Greetings, and welcome to the Hibbett, Inc. second quarter fiscal year 2022 earnings results conference call. At this time, all participants are in a listen-only mode. A brief question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Freuchtel. Thank you, Jason. You may begin. Good morning. Please note that we have a slide deck that we will refer to during our prepared remarks. The slide deck is available on hibbett.com via the Investor Relations link found at the bottom of the homepage, or at investors.hibbett.com under the news and events section. These materials may help you follow along with our discussion this morning. Before we begin, I would like to remind everyone that some of management's comments during this conference call are forward-looking statements. These statements, which reflect the company's current views with respect to future events and financial performance, are made in reliance on the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to uncertainties and risks. It should be noted that the company's future results may differ materially from those anticipated and discussed in the forward-looking statements. Some of these factors that could contribute to such differences have been described in the news release issued this morning and the company's annual report on Form 10-K, the most recent quarterly report on Form 10-Q, and in other filings with the Securities and Exchange Commission. We refer you to those sources for more information. Also, to the extent non-GAAP financial measures are discussed on this call, you will find a reconciliation to the most directly comparable GAAP measures on our website. Lastly, I would like to point out that management's remarks during the conference call are based on information and understandings believed accurate as of today's date, August 27th, 2021. Because of the time-sensitive nature of this information, it is in the policy of Hibbett to limit the archive replay of this conference call webcast to a period of 30 days. The participants on this call are Mike Longo, President and Chief Executive Officer, Bob Volke, Senior Vice President and Chief Financial Officer, Jared Briskin, Senior Vice President and Chief Merchant, Bill Quinn, Senior Vice President of Marketing and Digital, and Ben Knighten, Senior Vice President of Operations. I will now turn the call over to Mike Longo. Thanks, Jason. Good morning, and welcome to the Hibbett Q2 earnings call. If you're following along using the slide deck, I'm on the third slide titled Introduction. This quarter's financial performance was a strong outcome for the company. As you saw in the press release, we reported a decrease of 6% for total comp sales for the quarter. Having said that, we were comparing to a total comp for the second quarter last year of 79%. That means our two-year comp was a strong 73% for the quarter and 63% year- to- date. This resulted in operating income of $61.5 million and a diluted earnings per share of $2.86. These results were made possible by the hard work of our 10,000 teammates in the stores, the store support center, and the distribution centers. They executed their respective responsibilities at a high level and helped lead us through another quarter in a challenging business environment. We're proud to represent our teammates today and wanted to make sure to thank them for a job well done. As I've said repeatedly, this is my favorite team sport and I love our team. We believe our results put us on track to significantly outperform our previously announced fiscal year guidance, and Bob Volke will address that new guidance in his remarks in a few minutes. First, I want to highlight some of the reasons for the strong Q2 performance. Several factors last year gave both new and existing customers compelling reasons to shop with us. This included competitive closures, increased e-commerce adoption, spending rotation into our product categories, and some fiscal stimulus. As a result, we believe we've increased our market share. The momentum from these factors gave us even more opportunities to attract and retain new customers, and our data shows we've done a good job retaining them so far. Let's talk a little bit more about sales drivers on slide four. As we stated previously, our competitive advantages of service, selection, and a best-in-class omni-channel capability provide us with a strong and resilient business model that continues to satisfy our existing customers while also attracting and retaining new customers without sacrificing our ability to deliver a premium consumer experience. We continue to update and expand our product assortments, improve our supply chain capabilities, and enhance our overall customer experience, both in store and online. Our second quarter results delivered a strong two-year sales growth as well as a strong gross margin performance. Some of the key contributors to these results include, first, delivering on a number of business model improvements earlier than anticipated. Those include supply chain innovations, continued emphasis on store culture, and numerous other investments that will provide future benefits. Second, we added new customers while retaining our existing customers at above historical levels. Third, we experienced year-over-year gains in the number of existing customers shopping with us, and their average purchase price amount continued to increase. Finally, competitive closures and limited distribution continue to impact our sales positively. The combination of these factors drove our solid quarterly sales results and allowed us to maintain a high gross margin. Moving on to slide five, we want to give you some insight into our next few quarters. Some of the factors mentioned previously were temporary, while others will persist into the future and could significantly improve our opportunity to drive incremental sales and profitability. We believe the factors that will have a lasting impact in the future include continued improvements to our business model, additional investments in the consumer experience, new customer retention, capitalizing on competitive