New York & Company, Inc. (NWY) Q4 2016 Results Earnings Conference Call March 16, 2017 4:30 PM ETExecutivesEunice Han - ICRGreg Scott - CEOJohn Worthington - President and COOSheamus Toal - EVP and CFOAnalystsPamela Quintiliano - SunTrustDavid Kanen - Kanen Wealth ManagementOperatorGood day and welcome to the New York & Company Inc. Fourth Quarter 2016 Earnings Conference Call.
Today's call is being recorded.And at this time, I would like to turn the conference over to Eunice Han with ICR. You may begin.
Eunice HanThank you. Good afternoon, everyone.Before we begin, I would like to remind you that some of the comments made on todays call, either as part of our prepared remarks or in response to your questions, may contain forward-looking statements that are made pursuant to the Safe Harbor provisions in the Private Securities Litigation Reform Act of 1995.
Actual results may differ from those projected in such forward-looking statements. Such forward-looking statements are subject to risks and uncertainties as described in the Company's documents filed with the SEC, including the Company's fiscal year 2015 Form 10-K.And now, I would like to turn the call over to Greg Scott, CEO.
Greg ScottThank you, Eunice. Good afternoon, everyone, and thank you for joining us today to review our fourth quarter and fiscal year 2016 results. With me today are John Worthington, our President and COO; and Sheamus Toal, our Executive Vice President and Chief Financial Officer.
I'll begin the call by reviewing our performance for the quarter, as well as the progress that we've made on our strategic proprieties throughout the year. John will then review our accomplishments in credit and loyalty, eCommerce, store expansion and Project Excellence. Finally, Sheamus will provide more detail on our financial results before opening the call up for questions.
As a recall, we've provided an update on our holiday performance and fourth quarter expectations at the beginning of January. And both our comp sales performance and adjusted operating loss came in at the better end of that revised guidance.For the quarter, comp sales were down approximately 0.
4%. This was a result of declines in our brick-and-mortar store comp due to continued difficult traffic trends, as well as higher promotional activity. Store comp performance was partially offset by continued strong performance in our eCommerce business.
With comp gains in the low-teens driven by positive traffic, as well as positive comps in our outlet conversion stores.In terms of product, our ability to differentiate our offering continues to service well. We continue to see great results from our celebrity collaborations which we believe provide us with a strong point of differentiation versus others in the space giving these assortments our exclusive to New York & Company.
This is best demonstrated by the long-standing relationship and success of our Eva Mendes celebrity collaboration. In fact, Eva delivered another double-digit increase in sales during the fourth quarter. In addition, our exclusive Soho Jeans, and Soho Street sub-brands also achieved positive comps during the quarter.
Outside of our celebrity and sub-brands, we delivered comp increases across several categories including sweaters, dresses and accessories. The growth in accessories is driven by our strong gifting strategies during our holiday season which also led to expansion in our sweater category, a very important category for New York & Company during fourth quarter.In total, however, these positive performances were offset by softness in our 7th Avenue sub-brand, as well as our knit and woven tops category.
We have some exciting news to share regarding 7th Avenue that we believe will serve as a catalyst for growth in 2017 which Ill get to later.We also prudently controlled our inventory. At year-end total inventory was down 11% and inventory per average store down 6.
5% compared to the prior year. Importantly, we made strong progress in our key initiatives during the year. Let me walk you through some of the highlights from each and how we evolve these keys to drive forward our sales and profitable goals in 2017.
Our first initiative is to leverage and enhance our brand assets growing our celebrity partnerships and sub-brands as we evolve into a broader lifestyle brand. During the year, as I mentioned we expanded our Eva Mendes partnership at a double-digit rate. The success of Eva is further demonstrated in that we've grown this offering at a fast pace since launching in 2013.
The Eva Mendes brand now represents $50 million business and we believe that we have the ability to double that to 100 million sales over the next several years. To achieve this objective, in 2017 in March we are expanding Eva's footprint to 25 more shop-in-shops stores for a total of 50 shop-in-shops locations and we're increasing our assortments at boutique and party offerings in Eva Mendes.In addition, as we open our next six to 10 flexible lease stores in premiere locations, Eva will have a large presence.
