Good morning, everyone, and thank you for joining us to discuss our fourth quarter and fiscal 2021 full year results and our key areas of focus for fiscal 2022. Participants on the call expect to make forward-looking statements. These statements reflect the participants' expectations as of today, but actual results could be different. Genesco refers you to this morning's earnings release and the company's SEC filings, including the most recent 10-K and 10-Q filings for some of the factors, including the impact of COVID-19 that could cause differences from the expectations reflected in the forward-looking statements made during the call today. Participants also expect to refer to certain adjusted financial measures during the call. All non-GAAP financial measures referred to in the prepared remarks are reconciled to their GAAP counterparts in the attachments to this morning's press release and in the schedules available on the company's homepage under Investor Relations in the Quarterly Earnings section. I want to remind everyone that we have posted a presentation summarizing our results that is accessible on our website. With me on the call today is Mimi Vaughn, our Board Chair, President and Chief Executive Officer, who will begin our prepared remarks with highlights from the fourth quarter and year and Tom George, our Chief Financial Officer, who will review Q4 results in more detail and provide direction for the first quarter of the upcoming year. Tom will then turn the call back over to me who will then discuss some of our key strategic initiatives. We hope that you are all staying safe and healthy. Now, I'd like to turn it over to Mimi.

Thanks Dave. Good morning everyone and thank you for joining us today. I’d like to begin by welcoming Tom, who has almost 30 years of CFO experience. His deep expertise in brands and retail has been a tremendous addition to our team as we drive the recovery in our business and a return to profitable growth. We concluded an incredibly challenging year with the fourth quarter that exceeded our expectations across the board. Our performance was driven by record digital revenue and superb all-around results at Journeys, highlighted by stronger than anticipated store volume. As it did throughout fiscal 2021, our organization successfully navigated difficult operating conditions to serve our customers, this time during the all-important holiday selling season. I could not be more proud of how well our teams have executed during the pandemic. They have faced each new challenge in a very dynamic environment with tenacity and ingenuity while operating under protocols to ensure our highest priority, the health and safety of each other and our customers. My sincere thanks goes out to every member of our team at Genesco for all your good work driving the results we achieved. Before we get into a review of fourth quarter performance, I'd like to highlight some of the major accomplishments from fiscal 2021. Starting with the significant task of efficiently closing and swiftly reopening our entire fleet of nearly 1,500 retail locations, some of them multiple times, capitalizing on the accelerated shift to online spending, achieving record digital revenue of $450 million, an increase of almost 75% year-over-year, while also fueling record profitability for this channel, driving record conversion rates in stores to help partially offset the impact from lower traffic levels and store closures. Increasing market share in Journeys and Schuh, which represents a large majority of our revenue, with their ability to retain sales in the face of the pandemic's disruption, and serving capital while reducing operating expenses by 15% compared with fiscal 2020, generating cash flow of over $130 million to ensure healthy liquidity. Finally, delivering sequential improvement every quarter. In particular, bottom-line results reflect the strong foundation we built for the digital channel prior to the pandemic. Our online business generated double-digit operating margins before COVID-19 due to our focus on full-price selling, disciplined marketing spend, and shipping and return policies to reinforce profitability. Thanks to numerous digital investments we've made over the past several years, not only were we able to effectively handle the unprecedented volume from accelerated demand, but e-commerce margins improved further as we leveraged these investments over a wider base of revenues. Our overall performance under difficult circumstances also reflects the strong competitive positions of our retail concepts prior to COVID-19 and our success in capitalizing on opportunities to further strengthen the leadership positions of our teen and young adult footwear businesses. In today's channel-less world where the consumer can shop anywhere they want, Journeys and Schuh's results underscore the tremendous loyalty they've developed with their existing customers and the compelling propositions they offer new customers. So turning now to the fourth quarter, the work we did to ensure the right assortments and the right holiday campaigns helped deliver Q4 results ahead of expectations, despite some store closures not anticipated in the U.K. and Canada, as well as supply chain delays and disruption. While we continue to face softer traffic levels than a year ago across our retail businesses, Journeys stores posted a nice improvement compared with the third quarter as more shoppers visited Journeys locations during the peak weeks leading up to Christmas. Our store chains once again drove very strong levels of customer conversion to help materially offset the headwinds from less traffic. Meanwhile, our business online, especially mobile, experienced very strong gains in both traffic and conversion, with new customers again driving increased volumes. New website visitors were up 40%, contributing to almost 50% growth in new customer purchases, and we delivered another strong quarter of digital growth with comps up 55%. The combination of these factors led to a total revenue decrease of 6% versus last year, with stores open about 90% of the possible days in the quarter. This result was better than we expected, due mainly to the stronger store sales