Good afternoon, ladies and gentlemen, and welcome to the Shoe Carnival's Fiscal Year 2012 First Quarter Earnings Conference Call. 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 call over to Mr. Cliff Sifford, Executive Vice President and General Merchandising Manager of Shoe Carnival. For opening remarks, Mr. Sifford, please go ahead.

Thank you, and welcome to Shoe Carnival's First Quarter Fiscal 2011 Earnings Conference Call. Joining me on the call today are Kerry Jackson, Chief Financial Officer; and Tim Baker, Executive Vice President of Store Operations. Mark is unavailable to join the call today, so I will review the company's performance and then Kerry will review the financial results for the quarter and our guidance in more detail. We will then open the call up to take your questions. We are pleased to report a record first quarter earnings of $0.54 per diluted share compared to last year's first quarter earnings of $0.50 per diluted share. Please bear in mind the 3-for-2 stock split which Kerry will address further detail in a few minutes. Customers responded favorably to our spring and athletic footwear assortment to help us generate a sales increase of 12.2% to $222.6 million and in comparable store sales increase of 7.3%, which was at the high end of our guidance. Although our gross profit margin of 30.8% was lower than the first quarter last year, and our selling, general and administrative expenses were higher on a dollar basis, these reported results were better than we expected for the quarter. As a result of this performance and our strong sales momentum, we were still able to report first quarter earnings ahead of our expectation for the quarter and generated the highest quarterly earnings in our company's history. This record earnings performance, coupled with our consistent emphasis on controlling inventory and fixed assets, enabled us to generate cash flow of $20 million. We ended the first quarter with an increase in cash and cash equivalents of approximately $23 million to $92 million compared to the prior year period and we remain free of interest-bearing debt. Now focusing on our first quarter results in more detail. As I previously mentioned, our comparable store sales increase of 7.3% was at the high end of our expectation for the quarter. Our customers continued to respond well to our business model of providing the right product assortment for the entire family at compelling value. Traffic for the quarter was up 5.4% and conversion was relatively flat. Average transaction was up low single digits with the average unit per transaction down slightly compared to the prior year period. Merchandise margins were down 70 basis points due primarily to the final clearance of boots and winter-related footwear. Although the negative impact of the toning category to our comparable store sales is abating, our comparable store sales, excluding toning, would have been up 10.3%. Total toning sales for the first quarter were down in excess of 75% on a comparable store basis from the first quarter of 2011. Our positive sales results were broad based. With one exception, every operations region delivered a comparable store sales increase for the first quarter as compared to the same period last year. In the first quarter of 2012, our gross profit margin decreased 30 basis points to 30.8% from 31.1% in the first quarter of last year. As stated earlier, our merchandise margin declined by 70 basis points, and we are able to leverage buying, distribution and occupancy cost by 40 basis points. Our management group continued to do a good job of controlling selling, general and administrative expenses. SG&A expenses for the first quarter increased by only $4.9 million and as a percent of sales, decreased 30 basis points compared to the first quarter of 2011. And finally, we ended the quarter with inventory up approximately 5.2% on a per store basis, in line with our plan to increase inventory in categories where we see strength in order to maximize our business during fiscal 2012. Our continued improvement of key financial metrics reflect the strength of our business model and the commitment and the ability of our entire team to execute on certain fashion trends currently driving consumer footwear demand. Turning now to store expansion. In the first quarter, we opened 13 new stores and closed 3 stores to end the quarter with 336 stores operating in 32 states. Our new unit growth for the first quarter represents the largest number of new stores we have ever opened in a quarter. In addition, as many of you know, we entered Dallas, which is a new market for us, with 6 stores. We are extremely pleased with the grand openings of these stores, which exceeded our expectations. For the first time, we were able to really leverage our sales and marketing efforts as we have never entered a new market with this many new store openings. The effort of our entire Shoe Carnival team from our corporate headquarters to the store level continues to be tremendous as we execute on our robust unit growth strategy. I would like to reiterate, our management team will continue to review our annual store growth rate based on our view that the internal and external opportunities and challenges in the marketplace. We believe our strong, unleveraged financial position leaves as well positioned for additional square footage growth over the next several years. For the second quarter of 2012, we will continue our accelerated store growth with the opening of 11 stores, including our first 2 stores in Puerto Rico, and we plan to close 2 stores. Including the 13 stores we opened in the first quarter, we continue to expect to open a total of 30 new stores this year with a total of 7 in the Dallas market, and 4 in Puerto Rico. We also can -- currently plan to close 6 stores this year. Therefore, we expect in fiscal 2012 with approximately 351 stores. Please keep in mind that amount of stores we actually close will depend upon further negotiations with our landlords. As we look forward to the