Jay Sole: Got it, okay. Thank you so much.
Roger Rawlins: You’re welcome, thanks.
Operator: Again if you have a question, please press star then one. Our next question comes from Gabby Carbone from Deutsche Bank. Please go ahead.
Gabby Carbone: Hi, good morning. Thank you for taking my questions. Just wanted to circle back to that clearance customer again, that’s been coming back into your stores. Just curious if you can dig into how that’s impacting traffic and units per transaction. Thank you.
Doug Howe: Yes, hi Gabby, this is Doug. Again, we had talked about the fact that this was an opportunity for us, obviously, with regards to regaining that clearance customer back, and as we said in the transcript, we had a 28% increase in clearance sales in the quarter, so again that’s actually a model that we can lean into. We definitely saw that accelerating as we moved throughout the quarter, so to Roger’s point, customers are definitely migrating more towards value, so there’s favorability obviously in our model with regards to the clearance customer. Then the other thing that is a key differentiator, which I couldn’t be more proud of, is the results that we had with our owned brands. Obviously those connote significant value and those generated 22% of our overall volume at DSW in the quarter, and it was over a 30% increase, so those two factors we believe are going to be differentiators for us as we move forward, because again the customer is clearly focusing on value.
Roger Rawlins: Gabby, this is Roger. I think even to Jay’s question, if you think about what it is we do and how we respond to this, as Doug said, the big thing for us is lean into that clearance prop. Knowing that our customer comes to us, that’s sort of rooted in who we are from day one, I think it’s one more opportunity for us to pivot assortment and our thinking and leverage that as a way to compete and grow share, and then obviously leveraging all of our owned brands, especially the ones that are exclusive to DSW, is a way to continue to pass value to the customer. To Doug’s point in the script, where we’re talking about our owned brands growing at 25% year-over-year, that’s just remarkable, and that’s been our game plan for the last three years and it’s continuing to work. But the competitive landscape is different, and we’re going to keep leaning into those things that we’ve been doing now for the last three years.
Gabby Carbone: Got it. I just had a quick follow-up. I was wondering if you can discuss how you’re planning maybe your brand portfolio outside of DSW over the next couple quarters as we’re continuing to see retailers plan inventory pretty conservatively for next year.
Roger Rawlins: Yes, I don’t want to get into the forward-facing view until we give you some guidance for next year, but what we do know is that if you’re more conservative in your inventory plan, you always have the ability to chase upside. Right now, we’re dealing with the pain of the industry being over-inventoried, and we will not let that happen. I think we have a history and tradition of managing our inventories in a pretty tight manner, and that’s our approach as we move forward, is we will be much more conservative, I would say, in how we’re approaching our inventory positions specifically as we look at what we’re going to sell outside of our core DSW business and Shoe Company businesses.
Gabby Carbone: Got it. Okay, well thank you very much for that color.
Roger Rawlins: Thanks Gabby.
Operator: This concludes our question and answer session. I would like to turn the conference back over to Roger Rawlins for any closing remarks.
Roger Rawlins: Thanks everybody for listening in – I know we have a lot of associates, and I just want to recap. If you think about the big things you accomplished this quarter of growing your top line by 3%, and that’s on top of–remember, last year we grew our business by 41%, so there’s not a lot of folks I see out there in our space that had those kind of results for the third quarter. You grew our owned brands, meaning the things that we own and control, by 25%, and penetrated at 27% versus 22% last year – remarkable. Then you add into that our direct-to-consumer channels that grew by 33%, our gross margin rate up 370 BPs to where we were in 2019, and then just the amazing progress that Mary Jo and Nancy and the whole team up in Canada have demonstrated, growing 19% and grabbing huge market share.
The strategies we’ve put in place over the last four or five years are working, and just keep doing what you’re doing and I can’t thank you enough. I hope everybody has a fantastic holiday. Talk to you soon. Thank you.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
