Question-and-Answer Session
Operator
Thanks. (Operator instructions) Your first question comes from the line of Jeff Klinefelter with Piper Jaffray. Please proceed.
Jeff Klinefelter – Piper Jaffray
Okay. Thank you and congratulations everyone on a strong finish to the difficult year.
Paul Marciano
Thank you.
Jeff Klinefelter – Piper Jaffray
It is hard to limit to one question, but just to clarify something before my fundamental question is really Carlos on your Q1 guidance for comps, and if you could give us sort of the cadence of comp flow, as we came through the fourth-quarter, and then started the first quarter again kind of by month, and just to clarify, did you say Q1 comps would be down in the low to mid-teens, and how much of that is currency?
Carlos Alberini
Yes, currency has been affecting us in the last couple of months by about four points. So that as a general rule; you can use that for now because exchange rates have been impacted during the first quarter almost consistently throughout the month. With respect to the trends, we were very pleased with our fourth-quarter. We ended with 6.5% comp decline, but that was including currency. Before currency, the drop was about 2.8% or it was promotional. And really we have a commitment to run the business in a less promotional manner for sure, and we have planned our inventories accordingly. We were very pleased with February because we were already running with an adjusted inventory position, and in spite of that our comps were negative but not as severely negative as we were planning.
So that considered, we think that the months of March and April are a little bit challenging in terms of the comparison, because we have different spring [ph] rates, we will have relative to last year, and then Easter shifts from March into April. So that is also impacting the comparison. We're trying to be conservative and we think that planning the business in the mid-teens range is the right way to approach it now, and hopefully we do better than that.
Jeff Klinefelter – Piper Jaffray
Okay. So you are planning mid-teens. You have been trending a little bit better than that and you have to see what happens in March and April.
Carlos Alberini
Exactly, the good thing is that really in February we were pleased not only with the top line, but even as importantly or more importantly with the margin performance of the business, where we saw that the duration on production margin was almost negligible, and in many areas we had better performance than a year ago, where we were running full steam, and we think that that is great because obviously, with the kind of promotional market that we saw in the fourth quarter, that was a big question mark, but because our inventories good and the product assortment I think is terrific, it is definitely helping the top line (inaudible).
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