Good morning, ladies and gentlemen. Thank you for standing by. [Operator Instructions] As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Christina Cheng, Senior Director of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to DSW's Fourth Quarter Conference Call. Earlier today, we issued a press release detailing the results of operations for the 14-week and 53-week periods ended February 3, 2018. Please note that various remarks made about the future expectations, plans and prospects of the company constitute forward-looking statements. Results may differ materially from those indicated by these forward-looking statements due to various factors listed in today's press release and our public filings with the SEC. We assume no obligation to update any forward-looking statements. Joining us today are Roger Rawlins, Chief Executive Officer; and Jared Poff, Chief Financial Officer. Let me turn the call over to Roger.

Thanks, Christina, and good morning. I'd like to start our call today by sharing a few highlights of what we achieved in 2017. Most importantly, we delivered our first earnings growth since 2013. Our total company revenues set a new high of $2.8 billion. We had positive footwear comp at Designer Shoe Warehouse for the third quarter in a row. We delivered our strongest growth in digital demand in the last 9 years. We expanded Kids to over half of our fleet. We revitalized DSW's Power 35 group, which delivered positive demand comps this fall. We built an elite team focused on DSW's mission to inspire self-expression. And we reached a number of innovation milestones with the pilot of a new store design and multiple in-store service offerings. Our strong fourth quarter results enabled us to exceed our revised guidance and achieve the expectations we laid out at the beginning of the year despite lower-than-expected sales from Ebuys. I'm proud of how we've capitalized on investments we have made to better optimize sales productivity with a multichannel and mobile-first infrastructure at Designer Shoe Warehouse. Our team stayed focused even as we transitioned noncore businesses, Gordmans and Ebuys. Now that we've established a solid foundation, we're prepared to accelerate these initiatives that delivered the progressive improvement throughout 2017 and further drive market share growth. Now let me turn the floor over to Jared to discuss details of our financial results. Jared?

Thanks, Roger, and good morning, everyone. We are very pleased to report fourth quarter results that beat expectations and enabled us to deliver solid earnings growth for the first time since 2013. Fourth quarter reported earnings at $0.15 per share includes net after-tax charges totaling $18.8 million or $0.23 related to the following: $10.1 million provisional income tax expense from the remeasurement of net deferred tax assets, partially offset by the benefit of applying the new rate on the last month of the fiscal year with the enactment of tax reform; $12.2 million in pretax charges to write off inventory, fixed assets and intangibles, partly offset by the reduction in our remaining contingent consideration following our decision to exit the Ebuys business. The balance pertains to restructuring expenses, transaction costs related to the acquisition of Town Shoes and net foreign exchange gains. Full year reported earnings of $0.83 per share, including net charges of $0.69 per share from the exit of Ebuys, foreign exchange impacts, restructuring expenses and the impact of the implementation of the U.S. tax reform. Please refer to our press release for a reconciliation of non-GAAP results. The rest of our comments will refer to adjusted results. Excluding these GAAP items, fourth quarter adjusted earnings increased by 90% to $0.38 per share, driven by better-than-expected gross margin. Excluding the 53rd week benefit of approximately $0.06 per share, adjusted earnings per share increased by 60%. The healthy profit improvement at the DSW segment contributed to our first full year earnings growth since 2013, up 4% over last year to $1.52 per share. This includes the unplanned operating loss from Ebuys of approximately $0.10 per share, without which we would have increased earnings by 11%. We obviously were happy with the stronger-than-projected performance for the quarter, which allowed us…

Thanks, Jared. As I've said earlier, I'm happy with the progress we made to right the ship and position the DSW brand to capitalize on the market share opportunities in a consolidating industry. I'm going to share with all of you the conversations I've had with our team on shifting our mindset from defense to offense and provide some details behind the key areas of investment in 2018. First, it's about people. We recently performed time studies to better understand how we can improve the customer experience through changes in labor scheduling. As a result of this work, we are allocating close to 1 million hours in store labor towards key selling periods and better matching associate coverage with traffic, changes we expect will improve engagement and customer conversion. Additionally, we have expanded our associate incentive compensation plan to align the entire organization behind our key strategic and financial goals. We presented these goals across our business, and I'm excited to report our associates are all in. Second, it's about product. Part of the improvements we are seeing in our Power 35 is directly related to increased freshness, the right brands and more localized content. We believe we can produce similar results in the rest of the chain with the right inventory and an improved ability to respond to emerging consumer trends. In the last 2 years, comps have been impacted by our inventory positioning where we've taken a defensive position and pulled back some of our most successful categories to fund Kids and athletic. While this has allowed us to capture share in the Kids and athletic areas, it handicapped our ability to grow the rest of our business. Given the results we experienced last year, we are now in a position to continue to fund our key growth…

[Operator Instructions] Our first question comes from Camilo Lyon of Canaccord Genuity.

