Michael J. Newsome - Executive Chairman Scott Justin Bowman - Chief Financial Officer and Senior Vice President Jeffry O. Rosenthal - Chief Executive Officer and President Rebecca A. Jones - Senior Vice President of Merchandising

N. Richard Nelson - Stephens Inc., Research Division Daniel R. Wewer - Raymond James & Associates, Inc., Research Division Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division Seth Sigman - Crédit Suisse AG, Research Division Sean P. Naughton - Piper Jaffray Companies, Research Division David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division Camilo R. Lyon - Canaccord Genuity, Research Division Sam Poser - Sterne Agee & Leach Inc., Research Division Anthony C. Lebiedzinski - Sidoti & Company, LLC Sean P. McGowan - Needham & Company, LLC, Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the Hibbett Sports Second Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Friday, August 23, 2013. I would now like to turn the conference over to Mickey Newsome, Executive Chairman of the Board. Please go ahead. Michael J. Newsome: Thank you, Chris, and good morning, everyone. I am Mickey Newsome. Also with us is our CEO, Jeff Rosenthal; our Senior Vice President of Finance and CFO, Scott Bowman; our Senior VP of Merchandise & Marketing, Becky Jones; and our Senior VP of Stores, Cathy Pryor. We appreciate you being on the call today. We appreciate your interest in Hibbett Sporting Goods. Before we start, Scott Bowman will cover the Safe Harbor language.

Thank you, and good morning. In order for us to take advantage of safe harbor rules, I would like to remind you that any projections or statements made today reflect our current views with respect to future events in our financial performance. There is no assurance that such events will occur or that any projections will be achieved. Our actual results could differ materially from any projections due to various risk factors, which are described in the company's press release and SEC filings. Michael J. Newsome: Thank you. Next, our President and CEO, Jeff Rosenthal, will speak with you. Jeffry O. Rosenthal: Good morning. As you know from our press release this morning, our second quarter earnings per share were up $0.40 versus $0.30 a year ago, a 33% increase. Overall sales increased 12.6% to $186.2 million compared to $165.4 million a year ago. Comparable store sales on a calendar basis were up 0.3%. Comps by month were: May was down 0.4%, June was up 1.7% and July was down 0.4%. From a real estate perspective, we opened 17 new stores, expanded 3 high-performing stores and closed 4 underperforming stores, bringing the store base to 892 stores in 31 states. We added 2 new states, Delaware and Pennsylvania. For the fiscal year 2014, the company expects to open at least 70 to 75 new stores, expand approximately 18 high-performing stores and close 15 to 18 underperforming stores. The new stores continue to perform above pro forma, which gives us even more confidence that we can grow even faster in the future. We will become a national sporting goods retailer with over 1,500 stores over time. With the ongoing uncertainties in the economic environment, the company is revising its guidance for the 52 weeks ending February 1, 2014, and expects to report a raise of $2.65 to $2.77 earnings per share, an increase in comparable store sales on a calendar basis in the low single-digit range. Our current business has improved significantly through yesterday with sales up high single-digits on a comp basis. However, this is only the first 18 days of the quarter. During the quarter, the company successfully moved its corporate headquarters. We continue to make significant progress in our new wholesale and logistics facility, which is scheduled to open in spring of next year. We will continue to invest in people and technology. Our consistent strategy of going to smaller markets and our new store performance give us either -- gives us even greater performance that we can grow for many years to come. Michael J. Newsome: Next, our Senior VP of Merchandise and Marketing will speak with you, Becky Jones. Rebecca A. Jones: Good morning. From a product perspective, the men's business performed well. We had solid gains in men's branded active-wear, men's fashion apparel and men's footwear. The basketball footwear business continues to drive positive growth. The Jordan business remains strong and the launches were good in the second quarter. We also saw our men's running footwear trend improve in the second quarter. Our women's business overall was down. Our boys business was exceptional with branded active-wear posting double-digit comp growth. Likewise, boys footwear continues to perform well. The customers are responding to our assortments across all categories in the boys division. Girls footwear is a growth area for us and has had outstanding results. We will continue to support and focus on this opportunity. And accessories, socks and headwear are the best-performing categories. Collegiate apparel in both the men's and women's produced low single-digit comps. Our pro licensed areas were hampered by the NFL launch last year and the significant slowdown in licensed headwear area. Hardgoods were negative comp for the quarter. The merchandising staff continues to work diligently with the suppliers to deliver relevant and timely assortments. As we visit stores and stick with our suppliers and watch our competitors, we're really confident that our assortments are competitive. With that focus, we've been pleased with the third quarter results today. Michael J. Newsome: Thank you, Becky. Next, our Senior VP of Finance and CFO, Scott Bowman.

