Good afternoon, and welcome to Shoe Carnival's Fiscal Year 2014 Third Quarter Earnings Conference. Today's call is being recorded and is also being broadcast via live webcast. Any reproduction or rebroadcast of any portion of this call is expressly prohibited. This conference may contain forward-looking statements that involve a number of risk factors.

These risk factors could cause the company's actual results to be materially different from those projected in such statements. These forward-looking statements should be considered in conjunction with the discussion of risk factors included in the company's SEC filings and today's press release.

Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date.

The company disclaims any obligation to update any of the risk factors or to publicly announce any revisions to the forward-looking statements talked about during this conference call or contained in today's press release to reflect future events or developments. I will now turn the presentation over to Mr.

Cliff Sifford, President, Chief Executive Officer of Shoe Carnival, for opening comments. Mr. Sifford, please begin. .

Thank you, and welcome to Shoe Carnival's Third Quarter Fiscal 2014 Earnings Conference Call. Joining me on the call today is Kerry Jackson, Senior Executive Vice President, Chief Operating and Financial Officer. For today's call, I'll give a high-level review of the company's third quarter performance and provide some insight into the holiday season.

Kerry will review the third quarter financial results, along with fourth quarter guidance, and then we'll open up the call to take your questions. .

We are pleased to report that our comparable store sales for the third quarter increased 2.3%, driven primarily by the power of the fashion boot category for the family. Although store traffic was down low-single digits, increases in average unit retail were significant, resulting in mid-single-digit increase in our average transaction.

Strong boot sales at high margins allowed us to increase our overall merchandise margin by 20 basis points while continuing to clear out the last of our spring and summer merchandise.

We believe that our key initiatives, including national advertising, better brands in our women's department and our reinvigorated e-commerce presence, are helping us to bring new customers to our store and our website..

Gross profit was flat as a percent of sales versus third quarter last year, while SG&A was deleveraged by 60 basis point as a percent of sales, resulting in EPS for the quarter of $0.54, which is above the previously stated guidance of $0.45 to $0.51. .

We ended the quarter with inventory down approximately 0.6% on a per-store basis, which is in line with our expectation. .

I continue to be pleased with our merchants' execution of our turn initiative as they lowered inventory levels in our smaller-volume stores, while maintaining depth of key seasonal items in core basics. .

Although we don't report e-commerce sales separately, we are very pleased with the sales increases we experienced for the quarter. On September 16, we transitioned away from our third-party fulfillment arrangement and moved to a ship-from-store fulfillment model.

Our stores' associates have embraced this strategy and are executing at a very high level. .

Today, we have 250 Shoe Carnival stores capable of fulfilling e-commerce orders every day. As this business continues to grow, we will add additional stores to this program, eventually expanding ship-from-store to all stores.

This initiative not only expanded the selection of styles but it also increased the depth and sizes available online, which in turn improved conversion. .

For Thanksgiving and Black Friday, we also utilized our Evansville distribution center to fulfill promotional product, relieving pressure on our stores during this very important sales period. In addition to ship-from-store, we also launched our first ever mobile app during the month of September.

This app gives our e-commerce team the ability to interact with our customers through games and contests, in addition to giving us a new avenue for target marketing. .

The Shoe Carnival loyalty program, Shoe Perks, continues to contribute to our overall results with members shopping more frequently and spending more on average than nonmembers. The company added approximately 750,000 new members in the third quarter, an increase of 58% compared to the same time period last year. .

With a total of 5.6 million active members, third quarter sales from Shoe Perks members increased 104% to represent 43% of total sales, as compared to 23% for the same time period last year. For the year, we have added over 2 million members to this program. .

Continuing with marketing. Although we generated a comparable store sales increase all 3 months of the quarter, I am most pleased with the 2.6% comp store increase in October, which was on top of last year's October comp store increase of 5.4%. .

We felt this is a direct result of our national advertising campaign, which highlighted our large selection of fashion boots for the entire family, giving us terrific momentum as we entered into the key selling season for boots. .