closures, and the reduction in distribution of key brands, and an improved inventory position. To discuss some of that, I'll now turn the call over to Jared to discuss our merchandising performance. Jared? Thank you, Mike. Good morning. If you'll turn to the merchandising slide. For the second quarter, all categories were significantly above plan as we were able to comp the majority of the prior year's significant sales increase. Our focus on toe-to-head merchandising continues to drive results. Women's licensed products and team sports achieved double-digit growth for the quarter but were offset by declines in our Men's and Kids business. All genders and all categories achieved double-digit growth as compared to fiscal 2020, with women's being the standout area with triple-digit growth over the two-year period. Our Apparel business declined mid-single digits during the quarter. Drivers remain color-connected tops and bottoms, sneaker connectivity, and tall-to-small connectivity from adults to kids sizing. From the athletic brands, we continue to see strong demand for lifestyle products and improvement in performance products. Our fashion brand performance continued to be very strong. Our vendors in this space are very nimble and they've worked very closely with us to mitigate supply issues. Denim remains an important growth driver. Licensed business was very strong, led by headwear and jerseys, and looks inspired by the '90s are resonating and are in significant demand. Sneaker accessories, bags, and sunglasses had strong results during the quarter but were offset by pandemic-related items such as masks in the year-ago period. The footwear business declined mid-single digits. Basketball and lifestyle footwear continue to drive our Footwear business. Classics demand remains very strong. The Running business was also strong during the quarter as our elevated investment in this area has resonated with our consumer. Casual shoes as well as slides and sandals continue to perform exceptionally well. Specific to footwear and apparel, our Women's business was our fastest-growing area, with Men's and Kids' declining. Inventory remains under pressure due to the increased sales volume and supply chain disruption. Our merchants are working tirelessly with our vendor partners to deliver what we have on order as well as secure additional inventory. Based on current projections and information, we expect inventory levels to be up to fiscal 2021 during the back half of the year, but to remain below fiscal 2020 levels. I will now turn the call over to Bob to discuss our financial results. Thanks, Jared, and good morning. Please refer to the seventh slide titled Second Quarter Fiscal 2022 Results. As a reminder, our results include both Hibbett and City Gear and are reported on a combined basis. For the second quarter, total net sales decreased 5.1% to $419.3 million and consolidated comp sales declined 6.4%. This compares to second quarter fiscal 2021 sales of $441.6 million and a comp sales increase of 79.2%. Over a two-year period, our comp sales have increased 72.8%. Brick-and-mortar comp sales were solid during the second quarter and came in at a 3.8% decrease versus fiscal 2021 but were up 64.5% relative to the second quarter two years ago. E-commerce comp sales declined 20.4% compared to last year's second quarter but reflected a 153.3% comp versus the same period two years ago. In the prior year's second quarter, consumer shopping habits were disrupted as a result of the COVID-19 pandemic. This drove incremental business to our online channel. As a result, e-commerce sales declined to 13.1% of net sales in the current quarter compared to 15.7% in the prior year's second quarter. The current quarter mix of e-commerce sales is still approximately 450 basis points higher than the second quarter of fiscal 2020. Our GAAP gross margin expanded meaningfully to 39% of net sales compared to 37% in the prior year's second quarter. This approximate 200-basis point improvement was due to higher initial sell-through of premium priced product, a low promotional environment, improved e-commerce margin, and a slight mix shift away from e-commerce, which despite an overall improved margin, still carries a lower rate due to the cost of fulfillment. Excluding adjustments to our non-cash inventory valuation reserves last year, the current year gross margin of 39% is comparable to adjusted gross margin of 36.7% in the prior year. Store operating, selling, and administrative expenses, excluding depreciation and amortization, were 22.3% of net sales in the second quarter, which was slightly below the 22.6% reported in the second quarter of fiscal 2021. This decrease was the result of having minimal costs in the current year associated with City Gear acquisition and integration activities. Excluding certain City Gear acquisition and integration expenses, prior year SG&A expense on an adjusted basis was 19.3%. The current year SG&A expense rate of 22.3% represents an approximately 300-basis point increase versus the adjusted prior year's second quarter results. This increase was primarily related to the incremental cost of operating fully staffed stores across regular business hours, engaging in targeted advertising aimed at attracting new customers in disrupted markets, and investments to improve the customer experience and to drive efficiency in back-office processes. As a reminder, many of our stores operated at less than regular business hours with slightly reduced staffing levels in the prior year's second quarter. Depreciation and amortization increased approximately $900,000 from last year's second quarter, reflecting increased capital expenditures on store development initiatives, plus additional growth opportunities and infrastructure projects. On a GAAP basis, we generated $61.5 million of operating profit in the quarter, or 14.7% of net sales, which compares to last year's second quarter operating profit of $56.3 million. Excluding all non-GAAP adjustments during last year's second quarter, our $61.5 million of operating income this year compared to adjusted operating