Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Blaeser with Morgan Joseph.
Jeff Blaeser - Morgan Joseph
Thank you, and good morning. Couple of questions, one on the product margin improvement. What was the primary driver for that source in retail, wholesale pricing?
Tom Moran
In the first quarter it was primarily the fact that we were clearing less discontinued goods this year versus last year, with the accompanying lower margins.
Jeff Blaeser - Morgan Joseph
Okay. And then, also any longer term store closure target, CapEx budget for '08 and do you think there is any additional operating costs that you can eliminate in '08 or '09?
Tom Moran
Well, so what we have previously communicated talking about the capital first was, we were targeting a range of $20 to $25 million for 2008. So we're scaling that back to $15 million to $18 million range. Just in terms of being more prudent and conservative with our cash expenditures. We are always evaluating the business, in terms of monitoring what our expense levels are, and especially making sure that what we're doing is appropriate given changes in sales levels. So that's an ongoing process as well. But we have gone ahead and made a proactive change on the CapEx side.
Jeff Blaeser - Morgan Joseph
Okay. And the operating costs. Any other opportunities you see there for further reductions?
Tom Moran
Well, nothing that we're specifically calling out at this point. We put together a budget that delivers small, but positive earnings despite a minus 3.5% to 5% comps expectation. So we've scrubbed expenses pretty tightly. But it is a never ending process to continue to look at various operating efficiencies and doing what we can with it.
Geoff Eisenberg
I will just add it's important to note, that we are just beginning our season, in fact the season really hasn't even started in certain parts of North America. So as that unfolds we'll have a much better idea of what we should be doing.
Jeff Blaeser - Morgan Joseph
Thank you very much.
Geoff Eisenberg
Welcome.
Operator
Your next question comes from Anthony Lebiedzinski with Sidoti & Company.
Anthony Lebiedzinski - Sidoti & Company
Good morning, guys. I joined the call a little bit late, so I apologize if I may have missed it. But did you guys reaffirm your guidance for '08 or what's the current guidance for 2008?
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