Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Todd Slater – Lazard Capital Markets
Todd Slater – Lazard Capital Markets
I was wondering if you could talk a bit about what your direction is going to be across the enterprise for inventory commitments next year relative to 2009, up or down on a dollar basis. Could you give us a sense of your expense direction as well as is there an opportunity to lower the dollar level year-over-year just given the environment that we’re in. What would be the reasonable expectations on a thumbnail type level and also could you be a bit more specific about your sourcing costs. What percent up or down change are you anticipating as you’re starting to plan your orders at this point?
Wesley Card
In terms of inventory I think that we haven’t forecasted yet for 2009 or provided guidance obviously, we do that on our year-end call. We will expect retailers will order conservatively. Thus far with the spring bookings that we had in September we were booking on track. We are cognizant of the fact that if economic conditions change obviously there could be some adjustment in those orders but at this point orders are pretty much on track, even in fourth quarter we’ve shipped in October very well against orders. We’re seeing very little in the way of cancellations.
I think the overall conservative pattern that was expected for the back half has been helpful. We’re planning very cautiously against, we have realistic plans for next year. We planned realistically for spring. We bought our inventory against that. I would say that even with the drop that we showed in inventory this quarter, our inventories are actually much more current then they were last year.
Keep in mind that we have an inventory build up that we’re funding for, the big Wal-Mart program. I think as we end the year, inventories will be in excellent shape and more current because we’ve been very focused on moving quickly on our excesses, keeping inventory clean as we go through the year.
I think if there’s any inventory increment next year, its going to be to fund new programs such as l.e.i. Its hard to give specific numbers but we would think in our businesses inventories will be directionally down with the exception of l.e.i. where we’re building inventories and the focus is keeping them very clean.
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