Question-and-Answer Session
Operator
Your first question comes from John Shanley - Susquehanna Financial Group
John Shanley - Susquehanna Financial Group
Pete, you had previously indicated on the last conference call that product margins would be impacted in the fourth quarter based on taking some heavy markdowns which you obviously did, has this?and that was intended to keep the first quarter pretty clean and basically with fresh merchandise and so on, has that policy changed at all, are you basically feeling that the promotional environment is going to likely continue into the first quarter and that’s the real reason for the reluctance to give us any guidance in terms of EPS results in the moving into ’08?
Peter Horvath
Yes, it’s more about just matching the inventory to the sales trend and clearly in the fourth quarter we were unable to do that and we always focus on managing inventory first knowing that opening seasons clean is really the key to having the opportunity to change a trend. We’re going to continue to monitor sales trends and make appropriate adjustments to inventory. It’s less for us, as you know, we’re an everyday value model, and it’s less about promotion. We do leverage our loyalty program with benefits that come with the program such as gift-with-purchases, et cetera. Basically we stick with our value priced proposition as Debbie noted in the conference earlier comments. The end of the season we clean up what ever is left and that’s what we saw in the fourth quarter.
John Shanley - Susquehanna Financial Group
Okay fair enough. Debbie we just got a new 30% off spring promotional flyer. Is this anniversarying an existing promotion and are you?is there any concern now that some of the spring merchandise that you have in the stores may not be moving as quickly as planned and therefore you’re doing some early promotions?
Debbie Ferree
First of all this is not anniversarying anything that we did last year and as we said before we remain committed to our value proposition. We’re pleased with some of the trends that we’ve started to see emerge, as I mentioned to you the color, the prints, the natural bodies and the flat sandals. Has been said many times before, traffic obviously is a concern to all of us and what we were doing here is we’re testing this concept to see if we can address traffic and also drive some regular price, some additional regular price.
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