You gave a lot of details. I was hoping you could spend a little bit of time talking about the performance that you're seeing in the test stores that have the services element. I think you mentioned that you're excited about the customer response. If you could just help us understand maybe what kind of response you're seeing from those services and, more importantly, how you think the spend around those services should unfold. It seems like each store in your store base probably has an ability to have one or multiple of those services available to it. So just trying to understand kind of the profit picture from this incremental initiative.

That's a great question. So we call Polaris our Lab Store because we are testing things there day in and day out. So what we have experienced, and I'm just -- this is directional, was that store was trending in the double-digit negative comp range. And in the 9 months since we put in nails, repairs, other services, it is now double-digit demand comp. I think all of us that have been around retail for a while know that's not a story you hear very often when we come to remodeling a store or introducing new services. So that led us to say, "We got to take this thing to test," because you can't pass judgment on a Lab Store to say this -- is it working or not? So that's where we're going with an additional 4 stores that will be around the store design elements that we have. And then we're going to be pushing on the repairs in a larger way, I think in a larger group of stores, and then we're going to be testing the nail concept as well. A key part of all of this is the relaunch of our rewards program and integrating all of these services into rewards so that you can earn points when you're getting your nails done for footwear purchases or vice versa. So I think getting it to the next group of stores is really where our focus is to hopefully validate the results we had in one store can be applied to more doors, and then we will go from there. But that is our goal in 2018.

Got it. And then maybe, Jared, if you could just, if we take a step back, help us understand the components of gross margin and SG&A investment this year as it relates to the guide that was provided. Seems like you got a decent net uplift on the gross -- on the DSW segment in the fourth quarter. There's more initiatives on the inventory front and tailoring the buys relative to what is actually selling well. So it seems like there's a positive gross margin story unfolding. If you could just maybe help us understand the magnitude of gross margin and SG&A contribution this year as it pertains to the guide, that would be helpful, too.

Yes, sure, Camilo. I'll give you a little bit of color on '17 and then talk about the positioning that we took for guidance in '18. As you mentioned, '17's -- Q4 '17 margin was very, very good, primarily driven by IMU favorability from work that our merchants are doing with the vendor community. And then also, our clearance markdowns came in more favorable than what we had originally anticipated, led primarily by lower -- the need to take lower unit letters or what we call putting things into the clearance. I mean, that's part of our inventory positioning and moving into the chase mode that we were in, in fourth quarter as well as looking at the percentage off that various units go into clearance. So all of that rolled up to a nice beat there. That more than offset an increase in marketing markdowns, which we had actually mentioned at -- on the last call, which is going to be the case for Q4. So those came in pretty much as planned, slightly up but overall a net-net positive for margin. SG&A, I think I mentioned in the script, came in just a touch better from a rate perspective for Q4, but pretty much right where we were expecting that. For guidance, as you have obviously noticed, we did not give guidance, as we've done in the past, around gross margin and SG&A. And really, that's because there's so many moving parts right now with what Roger talked about. The investments we're making both in marketing as well as in inventory certainly puts a lot of noise into the middle of the P&L, if you will. We feel very confident in our ability to be flexible. We've shown that throughout multiple quarters here over the last couple of years and feel confident with our chase abilities, with the work that the merchants are doing with the vendors and with our order routing optimization, that we should be able to deliver that bottom line and feel very confident about that. But we are holding back on exactly what that's going to look like between margin and SG&A. I can tell you, we aren't expecting massive changes between those lines year-over-year, but we do want that flexibility to be able to adjust that as necessary.

Yes. Camilo, I just want to add. I think when you look at the margin improvement we had in fourth quarter, it really was a culmination of all of the things that this organization has been working on in the last couple of years. Our merchants getting much more aggressive with the vendor community, holding them to a higher standard of expectation, which obviously, that's our expectation as we head into 2018. It was the success we've had with order routing, which was an investment we made several years ago. It was turning on clearance digitally from the store locations so that you could actually fulfill out of the store our clearance orders, which helps us guide to a higher margin. So I think all of those are things that have been a part of our direction for the last 3 years, and they worked. And that's why we're so excited about the progress we made in the fourth quarter and what ultimately that can do for us for the -- 2018.

