Operator: Greetings, and welcome to the Oxford Industries' Second Quarter Fiscal Year 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Brian Smith. Please go ahead.

Brian Smith: Thank you and good afternoon. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or financial conditions to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K. We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures. You can find a reconciliation of non-GAAP to GAAP financial measures in our press release issued earlier today, which is posted under our Investor Relations tab at our website at oxfordinc.com. And now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmyer, CFO and COO. Thank you for your attention, and I can turn the call over to Tom Chubb.

Thomas Chubb: Thank you, Brian. Good afternoon and thank you for joining us. I'm pleased to be here today to discuss our second quarter results, the performance of our brands, and our outlook for the balance of fiscal 2026. Overall, second quarter results were within our expectations, highlighted by year-over-year adjusted earnings per share growth and a low single-digit comparable sales gain at Tommy Bahama. We also delivered meaningful adjusted gross margin expansion despite a higher level of promotional activity, reflecting the progress our teams have made on assortment, sourcing, and pricing across the portfolio. The strong cash flow we generated enabled us to make meaningful progress reducing debt in the second quarter. Refunds of previously paid tariffs contributed to that reduction. Maintaining a strong balance sheet and generating cash that can be deployed thoughtfully remained important priorities for us. Scott will provide more detail on our cash flow and balance sheet performance. Tommy Bahama's second quarter results were consistent with our expectations. As our largest brand, its positive comparable sales growth provided important support to the overall portfolio and helped offset pressure elsewhere in the business. We were also encouraged by a return to positive comparable sales in Florida, a key market for the brand that had experienced softer results in recent periods. We are pleased with the consistency of the brand's performance and remain focused on sustaining that momentum through disciplined merchandising, marketing, and operating execution. While we continue to deliver positive results at Tommy Bahama, performance at Lilly Pulitzer remained weak in the second quarter, and our outlook for the brand for the balance of the year is now below what we anticipated at the end of the first quarter. As we discussed on our first quarter call, Lilly Pulitzer entered the quarter with several product and marketing challenges. The core problem is the assortment, with the key issue being that we shifted far too much of our inventory investment out of our entry price points to higher price points. Second quarter results and the trends we are currently seeing indicate that those challenges have been more significant than we originally anticipated. We are responding with actions aimed at both near-term performance and the longer-term health of the brand. Because of our product development lead times, spring 2027 is the first season in which we can substantially reshape the full assortment. In the meantime, we are refining our marketing and messaging, adjusting the promotional cadence, and managing inventory and expenses more tightly. Given current trends, we expect Lilly Pulitzer to be more promotional during the balance of the year. We will remain strategic and disciplined, using targeted promotional activity to support customer engagement and inventory sell-through while protecting the long-term integrity of the brand. Promotions are 1 lever, but lasting improvement will also require stronger product relevance, marketing effectiveness, and execution. We are laser-focused on delivering these requirements. For spring 2027, our work is centered on 4 areas: our pricing architecture strategy, balance of print, pattern, and color, mix of intended use occasions between social and casual, and the proportion of new versus continuing styles. These assortment changes will not drive a positive trend change in fiscal 2026, but we believe they will create a more balanced and compelling assortment and better position Lilly Pulitzer for improved performance beginning with the spring 2027 season. We remain confident in Lilly Pulitzer's long-term potential. The brand has a clear point of view, a strong emotional connection with its customer, and meaningful opportunities for improvement. That confidence does not lessen the urgency of the current situation. We are focused on addressing the issues directly and returning Lilly Pulitzer to the level of performance we expect from the brand. At Johnny Was, we continue to make progress on the turnaround plan. The brand significantly increased EBITDA during the second quarter, driven by higher gross margin resulting from tighter inventory management and fewer promotions, together with disciplined SG&A cost management. There is still work to do, but we are encouraged by the improvement in profitability. Stepping back, weaker consumer sentiment has added pressure to discretionary demand. Our customers, particularly at Tommy Bahama and Lilly Pulitzer, tend to be active travelers, and although they continue to travel, higher airfare, lodging, and other travel costs may be leaving less room in their discretionary budgets for apparel. Even so, the steady performance at Tommy Bahama reinforces that compelling product and consistent execution can still produce solid results in this environment. Our responsibility is to deliver that level of product relevance and execution more consistently across the portfolio. The continued softness at Lilly Pulitzer, including the impact of a more promotional posture for the balance of the year, together with softer demand in certain other parts of the portfolio, led us to lower our top and bottom line guidance for the remainder of the year. At Lilly Pulitzer, the issues are primarily assortment and marketing related, while the pressure elsewhere in the business is more closely tied to a more cautious, discerning consumer. We believe the updated guidance represents a prudent assessment of current business trends, the macro environment, and the actions we expect to take. Scott will provide more detail on our revised outlook and the assumptions underlying it. Against this backdrop, our priorities are clear: sustain the positive momentum at Tommy Bahama, address the assortment and marketing issues at Lilly Pulitzer, and build on the profitability improvement at Johnny Was. We are managing inventory expenses and capital carefully while maintaining our focus on cash generation, debt reduction, and a strong balance sheet. After Scott's comments, I will turn briefly to discuss several broader actions underway across Oxford. As always, I want to thank our teams across Oxford. Their resilience, creativity, and commitment to our customers are the foundation of everything we do. With that, I'll turn the call over to Scott for more detailed commentary on our financial performance and outlook.

