Good day and welcome to the Designer Brand Inc. Second Quarter 2021 Earnings Conference Call. All participants will be in view-only mode. After today's presentation, there will be an opportunity to ask questions. We do ask that those in the queue limit themselves to one question and a single follow-up. Please also note today's event is being recorded. I would now like to turn the conference over to Stacy Turnof Edelman. Please go ahead.

Good morning. Earlier today, the Company issued a press release comparing our results of operations for the 13-week period ended July 31st, 2021, to the 13-week period ended August 1st, 2020. Please note that remarks made about future expectations, plans, and prospects of the company constitute forward-looking statements. Results may differ materially due to various factors listed in today's press release and in the Company’s public filings with the SEC. The Company assumes no obligation to update any forward-looking statements. Joining us today are Roger Rawlins, Chief Executive Officer, and Jared Poff, Chief Financial Officer. Now let me turn over the call to Roger.

Good morning and thank you, everyone, for joining us today. We are pleased with the tremendous momentum in our business. As always, we want to thank our associates for their hard work that has enabled our success. I'd like to highlight five notable achievements in the Quarter before diving into the rest of my remarks. First, for Total DBI, our performance of 85% exceeded our initial expectations, resulting in record gross profit and significant improvement in our operating income rate. Second, at DSW, we set an all-time sales and gross profit record for the Quarter. Third, we continue to see strong support in athleisure for kids, and we're positioning ourselves to capture even more market share in these areas. Number four, we also experienced incremental improvement in categories that were hit harder by the pandemic as demonstrated by a recovery in seasonal, which was up 5% for the quarter at DSW compared to the pre-pandemic 2019. And finally, we are seeing our core customers returning to our stores. They are buying full-price items. In fact, we saw 10% comparable store sales in regular price selling in our U.S. retail business during the quarter compared to 2019, which clearly benefited our gross margin. Although store traffic continues to be below our historical trends, we are continuing to see a rebound, especially in the U.S. while our digital demand continues to be robust. Let's talk a little bit about our continued progress in providing our customers with the best possible assortment. At DSW, our pivot to athletic continues to yield strong results with comparable sales up 45% compared to 2019 and kids’ sales up 55%. According to NPD's Retail and Consumer tracking services, in the quarter, DSW sales growth in both kids and athleisure outpaced the remaining U.S. footwear market significantly compared to the same quarter in 2019. This allowed us to gain market share since 2019 and positions us among the top 15 footwear retailers in both categories while maintaining a top 3 position in women's. This also holds true for the tremendous opportunity we see to grow our men's business. According to NPD's retail and consumer tracking services, DSW's results in men's compared to the same quarter in 2019 outpaced the rest of the market by 6%, also resulting in market share gains since 2019. Additionally, seasonal is continuing to rebound nicely in dresses, showing signs of improvement. In the second quarter, NPD's Retail Tracking Service shows that DSW recovered after being down 19% compared to 2019, with seasonal in the first quarter down 1%. This was a more significant improvement than the rest of the market. For back-to-school, athletic and kids have both seen significant growth in sales penetration as the season began in late July. We still have several stores working through back-to-school, especially in the Midwest and Northeast, but we are encouraged by our early results. We're continuing to work to bring freshness to our physical locations and grow basket size. We started with some smaller initiatives that are scalable over the long term. For example, we partnered with Staples to instill pop-ups in 48 stores for back-to-school and see this as something we can expand in the future. We've added apparel to select locations in a meaningful way with T-shirts that celebrate the local market and have sold those items twice as quickly as initially expected. In Canada, we're implementing Lids and Claire's shop-in-shops inside our stores so customers can accessorize their recent footwear purchases. Additionally, we continue to focus more heavily on the top 50 brands in footwear. In the second quarter, these brands, including our vertical brands, represented 78% of our sales in the U.S. We surpassed our goal to grow sales of the top 50 by 50% compared to 2020, with these brands growing 112%. According to NPD's Retail Tracking Service, we grew the top 50 brands, excluding our private brands, 15% faster than the rest of the market in the quarter compared to the same period in 2019. Let's turn to a few examples of how we are ensuring that we have the best product for our customers moving forward. In August, we announced that we will be the exclusive in-store distributor of the iconic brand Hush Puppies, giving us access to a global heritage brand that has exceptional brand awareness. This brand will now be sold only in DSW stores and on hushpuppies.com. Not only do we anticipate that we will capture new customers with Hush Puppies at DSW, but this will allow us to convert hushpuppies.com customers into DSW loyalty members, as well as offer their digital customers the ability to return products to stores and potentially serve as pick-up locations as well. Hush Puppies is the perfect blend of style and comfort, something that our customers are demanding. We are thrilled to welcome this fun, optimistic, colorful brand to our exclusive family and to have an exciting partnership that supports our focus to build our robust assortment of brands. This is an excellent example of how we can partner with an existing well-known brand while leveraging the infrastructure and loyalty we have already built to deliver exclusivity and brand dominance. We expect more opportunities like this that will allow us to further control our brand destiny and provide differentiated experiences for our customers. While I'm excited about all of this progress, I also want to recognize that we continue to operate in a dynamic and volatile environment. Things are improving as vaccination rates increase. We're still facing some headwinds, including new COVID-19 variants and the increasing impact of supply chain issues, including delays with inventory receipts. Now let's talk a little bit about marketing. Our best-in-class VIP loyalty programs remain a key support for our growth. For all of DBI, we have approximately 30 million rewards members as of the end of the quarter. During the quarter, enrollments in our program for DSW grew 18% compared to 2019, building momentum from a 7% increase in the first quarter. This was the highest quarter of sign-ups in the history of DSW.