For the second quarter, total sales increased $21 million to $186.2 million, an increase of 12.6% over the prior year. Comp sales on a calendar or like-for-like basis were up 0.3%. The week shift in the fiscal calendar due to the 53rd week last year resulted in approximately $12 million of additional sales in the quarter. Gross profit rate increased 16 basis points in the quarter. Product margin decreased 53 basis points, mainly due to markdowns associated with clearance merchandise and incremental promotional activity compared to last year. Warehouse and store occupancy leveraged by 69 basis points. SG&A decreased 133 basis points as a percent of sales in the quarter, mainly due to leverage in salaries and benefits. Depreciation and amortization decreased 14 basis points as a percent of sales in the quarter. The income tax rate for the quarter was 37.7%, which was higher than last year due to a reduction in job tax credits. Operating income of $17 million increased 37% over last year and was 9.1% of sales versus 7.5% last year, an increase of 163 basis points. Diluted earnings per share came in at $0.40 per share versus $0.30 last year, a 33% improvement. From a balance sheet perspective, the company ended the quarter with $80.9 million in cash versus $71.5 million last year with no bank debt. Inventories increased 11.2% over last year and were 4.3% higher on a per store basis. We spent $12.1 million in CapEx for the quarter, including approximately $9.2 million for our new office and wholesaling and logistics facility. Also for the quarter, the company bought back 110,000 shares for a total of $6.2 million. At quarter end, we have approximately $238 million remaining under the existing purchase authorization. Michael J. Newsome: Thank you, Scott. Operator, we're now ready for questions.

[Operator Instructions] And our first question comes from the line of Rick Nelson with Stephens. N. Richard Nelson - Stephens Inc., Research Division: To ask you if you're seeing any changes in the competitive environment. One of your peers talked about some stepped-up promos in the South. Jeffry O. Rosenthal: Any more competitive? Not any more than usual. It's really about on the same pace that we've seen in the past. So that hasn't changed dramatically, Rick. N. Richard Nelson - Stephens Inc., Research Division: Okay. And how about the tax-free holidays? Are you seeing any changes there that might be driving the improvement in the third quarter comp? Jeffry O. Rosenthal: Rick, for the most part, the tax-frees anniversaried the tax-frees last year, and we were very happy with the results from all the tax frees and really in all the states this year. So we're pretty excited that we had a great 3 weeks of back-to-schools because the majority of our back-to-schools have started. We have about 5 states that go back on Monday and I think we have 1 state that starts after Labor Day. But what's happened with back-to-school, it really changed from where we were running for the last -- for the whole of second quarter so we feel pretty good about where it is today. Hopefully, it will stay that way. N. Richard Nelson - Stephens Inc., Research Division: Jeff, the guidance revision, you're pulling that back. I'm curious what is behind that, what you're seeing with the consumer, why... Jeffry O. Rosenthal: Well, Rick, as everyone knows, we had a tough first half and our run rate was slightly positive. And even -- we've seen sometimes in the past when things were a little bit tough, people come out when they have to, such as back-to-school, and they come and shop. And then maybe they'll go back. Hopefully, we're wrong and we're being too conservative. But we know that they have to shop for back-to-school and they end up shopping for holiday, but we're just being a little bit cautious because of the last 6 months trend.

Our next question comes from the line of Dan Wewer with Raymond James. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: So yes, I think that we're all confused with the earnings guidance. When we're talking about just a small change in your same-store sales forecast, right, from low to mid-single digits down to low single digits. And how do we get from that small change in same-store sales outlook to a $0.25 reduction in the earnings outlook?

Yes, Dan. So the earnings outlook, the decline in the earnings outlook, think about, about 80% of that is really top line-related and maybe about 20% of that is margin-related. We actually underperformed in Q2 versus our internal targets. Our comp sales were lower than our expectations. We did have some nice leverage on expenses, that was mainly due to the $12 million of additional revenue due to the week shift. So that kind of clouds it a little bit. We thought we'd do a lot better in Q2. So that was part of it. And then just looking forward, we see the strength in back-to-school as more of a temporary surge and we think that will settle down after that time period's over. And so when you put all that together, that kind of gets us to the revised guidance. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: When you look at the cost of the new headquarters, the cost of getting on the new distribution center, is that proving to be higher than you originally estimated? And could that be contributing to the EPS reduction?

