Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of David Mann – Johnson Rice & Co.
David Mann – Johnson Rice & Co.
On previous calls you’ve talked a little bit about your credit card portfolio and the performance of your customer base, can you just give us an update on what you’re seeing there. Are you seeing a deterioration?
Edward Record
We’re not seeing anything material. Our current aging is within 30 basis points of last year and our 90 days plus is materially the same as last year. So from an approval rate standpoint we are seeing some fluctuations by region of the country but in general we’re flat to last year and our penetration is flat to last year, roughly flat to last year.
David Mann – Johnson Rice & Co.
On the unit growth, can you just clarify how many fewer stores have you cut back from your previous guidance and is this a more final number or is there the potential to pull it back further, how many leases are actually absolutely signed?
Andrew Hall
When we came out at the beginning of the year we were talking about 70 stores and that was really kind of a high end of the range as we were thinking at that point. We talked about 70 and not a range because we wanted to bake into our guidance an actual number and not a range in the sales number. So the 55 to 60 is a very solid range at this point. We’ll certainly land in between there. The fluctuation from the 70, when we’re always thinking about 70, the range was always about 60 to 70 and now we’re 55 to 60 and quite frankly the reason that came down a little bit was the current economic conditions.
Not a decision to pull back on the openings but when we look at these new markets and look at the sales that we’re going to have for the first 12 months of operations, when we compare them to like-sized markets, obviously with our comps down this year, at the low end, I guess we’re guiding about 2.5% down to 4% down, that pulls the sales down on those new stores. So on several of our leases we kicked them back to the landlord to renegotiate stronger terms for us. Some of those leases during that process will be delayed into 2009 as we work through with the landlords’ terms that meet our hurdle rates. We’re very consistent and very requiring on our new store approvals that we are not going to sacrifice our hurdle rate given the current economic climate. We’ve got solid hurdle rates out there that we expect the new stores to meet in year five and we’re not compromising on that.
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