end the quarter with approximately 638 stores. Our sales comp guidance for Q1 is a minus 3% to a plus 1%. Our estimated revenue is in the range of $160 million to $167 million. We are targeting our gross margin rate including buying, occupancy and distribution costs to be in the range of 21% to 24% versus 23% last year. We expect SG&A expenses to be in the range of $54 million to $56 million.

Assuming a normalized annual income tax rate of approximately 37%, this translates to a non-GAAP net loss per share from continuing operations of $0.17 to $0.24 for the quarter compared with a non-GAAP net loss per share from continuing operations of $0.20 last year. Our non-GAAP net loss per share from continuing operations guidance also excludes the quarterly impact of any change in the fair value of the derivative liability due to the inherently variable nature of this financial instrument.

Operator, we will now open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And you do have a question from the line of Betty Chen.

Alex Pham - Wedbush Securities Inc., Research Division

Alex Pham on for Betty. I was wondering if you guys could just share any additional color on the Kendall & Kylie collection, how that's performed during the quarter and what we can sort of expect in the upcoming deliveries? And then do you guys have any addition collaborations with other celebrities, maybe planned in the future?

Gary H. Schoenfeld

So I think important for us was they really reflect who our customer is and the lifestyle that we want to project. So this was less about, "Gee, let's go get a celebrity," but rather about how can we find an individual or in this case, 2 sisters, that we think reflect who we are, have a great sense of style, and that we could build a brand with over the next few years. So we're not looking to just have this be just a short-term collaboration, we really view this as launching a brand. Not going to get into specific sales information other than we're pleased with how it started. Next delivery will be hitting stores in a couple of weeks, and as I said, for us this is about building a brand together with them for some period to come.

Operator

Your next question comes from the line of Adrienne Tennant.

Unknown Analyst

This is Brian on for Adrienne today. Just as like a follow-up to that question, I was wondering just quickly along the lines of becoming a longer-term kind of brand that piece on, do you see it progressively becoming a larger part of the mix perhaps in FY '13? And then if I could just ask one more, I was wondering if you could comment on how you're planning inventories here at the end of 1Q '13, just kind of from our store checks, the inventory across all the stores we're checking looked great, especially on a clearance level, year-over-year, so I was just wondering if you guys have any other color on that, that would be great.

Gary H. Schoenfeld

So we continue to be disciplined in terms of how we manage inventory. We think that we demonstrated that over the past couple of years. We've added a new Vice President of Merchandise, Planning and Allocation to the team who joined us in the last 60 days. So continuing to make our inventory more and more productive to help drive further improvements in merchandise margins remains a high priority for us. As to the Kendall & Kylie collection, there's not a lot more for me to comment other than what I said before, which is our intention is to work closely with them to build a brand, we're excited about what it can be. Our first step has been a good one, but can't predict yet where it's going to go. But our hope is that it becomes a meaningful brand in our stores and we're excited about how it started and we'll certainly share more with you as the brand develops and it progresses through the year.

Operator

Your next question comes from the line of Steph Wissink.

Stephanie S. Wissink - Piper Jaffray Companies, Research Division

Guys, I just have a couple of questions on the mix and I think the prior questions were alluding to this a little bit, but could you give us an idea of your brand concentration relative to what we've seen historically, if you exclude out your private label, just looking at the core third-party brands? And then separate to that, just the balance of sales across categories, if you could give us an update on the current mix of business, Men's, Women's, accessories, footwear? Just give us some sense of where we're starting to see some of that brand penetration.

Gary H. Schoenfeld

So we don't break out specific brand performance. I think the most significant trend that continues -- that we've alluded to before and again is really the distinction of New Emerging brands and our footwear brands led by Nike and Vans, really driving the growth in our Men's business and the mix of heritage brands that were the drivers of our business when I got here 3 years ago, that has changed in a pretty profound way. I think that if I were to look at our top 10 brands 3 years ago versus today, I think that out of the top 10 at that time, Hurley and Volcom would continue to be top 10 brands as we look ahead to 2013. But those would probably be the only 2 that would make the top 10 in 2013 from that list back in '09. And conversely, you're seeing a new group of brands plus Nike and Vans really drive the Men's business going forward. On the Women's side, as we've talked before, she's first and foremost shopping about fashion, and trend, and fit, and fabrication, and styling and price certainly playing an important piece into all of that, and brand isn't necessarily a primary driver for her. Although at the same time, she still appreciates the value of certain brands. And if she loves a certain item that is from a brand, she's prepared to pay a bit more and recognizes what goes into that brand. So Roxy and Billabong continue to be brands that you'll continue to see in our Women's merchandising mix. We also continue to see a crossover with some of our Men's emerging brands into the Women's side of our business, but that's part of why the strategy of an opportunity like working with Kendall & Kylie is interesting to us because we want to create more opportunities for brands to be meaningful and a point of difference on our Women's side of the business.