No, it's not, Dan. That's really on track and there's really no surprises. From an expense standpoint on new projects or otherwise, it's really a top line and a gross margin rate assumption that we have for the back half. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: I guess, I'm also confused. You were saying you were short on 2Q comps, but a year ago, you were up 12.5%, isn't that right, in same-store sales you stated last year?

Yes, the stated was a little bit lower than that, but the shifted was a little bit better. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: So you were thinking you would do better than flat on top of a 12.5%? Rebecca A. Jones: Yes.

Yes, we did. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: And then that's what's resulting in the extra clearance markdowns?

Correct. We tend to take a pretty aggressive stance on inventory just to make sure that we don't put ourselves in a bad position at the end of the year especially. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: When you -- I guess, this is my last question. When you look at the estimate reduction for the second half of the year, will this impact 3Q more than 4Q?

It will. Yes, it will. In 3Q, remember that the week shift will hurt us in Q3 similar to how it helped us in Q2. So we'll have that impact in Q3 and so we see a larger impact there. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: I guess just one other question. So we still look at the third quarter as heavily weighted towards the first month, right? August is 35%, 40% of revenues for 3Q? Jeffry O. Rosenthal: Yes, that's correct. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: So I think we're just all surprised if you're running in high single digits during the most important month of the quarter. I think we're still having difficulty seeing why is the company concerned about the outlook. Jeffry O. Rosenthal: Yes, really, we feel really good about where we're going from a product standpoint and where we're going from operations. And all the parts of the business, nothing's really changed. We're just not -- unsure of the economic environment that's out there, Dan. We may be wrong but just based off of the last 6 months, we put a conservative view out there. Hopefully, we're wrong. We still feel good about what we got coming in for the second half of the year and we're excited that we're off to a great start. But our past 6 months have not been as good as we expected.

Our next question comes from the line of Peter Benedict with Robert W. Baird. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: Just thinking again about the pickup here in August so far. I mean, how -- is it across the store? Are there any categories that are notable in terms of their departure from the prior trends that you were seeing? Is it concentrated in one area? Is it across the store? Rebecca A. Jones: As far as the trends in general? Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: Yes, the pickup in August. Rebecca A. Jones: Yes, so when we talked about it in the first quarter, we said that our core businesses were still strong and that would be our branded apparel and our footwear, as well as accessories and that still is true for second quarter as well. Those areas continue to perform well. We were disappointed overall in the women's business in particular. And then -- I'm sorry, are you talking the third quarter miles [ph] on that? I'm sorry. Across-the-board, third quarter's great. We think that we've seen a real shift in -- when they're buying for third quarter as far as equipment and that sort of thing. We think that they've waited a little bit on that regard because we're, across-the-board, positive comp. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then... Rebecca A. Jones: Sorry about that. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: No, that's fine. I don't know if you guys mentioned this already. If you did, I apologize. The transaction count versus average ticket, kind of how are those trends looking? Jeffry O. Rosenthal: So as we look at the second quarter, our transactions were down mid-single and ticket was up mid-single to kind of get us back to flat. As we've gone into the third quarter, we've seen transactions pick up for us, so there's a positive trend there. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: Okay. And Scott, when you guys think about the back half of the year, do you think the comps that seem to be implied there are low to mid, I guess. Does that imply that traffic is flat to up, or do you think ticket's going to really carry the day?

Well, I think it will be more ticket than transactions. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then the last -- no, I'm sorry. Go ahead, Scott.

I was just going to say during this back-to-school period, we think it'll be a little bit more skewed towards transactions and then after we get past this, it'll settle back down similar to the way it was before. Peter S. Benedict - Robert W. Baird & Co. Incorporated, Research Division: That makes sense. And the last question, just on the product launch outlook. Can you give us an update there, and how are you guys are thinking about is this really the product cycle, the footwear cycle, kind of bigger picture things like that? Rebecca A. Jones: What we see for the back half of the year, we feel really good about the assortments that we've put out. And certainly, we just -- we've been looking at spring and summer for next year, and we feel pretty good about what we've seen out there in that respect as well. So as far as the trend, we see it really continuing where it is. Basketball was good. It continues to be good. And we were encouraged with the men's running business turning positive for us because it was a little bit slower early in the year. Now that it's starting to gain some traction, we've seen some good items come out. Certainly, not really impactful to the total business, but we did see some really nice sell-throughs on the adi Boost and the Springblade. And so we're looking at those as opportunities for the future.