K. Grassmyer: Thank you, Tom. Consolidated net sales were $394 million in the second quarter of fiscal '26 compared to $403 million in the second quarter of fiscal '25, and near the high end of our guidance range of $380 million to $400 million. The company comparable sales were down slightly at 1%, including a 3% decrease in retail sales and flat e-commerce sales. The decline in retail comp sales was partially offset by sales from non-comp stores open primarily in the prior year. Notably, food and beverage sales increased 11%, driven primarily by non-comp locations. Wholesale sales decreased 14% compared to the prior year, but was primarily driven by lower sales of residual inventory through off-price channels. By brand, sales growth at Tommy Bahama helped to partially offset decreases in our other businesses. Sales decreases at Lilly Pulitzer and Johnny Was were driven by a mid-single-digit negative comp and lower off-price wholesale sales, while the sales decline at Emerging Brands was driven primarily by lower wholesale sales. The positive sales growth at Tommy Bahama was driven by a low single-digit positive comp in our DTC channels, partially offset by a decline in wholesale sales driven primarily by lower off-price clearance sales. Adjusted gross margin expanded 140 basis points to 63.1%, driven primarily by updated assortment, sourcing, and pricing strategies across our portfolio that resulted in higher IMUs, along with a change in sales mix with off-price wholesale sales representing a lower proportion of net sales. These factors were partially offset by a higher proportion of net sales in our DTC channels occurring during promotional events at Tommy Bahama, Lilly Pulitzer, and Emerging Brands. Tariff cost included in inventory sold during the year were materially consistent with the prior year. As Tom mentioned, we recorded and received significant tariff refunds during the quarter. We recorded a reduction to cost of goods sold of $42 million of tariffs previously paid and received substantially the entire balance during the second quarter or shortly thereafter. The impact of these refunds was excluded from our adjusted results. Adjusted SG&A expenses increased slightly to $210 million compared to $209 million last year, impacted primarily by new brick-and-mortar retail and food and beverage locations, as well as increases in software and consulting costs, and costs associated with the transition of our Lyons, Georgia, distribution center operations. These increases were partially offset by lower incentive compensation and cuts in more discretionary categories like travel. The result of this yielded adjusted EBITDA of $45 million, or an 11.4% adjusted EBITDA margin, compared to adjusted EBITDA of $43 million, or 10.7%, in the prior year. Moving beyond EBITDA, adjusted depreciation and amortization increased by approximately $1 million compared to the prior year, primarily due to increases in depreciation related to our new Lyons facility. Interest expense was relatively flat compared to the prior year, as our average debt levels declined during the year. The effective tax rate of 27.5% was lower than the prior year of 29.6% due to certain discrete items that were more significant in the prior year. With all this, we ended up with $1.34 of adjusted EPS. Moving to the balance sheet, inventory decreased $20 million to 12% on a LIFO basis that included a $10 million increase in to the LIFO reserve. On a FIFO basis, inventory decreased $9 million, or 4%, compared to the second quarter of 2025, with decreases in Emerging Brands, Lilly Pulitzer, and Johnny Was. We ended the quarter with long-term debt of $73 million, which is down $70 million compared to $143 million at the end of the first quarter, and compared to long-term debt of $81 million at the end of the second quarter of fiscal '25, and $116 million at the end of fiscal 2025. Cash flow from operations provided $97 million in the first half of 2026, which includes $29 million received related to tariff refunds, compared to $80 million in the first half of 2025. We also had lower capital expenditures of $32 million in the first half of '26, compared to the first half of fiscal '25 of $55 million. The decrease, which primarily related to the addition of fewer new bricks-and-mortar locations and lower expenditures on the Lyons, Georgia, distribution center project, as that project comes to a close, also allowed for further reduction of our long-term debt. We're also paying dividends of $22 million. And now I'll spend some time on our updated outlook for 2026. As Tom mentioned, the ongoing challenges in the Lilly Pulitzer business, along with our generally conservative view of consumer sentiment, led us to reduce our top and bottom line outlook for the remainder of the year. For the full year, we now expect a low single-digit negative comp for the total company, which is lower than our previous range of slightly negative to slightly positive. As a result of the change in our comp assumptions, we are revising our guidance range for the full year and now expect sales to be between $1.43 billion and $1.47 billion, or a decline of 3% to relatively flat, compared to sales of $1.478 billion in fiscal 2025. Our revised sales plan for the full year of '26 includes a sales decrease in Lilly Pulitzer and Johnny Was, partially offset by a sales increase in Tommy Bahama, and growth in the Emerging Brands. By distribution channel, the full-year sales plan consists of low single-digit decreases in our direct-to-consumer channels and a high single-digit decrease in wholesale, partially offset by a low double-digit increase in our food and beverage channel that is benefiting from the additional -- addition of new locations. Moving on to gross margin, our outlook assumes that the tariff rates reflecting the recent Section 301 changes will remain in effect for the balance of fiscal 2026. Because those rates are only modestly higher than the rates applicable to most of our first half inventory receipts, we do not expect the changes to materially affect fiscal 2026 results. Any additional tariff increase implemented during the balance of the year would be expected to affect primarily future periods due to the timing of the inventory receipts and sales. When removing any tariff refund-related impact, we now expect an approximate 50 basis points increase in gross margin for the year with improved IMUs and a continuation of the shift to a higher proportion of direct-to-consumer sales to be partially offset by higher promotional activity, particularly at Lilly Pulitzer. As a result of these factors, we expect gross margins to improve approximately 100 basis points in both Q3 and Q4 fiscal '26 compared to the prior year. In addition to lower sales and higher gross margins, we expect SG&A to grow in the low single-digit range, primarily due to the annualization of incremental SG&A from new stores added primarily in fiscal 2025, additional costs related to transition to the Lyons, Georgia, distribution center, and increased software-related costs. Also within EBITDA, we expect higher royalties and other income of approximately $2 million in fiscal '26, largely due to the normalization of sales from our licensing partners that were heavily impacted by the implementation of tariffs in fiscal '25. Outside of EBITDA, we expect an increase in depreciation due to significantly all of the incremental costs to operate the new Lyons DC in fiscal '26 being depreciation related. We also expect interest expense of $6 million, which is lower than our previous estimate due to our recent significant reduction in debt. Considering all these items and a tax rate between 27% and 28%, we're revising our 2026 adjusted EPS guidance to $1.60 to $2 versus adjusted EPS of $2.11 last year. In the third quarter of '26, we expect sales of $280 million to $300 million compared to sales of $307 million in the third quarter of '25. This primarily reflects a mid-single-digit negative to low single-digit negative comp assumption and relatively flat wholesale sales. By brand, we expect lower sales at Lilly Pulitzer and Johnny Was to be partially offset by a sales increase at Tommy Bahama and growth at Emerging Brands. We also expect gross margin to expand approximately 100 basis points, SG&A to grow in the low single-digit range, royalty income of approximately $3 million, an interest expense of $1 million, and an effective tax rate of approximately 24%. We expect this to result in third quarter adjusted loss per share between $1.40 and $1.20, compared to a loss per share of $0.92 last year. Our fourth quarter sales plan includes the benefits of some additional promotional activity, primarily at Lilly Pulitzer, along with most of our groups benefiting from the correction of tariff-related merchandising issues that significantly impacted our holiday season and fourth quarter results last year. As a result, our fourth quarter plan includes a comp assumption of relatively flat to slightly positive. Moving to our CapEx outlook for the remainder of the year, we expect capital expenditures for the year to be approximately $60 million, including the $32 million spent in the first half of fiscal '26, compared to a total of $108 million in fiscal '25. The remaining capital expenditures relate primarily to new brick-and-mortar locations and the remaining capital expenditures for the new distribution center in Lyons, Georgia. I will now turn it back to Tom for some closing comments.

