Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Eric Tracy – BB&T.
Eric Tracy – BB&T
Starting with sales trends, certainly Q3 from the innerwear standpoint seemed to come in above our expectations, maybe talk through a little bit of what transpired there, whether there was a little bit of pull forward from Q4, just some timing versus market share.
Rich Noll
First all with Q3, we're overall pleased with our results, especially when you look at from a share perspective because as I talked about, we are gaining share in back to school. We had a similar offering for back to school as we did the prior year with the exception that we actually decided to increase our use of bonus packs. So last January when we started seeing the tough environment, we decided that this might be a year to provide a little bit more value to consumers and I think that actually helped us.
In terms of timing shifts in the quarter, you may remember that Q2 was a little dampened because there was a little bit of a shift from Q2 into Q3. There is absolutely no pull forward from Q4 into Q3.
Eric Tracy – BB&T
You mentioned into Q4 the trends obviously decelerating meaningfully. Can you talk about you assumptions that these trends continue at those levels of minus three or single digit declines for the balance sheet?
Rich Noll
Q4, everybody's calling for a tough environment and we're very similar. In terms of the patterns, there are three distinct time periods I think about for 2008. Business seemed soft from January through April/May, and then it got a little bit softer. It was a clear impact from gas prices and that's when overall retail traffic was down.
The last week of September with the financial crisis and the first couple of weeks of October, we saw not only in our categories but retailers very broadly; saw a real slowdown in sales. In fact, one of the retailers has commented that the day the DOW dropped 777 points; they had the worst comp store sales day than they had since September 11.
So I think the last couple of weeks has just gotten everybody a little bit nervous. I don't think that trend is going to stay and continue for all of Christmas, but I do think it's going to be challenging and we think that sales will decline. Exactly how much I'm not sure. The trend that we're seeing year to date has been 3% to 6%. Will it be a little bit more than that, a little less, it's hard to tell right now.
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