Thank you, Roger. And good morning, everyone. Our second-quarter performance significantly exceeded initial expectations across the board. This continues to illustrate how we are successfully executing against the strategy we previously laid out by leveraging the flexibility of our business model, pivoting our assortment to what the customer is demanding right now, and controlling what we can across the business. We are optimistic that business will continue to improve in the second half as vaccination rates have the potential to increase following the FDA's approval of Pfizer's vaccine, and as we see our customers increasingly returning to stores and participating in social occasions. This optimism is somewhat tempered by the continuing uncertainty with Delta and other variants and the direct impact it is having on the global supply chain, which I will discuss further a little later. Please note that the financial results we will reference during the remainder of today's call exclude certain adjustments recorded under GAAP unless specified otherwise. For a complete reconciliation of GAAP to adjusted earnings, please reference our press release. Turning to our results, for the second quarter, sales increased 66.9% to $817.3 million compared to 2020. Total comps were up 84.9% in the second quarter, a significant increase from the first quarter's comps of 52.2%. As Roger mentioned, we saw record-level second-quarter sales and gross profit in our U.S. retail segment. U.S. retail comparable sales were up 94.3% during the second quarter versus the prior-year period and sequentially improved from the 56.3% in the first quarter. This growth was driven by our near-term strategy and improving store traffic. Year-to-date traffic as compared to 2019 has continued to improve. While store traffic in the second quarter in total was down 10% to 2019, we saw sequential improvement throughout the quarter with May down roughly 17% and July down just 3.6%. We saw positive store traffic comps on multiple days. Our results are continuing to exemplify that our pivot towards athleisure and kids footwear in our U.S. retail business is working. During the second quarter, athletic comps were up 90% compared to the second quarter 2020, which I'm proud to say was among the strongest athletic performances in the footwear industry and delivered a sales penetration of 23% versus 17% in 2019. Athleisure sales comps, which include athletic and casual, were up 107% during the quarter compared to the second quarter 2020. The athleisure penetration was 57% versus 44% in 2019. Coming into the quarter, we had cautiously planned inventory for seasonal products, and the category outperformed our initial expectations and was up 5% versus the same period in 2019. Our dress category also saw improvement from prior trends. While women's dress was down 40% for the second quarter versus 2019, it was much improved from the first quarter, which was down 57% to 2019. Similar to women's, men's dress was down 30% versus 2019, much improved from the down 56% in the first quarter. Dress continues to lag the broader recovery given continued challenges in the trend of working from home and apprehension around social gatherings and traveling but we like the trajectory we see.