In fact I'm excited to announce that tonight we are hosting an appearance by Eva Mendes at our new Dadeland boutique which opened yesterday.Importantly, Eva Mendes gives a framework to successfully add new celebrities to our fold. We are excited that our March 31, we plan to announce a new celebrity collaboration.
This celebrity will be serving two important roles for our Company. First, as brand ambassador to our largest sub-brand, 7th Avenue, and second to launch our own collection which to be sold exclusively at New York & Company beginning in August. We expect this new celebrity collection will see the same success of Eva Mendes and has the ability to grow at a similar rate.
The other aspect of these initiatives is growing our sub-brands. I believe and our customers agree that we have unique sub-brands, expand many lifestyle and occasion and our unique to New York & Company. First, from 7th Avenue for wear-to-work to Soho Jeans for downtown cool and more casual lifestyle, and to lounge under the Soho's Street brand a capitalized on the athleisure trend.
We believe in 2017 that both Soho Street and Soho Jeans has continued upside and we hope with a new brand ambassador we can change the more challenging trend we have seen in 7th Avenue sub-brand.Also in 2017, we will continue to lean heavier into always having new fashion all the time and becoming known as a destination where fashion has created every day. Under this, we will continue to project our new Trending Now dresses and continued growth in celebrity assortments.
Our second initiative is creating a deeper national connection with our customers and increasing brand awareness among our target customers along with increasing traffic to our brand. Our celebrity partnerships continue to be a key part of our marketing strategy. We will continue to leverage celebrities along with an introduction of a new partnership in April to drive traffic and new customers to the brand as I mentioned previously.
At the same time, we will continue to use our customers' influencers to drive awareness and engagement.Last month, we launched a new campaign #IAmNYandCo where we featured longtime Atlanta customer as the face of a collection influenced by her. This collection and her parents drove strong sales in our Atlanta market.
Along with these two initiatives we also will continue to test radio, where we think successful results in metro markets, out of home and well continue to grow our digital media spend. Personally I have the once in a lifetime opportunity to participate under cover of our television show. This was a truly unique experience and would happy to have the opportunity to discreetly go out in the field to interact with customers and members of our organization like I have never been able to before.
I heard so many greater gifts, improved profits for our store teams and would be able to learn how to elevate the in-store experience for customers. Going forward youll see us work to implement many of these ideas in our stores. Third, we continue to better connect with consumers to our private label credit card program which importantly services are loyalty program.
This is evidence by the continued growth in our private label credit card sales and penetration with sales from PLCC customers or private label credit card customers increasing roughly 300 basis points to over 40% of overall sales for the year.We also extended our agreement with ADS as part of this, our royalties from our PLCC sales will increase as move forward in 2017 which John will elaborate on. Fourth we were pleased in 2016 to see e-commerce grow double-digits enhanced by omni capabilities and improvement.
Online now represent over 25% of our business and continues to grow as we continue to look for new ways to further enhance the capabilities and grow our overall business.Fifth, we continue to execute on Project Excellence John will provide more detail shortly but I wanted to say that I'm very proud of the progress the team has made around improving our speed to market. Over the past several years, weve shorten our lead times by almost seven weeks and now have the ability to get reorders in about 12 weeks throughout most of the year excluding Chinese New Year.
Been able to provide great products that fits the trends and meet the needs of our customers quickly is paramount to success in this business and Im very pleased with the work we've done on this front.Finally, I want to note there is landscape that we are currently operating and brick-and-mortar continues to change rapidly. Our solid foundation and focus on the discipline management of our business has opened new growth opportunities for us at strong ROI.
With this in mind as I mentioned earlier, we plan to open six to 10 stores in premier locations at attractive rents require low capital investments which will able us to drive top line sales, additional profitability generates significant return on investments and more importantly expanding our brand and our celebrity presence.Overall, we believe our strategies have poised to continue to evolve the lifestyle brand to the growth sub-brands and celebrity partnership that meet the need for fashion that is on trend, stylish and pull together in a best-in-class omni-channel environment allowing you to shop how, where and when she wants stores, mobile or desktop. At the same time, we focused on increasing sales productivity through strategic real estate moves such as acquiring certain premier lease locations, increasing our speed to market and improved operational efficiencies.