Operator

Your next question comes from the line of Jeff Van Sinderen with B. Riley.

Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division

I wonder if you could talk a little bit more about what you see in your business trends in early 2013 in terms of traffic and conversion, I know you said it's been generally slow. But maybe you can just separate out what you've seen in the colder weather markets versus, for example, on the West Coast. In other words, do you think it's all weather, how much of it -- how much of the slowness do you think is the macro? And then I have a follow-up question.

Gary H. Schoenfeld

So I hate talking about weather, but it at times of the year is a reality. So as Michael shared and that's more detail than we typically get into on these calls, we are seeing a disparity between a warmer weather, more normalized markets where comps are on the plus side and then parts of the country that compared to a year ago are significantly colder. We track that reasonably closely and the variances we're seeing right now, right at the spring – peak of spring break, which is a pretty important time for most of us and certainly for PacSun, average temperature variances right now are running as much as the high teens to as much as 30 degrees cooler than a year ago at this time. And unfortunately, Mother Nature doesn't seem to be cooperating with us as we look out the next 10 days if the weatherman is right. So that is a factor that's at play and we're seeing that disparity, and I think what Michael shared with you in terms of the difference between a plus side in the warmer markets and negative side where it's significantly cooler year-over-year is some reality, and this is a very – this is kind of peak time for the quarter is happening right now these next couple of weeks. Is there a second issue that was pretty well chronicled in February, whether it was payroll taxes or other things that was stymieing transactions? Yes, transactions were certainly lagging in February. Having said all that, we continue to believe that we're making progress in the business, and hence, the guidance that we've given for the quarter somewhere in that minus 3 to plus 1 is our best thinking in terms of how we think the quarter's going to unfold.

Jeffrey Wallin Van Sinderen - B. Riley Caris, Research Division

Okay. And the guidance that you gave, are you assuming there that you're more promotional in Q1 versus last year? I'm just sort of trying to understand that, because you've closed quite a few stores, and I would think that if you're running sort of at the better end that your gross margins -- that you'd get a little more leverage, I guess, in gross margin on occupancy. So maybe you could just frame that. And then also how much further do you think you can reduce SG&A going forward this year?

Gary H. Schoenfeld

So as to margins, I think we all know that, unfortunately, the way retail works, which is if the marketplace gets behind then the marketplace gets more promotional. So yes we're anticipating the marketplace being more promotional, not dramatically so, but incrementally, more promotional. That's our view of what is already happening in the mall. And so yes, we -- reflected in that guidance as we think we're going to have to be a bit more promotional than what we would have thought going into the quarter. The second part of your question was on SG&A. No, I wouldn't say that we see a lot -- as we've closed stores, we've worked hard to continue to find ways to cut SG&A. The truth is whether we're operating 800 stores or 600 stores, the infrastructure doesn't change that dramatically. But nonetheless, and Michael's done a great job championing this over the last 18 months, we've challenged ourselves to say, we have to continue to find ways to bring SG&A as we do reduce our stores by about 200. But as we're now at more stabilized door count, we don't see taking the scalpel a lot deeper in terms of SG&A.

Operator

Your next question comes from the line of Jane Thorn Leeson with KeyBanc.

Jane Thorn Leeson - KeyBanc Capital Markets Inc., Research Division

I just had a question on the brand side, how many more brands are slated to be added this year that you don't have?

Gary H. Schoenfeld

Not going to be specific in answering that. But what I'll say, in general, is we continue to be excited about the mix that we have today. So I think that's the first thing that's important to communicate and we look at the brand mix that we have today as exciting drivers of our business going forward. That being said, there are some other brands that we would like to have in PacSun, and I think you'll see a few more show up in PacSun as the year continues to unfold, of brands that have a reasonable scale. Beyond that, one of the things we're committed to do is also be a place where new brands that may not be even on our radar screen at the beginning of the year, but where new brands begin to emerge and we start to do business with them as well. So that'll just continue to be part of how PacSun operates from this point going forward, which is one of the strengths that the old PacSun had many years ago.

