Good afternoon, and welcome to Shoe Carnival's Fiscal Year 2013 Third 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. In the company's earnings release and their prepared remarks on this call, the company will refer to adjusted earnings per diluted share for the fourth quarter of fiscal 2012, which financial measure has not been calculated in accordance with United States' Generally Accepted Accounting Principles or GAAP. This non-GAAP measure eliminates the impact of the special cash dividend paid by the company in December 2012 to earnings per diluted share in that quarter. The company believes that adjusted earnings per diluted share for the fourth quarter of fiscal 2012 is a useful measure of its performance and allows the company and investors to analyze the financial and business trends related to the company's results of operations separate from the impact of the special cash dividend. More information on this non-GAAP financial measure, including a reconciliation to the company's GAAP results, is including in the company's earnings release. I will now turn the call over to Mr. Cliff Sifford, President, Chief Executive Officer, Chief Merchandising Officer of Shoe Carnival, for opening comments. Mr. Sifford, please begin.

Thank you, and welcome to Shoe Carnival's third quarter fiscal 2013 earnings conference call. Joining me on today's call is Kerry Jackson, Senior Executive Vice President, Chief Operating and Financial Officer. For today's call, I will give a high-level review of company's third quarter performance and provide some insight into the fourth quarter thus far. Kerry will review the third quarter financial results, along with the fourth quarter guidance, and we'll open up the call to take your questions. As a reminder, the 53rd week in fiscal 2012 caused a 1-week shift in our fiscal 2013 calendar. This resulted in the third quarter of fiscal 2013 ending 1 week later on November 2 versus October 27 last year. We have adjusted our reported quarterly and year-to-date comparable store sales results for fiscal 2013 to reflect this calendar shift. Now focusing on our results for the third quarter. As we reported in our second quarter conference call, we ended August with a low single-digit comparable store sales increase. We believe that negative press surrounding the debt ceiling and the subsequent government shutdown, along with warm weather patterns throughout our geographic footprint, had a negative impact on our customer traffic in September, which in turn negatively impacted our sales. The agreement to reopen the government coincided to the day with the arrival of cooler fall weather. The combination of the 2 events had an immediate positive effect on traffic patterns leading to more robust customer participation. The result was that the comparable store sales for the quarter increased 0.7%. Traffic for the quarter was down mid-single-digits while conversion, average transaction and units per transaction were all up low single-digits. Merchandise margin was flat as we were slightly more aggressive with our adult athletic departments. Even though sales for the third quarter were…

Thank you, Cliff. I will discuss our third quarter financial results in more detail, followed by information on cash flows and then conclude with our outlook on the fourth quarter of fiscal 2013. Net sales were $235.8 million for the third quarter ended November 2, 2013, as compared to net sales of $244.4 million for the third quarter ended October 27, 2012, a decrease of $8.6 million. As Cliff indicated at the beginning of our call, as a result of fiscal 2012 consisting of 53 weeks, each of the first 3 quarters in fiscal 2013 has shifted 1 week later when compared to fiscal 2012. This 1-week shift moved an important week of back-to-school sales from the third quarter of fiscal 2012 into the second quarter this year. While this shift positively affected our Q2 results, it has negatively affected our net sales comparisons for the third quarter of fiscal 2013, reducing sales by approximately $21.2 million. The other components of our third quarter change in net sales included a comparable store sales increase of $437,000 and an increase in sales from new stores net of store closings of $12.1 million. Comparable store sales for the 13-week period ended November 2, 2013 increased 0.7% compared to the 13-week period ended November 3, 2012. The gross profit margin for the quarter decreased 1.2% to 30.1%. The merchandise margin remained unchanged from Q3 last year due to -- well, due to the deleveraging of the occupancy expenses, primarily attributable to the shift in the fiscal calendar, buying, distribution and occupancy expenses, increased 1.2% as a percentage of sales. Selling, general and administrative expenses decreased $2.7 million in the third quarter of fiscal 2013 to $53.2 million or 22.5% as a percentage of sales. Significant decreases in SG&A included a $3.5 million reduction…

[Operator Instructions] All right. We'll take Jill Nelson with Johnson Rice.