As demand in stores has accelerated, we have not seen a slowdown in digital growth. U.S. retail's digitally demanded sales for the second quarter were up 21% versus 2020 on top of a roughly 27% increase this same time last year. Digital demand was 27.2% of total demand for the second quarter, well above pre-COVID levels of 18.9% in the second quarter of 2019. Turning to Canada, total comps were up 14.6% in the second quarter first-quarter comps at 10%. Store traffic comps were down 43% in the second quarter compared to 2019 levels, which is an improvement from down 51% in the first quarter. We saw sequential improvement in traffic throughout the quarter from being down 66% in the first five weeks to being down 29% in the last eight weeks. As discussed last quarter, Canada experienced much longer lockdowns and restrictions than were experienced in the U.S. As such, their recovery, while trending very similar to the U.S., is running about 2 to 3 months behind what is being experienced in the U.S. Turning to Camuto, I always like to remind everyone that Camuto is a critical part of our long-term focus to build our critical brand strategy. As Roger mentioned, the performance of Camuto-produced brands within DSW has been increasingly strong. Our customers are responding very well to our products as we are offering the right fashion at the right price points. Our ability to quickly turn on production when we saw changes in consumer demand was critical to this success and will continue to be a differentiator for our business.

Across Camuto in total for the quarter, we continued to ramp up our production to meet consumer demands. But as I mentioned previously, we are feeling the impact of the global supply chain pressures. Specifically, we saw approximately $7 million of our wholesale orders shipped into Q3, mainly due to production delays caused by increased demand with limited factory capacity during peak season, rolling blackouts, COVID issues, and labor shortages. We anticipate more shifts will occur from Q3 to Q4 based on COVID closures we are seeing in Vietnam, in addition to further rolling blackouts and labor issues. We are expecting continued production ramp-ups throughout the remainder of the year from both a shift of production from Q2 and an increase in consumer demand. Please keep in mind, unlike retail, consumer POS are written well in advance for wholesale and thus the ability to impact pricing is more limited in the near term. Total net sales for Camuto, including sales to DSW, were $50.5 million in the second quarter, up 65.9% versus last year. Wholesale sales were $42.7 million in the second quarter, versus $15.6 million last year, including sales to our retail segments, which totaled approximately $12.7 million versus $4.5 million last year. Our consolidated gross profit increased by $247.6 million to $284.7 million in the second quarter versus $37 million in the prior year. Our consolidated gross margin improved to 34.8% in the second quarter versus 30.5% in 2019, up 430 basis points. At our U.S. retail segment, the gross margin was 35.5% in the second quarter versus 30.7% in the second quarter of 2019. This was driven by strong regular price selling, limited promotions and clearance, and select price markups, which was notable given our increased penetration of athletic which generally comes with lower initial markup. We also saw leverage in our store occupancy and supply chain costs. Canada gross margin in the second quarter was 32.6% versus 34.7% in 2019. This is primarily due to lower promotional activity and a higher content of closeout, which yielded higher rates versus 2019. This was mitigated by higher shipping expenses due to growth in our digital business. Camuto gross margin rate was 16.9% in the second quarter, down 910 basis points from the second quarter of 2019, primarily related to deleveraging from fixed guaranteed minimum royalties or GMRs. Without the GMRs, gross margin rate would have been up 110 basis points. We ended the quarter with inventories of $504 million versus $445 million last year, but down in units by 16% and down 28% in units compared to 2019, which was below our initial plan to be closer to flat to 2019. This obviously causes some potential friction as we continue to see our sales ramp quite positively to 2019. Accordingly, we are leaning heavily into our own