income of $69.7 million in the second quarter of fiscal 2021. GAAP diluted earnings per share were $2.86 for this year's second quarter, and we had no adjusting items in the current period. In last year's second quarter, GAAP diluted earnings per share were $2.38, and adjusted diluted earnings per share were $2.95. Now I will turn to slide eight. On a year-to-date basis, sales increased 30.2% to $926.1 million, which is up from $711.4 million over the first six months of the prior year and significantly higher than the $595.7 million in the first six months of fiscal 2020. Relative to fiscal 2021, comparable sales increased 30.3%. Brick-and-mortar comparable sales were up 39.9%, while e-commerce sales decreased 11.4%. E-commerce represented 12.4% of total sales in the current year, compared to 18.2% of total sales in the comparable period last year. In looking back two years to the first six months of fiscal 2020, comparable sales increased 63.4%. Brick-and-mortar comparable sales increased 56.9%, and e-commerce sales grew 127.7% over the two-year period. Our year-to-date GAAP gross margin was 40.3% of net sales, compared to 33.4% for the first six months of fiscal 2021. Excluding adjustments to our non-cash inventory valuation reserves last year, the current year gross margin of 40.3% is comparable to the adjusted gross margin of 33.9% in the prior year. First half SG&A expenses were 20% of net sales, compared with 26.6% of net sales in the first six months of last year. Excluding certain City Gear acquisition integration expenses and pandemic-related impairment and valuation costs that occurred last year, current year SG&A expense of 20% of net sales reflects an improvement of approximately 100 basis points from adjusted SG&A expenses of 21% over the first six months of last year. On a GAAP basis, we produced $171.6 million of year-to-date operating profit compared to last year's operating profit of $34.2 million. Excluding all non-GAAP adjustments last year, our year-to-date operating profit of $176.6 million compared to adjusted operating profit of $77.5 million over the first six months of last year. GAAP year-to-date diluted earnings per share were $7.90, compared to $1.50 in the prior fiscal year. Since there were no adjusting items in the current year, the diluted earnings per share of $7.90 compares to $3.30 for the comparable period of fiscal 2021, excluding all non-GAAP adjustments. Driven by strong sales, robust margins, and leverage of SG&A expenses, we generated operating cash flow of $115.5 million on a year-to-date basis and have spent $20.8 million in capital, which was largely related to new store openings, relocations, remodels, and expansions of existing stores. Over the first six months of the prior year, operating cash flow was $178.9 million and capital expenditures were $12.5 million. Turning to the balance sheet, we ended the quarter with $176.8 million in cash and cash equivalents. This is down from $270.9 million at the beginning of the quarter and $217.8 million a year ago, as we continue to deploy cash to build inventory and fund capital expenditures while also returning cash to our stockholders. We entered into a new five-year, $100 million unsecured credit agreement with Regions Bank during the second quarter. We have no outstanding borrowings at present and do not anticipate the need to borrow from this unsecured credit line based on current cash projections. Net inventory at quarter end was $216.8 million, an 18.9% increase from the beginning of the quarter and a 19.1% increase from last year's second quarter. As Jared previously mentioned, we have continued to strengthen our relationships with our vendor partners, and our buying team continues to work around the significant challenges posed by the global supply chain to obtain merchandise that is highly coveted by our customer base. During the second quarter, we returned $87 million to our stockholders as we repurchased just over 985,000 shares of common stock at a cost of $83.2 million under our authorized share repurchase plan and distributed $3.8 million as part of our first-ever recurring quarterly dividend. For the year, we have repurchased approximately 1,527,000 shares of common stock at a cost of $120.5 million under our share buyback plan. In addition, our Board of Directors has declared the next quarterly dividend payment in the amount of $0.25 per common share to stockholders of record at the close of business on September 9th, 2021. Next, I'll review our updated fiscal 2022 guidance on the ninth slide entitled Updated Guidance. Given the strong performance in the second quarter, we are revising our full-year outlook for fiscal 2022, which ends on January 29th, 2022. This update is influenced by several factors. As mentioned in previous comments, we attract and retain new customers throughout fiscal year 2021 due to pent-up demand, market disruption, and government stimulus payments. We continue to attract and retain additional new customers in fiscal 2022. We expect that accelerating consumer adoption of e-commerce will continue to drive growth across our best-in-class omnichannel platform. Those factors, in addition to our product selection and improved inventory position, have us well positioned to take advantage of additional revenue opportunities. Net double-digit store unit growth, incremental improvements to the in-store consumer experience, and capital investments in supply chain capabilities and corporate infrastructure should also help drive sales and profitability growth. We are now forecasting comp sales for the full year in the positive mid-teens, which is up from previous guidance of high single digits to low double digits. Although we expect comp sales to be positive in both the third and fourth quarters, we also expect the year-over-year growth to slow. We expect gross margin performance will be lower in the second half of the year in relation to the first half of fiscal 2022 due to potential headwinds on freight and shipping costs and deleverage from store occupancy costs. We continue to expect gross margin will be favorable to