In prior times, we have been focused on a shift into casual might mean trading down average selling prices for our footwear. But because we have built in technology, we’re actually able to achieve pretty similar overall pricing for casual products. And in addition to that, the team has done quite a tremendous job of proliferating categories and building these technical features into the apparel and the accessories. And so I talked about our overall apparel and accessory sales being up 20%. They now comprise overall 40% of our direct-to-consumer sales. And so in general, our customer really likes what they’re seeing. They’re seeing an opportunity to buy product that doesn’t — that they doesn’t have in their closets right now, and it’s just fantastic when you put on the shoes, you put on the parable it is so comfortable.
It is so good looking. And so there’s opportunities for further expansion into other categories, expansion into blazers, we’ve been doing really well this season. We have expanded into a boys business as well. And we think right now the opportunity is to build brand awareness. Our customers like what they’re seeing. Some of our more recent research has said that we have opportunities to drive further awareness, and that’s what we’re intending to do.
Corey Tarlowe: Great. Thanks. That’s very helpful. And then just secondly, on inventory. It seems like you’ve made some really nice progress there. Could you maybe talk about how you expect inventories to trend throughout the rest of this year? And maybe the associated impact on margin. It seems like your inventories maybe even be in a better place than the industry more broadly. So curious just to get a sense for where you’re at on that journey.
Thomas George: Yeah, Corey. This is Tom. Good question. We’re really pleased with what we’ve been able to do with our inventories. The Journeys Group continues to have strong relationships with all its key vendors and those vendors work and the merchandising team works very closely with those key vendors. Making sure we have the right product at the right time and the appropriate inventory balance, so we can mitigate month balance (ph). So for terms of trends going forward, you saw the overall inventory was down 2% to 3% at the end of the second quarter. We expect to even continue to improve on that for the third quarter and the fourth quarter. And Journeys specifically, you saw it was down at the end of the second quarter, 15%, and we expect similar kind of results in the third quarter and the fourth quarter.
So I’m really pleased with that. And I think in terms of how that impacts margins going forward, we feel a little bit more bullish in the fourth quarter on Journeys margin as a result of that. Because we’re going to end the year with an inventory position of — with much more of their current relevant product that’s selling well vis-a-vis a year ago. So really good what we’ve done with inventory. We’ve got continued processes in place and the business is driving to continue to watch inventories going forward and help — which will help with the margins as well.
Mimi Vaughn: Yeah. As Tom said, our merchants have done a great job of managing inventory. But what’s so good about this is it gives us lots of flexibility to chase into the newness that I’ve been talking about. We, in fact, have been able to do that. And so we’ve got ultimate flexibility to be able to bring in the product we need to be able to drive that business.
Corey Tarlowe: Great. Thank you so much for all the color and best of luck.
Mimi Vaughn: Thank you.
Operator: And we now have some follow-up question from Mitch Kummetz with Seaport Global. Please proceed.
Mitchel Kummetz: Yeah. Thank you. I’ve got another handful, so I hope you’ll indulge me. On the Journeys guide for the year. It looks like it’s improved from down low doubles to down high singles. So can you kind of walk through sort of what’s implied for the back half of the year. I mean, are you looking at like sort of down high singles in 3Q down mid-singles in Q4? Is that kind of the trajectory that you think that business is on?
Mimi Vaughn: Let me talk generally about that and let Tom be able to weigh in. But specifically, the approach that we have taken is that we believe it’s prudent to just keep extrapolating the current trend, Mitch. So there’s been a little bit of pickup in the current trend. And so we’re incorporating that into our overall thinking. But we’re not anticipating that there’s going to be a big pickup in the consumer market. We’re not expecting that any major economic improvement or decline in the back part of the year, we’re just extrapolating out the trend. What we are doing though is we are building in this newness that I keep talking about and the product that is resonating with our consumer. And that’s what is driving our overall pickup. It is product driven by gaining access to products that we have a good degree of confidence that we’ll sell through. And so that’s the general approach that we’ve taken. And I’ll turn it over to Tom to give you any more color.
Thomas George: Yeah, Mitch. In the third quarter, we’re really same expectations as we had three months ago for the third quarter. Sort of down relative to the prior year, high-single digits to low double-digits. And in the fourth quarter, pretty similar expectations as well. Maybe a slight improvement based on some improvement in newness, but really nothing of significance relative essentially pretty much in line with the prior expectations in both the third quarter and the fourth quarter.
Mitchel Kummetz: Good. And then Mimi, just to clarify something you said earlier, and reconcile that with your prepared remarks. I think you said that July Journeys comp was minus 9%. And I thought you said in your prepared remarks that August was better than July in Journeys. Is that the case? Was August better than a minus 9%?
Mimi Vaughn: Yeah. I think what I was referencing in my prepared remarks, Mitch was the pickup from the second quarter into the third quarter. And so really it was going from the down 11% in the second quarter, which, of course, had sequential improvement into overall improvement into August.
Mitchel Kummetz: Okay. And then you mentioned the confidence that you have in the newness. In your prepared remarks, you also talked about some of the challenges around the athletic inventory overhang. Have you seen any improvement there? Or are you anticipating less of a drag from that on Journeys as we go through the balance of the year?
Mimi Vaughn: We have been talking for several quarters at this point about the athletic overhang really within the industry, not within the product that we are selling. And initially, I think everybody was anticipating that this overhang would be cleared up by back-to-school. And then the goalposts shifted out until the end of the year. And what we are seeing out in the marketplace, and what we’re hearing from other competitors and the like, is that the overhang is still out there, and it will linger certainly through the back part of the year. And that’s incorporated within our overall thinking. And we are anticipating that by the end of the year, we hopefully that the industry can really move past some of this, but it’s still existing today.
And markdowns are still being taken pretty significantly. You’re not seeing that degree of markdown within. That’s not a specific factor that is affecting our business. But what it is doing is suppressing demand for some of the athletic product that we’re selling because the deals that are out there on really very good product is pretty attractive.
Mitchel Kummetz: Okay. And then just a couple of last one. Tom, on the Journeys stores, I know you’re closing a bunch of stores. Do you have a store count for Journeys at year-end?
Thomas George: I do.