Our next question comes from the line of Seth Sigman from Crédit Suisse. Seth Sigman - Crédit Suisse AG, Research Division: I just had a question about the hardgoods business. It seems like it's underperformed a bit for a couple of quarters now relative to other parts of the business. What do you think is going on there? Is there a participation issue maybe or you think it's been weather? Any competitive change? I mean, how do you think about that category? And I mean, given the underperformance, I mean, is there a thought to maybe reallocate some of that square footage to apparel or footwear? How are you thinking about that category? Rebecca A. Jones: You know what, you said everything we've been thinking. It's every bit of -- you just said everything that we think from an equipment perspective. We think it's partly participation. We think that it's -- we -- from a competitive perspective, we think that there's some things that's shifting in the business in general. And yes, we're taking a look at what really works for us. The thing that we have to remember when we're looking at our small market strategy is that we really are the people that bring that product to those communities. So we want to make sure that we're doing the right thing about the consumer for the long haul. We're not going to be quick to make a rash decision because that's just not what we do. But we do take a look at what are the products that are going to be most important to the consumer and then how do we come to life. We think that the right with thing to do is to stay premium at this point. Seth Sigman - Crédit Suisse AG, Research Division: Can you maybe just elaborate on what you mean by the competitive change that you're seeing? Is it -- is it consumer shopping online or in different formats? Rebecca A. Jones: We're not really sure. We don't really have a real good read on that. Certainly, online is something to consider and is out there. And when we look at how the business has been trending in general, we saw, as an example for second quarter, we saw that business shift because we were not happy with the results. But in the third quarter, it's good. So we've seen our consumers buying really closer to need. We know that, from a football perspective, that of the schools shifted their games out a week to start the season. And you know what, we don't know. They may shift it back next year. You never know from a high school perspective how they're going to react to that. Seth Sigman - Crédit Suisse AG, Research Division: Okay. That's helpful. And maybe just one more. I know you've talked about a bunch of merchandising initiatives in the past. And I think one of them was just enhancing the visuals around the shoe wall and maybe some other initiatives you have in place. Can you just walk us through the progress with that and how to think about some of the drivers outside of just the pure product trends for the back half of the year? Rebecca A. Jones: Sure, yes. So the shoe wall is about 2/3 complete, the number of doors that we're putting it in this year. And when we look at the results for second quarter on those particular stores, they did perform much better than -- on a comp basis, they had a nice significant uptick compared to the stores that didn't have it. So as we go forward with that program and finish that up for the rest of the year, we expect that to be a positive impact in general. We did have -- we did run reports on it for the first 3 weeks of this quarter and it was good and actually better than it was in second quarter for those stores that completed it. So we see that as a positive impact. Just from a consumer perspective when you walk into the store, it does highlight the walls in a much better way than what we were doing in the past and so we're confident around that. We continue to put our shops in stores as we think that, that's appropriate and suppliers partner with us. We have Nike shops and Under Armour shops and that does tend to perform well for us. It allows us to present the product in a very concise way and helps us do key item merchandising. So we continue to support in that way and we really like to ensure that our new stores are open with those shops.

Our next question comes from the line of Sean Naughton with Piper Jaffray. Sean P. Naughton - Piper Jaffray Companies, Research Division: The traffic volatility that you talked about in the second quarter, does that feel like it was potentially more pronounced than Q1? Were you seeing more people -- if there is a paycheck cycle, are more people there in the weekend than during the weekday? Did you notice any significant difference in traffic patterns? And then maybe the same question for did you notice any performance differences between your mall-based stores and your off-mall stores? Jeffry O. Rosenthal: Really, it was about the same and really mall doors versus strip centers really wasn't that big a difference, slightly but not anything to make it any different than what it is. It really is very similar. Sean P. Naughton - Piper Jaffray Companies, Research Division: Okay. And then, I guess, you talked a little bit about there may be some excess inventory given the shortfall in Q2. I guess, throughout the quarter are you seeing more people purchase at full price or fewer people, excuse me, purchase at full price and more people are looking for a discount and seeing better sell-throughs on some lower-priced items potentially in the store within the assortments? Jeffry O. Rosenthal: Well, we were a little bit more promotional in the second quarter just because of the shortfall in sales and making sure our inventory stays clean. Really not seeing that people are looking at price points more. And really, we're seeing our premium products sell even better. We have launch shoes that we sell 80%, 90% in a launch day. So it's really about having the newest and the greatest than necessarily price points. Michael J. Newsome: Keep in mind, price per item is up. Sean P. Naughton - Piper Jaffray Companies, Research Division: Yes, okay. And then the other thing, I guess, I would just -- one other question is on the back half of the year, when you think about cost of goods, are you seeing any sort of price increases on those? Is there any pressure on the cost of goods coming into the back half of the year? Rebecca A. Jones: Nothing that's significant. Certainly, when you bring in new product that is a new technology, those prices will be higher than maybe something else that was on the floor a year ago. But that's really about mix, not really price consideration.