both the GAAP and adjusted fiscal 2021 gross margin percentages on a full-year basis. We continue to expect to deliver SG&A leverage on a full-year basis compared to both GAAP and adjusted SG&A reported in fiscal 2021, and we believe SG&A as a percent of sales will increase in the second half of the year in comparison to the first half of fiscal 2022 due to wage and related benefit impacts, performance-based incentives and equity costs, and increased costs in categories such as repairs and maintenance, travel, and insurance. Depreciation expense is expected to deleverage slightly in the back half of the year due to the expected level of capital expenditures. We would also like to point out that we believe year-over-year growth margin and operating margin comparisons will be more difficult in the third quarter than the fourth quarter due to fixed cost leverage considerations. Lastly, diluted EPS is now forecasted to be in the range of $11-$11.50 versus our previous outlook for projected diluted EPS of $8.50-$9. Our diluted EPS forecast assumes an effective tax rate of approximately 25% and a weighted average diluted share count for the year of approximately 16.2 million shares. We do not anticipate the difference between our GAAP results and non-GAAP results will be material for the current fiscal year. From a capital expenditure perspective, we remain committed to investing in our business for the long term and have identified additional investment opportunities. We now forecast capital expenditures of approximately $70 million, focusing on organic growth opportunities that we believe will lead to incremental sales and profitability and also on strategic infrastructure projects that will enhance our distribution and back-office efficiency. We believe that these investments will assist in attracting new customers, improve retention of new and existing customers, enhance the consumer experience in stores and online, and modernize our technology and processes. In addition to our capital expenditure plans, we intend to opportunistically allocate capital to share repurchases and as of the end of the second quarter, have approximately $516 million available under our share repurchase program. We also remain dedicated to returning additional capital to our stockholders in the form of our recently initiated recurring quarterly dividend program. That concludes our prepared remarks. Operator, please open the line for questions. Thank you. We will now be conducting a question- and- answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants on the webcast, if you would like to ask a question, please click on the question mark icon on the screen, type in your question, then click submit. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Please ask one question and one follow-up question, then re-queue for additional questions. One moment, please, while we poll for questions. Thank you. Our first question is from Alex Perry with Bank of America. Please proceed with your question. Hi, thanks for taking my question. Congrats on another great quarter. I think there is an implied slowdown in the two-year stack in the guidance. Can you explain what is being considered that would lead to a slowdown? Is most of it just contemplating challenges, securing inventory in the back half? Maybe just off of that, could you give us a little more color, thinking through on sort of the cadence of the comp progression in 3Q versus 4Q? Thank you. Hey, Alex. It's Jared. I'll take the first part of the question. Yeah, obviously, we're very confident in the results that we've had here recently without question, and we're certainly starting to go up against additional very strong numbers from the year-ago period. There's certainly some concerns with regard to the supply chain. I guess I would characterize it as chaotic and somewhat fluid. We feel really strongly about our flow goods and our ability to hit the numbers that we talked about. I think I'll turn it back to Bob maybe to answer the second part of your question. As far as the back half of the year, like I said, we did indicate that obviously coming off of some pretty strong quarters over the last four periods, it gets a little bit tougher to keep comping such large numbers. We still expect to see positive comps in the back half of the year. I think we're kind of implying somewhere in the mid to upper single- digits for the back half of the year. Again, we think that that's what's going to keep the momentum going. That's really helpful. Just my second question, in light of the newly raised guidance and thinking through the guidance about next year that you gave us at Investor Day, how should we be thinking about that changing at all? Is there still a scenario that you're planning for positive same-store sales and gross margin expansion off of a pretty high base this year? Just any more color on shaping for next year. Yeah. Obviously, a challenging question from a standpoint of, we've kind of outperformed a lot of our expectations here over the last several quarters. Again, we still expect that we've got future growth opportunities. I think as we continue to pile one good quarter after another, obviously the hurdle rate gets a little bit more difficult. We still feel confident in our long-term outlook. Again, this is not a linear equation. We don't necessarily go up in certain steps year- after- year or quarter -after- quarter. Again, we think over an extended period of time, we still have opportunities to grow, obviously, sales and continue to expand on margin and profitability. Perfect. That's really helpful. Best of luck going forward. Thank you. Our next question is from Sam Poser with Williams Trading. Please proceed with your question. Thank you for taking my questions. I've got a few. I just want clarification. You're saying that you're going to comp up versus last year in the back half, or versus two years ago in the back half? No, we will comp positive in the back half this year versus last year. The range, again, you mentioned was how much? Mid- to high- single digits is our expectation. Doesn't that put your