Good afternoon, and welcome to Shoe Carnival's Fiscal Year 2014 Fourth Quarter Earnings Conference Call. Today's conference 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 call over to Mr. Cliff Sifford, President, Chief Executive Officer, Chief Merchandising Officer of Shoe Carnival for opening comments. Mr. Sifford, please begin. .

Thank you. And welcome to Shoe Carnival's Fourth 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 fourth quarter performance and provide some insight into our fiscal 2015's earnings guidance. Kerry will review the fourth quarter financial results, and then we'll open the call to take your questions..

We are pleased to report that our comparable store sales for the fourth quarter increased 9.5%. Our positive sales performance in the fourth quarter, along with our 2.3% comp increase in the third quarter drove a second half comparable store sales gain of 5.6%.

This increase for the quarter was broad-based with all merchandise departments contributing..

Store traffic for the fourth quarter was flat to the same time period last year, which is an improvement to the trend we have experienced over the past several years. A combination of moderate weather patterns, which generated strong athletic sales, along with a very strong boot trend drove sales throughout the quarter.

Conversion rates at our comparable stores were up 150 basis points, which drove a mid-single-digit increase in the number of transactions. Unit -- average transaction and average unit retails all showed positive growth for the quarter..

Although weather played a role in our overall comps, we saw sequential improvements in the comparable store sales increases as we moved through each month of the quarter.

We believe that our key initiatives of national advertising, better brands in our women's department and our aggressive multichannel initiatives continue to bring new customers to our stores, e-commerce site and mobile touchpoints..

Gross profit margin for the company increased by 10 basis points, while SG&A decreased by 140 basis points, resulting in EPS for the quarter of $0.15 versus $0.03 for the same time period last year..

Merchandise margins were down 40 basis points due primarily to an increase in inbound freight expense due to a slowdown on the West Coast ports and the acceleration of our e-commerce business. We ended the quarter with inventory down approximately 5% on a per-store basis, which was in line with our expectations.

Our focus on inventory management continues to be a significant initiative..

We are still committed to being the destination store of choice for key brands and categories we believe will drive our business. Our current strategy is about reducing inventory in those areas that are either duplicative or eliminating items in categories which are not producing the sales and margins we have come to expect..

As I reflect on 2014, many of the initiatives we have been talking about over the past year or so are beginning to reflect in our results. First, we launched a national advertising strategy that introduced Shoe Carnivals to new customers in new markets. It also gave us exposure in current markets that may not have gotten TV advertising in the past.

Throughout 2014, we continued to tweak the messaging, and by October, we began to see real results. And we believe it was a driver of our business through the fourth quarter..

Second, we continue to focus our store management and e-commerce teams on the importance of bringing new customers into our Shoe Perks loyalty program. We started the year with approximately 3 million Shoe Perks members accounting for just over 22% of our sales.

We ended the year with more than 6 million members who accounted for over 43% of our business. The growth in this program is an essential element to our overall marketing strategy..

Third, we took a huge step in building a compelling online presence by opening up our store-level inventory to our e-commerce store. Today, we have 250 stores capable of fulfilling e-commerce orders every day.

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

Our ship-from-store scenario is the first step to creating an endless aisle experience for our customers. Our most important initiative for 2015 is to give our store personnel the ability through our POS system to find the item or size the customer is looking for and have that item shipped to the customer's home.

We remain committed to establishing Shoe Carnival as a world-class multichannel retailer..

The growth of our e-commerce business remains strong, and we'll continue to make enhancements to both capitalize on our increasing traffic and optimize conversion rates. Additionally, we will make significant improvements to our mobile site and mobile app, which have become a meaningful part of our overall online sales..

Our customers expect a seamless shopping environment with both a broad selection and a depth of sizes, regardless of how they choose to shop. Our multichannel strategy is making that possible. Our e-commerce store is the fastest-growing store in our fleet..

Fourth, we changed the way we look at real estate by utilizing technology to find where our customers live and where the best place is in any given market to open a Shoe Carnival store.