Moving on to merchandise. Early this year, we identified boots as a key opportunity for the second half of the year. Our merchants planned for it, our marketing team built their plans around it and our stores have boots prominently displayed. I believe our boot assortment is the best selection of boots we have ever offered and the strategy is working. .

Season to date, sales in boots for the family are up in the high 20s on a comparable store basis. This strong boot trend continued throughout the month of November, as boots for the family produced a comparable store sales increase in the 30s. .

Looking at each department now, in our women's nonathletic department, sales for the quarter were up low single digits on a comparable store basis. Boots were the primary story here with comparable store sales increase in the mid-20s.

Although dress shoes ended the quarter flat on a comparable basis, we did see a sequential improvement in the sales as we progressed through the quarter. .

Other strong categories were junior flats and vulcanized canvas. We continue to experience a downward trend in boat shoes, athletic sandals and sports sandals. .

In our men's nonathletic department, we ended the quarter down slightly on a comparable store basis.

Although we continue to see decreases in boat shoes and soccer slides, which have traditionally been the drivers for back-to-school, this year, we experienced a shift to canvas casuals and fashion boots, both of which grow double-digit comparable store sales increases for the quarter. .

Our children's business ended the quarter with a mid-single-digit comparable store sales increase. For girls, the quarter was all about boots and canvas. For boys, basketball, running and canvas were the key categories. .

In adult athletics, comparable store sales were up low single digits for the quarter. We experienced a nice quarter in men's and women's running, men's and women's canvas, along with men's cross-training. .

Turning now to store expansion. We ended the third quarter of 2014 with 404 stores, operating in 33 states and Puerto Rico. For the quarter, we opened 7 new stores, including our first store in the Philadelphia market, and we closed 1 store. .

For the remainder of 2014, our plans call for opening 1 more store by year-end, which will bring our new store total for the year to 31. We will close an additional 5 stores to end fiscal 2014, with approximately 400 stores. .

As I mentioned in our last call, we're spending a great deal of time comprehensively reviewing our entire store base. This review is helping us understand not only the best markets for near-term expansion but also identify underperforming stores with little or no growth opportunity.

As part of our 2014 review efforts, we have identified 5 stores for closure in the fourth quarter of 2014, and 6 stores for closure in 2015. Additionally, we recorded impairments during the third quarter on the fixed assets associated with 6 marginally performing stores. .

With regards to near-term expansion, we look to open 20 to 25 stores in fiscal 2015, concentrated either in the large markets we currently serve or single store markets within our current footprint. Lastly, I'd like to address the guidance we gave within the press release.

As I stated earlier, we believe that our strategic initiatives surrounding women's better branded merchandise, enhanced marketing and our reenergized e-commerce site has attracted a new, more affluent consumer. We see this with the sell-through of our better branded shoes and boots and the higher average retails in their respective categories.

In addition, we still have the brands, strong promotions and our unique store environment keeping our core customer a loyal Shoe Carnival shopper year after year. Our results in November are evidence of this as we continued our positive comparable store sales trend on top of a record-breaking November last year. .

Now as we enter the balance of the fourth quarter, our expectations are based on how our customers have reacted to our trend right product assortment all season. This, combined with our strong marketing cadence, should deliver an improvement in customer traffic and sales for the quarter versus same time period last year.

Therefore, we believe the fourth quarter will come in with a comparable store sales increase of 3% to 5%, and EPS of $0.06 to $0.10 per share versus EPS of $0.03 per diluted share the same time period last year. .

Kerry will offer more insight on this within his prepared remarks. Now I'd like to call -- turn the call over to Kerry Jackson for details on our financial results. .

Thank you, Cliff. I will discuss our third quarter financial results in more detail, followed by information on cash flows and then conclude with our outlook for the fourth quarter of fiscal 2014. .

Net sales were $254.7 million for the third quarter ended November 1, 2014, as compared to net sales of $235.8 million for the third quarter ended November 2, 2013, an increase of $18.9 million.

This $18.9 million increase in net sales was driven by an increase of $15.9 million from the 41 new stores opened since the beginning of the third quarter of fiscal 2013 and a comparable store sales increase of 2.3%, partially offset by a $2.3 million decline in sales from the 7 stores closed since the beginning of the third quarter of fiscal 2013.