That's great. Just one clarification question for the Q4 gross margin. Was there an inventory write-down that also flowed through to that adjusted number that led to the $0.38?

Not in the adjusted, no. That was GAAP only.

Got it, okay.

And then that was for Ebuys, just to be clear.

Yes. So that Ebuys inventory write-down did not flow through to the adjusted?

Yes, that's correct.

Our next question comes from Steven Marotta of CL King & Associates.

Roger, talking about the new store design a little bit more. First of all, the 3 to 6 new locations, will -- besides Las Vegas, will any of those be in the new format? And can you also talk a little bit about the SKU count's increase in the new format layout as well as the capital expenditures associated with reformatting a store?

Yes. So the stores that we are opening in the back half of 2018 will have the new fixture package as well as the 4 that we already have planned and essentially have remodeled it, I'm thinking would happen in -- they'll be done in the spring, so we'll be able to have a read. As you look at the SKU increase, the -- what we've really been doing is not buying more inventory. We've been taking product out of our fulfillment center, which was only available digitally, and pushing it to this Polaris location so that there are more and more choices available physically to the consumer when they walk into our warehouse. So we like that because with all the tools we've spent years building around order routing, that store and -- I should say, I'm sorry, that warehouse is treated no different than any other warehouse in the chain so that when that store -- if it were to have some challenges with inventory turn, it would be picked from first for a digital demand. So we've really been using the new fixturing package to get more product out in front of the consumer. And that's where we're seeing a nice lift in demand, which obviously can help you with conversion and putting more product in, which can also get you a higher AUR. So I think so far, we've been happy with that. From a CapEx standpoint, I will tell you that's why we're trying to get it in these other 4 doors to see what it's like to do it when it's not a lab. I don't think we're prepared yet to sort of give any details what that cost might look like for now, but we feel good about the direction we're at right now with the new concept.

Great. And just one follow-up. Jared, as it pertains to the occupancy leverage, you levered occupancy in the fourth quarter on a 1.3% comp. Can you talk a little bit about why that would have occurred? I would have thought that comp would have needed to be higher than that. And is that something that we can continue to expect on, say, a 1% to 2% comp at least?

Great question. It's really a pretty simple answer: it's the 53rd week. So the 53rd week was in our total top line number, so that did certainly help to leverage that occupancy line. However, it was not in our comp number. That's not -- you pulled that out when you're doing your comp calculation. So that really wasn't a huge change from where we had been in the past. And I would say, I would not expect our comp point or our leverage point to really change in 2018.

And that's 2% or greater?

Yes. Right around there, yes.

Our next question comes from Paul Trussell of Deutsche Bank.

This is Gabby Carbone on for Paul. Just a quick question on Ebuys. Could you discuss what the impact on EPS would have been should you have decided not to exit the business? And then just a bigger-picture question. Have you seen any impact on your business from competitor store closings? And do these store closings change your view on longer-term market share opportunities?

I'll take the first question. The Ebuys piece, actually, about $0.10 of their operating loss, their entire operating loss actually pulled through to our adjusted earnings. So that is included in there. The costs for exiting, which is the inventory write-downs, the fixed asset write-downs and all of that, that is what was adjusted out. That's in the GAAP reconciliation as part of the press release. But their operating impact did flow through and is included in our adjusted earnings. And the second question...

Yes. I can take that from a competitive standpoint. Yes, we do believe that as people exit the industry, it's creating market share opportunities for us, which is why, as I've said in our opening comments, it's time for us to play offense and not just defense. And when we look at the Gen Z, the millennials, the Gen X, the boomers, how all of those folks play out, we heavily penetrate in market share to the boomers. And so finding ways to acquire new customers, especially as people come and go in our industry, that's where we have an incredible opportunity. We have a great platform that we can use to attract new people to our brand. And that's the work that we're doing. Again, that's why we are playing offense. That's why we're not going to pull back receipts in our seasonal categories. We're going to continue to invest in athleisure. We're going to continue to invest in kids because we know it attracts a new customer, and as people are leaving, let's go get their customer.

Our next question comes from Kate McShane of Citi Research.

My question is centered around the tax reform benefit. You highlighted you're spending some of it in returning it to shareholders. But I wondered how your investment agenda has changed in response to the tax reform and if you're accelerating any of your investments.

Do you want to take that?