Our next question comes from the line of David Magee with SunTrust. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: A couple of questions. One is the -- obviously, you're very cautious about the September through, say, the mid-November time period. And I'm just curious, as you look at the year so far, you had the extreme weather comparison in the first quarter and then you had the sort of the macro thing happening in the late spring, early summer. But that's a period of time, which you guys, seems to me, more times than not sort of struggle anyway with that late spring period because it's seasonally weak. Do you see anything unusual about the September through November time period? It seems like that historically has been more a steady time for you than not. Jeffry O. Rosenthal: Yes, David. You've hit it right on. Usually, second quarter for many, many years is always our quarter that could be a hit or a miss. And weather, we use weather in the first quarter. I don't know if that was as big or not as big as it should have been. And then you got second quarter, you have rain and all that. And we don't really like to use weather as much. But as we get into the second half of the year, we don't see anything significantly really changing. We're just thinking maybe it calms back down to the way it was, first and second quarter, but hopefully, we're wrong. We feel good about products coming. We have a lot of new launch products. We have a lot of new initiatives in apparel. So we feel good about that. If we have consumers, we'll do fine. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: Everybody is trying to get a sense for what sort of impact the web might be having. Are you seeing any sort of heightened activity on your own website that can serve as a proxy for that with your customers? Jeffry O. Rosenthal: Not really. You got so many moving parts. I don't know how anyone can predict the weather or changing of seasons or those types of things. And we do our best to try to see that. We've had so much up and down noise since the beginning of the year with payroll taxes, shift in tax refunds, weather, launch dates shifting. So it is just so hard to sit there and pinpoint what exactly is going to happen. Obviously, when we had less traffic the first half of the year, we're concerned about that if that goes back after back-to-school. Hopefully, we're wrong. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: But I was thinking more of the web traffic. Are you seeing things that, within the case of your customers, are becoming more incrementally more interested in the web this year? Jeffry O. Rosenthal: Not necessarily. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: Scott, with regard to the headquarters move, did that -- you mentioned that to be on track. Was that like a 10 to 20 bps of the second quarter as far as the impact?

Yes, it is about that, David. We executed the move in. There's really no surprises. I think it all comes down to very good planning and execution on everybody's part. And so there's no surprises there and it was right at expectations. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: What is your current thinking regarding incremental costs in the second half, either for the next year's DC move or maybe extra systems work?

It's very similar to kind of how we've talked about it before. We said in the past that we would expect the new office and new wholesale logistics facility to drag about $0.05 on this year's earnings. That really hasn't changed. There's really nothing that shows us that, that will be much different. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: And what do you think that would be for next year?

It'll be an incremental, about another incremental $0.10 next year because that's when we will go to the new DC and turn it live and so we'll have some duplicate expenses and some transition costs. So that's the reason for the increase next year and then it will level off after that. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: And my last question is when you mentioned the performance of the new stores being strong, is that on a relative basis or are you speaking versus an absolute pro forma dollar number? Jeffry O. Rosenthal: It's really on a relative basis. I think we continue to get better as we open new stores on the level of inventory we put in those stores and the assortments by local market. And the numbers show it. And the last -- over the last 3 years, the projection of annual sales for those new stores has increased 3 years in a row. So we've seen that and that is against our pro forma as well. They've continued to do better than our expectations. David G. Magee - SunTrust Robinson Humphrey, Inc., Research Division: And that's again versus a pro forma dollar number that you have? Jeffry O. Rosenthal: That's correct.

Our next question comes from the line of Camilo Lyon with Canaccord Genuity. Camilo R. Lyon - Canaccord Genuity, Research Division: I wanted to focus on the gross margin a little bit and particularly the merchandise margins. So down 53 basis points in the second quarter. Where there any shifts that, that was comparing against last year unfavorably? I seem to remember, Becky, that you talked about a promotional shift by a week or 2 last year. Can you just remind me of that first? And then I have a follow-up to that. Rebecca A. Jones: Yes. In fact, last year, we really pulled back on our promotional cadence because we just didn't need to go there. So this year, where you would see a shift is that the last week of this quarter was really the kickoff week for back-to-school for us. And all of that promotional activity that we do during that time period, it fell into the last week of this quarter. So if you think about our back-to-school mailers and those things, that all hit right at the end of the quarter, which is no different timing on a calendar basis because it was the first week of August. But it did shift in our fiscal calendar. And that came -- those expenses came then. As far as where we're going forward, I would say that next year, it will shift back into the third quarter than where it was this year. And we get aggressive to clearance because we want to make sure that we keep our inventory in a healthy position.