Could you talk about the performance of women's athletic? Typically you talked about last conference call that it was a weaker category. It seemed to have a soft start to back-to-school. Can you talk about how that's turning -- how that trended in third quarter and, I guess, into November?

We actually had an increase in sales -- comparable store increase, low single-digit -- we were flat -- excuse me. In the third quarter, we were -- because of August, we were down mid-single-digits. So let me start over. Because of August, we were down mid-single-digits in women's athletic. We had a mid-single-digit increase in the month of October. So what we saw as the business started to turn around in October, we also got a bump in our women's athletic business. So one thing I want to caution you on though, is that the way we track women's athletic is not the same way that every department -- every store tracks it. Some of our product that some people would put in women's athletic, we actually put into the women's nonathletic business. So it's hard to compare athletic sales in our store or in anybody's store to anyone else unless you know how they classify the product.

Okay. And then if you could talk about maybe, you mentioned national advertising, you're -- you feel as though the store base is kind of getting to that level to where it makes sense for you to do that. If you could talk about maybe the timing of that launch and when we should expect it.

We expected to launch it in the spring. I don't want to give you the exact time, because to be honest with you, we're still working through that. But we do expect to launch it in the spring. And at this point, we expect to add a few weeks to our overall advertising calendar. We're still, as I said, still working through all the logistics of that. But right now, I would look toward the spring.

Okay. And then just last one, it seems that you're very pleased with the test you did in the women's nonathletic with the fashion brands and whatnot. Could you maybe talk about some of your early reads? Do you feel like you're bringing in a new customer or you're just increasing that basket? And just some early insight into that test, I appreciate it.

We have seen an increase in basket size since we launched the program, but I don't want to say that it's because of the program that's happening. I really believe that has more to do with probably boot sales or -- if you asked Carl, it probably has to do with the fact that the assortment is just so much better. But anyway, what we noticed, Jill, is the very first week we had this out and put it on in the front of the store, we started seeing sell-throughs immediately on the product. And out of the 4 new lines, there was -- I think it was a total of 9 brands that we either increased our assortment or added, 4 of those were new lines. Out of the 4 new lines, 3 performed past our expectation from the very first week, 1 did not. But we knew that there were going to be some things that didn't work and maybe we got a little ahead of the customer on that particular line. But I'm -- we're very pleased with it. And then like I said in my prepared remarks, we had the VIP weekend or VIP day in the first Sunday of November and the results of that was just outstanding. And since that time, we've been seeing elevated sell-throughs of that product.

We'll hear next from Jeff Stein with Northcoast Research.

Yes, I would -- just to kind of amplify on that a little bit, Cliff, what were the -- can you tell us what the comp store sales in November were for those 75 locations? Were they...

I do not -- that's a great question and I do not have that in front of me, so I cannot give you that. Not because I wouldn't, I just don't have it.

Okay. Can you talk a little bit about the loyalty program and how that's going? I know that was kind of on the board as one of your initiatives for Q3.

I'm really glad you asked that question. I probably should have talked about that in my prepared remarks. We set a goal of doubling our loyalty base this year, which we have met. I set an outside goal of getting our loyalty base up to 4 million and that we have not quite gotten to yet. But there's still -- as I keep reminding my marketing department, there are still 2 more months left in the year. So I'm hoping that we can get there. The goal is to double it again next year. We -- just to give you an idea, Jeff, the VIP day that we had in the first weekend in November, that was driven strictly off an email campaign and digital blast to our loyal customers. So it's working and it was proof to the stores. In fact, the feedback we got from the stores was just incredibly positive as to how well it did work. So I'm very excited about the loyalty program and what it's doing for us, not only in the stores, but even online.

So Cliff, at the end of the quarter, how many loyalty members did you have? Would it be kind of like in the 3.5 million range or better than that?

We're just short of 3 million right now, just short. We started the year at 1.2 million of true loyalty customers, so ones that -- who we could actually talk to. We had more than that, but we didn't have the email addresses. So true loyal members we started the year at 1.2 million, we're just under 3 million.