at Journeys and represents a meaningful improvement from last quarter’s 11% decline and Q2’s 20% decline. While gross margins were down compared to last year, the gap narrowed for the third consecutive quarter, and the sequential improvement was driven by an increase at Journeys due to strong full-price selling. As a result of decisive cost containment actions, along with one-time benefits, including substantial rent abatements recognized in the quarter, we drove total expenses down twice as much as revenue on a percentage basis. Inclusive of the rent abatement, operating income was up year-over-year. By tightly managing inventory throughout the year, we had the flexibility and confidence to bring in new fresh product. However, much lower year-end numbers also reflect the disruption in the supply chain, which caused delays especially at Journeys and Schuh, where we would have liked to have received product earlier. Turning now to discuss each business in more detail, let's start with Journeys and begin by congratulating the team on its impressive results across the board. Journeys has delivered record operating profit in the biggest quarter of the year amid a pandemic. Fourth quarter top-line results matched last year's levels as this merchant team skillfully interpreted trends, making the right product calls, and its store and digital teams delivered an exceptional customer experience. When our stores were open this year, Journeys customers were enthusiastic to shop our physical locations and engage with our staff. Over the holidays, we were pleased by the strong appetite to shop our stores. With replenishment orders for many key styles arriving post-holiday, combined with the first wave of checks from the December stimulus program delivered early in the New Year, the business accelerated as January progressed, leading to a strong finish to the quarter. Comfort reigns as the fashion choice of the pandemic, and Journeys' offering of casual product continued to resonate strongly with consumers. While teams always have a big complement of fashion athletic footwear in their closets, when fashion swings toward non-athletic, or what we call casual footwear, Journeys is especially well-positioned among its competition to deliver this assortment. This fall and winter, our consumer’s appetite for boots began early, and our boot business was good. Our casual business was even better, especially in women's and kids. Congratulations team. Following a good back-to-school season, Schuh came into the fourth quarter with positive momentum and a strong assortment of high-demand brands and styles. Unfortunately, the holiday season was severely disrupted by store closures across the U.K., with Schuh stores closed for about two-thirds of the possible days in the quarter. Fortunately, with best-in-class digital capabilities, Schuh was able to capture a significant portion of lost store volume through its digital channel, and total sales were down only 13%, capping off a year in which Schuh, like Journeys, gained market share. As with Journeys, Schuh's casual assortment gained ground over its fashion athletic assortment, with boots and casual styles strong throughout the quarter and women's leading the way. Meanwhile, Johnston & Murphy's casual footwear and apparel categories were again the bright spots for the brand in what remained a very tough environment due to the work-from-home trend and significantly fewer social gatherings during the pandemic. The plan going forward is to accelerate the work started years ago to evolve Johnston & Murphy into a footwear-first lifestyle brand with a range of footwear and apparel from dressier to more casual. Despite the challenges of this past year, there were solid proof points that this strategy continues to gain traction, including the success of the innovative XC4 collection and the relaunch of golf. For the upcoming year, Johnston & Murphy has focused 90% of new product development on the expansion of its casual offering to include casual athletic, leisure, rugged outdoor, and performance. We brought in a new head of product development who brings a successful track record in developing casual brands to aid in these efforts. As the customer returns to work and socializing, which we hope will be sooner rather than later, Johnston & Murphy's assortment will be ready for the post-pandemic lifestyle and further buoyed by their core customers' increased level of savings during the pandemic. Turning now to the current quarter, early February extended January's positive momentum until we hit the offset of income tax refunds, which were delayed by a few weeks this year. Nevertheless, February sales came in line with our expectations, and in March, we have seen an uptick as refunds began to catch up. Looking ahead, while great progress is being made on this front, we expect the environment to remain fluid in the near term until the vaccine rollout is more comprehensive. In terms of how this shapes our results, it means the first half will show an improvement over last year given the easier comparisons due to the COVID shutdowns. But we will still be under pressure from store closures, especially in the U.K., which is expected to be shut down until shortly after Easter. We anticipate store traffic will also continue to be affected across all geographies this spring. These dynamics will further pressure our results in these low-volume months, when in normal times fixed operating expenses make it challenging to break even. Stimulus will help, and we are optimistic about a greater recovery in the back half of the year. We see opportunities to solidify the digital gains we've made and capitalize on the ongoing industry consolidation to further expand our market share. As many challenges as COVID-19 has created for our company, it has also provided us with the real opportunity to transform our business at a faster pace. We've learned a lot and will work hard to accelerate the initiatives and investments we planned to achieve these goals and exceed the expectations of the consumers whose needs have advanced. So I'll now turn the call over to Tom, who will review our fourth quarter results and future outlook in more detail.