Thomas Chubb: Thank you, Scott. Before we open the call for questions, I want to briefly discuss a broader review we recently initiated across the enterprise aimed at meaningfully enhancing operating margins in the next few years. The review is focused on opportunities to simplify the business, improve efficiency, and sharpen how we allocate resources across Oxford in order to become less dependent on historical rates of growth to fuel higher profitability. We are still developing our plans and expect to share more as they are finalized, but we believe it is important to highlight several actions already underway. First, we have made significant progress ramping up the Lyons, Georgia, distribution center. As the facility matures, we'll look to take full advantage of our investment and move more product into the building, including from a legacy 3PL, to operate more efficiently across our increasingly automated footprint. With the major investment phase nearing completion, we also expect capital expenditures to normalize after several years of elevated spending on Lyons, which will increase the cash available for further debt reduction. With impending retirements within our technology leadership, we have transitions underway that will support a reassessment of our IT infrastructure with an eye towards simplifying our tech stack and advancing our data analytics and AI capabilities across the enterprise. We are also optimizing our store fleet, including converting selected Southern Tide and Johnny Was locations to Lilly Pulitzer, where we believe the market and location are better suited to that brand. We will continue to evaluate the fleet market by market and location by location and make changes where we believe they will create the greatest long-term value. We have a new brand leader at Southern Tide, and also within our Emerging Brands group, we consolidated oversight of the group's finance, planning, and operations functions to improve consistency and efficiency. These are a few examples of the actions underway alongside the work at Tommy Bahama, Lilly Pulitzer, and Johnny Was. We believe these actions will simplify the business, strengthen execution, and position Oxford for more consistent performance and stronger returns over time. We'll have more to say about all of this in December. With that, we're happy to take your questions. Paul?