remainder of 2012, we are encouraged by our new store openings and current sales momentum. We remain optimistic about our outlook for the summer and especially the back-to-school season. Moving on to merchandise. We are -- there is no question that the unseasonably warm weather patterns of February and March was one of the catalysts for early sales of sandalized footwear and athletic shoes for all ages. Our women's nonathletic department for sale of sandals and early spring product helped overcome a lackluster performance in traditional dress shoes. Women's sandals posted a double-digit comparable store sales gain, while women's shoes, as a whole, had a low-single-digit comparable store sales gain for the quarter. Casual flats and colorful canvas and opened-up sandals both performed well. In addition, we saw strong gains in sports sandals and opened-up wedges. The Americana trend, which covers looks from boat shoes to Western shoes and boots, also continues to be strong in a growing trend. In our men's nonathletic department, we ended the quarter with a mid-single-digit increase on a comparable store basis. Sandals, canvas casuals, along with boat shoes, were all up double digit. Our children's business ended the quarter with a double-digit comparable store sales increase. This increase was driven primarily out of sandals and girls and boys athletic. With great spring colors being the driver, the key category in kids athletic were infants athletic and girls and boys running. In adult athletics, comparable store sales were up mid-single digits for the quarter. Comparable store sales in the athletic would have increased in the teens without the negative impact of toning. As I said in the last conference call, as we moved through the remainder of 2012, toning becomes less of an impact to our comparable store sales. Toning, as a category, accounted for just over 2% of total sales in the second quarter of 2011, just over 1% of total sales for the third quarter and just less than 1% of total sales in the fourth quarter. Inventory ownership of toning represents less than 1% of our overall inventory, which is in line with both the sales trend and our expectation. The classifications of product drove in the gains in the adult athletics for the first quarter were: men's and women's retro basketball; men's and women's performance in technical running; and men's and women's skate. As we mentioned last conference call, color is still the lead story in running shoes for both men and women. We see this trend not only continuing, but getting stronger as we move through back-to-school and beyond. Inventories on a per door basis ended the quarter up 5.2%, which is in line with our expectation. As we mentioned in the last call, we shifted February athletic receipts into January to take advantage of the unseasonably warm weather patterns. This shift allowed us to get additional product into our stores for the all-important rapid refund time period. That decision was instrumental in driving strong high-single-digit comparable store sales growth for February, and also provided momentum to drive athletic business throughout the quarter. With this success, we continue to push our key athletic vendors to deliver our orders earlier in the shipping cycle, which plays a very important role in keeping our product assortment fresh. I am very pleased with the content of our inventory and our merchants continue to keep our aged inventory low. Moving to e-commerce. We continue to make good progress with our site, which has now been open for 7 months. We continue to make improvements in the overall performance of this site, including the successful implementation of PayPal. We have tripled our royalty numbers, utilizing both our brick-and-mortar stores and our e-commerce site. We are in the process of building our mobile site, which we plan to launch prior to the back-to-school time period. This is an important strategy because mobile technology accounts for over 20% of all online purchases. This technology will help facilitate the installation of kiosks in many of our smaller stores, allowing our customers the opportunity to see the broad assortment found online while shopping our stores. This strategy will be another component on improving conversion and transaction size in those stores. Over the longer term, we'll add enhancements such as order online and ship from vendor. This will allow us to utilize our vendors' inventory resulting in increased turns and reduced risk. While there is still much work to be done, we're very excited about the full potential the site gives us to grow our customer base, which will result in stronger sales and profitability as we move through the remainder of this year and next. Lastly, looking forward to back-to-school, we believe that we are in the midst of a strong athletic shoe cycle. This trend is being driven by a combination of factors. First, there is a growing commitment to the -- to a healthier lifestyle among all age groups and income levels. Secondly, the product has never been more exciting with vibrant color, lightweight constructions and new technologies. This strong trend shows no sign of slowing. And with the Summer Olympics set for the back-to-school time period, we believe it will just get stronger. In addition to athletics, colors have found its way into new casuals, both in flats and wedges. The Americana trend continues to grow and should be a must-have for back-to-school. Tax rebates for most markets have been set, and there are no moves from quarter-to-quarter. Our marketing plans are in place, and we'll reach our customers through multiple media channels. Back-to-school is our most important sales period, and we are well positioned to take full advantage of our opportunity. Now I'd like to turn the call over to Kerry Jackson for details on our financial results. W. Jackson: Thank you, Cliff. Let me begin by taking a few moments to review the stock split on our historical financial information. I will then discuss our first quarter results in