Question-and-Answer Session
Operator
(Operator Instructions). Our first question is coming from Mr. Rick Nelson of Stephens, Inc.
Richard Nelson – Stephens, Inc
Mike, can you comment on what you're seeing in October both new and used cars from a sales standpoint and then inventories were at pretty low levels at the end of the quarter, maybe where those stand now and how long you think it's going to take to get the stores fully stocked?
Michael E. Maroone
All the published reports speak to a higher selling rate in October. We're seeing the same thing. I think the forecasts that are out are at about 10.3 million rate. We are seeing re-stocking. We are moving our new and used inventories up and today find our inventories sufficient. Our mix is in much better shape. We've cleared out a lot of the old merchandise and prior year models and really have a lot of good, fresh inventory as we work through the fourth quarter.
Richard Nelson – Stephens, Inc.
Could you also comment on geographic areas of strength and weakness and California and Florida would be of particular interest?
Michael E. Maroone
I would say that California continues to struggle, although it's stable. It doesn't fall more but it hasn't recovered a lot. We see a lot of pressure in Arizona and Nevada, which were a little bit later to the party. Florida recovered some for us in the third quarter and actually had a pretty decent third quarter.
I think it's too early to really point to a full recovery but we clearly have hit bottom and it looks like we're recovering in Florida. Some of our other markets, Texas continues to be a good, stable market for us, and we have other markets such as Denver and Atlanta and Memphis and Chicago that have performed at a very nice level.
Richard Nelson – Stephens, Inc.
Also want to ask you about used cars. We have seen price erosion at auction. I think you made reference to that in your comments. Do you think that says anything to demand for used cars?
Michael E. Maroone
I'm not sure about the demand. I think as the economy recovers, I think the used car market will get stronger. I think the improvements in the credit markets and the ability to get financing has given that business a lift.
We felt that the prices were very high in the third quarter and took a pretty conservative posture on our auction purchases. We're happy to see the prices moderate and I think you'll see us build our inventories through the fourth quarter.
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