Yes, yes. What I would say, Kate, is we certainly used a piece of the tax reform to help fund some of the growth initiatives and investments that Roger had highlighted. So we -- as he mentioned, we are adding 1 million hours into our store base. We'd increased marketing especially around digital, and in overall inventory, a very strategic but targeted inventory increase across the board. So overall, there's a piece of that tax benefit that's going to that. Net-net, we are sitting at the end of this year around $300 million of cash. So there was not significant CapEx that we were not doing as a result of not having liquidity. So there really isn't a change in our investment appetite from a CapEx standpoint. We continue to invest in the things that make sense. But from a strategic standpoint, we did use that flexibility to help us fund some of these growth initiatives.

Okay. And then my second question is just on wages, if you have any comments on how that's coming into play with your 2018 guidance.

We obviously are always looking at all of the areas where we have a workforce, and we are feeling that pressure like everyone else. So I think we've got a very competitive compensation package, and that's built into our guidance. We -- as I mentioned, we have added hours. And to do that, that's not free, but we feel it's important. Additionally, we are also looking at broadening some of the benefits for our full-time employees and helping them be able to participate with us in these growth initiatives. So we've extended our bonus program down to -- all the way down to everyone in the organization that participates at a full-time employment level. And that's something new for us but something we're excited to do.

Our next question comes from Jeff Van Sinderen of B. Riley FBR.

I had a couple of follow-up questions. Can you update us on the penetration of the sneaker and/or athleisure business and, I guess, how you're thinking about that segment for '18, and then just sort of overall, how you see that assortment evolving with more seasonal buy inventory? And any other color you can add on how you're thinking about mix shift by product category, particularly in women's? And then any color you could add on your thinking around managing increased seasonal buys and, I guess, kind of how your prepare for the potential downside of making bigger bets there?

Yes, no, that's a great question. So in general, the athleisure mix, it increased -- I think we were roughly around 23% was where we were versus I think it was 19% last year. So it was pretty material shift for us. And if that's where she's going, so that's where we're going to take our assortment. But to the comment around what we do with seasonal, where we have created some challenges for ourselves is whenever we then go after those categories, we've pulled back on the seasonal categories. I'm going to give you the best example. We entered this fall with our boot category was planned down in the 20% range, and that put us in a position to chase. But we know, during that August and third quarter, we left volume on the table in a meaningful way. So we're figuring out how can we continue to invest in the athleisure space, where she's going, but also not walk her when we know we can get that boot business as well. And I think we're excited about that opportunity because we see a significant dip in our conversion day in and day out in the physical box because we just haven't had the product in the box. So I think that's where we're making the investment. How you mitigate that risk is you have a great merchant team and you have a great planning team. And I think we've demonstrated over the last couple of years that we can be nimble when we make these kind of investments. It's also putting accountability back on the vendor community. And they've been our partners for 26 years, and we have to continue to partner with them. So I think Debbie and team are doing a great job with that. And then also, I think it's looking at, how do you -- as I said in the opening comments, where do you take people out of the equation? You need to earn the right to be on the floor at Designer Shoe Warehouse. And we carry roughly 600, I would call them brand/labels. And to be able to be on that floor and for us to bear the risk of that inventory, that shouldn't all sit with us. And so Debbie and team are working hard with our partners to share that risk. So I think those are all ways in which we will mitigate some of those challenges.

Okay, that's helpful. And then just to follow up on some of the Lab Store enrollments, is it fair to say that the nail salons have been successful at this point? And I guess any other elements you could elaborate on in that store in terms of storage, repair, any of those things where you're seeing success and you think they're kind of heading to be more likely to be rolled out more broadly?

Well, the one data point I can share is, given the amounts of rewards points I have earned for my wife and daughter getting their nails done, I would say we are having success. But no, in general, the nail bar has achieved our expectations. It's a material lift in our business there. And we're excited, and what we've got to figure out for nail is, where do we go next? How do we take it through more doors, which we will have it in a couple more doors here in Columbus so that we can actually then go market all of Columbus to say, "Come see this new footprint that we have called Designer Shoe Warehouse with the W Nail Bar embedded." As it relates to the other pieces, repairs, we're excited about. We have a good partner that's helping us grow that. We're going to put that in more doors in first quarter even. So we like the direction that's going. We're operationally trying to figure out how to work it. Storage, we have ourselves set up now with some new storage capabilities in the backroom of some of our larger facilities, and we're going to be able to start testing that later this year as we roll out changes to our rewards program. All of that is that anytime someone thinks of footwear, we want them to think of DSW. And it's not just going to be those elements that you're going to see as we relaunch our rewards program, embedding the ability to give away your shoes at the end of their life, or other things that we want to do from a charitable standpoint that we think can have a huge impact on your relationship with the DSW brand. So all of those things are things we're weaving into this new design.

