Question-and-Answer Session
Operator
(Operator Instructions) Thank you. Our first question this morning is from the line of Eric [Sarota], Consumer Edge.
Eric Sarota - Consumer Edge
Good morning, guys. Hello?
Operator
It appears we’ve lost Mr. Sarota’s line, gentlemen. Our next question is from the line of Rob Moskow with Credit Suisse.
Rob Moskow - Credit Suisse
Good morning. I thought it sounded like a good quarter and you managed through the U.K. situation very well. Two questions -- one is, is there going to be an ongoing higher cost of doing business in the U.K. now that you are going direct? And then second, you said you are evaluating putting more investment back into the business if you have the money to do it. How can you -- how are you going to balance that with the possibility of dropping some of the money to the bottom line? Historically you’ve kind of done a little bit of both -- you’ve kind of raised guidance and reinvested. Can you still do that in the current environment or is the current environment tougher from a consumer standpoint if you --
Alan D. Wilson
Let me answer the first question first about the U.K. There will be a slight increase in our operating costs by going direct. We are working through what that is and how we are going to do it but the important thing for us is servicing the customers and our teams have done a great job with that and we don’t think it will be meaningful to results.
On the question around investment spending, typically we do up-spend when we have the opportunity and let some drop through the bottom line. It’s still kind of early in the year and we’ve had two small quarters behind us and so we are going to continue like I think most other companies are doing to monitor it on a near-term basis. As we see the opportunity to invest, we like the results that we had in the second quarter as we increased our investment, and we think driving the top line is extremely important. We think also that staying in front of the consumer in this kind of economy is also important, so we’ll continue to evaluate it. If there’s opportunity that some of it may drop through because the sales are better than we expect, then we’ll see that but we are not -- we don’t have any indication this early to change guidance.
- To read the full transcript on Seeking Alpha, click here »