Okay. And you mentioned in the last conference call the fact that you were going to be expanding Merrell to roughly 55 new doors and then maybe to 100 by the end of the year. How has that program gone for you?

The Merrell program in men's has worked very well. We got off to somewhat of a slow start in women's, but we've seen recent pickups as the weather turned cooler. But that's going well and we are expanding that to 100 doors before the end of the year. But it is working better in men's than it is in women's.

Okay. And final question would be on the real estate side of the business, if you're going to be expanding the women's better brands into all new stores for next year, does that imply that you're going to be looking for better real estate and therefore, perhaps having to pay a little bit more for rents next year?

I wouldn't, no -- I wouldn't -- we're always looking for better real estate. So let me answer that in 2 ways. We're always looking for better real estate. We are entering into some malls next year, which we're very excited about, and those brands definitely belong in malls. And then what we -- the decision we made was that as we enter into these new markets or enter in to a new store, we want to give that store every opportunity to succeed. And we don't want to -- we -- so therefore, we made the decision strategically that as we open up the new stores to put these better brands in there. I'm not going to tell you that we're 100% confident they're going to work in every store, but I am 100% confident that we should put our best foot forward in every store.

[Operator Instructions] We'll hear next from Ben Shamsian from Sterne Agee.

It's Sam Poser. A couple of questions. Number one, Cliff, what did the traffic do in October and November? I mean, did you see the improvement in both -- in the traffic in the last 2 months?

Absolutely, Sam, and it was -- it's hard to say whether it was the government shutdown or whether it was the weather. But as I said in my prepared remarks, the weather turned cool the day the government shutdown ended and we saw an immediate improvement in traffic, going from down mid-single-digits to down -- either flat to down very low singles. And with that, because of the fact that we have been increasing conversion, we have been increasing basket size and average transaction, our business immediately turned around. And we ended up October -- with a good October and that just continued straight into November as well.

With traffic in the flat area?

Flat to -- after this weekend, I'd have to say, slightly up.

Okay. And then, Kerry, the marketing budget for next year, you saw that -- are you implying that it's going to be a little bit higher, given the new -- you said that -- it sounds like the additions will be more than the takeaways plus the extra weeks. Am I thinking about that correctly?

It will. Yes, you are thinking about that correctly. It will be slightly higher. We're still finalizing the plans on that as we speak, Sam. But at this point, it does appear to be slightly higher.

Okay. And how many -- given the mark -- given the national marketing plan, even though it will probably be in its -- it will be in its infancy next year, what -- when you go into the 3 or the 3 new markets that you're going to get into, are you going to go in with a big store count? Or are you going to be able to limit it a little bit more based on timing because you won't have to be adding a marketing message directly -- as much of a marketing message directly targeted to those new markets?

We believe in future years, we will not have to open up a new market with as many stores as we open up new markets today. Next year, however, in the 2 new large markets, we are going to go in with multiple stores on the days as we open those stores up, so that we can utilize our marketing. As you said, next year it's going to be in its infancy stage. So we -- it takes a while for -- marketing doesn't have an immediate impact, especially, television marketing doesn't have an immediate impact. You don't run it today and get a sales boost on it tomorrow. So we need to have a period of time for that marketing to work before we can change the strategy of how we enter into these new markets -- new large markets.

Okay. And lastly, is Miami, Philadelphia or Detroit a small market?

All of those are pretty large markets.

And again, I have to go back to this because we haven't had entertainment on this call, you were announced as the Chief Merchandising Officer by the operator. So I began to get really worried.

Well, I appreciate you saying that. But the fact is that the board saw fit, even though Sam didn't, keep me as a Chief Merchandising Officer. So you got to also remember that the new Chief -- the new GMM that we hired was a decision that the new president made. So pretty good decisions, I would say.

And with that, gentlemen, we have no further questions in the queue. I'd like to turn the call back over to you.

We really do appreciate you joining us today and we hope you all have a very happy holiday season with your families. And we look forward to speaking to you again on our fourth quarter call. Thank you.

And with that, ladies and gentlemen, that does conclude today's call. Thank you for your participation and have a great day.