Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of John Morris – Wachovia
John Morris – Wachovia
You talked about managing inventories better can you break it out a little bit about how you’re managing apparel relative to the hard goods which are doing better and where you see that going for the balance of the year given the environment and how you’re planning to it?
Richard Brooks
There’s no secret to this which is again our business model has the strength of being a branded business model so we work very closely with our brands at managing inventory positions. I think we demonstrated that we’ve done a pretty good job of that through the first six months of this year.
So its about a brand partnership for us and that means we work very closely with them to work on based on what’s selling, what’s not selling, switching things out, moving things around, pushing orders out, pulling orders up. It’s a very dynamic process that our buyers are working on every day as we balance out the best of what’s working with the stuff that’s not working in our system.
And that’s fundamentally what we do. It’s dynamic and ongoing.
Trevor Lang
On the projections and again this is where the merchandising team I think has done a really good job for a long period of time. As you know the company was double-digit comping for most of the last five years until we got to the fourth quarter of last year. They had been able to do that on moderate and sometimes less inventory per square foot and they’ve been able to react very quickly as business has gotten tougher in this macroeconomic environment. Our inventory per square foot was down about 8% on a per square foot basis at the end of the first quarter, down 6% at the second quarter.
Our current expectation as we look out to the third quarter is that total growth in inventory will be in the mid teen range but with a 21% increase in square footage growth you would expect that inventory per square foot would be down similar to where we were in the second quarter which again was about 6%.
As we look out to the end of the year when we get to January, we are currently showing just a modest amount of inventory per square foot declining and the reason for that is there are certain parts of our business where we think we can do a better job of providing for our customers. We know there’s some transitional product between winter and spring that we could do a better job of based on our results last year and things we tried. We also know there are some warmer weather doors that we have opportunities to do things down there as well.
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