We are utilizing this technology to help us identify new trade areas for growth as well as identifying current trade areas where we may have a small-volume store with little opportunity for growth..

Our real estate team utilizes this information to negotiate terms with landlords, look for relocation opportunities, or if all else fails, recommend closing a location. In addition, with a better understanding of the volume a potential site can produce, we will negotiate a box size that will allow us to achieve higher average sales per square foot.

Through these actions over the next few years, we should see improved operating margins and accelerated EPS growth..

As part of our 2014 review efforts, we closed 5 stores in the fourth quarter of 2014 and opened 1, ending the year with a total of 400 stores in 33 states and Puerto Rico.

With regards to near-term expansion, we look to open 18 to 22 stores in fiscal 2015, concentrated in either the large markets we currently serve or single-store markets within our current footprint. As of today, we have identified 11 stores for closure in 2015..

Moving on to merchandise. As I stated on our last call, we prepared for and achieved a very strong boot run. I'm pleased to say that the success we reported for the third quarter continued through the fourth quarter with boots for men, women and kids, posting a comparable store sales increase in the mid-20s.

But as I said earlier in this call, the increase we reported for the fourth quarter was broad-based, touching every major department. For instance, athletic shoes, which accounts for approximately half of our overall sales on an annual basis, delivered a high single-digit comparable store sales increase for the quarter..

In our women's nonathletic department, sales for the quarter were up in the low teens on a comparable store basis. Our women's boots continued their phenomenal run with a comparable store sales increase in the 30s. In addition to boots, we were very pleased with the double-digit comp increase in dress shoes.

In our men's nonathletic department, we ended the quarter up low single digits, with dress shoes and boots each producing comparable store sales gains..

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

Lastly, I would like to address the guidance we gave within the press release and the West Coast port issues. First, the ports. As we all know, the slowdown in the West Coast ports finally came to an end during the latter part of February.

Even though they reached a settlement, it has taken some time to get caught up with container ships that were backlogged and to reposition them to containers. We are still experiencing up to 2-week delays on many of the orders we have slated for February and March deliveries through the West Coast.

We began utilizing East Coast ports for containers delivering in mid-March and forward to ensure more timely delivery. It is believed that it will take 60 to 90 days before the West Coast issues get fully resolved. We are monitoring the progress at West Coast ports, and we'll begin utilizing them again as we see the situation improving..

Now on to our guidance. For the past few years, it has been our policy to issue guidance 1 quarter at a time. This year, we will transition to issuing full year guidance and updating that guidance as necessary as the quarters progress.

2015 got off to a very strong start until the second half of February when winter snows moved through the Midwest and Southern regions. Much like last year, late January and early February -- last year's late January and early February, we experienced over 400 closed or partially closed store days.

However, as soon as the weather moderated, we saw an immediate lift in sales similar to what we were experiencing throughout the fourth quarter. We believe with the current momentum in sales, we'll finish the quarter with a low single-digit increase on a comparable store basis..

As we look forward to the rest of the year, we will continue to plan conservatively, but with the ability to react quickly to opportunities as we did in the second half of last year. This strategy allows us to continue to control our inventory and expenses, which should result in double-digit growth in earnings..

Therefore, we expect full year net sales to be in the range of $977 million to $991 million, with a comparable store sales increase in the range of 1.5% to 3%. Earnings per diluted share are expected to be in the range of $1.40 to $1.48.

Included in these earnings estimates for the fiscal year is the expectation that at the high end of our guidance, the gross profit margin will increase slightly due to leveraging our buying, distribution and occupancy costs, and SG&A will decrease slightly as a percent of sales..

Now I would like to call -- turn the call over to Kerry Jackson for details on our financial results. .

Thank you, Cliff, and good afternoon, everyone. Net sales for the fourth quarter of fiscal 2014 were $227.6 million. That's compared to net sales of $200.3 million for the fourth quarter last year, an increase of $27.3 million.

