Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Glass with Morgan Stanley.
John Glass - Morgan Stanley
Katie, maybe can you just flesh out a little bit the second half earnings guidance and why it’s going to be so much worse than it was in the second quarter? It would look like your comp expectations aren’t going to get worse, in other words, if the 1% is a good number. Is there something specifically in the margins that are going to be excluding the advertising shift which I think is essentially a wash in the back half or even the benefit. Is there anything else in the margins that is unusual relative to the first half?
Katherine L. Scherping
Other than replying to leverage G&A which is on a positive note, we’re going to lower our tax rate as well to 29% from the previous guidance of 30% but really it’s all sales and the change in our assumptions around our comp store sales. For year-to-date we’re running about 2% and our full year guidance is built around a 1% to 2% same-store sales expectation.
John Glass - Morgan Stanley
But in the second quarter your comps were slightly negative right, and do you expect them to get any worse than slightly negative in the back half of the year?
Katherine L. Scherping
Q3 is the most difficult comp of the year so I guess the answer would be from a guest count standpoint, yes, and we’re going to be rolling off price.
John Glass - Morgan Stanley
There’s no more incremental acquisition expense related in that guidance other than the $0.03 or is there?
Katherine L. Scherping
No, just the Q2 expense.
John Glass - Morgan Stanley
Then when you think about free cash flow, you talked about free cash flow generation, first of all can you just... can you maybe just talk about the theoretical CapEx for next year on that lower number of stores or if not can you at least just talk about what the maintenance CapEx of this business is excluding growth so we can figure that out and how do you intend to deploy that? I mean at this point given the leverage that you have maybe you could take on more debt but wouldn’t it be prudent to start paying some of that down just based on the environment?
Katherine L. Scherping
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