more detail, followed by information on cash flow and concluding with our outlook for the second quarter of fiscal 2012. On Friday, April 27, we completed our 3-for-2 stock split. Upon the completion of the stock split, the company's outstanding shares increased from approximately 13.6 million to approximately 20.4 million shares. Beginning this quarter and with all future financial press releases and SEC filings, Shoe Carnival's historical earnings per share and additional share information will be retroactively adjusted for all periods presented. Now I'll focus in our financial results for the quarter. Our net sales increased $24.2 million or 12.2% to $222.6 million during the first quarter of fiscal 2012 compared to the prior year's net sales of $198.5 million. This increase is primarily due to a 7.3% increase in comparable store sales and an $11.8 million increase in sales generated by new stores opened since the beginning of last year, as well as our e-commerce site, which we launched in September 2011. These increases were partially offset by $2.0 million loss in sales from the 7 stores closed since the beginning of fiscal 2011. The gross profit margin for the quarter decreased 0.3% to 30.8%, a decline of 0.7%, and our merchandise margin was partially offset by a 0.4% reduction in buying, distribution, occupancy costs as a percentage of sales. The decline in buying, distribution, occupancy expense was primarily due to improved leverage on our occupancy costs associated with the higher sales in the quarter as compared to last year. Selling, general and administrative expenses increased $4.9 million in the first quarter of fiscal 2012 to $50.6 million from $45.6 million in the first quarter of last year. However, our sales gain enabled us to leverage these costs by 0.3% as a percentage of sales. The increase in SG&A was primarily due to a $3.8 million increase in expenses for new stores, net of expense reductions for stores that have closed. In addition, we've experienced an increase in self-insured health care cost of $1.4 million. Our health care expense is subject to a significant degree of volatility and will continue to carry the risk of material variances between reporting periods. Total preopening costs for Q1 increased $1.1 million to $1.6 million. This increase in preopening cost over Q1 of last year equates to a reduction in EPS of a little over $0.03 per diluted share. Of the total preopening costs incurred in Q1, $1.15 million is included in SG&A and $469,000 is included in cost of sales for preopening rent and freight. In Q1 last year, we incurred $516,000 of preopening expense, of which $415,000 was included in SG&A and $101,000 was included in cost of sales. The effective income tax rate for the first quarter of fiscal 2012 was 38.5% as compared to 38.4% for the same time period in fiscal 2011. Now let me discuss our cash position and information affecting cash flows. Depreciation expense was $3.8 million in Q1 and is projected to be approximately $16 million for the fiscal year. We expended $8.5 million in cash during the first quarter of fiscal 2012 for the purchase of property and equipment, of which $6.9 million was for new stores, remodeling and store relocation activities. The remaining capital expenditures were used for continued investment in technology and normal asset replacement activities. Cash lease incentives received from landlords was $2.7 million for the first quarter of fiscal 2012. Capital expenditures for fiscal 2012, including actual expenditures during the first quarter, are expected to be between $24 million and $25 million. Approximately $11 million of the total capital expenditures are expected to be used for new store construction and $8 million will be used for store relocation and remodels. Lease incentives to be received from landlords during fiscal 2012, including the amounts received during the first quarter, are expected to be approximately $5 million to $6 million. We currently have $25 million authorized under our share repurchase program. However, to date, no shares have been repurchased under this program. My final comments today will focus on sales and earnings expectation for the second quarter of fiscal 2012. We expect second quarter net sales to be in the range of $179 million to $182 million, and comparable store sales to increase in the range of 1% to 3%. Earnings per diluted share are expected to be in the range of $0.08 to $0.11. Included in this earnings expectation is an increase in preopening costs of $1.25 million. This increase in preopening expense equates to approximately a $0.04 reduction in EPS. Total preopening expense for Q2 is expected to be $1.7 million compared to $450,000 in Q2 last year. Of these total preopening costs, we expect $1 million will be included in SG&A compared to $350,000 -- $315,000 included in SG&A last year. The remaining preopening costs are included in the cost of sales. Due to the acceleration in our store growth this year, we expect to incur higher preopening costs in each quarter this year. Given these are material increases in the expense and we believe we can reasonably estimate this expense, let me provide you with the expected preopening costs for the second half of 2012 and the prior year comparison. The prior year comparisons are important given that this year, we now identify the preopening rent and freight costs, which are included in the cost of sales. Total preopening costs for Q3 are expected to be $900,000, with $550,000 included in SG&A, and $350,000 included in cost of sales. Preopening costs in Q3 last year totaled $355,000 with $178,000 included in SG&A, and $177,000 included in cost of sales. In Q4, we expect total preopening costs to be about $700,000 with $400,000 included in SG&A, and $300,000 included in cost of sales. Preopening costs included in Q4 last year totaled $518,000, with $295,000 included in SG&A and $223,000 included in cost of sales. This concludes the first quarter financial review. Now we'd like to open up the call for questions.