This increase in net sales was driven by an increase of $18.3 million in comparable store sales, an increase of $11.7 million from the 34 new stores opened since the beginning of the fourth quarter of fiscal 2013, partially offset by a $2.7 million decline in sales from the 12 stores closed since the beginning of fourth quarter of fiscal 2013..

The gross profit margin for the fourth quarter of fiscal 2014 increased 10 basis points to 28.6%. Our merchandise margin decreased 40 basis points, while our distribution and occupancy expenses decreased 50 basis points as a percentage of sales.

While we were able to leverage our buying and occupancy costs a combined 70 basis points due primarily to higher sales base, driven by our comp store sales increase and net new store growth, our distribution costs deleveraged by 20 basis points due to higher costs related to the West Coast port congestion issues.

We estimate the extra costs included in the gross profit due to the port congestion decreased diluted EPS by approximately $0.03 in Q4..

In our original guidance, we had estimated $0.01 of additional costs..

Selling, general and administrative expenses increased $4.4 million in Q4 to $60.5 million. This increase was primarily due to a $2.5 million increase in expenses for new stores, net of expense reductions for stores that have closed since the beginning of the fourth quarter of fiscal 2013.

Other significant changes in SG&A for the quarter were attributable to an increase in incentive compensation, offset by a reduction in advertising. As a percentage of net sales, SG&A decreased to 140 basis points between periods..

Total preopening costs for Q4 were $379,000, a decrease of $98,000 over Q4 last year. Of the total preopening costs incurred in Q4, $180,000 is included in SG&A and $199,000 is included in the cost of sales for preopening rent and freight..

In Q4 last year, we incurred $477,000 of total preopening expense, of which $286,000 was included in SG&A and $191,000 was included in cost of sales. The effective income tax rate for the fourth quarter of fiscal 2014 was 34.6% compared to 40.9% for the same period in fiscal 2013..

Net earnings for the fourth quarter of fiscal 2014 were $3 million or $0.15 per diluted share, which was above our guidance of $0.06 to $0.10 per diluted share. For the fourth quarter of fiscal 2013, we reported net earnings of $598,000 or $0.03 per diluted share..

I would like to transition to our full year fiscal 2014 financial results. Net sales increased $55.4 million to $940.2 million for fiscal 2014, a 6.3% increase from the net sales of $884.8 million for fiscal 2013. Comparable store sales increased 1.8% for the year.

The increase in net sales for the year was driven by an increase of $50.2 million for the 63 new stores opened since the beginning of fiscal 2013 and an increase of $15.4 million in comparable store sales, partially offset by a $10.4 million decline in sales from the 14 stores closed since the beginning of fiscal 2013..

Our merchandise margin remained flat between the years, while buying, distribution and occupancy costs as a percentage of sales increased 20 basis points. SG&A expenses increased $16.2 million for the year due in part to an $11.9 million increase in net new store expenses.

Partially offsetting the increase was a decrease in incentive compensation of $2.4 million as compared to last fiscal year..

Total preopening costs for fiscal 2014 were $3.7 million, an increase of $235,000 over last fiscal year. Of the total preopening costs incurred in 2014, $2.1 million was included in SG&A and $1.6 million was included in cost of sales on preopening rent and freight..

Preopening costs averaged $118,000 for the 31 stores opened during fiscal 2014 as compared to an average of $107,000 for the 32 stores last year..

Store closing costs and noncash impairment charges, including SG&A expenses for fiscal 2014, were $1.5 million compared to $1.2 million in fiscal 2013..

Now turning to our cash position information affecting cash flow. We declared and paid in each quarter of fiscal 2014 a cash dividend of $0.06 per share to our shareholders. The cumulative amount returned to shareholders in fiscal 2014 was $4.8 million.

During the fourth quarter, our Board of Directors authorized a new share repurchase program of up to $25 million of our outstanding common stock, effective January 1, 2015.

The new share repurchase program replaced the prior $25 million share repurchase program that was authorized in fiscal 2010 and expired in accordance with its terms on December 31, 2014..