Thank you, Mimi. We were pleased with our performance in Q4 as we handily exceeded our expectations in all facets of operating results. Building upon our strong return to profitability in Q3, sequential improvements compared to the prior quarters in revenue, gross margin, and SG&A due to some help from rent abatements drove higher operating income than last year. A higher tax rate offset the higher operating income, resulting in adjusted earnings per share of 276 compared to 309 last year. Turning to the specifics for the quarter, while comps are up 1%, consolidated revenue was 637 million, down 6% compared to last year, driven by continued pressure at Johnston & Murphy and the impact from store closures during the quarter. A robust e-commerce comp of 55% was offset by a decline in store revenue of 19%, driven by a comp decline of 10% while our stores were closed for 10% of the possible operating days during the quarter. Digital sales increased to 27% of our retail business from 17% last year. Consolidated gross margin was 45.8%, down 110 basis points from last year. As we have experienced all year, increased shipping to fulfill direct sales pressured the gross margin rate in all our businesses, totaling 80 basis points of the overall decline. Notably, Journeys' gross margin increased 210 basis points driven by lower markdowns. Schuh’s gross margin decreased 410 basis points due to the increased e-commerce shipping expense. Johnston & Murphy's gross margin decreased by 1690 basis points due to more closeouts at wholesale, higher markdowns at retail, and incremental inventory reserves. Finally, the combination of lower revenue at Johnston & Murphy, typically the highest gross margin rate of our businesses, and the revenue growth of Licensed Brands, typically our lowest gross margin rate, negatively impacted the overall mix by 50 basis points. Adjusted SG&A expenses were down 12% and as a percentage of sales, leveraged 240 basis points to 35.7%. We benefited from ongoing actions around expense management, savings associated with rent abatements, as well as relief in government programs in the U.K. and Canada. The largest year-over-year savings came from occupancy costs driven in large part by the execution of about $18 million of rent abatements with our landlord partners who provided support for the time stores were closed, and savings from the U.K. government program, which provides property tax relief. The next largest areas of savings came from the reduction in store salaries, driven by effective use of workforce management tools, and from lower bonus expenses. These savings were partially offset by increased marketing expenses needed to drive traffic in both stores and online. We took the most significant cost actions at Johnston & Murphy, evident by the 29% reduction in SG&A in Q4 and a 25% reduction for the full year. In addition to the rent abatement savings, our organization has been intently focused on a multi-year effort centered around occupancy costs, and we have achieved even greater traction with the pandemic. We negotiated 123 renewals this year and achieved a 23% reduction in cash rent, or 22% on a straight line basis in North America. This was on top of an 11% cash rent reduction, or 8% on a straight line basis for 160 renewals last year. These renewals are for an even shorter term average of approximately one and a half years compared to the three-year average we saw last year, with almost a third of our fleet coming up for renewal in the next 24 months, this will remain a key priority for us going forward. In summary, the fourth quarter’s adjusted operating income was $64.7 million versus last year's $59.3 million. Our adjusted non-GAAP tax rate for the fourth quarter was 37.5%. Tax initiatives under the CARES Act and other provisions generated a one-time $65 million permanent income tax benefit for fiscal year 2021. This permanent benefit is excluded for non-GAAP reporting. Turning now to the balance sheet. Q4 total inventory was down 20% on sales that were down 6%. The levels of Journeys and Schuh are lower than we would like given the delays in the supply chain. For the fourth quarter, our ending net cash position was $182 million, $100 million higher than the third quarter's level, driven by strong cash generation from operations. The year-end cash balance benefited from both the lower inventory levels as well as rent payables that will be trued up once remaining COVID-related deals are fully completed and executed. Capital expenditures were $6 million as our spend remains focused on digital and omni-channel, and depreciation and amortization was $11 million. We closed 16 stores and opened