production capabilities at Camuto, as well as aggressively working with our vendor partners to get priority access to the inventory that is available. Our scale and overall relationship size with most of the brands we carry typically positions us well when chasing limited inventory. Additionally, we have projected several million dollars of increased freight costs across DBI this fall to expedite inventory that becomes available. In the second quarter, consolidated adjusted SG&A and all of our businesses was up 29% to $218 million versus last year and up 2.4% compared to 2019, driven by our continued strategic pivot of redeploying excess gross margin dollars into increased customer acquisition and marketing dollars. Our adjusted SG&A ratio for the second quarter was 26.7% of sales, slightly above second quarter 2019 level of 24.9%. Depreciation and amortization totaled $19.7 million in the second quarter compared to $20.9 million in the prior year. Adjusted operating profit for designer brands was $69 million in the second quarter versus $50.9 million in the second quarter of 2019. I am so proud of the work we've done to have not only returned to profitability last quarter but to have materially grown profitability this quarter and coupled that with positive cash flow generation. We had $8.1 million of interest expense during the second quarter compared to $3.8 million in the prior year. Our effective tax rate was 28.7% in the second quarter versus 29.5% last year. Total weighted average diluted shares during the quarter were 78 million compared to 72 million last year. The increase was primarily driven by the return to positive earnings and the related dilution accounting. Second-quarter reported net income was $42.9 million or $0.55 per diluted share, which included after-tax charges of $0.6 million. Excluding these charges, adjusted EPS was $0.56 per diluted share for the quarter. We are quite pleased with our liquidity position, which includes cash and availability under our revolver, which at the end of the quarter was $410.5 million versus $208.7 million last year. We ended the quarter with $247.1 million of debt versus $393 million last year, and down $87.7 million since the end of fiscal 2020. During the quarter, we did not open any stores and closed one in the U.S. and two in Canada, resulting in a total of 515 U.S. stores and 143 Canadian stores. Given the environment, we believe it is still too uncertain to provide detailed long-term guidance. We see sales potentially increasing in volatility given variant outbreaks and, as discussed, we recognized the mounting global supply chain pressures. However, given the levers we have available to pull and our proven ability to strategically pull those levers, we do expect to continue meeting or beating our pre-COVID profitability performance and deliver an adjusted operating income for the fall of fiscal 2021 that will be slightly above the fall of 2019. This includes the assumed increases in freight and labor costs, as I mentioned earlier. If the potential impacts of the variance and supply chain pressures mitigate, and consumer demand remains as robust as Q2, we believe we could certainly overperform from this number. Finally, I would like to call out that our traditional calendarization may be skewed due to the various disruptions we've discussed during this call. Thus, we're looking at fall in total, which is Q3 and Q4 combined.

We will now begin the question-and-answer session. We ask that you please limit yourself to one question and a single follow-up. Today's first question comes from Steve Marotta with C.L. King & Associates, please go ahead.

Good morning, Roger and Jared. Congratulations on the second quarter. Jared, can you go over the inventory position again? It looks like your inventory is up year-over-year, which is a somewhat enviable position considering what other footwear retailers have announced. Can you talk a little bit about composition? It seems like a competitive advantage, but you also mentioned a couple of other items that I was writing as fast as I could that seemed to be – I know that there are headwinds also and pinch points, of course, in the supply chain, but maybe you can just elaborate on the current inventory position a little bit better and also what you would expect from a flow standpoint for the back half. Thanks.