At expiration, the prior repurchase program had repurchased approximately 625,000 shares at an aggregated cost of $12.2 million..

Depreciation expense was $5.4 million in Q4. Depreciation expense was $20.1 million for the full fiscal year. During fiscal 2014, we expended $33.5 million for the purchase of property and equipment, of which $27.2 million was for new stores, remodels and relocations. Incentives received from landlords were $8.5 million..

We opened 31 new stores, relocated 3 and closed 7 stores during fiscal 2014. We remodeled approximately 7% of our store base. Capital expenditures are expected to be $23 million to $24 million in fiscal 2015..

As Cliff mentioned, in 2015, we expect to open between 18 and 22 stores, which will account for approximately $9 million to $10 million of our total capital expenditures. Approximately, $7 million of the total capital expenditures will be used for store relocations and the remodeling of approximately 6% of our existing store base.

The incentives we received from landlords are expected to be approximately $6 million to $7 million..

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

[Operator Instructions] We'll go first to Eddie Plank with Jefferies. .

I guess, could you talk a little bit more about what you're seeing with respect to the better brand strategy, where you are in that phasing and where you think you can take it going forward? Is it -- do you think you'd take it to more stores than you initially thought? And then I have a follow-up. .

Okay. No problem. We started this process about 18 months ago with 75 stores. This past year, we increased the number of stores to 140. We'll probably take it somewhere between 150 and 170 this year. And we think that, in total, if you look at our total store base, we can probably get it to 200 stores.

Now as we grow new stores, we'll obviously add it to most new stores. What we've seen is in the stores that have the better brands in women's, the comp increases in those stores are significantly better than the comp increases in the other stores.

All stores were -- the stores without were also up for the quarter and for the season, but the stores with the better brands had significantly better increases. .

Great. That's helpful. And then, I guess, just to clarify on the start of this year. You said it trailed off with the weather in the back half of February. But can you break out in more detail, like did February start off at a similar run rate as the fourth quarter? If you could just give a little bit more color around the comps between the 2 halves... .

February actually started off at a better run rate than the fourth quarter, in fact, a much better run rate than the fourth quarter. And then towards the tail end of the second week, along with the third and fourth week and the 1st week of March, the weather moved in and we saw declines in our business for those particular weeks.

But since last week, I guess the beginning of last week when the weather finally moderated to the more spring-like temperatures and sunshine, which we needed in the Midwest, it -- we saw a significant improvement that actually was a little better than our fourth quarter run rate.

So we're feeling really good about the first quarter -- as long as the weather continues to cooperate. .

We'll go next to Jill Nelson with Johnson Rice. .

If you can talk about -- it looks like just from your previous outlook on 2015 store openings, it looks you'll have, I guess, net fewer new openings.

Could you just kind of talk about that revision and some factors leading behind that?.

Well, one of the things that we gained when we started using the technology for helping us find sites is that we were able to get insight to some of the store locations that we have -- that we had been struggling on and take a look at whether we felt like there would be opportunity for growth in those stores.

And on the stores where there were work growth and there was a kick out or an opportunity to get out of store because of a lease-in, we went ahead and exercised that. So this particular year, we will -- we are going to close 11 stores there that we are closing, that we have identified to date 11 stores.

There might be 1 or 2 more before the end of the year. But at this point, because we -- in addition to that, we have our real estate team concentrating on looking at real estate and markets that we've grown over the past couple of years.

If you take a look at -- we've entered into Dallas, we entered into Detroit, we entered into, just recently, into Philadelphia and Miami. We need to backfill those stores with additional locations. So we have our real estate team pretty much focused on those 4 major cities, along with markets we currently serve. .

Okay. And then you could just talk about -- you definitely got some good traction off your national TV ad. I mean, the first time, I think, you said store traffic was flat. Now that's probably a pretty good number for the past 2, 3 years.

If you can just talk about kind of the more call-to-action messaging, your thoughts on 2015, just on that?.

