Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mitch Kummetz – Robert Baird
Mitch Kummetz – Robert Baird
Let me start with the backlog, you mentioned down mid single digits at the end of the third quarter but up solidly for Q1 up even more then that for Q2 and beyond. Could you better quantify the spring backlog in terms of the increase that you have right now?
Don Grimes
We’re not giving a specific dollar amount by quarter. It’s up solidly in Q1 and up a smaller dollar amount in Q2. I will say that the dollar amount that we have on the books now for Q1 represents a meaningful portion of expected or anticipated Q1 revenue so I think it’s a pretty good indicator as to how Q1 looks. The shift from Q4 to Q1 is for the reasons we sighted during the prepared remarks.
Mitch Kummetz – Robert Baird
Is the spring backlog up across all of your business groups?
Blake Krueger
I would say generally yes that’s true.
Mitch Kummetz – Robert Baird
You mentioned in your comments that retailers are placing futures on a more normal basis. I know that in the last year there’s been a shift away from the pre-book with more retailers skewing towards at once orders. How much of the solid spring backlog do you think is just a reflection of that pendulum swinging back the other way where maybe as you go into the first half of next year more of your businesses can be captured by your pre-books and less at once and maybe your ultimate sales aren’t going to be as strong as what your pre-books might be indicating.
Blake Krueger
What’s happening is not unexpected. Last year Q1, Q2 and even Q4 of last year we saw the retailer scramble to adjust their inventories. Future orders fell off significantly for retailers and they only placed at once orders on a needed basis. The pendulum we hope and believe has swung back to more normalized order placement for future orders. They need their stores looking fresh; they need to plan their inventory. Inventory levels are a lot thinner today then they were a year ago so we’re not surprised. We’re seeing at once maybe fall to a more normalized level and that may take another quarter or two but future orders hopefully have reached a normalized level.
Mitch Kummetz – Robert Baird
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