And just as a reminder, you kind of alluded to it, last year in Q2, we were up 80 basis points in product margin. So if you look at Q1 and Q2 over a 2-year period, it's up about 30 basis points over that 2-year period for both Q1 and Q2. Camilo R. Lyon - Canaccord Genuity, Research Division: So what was the bigger driver of the Q2 merch margin decline? Was it the shift from the timing of the promotion or was it the accelerated clearance? Rebecca A. Jones: It was both. It was both. It was a little bit of both. It was probably evenly distributed. Camilo R. Lyon - Canaccord Genuity, Research Division: Okay, great. And then so for the outlook, it seems to imply that there's pretty dramatic merchandise margin contraction expected. If you feel that you've cleared out some of the inventory that you needed to clear out and you've already guided comps down to that low single-digit range, I'm just trying to understand what the expectation is. Why would gross margins -- merchandise margins, in particular, be so affected if you're already planning for a lower sales base?

Camilo, this is Scott. We don't really think merch margins will be affected that much in the back half. They'll be close to where they were last year. Really, the bigger effect will be the leverage or lack of leverage on store occupancy and warehouse and that will be magnified a little bit in Q3 as we have that big negative effect on the week shift. So if you look at Q2's numbers, you can see really favorable leverage in those line items. But that will tend to reverse in Q3 so that's where we see the drag. Camilo R. Lyon - Canaccord Genuity, Research Division: Got it. Okay, that's really helpful. And then just lastly, what's the dollar detriment to Q3 that was beneficial to Q2 from that extra week to sales?

It's about $13 million to $14 million and it's a little bit higher just because we have a bigger base in Q3. Camilo R. Lyon - Canaccord Genuity, Research Division: So $13 million to $14 million for Q3 detrimental?

Correct. Camilo R. Lyon - Canaccord Genuity, Research Division: Okay, great. And then just finally on pricing, you talked about running -- showing an uptick in comps and that's definitely a positive result given where it's coming from. Have you seen anything different in your consumer's ability to respond to these higher priced products that are coming to market? So Flyknit Free is an $160 shoe. The Springblade is an $180 shoe. Is there any resistance to that high price point in the category -- is the new products coming to market outpricing the consumer's ability to -- or desire to purchase that kind of running shoe? Rebecca A. Jones: I think that you have to take that on an item basis because we will see some items come out that do very well and others that don't. And it's really about whether or not the consumer understands it. They are responding to newness. Anything that we bring in at newness with good technology, they'll spend the dollars for it if they think that it's something that they like to see. It depends on the item. It's a hit or miss thing. We were pretty happy with the Springblade and the Boost, in particular. They weren't in a lot of stores. They were not in a lot of stores, and as I mentioned earlier, it wasn't really impactful to the total. But it was encouraging because we were hoping to be able to follow that up in the spring period and take it to more doors. And with this performance, that gave us the confidence to move forward with that plan.

[Operator Instructions] We will go to Sam Poser of Sterne Agee. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay, just to clarify. It had -- the Street was at 3.5% comp for the quarter. Had you put up a 3.5% comp, can you give us some idea of what your earnings would have been? Because you beat the Street numbers but...

Yes, Sam. If we would've had -- had we come in at the Street numbers, we would have been better close to $0.20. So if you think about it, the internal expectation that we had was a bit higher than where we came in because our comp expectation was higher. So that... Yes, we did get a big benefit from the extra week and that could be about $0.10 better if we were to come in at 3% versus up 0.3%. Sam Poser - Sterne Agee & Leach Inc., Research Division: And so in your guidance, basically, you're taking $0.10 out of the back half. And I mean, it's a split between the miss and the look at the back half of the year, correct?

Exactly. The way to think about it, if you go all the way back to Q1, we underperformed slightly versus our internal kind of numbers because comps were 0.8%. Q2 was a little more pronounced. We underperformed our internal target a little more. And so that was -- that's a big piece of the guidance reduction. And then the rest of it is just forward-looking where we think things will fall off a bit after back-to-school. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay. And then -- and to clarify, your busiest month of last year -- of the third quarter was August where you were up -- you ran a very healthy comp. And that's also the largest month of your -- of the quarter. Am I correct about that? Jeffry O. Rosenthal: Yes.