Yeah. I'm happy to give that and I'm sure Roger will want to add some color, especially around the composition. What we reported was we were up over last year in dollars; we were down slightly over last year in units. Much of that is a question of lack of reserves and the overall IMU that we're experiencing. So that’s kind of the disconnect there. Not overly concerning, but that was why one’s up and one’s down. The second stat that was provided was just versus 2019 - there we were down in the high twenties. What we are seeing is a lot of flow coming our way. We have seen quite a few delays in shipments, but on the flip side, we actually are getting many of those shipments. One thing I'm very happy to say is on the athletics side, we had been very aggressive. In fact, placed quite a bit of over-ordering athletic knowing there was little risk to that product even if it all showed up. So that has put us in a pretty good position on that front. On the seasonal front, that’s where we see some potential delay. We are very thankful we've got our Camuto operation that is giving us priority access to the inventory that is coming off the factory lines. We’re receiving that now and we're really happy, but that’s where I could see some potential delay and why I mentioned you might see some traditional shifting from Q3 seasonal selling into Q4, very similar, even with sandals that we saw that decline not happen into Q2 the way that it normally does.

Steve, I would say that when you look at the seasonal category in particular, making certain that we put in sufficient freight into our back half expect to get that product here, which, as Jared had said in his comments, has been built into our plan for the back half. But right now, day in and day out, it's about athletic and kids and I feel really, really good about the way our team has positioned inventory in that piece of the business, which is frankly the key to the game we're now playing with back-to-school.

That's really helpful. Also, is it possible to tease out the gross margin improvement in the second quarter versus 2019? What was captured with better full-price selling and what was captured with increased DSW-sourced, Camuto-sourced items selling in the store?

Yeah. The name of the game, first and foremost, was full-price selling. I mean, not only did we reduce promotions materially, but we also had the opportunity to increase pricing several times throughout the quarter. Just as we were seeing turns be so aggressive. We saw that the consumer followed us there, and we really did not experience any hesitation around that. We did see some deleveraging on the shipping side, but not a whole lot. And then as Roger mentioned, there were some additional freight charges even in Q2, where we had agreed to expedite some freight and just the overall inflationary environment of freight across the board did the lever there. So, again, net, very positive, but those are the significant factors at play.

Steve, I've been trying to figure out how we share this assortment strategy and what we've done. If you break it down, our distortion toward athletic, kids, and seasonal has absolutely paid off. Our athletic business is up 45%, this is 2019. Up 45% in kids, up 55% in our seasonal business. Those are the three big things we've told you we were going to focus on, and it's worked. The way we’ve shifted is to target the top 50 brands, which now account for 78% of our sales. That number was 40% or less just a couple of years ago. To give you a sense of how we've leaned into those brands, it was up 112% compared to last year. Additionally, our business was up 88% on Camuto produced brands on inventory down 13. That came with an extra 1500 basis points of gross margin. Adding all that up, and telling a story to a customer the way we've been doing it, has grown our customer file at an unprecedented rate. This strategy that we implemented a couple of years ago is working, and it’s just so exciting to see the progress we’ve made.

Thank you and our next question today comes from Gaby Carbone of the Deutsche Bank. Please go ahead.

Hi, congratulations on the nice quarter.

Thanks, Gaby.

So first, I was wondering if you could maybe dig into the increased freight expenses that you mentioned. How should we be thinking about the impact of that versus what you saw in the first half of the year? Are you able to quantify that at all?

Yeah. I would say we saw roughly $5 to $6 million of increased freight costs of deleverage versus 2019 in the first half. We baked in a little more than double that for the second half. So that's what we've got currently in our projection. If some of that isn't needed, we are able to get priority access and can both things and not have to air some things in; that may subside, but that's what we have currently baked in.

Got you, thanks for that. And this is another bigger picture question. Earlier you mentioned approximately 65 U.S. stores that would make sense for closure over the next four years. Just wondering if there's any update there and maybe how you're thinking about the overall store fleet.