none during the fourth quarter, capping off the full year in which we closed 33 stores and opened 13. Now looking forward to fiscal 2022, given the uncertainty remaining with the pandemic, we are not providing specific guidance for Q1 or the full fiscal year. That said, I do want to share some high-level thoughts on how we are thinking about our business. To do this, we think it's best to use the pre-pandemic fiscal 2020 as the reference point, as there is simply too much noise in fiscal 2021's results for drawing informative comparisons for future expectations. Thinking about Q1 revenue, although we expect a nice recovery compared to fiscal 2021, we will be below fiscal 2020 levels. This is mainly due to Schuh with major store closures expected through most of Q1 and continued pressure on Johnston & Murphy. Directionally, the overall sales decline for Q1 compared to fiscal year 2020 could be in the neighborhood of the 11% decline we experienced this past third quarter. We will have more stores closed than in the fourth quarter. Our view does not contemplate additional store closures or restrictions beyond what we know today. In addition, we have not included any stimulus from the most recent bill in our forward thinking, which historically is a tailwind. Gross margin rates for Q1 will be below fiscal 2020 levels, more than the 210 basis point decline we experienced this past third quarter. The increase in closed stores will drive higher e-commerce penetration and the higher shipping costs that come with it. Additionally, we anticipate the negative headwinds from Johnston & Murphy to continue into Q1. We expect the SG&A dollars in Q1 to be below fiscal year 2020 Q1 levels, inclusive of some one-time benefits. However, there will be some deleveraging due to the sales volume, likely in the neighborhood of 100 basis points. This is driven by closed stores and lower store volumes, as the fixed store occupancy expenses cause deleverage. In summary, it will be difficult to turn a profit in Q1 as is typical during our lower volume quarters of the year. Combined with the seasonality of our business, we are expecting more than 100% of our full year earnings to come from the third and fourth quarters. Even though we are expecting an overall loss in Q1 since that loss is generated in foreign jurisdictions for which there is no tax benefit, we expect a tax expense related to a small amount of U.S. earnings in Q1. The annual tax rate is expected to be approximately 32%. For fiscal 2022, capital expenditures will be between 35 million and 40 million centered on digital and omni-channel investments, which comprise about 75% of this amount. This does not include another 16 million net of tenant allowance related to the move to a new headquarters location, which we delayed because of the pandemic, but which was precipitated by the landlord's plan to demolish our current building. We estimate depreciation and amortization at $48 million. We currently plan to open up to 15 new stores, mainly at Journeys. New store leases will be designed to minimize our risk by including landlord support on build-out costs, variable rent, and kick-out opportunities. We currently plan on closing about 35 stores, but this count can go up or down based on our ability to obtain short-term lease deals at attractive rates. Our strong year-end cash position enables us to invest in our business. We had moderated capital expenditures with the onset of the pandemic and expect to catch up with some of our initiatives. In addition, we plan to increase our inventory levels to drive increased back-half sales. These investments will be funded by earnings and a net inflow of cash from our tax planning initiatives. Also, we anticipate this year's numbers will include bonus expenses. Our EVA program pays for year-over-year improvement, and we paid no bonus in the year we just finished. For the year, we are assuming an average of 14.6 million shares outstanding. This assumes no stock buybacks under our current $100 million board authorization, of which $90 million is remaining. Now turning to discuss in general our cost structure. Given the accelerated shift of our business from stores to digital, and the impact from the pandemic, we must reshape our cost structure. Initially, we believe we can reduce operating expenses by as much as $25 million to $30 million, approximately 3% on an annualized basis. This is a good start to a multi-year profit improvement plan to rebound from the pandemic and to enable investments in growth while at the same time improving operating margins and return on invested capital. We will provide more details as the year progresses.

