Tom has almost 30 years of CFO experience and deep roots in brands and retail, most recently in footwear at Deckers brands.
In the U.S., there was nothing normal about the cadence of back to school.
Stores were open for about 95% of the possible days in the quarter compared to about 70% during the second quarter.
New customers continued to deliver increased volumes as new website visitors were up almost 40%, driving an almost 60% in new customer purchases.
The combination of these drivers led to a total revenue decrease of 11% year over year.
This result was better than we expected due mainly to stronger sales at Journeys and represents a meaningful improvement from last quarter's 20% decline.
The drop in-store volume was partially offset by another strong quarter of digital growth with comps up over 60%.
Equally encouraging was the health of our inventories which were down more than 20%, allowing for fresh receipts of holiday merchandise.
E-commerce generated almost 45% of Schuh's sales in the quarter, even with most stores being opened.
In addition to store traffic being down over 50% for the quarter, some of J&M's airport and street locations have yet to reopen which further impacted retail sales.
Highlighting the traction we've already made, casual and casual athletic represented about 60% of footwear during our last fiscal year and apparel and accessories drove 40% of total sales.
Looking forward to the coming year, J&M has focused 90% of new product development on the expansion of its casual offering to include casual athletic, leisure, rugged outdoor and performance which follows upon its highly successful reentry into Gulf this spring.
And as a result, we're closed for more than 10% of the possible operating days in the month.
With the ability to fulfill online orders via our distribution centers or from any of our almost 1,500 store locations, we're well-positioned to meet the surge in demand.
In Q3 sequential improvement compared to the prior two quarters in both revenue and gross margin, along with a lower tax rate and a small pickup in SG&A drove results back to nicely positive levels with adjusted earnings per share of $0.85 compared to $1.33 last year.
For the third quarter, ending cash was $115 million, with borrowings of $33 million for a net cash position of $82 million.
We entered the quarter with $299 million of cash.
And during the quarter, operations generated $5 million while we spent $8 million on capital projects and paid down $178 million in borrowings using $184 million in total.
As a reminder, early this year, we increased our North American ABL borrowing capacity to $350 million.
Consolidated revenue was $479 million, down 11% compared to last year driven by a lower back-to-school revenue, continued pressure at J&M and the impact from store closures during the quarter.
Robust e-commerce comp of 62% was offset by a decline in-store revenue of 22% driven by a comp decline of 18%, while our stores were closed for 5% of the possible operating days during the quarter.
Digital sales increased to 21% of retail business from 11% last year.
Overall, sales were down 10% for Journeys with comp sales down 6% while store traffic was down well into double digits, much higher conversion and transaction size lifted Journeys' comps.
At Schuh, overall sales were down 3%, while sales were up 1%.
At J&M, overall sales were down 45%, and comp sales were down 43%.
Our licensed brands, overall sales were up 91% due to Togast acquisition.
Consolidated gross margin was 47.1%, down 210 basis points from last year, 100 basis points of which was related to J&M.
Consistent with last quarter, increased shipping to fulfill direct sales pressured the gross margin rate in all of our businesses, totaling 50 basis points of the total overall decline.
Journeys' gross margin increased 110 basis points driven by lower markdowns.
Schuh's gross margin decreased 320 basis points, more than half of which was due to increased e-comm shipping expense with the balance due to higher penetration of sale products.
J&M's gross margin decrease of 1,370 basis points was due to more close outs at wholesale, incremental inventory reserves and higher markdowns at retail.
Adjusted SG&A expenses were down 11%.
And as a percentage of sales, leveraged 10 basis points to 44.1% as we realized the collective benefits of our organization's disciplined actions to manage expenses and relief from government programs.
In addition to the rent abatement savings, we have negotiated 58 renewals year-to-date and achieved a 28% reduction in cash rent or 27% on a straight-line basis in the U.S., this was on top of an 11% cash rent reduction or 8% on a straight-line basis or 160 renewals last year.
These renewals are for an even shorter-term, averaging approximately one and a half years compared to the three year average we saw last year, with almost a third of our fleet coming up for renewal in the next 24 months, we should make substantial progress here.
In summary, the third-quarter's adjusted operating income was $13.9 million versus last year's adjusted operating income of $26.7 million.
Our adjusted non-GAAP tax rate for the third quarter was 4% reflecting the impact of foreign jurisdictions for which no income taxes were recorded.
Q3 total inventory was down 22% on sales that were down 11%.
Journeys' inventory was down 28% on sales that were down 10%.
Schuh's inventory was down 22% with sales that were down 8% on a constant currency basis.
J&M's inventory was down 3% on sales that were down 45% reflecting the pack-and-hold inventory and the level of reserves we believe will be adequate to better rightsize the current inventory levels.
Capital expenditures were $8 million as we -- as our spend remains focused on digital and omnichannel and depreciation and amortization was $11 million.
For the month of November, stores were open for about 88% of the possible operating days and currently, 97% of our stores are open.
While the annual tax rate is expected to be approximately 18%.
I'd like to highlight that in the fourth quarter, we expect it to be approximately 40%.

Summary:
In the U.S., there was nothing normal about the cadence of back to school.
In Q3 sequential improvement compared to the prior two quarters in both revenue and gross margin, along with a lower tax rate and a small pickup in SG&A drove results back to nicely positive levels with adjusted earnings per share of $0.85 compared to $1.33 last year.
Consolidated revenue was $479 million, down 11% compared to last year driven by a lower back-to-school revenue, continued pressure at J&M and the impact from store closures during the quarter.