full-year comp above your guidance? No, that's basically the math to get to the guidance. Okay. Compared to fiscal Q2 2020, Jared, Footwear, Apparel, and Team sports versus two years ago. Could you give us some color there as to what it was versus a couple of years ago, please? Yes. As I mentioned, Sam, first of all, good morning. All of our categories and genders were up double-digit compared to the two-year ago period. Certainly, the standout, as I referenced, was our Women's area. Next would be our Kids area, which was incredibly strong. As a reminder, those two areas were a significant focus for us as we evolved our entire merchandising organization to try and capitalize on that opportunity. Our smallest area of growth was our Team Sports area. We were thrilled with the double-digit improvement over the two-year ago period, but the growth was really driven by Footwear and Apparel. Great. Also, when you gave your Analyst Day, you said that based on the prior guidance for this year, that you anticipated that next year's EPS would grow versus fiscal 2022. The question is, based on what you know today, is that still the case when we look into fiscal 2023? Hi, Sam. It's Bob. Hi, Bob. I don't know if we were definitive in that saying. It was definitely we said, I think the question was more along of like, could it grow? And I think the answer was yes, we thought it could certainly grow year-over-year. As I just mentioned when we talked to Alex here in the last question, as we continue to stack strong quarters, it obviously increases the bar a little bit. Again, I'm going to repeat what I just said, but again, may not be completely linear. Again, I still think it is possible, and I still think that we will do the best we can to continue to grow on a year-over-year basis. But again, I don't think we've made a firm commitment to that. It's just that's our expectation and hope that we can continue to do that. All right. I'll let somebody else go and buzz back in. Thank you. Thank you. Our next question comes from Cristina Fernández with Telsey Group. Please proceed with your question. Yeah, good morning, and thank you for taking my questions. My first question is, on the last call, you talked about increasing inventory by, let's say, $80 million-$100 million, I think was the number, by the end of the year. Do you still think that is possible, just given the supply chain constraints in the system? Good morning. It's Jared. I would say our aspiration is certainly to continue to try and get our inventory levels caught up to those numbers. Based off the demand that we're seeing and some of the constraints, that's becoming more difficult. At the same time, I think we've effectively operated on a significant lower amount of inventory and our team's gotten more comfortable in operating with a lower amount of inventory. I think it really becomes more about the flow of that inventory, how trend-right we are, and ensuring we have it at the right time. That's what we're focused on now. We're controlling the things that we can control with regard to the supply chain. We're very confident in the inventory that we have and the flow of inventory coming in. Thank you. My follow-up is, can you provide more details about where the incremental CapEx is going this year, the $70 million you forecast now versus previously the $45 million-$50 million? Thanks. There's two major buckets on that. Obviously, store development. When we talk about new store growth, expansions, remodels, refreshes of our stores, again, we've got the opportunity to move that forward a little bit more quickly. We figure this is just something that we would be doing over time anyway, we've accelerated some of that to get some bigger bang for the buck into the future. That's a piece of it. The second piece is what we're kind of referring to as the overall store infrastructure project. We've committed to putting smart safe in all of our Hibbett stores, and as a result of going into those stores and upgrading some of the technology, we decided to also attack some of the IT infrastructure to give us more IT capabilities, as well as just refreshing the fixturing around some of the cash wraps and some of the other fixtures within the store. Just, again, accelerate those projects from something we probably would've done normally over a two- or three-year period, took advantage of the timing and moved that stuff forward. I want to be clear that the $70 million is not the new baseline for the go-forward spend, but it was an advantage or an opportunity we took advantage of in the current year. Yeah. Cristina, this is Mike. I'm going to tag along on those comments. We think there's a lot of upside on those investments. We're very excited about them. Bob outlined some of the broad strokes there, but our opportunity to invest in and improve the consumer experience is still there, still provides upside, and in my opinion, is one of the more exciting aspects of this quarter. The fact that we took that bold step, we see those opportunities, and we're executing against them. I'm really enthusiastic about that. Thanks for asking the question. Thank you. Very helpful. Thank you. Our next question comes from Jim Chartier with Monness, Crespi, Hardt. Please proceed with your question. Hi. Good morning. Thanks for taking my questions. You're one of the few companies that have seen a big acceleration in their two-year sales trend, and I'm just curious, could you provide a little color in terms of what drove that improvement relative first quarter? Was it just better inventory availability, or were there other factors at play? Well, thank you. Yeah, we're very excited about that two-year comp. I think that's the thing that everybody's been waiting on is how are they going to do? How is Hibbett going to do against a 79% second quarter last year? That's been the speed bump everyone's been waiting to see how we're going to perform against them. I got to tell you, I'm very excited about this performance. 