Operator: Thank you. [Operator Instructions] Our first question is from Ashley Owens with KeyBanc Capital Markets.

Ashley Owens: Maybe just to start, I wanted to focus in on Tommy Bahama because I thought the point about you calling out the return to positive comps in Florida was very important, just given the size of that market. Could you unpack what helped drive that improvement in the quarter? Whether you're seeing similar strength across both the men's and women's categories?

Thomas Chubb: Yeah, thank you, Ashley. Great questions. And we were -- and I'm glad you called it out because we really were thrilled to see Florida turn positive. As you know, for a number of quarters now, it's been negative for the most part in Tommy Bahama, and that is such a big and important part of our business that when it's negative, it's tough. When it's positive, it makes the whole world seem better. So very glad to see that. Men's versus women's overall in Tommy this year, men's has been up. Women's has actually been up more than men's, which we're happy to see. As you know, we've believed for a long, long time that women's has a huge opportunity in Tommy Bahama. We've made steady progress in growing that business and what we've seen this year has been really encouraging.

Ashley Owens: Great. And then maybe just quickly on Lilly as well. So I think you were very explicit that spring '27 is that first season where you can and are working to reshape the assortment. And that the changes -- we're not going to see that positive trend change until fiscal -- within this year. I guess, should we now think about Lilly as being a spring '27 recovery story? Could there be improvements in the comp with some of that planned promotionality through the back half of the year? And then just any proof points to, kind of, watch out for that would tell you that the reset is working ahead of the launch. Then maybe just 1 on the modeling side of things with the gross margin guidance. I think it was 100 bps improvement in both Q3 and Q4, despite those elevated promotions at Lilly. Just anything you can say as to what's giving you the confidence in that outlook, particularly if that consumer demand does remain a little bit pressured.