These actions are expected to enable us to move forward toward our high single-digit operating margin goal.Before I turn the call over to John, I want to take a moment to recognize the entire New York and Company team for their continued hard work and dedication. We have made a lot of progress in 2016 that we have a long way to go and I look forward to continue this great work in 2017 and beyond.
With that I'll turn it over to John.John WorthingtonThanks Greg, In a challenging environment the discipline management of our business drove operating results in line with our fourth quarter guidance highlighted by increased sales of our celebrity brand most notably Eva Mendes along with double-digit growth in e-commerce sales, positive outlet conversion comps, and expansion in gross margin. These achievements demonstrate solid traction against our key initiatives, differentiate New York & Company by scaling our celebrity and sub-brands, optimize our real estate portfolio, grow eCommerce and digital sales, benefit from our new PLCC agreement and deliver operational efficiencies included in Project Excellence.
We'll continue to evolve our strategies in 2017 in an effort to drive customer loyalty and preference for New York & Company and better position our stores to mitigate negative mall traffic trends. I'll begin my remarks with the review of our credit loyalty program and omni-channel initiatives, I'll then provide an update on our real estate portfolio, outlet conversion and Project Excellence our productivity initiative.Our credit loyalty market share increased in the quarter to over 40% of sales up almost 300 basis points over Q4 of 2015.
We continue to expect growth in our private label credit card, as well as our email database to drive long-term loyalty and incremental sales. As I have noted previously, our private label credit card customers shop more frequently and spend 2x to 3x more annually. As we continue to increase our credit loyalty penetration, we have the opportunity to more effectively target these loyal customers.
Looking ahead to 2017, we expect to further grow from our private label credit card driven by the relaunch of our loyalty program Runway Rewards. We are very excited about our reduction of Runway Rewards which make it easier for our customers to earn and use their rewards.As it relates to our PLCC, we expect to continue to expand our customer file as we leverage SMS acquisition campaign in-store and online made possible by new technology enhancements at point-of-sale.
We also expect our new PLCC agreement to continue to assist us to expand gross margin driven by $11 million in incremental royalties we expect to receive versus 2016.Now let me turn to our omni-channel business. We continue to experience double-digit growth in eCommerce benefiting from a combination of enhancements we've made and continue to make to our web platform.
We believe we continue to lead in technology within the specialty store channel and expect our enhanced capabilities with Ask Us, ship-from-store and buy online pick up in-store to further differentiate New York & Company from others as we give consumers the flexibility to have the product in the size and color they want and enable them to shop when, where and how they want.We expect our positive performance from eCommerce to continue in 2017 as we benefit from the expansion of our core business driven by exclusive shops for cheap and call our online exclusive styles and the expansion of non-apparel categories such as jewelry. We'll also build on the strong momentum of Eva Mendes with the introduction of the Eva boutiques online that engage consumers in the full collection.
We have several initiatives in place to drive traffic conversion and ADS online. To drive online traffic will leverage social media marketing, an increase PLCC engagement on-site. Conversion improvements are expected as we redesign our website to drive a better brand experience and we expect to increase average dollar sales as we focus on promotion and events that enable us to achieve the objective while increasing higher AUR category such as Eva dresses and outerwear.
We'll also focus on increasing units per transaction as we enhance the recommendation feature on our site as part of our web redesign to drive more outfit dressing.Now let me briefly provide an update on outlet conversion, real estate and Project Excellence. As we have previously disclosed, we are committed to the comprehensive review of our entire real estate portfolio to improve profitability.
Our converted outlet stores continue to perform well and these stores achieved positive comp sales for the year and increased profitability driven by lower rents, as well as higher conversion UPT and traffic.During the fourth quarter we closed eight New York & Company stores and eight outlet stores. For the year we opened two stores and closed 20 New York & Company stores and six outlet stores while converting 50 stories to our outlet concept.