Thanks, Tom. As I said, COVID-19 has provided us the opportunity to transform our business at a faster pace as we emerge from the pandemic and to build our company into an even stronger position. With online behavior advancing by several years, we need to accelerate many of the digital and omni-channel initiatives in our pipeline. The investments we have made paid huge dividends this year. Importantly, as a footwear-focused company, digital provides the platform to drive profitable growth across all our concepts. The pandemic also drove a number of consumer trends that play into the sweet spots of our two largest businesses, Journeys and Schuh, such as an increased emphasis on comfort and greater casualization. While this was already the direction Johnston & Murphy was heading, we are accelerating progress here as well. A year ago, I described the outcome of our five-year planning process and the six strategic growth pillars around which we aligned our business. While the past year only reinforced that we are focused on the right areas, we re-evaluated our initiatives to take further advantage of the significant changes underway in our industry. I'll walk you through the pillars and briefly highlight select initiatives for fiscal 2022. The first pillar is building deeper consumer insights to strengthen customer relationships and brand equity. Data-driven consumer insights and more robust CRM capabilities are key to driving our next big wave of growth. Not only do we have robust information for our online customers, but in North America, over 70% of store customers trust us enough to share their data, providing a very strong foundation on which we continue to build. We implemented a completely new CRM system in fiscal 2021 at Schuh aimed at increasing shopping frequency and average order value. Schuh's CRM welcome campaigns, initially launched in summer, were designed with personalized content to drive additional purchases and further engage customers. These new campaigns delivered results that exceeded our expectations. This new CRM system will create the basis for the launch of a loyalty program in fiscal 2022, incentivizing customers to consolidate their purchases across brands at Schuh through recognition and rewards. Likewise, at Journeys, we just finished an evaluation of how to take Journeys' CRM capabilities to the next level and enable us to introduce a loyalty program for Journeys in the future. The second pillar is intensifying product innovation and trend insight efforts. I've talked about Johnston & Murphy's product innovation which uses proprietary technology to differentiate the brand from competitors, as it fast-tracks development of a broader casual offering. Additionally, we're excited to reap the benefits of last year's acquisition, which advanced our strategy of growing the branded side of Genesco. Beyond acquiring new talent and additional sourcing capabilities, we secured the rights to the Levi's footwear license for men's, women's, and kids in the U.S. We are leading in not only the gender but also the category opportunities in areas like slippers, flip-flops, and slides. Levi's is one of the most recognized consumer brands with a heritage dating back almost 170 years. The Levi's brand halo and casual aesthetic are a perfect fit with pandemic fashion preferences, and we are very optimistic about the growth prospects here as demand in the channels for this product returns. Next, I'll discuss the third and fourth pillars together: accelerate digital to grow direct-to-consumer, and maximize the relationship between physical and digital with a series of initiatives we have underway. While we have doubled e-commerce in the five years leading up to the pandemic, we aim to double the business again in a much shorter period by leveraging the 75% comp increase we achieved last year. To do this, in North American stores, we're launching the initial rollout of this offering, which we've had in the U.K. that drives around 20% of Schuh’s online purchases and brings customer traffic to its stores. As the lines between physical and digital further blur, we're tackling last-mile innovation by rolling out this capability along with buy online, ship-to-store, and ultimately offering important conveniences to our customers like curbside pickup. The foundational project for this effort was last fall's upgrade of our inventory locating and order brokering system, which provides the requisite improved inventory accuracy. Building on this, we will install new store point-of-sale software and hardware to accelerate the digitization of our stores and provide a platform for new capabilities, including mobile checkout, line busting, and features to make non-selling tasks more efficient. These projects, plus the completion of another bespoke e-commerce picking module at the Journeys distribution center, comprise the greater part of our capital spend in fiscal 2022, which Tom highlighted as being significantly more concentrated in digital and supply chain. The fifth pillar is reshaping the cost base to reinvest for future growth. As our business transforms, we require a cost structure that supports an omni-channel business. While our stores remain a critical strategic asset in this omni-channel world, we've been working to evolve the historical rent and selling salary models. Tom just took you through our cost initiatives. I want to reinforce that working with our landlord partners to find a solution that right-sizes rent to match traffic levels is a big part of this endeavor. Finally, the sixth pillar is pursuing synergistic acquisitions that add growth and create shareholder value. We are pursuing reactively rather than proactively until we recover further from the pandemic. To conclude, as I reflect on my first year as CEO, I have been truly amazed by the executional excellence and resilience of our entire organization as we navigated a year like none other. I want to again thank our remarkable people for their extraordinary efforts. Genesco’s success can be traced directly back to you who have stepped up in so many ways right from the beginning of the pandemic. My thanks to you all. This concludes our prepared remarks, and I'll now turn the call back over to the operator for Q&A.