Gross profit margin for the quarter was 30.1%, which was unchanged compared to the third quarter of fiscal 2013. Our merchandise margin increased 0.2% from Q3 last year, while buying, distribution and occupancy expenses increased 0.2% as a percentage of sales.

The increase in buying, distribution and occupancy was primarily due to higher occupancy costs. .

Selling, general and administrative expenses increased $5.8 million in the third quarter of fiscal 2014 to $59 million. The $5.8 million increase in SG&A was primarily due to a $3.7 million increase in expenses for new stores, net of expense reductions for stores that have closed since the beginning of the third quarter of fiscal 2013. .

Other significant changes in SG&A for the quarter were attributable to increases in advertising and employee health care expense, offset by a reduction in incentive compensation. As a percentage of net sales, SG&A increased 0.6% between periods. .

Total preopening costs for Q3 were $621,000, a decrease of $391,000 over the third quarter last year. Of the total preopening costs incurred in Q3, $321,000 is included in SG&A and $300,000 is included in cost of sales for preopening brands and freight.

In Q3 last year, we incurred $1 million of total preopening expense, of which, $521,000 was included in SG&A and $491,000 was included in cost of sales. .

The effective income tax rate for the third quarter of fiscal 2014 was 39.1% as compared to 38.6% for the same period in fiscal 2013. The annual effective income tax rate for fiscal 2014 is expected to be 39.3%, an increase of approximately 1% over the prior year.

This increase in the annual rate will primarily be due to the expiration of certain federal tax credits not currently available to us and the passage of new tax legislation in Puerto Rico. .

Net earnings for the third quarter of fiscal 2014 were $10.8 million or $0.54 per diluted share as compared to our expectations provided on September 3, 2014 of $0.45 to $0.51 per diluted share. For the third quarter of fiscal 2013, we reported net earnings of $10.9 million or $0.54 per diluted share. .

Now turning to our cash position information affecting cash flow. During the quarter, we purchased approximately 244,000 shares under our share repurchase program at an aggregate cost of $4.5 million. We currently have 12.8 million available under our existing repurchase authorization. Depreciation expense was $5.2 million in Q3.

Depreciation expense is projected to be approximately $20 million for the full fiscal year. Capital expenditures for fiscal 2014, including actual expenditures during the first 9 months of the year, are expected to be between $33 million and $34 million.

Approximately $16 million of the total capital expenditures are expected to be used for new stores and $9 million to be used for store relocations and remodels. These incentives are anticipated to be $9 million for the year. .

My final comments today will focus on sales and earnings expectations for the fourth quarter of fiscal 2014. We expect fourth quarter net sales to be in the range of $218 million to $222 million, with comparable store sales increase in the range of 3% to 5%.

This range takes into account the November comp store sales increase of 5.8% and the expectation of a comp increase ranging from 1.5% to 4.5% for the combined December-January period. .

Earnings per diluted share in the fourth quarter of fiscal 2014 are expected to be in the range of $0.06 to $0.10. In the fourth quarter last year, sales were $200.3 million and diluted earnings per share were $0.03.

Included in the earnings estimate for the fourth quarter is the expectation that at the high end of our guidance, the gross profit margin will be down 0.3%.

We anticipate lower merchandise margins due to being more promotional through the remainder of the quarter, but we will partially offset decline by leveraging our buying, distribution and occupancy costs due to the expected comp store sales gain.

We should leverage our SG&A expenses by over 1% due to controlling expenses and deleveraging effect of the comp store sales gain. .

Just one additional note, our guidance includes additional freight costs of approximately $0.01 per share we expect to incur in Q4 related to the port slowdown. .

This concludes our financial review. Now I'd like to open up the call for questions. .

[Operator Instructions] And our first question comes from Mark Montagna with Avondale Partners. .

Question about the fourth quarter EPS guidance at $0.6. According to my notes, the prior implied guidance was $0.05 to $0.16.

I'm just wondering, is that accurate? And if so, why would the top end of the guidance come down from $0.16?.