73% two-year comp is something to get excited about. Pretty proud of that. Pretty proud of how the team executed against it. Do we expect to have 79% and 87% comps from here on out? Probably not. Certainly we aspire to great things. We're continuing to push that. I know that the efforts of Ben in the stores and Bill with digital and marketing and Jared in merchandising, there's a lot of exciting things coming, and I can't wait to get after it. Great. On your customer retention trends, now that the country is mostly reopened and stores that were closed last year are open again, are you seeing any change in customer retention trends? Hi, this is Bill Quinn. Good morning. Yes, we are. Actually very, very positive trends overall in customer retention. When we reopened our stores back in May of last year, we tracked each customer cohort group by month, so May of 2020, June, et cetera. What we're seeing in those cohorts is low attrition, lower one and dones. Also on top of that, more trips, higher average purchase value. On top of that, we're even seeing lapsed customers that we haven't seen in a while, come back in and shop with us. In terms of the lapsed customers, is that something that you're doing in terms of your outreach, or is that just happening organically? Yes, we are actually doing a lot of outreach to lapsed customers, so that's definitely part of it. The other part of it is we continue to improve our model. If you look at the level of customer service that we provide in the stores as well as online and continue to improve that customer experience. On top of that, we continue to improve product. Jared's team and our vendors have just done a fantastic job there. Lastly, our best-in-class loyalty program attracts customers. It is very easy to use and provides a lot of benefit to them. Great. Last year you put out a target, I think of $20 million-$40 million sales benefit from competitor store closings. What are you seeing in the markets where Stage and JCPenney stores closed? How are you tracking versus your initial expectation? This is Mike. We feel really good about that estimate. We're seeing those sales come in. We track all of the competitive closures as well as changes in distribution as reported externally within a 3-mi radius of our stores. We know where those competitors are. We believe we have a pretty accurate model of what it means to our sales forecast. We're executing against that. We have gone to the level of detail of doing the obvious things like marketing against those opportunities and getting the consumer awareness to know that we're there, and we've got the product, and we're ready to serve those consumers. We've gone to the lengths of changing the product mix in the store and adding to product. We've done a great job. Ben has done a great job in coaching our employees in the stores and getting ready for that. We feel really good about the estimate. There's more to come. I think everybody remembers it was this time last year that Stage Stores began actually closed their stores. I believe it was the 26th or 27th of August. One thing that we didn't see very clearly was we thought that it would come in quicker. What we saw was somewhere along the lines of 45 - 60 days before the effects began to really show up in our cash registers. That has been relatively consistent. As you would think about it now, we're going to annualize those numbers at least against Stage. As you continue to think about the future and how those sales opportunities layer in, we've still got upside against all of those publicly reported changes in distribution. They really don't all come into effect until the end of this calendar year. All of those upsides are still in the future, except for the Stage Stores comp. Did I answer your question yet? That was great. I appreciate it. Sure. Thank you. Thank you. Thank you. Our next question is from Justin Kleber with Baird. Please proceed with your question. Yeah. Hey, everyone. Thanks for taking the questions. Just first off, as we think about the timing and magnitude of back-to-school, how much of that business do you think came at the tail end of 2Q, or is most of that hitting here in 3Q? Yeah. This is Mike. Back-to-school in general, we think is going to mimic historical levels and historical sales curves in terms of timing and seasonality. We did see that it shifted a little bit to the right. It shifted a little bit later. For all the obvious reasons, I think that school districts and parents, there was some angst out there, and I think that they gave themselves a week or two additional lead up to back-to-school to prepare themselves for it. We will see, and we won't comment any further than this specific thing. We do believe that a little bit of the sales from Q2 moved into Q3. I don't think it's something you should think of as material, but we did see it. Ben, how's it going in the stores with regards to back-to-school? Yeah, Mike. To echo some of those comments, of course, comparing to last year, which we really didn't have a back-to-school, so comparing to two years ago, definitely saw a little bit later shift there. I've been very happy with our results, by the way. It continues. We do have a lot of stores in the Northern and Western markets that still haven't gone back and won't go back till after Labor Day. We've been very pleased with the results. We did a lot of things in store and in market to capture that, particularly with our DSMs leading local efforts from a marketing standpoint around back-to-school with backpack giveaways and things, hyper local events, which we've been very excited about. It continues on. We definitely saw a shift, but nothing major there and we've been very happy with the results thus far. Okay. That's good to hear. Maybe a question for Bob, just in terms of the gross margin outlook. The second half rate being below the first half, I think makes sense. Do you think the second half gross margin will be above last year's second half, which was around 37.6%? Yeah. By the way, Justin, welcome. Welcome to the process here. I think we have a tough compare in Q3 coming up here because last year Q3 was our highest margin quarter of the year. We had some opportunities in the marketplace to