We ended the year with 466 stores including 343 Nico stores, New York & Company stores, 123 outlet stores and 2.4 million selling square feet in operation.In 2017 we'll continue to optimize our real estate portfolio with the goal of delivering $5 million in incremental savings and significant rent concessions with 36 store closures plan for the year.
As it relates to store and outlet expansion, our plans are to open six to 10 new stores in high-performing locations. We were excited to have the opportunity to enter these flexible lease locations that were previously occupied by a close competitor and therefore were move-in ready.The first six will open in the first half of this year.
They include a Dadeland in Miami, Miami International, Pentagon City in Arlington Virginia, Chicago Rosemont Center, Valley Fair in Santa Clara California, and Garden State Plaza in New Jersey.As it relates to outlets, we expect positive comp sales to continue in 2017 as we strengthen our product assortment and grow our lifestyle beyond wear-to-work by building Denim, the reintroduction of lounge and increasing seasonal selections especially in dresses and sweaters.In addition, we will also strengthen our non-apparel categories with the expansion of jewelry.
We also expect to enhance credit loyalty program to assist us to drive traffic to our outlets with a focus on increasing new PLCC accounts. Overall we expect to end 2017 with roughly 440 stores including 122 outlet stores and approximately 2.2 million selling square feet in operation.
We'll continue to asses our store base so that we are positioned to drive optimal sales productivity and profitability. We have increased our flexibility to achieve this goal by having over 60% of our lease renewals on two year basis.Now let turn to Project Excellence which you now is our ongoing initiative to improve overall operational efficiency and productivity.
Our most significant accomplishments toward Project Excellence this year is centered around improving our speed to market and realigning and increasing our collaboration with our key agent partners along with simultaneously driving reduction in our product costs and developing expense controls across all areas of the business.As it relates to Project Excellence, we continue to target areas of opportunity and continue to target additional savings as we increase efficiencies across the organization and continue to realize procurement cost reductions.In closing, we managed our business in a challenging environment in Q4 while positioning our business and brand for improved long-term performance.
We remain encouraged by our strategic efforts across credit loyalty, omni-channel, real estate and Project Excellence and are beginning to yield top and bottom line results. We remain very focused on delivering both short and long-term improvements in sales and profitability for New York & Company.With that, Id like to turn the call over to Sheamus to review our fourth quarter and full-year results and introduce our 2017 outlook in greater detail.
Sheamus ToalThank you, John. Good afternoon, everyone.Net sales for the fourth quarter were $266.
3 million as compared to $271.3 million for the fourth quarter of last year's. Comparable store sales decreased 0.
4% reflecting strength in our growing eCommerce business and $5.4 million of royalty revenue from our new private label credit card agreement offset by decreases in store sales due to reductions in store count and decreased mall traffic which led to declines in comparable store sales.In the comparable store sales base, average dollar sale per transaction increased by 4.
9% while the number of transactions per average store decreased by 5.1%. Gross profit as a percentage of net sales increased by 170 basis points to 27.
4% versus last year's fourth quarter gross profit rate of 25.7%. This increase reflects $5.
4 million in benefits from the new private label credit card agreement, product cost reductions and efficiencies from vendor negotiations related to the implementation of Project Excellence, as well as a 40 basis point improvement in the leverage of buying and occupancy costs partially offset by increased season end product markdowns.Selling, general and administrative expenses were $82.3 million as compared to $69.
2 million in the prior year. However, this includes a $6.2 million legal reserve related to an ongoing trademark infringement case where the Company received an unfavorable judgment but is still in the process of vigorously defending.
On a non-GAAP basis excluding this reserve, selling, general and administrative expenses were $76.1 million as compared to non-GAAP selling, general and administrative expenses of $68.5 million in the prior year.
This increase largely reflects reclassifications to certain amounts under our new agreements or the elimination of benefits which occurred in the prior year. These changes in comparability include $1.3 million increase in marketing expense due to the shift in classification of private label credit card benefits to revenue or $1.
1 million increase in expense due to the elimination of insurance credits and $1.8 million increase due to the reversal of performance-based compensation accruals in the prior year.In addition, the Company also experienced $0.