Well, there's no question that once we added a call-to-action to our national advertising, the customers responded. It -- we want to have a balance between the -- to tell them the Shoe Carnival brand story because we have a good story to tell and a call of action. And I think we executed that really well.

Actually, beginning at back-to-school, but it really resonated with the consumer beginning in October. We feel that we -- the increases that we generated in October were pretty much industry-leading even with the department stores.

And that momentum just continued through November, December and January, each month getting better and better from a comp store increase. .

Okay. And then just last one. The port issues and disruptions hit fourth quarter by $0.03. If you could talk about kind of what you're seeing for first quarter, given it seems like it will take some time for you to catch up on the shipments. .

So the biggest issue in the first quarter is the delay in products getting to the stores. We're running about 2 weeks behind.

On the orders that we can control, which are some of the branded orders that we bring in from the West Coast and some of our own product label, we moved a port of entry into the East Coast, that we just couldn't take any more chances. With the hit we took in the fourth quarter of $0.03, that was a significant hit.

So we said, let's just move to the East Coast so we can get the product here in a little quicker. Unfortunately, some of our major vendors didn't do that. So we're seeing some -- up to 2 weeks delay on getting some of the product in. I don't think we're any different than anyone else.

In fact, we may actually have an advantage because we moved to the East Coast pretty quickly. But I don't think there is any difference in the way product is flowing in than what you've already heard on previous calls. .

We'll go next to Chris Svezia with Susquehanna Financial Group. .

So anyway, I'm curious, the comp, could you just remind us what did you do in March and April of last year in the first quarter from a comp -- what are you up against?.

We are definitely going against weaker comps for the, actually, for the first half of the year. I don't have it in front of me, what the comps were for March and April is tough to say because of the Easter.

Easter was in the -- at the end of the 2nd week of April last year, and this year, actually, it's at the end of the third week in April last year and this year after the first week of April. So your comp sales move around. March will be stronger than it was last year. April will be weaker from a comp comparison.

But the first quarter we were -- I don't -- we were down... .

1.7% for the quarter. .

1.7%. .

Okay. So let me ask it this way. If you were comping in the beginning of the first quarter sort of above where you were comping in the fourth quarter, then it slowed -- I guess, in aggregate, you turned negative slightly for February.

And then into March, you've started seeing acceleration, you are kind of indicating maybe low single-digit comp for the first quarter. So I'm just trying to figure out, I mean, right now, are you just -- are you barely low single? Just assuming it's the same to that level, or I'm just trying to get a little more color about where you are right now...

.

Well, the reason we're guiding it low singles for the first quarter -- the reason we're mentioning low singles is you're really at still through the first quarter. You have concern -- I haven't heard anyone else talk about this. But is these actual issues. We don't know what's -- the weather is going to be like between now and the end of April.

You can have significant weather issues between now and then. We built -- we have that built into our guidance. We feel that with -- that with what is happening today and where we've built we're going to be, that we should end the quarter, at least up low single digits. .

So you're assuming it snows for Easter, I guess?.

Well, I don't know. That's the point, Chris, is you don't know. I try to be a weather man, but it's just not as, not my expertise. .

Do you assume e-commerce in your comp? Is it that meaningful that moved the comp needle? And is it in that comp forecast or no?.

It is in the comp forecast, and it is moving the needle slightly. .

Okay. Just from the -- the merchandise margin for the year, I assume, it's -- what are you expecting? Are you assuming it to be flat for the year or... .

So basically, expecting it to be flat. And then the reason for that is -- the main reason for that is the e-commerce growth throughout the year. .

Okay. So it seems like with your inventories being the way they are, strength in the dress business, which I wanted to ask you about. It just seems like you can have some opportunity to drive it.

But I guess, what you're saying, is the e-commerce is going to more of than off-set that based on what's you are thinking?.

I'm not sure I understood that. They have an opportunity to drive... .