get access to product at maybe some discounted prices. I think, again, we're struggling to figure out exactly where all the margin movement is going. We are going to see some deleverage, we think, in shipping and freight costs. Also, some of the competition against the store occupancy number is going to be a little bit more challenging. Excuse me. We think overall for the back half of the year, we think we can certainly have a strong compare to the last half of last year. Okay. Just one last one, if I could sneak it in. Just going back to the long-term guidance you outlined at the meeting. I know it's been asked a few times here, the 15 basis points to 25 basis points of annual improvement that you guys talked about. When you set that guide, were you using the old base for this year, which was something north of 12%? Or did you outline this expansion knowing that your base was going to be moving higher? I think based on today's guidance, you're going to be north of 14% on the operating margin line. Just trying to make sure I understand exactly what you're saying there in terms of a go-forward basis. Thank you. Yeah. As we said, we keep stacking pretty strong quarters on top of each other. I think the 15 basis points- 25 basis points was clearly based off of a slightly lower estimate from what we have achieved here in the most recent quarter. Again, thinking about this over a longer-term cycle, not just in a linear equation, we still think we're going to end up where we said we'd be over a multiple year period. It may not just be that big of a lift from period to period to period. Okay. Thank you guys, and congrats on the strong results. Thank you. Thank you. Our next question is from John Lawrence with The Benchmark Company. Please proceed with your question. Yeah, thanks. Congrats, guys. Mike, would you comment a little bit? We've seen this week some of your competitors and just really strong reports for the space. You've indicated about what you've done to be able to help your business, but is there something structural in the sporting goods business that, besides the closures, that have set this up on a higher bar for going forward? Good morning, John. Welcome. Thanks for the question. I think this industry is in a very good place. The reason that I believe that is I think the consumer has money. The opportunity to have a job is there. I think that a great deal of the angst that we were suffering through last year, while it hasn't dissipated, I think the coping skills of the consumer have improved and a much more realistic idea of how to cope with the pandemic. I think all of the concerns that we all had about are our kids going to be able to go to school, what's going to happen to us in general, I think all of those we have been able to comp against. I think people's outlooks have gotten much better. The strength of the mental mindset, combined with the just basic microeconomics of how they're doing as an individual and how their families are faring, combined with a very good job by the brands of controlling the distribution of their product, continuing to innovate, continuing to provide new reasons to consume, all of those combine into a demand curve that we think is really strong. The demand continues to exceed the supply. That leads to all of the things that you know I'm going to say now. You're going to see prices continue to creep up, and that will be less about inflation and more about demand exceeding supply. You're going to see continued high turns and sell-throughs at the store level and online. Those lead to higher gross margins on the product. Certainly, we're going to see some inflation creep in on the product cost, but as long as the gross margin continues to keep pace, that means the gross profit dollars per one product are actually going to be higher. We are certainly going to see challenges in the supply chain. I don't think you need me to go chapter and verse on that. We all know what they are. They're publicly reported. You all see it. Anybody who's tried to order anything has found that it's hard to get. That means that we're going to see disruptions in the supply chain. It's going to cause problems with timing. It's going to cause increased freight costs. It's going to cost us more in supply chain. All those are swamped by the benefits of an increased demand over supply, and that gap continues to increase. Now, that won't last forever because we all know what economics is. It's going to catch up. By the time it catches up, the industry itself will be in a completely new place. That place is, again, we've got innovative product, we're addressing the consumer's needs, and we're doing it in innovative ways, both the brands and the retailers themselves. For my part, I couldn't be more bullish about our industry and our segment and what we're doing and how it's looking going forward. Great. Thanks so much for that insight. Jared, just one question for you. Remind us a little bit, when you look at this Women's business and you reformulated the buying teams and restructured that, remind us a little bit because obviously, that's turned out to be a pretty bullish move and pretty dramatic in the numbers. Can you walk us through that just a little bit, please? Yeah. Thank you. Good morning. Yeah. Really pleased with the results. We took an opportunity. We felt like we had significant opportunity across the Women's and Kids' business. With the Men's business being our largest business, we felt like we weren't putting enough time, enough effort into growing the Women's and Kids' business. We were able to bring in some external talent which helped significantly, and we reorganized the entire merchandising area with leadership across Men's, Women's, and Kids, as well as City Gear. That focus has allowed us to really dig in and look at all these incremental opportunities and then really put forth a strong effort in partnering with Ben and the ops team and Bill and the marketing team to really ensure that we're really getting after these consumers individually and trying to capitalize on what really was a lot of low-hanging fruit. Really