Yes, and I’ll remind you and all the listeners that I also said, I'm 100% positive that that list would change because that was based on tracking and looking at projections when we were in the height of COVID and not knowing what the stores would do. In fact, as you just heard from our results, the stores have come roaring back. We are exceeding what those initial projections were. So, that number is certainly not the same that was on the table before. However, longer-term under the consumer, the customer, brand, and speed pillars that Roger talked about, we know that the shift to digital is continuing and we're going to follow our customers there. We’re happy to do that. Longer-term, we are looking to reduce our fixed occupancy related to store overhead. One of the ways to do that without vacating a market is to look at a different square footage solution. We’re in the process, very far into the process right now at a redesign we call warehouse re-imagined. Some people used to call it the store of the future. But how can we get more productive in a smaller space and still offer that same flexibility? So we can service our customers and serve as a fulfillment center. More to come on that front. I don’t think it’s going to be the full 65 stores, but I do think longer term we want to see a net reduction in square footage—it just may not be vacating stores in the way we thought.

Thank you. Today's next question comes from Jay Sole at UBS. Please go ahead.

Great. Thank you so much. A lot of great information on the call. I just want to make sure I understand the guidance. Jared, is it possible to provide any insight into how you're thinking about sales in Q3, maybe relative to 2019?

Yeah Jay, I unfortunately right now and why we left it just as operating income is we see too much volatility, especially slippage between Q3 and Q4 that I don’t want to put ourselves in a box that may not be what someone thinks we should be in Q3 and then overdo it in Q4. So we're really hesitant to go lower than operating income, but we do feel really good when we look at all the leverage we have at this point. We look at how we've maneuvered Q1 and Q2, and we saw shifting there between quarters that weren’t traditional, but we also saw gross margin play differently. We just don’t feel comfortable right now giving more than that. But we’re excited to reinstate some level of guidance, which was the operating income. Jay, I think it's important to share that this is the first time that I can recall in my 15 years that we actually provided some kind of insight into how we are doing in the next quarter in our comments. We are very pleased with how back-to-school is playing out and the success that we had as we were in Q2 and we saw that spillover into the third quarter. So we're not going to provide you the by-quarter breakdown, but we still feel very, very good about our business and how we're positioned.

All right, so I understand. Maybe just on some of the uncertainty that's out there, there is a lot of talks that hopefully factories in Vietnam will open up next couple of days and obviously through the next few weeks. Obviously, there's a chance that doesn’t happen. Can you just talk to us about how you think about managing through that potential situation? If there’s not a lot of product being made, what can the Company do given that you work with so many different vendors to get the goods that you need to drive the business going forward, especially in Q4? Can you talk about your ability to get inventory if there are factories that remain closed for an extended period of time beyond what’s currently expected?

Yeah, Jay. There isn’t a day that goes by, I don’t think, where I remind Jim and Brooke and our team that does all of the buying and planning for our organization how much I appreciate the work they've done to focus on these top 50 brands. And so this is how I’ve been describing it to folks. When you're in these situations, you’re going to take care of your family first. And when I think of how we've transitioned our assortment from having 7 or 800 labels to really focusing on these top 50 brands, we’re part of their family. We anticipate that we’ll get our fair share of products. So when you're running 112% increases in your top 50 brands, you'd hope you can have a conversation with those leaders and say, 'Hey, can you please ensure we get our share of products?' So I think that's priority number one. The second is leveraging our ability to design and source our goods, which Debbie and our team at Camuto are doing a fine job of. So, it’s the combination of those two things. Will there be some misses here and there? Yes. But have we demonstrated over the last 24 months an ability to be nimble on our feet and manage whatever comes our way? We absolutely have. And that’s my expectation as we go through the back half.

Thank you. And our next question today is a follow-up from Steve Marotta of C.L. King & Associates. Please go ahead.

Thank you for providing the opportunity for a follow-up. Roger, can you talk a little bit about the current back-to-school season? How normal do you think it is from a pace of sales in comparison to 2019? I understand there are some variances, but if you could quantify or qualify them a little bit of the cadence and the geography, just specific to how you would have expected kids to have sold this year in a completely normal environment. Thanks.

