Question-and-Answer Session
Operator
(Operator Instructions) And for our first question we go to Omar Saad with Credit Suisse.
Omar Saad – Credit Suisse
A quick question Mike on just kind of a clerical question; did you say at the beginning of the call that $0.06 -- the quarter benefit is by $0.06 from earlier timing of shipments and expenses, I just want to make sure you clarify that?
Michael Casey
Absolutely, of the $0.10 I’d say probably $0.04 is due to better retail performance, better spending. I’d say the other $0.06 is largely due to the timing of shipments and timing of spending.
Omar Saad – Credit Suisse
So, I wanted ask you, if you look back at some of the comments from the last call, last quarter, you talked a lot of about, as a company talked about some of your strategic initiatives to lower pricing to retailer, raising retailer -- getting retailer margins going higher kind of in the phase of an inflationary kind of cost environments. So could you give us an update on those kinds of three dynamics where you stand on them, what inflation kind of impact you have been having and you expect it to have and whether you still want to continue to pursue that strategy?
Michael Casey
Going through the pricing I think we have clarified the object. Really it is to provide clarity and a stronger value message to the consumer and what you’re referring to was the pricing before the firm markdown. We probably caused a little confusion and that was interpreted for the whole season and that we are lowering wholesale prices accordingly. It’s really a change in more of the pricing strategy, the everyday pricing strategy consuming before firm markdown.
The second objective was really to increase, the customer and our margin. So, we really -- the strategy changed initial prices from high low to everyday low pricing on certain products, sell more prior to markdown and then reduce margin assistant at the end of the season. We based this on research we have done with stacks, but the bottom line is in the average wholesale prices probably went down about 4% and it was all attributed to one segment of the business which is about 15% of our revenue.
Our internal margins which is the playwear separates-- our internal margins we feel our new, there’s no impact to our total margins, so we are not lowering wholesale and lowering our internal margins.
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