Mark, the high end of that guidance, to be honest with you, I don't have that with me. That sounds a little high. I don't remember us guiding to that level.

But what we've taken, we've adjusted our actuals taking into account how we -- what we did achieve in December and looking at the fact that it's going to be a promotional quarter for the rest of the quarter and reflecting that in our margins.

And right now, between the comp increase and the slightly reduced margins, we're looking at the top end of our range being $0.10. .

Okay. Then next question dealing with national advertising.

With the national ads, did you see an immediate impact from literally the day that those things started to run?.

We began national -- Mark, it's Cliff. We began national advertising back in March. Now we've said at that time that it was going to be a building process over the course of the year.

We did see an immediate impact in March to our e-commerce business but our store traffic didn't begin to improve until we actually exited out of August and into September and October. The October ad, however, that we -- the advertising we ran during the month of October, we saw almost immediate results in our boot category at that time. .

Okay. Yes, so October, you had much more of a call to action that would've led to that more immediate reaction. .

Correct. .

Okay. And then, just the last question dealing with fashion boots.

Did you say that they were strong throughout the month? And then, I was just -- throughout each of the month? And then, I was wondering if there was any sort of variance between tall versus short? Or any other types of variants? Because I know it was more fashion boots as opposed to, say, weather-related boots?.

As the season progressed, we were selling shorter boots earlier in the season. As the season progressed and into November, taller shafted boots got stronger. I will tell you that during the month -- excuse me, during the third quarter, our boot business in total was up in the 20s.

So we had a great November, where our boot business was up in the 30s, but we've seen that the boot business get better and better as we progressed through the second half of the year. .

Mark, what I said earlier that I believe our guidance at the top end for the -- when we gave guidance for the second half would've been implied at $0.13 and the difference is that is the anticipation of being promotional and lowering our margin a little bit and taking the actual sales into account.

I believe that would account for the difference between the $0.13 and the $0.10 we guided. .

Yes, that would work. I was looking at the midpoint of third quarter. That's how I got the $0.05 to $0.16. So yes, I can see it with the $0.13. .

And our next question comes from Chris Svezia with Susquehanna Financial Group. .

I guess, first question is just as it pertains to promotional cadence, is there any particular category or area you expect to get promotional? I'm just curious, I mean, your inventories are in good shape, seems to be closing the gap on the product margin, your boots performing well or is there just a certain category [ph] expecting to get promotional? Or just preparing for the worst? I'm just curious about your thoughts there for the fourth quarter?.

It's closer to the second, Chris. As we've listened to calls, and I know that you have as well, everybody is talking about the promotional environment. Business -- it doesn't appear that business was that great in the third quarter for many retailers, department stores and others.

And we anticipate a promotional fourth quarter, and so we've wanted to be prepared to be promotional as well. So it's really a case of being prepared in case -- we don't want to be caught with someone taking our -- some retailer taking our business during the fourth quarter. .

Okay.

Have you seen any of that in November? I mean, to generate that 5.8% comps, you had to get more aggressive? Or promotional cadence kept the same relative to the third quarter?.

No. Our promotional cadence stayed exactly the same in the month of November. In fact, we cut back one of our insert programs early in November and still were able to generate the increase that we generated. But -- so we were no more promotional than any -- than we have been in the years past. .

And Kerry, remind me, December and January, what kind of comp are you up against versus last year?.

Both of them were negative. Last year, we were down mid-singles in December and just in the double digits in January. .

Okay. And then, just -- Cliff, for you, just on the direct category.

I'm just curious, first time you've sort of mentioned it flattening out, is that just cycling things that lead to comparisons? Is that just some favorability with the better women's brands? Just maybe talk about what you're seeing there?.

Yes, I think, it's a little bit of both. The comparisons are weaker, to your point. But we have a couple of categories that are just performing really well. A category, we call, shooties, which is a low kind of ankle, it looks like pumps, just comes up a little up toward the ankle, and in pumps, both -- and tailored dress shoes.

All 3 of those categories are performing very well. And that has actually extended into November. Our women's dress business is up mid-single digits for the month of November. .