Thomas Chubb: Yes, so I think you understand this, Ashley, but the length of the product pipeline is really the issue. So you get into spring '26, you realize that you've got a really pretty significant assortment issue, but you've got the rest of the year's product already in the pipeline and you can do limited things to adjust for it. So spring '27 is the first season where we were able to really incorporate what we realized was wrong about the assortment in spring '26. The rest of the seasons for '26 were already fundamentally in the pipeline. There are some other reasons to think that there might be some fourth quarter upside in Lilly and that's just because last year they were struggling through the tariff-related gaps in the product assortment and they overall had a weak fourth quarter last year. So you might see some upside because of those things in the fourth quarter. And then the other thing is the resort product line, I think, which will look more like the spring '27 line, I think, could give us some early reads, but you're not really going to know till very late in the quarter when you've got some spring stuff. And then on the gross margin question, certainly a good question. And I'll let Scott walk you through that, why we feel good about what we're projecting.

K. Grassmyer: Yes, we are starting with higher IMUs. Also, wholesale will be a little bit lower percent of the total mix, so that will help neutralize or more than offset the higher promotional cadence that we do expect out of Lilly this year.

Operator: Our next question is from Janine Stichter with BTIG.

Ethan Saghi: You got Ethan on for Janine. First, I was just wondering what's driving the divergence between Tommy and the rest of the portfolio? Is it product, demographic, geography, or something else? Just any color you could give on that.

Thomas Chubb: Well, what I would say is I don't think there's really a big divergence between Tommy and most of the rest of the portfolio. It's a little complicated, but Tommy and Lilly, clearly a big divergence, and I think that's almost all about the assortment challenges that Lilly has. Johnny Was, even though their comp numbers are not where Tommy's are, we, kind of, knew that going into the year just because of the trajectory that we came out of '25 on. As we've talked about extensively, the goal in Johnny Was this year is to improve profitability, even if the sales number comes in a bit lower. And that's exactly what happened in the second quarter. So we really look at Johnny Was as a positive story year to date. We think they're ticking the boxes on their turnaround plan. And then within the Emerging Brands, it's really a Southern Tide issue. We don't -- they're too small for it to make sense for us to get into breaking out a lot of granularity, but Southern Tide's the laggard there. Everything else looks quite good. And as we talked about, we've -- we brought in a new leader at Southern Tide, very excited about him. I think this is his 6th week, maybe, on the job and we're, kind of, rebooting Southern Tide. He's already seen some good opportunities of things that we can improve closer in and then obviously beyond. So I don't think there's as much of a divergence as it might seem like on the surface.

Ethan Saghi: That's a really helpful color and kind of answered my next question, which is going to be on Emerging Brands. So I'll pass it on.

Thomas Chubb: Okay. Thank you, Ethan.

Operator: Our next question is from Mauricio Serna with UBS.

Mauricio Serna Vega: Maybe could you talk about quarter to date, what, kind of, comps you're seeing overall? And how should we think about the comps specifically for Tommy Bahama? How are you thinking about the level, like, the sustainability of the, kind of, comps that you delivered in Q2? And then after that, I have a follow-up on Lilly Pulitzer.

K. Grassmyer: Yes, the comps quarter-to-date, a little cloudy because you have some promotion timing. You also have Labor Day being late. So it's a little cloudy. They're down slightly, but it's -- there's a lot of noise in them this early in the quarter that will normalize more as the quarter goes on.

Mauricio Serna Vega: And then on specifically on Tommy.

K. Grassmyer: We're not going to get into comps by group this early. It's just 1 month is -- not with some of the timing.

Mauricio Serna Vega: No, I wasn't asking about the comps for Tommy. More like, how are you thinking about the comps for, like, that brand in the year?

K. Grassmyer: Yeah, yeah, for the year, Tommy, I mean, we expect them to be slightly positive for the year. And so yes, slightly positive comps for the year.

Mauricio Serna Vega: Got it. And then just on, on Lilly Pulitzer, I guess, just was wondering how are you thinking about the, the assortment strategy? I guess like on a go forward basis. I guess I recall like last year in '25 one of the things that had been successful was to move that -- bring more assortment that was higher AUR. And now it sounds like it seems maybe it went too far. So is the right strategy being more towards the historical type of AURs? Or just trying to figure out from that perspective, how should we think about the assortment strategy? And then I think you also mentioned on the prepared remarks that you were converting some, I think it was Johnny Was and Southern Tide stores into Lilly Pulitzer. Like, what's the rationality behind that considering that the brand -- the brand seems to be still, obviously struggling and you expect that to continue throughout the rest of the year?