[Operator Instructions] We'll take our first question from Scott Krasik with BB&T Capital Markets.

Just a couple of questions. Since February and March, comp trend was so different than April. Can you help us understand the difference, the magnitude of the difference between Feb, March and April?

You have to remember that April last year included 3 weeks for Easter, and this year only included one week. That's your main difference in the April number.

I'm sorry, if you gave it, I missed it. Did you give it already?

From a -- I guess you're asking for a month-to-month comp increase. What I was saying is that Easter last year was the third Sunday in April, which gave us 3 weeks of Easter sales in April. So we're going against much stronger comparisons in April than we -- and a lot of those sales shifted into March. Because Easter was at the first Sunday of April this year. So it's not a fair -- I guess what I'm saying to you, Scott, is it's not a fair comparison because you're either comparing Easter against a strong Easter time period against a shorter Easter time period this year. W. Jackson: What we typically look at is combining March and April together. And if you do that, because then takes out, obviously, the shift in Easter, when you do that, the run rate was just slightly below the run rate for February on a percentage basis. So we found the quarter to be -- when you look at it that way to be very consistent.

Okay, that's good. And then can you give us a sense what the comps are running quarter-to-date?

We're pleased with our projection, and I think we're in line with that.

Okay, that's helpful. And then, Kerry, can you talk about now that you're through the clearance part -- portion of boots in winter, how do you look at merchandise margins now for the next few quarters? Are product costs still impacting you and where does pricing come into? W. Jackson: From an overall standpoint, what we built into the Q2 guidance at the high end, the merchandise margin would be rather flattish. And we've stated before that we thought in Q3 that an overall look at it would be -- it would rather flattish with the prior year. The real opportunity up from a gross margin standpoint -- from a merchandise margin standpoint comes from the standpoint of Q4, where we had to get so aggressive in liquidating that merchandise. If we get any weather at all, we would expect to see a nice improvement in our merchandise margin in Q4. The leverage of the buying distribution, any increase in Q2 and 3 will really come out leveraging our buying, distribution, occupancy cost and really would depend on the comps. We're projecting at the high end for Q2 will be 3%. We might get a slight leverage of 10 basis points on BD&O at that level. But as we said before, it takes about a 3% comp -- 2% to 3% to get some leverage out of BD&O.

Okay. And then, Cliff, I guess, since you didn't insinuate that running should be strong for back-to-school in fall, can you guys really prove with toning that you could sell $100 footwear, if there was really demand from your customer? How do you see the pricing of some of these brands that were sold at athletic specialty and running specialty for that matter? What is the price that your customers are looking to buy these sneakers at?

That's a great question, and that's one of the best advantages that toning brought us is that it did prove that we could sell a more expensive footwear. And at that point, the vendors, especially our top vendors, all opened us up to better products with better technology. And the customers are responding well to that. We now sell product very well at nice sell-throughs each week priced over $100 running products. So you may have heard of our prepared remarks. I talked about performance running and technical running. And for us, technical running is anything that retails over $85, $85 to $100 and above, and that business is up strong double digits. And we see that continuing. This fitness, what's going on with this new fitness lifestyle and the fact that people are really concentrating on getting back in shape and living a healthier lifestyle has truly helped out and they are looking for technical product, and they like to see the technology and the heel of the shoe. And that's helping us. So from a pricing standpoint, to get back to your question, so from a pricing standpoint right now, we haven't hit the ceiling of what I think our customers will pay.

And we'll take our next question from Chris Svezia with Susquehanna Financial Groups.