pleased. It was really more about providing the focus and then making the appropriate investments and frankly, taking some risk in inventory in these areas based off the data that we saw. Yeah. Thanks for that update. Congrats. What Bill has done there because the way that's come to life in the store is really connectivity at a higher level across those genders. Now when you walk in the store and we talk about toe-to-head, you see it come to life much more so than it has done historically. We now have that connectivity in store from Footwear to the Apparel to the Accessories, and so that's where it shows up for the customer, and we see the results. Thanks a lot. Congrats again. Thank you. Thank you. Our next question is from Sam Poser with Williams Trading. Please proceed with your question. Hi. I just wanted to follow up on the supply chain, specifically, when you're looking for this fall. This is probably for Jared. When you're looking at this fall and then looking into spring 2022, we're starting to hear that some of the vendors are raising prices, specifically large ones, and that they're starting to adjust orders. I want to get your impression of what's going on To what degree are you getting your fair share or more than your fair share, or however you want to attack that? Thanks. Yeah. Hey, Sam. I think I would revert back to something I said earlier. First and foremost, it's pretty chaotic. It is fluid. It is changing rapidly. Our team's done a great job, without question. They've been tasked with having to continually redo, re-sort, reallocate, rebuy, and find opportunities, and have done a remarkable job. We've been doing this for the last 16 months. We know how to do it. We've been doing it. It's something that we're used to, although we don't like it. We're going to control the things that we can control. We feel really strongly about the flow of our inventory. We feel very strongly about the way our vendors are treating our business. You really don't want to answer the question. I'll be blunt. We've heard that Nike has, one, taken, I guess, January orders that were written prior and raised the prices 5% or 10%. We're hearing that they're starting to cancel some spring orders with other retailers. Are you seeing those specific things? Sam, we've seen some price increases. I don't think that would be a surprise. There's nothing that we've seen that we're concerned about. As Mike mentioned earlier, the complement of the price increases will allow us to continue to drive additional gross margin. With regard to any cuts or cancellations, as I said earlier, these are things we've been dealing with for the last 16 months. As of right now, our vendors have done an incredible job of treating our business as a priority, and I would expect it to stay that way. Thank you very much. Continued success, guys. Thank you. Our next question is from Alex Perry with Bank of America. Please proceed with your question. Hi. Yes, thanks for taking my follow-up question here. I just wanted to ask about, maybe Jared, if you're seeing the consumer sort of willing to substitute between brands and between products based on the inventory availability. If they came in looking for Air Jordan 1, being willing to maybe substitute based on the inventory availability. Thank you. Yeah. Thanks, Alex. Good question. Certainly, as Mike mentioned, the demand has been far greater than supply. We are seeing more of an opportunity for substitutions. At the same time, consumers frequently want what they want. We've done a lot within our company to be able to ensure that we can provide access to consumers. That's certainly paying off. We are absolutely seeing, I wouldn't say necessarily a full trade, but consumers are a little bit more accepting of similar products. I think Ben can give some really good insight to this from a store perspective, so I'm going to flip it over to Ben. Yeah. Thanks, Jared. I kind of classify it as a more understanding than they have been historically around inventory levels because they see it kind of throughout, be it in our industry or in other industries and the limited supply or it's here one day, it's not there the next day just because of the sell-through. We've seen some substitution out there that you probably haven't historically, but still very brand loyal by nature. When you have to buy for back- to- school, you have to buy for back- to- school. You kind of shop around, you figure out where you can get what you're looking for and we hope we provide that in the best way possible. Perfect. That's really helpful. Thanks again. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Hi. It looks like we have a few questions over the webcast. To summarize, how do you think about your capital allocation strategy in terms of returning capital to shareholders? Do you view repurchasing additional shares or increasing your dividend a higher priority? Well, this is Bob. Again, we believe they're both important parts of the capital allocation strategy. At this point in time, we have still, as I mentioned in my comments, over half a billion dollars available to repurchase shares. We will certainly be opportunistic in doing that. You've seen that we've been fairly aggressive in the first six months of the year. I would expect, again, that will be a priority for us as we go forward. The dividend is now established. We expect that it'll be fairly stable here for the next couple quarters. Again, we will continue to evaluate all of those opportunities as we continue to have the cash available to support that program. Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing comments. Well, thank you for your time this morning. We always love to speak to our business, answer questions, and represent our teammates on the call. Again, we're very bullish about the industry. We love our team. We love our business model, and we really appreciate your time this morning, and so thank you. We'll sign off now. Goodbye. Ladies and gentlemen, thank you for your participation. This does conclude today's conference. You may disconnect your lines and have a wonderful day.