Okay.

How many stores right now have the -- that are women's brands? And I think, before, it was 108 from a comp? Or something along those lines? Just where do you stand there?.

It's between 140 and 150 stores. We started out with, if you remember, it was 75, we added 25, and then, as we added new stores, we continue to add better brands to most of our new stores. And then, over the course of the year, a store here and there. So we're between 140 and 150 stores. .

And we'll go next to Jeff Stein with Northcoast Research. .

I have another question on gross margin.

So Cliff, it sounds like your gross margins were pretty good in November, and I'm still struggling to understand why December and January is going to be tougher? Are you -- as you've moved into December now, are you becoming more aggressive on your promotions? Or are you going to wait and react to see how competitors -- what competitors do with their pricing? So in other words, are you proactive or reactive?.

It's a little bit of both, all right? We do have, and I'm going to hesitate telling you when, but we do have an additional promotion planned over last year, so in that particular case, we are being reactive -- excuse me, proactive.

And then, we will be reactive if we see that, especially the department stores, if they get very promotional in the month of December with -- and as you know, with our concept, we can react to that pretty quickly. .

Have you seen the -- I'm sure you've looked at the Black Friday ads of your competitors.

Based on what you've seen today and for those that perhaps started a little bit earlier before Cyber Monday, what's your feeling today versus where you were a couple of weeks ago with regard to promotion -- the promotional environment?.

I read that -- first of all, I don't think the department stores were any more promotional this past Thursday, Friday than they have been in years past.

There was a new player in town, a very promotional department store that wasn't as promotional last year, but if I believe everything I read, business wasn't that great for the department stores over Thursday and Friday. And in that regard, they own the product, so they're going to have to get promotional on that product as they go through December. .

And that's providing, of course, that footwear was one of the underperforming categories so... .

Exactly. And they don't call that out, Jeff. All I know is that if I believe everything I read today, business was not good in those stories over the weekend. .

If you were above a competitor on a particular item and a customer comes to you and says, "Kohl's is $10 cheaper," will you match Kohl's?.

In the markets where we go against them, we'll match them. But not in the entire company. .

Okay. And just a couple of questions on e-commerce.

Can you tell me how do you determine which store an order is pulled from? And is there any concern that this could create issues as you get into -- a little bit deeper into the selling season having sufficient in stock on key items if you pull too much inventory from a particular store?.

The system looks at 2 things. First, it looks at multiple things, but first 2 things is the stores -- how close the store is to the customer so that we can -- once the shoe ships, it gets to the consumer faster, if that makes sense.

And number 2, it looks at sell-through of the item in the store and it will not take the shoe from a store with a high sell-through. So it's always looking to take the product from stores that aren't selling as well, if that makes sense. So those are the first 2 criteria that the system looks at.

And then, there's multiple things that -- iterations that it goes through. But those are the first 2. .

Okay. And final question, do you recall how many store days were lost due to bad weather last year? Because it seems to me that the plan is to be more promotional but you also lost a considerable amount of selling days last year because of all the weather issues. .

There's -- I do not recall exactly how many. It was significant, however. .

Is January is a higher-volume month then November?.

I'm sorry, I didn't hear the question. .

Is January a higher-volume sales month normally than November?.

No. January is the lowest-volume month in the quarter. .

And we'll go next to Sam Poser with Sterne Agee. .

A couple of things.

Can you give us -- you gave the comp for October up to [indiscernible] -- can you give us August and September as well, please?.

We gave October comp only as a comparison so that you can understand what the national advertising was doing. Can I say this, Sam, is that the month -- the business got better every single month of the quarter and it increased a bit more -- well, that's not true, September was the best month of the quarter. .

We've already given out August to you. When we released our Q2 information, we said we're up 0.8. We're up mid-singles in September. .

Do we really care? I mean, I'll tell you, we were up 4 3 in the month of September. .

That was complicated. .

A lot more complicated than it needed to be, Sam, sorry. .

Well, all I did was ask the question. Anyway, I guess, the question is your gross margin was down 70 basis points in Q4 last year with a lot of crazy stuff going on with weather and all.

