Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question or comment comes from the lines of Matt Nemer with Thomas Weisel Partners. Your line is open.
Matt Nemer - Thomas Weisel Partners
Good afternoon everyone. Thanks for the quantification on the one-time items in the second quarter of ’07. I was just wondering if there were any items like that in the back half of last year that we should be aware of from a modeling standpoint.
Chip Molloy
Hey Matt, it’s Chip. Taking a look at it, I don’t see anything that jumps out. There shouldn’t be any big one-timers. There’s still a little bit of the SLT cost that we quantified last year as went through, but other than that, there are no other one-timers that we’ll be anniversarying beyond Q2.
Matt Nemer - Thomas Weisel Partners
Are there any major offsets to those items? I was looking through the transcript, and it seems like there was maybe higher advertising expense last year, and then you had some one-time expense-related to strategic operatives, I believe.
Chip Molloy
We feel real clean about Q3 and Q4, even from a year-over-year perspective. The other thing I forgot to mention – of course, you got the 53rd week, so beyond the 53rd week and the SLT, there’s really nothing out there that we see that’s going to be big for your modeling. Q2 is sort of rough year over year, but beyond that, we’re good.
Matt Nemer - Thomas Weisel Partners
And you mentioned, in terms of your guidance, that in the second half, you’ll start to anniversary softer comps and I guess a less favorable mix of goods. Does the guidance assume a reversal of those trends or just a stabilization? In other words, do you have comps improving on a 2- and 3-year basis in the back half, and you expecting a shift back from the consumables to hard goods?
Chip Molloy
We are not expecting a shift back right now, and back half is indicative of just the current trends. So current comps, as you go in, you get weaker on the back half. It’s where we are from a current perspective.
Matt Nemer - Thomas Weisel Partners
And then lastly, can you comment on the productivity of re-merchandized StateLine Tack space?
Chip Molloy
With StateLine Tack, there are a couple of things to remember there. First off, from a sales perspective, in the first quarter of last year, we had about $17 million of StateLine Tack sales in the stores. We had about $5 million in our direct business for a total of $22. In the second quarter, we had about $10 million in the stores, and in the third quarter, $2 million. We did get the stores all remerch’d by the end of Q4—towards the end of Q4 by the time we got it all through—and we’re starting to see progress there. We started to see some in Q4, and we’re beginning to see that, but overcoming those lost sales, we still believe we have some ways to go, and that’s good for us for the back half.
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