Yes, that's correct. Sam Poser - Sterne Agee & Leach Inc., Research Division: And so if you're trending up high singles right now and that continues to the next few weeks, it could drop to flat and you'd be ahead of your current plan, I would assume, your current guidance?

Yes, that's a fair statement, if it continues. That's really the whole question for us, how long will it continue and to what extent. So it's really just based on your assumptions as we go forward. Sam Poser - Sterne Agee & Leach Inc., Research Division: And then at the end of the year last year, you got hurt very badly by -- you got hurt very badly by the shift to the tax refunds. What is your assumption in the guidance for how that's going to play out?

Yes. For us, it's really not a certainty for us. Your logic -- your point is a good one that you could see some tax money come back into Q4 because we did have a delay last year, but we don't really put that into our guidance because it's somewhat uncontrollable or totally uncontrollable for us and so we don't really put that into our guidance. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay. And are your inventories, Becky, are they clean right now? Are they where you want them to be after the work that you did in the second quarter? Rebecca A. Jones: They're better than where we thought that we would land, but I think that we still have some work that we want to do round that. Just because we had a nice little run the first 3 weeks, that's giving us a better position. But we still have some summer products that we're going to have to address. Sam Poser - Sterne Agee & Leach Inc., Research Division: And it is this -- everybody's been talking about the consolidation of these events. I mean, has back-to-school just tightened up or it used to be, let's say, a 6- to 8-week event now, like a 3- or 4-week event and it's coming a little bit later as well, is that the way to think about it? Jeffry O. Rosenthal: Sam, I think it sure shows that. Really, all events, when you even look -- going looking forward in the fourth quarter, I think November, December until you get to about 5 days before and the 5 days after Christmas, I think it's not going to be so great. But at the of the day, people always seem to come and it seems like things are getting much tighter than they used to be. Football season, it's a 10-day period. But what 10 days it falls is just really where it the season starts. But really, the big things happen much tighter than they used to. People don't shop for a cleats 3 weeks early anymore. They wait until the week of or the day before practice. Rebecca A. Jones: The day after practice. Jeffry O. Rosenthal: Or right after to get things. And it just seems like the consumer, they don't want to go early anymore. It's just when needed.

Our next question comes from the line of Anthony Lebiedzinski from Sidoti & Company. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Just wanted to get a little bit more clarity, if I could, in regards to the transaction decline for the second quarter. Could you perhaps give us a breakdown as to the transaction decline with traffic versus conversion rates? Did you have any insight into that?

Anthony, we don't really track conversion rate. I mean, the transaction number was down mid-single. So the other side of that, the ticket was up about the same amount. But we don't really track conversion as a separate item. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay. And so far in the third quarter, you mentioned that same-store sales up strong. Can you give us a little bit more flavor as to which categories, footwear, apparel, equipment, kind of are they all equally strong or is one doing significantly better than the other? Rebecca A. Jones: For third quarter? Jeffry O. Rosenthal: Yes.

Yes. Rebecca A. Jones: Yes, I will tell you that our footwear is doing incredibly well right now. It's having a really nice run. But on the flip side, it's branded apparel as well. Where we were disappointed with our women's and girls branded apparel business in the second quarter, we're seeing a really nice comeback in the back-to-school time frame. So when I look at the core businesses as a total, they continue to be the drivers. And those businesses that were softer for the second quarter are actually positive for this quarter. We're seeing a nice run early in our collegiate business and that's a good sign for us. Everybody's a winner right now and in college, so I think the fans are out shopping and getting ready for the season. But I'm going to -- and I do think that we have a lot of back-to-school business for the collegiate business as well. But I couldn't tell you that there's any one category that is driving the overall results. We just see it being pretty healthy across-the-board. Anthony C. Lebiedzinski - Sidoti & Company, LLC: Okay. So it sounds like there was a shift between... Rebecca A. Jones: The customers are walking in the store right now. Anthony C. Lebiedzinski - Sidoti & Company, LLC: 2Q and 3Q, okay. Good. And can you just give us an update on the IT upgrades? I know you had talked about business intelligence tools and some other things. So can you give us an update as to what you've done so far this year and the plan going forward, please?