I mean, it sounds to me like a lot of what you're talking about here is extremely defensive because, it sound -- I mean, if I heard you correctly, the business quarter-to-date is no more promotional than what you had originally anticipated going in.

Is that a fair statement? And you're -- and basically, your guidance is maybe protective of that, that it may not stay that way?.

That is correct. November was no more promotional than in years past and we were not displeased with our margins in November. However, again, we're not going to take any chances with December. December is a big month. It's a 5-week month. It's the holidays.

And we're not going to take any chances and I would rather be -- I would rather err on the side of caution on December than tell you that margins are going to recover to last year -- to higher than last year and be wrong. .

There's a lot of people that share that. I just want to follow up on Jeff's question about November and January.

If you basically take out the -- if you take out Thanksgiving week, like on a week-by-week basis, is January about the same as November if you just 86 out Thanksgiving? I mean, because -- like on a [indiscernible] basis?.

Kerry is looking at that now. .

No. January is just a very small month. It gets very quiet after the New Year, and it doesn't compare to November. .

Even if you take out Thanksgiving? And then, could you -- I mean, even if like you took the first 3 weeks on a weekly basis and thought of January as the same thing, would it still be, on a weekly basis, smaller, if you didn't include that -- the big pop you got from the last 2 days of the month?.

Well, haven't looked at it that way. I'm looking at it right now seeing that we compare. If you took out the entire last week, you would get much closer to the January number. .

That makes sense. And then, about -- I mean, about product, you talked about the boots.

When you're saying the fashion boots, I mean, you're talking about over-the-calf kind of things, that are sort of more on the casual dress mode versus cold weather product and so on and so forth?.

Well, when I say fashion boots, what most -- I'm taking out work boots from that scenario. .

But would you include like bear paw in fashion boots?.

Yes, I would. I would include every boot we sell with the exception of work boots. Work boots are a year-round category. .

So can you give us some idea within that boot business what -- within that non-work boot business, sort of what were the real highlights? You don't have to be specific, for brand, just any kind of fashion look that you might have taken a better advantage of than you did 1 year ago and possibly than your competitor?.

Well, I'm not sure really how to answer that question. I can tell you -- I'll tell you this, that it was -- it started off with midshaft boots and low boots selling well early in the quarter and it progressed to high-shaft boots later in the quarter and into November. And that, along with anything that was fur-lined, worked as well. .

All right.

And lastly, what drove the athletic business that you talked about that was pretty good?.

It is actually -- our running business was good. The fashion athletic business, as you know and as others have reported, is on fire. Plus, we did have a pretty good quarter in running and basketball. .

[Operator Instructions] We'll go next to Jill Nelson with Johnson Rice. .

A follow-up on the women's nonathletic initiative. I think, in the previous 2 quarters, you had said that, that -- those stores with the new product had comped about 200 basis points above company average.

Is that kind of the trend you saw in the third quarter?.

Jill, the minute this conference call started, I realized I don't have that number, and I apologize for that. We should since we we've talked about it the last 2 quarters, but we'll look that up and get back to you on that. .

Okay. And then, just kind of related to that, your comments, I think, you mentioned you're seeing definitely that, that new better brand assortment as well as the national TV advertising is attracting a more affluent customer.

Are you seeing even -- in more traction kind of gaining in third quarter? Just kind of relate those comments versus past previous quarters?.

Well, what we're seeing is that in years past, we have not been able to sell better branded boots. Well, actually, new years' past, we haven't really been able to sell better branded women's products and that changed last year when we started putting a product in and started marketing and prominently displaying that product in front of our store.

This year, we expanded that product selection into a better branded boot assortment, which to be perfectly honest, which it made me just a little bit nervous but the sell-through on that product has been very good.

So my only assumption on that, and of course, I can't quantify the fact that the more affluent customers coming in, we're just -- that leads us to believe that, that's happening was because all of a sudden these -- all the better brands, whether it's in casuals or dress or -- are now inclusive of boots are selling through at really good rates. .