8 million increase in variable expenses associated with the growth in eCommerce and a $1.3 million increase in digital marketing spending to drive sales.GAAP operating loss was $9.
2 million as compared to the prior year's fourth quarter GAAP operating income of $0.6 million. On a non-GAAP basis excluding $6.
2 million of non-operating charges, adjusted operating loss was $3 million compared to the prior year's non-GAAP operating income of $1.3 million.GAAP net loss for the fourth quarter of fiscal year 2016 was $10 million or $0.
16 per diluted share. This compares for the prior year's GAAP net income of breakeven. Excluding $6.
2 million of non-operating charges, the Company's non-GAAP adjusted net loss was $0.06 per diluted share, as compared to the prior year's fourth quarter non-GAAP adjusted net income of $0.01 per share.
Total quarter end inventory decreased 11% which was below our previous guidance reflecting significantly lower levels of in-transit inventory, as well as lower levels of inventory on-hand. On an average store basis, inventory declined 6.5% reflecting on-hand inventories which were approximately flat and lower levels of in-transit inventories due to changes in vendor terms and timing of deliveries.
Capital spending for the fourth quarter was $5 million as compared to $5.8 million in last year's fourth quarter primarily reflecting continued investment in IT infrastructure and real estate. The Company ended the quarter with $88.
4 million of cash and no outstanding borrowings under its credit facility.Now turning to outlook for the first quarter of fiscal year 2017. Net sales are expected to decline in the low single-digit percentage range reflecting decreased store count partially offset by $5.
8 million of royalties and other revenue from the new private label credit card agreement and growth in the eCommerce business. Comparable store sales are expected to range from low single-digit negative to flat on a percentage basis. This range reflects the fact that we still have a high percentage of our quarterly sales ahead of us with the shift of Easter to later in the quarter.
Gross margin is expected to be up significantly reflecting $5.8 million in benefits from the Company's new private label credit card agreement, reductions in product costs and agent expenses resulting from Project Excellence, and reductions in occupancy costs due to the continued rationalization of our real estate portfolio partially offset by increased shipping costs associated with the growing eCommerce business.Selling, general and administrative expenses on a GAAP basis are expected to deleverage by 250 basis points to 300 basis points versus the prior year.
While the Company continues to reduce home office and field payroll costs, these reductions have been offset by the following factors. The shift in benefits from the Company's new private label credit card agreement to revenue as compared to the prior year which reflected these benefits as reductions of marketing expense.; investments in marketing to drive incremental sales, increases in selling, general and administrative expenses driven by increases in eCommerce variable costs, and increases in seasonal and annual performance-based compensation accruals.
Operating results on a GAAP basis for the first quarter of fiscal year 2017 are expected to improve versus the prior year however we do still anticipate a loss in the range of $2 million to $5 million. These results reflect the anticipated impact of a highly challenging and promotional environment given the backdrop of soft industry traffic trends the brick-and-mortar stores.Earnings before Interest, Taxes, Depreciation and Amortization or EBITDA is expected to be positive during the first quarter adding to the Company's strong working capital position.
Total inventory at the end of the first quarter is expected to be down in the low to mid single-digit percentage as compared to the prior year first quarter.The Company continues to be very aggressive in the rationalization of its real estate portfolio reducing occupancy costs while maintaining flexibility. In this regard we currently have a very high penetration of stores on short-term leases with approximately 50% of our stores with lease expirations of less than one year and more than 60% of our stores with lease expirations of less than two years.
We believe this gives us tremendous flexibility as we move forward.Capital expenditures for the first quarter are projected to be between $5 million and $6 million as compared to $1.9 million of capital expenditures in the first quarter of last year.
Depreciation expense in the first quarter is estimated at $6 million. During the first quarter of fiscal year 2017 the company expects to open one outlet store remodel or refresh three existing stores and close six New York & Company stores. In addition the company also expects to open five new stores in existing competitor locations under short-term leases which require little capital investment.