So you -- well, I guess I'm saying that your inventories are down. You're seeing good growth, like for example in women's dress, which I assume is higher margin than some other categories. So it seems like you had an opportunity or have an opportunity to drive higher merchandise margins, you're just aiming to tell it that way... .

The offset is e-commerce. The margins in e-commerce due to, well, various reasons whether it would be from the promotional aspect of e-commerce or whether it would be the shipping costs mainly, that's the main reason it is helping drive that margin -- keep the margin flat. .

Okay. And women's dress up double digits.

And what's the difference between the stores that have the better brands and the stores that -- I mean, you're still seeing -- is that the one differentiator or as even those stores that don't have the better brands you're seeing really strong comp growth in women's dress?.

Actually, that's not the differentiator because the better brands are mainly in the casual end of our business.

We do have some dress shoes there, but what we're seeing is there are categories within dress, and I really don't want to get specific within the categories, if I can, but there are categories in dress that are driving really nice increases and have been for a couple of quarters. .

We'll go next to Sam Poser with Sterne Agee. .

So your consumer was probably hurt more with the high gas price than the economy.

Are you seeing sort of that customer loosening up a little bit? And combined, can you quantify that at all? Are you seeing that?.

I don't know how to quantify that, but I feel like there is a lot of moving parts in the way the businesses has turned. One, I believe, and I'm going to give you a couple of reasons, I believe that we executed the boot business as well as we ever have and probably better than many other retailers. We -- so that helped our business.

That fact that gas prices went down had to play a part, the fact that weather was much more moderate in the fourth quarter than it was last year had to play a part, the fact that income taxes were not -- the refunds were not delayed had to play a part. There were all kinds of moving parts into that.

But as you always tell me, Sam, it always starts and ends with the stores and with the merchandise. And I felt that merchandise was -- the merchandise selection was right. The -- definitely, the boot selection was on par. There's no other way to explain a 30-plus increase in women's boots.

After we had a double-digit increase in women's boots last year, that had to be a merchandise selection opportunity. .

That's crisp. Before I continue, I'm glad you listened to me. But the -- sorry, I just wanted to throw that in. The mobile app, I mean, you talked about it being -- you sort of talked about your e-commerce starting to be somewhat material. At one point, you were saying it wasn't as big as a single store.

Can you give us an idea how many stores is it worth today?.

No. We don't -- we're just not going to talk about the volume of our e-commerce business. I'll tell you that it is -- it was slightly accretive to our increase for the fourth quarter, and we believe that we'll beat our increases this year. But hopefully, it will be for sure. .

And how much -- I mean, a lot of the sort of inflection in your comp, besides the improved execution, seem to inflect around the introduction of your mobile app.

I mean -- or was that just coincidental? Or do you think there was something there?.

I think, it was 2 things. But I don't believe it was the mobile app near as much as I believe it was this ship-from-store scenario that we implemented in September.

Once we were able to fulfill e-commerce orders, almost at a -- very close to 100%, we -- customers began coming in, in higher numbers to our -- not only in our e-commerce site, but into our stores as well. So I think -- no, I got to believe that it was -- I believe and I wish I could quantify it to this.

I believe that our national advertising played a part to get the customers not only in our stores, but in our e-commerce site. I believe that the digital advertising that we added to our e-commerce store as the business improved drove customers not only to our e-commerce store, but to our stores.

So I think once we launched the ship-from-store scenario that was the real turning point of our business. .

And then I've got 2 more -- a few more things.

Number one, what percent of the orders have you been able to reroute to the West -- to the East Coast?.

Well, it would be our private label and anything that we control from the West Coast, and that would be somewhere less than 20%. .

Okay.

And then what type of product -- I mean, are you seeing that you're seasonal product is jammed up? Are you seeing it more -- more athletic basic products that's jammed up?.

I think it's pretty much across the board. I mean, branded vendors, whether it be in the athletic side or in the nonathletic side, are all struggling to get product through the ports. It's not -- it's definitely not just us. And... .

