Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Omar Saad from Credit Suisse. Your line is open.
Omar Saad – Credit Suisse
Thanks. Good afternoon.
Rich Noll
Hi, Omar. How are you doing?
Omar Saad – Credit Suisse
Good. Thanks. I actually want to start with a question for Lee on the SG&A line. In the first quarter, I kind of remember you guys talking about some costs have been pulled forward. It sounded like some of the marketing stuff came out of the second quarter but there were still some IT spend, how do we think about this kind of on a quarterly run rate and on annual run rate? Last year, you had some payroll come out and towards the end of the year in terms of some middle management that you cleared out. Can you help us understand the kind of the puts and the takes on the dynamics on this line item of the P&L?
Lee Wyatt, Jr.
Sure. I think if you think of the second quarter, it’s very much like the first quarter. We continue to have cost savings initiative benefiting the SG&A line but they’re being masked by some timing issues primarily around those timing issues of IT spend which were planed to be higher in the first half and media spend which was higher in the first half and we’ve got some other smaller things like distribution in the second quarter. Most of those are timing issues that kind of mask or offset the benefits from our cost savings initiatives. Those should turn around in the fourth quarter.
Omar Saad – Credit Suisse
Got it. Got it. Okay. And then Rich, on your side of the equation, you think about kind of the revenue trends and the environment and whether people are going to stores and if they’re in the stores, they’re just buying bread and milk or are they buying – are they going to the apparel section. What are your plans? How do you think about driving your business at retail on this environment going to the second half, can you give more details around them, the programs you have in place and how retailers are thinking about things, are retailers just really cutting back on their inventory levels and planning extremely conservatively? Any color would be helpful.
Rich Noll
Certainly. First of all, people are coming into stores every single day and buying lots of our products. I mean, we sell $2.2 billion products a year and each and every week, people are buying it and we are shipping it. What we’re talking about is sort of what the overall impact is on the margin. There’s no question. Consumers are visiting stores slightly less than they were before and spending a little bit less in our categories as more of those dollars go towards the food and so and so forth. To be quite honest in terms of execution, I am actually quite pleased with the plans we have in place for back to school and if this was a normal year, I’d be very optimistic. I think we’ve got the right promotional offering that's stronger than it was last year. We?ve got better promotional placement and actually timing of our ads, but I am a little bit worried about the overall backdrop and if we’re going to see less consumers come in albeit a little bit judicious with their spending. But we've got a lot of things that are working well. Men’s underwear is doing well. Socks are doing well. Our international business is doing well. I think the one area I called out in my prepared remarks that I’ll reemphasize is intimate apparel. In fact, it's slightly more than half of our decline in the quarter and there's really three reasons that are driving that specifically.
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