For fiscal year 2017, the company expects to open two new outlet stores remodel or refresh eight existing stores open six to 10 stores in existing competitor retail spaces under flexible leases and close 36 stores including three outlet stores ending the fiscal year with roughly 440 stores including a hundred and 22 outlet stores and approximately 2.2 million selling square feet in operation.With that I would like to turn the call over to the operator to begin the question-and-answer portion of the call.
Question-and-Answer SessionOperator[Operator Instructions] And at this time, we will take your first question which will be from Pamela Quintiliano with SunTrust. Please go ahead.Pamela QuintilianoHi thanks so much to take my question guys.
So actually have a few starting with the loyalty program. Can you talk about the timing of the just the runway relaunch if could remind us the current reward structure and anything you could share about how you expect that to change with the new program. And then just how robust the data capture is that youre getting from the loyalty program and if youre utilizing that across the stores and then a few after that?
John WorthingtonHi Pamela, its John, Ill start off a couple and then Ill let Sheamus and Greg chime in. The relaunch of runway rewards our loyalty program will start in Q2 were really excited about it obviously we worked very hard with ADS in 2016 to negotiate what we think is a very solid deal for the next 10 years on.And the relaunch will have three separate tier so well be introducing a new top-tier to our loyalty program which were very excited about that will offer at all levels exclusive coupons and offers will have things like free shipping to certain levels, birthday offers double city cash, things of that nature and just the overall rebranding of the program has allowed us to really do some creative things in the marketing space and especially with our promotional cadence as were extremely promotional.
So well be allowed to kind of target each of those tiers and aggressively go after two build each of tiers.I think probably the biggest thing for us in 2015 and 2016 is to see our loyalty program grow in such fast clip so now we've gone from the mid 30s to a little north of 40. We believe there is some real strong growth for private label both from an acquisition new and from those customers to spend more.
So we did see an uptick in both of our loyalty programs and customer spending more in 2016. So were very excited about it. Were very excited about the deal we think we again we can get this up hopefully in other 200 to 300 basis points this year and hopefully we can get it to the mid-40s and beyond.
Sheamus and Greg anything else on PLCC?Greg ScottSheamus.Sheamus ToalNo just in terms of the PLCC benefits as John mentioned last year we signed a new agreement we believe there were tremendous benefits associated with that agreement for us first obviously we received a sign-on bonus of about $40 million a little bit over $40 million which certainly helped our cash and working capital positions so that was a tremendous benefit of that negotiation.
As well as the increase in the royalty rates so as you have seen over recent quarters we have experienced an increase in the royalties that we've received from ADS and in this most recent quarter obviously you can see the amounts in revenue increased to $5.4 million for the quarter.As we move forward in 2017 under the second phase of that agreement we started to experience actually during Q4 the next step up in those royalties.
So as we move forward we would expect royalties depending upon our volumes in the quarter to range anywhere from $5.5 million to $7 million per quarter again depending upon our volumes which is obviously up from last year and significant increases versus where we were two years ago. So there has been tremendous success in terms of that program and that renegotiation.
Pamela QuintilianoRight, thank you for the detail on that. And just a few other questions can you talk about Evaluation Mendes is that attracting a new customer its an existing customer who is cross shopping and if its a new customer is she then going test the Eva collection and buying other things so that was the first question. Second question regarding the limited closing are you seeing any benefit from that Im assuming there were some overlap there and also assuming you picking up some of their locations.
And then lastly Greg just any thoughts on fashion shifts and what you're seeing out there with your girl would be much appreciated? Thanks so much.Greg ScottSure, so as we talked about were super excited about our relationship with Eva were opening Dadeland yesterday and she is appearing in our Dadeland store today kind of marking a milestone at $50 million in the business with a goal $100 million in the short-term.
I think as we've always seen Eva Mendes she does bring in a new customer but at the same time we saw a lion share of our customers shop at as well. When we do find a customer comes in she generally does pick up another piece of New York & Company the average dollar sale for an Eva Mendes customer is significantly higher than a non-Eva Mendes customer that is shopping. So it is s a very qualified and very strong customer for us.