Thank you. Our first question comes from Steve Marotta with CL King and Associates. Please go ahead with your question.

Good morning, Mimi, Dave, and Tom, terrific fourth quarter. Way to manage through an unprecedented pandemic.

Thank you, Steve.

Nicely done. Can you talk a little bit about the supply chain issue that's currently going on, how it's affecting each of the domestic businesses, and whether there's geographic variability within some segments, particularly Journeys? And if that gives you any additional reads on potential future fashion trends?

Sure, I think that's two questions. So, let's talk first about just the availability of inventory across banners. As you know, there have been supply chain disruptions since stores opened up, really following the initial store closures back last spring. But there's also been disruption on the consumer side, as purchasing patterns have shifted, and this disruption can be traced directly to congestion in the ports and other variables that you've heard about. We have factored this into our forecasts. Overall, the supply chain is probably running about four to six weeks behind. It's a bit of a domino effect that we wish we had had some more products over the holidays, and that product then arrived in January. That helped fuel some more sales in January. We wish we'd had more product delivered then, but that's coming now in time for tax returns. So it's a bit of a domino effect that we think will continue until sometime this summer and is affecting really all of our businesses. But we feel like we will manage through that. This is a much lower volume time for our company. When we get to the high volume part of the year with back-to-school and holiday, the supply chain ought to be in much better shape. As far as any geographic differences of Journeys and insight into future fashion trends, the last major fashion trend that we described was the retro athletic trend. We had a nice long run in that trend, as there was a great choice of options from all the athletic brands. What we've seen throughout this year is we have seen that the consumer shifted into what we call casual, and we differentiate between fashion athletic and the casual side of our businesses. In the spring and summer, we saw a move into sandal products, and sandals did really well over spring. Then, through the third quarter, we saw further acceleration of everything that is our non-athletic product. Boots, of course, are always strong in the fourth quarter, but we have just seen an appetite for a number of brands that are more on the casual side of the world, and comfort has been very important to kids. As we look into the future, Journeys is extraordinarily well-positioned among its competition. We are known as the place to go for fashion and casual footwear, and those two realms really go together. We've seen many of the same trends across the country; no specific geographic differences, but a number of brands are performing quite nicely.

That's very helpful. And one other follow-up question given the target of $25 million to $30 million in annual SG&A savings. Can you talk a little bit about the timeframe when you would expect to realize that magnitude? If you think there will be any offsets to that? In other words, would you use some of that for demand creation activities or some other growth opportunity?

Yes, Steve, this is Tom. I think the best way to answer that is it will take some time to reach that $25 million to $30 million; it's more of an annualized rate, sort of exiting the year, with an additional $25 million to $30 million. It may come sooner in the form of some additional rent abatements and whatnot. But for the most part, we're looking at permanent savings in the cost structure and exiting the year with savings of $25 million to $30 million. On the other side, we also believe we'll continue to have some increased digital penetration, and there's going to be some additional variable costs associated with that. So there will obviously be some offsets to that $25 million to $30 million, but we feel good about our ability to do that, which should mitigate a lot of the increase in variable costs associated with increased digital penetration. That should put us in a much better position moving forward to earn good operating margins and better returns on capital. One other thing to point out is, with Johnston & Murphy, we still feel good about our opportunity there; most of the headwind in the quarter was really all about the retail stores and the wholesale business of Johnston & Murphy. Their digital business was actually roughly flat for the quarter, but there's still a lot of people out there who want the Johnston & Murphy brand. It's going to take a good two years to recover for Johnston & Murphy to return to some of their historical profitability rates. So hopefully that gives you some insight into where we see our cost structure and improved returns on capital in the longer term.

Terrifically helpful. Thank you very much.

Thank you. Our next question comes from line of Jonathan Komp with Baird. Please proceed with your question.

Yes, good morning, thank you. If I could start on Journeys, I know the math is a little rough here. Is there any more color on what you saw in January that suggested healthy double digits for total sales? Any further color there? I don't think you commented on Journeys in the first quarter when discussing the comparison to 2020, so any more color on what you're expecting there?

Yes, January was a terrific month. When we spoke to you at ICR, our sales were down 8% at that time, and we closed the year with sales down 6%. January, a typically low-volume month, was strong enough to drive that improvement. Much of that came from Journeys. We've seen that when our customers have money, they want to spend it at Journeys stores. We saw the benefit from tax returns; our folks in the Journeys business refer to this as tax season, because it’s a great time for selling. We need to come up with a term for the stimulus effect, because the stimulus passed in late December had an immediate impact across January. That continued into February, and as I said, our business has been quite impacted by tax refunds. If you follow the tax refunds, there was about a $50 billion gap due to delays, but we know the upcoming stimulus package is even better than those before. This includes both direct payments and increases in the child tax credit. So we expect families will spend these dollars on our products when they return to school. So overall, Journeys had a great January, combined with a strong first half of February. We expect some continued strong performance but we need to monitor tax refunds. January results showed record performance in terms of volume, matching last year's levels.

