Question-and-Answer Session
Operator
(Operator instructions) And we’ll take our first question today from Kerry McInerney of Banc of America Securities.
Kerry McInerney – Banc of America Securities
I was wondering if you could talk about some of the back half expectations that are implicit in guidance, sounds like the higher end of the range looks a little bit of comp left and you’re also looking for gross margin to see less pressure there in the second quarter. So, I was wondering if you could talk about that a little bit and maybe also give your inventory expectations for the back half.
Keith Plowman
Okay, I’ll address the guidance piece of it, Kerry and then I’ll turn it over to Tony for the inventory peak in the second half. As you look at our guidance, what we are trying to accomplish here is we are to trying to give a range of what expectations could be based upon in more difficult environment. As you look at our results in fiscal 2007, which is where we built forward from and you look at the first half of the year versus the second half of the year. In the sales arena, we really did have a stronger performance in the first half of fiscal 2007 and started to see the macro environment deterioration in the second half of 2007.
So, as we go forward in a year and we were building up to our numbers, the 5.1% that we realized in the first six months of 2008 compared back to an adjusted basis taking out the comparison for liquidation of inventory, compared back to about 2.1, a little over 2% decrease in 2007 for that same six months period.
As we go forward into the fall season in the second half of 2007, we were down closer to 3.5% for the fall season in our comp store sales results. So what we said that we would be down 3.5 for the year as of the better end that caused the lower end of the loss range of our guidance. That is with the expectations that because of the comparisons, the fact that we had a much higher decrease in the second half of last year, we would not have as much as of the fall in the comp store sales results. That’s how we built the lower end of our guidance of the loss range.
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