No. No, I understand that. But my point is that you're going to have less seasonality risk if some sneakers got delayed 2 weeks. But if some sandals got delayed, there could be significantly more seasonality risk. That's more my point. .

And you would think that, but if everyone's sandals are delayed, all it does is delay the ability for the customers to buy sandals by a couple of weeks. So whether it would be us or one of our competitors. So I will tell you that our sandal business is pretty good. So... .

Okay. And then 2 more things.

The earlier Easter, does that help jump start the season, assuming you have the inventories support it theoretically?.

I have heard it a couple of ways. Some people say that a later Easter as better for the business because it's warmer. But I don't know the answer to that, Sam. I like our earlier Easter, but I think -- I know I've heard it and experienced it both ways. It is really -- the first quarter is all about weather.

If the weather stays like it is, like it has been in the past 2 weeks, we'll have a really nice Easter. .

Okay. And then lastly, the ship -- you talked about the shipping costs hurting you with your e-commerce. But -- and when you can ship from store, but -- and the margin's hurting on e-commerce.

But if theoretically, if you can ship from store, doesn't that mean you can go to the store -- like if you have a $50 shoe that isn't available that you're pulling from a store, and don't you pull from the store that's -- one of the reasons you pull it from the store is because they may be at the biggest risk for selling it at a markdown, so you end up with -- get a regular price sale out of that where something else might -- it might help the margin pulling from the right store?.

That is certainly the strategy. But again, part of the margin issuance is not the price in which we sell a product but the expense, getting the product to the customer. So imagine this, if you -- a customer comes in and buys 2 or 3 pair, unless you can ship all 3 of those pair from the same store, then you have an increased cost in shipping. .

Are you looking to get to a big-enough size with the e-commerce platform a year or 2, whenever it is, to be able to work more closely, let's say, with UPS or somebody to get different rates? Does that all develop at it scales up?.

Well, it does develop, but we have pretty doggone good rates today. We -- I don't want to get into what we pay, but we have good rates. .

[Operator Instructions] We'll go next to Jeff Stein with Northcoast Research. .

This is [indiscernible] calling in for Jeff.

Based on the comp guidance you guys gave today, can you guys talk a little bit about all the various components of it, AUR, traffic and mix? And secondly, on wage pressures, can you guys just talk about wage expense going forward, how we should model that and how we should look at that going forward in the next year or 2?.

Well, from a traffic standpoint, traffic was basically flat for the quarter. We had increases in our average unit retail. We had increases at -- let's say, conversion rates were flat -- conversion rates were up 150 basis points, and we had an increase in transaction units.

So we've showed positive growth on most metrics, so from a transaction standpoint.

As far as -- you asked about wage inflation?.

Yes. I did. .

It's obviously a concern, but so far, we've been able to absorb whatever wage inflation we have experienced. As far as what happens next year or in the year after, I really can't address that at this point because I really don't know what's going to happen a year or 2 down the road.

But the wage inflation that has taken place for this year, we have been able to absorb. .

And as for the comp, I was looking at about the more the comp guidance for 2015, maybe what you're looking at for mix and traffic and AUR for the -- when you look at the comp guidance?.

Well, I think AURs are going to be flattish, maybe up low single digits. We haven't seen a lot of cost increases in the product that we sell. But I think that we believe that we're going to see a pretty strong athletic business based strictly on what we have seen so far this year and as we went through the latter part of last year.

We think that we have an opportunity for a very strong sample season because of some of the things that we've seen work so far in this year and actually, at the latter part of last year as well. So getting through the first half, strong sandals and athletic and our dress shoes, we expect to see a continuing comp store increase there. .

And there are no further questions at this time. I will turn the conference back over for closing remarks. .

All right, in closing, I want to thank the entire Shoe Carnival team that worked hard to deliver great product and excellent customer service, which led to a record annual sales. And I want to thank you for joining us today, and we look forward to speaking to you about our first quarter results on our next call in May. Thank you very much. .

This does conclude today's conference. Thank you for your participation..