So I'm curious. I just wanted to go back to the product margin for a second. Just curious, with your inventories being as clean as they are, and I'm sure certain categories are performing well, why wouldn't product margins start to show some improvement in Q2? Is it just because of input costs? Is it mix? Is it -- what's the conservatism around product margin?

Here's the decision we made and our -- the decision I made early in February. When -- we talked about last call bringing all this athletic product in January. The product that we had planned originally to bring in, in February and some in March run in January. And when that product took off in the first part of February and our comps were up significantly. I've said, "Why wouldn't we just go ahead and continue to take further markdowns on the fall and winter product, including boots, and let's just get squeaky clean?" And that's exactly what we did. So our margins in February ran a little below last year, somewhat below last year, and then we were able to make up some ground in March and April. But the good news on that is we had in the fall inventories are much cleaner than we would've even anticipated.

Okay. So -- okay.

Just a strategic decision, Chris, to make sure that everything -- we were happy with where we were from a inventory ownership going in. But we could reduce that ownership even further with the sales gain that we are experiencing.

I see. Okay. Just as you -- I know you don't want to comment on the trend. So I know you're guiding to a 1:3 comp for the second quarter. But anything -- you're commenting about going forward with some business because of the Easter calendar shift. Do you see anything out there, anything abnormal at all? Or is it just normalization in May in terms of the business? I'm just trying to get a sense because there's a lot of concerns either about what's going for macro or from a weather perspective. From what I can gather, it seems to be business as usual for you guys. Is that a fair statement?

We do believe that the first quarter was driven, especially that early part of first quarter, February and early March, driven by seasonably warm weather. We do believe that. It did ignite the customer to come in and buy sandals and athletic product. And as we move through the second quarter, there's -- the weather patterns all become seasonal. The warm weather is seasonal. So whereas it drove customers to buy product that wasn't involved last year in the first quarter, we think that it'll return back to a more normalized rate in the second quarter. And that's the reason for the 1:3.

And on -- just on the fall, as you get better visibility to boots, any update on that? And do you feel pretty good about that? And I think you're planning it up for fall. Any change to that thought process?

No. We're still planning boots up mid- to high-single digits based strictly on an average price increase. We had to take average price down significantly last year due to the poor sales of boots. So this year, we expected rather higher average out-the-door price with fewer units. And we think -- no, we do think the mix of those boots will change. There won't be as many fur-lined kind of slated boots that we've kind of owned in the past and more toward more fashion leather riding kinds of boots.

I see, okay. And then last question, just on product. When you talk about the Americana look, I assume nautical boat shoes, Sperry topsider falls into that category, where in your, I guess, casual lifestyle business are you, I guess, either taking open to buy away from to overemphasize those "Americana" kind of categories?

Actually, what we did is we've seen a weakness in our dress shoe business over the past couple of seasons. And we have taken open to buy away from that category to fund the casual and Americana. And to be perfectly honest with you, we've overfunded the boat shoe category to maximize our opportunity there.

And we'll take our next question from Jill Caruthers with Johnson Rice Investments.

A question on the inventory. You did talk about that you were taking investments in specific categories. And I think you talked about that. Is that mainly athletic category and whatnot?

Several categories, Jill. One, the whole nautical or Americana category, as I called it in my prepared remarks, is a strong category. It continues to grow and it continues to expand in its geographic reach. So we have funded that. We funded the sport sandal category, which has become a huge trend with the college-age and high school kids. And we see that as a continuing opportunity. And then in the athletic category, especially running. And as I mentioned earlier, retro basketball is a category that's continuing to grow along with skate.

Okay. And I guess, could you comment more on e-commerce? If you've been pleased with the sales ramp-up and kind of expectations of what that business will do to your bottom line for 2012?

From a sales expectation, we're still working through that. I will tell you that we're not as happy as we hope to be by this time. We have enlisted the help of our agency to work with us on SCOs and search terms and to try to spur that business along to get it to variable. But it's not from an impact to our bottom line, not going to have an impact this year. Kerry? W. Jackson: Well, Jill, what we said previously is we thought that the e-commerce would be slightly accretive on an annualized basis that was not going to be material to us in a positive manner.

And we'll take our next question from Sam Poser with Sterne Agee.