So Steve, I will bring you into the conversation our team had last night. This is not normal for us because historically we've always talked to you about September; there are 9 weeks of September and October because we really didn't have a business in July and August other than clearance selling. When I look at our penetration of kids sitting upwards of 14%, 15% based on the timing of folks going back to school, I’m really excited about it. I wish I could say that I knew how that compared to our history. We don’t have any history for this space. It’s that much of a distortion when you again hear that Kids was up 55% to 2019 in the second quarter, and that gives you a sense of just how different we are playing. We are now in the back-to-school space. We're in the top 15 in kids. We’re doing great in athletic and I'm just really excited about this. I think we see an opportunity in the future to do a whole lot more. The example is the Staples experience we’ve created; we're going to have that in more doors. The things we’re doing with Lids to engage differently. The things we’re doing with apparel that will match back-to-school timing. Things we’re doing with athletic brands to offer their apparel products in our stores during this window. Those are all things that I think provide us significant upside in the future for the kids' business. But unfortunately, right now, this is a new normal for us.

We are really excited about this, and I think we see an opportunity in the future to do a whole lot more. The example is the Staples experience that we've created; we're going to have that in more stores. The things we're doing with Lids to engage differently. The activities we're pursuing with athletic brands to offer their apparel products in our stores during this time. Those are all things that provide us significant upside in the future for the kids' section. But for now, this is our new normal.

One thing I would add just from quantifying that, Steve, that I think you’ll find interesting, is that when we look at what is happening this year, there's a very direct correlation that stores around districts that are returning back-to-school the following week. That is when we have our peak sales. It’s one week prior. In Q2, there had only been 39 of our stores that had that week. All the rest of our 515 stores have that week in Q3. To Roger's point, we don’t have history to really reference, but we do know what we're seeing now. Most of that is a Q3 event, not post behind us.

Great point.

That's very helpful. One last question about back-to-school. You had plans when you talked about kids to have a tag-along sale for the mom or dad that was bringing them back-to-school shopping. Can you talk a little bit about how that is running and what the upsell is? Are you maximizing the upsell opportunity currently or is that still in the works?

Great question, Steve. Again, the conversation we were having last night with our team. I think there's still upside to that. I think what we're seeing is that it is truly an incremental transaction. But then how do we marry those two things together and tie that into our rewards program to incentivize mom and dad to come in at the same time and buy for themselves when they are buying for their child? I think we still have an opportunity there.

Hi. Good morning and nice to see the progress. Given the announcement that you made about Hush Puppies, how you're going to be the exclusive supplier or provider, how do you think of this as an opportunity for other brands? And also any update on Canada and what you're seeing there?

Yes. Thanks, Dana. I first have to think Blake and Brendan for their support and partnership. As we talk about brands and vendor relationships, this is as good as it gets for us. The fact that we were able to sit down, have this conversation, and reach an agreement. When you think about how this provides Hush Puppies access to 30 million rewards members across our platform, and we’ll be doing things for them that we would not for others. The fact that we can build differentiated experiences both digitally and in the store. We’re going to be doing some shop-in-shops to build out the brand significantly. At the end of the day, what we’re able to provide is the ability to remove friction from transactions. There will now be return centers for Hush Puppies products to come back to DSW, or there will be Buy Online Pickup in Store locations within 20 minutes to 70% of the population. Those are all things that we’ll be able to offer to this consumer. We believe not just a great platform for Hush Puppies but for other brands like Hush Puppies that are looking for a growth vehicle become a part of our model. I’m still really happy with the results we’re getting in Canada. Things have been slower to recover there, primarily from a store standpoint. Our digital business was still up 140% — north of 140% for the Quarter, and stores have been slightly slower to recover, and their back-to-school has really just started in the Third Quarter. So, I’m actually feeling really good about the results we’ve had up there.

Thank you, ladies and gentlemen. This concludes the question-and-answer session. I'd like to turn the conference back over to Roger Rawlins for any closing remarks.

Thanks again, everybody for listening in and to all of our associates tuning in. Keep up the great work. Appreciate what you're doing, and everyone have a great day. Thank you.

Ladies and gentlemen, that concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.