Thomas Chubb: Yes, good questions, Mauricio. And we have, over the last several years, been able to grow the higher-priced business at Lilly Pulitzer. And even this year we continue to have success in those higher-priced points. But think of your pricing strategy as like a pyramid where that top tier, which for us in dresses is $400 and up, it's the little tiny triangle at the top of the pyramid and then you go down the pyramid, the pieces get bigger and bigger. That's, I think, the way almost any brand in the world is set up from a price architecture standpoint. And so what we did this year, you captured it, is I think we just went too far too fast in shifting up the pricing tiers and so last year in our entry price point bucket -- and for us, that's dresses, which are a big category under $200. Last year that would have been about half of the styles that we offered, would have been in that price bucket. This year it was down to almost down to a 3rd. I think it was like 35%. That was just too much too quickly. And as a result of that, some of those customers were willing to move up a price point, but a lot of them I think were not. And that's been -- I think the the bigger part of our problem has been the price architecture. So going forward, what we've done is we've gone back to what we had in '25. And '26 will move a little more in the upward direction than '25 -- excuse me, '27 will move a little more upward than '25, but that'll be a lot back from '26, if that makes sense.

Mauricio Serna Vega: Yes.

Thomas Chubb: And then on the why switch the stores, these are all locations. And Lilly Pulitzer, even this year as bad as it is, it's still a profitable brand. We very much believe in the brand and the team there. This is completely a fixable issue. And the locations that we're converting are some that, where we believe Johnny Was and Southern Tide just because of the level of brand awareness in those markets is going to have a long, hard road to profitability, but that Lilly Pulitzer can -- easily be profitable in -- a great example is on King Street, in Charleston, where Lilly Pulitzer had operated a store. The landlord was expanding a jewelry and watch business and needed to take the space back. So we were about to be off King Street in Charleston in Lilly. At the same time, we had a Johnny Was store that was losing a couple of $100,000. And Charleston's not the most natural market for Johnny Was. I do believe over the long term, that'll be a place where Johnny Was will win. But in the short term, and with all the other challenges we had, we knew if we flipped it to Lilly Pulitzer, we'd immediately start making a lot of money, which is exactly what happened. So it's those types of scenarios, Mauricio.

Operator: Our next question is from Paul Lejuez.

Tracy Kogan: Hi, it's Tracy Kogan filling in for Paul. I was hoping you could talk to us about the traffic, AUR, and average basket in Q2 for Tommy and Lilly. And then secondly, I was just wondering on freight if you're seeing any delays and then also related to freight, what level of pressure you've built into your gross margin, and if that has changed materially from what you expected as of 1Q?

Thomas Chubb: Yes, so in 2Q -- and this has really held pretty constantly throughout the year. Traffic has been pretty good. Conversion rates have been off a little bit. Average order values, average basket sizes have been 1 of the bright spots in the story for us. And then the AURs, I think mostly due to the level of that -- the IMUs are higher and the the MSRPs are higher, but the AURs have actually gone down a bit due to the amount of stuff that we promoted this year.

Tracy Kogan: Is that true? I would guess some of that's a little different though between Tommy and Lilly. Were you speaking about 1 of them in your answer there or was that, kind of, an overall?

Thomas Chubb: It was more of an overall comment. There are differences in the brands, but the trend's been pretty similar.

Tracy Kogan: And then on the freight?

K. Grassmyer: Yeah, on the freight we've built in some slight increases, but we have the a little bit of an offset from some some of our outbound parcels. We have -- we renegotiated contracts. So we're -- in the first half of the year especially, we've got a favorable there that's helping neutralize. Now in the second half, I'm sure we'll get some fuel, additional fuel surcharges that will have a slight increase. But overall, our base rates were starting a little bit lower on our outbound parcels, but our containers coming in from Asia are slightly higher and that's -- it's not a real material.

Operator: Thank you. There are no further questions at this time. I'd like to hand the floor back over to Tom Chubb for any closing comments.

Thomas Chubb: Thank you, Paul, and thanks to all of you for your interest. We look forward to talking to you again in December, and hope all is well until then.

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