Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Bill Sims with Citigroup.
Bill Sims – Smith Barney Citigroup
Thank you and good morning. Congratulations on an excellent quarter. Mike, my first question is to you. Can you give us an update on the operating margin performance of the bottom two deciles stores? Are those stores producing the same comp and margin improvement as the rest of the stores at a faster rate, and what are the main drivers of that improvement?
Michael Foss
I’m sorry, Bill. On the which stores? The . . .
Bill Sims – Smith Barney Citigroup
The bottom two deciles.
Michael Foss
Okay. Right, right. I don’t have a specific percentage to tell you. You’re talking about how we showed it at the analyst conference?
Bill Sims – Smith Barney Citigroup
Correct.
Michael Foss
I don’t have that level of detail with me here, Bill. I apologize for that.
Bill Sims – Smith Barney Citigroup
Can you just give us more color, then, on the overall rate of improvement? The number of stores that you’ve indicated that are underperforming have shrunk over the past year. Can you give us an idea of what is driving the drop in underperforming stores?
Michael Foss
Bill, let me make one comment first. Just given the strong sales performance we’ve seen in the first quarter and Phil’s comment that we saw that strength across regions and across markets that clearly, although I don’t have the specific percentage for you, I will pretty much guarantee you that we had very strong performance in those stores as well. As we demonstrated in – gave you the specific numbers for the fourth quarter, number one.
Number two is, I think Danny can comment on some of the actions that we’ve taken within the retail organization to drive this strong performance, things like ELITE teams and such.
Danny Clark
What you’re referring to is the work that we did with the ELITE teams last year, and we’ve continued to work with those folks this year. So think about ELITE team as just mobile, eight-plus management teams that can go out to the organization and help close the gap in performance.
You know last year we had a tremendous gap in our bottom-performing stores compared to our top-performing stores, and so Mike’s point is as we’ve lifted our overall business that gap has improved.
This year we’re focused on gap performance as it relates to services areas, PC services, home theater installation and opportunities that we have in the baskets inside the stores and we’ll be utilizing the ELITE teams against that work.
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