Jane Thorn Leeson - KeyBanc Capital Markets Inc., Research Division

Okay. And then also on adjacent product categories, I know that sometime towards the end of last year, you were testing or adding a little bit. How are adjacent product categories performing and then any growth plans for them?

Gary H. Schoenfeld

Can you clarify what you mean by adjacent product categories?

Jane Thorn Leeson - KeyBanc Capital Markets Inc., Research Division

You had beauty and you had a couple of other non-apparel and non-footwear.

Gary H. Schoenfeld

Yes, thank you. So yes, we were pleased with beauty. Again, I give the team credit for feeling like our customer would embrace that in our store and we were pleased with the reaction to that. Footwear, as we've talked about, continues to be a category that we see growth in. And as we add a brand like Neff, that certainly adds another dimension in terms of some other non-apparel categories for us as well. So do believe accessories are an important place for us to play. It's part of where brands can really win, but it also reflects today's consumer that may not always have $50 in their pocket to spend but wants to find something else that they can add to an outfit or change things up a bit, and accessories play an important role in that.

Jane Thorn Leeson - KeyBanc Capital Markets Inc., Research Division

And just so we know how much of it is accessories, like what penetration percentage of the business is accessories today, and what sort of is an intermediate goal?

Gary H. Schoenfeld

It's in the teens, and I think has moved from the low teens to the mid-teens, and I think that'll continue to incrementally progress. We're not intent on that becoming 30%, 40% of the business but we do think it could continue to be a grower for us.

Operator

[Operator Instructions] And we do have another question from the line of Andrew Burns with D.A. Davidson.

Andrew Burns - D.A. Davidson & Co., Research Division

I was hoping you could spend a little more time on merchandise margins and your thoughts for this year. You had a solid year last year, improving 220 basis points. Looks like the first quarter gross margin guidance could imply at the low end at least merchandise margin contraction, given that the brand mix continues to evolve, and could you just highlight some of the headwinds, tailwinds, and how you're thinking about that for '13?

Gary H. Schoenfeld

Yes, it's a great question. I mean, ultimately, this business really is about sales and margins and inventory productivity. So a really important topic. I think I said on the last call that somebody asked expectations versus kind of our guidance around 200 basis points for last year on that last call. And said, I don't think that's a realistic expectation of improvements in 2013. But we would like to think that we could continue to improve margins even if Q1, things we've already talked about in this call, may prevent us from having -- achieving merchandise margin improvement in Q1, we'd still like to think that we're able to achieve improvement in merchandise margins for the year. I'm not going to be more specific about what that is, but is 10 basis points what we would consider a real improvement in merchandise margins? No, we would certainly like to see it be considerably more meaningful than that. I guess -- but I'm going to stop short of saying a lot more. So it's a priority, and not only for this year but over the longer term, I guess I would feel comfortable saying, over the longer term, do we think that there's the potential of another 100 or 200 basis points of merch margin improvement? Yes, I'd like to think that we've got our sights set on achieving that. What time horizon that unfolds kind of remains to be seen but it definitely is a priority.

Andrew Burns - D.A. Davidson & Co., Research Division

And outside of the weather impact, as the year progresses, given some of the brands you're bringing into the store, would you expect potentially or see the potential for a less promotional activity or that being a benefit to '13 relative to '12?

Gary H. Schoenfeld

Boy, I wish I knew the answer to that. I can tell you, I feel good about the quality of our merchandising assortments. I think what our designers and our merchants and our brand partners are working on, what I've seen makes me excited about the prospects of the business as a whole. But I'm not going to be the one to predict what the promotional environment is going to look like. In fact, I'll say, I think overall, the shift that we've seen in the last couple years to a pretty promotional retail environment, we're not counting on that abating. And for us, the challenge is, like anybody else, to create strategies that says we can win even within a promotional environment.

Operator

Your last question comes from the line Corbin Weyer with Robert W. Baird.

Corbin N. Weyer - Robert W. Baird & Co. Incorporated, Research Division

It's Corbin calling in for Mitch Kummetz. I just had a quick housekeeping question here. Michael, could you tell us the sales and earnings impact of the quarter from the 53rd week?

Michael W. Kaplan

Yes. So the sales was $8 million and from an EPS standpoint, it was about $0.01.

Operator

And there are no further questions at this time. And I would like to now turn the call over to Gary for any closing remarks.

Gary H. Schoenfeld

Great. Well, thank you, all, for joining us. Appreciate it very much. Have a good afternoon.

Operator

Thank you, ladies and gentlemen, for participating in today's conference call. You may now disconnect at this time.

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