The only thing I would add to that, and Roger mentioned the success we're seeing in the services themselves, I'm also very happy with what we're seeing from an attachment rate. So that's a read of one store, so that's why we want to roll it out, but every single one of the services that we've added has had a meaningful attachment rate attached to them. Different between the services, but all of them were meaningful. So very excited about what that can mean long term for footwear sales.

Yes. And we talk about it a lot here within our team of, again, going from defense to offense. And we monitor what has gone on at Best Buy and how they've evolved their model. And we've had a lot of conversations with our team about how that evolved, and we're excited about where this could go.

Our next question comes from Chris Svezia of Wedbush.

I guess I just want to go to the guidance for a moment for 2018. So when I kind of walk through the earnings outlook and the sales outlook, it looks as if EBIT margins would be down, call it, roughly 40 basis points at the midpoint of the range. So I'm curious maybe if you can just walk through some of the areas or reasons why there would be that compression, whether it's the investments that you're making in the business, whether it's labor. Maybe you can rank what some of those are. And also, just curious, if you look at fourth quarter and the momentum you had on the margin, particularly the gross margin, why some of that wouldn't carry more significantly into 2018. So that's my first area of questioning.

Sure, Chris. I will take that. You hit it on the head. That is what I am not surprised that your model is teasing out. We do believe that the investments that we're making here are truly investments for the future and for growth. So that is primarily what's driving that slight erosion there on the EBIT line when you take into account pretax. I would say our digital marketing investment is one of the biggest investments that we're making. The -- as we mentioned, the million hours, some of that's funded with savings we already did this year and rolling out the full year, but it all isn't funded. So that's a piece of it as well. And then overall, from a margin standpoint, I do think that there's the opportunity to see some of this continued momentum. As the merchants are working more aggressively with the vendors, as Roger alluded to, I personally expect that piece to continue. However, we are making an inventory investment. And as good as we are, not every single thing is going to be right. And so we wanted to make sure that the P&L is protected from a markdown standpoint. So altogether, we feel that it is a very well-positioned P&L, and we feel very confident in delivering that bottom line.

Okay. And just on clarity, the Ebuys component of that is no longer -- I think you said it was $0.10 in 2017. That's no longer in '18. In other words, there's no P&L impact related to Ebuys in 2018?

That's correct.

In the guidance? Okay. All right, got it. And then lastly, just on the rewards program, just all the initiatives you're doing there in terms of the revamp, can you just walk through the timing of when that's going to happen and when that's supposed to hit? And are you making any assumption for a comp lift? Or anything in your outlook aside from maybe the cost of getting it up and running factored in?

Okay. So we will -- it's probably going to be early second quarter is what we're targeting to relaunch. We don't want to get into a ton of detail, but we think it creates a great market share opportunity for us. From a comp perspective, yes, we believe that we'll increase our comp. But we are also making significant investments as we roll this out with the new program. So net-net, from a op income perspective, I don't see it being a big driver. It's really about, how do we go grab more and more consumers, get them in this program, retain them and grow our business? And that's what the relaunch is all about.

Okay. And just final thing. Just on the remodel, the fixturing you're talking about, that's just in the 4 test stores? Are you rolling out new fixturing to all stores? Can you just clarify that?

The 4 that we are doing will have the new fixturing package. And then fall, I don't know the exact number, but directionally, 3 or 4 stores in fall that we will also open will have the new fixturing package. So again, by the end of '18, we're going to be in a position to see, is this design something that has the legs that we're seeing in the Lab Store?

Our next question comes from Dylan Carden of William Blair.

Just curious. In the context of a consolidating market and a more promotional fourth quarter generally but also that you've been open about having to compete for market share, how much do you see sort of having to incrementally increase or compete on pricing, both in the near term and sort of moving past some of these most recent closures?

I would tell you, for us, the pricing pressures have not been that extreme, is what I would say. I think because we have the luxury of the 25 million rewards members and being able to engage with them, we haven't seen it in the same way that I think many people have described it. That being said, that doesn't mean that day in and day out, we're not looking at like items and making certain that we are positioned properly. And I do think the work again that Debbie and team have done to differentiate our assortment helps protect you from some of those things so that when you start with an exclusive brand or when you have goods that are only available at DSW through a specific brand, those are all things that we are putting in place to protect us against some of that promotional environment and pricing pressure that we do see. But I -- again, I think our team has done a fantastic job of protecting us from some of those challenges.

