Question-and-Answer Session
Operator
At this time I would like to remind everyone if you would like to ask a question please press * then the number 1on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Your first question comes from Eric Tracey. Your line is open.
Eric Tracy – BB&T Capital Markets
Good morning. Congrats on operating in a very difficult environment. But if we could to kind of start off with the top line, Rich. Maybe just if you could provide a little bit more color to what you are seeing in retail if anything has changed relative to that 1-3% top line growth you expect to achieve over the next 3 years for this year? If not there is obviously an expectation that things improve in the back half of the year with back-to-school and holiday and if you could just talk about your expectations there?
Rich Noll
There is no question the near term is tough and a little bit tougher than we were expecting but I believe we are working on the right things with our retailers to drive those key selling periods. Exactly how much those key selling periods can help overcome the soft start really remains to be seen but we are working on the right things to build our brands and to help our retailers actually bring people back into stores. So we are clearly committed to our long term growth goals of 1-3%.
Eric Tracy – BB&T Capital Markets
Okay fair enough. And then maybe Rich or Lee in terms of the gross margin up 290 basis points year-over-year despite what is obviously a weak environment. Could you talk about what it would be in a more normalized scenario? I’m assuming significant promotional activity was a drag?are you able to sort of quantify that for the quarter?
Rich Noll
What we saw in the first quarter on a dollar basis for margin was a net dollar increase of about $3 million to $348 million. What we saw in the quarter were benefits from our cost reduction initiatives that actually offset the sales decline in the quarter so we were very pleased with our cost reduction initiative. We did see cotton go in the first quarter only at $0.54 per pound versus $0.56 last year so as we stated in our cotton comments we will see that increase in the balance of the year.
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