I guess a lot of the questions have been asked and answered. But I have a few more. You talked a little bit, Kerry, about the deceleration of the same-store sales in Q2, and Cliff as well. But I mean, it's a significant the decel and you did speak to the current trends at the end of Q4. So can you give us some idea of sort of where it's running right now? And is it looking more like April or more like -- is it looking more like March, I guess? W. Jackson: Well, it sounds like there's a lot of concern that multiple questions have been around that as to whether we're seeing a significant slowdown. We're actually trending slightly better than the top end of our guidance. But it's still early in the quarter and there's a lot of different promotions that are going to happen throughout the quarter that we're not -- we're cutting, like Cliff said. When he started the call is that we're comfortable with our earnings guidance and where we stand to date. But it's just too early in the call to draw too many -- early in the quarter to draw too many conclusions.

And you talked about traffic for the quarter being up about 5%. How about if we just talk about traffic? Has the traffic sustained itself? W. Jackson: Our traffic is positive, and we would expect positive traffic in order to generate a comp store sales of 1:3.

Okay. And then clearly, you're still feeling some pain. When do you think you'll be out of the pain of all the toning? When does that happen? In Q3?

Sam, I promised my women's athletic buyer just the other day that this is the last conference call I'll be able to talk about toning. As I said in my remarks, I think it accounted for 2% of our sales in the second quarter. And we believe, and I firmly believe, that the athletic category will comp positive against that. And so toning should not be much of a factor as we move through the entire -- entirety of second quarter. And it becomes almost a no factor as we go into the third and fourth quarter.

Okay. And then can you talk about some of the brand drivers that are giving you this confidence? And also in athletic, as well as what's driving business over in the sandal -- in sandals and more casual wear?

We truly don't like talking about brands for competitive reasons, but I'll tell you, Sam, our top brands are performing the best. And that's -- you know our brand strategy as well as anyone and that continues to be the case.

Okay. And then lastly, Kerry, can you give us what the share count was because that wasn't in the press release? W. Jackson: For the first quarter, fully diluted was 19,971,000.

And how should we think about that for the balance of the year? W. Jackson: What we typically see is a slight increase in that throughout the year and I'd expect to see the same thing. Not significant, just slight.

[Operator Instructions] We'll go next to Mark Montagna with Avondale Partners.

Just want to follow up on the question regarding first quarter -- I'm sorry, second quarter comps. Is it possible that considering how strong first quarter was, that you could have maybe a lack of spring and summer inventories to drive a powerful second quarter comp?

Mark, I don't believe that's been the case. What we've done -- because a good bit of our increase was driven out of the athletic area, and what we've done is work with our athletic vendors. A year ago and I don't know if you -- I don't remember if you were on the call a year ago, but we were talking about having trouble getting delivery from some of our key athletic vendors. This year, that has not been the case. They have solved that problem in China and Vietnam. And we have not had any issue. We are moving orders up. So we were able to move orders out of February and then to January, and in some cases, even out of March to January. And we've been able to continue to do that. And so what we've done is, based on the strong performance we had in the first quarter, we continue to bring product in a little earlier than what we had originally placed the orders for. So our inventory in athletic is strong, and our inventory is fresh and clean. And we see that continuing on.

Okay. So how much earlier on a year-over-year basis will your, say, back-to-school setup be complete this year versus last year? And is that really just for athletic and then you may be set up the nonathletic at a more normalized pace?

Well, athletic for the back-to-school time period, which is mainly August and the first part of September, accounts for very large percent of our total business during that time period. So the key component to getting ready for back-to-school is to get the athletic product in. So we will have the athletic product here. As I said, they seem to have solved the issue of delivery, and that product is in router, on the way on the water. So I don't know that I'm prepared to tell you today that we're going to be set up much earlier. I'll tell you that we see no issue with being set up when we go into July. But we also -- let's get past athletic and talk about the fact that we think sandals will also play a major part of our back-to-school time period. Sport sandals have become a huge fashion trend. And we think that, that category is going to perform well, along with casual, flats and wedges and boat shoes for back-to-school. And that -- and those -- that product is either in place, on the water or will be in place as we go into August.

Okay. And then as far as clearance at the end of the first quarter, would you say that you're cleaner at the end of the first quarter this year or perhaps equal to last year?

Our aged inventory is below -- is cleaner.

Okay. Then just going back to the boot clearance that you had in February. If you had a more normalized boot clearance in February, could you have possibly posted a gross margin increase?

No, because it was further than boots. It had to do with the fall and winter product, as well as boots.