Our next question comes from Patrick McKeever of MKM Partners.

Just a question on the progression of earnings -- sales and earnings in 2018. Just wondering if you're -- if you'd be able to give any comments there, especially anything on the first quarter just given the 2 weeks earlier Easter, and it's also the easiest comparison of the year? And then any read on sandal trends from some of your warmer weather markets? Or is it just still too early there? And then second question, on Kids. I'm wondering if you're willing to share any specifics on the lift, the comp lift from that initiative? And also wondering how the assortment is evolving and how the next phase will look just from a SKU standpoint or assortment standpoint versus what you've already done so far.

This is Jared. For the earnings piece, obviously, we don't -- we never have to. We -- and we aren't anticipating starting to give quarterly guidance. So really can't speak to much there. What I will say is that some of the same volatility that we saw in margin rates and between the quarters last year, I don't have reason to believe we won't see volatility again this year. So whether it's to the same extent or not remains to be seen. But just our read-and-react nature and flexibility does call some of that volatility in there. Overall, I would say we may tilt back towards a little bit of more of a 60-40, front half-back half earnings, the contribution. But that's, again, not set in stone. That's where we historically had been. '17 shifted a little more back towards 50-50, but again, there's just a lot of moving parts right now within that guidance.

Yes. So Patrick, I'll take the question on Kids. Given that roughly half the chains had kids for about a year now, it is giving us the ability to really be able to measure. And so directionally, you could say it's worth a couple of comp points is what kids has added to our day in and day out brick-and-mortar kind of business. So getting that to the entire chain so that we can actually include it in everything we do to advertise every way in which we engage with the consumer is a big win. And I know you probably recall this, but when we went into kids, we went in, yes, to get kids' market share, but we really went in to keep the mom and dad in DSW. And with half of our DSW rewards members having a child in their household, we knew, by not having kids' footwear, we were walking that customer to our competition when they were shopping for their kid and buying their adult footwear. So we love the fact that we're getting a comp lift, and we can see that there is an attachment to adult footwear. So I think, again, it's been -- it was a decision that was made based on a lot of data and competitive information we had. And we've done a great job executing it. When you think about what's next with Kids and our Kids team, I know, I'm driving them crazy, I keep -- we try to get -- we've got to get more aggressive, and they are. But we -- our assortment is much better than where it is today than where it was a year ago. Our in-stocks are better. Our key items are positioned better. Our margins are better. That team has done one incredible job to help us get this out and grow the business.

Our last question comes from Scott Krasik of Buckingham Research Group.

Most of my questions have been answered. Just a couple. First, just on the men's business, again, you said you had reset that. Just wondering, the timing and the expected turnaround there.

Yes. On the men's business, again, we -- it's tough to look at it if you look at just the men's nonathletic area because there's so much of that athleisure piece that has come into play. I think overall, obviously, the category that has been challenged most in men's has been the dress category, which we don't see anything immediately that's going to turn that trend around, which is why we're figuring out, how do we go more aggressively after the casual, the seasonal categories as well as the athleisure? But historical dress, men's footwear has been a challenge for us for the last couple of years, and we don't see that changing anytime soon.

And then -- okay. And then just to finish up on Ebuys, I know you wrote down the inventory. Where are those -- are you recognizing the sales? And did you recognize sales on the fourth quarter from that inventory? And if so, where?

So sales that actually happened in the fourth quarter, we recognized that, and that went through our adjusted earnings. So as we mentioned, net-net, those sold at a loss, and so that helped contribute to our $0.10 drag on EPS there during the full period. However, the write-down was not associated with sales. That was associated with inventory that we have on hand. We just wrote it down to what we think the liquidation value is going to be. As we exit that business now, that inventory is being liquidated not through the regular sales process but through a liquidation process, and that would flow through adjusted. We wouldn't see that come into our -- or flow into GAAP only. We wouldn't see that come into our adjusted.

So will that be a positive contributor since it has no COGS value at this point in terms of...

Well, we didn't write it down to nothing. We wrote it down to what we felt we'd be able to liquidate it, and we're coming in right around that.

Yes.

This concludes our question-and-answer session. I would like to turn the conference back over to Roger Rawlins for any closing remarks.

Thanks, everyone, for your questions. And again, just a callout to our team I know listening to the call. Great fourth quarter, and let's keep it rolling as we go into 2018. Everybody, have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.