Question-and-Answer Session
Operator
(Operator Instructions) Our first today will come from Todd Slater with Lazard Capital Markets.
Todd Slater – Lazard Capital Markets
Good morning.
Dov Charney
Good morning Todd.
Todd Slater – Lazard Capital Markets
First of all, let me just congratulate you for hitting numbers that you’ve guided to over a year ago when the world was a very, very different place. I also think you maybe the only retailer guiding to an increase in revenue in ?09, as well as expansion in operating margins and an increase in earnings, so that you’re in a pretty elite group there.
I just wanted to ask you about your assumptions, a little bit especially on the comp line. What comp are you assuming in ?09 and just sort of maybe give us some range for the first half versus the second half. I am assuming flat to down in the first half given the cannibalization, something a little better than the second half. I wonder if you can just give us some color around your expectations.
Dov Charney
Yes, Todd I mean just to give you a little bit more color, I want to preface my comments by saying that given what’s going on in the economy, we are very hesitant to put out any guidance whatsoever, so what I’m going to give is highly speculative, but what we are assuming in our model is we would have flat to mid single-digit negative comps for 2009 given the amount of store openings that we’ve had in the second half of ?08. I think we are expecting wholesale to be flat to negative in a range of zero to negative 10%. That’s what we are looking on the sales line.
Todd Salter – Lazard Capital
Could you just sort of also bracket that first half, second half? Do you see an improvement over the course the year given the easier comparison and also talk, when does the cannibalization start to end, what quarter?
Dov Charney
The Cannibalization really comes in to play in the U.S. markets, because are Canadian and international stores, the stores that we opened in ?08 were very spread out, so we didn’t really see as much of an impact.
In the U.S. retail where you had a large number of store openings, you had 39 in the last two quarters and that’s why you see a slowdown I think in our comp performance in the U.S., but once those stores start to annualize, I think that’s going to provide a list to our comps and so I think it’s going to elevate in the second half.
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