I think with Eva you know whats exciting as we open these six what were calling stores and premier locations that many were limited stores that were opening in the next were opening two today and we opened to last week. I think what you'll see there is Eva Mendes is going to take a very strong front positioning in these stores permanently with a window permanently we think in these upscale centers Eva is a major draw. And were seeing that with these stores that are opening a very high penetration of the Eva Mendes.
So I think what we're seeing is I cant say that we have seen a shift from the limited customer coming into our stores yet. However a couple things one I would say that yes there was some crossover for sure. Two I think we've been fortunate to secure advantageously six to 10 locations many that limited operated in that were able to open very quickly, we talked about that on the call.
So obviously with those locations I think we will absolutely benefit from the limited closing for sure. I think fashion there some really exciting things are happening weve really it didnt kick off early I'll tell you February we did not see this but beginning with March some real significant trends that are happening obviously soft dressing is huge.Whether it be the paper bag palazzo or pant, the highway paper bag, soft skirt, soft tops, soft dressing is great for us right now really palazzo pants of and new palazzo meaning high wasted paper bag are excellent I think in tops weve got three main trend that were seeing early on anything with shoulders, cold shoulder, bare shoulder off the shoulder very strong in our business across the board.
We are also seeing anything with dramatic sleeves opening up so tops are really in that respect as well.So I think in the top trend we have to major trends and then I will say as last year was very neutral on color and still think color is very neutral. We are seeing some color start to appear again which is interesting and mainly the color pink is good across the board there were all seen this new shaded green happening.
So they are trends that we saw in early March that were going to chase heavily into for May, June period specifically around soft on all the tops trends that were seeing. There was so well really build back into that for the late May, June assortment and that kind of speaks to our supply chain and something that we continue to want to grow our chase dollars meaning spend more on chase less probably up from buy and we continue to make that initiative to really drive that second and fourth quarter.Pamela QuintilianoGreat and just one last one with dresses you guys said dresses were one of the categories that was doing well for you right in the prepared commentary or do I heard?
Greg ScottSo what I said is dresses in Q4 were excellent and dresses so Q4 we had a great comp there as we open spring I will say dresses and Eva Mendes are fantastic dresses in our main line have opened just okay. Really strong on eCommerce and not as good stores - I'm thinking this has to do with store traffic which you know store traffic for us as we always talk about through last year in Q4 our store traffic was down in low to mid singles where mall traffic was down double.So we continue to be beat them I will say in our brick-and-mortar Nico stores February traffic was softer though as many people have commented it was definitely better as we move to the Presidents holiday had a lot to do with obviously the shift and the holiday and the shift of brakes so that really helped as well.
So I think what I'm seeing in dresses we are definitely seeing jumpsuits and maxis continue to be strong for us and any shift dress with an interesting sleeve is great. The sleeves are really great things like crazy sleeves things you would never thought would sell are selling really, really well.Pamela QuintilianoThat's great to hear.
Best of luck guys.Operator[Operator Instructions] At this time, we will take a question from David Kanen with Kanen Wealth Management. Please go ahead.
David KanenGood evening. First question Sheamus can you tell me exactly for the quarter what the shipping expenses were relating to eCommerce?Sheamus ToalSo we havent disclosed the specific amount of the shipping expenses for the quarter.
So I don't have that are disclosure in our release at this point I'm obviously on shipping expenses as well as overall eCommerce expenses have gone up considerably over the last few years. So as we have seen growth in our eCommerce business from virtually nothing to 25% of our sales almost $250 million of overall business. Weve set up that business as almost entirely variable cost structure.
So as we've seen that growth in sales we have seen an increase in shipping expenses as well as other expenses associated with that business. So you that's you know been part of what's offset some of our project excellence savings and some of the other benefits that we've been able to pull in. As our business evolves and becomes more of an omni-channel business we have seen a growth in that segment of our expense structure.
OperatorAnd at this time Ill turn it back over to management for any additional or closing remarks.Greg ScottThank you again for joining us. We look forward to speaking with you again when we report our first quarter results in May.
Thank you and speak to you later.OperatorAnd again that does conclude todays conference call. Thank you all for your participation.