Question-and-Answer Session
Operator
(Operator Instructions) Your first question is from Neely Tamminga – Piper Jaffray.
Neely Tamminga – Piper Jaffray
I just wanted to get a sense of how much in the guidance for Q2 are you expecting a recovery on your easy compare really in July? If I think if I remember correctly the business really started to fall apart particularly in accessories in July last year? And I'm just wondering if the flow of the quarters are you expecting much to come back in July or is that for lack of a better term, just like a bonus relative to expectations?
Ronald W. Ristau
I would say that we do think there is some opportunity in July because of what should be number 1, better inventory and pricing and also some continued recovery in the accessory businesses via a year ago. We also think that the majority of our comp last year was actually driven by a delivery that we put in in late May into June, and we are replicating that delivery pattern this year, so we believe that we will be in reasonably good shape relative to the comp comparisons even though they are slightly higher in the second quarter. We feel confident about our guidance and our early trends are actually running slightly above our current plans so, so far, so good.
Neely Tamminga – Piper Jaffray
And then in terms of cost pressures, obviously everybody's pretty focused on what's been going on out there and China, just wondering, are you seeing anything whether it's with respect to logistics, having to bring in inventory deliveries early, or because of China, Olympics, can you just help us to understand from your perspective what you're seeing out there?
Ronald W. Ristau
Well, a couple of things, number one, the Olympics will not be disruptive, people have planned for that for many years so that's really not going to disrupt the supply chains in any way. We are seeing some cost pressures obviously out of the Asian economies due to increased oil prices, that's a fact of life. We are continuing to manage that by continuing to stay diversified and seek out sources of supplies that are most advantageous to us. We do have a diversified sourcing base so we continue to leverage that and also leverage our largest factories by making them more important and then continuing to consolidate our volumes.
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