Okay. Then just last question, dealing with dress shoes. Has your optimism for dress shoes may be diminished for the second half? I think on the last call you had mentioned...

No, it has not. I think that we have an opportunity. When we went to market and shocked the market in February, we are still very encouraged about dress shoes when we go through the second half.

Okay. And was it women's that had the weakness or was it men's also?

Yes, it's the women's dress shoe business. And the men's shoe -- dress shoe business has not been where we wanted it to be for the past couple of quarters. So we feel -- actually, we feel pretty good about dress shoes as we moved to the second half of the year.

We'll go next to Scott Krasik with BB&T Capital Markets.

Just a couple of follow-ups. Cliff, you alluded to it, your largest vendor having a problem delivering last year. If we look at that negative comp in Q2 last year, was that because July didn't get the benefit of having that brand, kids stuff, there for early back-to-school?

It definitely affected the kids comps last year, and I think I called that out in the second quarter call. But it wouldn't have had -- would have had just a very small impact on the overall comps. W. Jackson: I think we talked about it last year, that May was cold and wet, and we really didn't start selling our spring goods until late May, and really it felt like June was the first time we're able to get some. So we started out the quarter with a tough comp and then we saw a nice acceleration in June. But then it tailed off because of the lack of some of that athletic product at the very tail end of July.

Okay, that's helpful. And then just by omission, you didn't mention molded footwear as a strong contributor. Is there anything that changed in that trend?

I was actually waiting for one of you guys to ask that question, so you didn't disappoint. Molded footwear is still working very, very well.

And we'll take our next question from Sam Poser with Sterne Agee.

Well, Scott beat me to that question. So it's good -- well, let me just ask you a vague question, and just since we're asking predictable questions here. What about the primary toning vendor and some of their other products? Are you seeing anything, any light on the horizon there?

I'm not really sure what you're talking about.

The same one -- the same as you are with the molded footwear vendor. I understand that.

We just got back from prelaunch with many of our vendors. Sam, I'm not really prepared to talk from a competitive standpoint where we plan to take that business, but I would say this, they have moved on from toning.

And is that a good thing? Is that positive -- is that a positive thing? Or they're moving in the wrong direction?

And my opinion, it's positive.

And we'll take our next question from Jeff Stein with Northcoast Research.

Hey, Kerry, question for you on the performance with the new Dallas stores. Just your biggest market opening you had in quite some time and it sounds like it went well. I'm just wondering, cumulatively over the past couple of years, have you learned anything from launching in new markets that perhaps may have helped you a little bit more in terms of making this a success? And is there any way you can kind of quantify for us, were you guys 110% of budget, 120% of budget? How should we be thinking about how the launch went?

Jeff, its Cliff. I'm -- we're not prepared to talk about how close or how over budget we are. But I will tell you what we've learned. And that's -- it's important for Shoe Carnival as we enter into new markets to be able to market the concept and advertise to the customers, not only advertising to the customer, but advertising to the customer base that we feel shop the store. And we were able to do that and do it very successfully. We -- actually, our grand opening is -- in Dallas was not one grand opening, but 2 so that we could talk to the different customer -- consumer bases that we expected to shop the store. And it really -- it truly helped us out. We always thought that was part of the issue opening up in new markets or new large markets where we couldn't get enough stores opened to advertise effectively and that did not happen in Dallas and it was a great learning.

Terrific. And question on average unit retail. You mentioned it was down slightly in the first quarter and I'm wondering is that because of the liquidation of boots? Or was spring product year-over-year also down in AUR?

I think what I said was that the average transaction was up slightly. The average unit retail, I believe, was down slightly.

The average unit retail down. And was that because of the boot liquidation? Or was light spring product, year-on-year spring product, also down in AUR?

I'm sorry, Kerry, just corrected me. Average unit retail was up, that's very slightly, low-single digit. And that was driven primarily out of the athletic business.

Okay. So entering Q2, you've got higher AURs and you got positive traffic. Accurate?

Entering into the second quarter, yes.

And ladies and gentlemen, this does conclude the question-and-answer session. I would like to turn it back to the speakers for any additional or closing remarks.

All right. In closing, we are very pleased with our record achievements in the first quarter of 2012. I'd like to congratulate our Shoe Carnival associates for recording the highest quarterly earnings in the company's history, and thank our valued vendors for their continued support. We really appreciate you joining us today, and we look forward to speaking about second quarter results in August. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. We appreciate your participation. You may disconnect at this time.