Sure. Markdown optimization, we continue to roll that out on a gradual basis and so that's going as planned. And so like we said before, we don't really expect any big benefit this year. But the early read is that it's operating as expected. So we're confident that, that will deliver for us starting the next year. Business intelligence, we recently had a kickoff with our partners a few weeks ago and we're now into the mapping phase, mapping the data over to the data warehouse. And so we're full speed ahead on that project and we're very excited of what that can bring to us in the future. As I kind of look forward down the road, we're looking at making some upgrades to our allocation system. It is several years old and so as we install the new upgrade to that system, that'll give us much more functionality than what we've had in the past. So we're looking forward to that as well.

Our next question comes from line of Sean McGowan with Needham. Sean P. McGowan - Needham & Company, LLC, Research Division: A couple of questions here. Some of the factors that you're citing for concerns over how the consumers are going to behave, some of those factors were already highlighted at the beginning of the year. So can you sort of parse out from what you're seeing, what's gotten worse or what you're afraid was going to happen -- is happening? It's not like nobody knew about payroll tax or other issues like that, so what do you think is really going on? Jeffry O. Rosenthal: I think a lot of it is just early in the year, we were really unsure of what impact all these things might have on our business. And so as we get deeper into the year, it becomes a little bit more clear of what our run rate is and that we do see some weakness in the consumer and I'm sure payroll tax is a part of that. And so really the changes, just we have more history to go from to understand what that trend really is going to be. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. A couple of other questions. Any thoughts, maybe updates on kind of need or plan for a second distribution center in a different part of the country?

At this point, we don't. I mean, we'll continue to evaluate as we open up the new stores. Right now, we have third-party logistics support out in our Western stores and some of the Midwest stores and so we'll continue to use them to support. As we continue to grow stores though, we'll continue to keep our eye on it to evaluate when that time may be where we build the second facility. But it's not in the cards in the near term. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. And then last question, I know you touched on a little bit, but we are looking at some data that suggested in some of your markets, the weather was quite unusually wet or cold there. I'm not sure how much colder matters this time of year, but certainly the wet does. But you're not also very strong in some of the categories like golf that might be that affected. So can you kind of quantify how much you think weather did affect the business? Jeffry O. Rosenthal: It's so hard to quantify that. We don't have golf. But it's -- weather, maybe you don't go outside as much. I don't think it affects us as much in the second quarter as weather did really in the first quarter. It's so hard to quantify.

And our final question comes from the line of Camilo Lyon with Canaccord Genuity. Camilo R. Lyon - Canaccord Genuity, Research Division: I just had another one to get your take on. How are you viewing your discussions with your vendor partners? Are you -- now that you've taken down your comp guidance for the back half, have you altered the receipt of product? Are you starting to push out receipts or you're delaying any sort of receipts? Is there any change in that methodology or discussion point that you're having with your vendor partners? Rebecca A. Jones: We work with our vendors regardless of what the sales trend has been to make sure that we're as clean as we possibly can be from an inventory perspective. At times, that's adjusting the on order; other times, it's really working with them to gain returns on product that isn't moving for us. So we know that as we move forward into the back half of the year, that managing the inventory will be part of the success of managing our margin piece of it. And if we see tertiary things that aren't working for us, if we bring something in that doesn't sell at the pace that was anticipated, then if there's a backup order we'll talk to our supplier about it and get their support where we need to. Camilo R. Lyon - Canaccord Genuity, Research Division: But has anything changed as of today with how you -- you're having those discussions and those receipt dates for the remaining part of the year? Rebecca A. Jones: No, it doesn't change because that's just part of the practice of the business that we do everyday.

There are no further questions on the phone lines. I will turn the conference back over to you, Mr. Newsome. Michael J. Newsome: Thank you. In summary, we're prepared for growth in Hibbett Sporting Goods. I am proud that we successfully moved into our new offices in the second quarter, and I am confident we'll successfully move into our new wholesale and logistics center in the spring of next year. We will have a foundation to have a minimum of 1,500 stores in the future. Our new store count net of closings is growing. Five years ago, we had only 21 new stores net of closings. This year, we'll have 50 plus. We will increase again next year. The last 3 years, new stores are performing approximately 20% above their pro forma. Our new store pro forma gives us the confidence to increase our new store count now and in future years. We have identified a minimum of 450 to 500 additional new markets for Hibbett stores in just our current 31 states. Our model will work in all states. Thank you for being on the call today, and we look forward to speaking with you on November 22 at 9 a.m. Central Standard Time with our third quarter results. Thank you.

Ladies and gentlemen, that does conclude the conference call for today. Thank you for your participation, and ask that you please disconnect your lines.