Okay. And then, just a comment. I think, you mentioned taking some impairment charges during the quarter for some additional closed stores or something to that nature.

Could you -- was that material on a numbers basis?.

Not on a year-over-year basis. Total impairment charges and fixed asset write-offs were about $700,000 this year compared to about $500,000 in the prior Q3. So it increased about $200,000. .

Okay. And then, just last one, you've been very lean on the inventory management and whatnot.

Could you talk about kind of how do you look -- it seems as though boot inventory likely up kind of where the categories that are down pretty significantly year-over-year?.

Well, boots are up. You called that correctly. We're down in some of the casual categories, as you can imagine, when I call out the fact that we have some categories that aren't working. And most of those categories like boat shoes, we are down significantly over last year.

So basically, what we've done is we've taken a look at our business and then in every -- it's really not hard, and in the categories that are underperforming, we've brought the inventory down significantly. The big deal here, Jill, is the fact that we're rightsizing the inventory based on store volume.

We talked a lot about effectively -- average -- used to talk a lot about the fact that we average 32,000 pair per store. And today, we average somewhere between 27,000, 28,000 pair per store. And the reduction is all coming out of smaller-volume stores.

And it allows those stores to actually -- they don't have to clear through as much product, and therefore, we should be able to get margins on a long-term basis up in those stores. .

And we'll take a follow-up question from Jeff Stein, Northcoast Research. .

Cliff, I'm wondering if you could -- I know you don't disclose your e-commerce sales, but can you at least tell us what e-commerce is contributing to the comp store sales increase?.

Here's what I'm prepared to tell you is that we had obviously a comp store increase in e-commerce, but we also had a comp store increase in brick-and-mortar stores. So this increase was that driven entirely by e-commerce. .

Okay. What are your thoughts on advertising as we move into next year? Is that going to be a leverage point for you? Obviously, you have... .

We don't plan on increasing the percent to sales that we generated this year in marketing but we don't plan on decreasing it either.

We believe strategically, Jeff, that this is a long-term, strategic initiative that's going to continue to get the Shoe Carnival name out there, especially in the large markets that we have entered over the past several years but they don't know us as well as customers know us in the Midwest. .

Okay. And the final question is a real estate question.

Is the 20 to 25 stores you're opening next year, because that does represent a slowdown from this year, is that related to just being cautious about the environment? Or is it a lack of availability of suitable real estate at the price you're willing to pay?.

Jeff, it's more about the former. We want to be cautious as we're growing. We've opened some large markets in the past years. We want to continue to focus on backfilling those. If we wanted to continue to open large markets, we could accelerate that growth, but I'm not sure that would help our profitability.

So what we want to do is focus on the markets in Detroit and Miami, the Buffalo areas that we've opened up. We're going to open Philly as a new market, which will be a big part of our expansion for next year, but we want to be careful about not overextending ourselves. .

So Philadelphia will be new for next year?.

It is. We opened our first stores in Philly this quarter. However, the bulk of the store openings will come next year, the market entry. .

Got it. Okay. And as far as circulars are concerned, you mentioned that you are adding a circular in the fourth quarter.

So other than that, is your media spend pretty much expected to be flat as a percent of sales? I know TV is going to be kind of a headwind of 15 to 20 basis points for the year, but I'm just trying to understand what we're looking at in the fourth quarter on a combined basis for your marketing spend as a percentage of... .

I want to be real clear on that. We're not adding a circular for the fourth quarter. We are adding a promotion. We have been proactive in adding a promotion, but that's not an insert. And as far as next year is concerned, look, we'll keep pretty much the same promotional cadence that we had this year. .

Got it.

And Cliff, additional promotion, can you tell us anything about it? Is it an in-store promotion? Is it an online promotion?.

Jeff, unfortunately, part of this call is either the transcripts are read by my competitors or listened to by my competitors. So I'd just soon not talk about what it is. .

And with no further questions in queue, I would like to turn the call back to Mr. Sifford for closing remark. .

We want thank you, guys, for joining us today, and we look forward to talking about our fourth quarter results in March. Thank you so much. .

This concludes today's call. Have a wonderful day. .

Thank you..