Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Todd Slater of Lazard Capital.
Todd Slater - Lazard Capital Markets
I have a few questions, so I’ll just list them, starting with the Liz move out of Macy’s into Penny’s. How does that affect Jones in the department store channel and is there any kind of an offset in Penny with Jones wear?
And secondly, what are you guys thinking on the market size opportunity for Rachel Roy, given initial success and for the rollout?
And then I have a question on the retail side, given all the improving footwear trends you noted and the restructuring that you’ve done there, does the retail segment, any reason that segment shouldn’t turn at least a small profit in the fourth quarter?
Wesley Card
I’ll start with the last one first. I think that the guidance that John has given for the year probably would indicate that we are going to be break-even or hopefully have a profit in the fourth quarter. I think some of that is going to depend on how the consumer responds. We are cautiously optimistic the way the consumer is buying it. We are going to continue to have a strong fourth quarter, so we will see how that plays out but I think there’s a good chance that we will be in the black in Q4.
Todd Slater - Lazard Capital Markets
Wes, could I just follow-up -- does that mean sort of the low-end of that range down 2.5% comp would be sort of represent a break even and the higher end would represent some profit there?
Wesley Card
Well, I think a key element there, it’s not so much the comp. What we are seeing, and I think it’s across the board as stronger gross margins and lower expenses, so I think that it’s going to be the strength of the markdown, as opposed to just the relative comp. I think -- and that’s what we have seen as we have come through the summer. Inventories are very well controlled -- in fact, we are I think finding ourselves in a position many retailers are of even being a little bit understocked in selected spots and I think that’s a good thing right now. I think everybody -- it’s better to be on the low-end than to have pushed for a higher growth and just had more markdowns, so we’ll see how that rolls out.
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