Yes, adding a bit of color on the first quarter guide, the real pressure there compared to fiscal year 2020 comes from Schuh, primarily due to all the store closures. We also expect some continued pressure on Johnston & Murphy but some lift from our Licensed Brand business, so in brief, Schuh is the primary driver behind our expectations.

Just to clarify, I know you mentioned that including the incremental benefits from stimulus looks likely here. Are you factoring in the catch-up from tax refunds as well? Do you have enough of the right inventory to take advantage of that?

Yes, we're planning on a tax refund season similar to last year. In terms of inventory, the slowdown in the supply chain meant we weren’t able to receive some products sooner, but we are getting replenishment for Journeys inventory, so it will be there for consumers when they're ready to shop.

Great. Are you seeing signs of changing consumer behavior in the markets that you're open as we progress further along with vaccinations?

Yes, for sure. While store traffic was still down in January, we had positive comps because traffic was much better overall. We have seen a pickup in traffic, especially for Johnston & Murphy, over the holidays. Our J&M customers are well-positioned to spend, as they have savings from not dining out or traveling. We await the return of the Johnston & Murphy consumers and are optimistic that our increased casual offerings will drive sales when they return to offices. However, as of now, about only 15% of workers have returned to offices in major metropolitan areas. So we are still in the waiting phase but feel positively about upcoming opportunities.

Thank you. Our next question comes from the line of Janine Stichter with Jefferies. Please proceed with your question.

Hi, good morning. I'd like to ask about the 6% operating margin target that you gave exactly a year ago, just as the world was coming to a halt. As you reflect back, is there anything stopping you from getting there? Conversely, is there anything that might push you above that level, given the progress you've made on expenses and rent?

So a year ago feels like a lifetime ago. Thinking about the 6% operating margin, the key structural change in our business has been the greater degree of digital penetration. Our e-commerce channel is profitable and highly profitable. The profit-rich nature of our digital channel will drive profit. We have been working on store economics more intensively due to lower traffic, which presents challenges for fixed expenses. The efforts toward expense management, especially with lower rent expenses and greater sales will enhance our returns and margin going forward. It will take some time to fully achieve this, but our competitive positioning has improved dramatically.

I would also add that we see opportunities with a more formalized procurement process that could help lower overhead, leading to further cost reductions in the future.

Okay, can you share any thoughts about rolling this out in the U.S. and how that might offset digital shipping headwinds, and how that has performed in the U.K.?

We're excited about upgrading our operations. We have seen great results in the U.K., where this has driven about 20% of online sales. One advantage of our store network is that customers like the convenience of picking up their orders, which could potentially increase cross-selling in our stores as well.

Thank you. Our next question comes from the line of Mitch Kummetz with Pivotal Research. Please proceed with your question.

Yes. Thanks for taking my questions. I've got a few. Tom, I think you covered the sale side of Q1 pretty well. I'm curious about its gross margin. I recall you said that Q3 gross margin was down and for Q1, relative to two years ago, should be down more than Q3. I want to understand the dynamics here, as it sounds like there are some benefits from full-price selling carrying forward. Is the pressure point really higher digital penetration? Can you clarify this for Q3 and Q1 gross margin?

You're right, Mitch. It's a combination of factors, including the increase in digital sales and our focus on full-price selling, relative to two years ago. The higher digital penetration has contributed to gross margin pressure this quarter versus previous years.

It’s also worth noting that all Schuh stores were effectively closed right after Christmas, and they won't open until mid to late April, which creates additional pressure as volume is pushed online.

Okay. Mimi, you talked about opportunities in the back half. What was last year's back-to-school season like? Was it 10% below the typical season? To help us frame opportunities if we have a normal back-to-school season versus the disruption faced last year.

We are looking forward to a more normal back-to-school season this year. Last year, we believe we probably got in the neighborhood of about 60% of what we normally would have during that season. Thus, there's potential for pent-up demand for this year combined with additional funds from the child tax credit coming just in time for back-to-school purchases.

Thank you. Ladies and gentlemen, this concludes our time allowed for questions. I'll turn the floor back to Miss Vaughn for any final comments.

Thank you for joining us today, and we look forward to talking to you in another three months.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.