Question-and-Answer Session
Operator
Ladies and gentlemen if you wish to ask a question please press * followed by a 1 on your touchtone telephone. If your question has been answered or you wish to withdraw your question please press * followed by 2. Questions must be submitted at this time in order for them to be registered. Please press *1 to begin.
Your first question comes from the line of Lauren Levitan. Please proceed.
Lauren Levitan – Cowan and Co.
Thanks. Good afternoon. Betsy two questions for you. First I’m wondering if with respect to the online music initiatives I know you said that ShockHound is intended to be a destination for rock music. I’m curious if there is opportunities or thoughts to take what you are doing there beyond that genre? Second, on the February sales release you were very helpful in giving us regular price comp trends to help us understand the impact that the promotional cadence is having on the business and you’re now anniversarying the beginning of eliminating those promotions. Can you give us some reconciliation between the comp guidance you just gave us for Q1 and the regular price trends that you have been seeing and how we should think about whether there might be really no difference between the two comp numbers as reported? Thanks.
Betsy McLaughlin
Okay. First let’s talk about the regular price comp trends for Q1. As we recorded our message in January on the call and also in February we started to see regular price business versus clearance business?regular price business turned positive as we moved through January and into February, which was very encouraging for us. Last year we had an extraordinary amount of clearance inventory due to the mark downs that we took in January so we felt it important to separate the two just so we could get an understanding of whether we were continuing to make progress with regular price. Also as we move through the back half of February the promotional comparisons stopped as mid-February last year was when we decided that everything would be regular price during non-peak periods.
So, our intention and what we hope is that the regular price portion of our assortment will be positive for the first quarter. We certainly have seen encouraging results to that end. The clearance business though continues to be substantially negative just because we do not have the inventory that we had last year. As we move through March and through April we will see less of an impact and by the time that we get to the end of the first quarter clearance should not be an issue. So our guidance which is down in a low single-digit comp does include an assumption that regular price would be positive and that clearance would continue in its low to mid double-digit negative.
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