Question-and-Answer Session
(Operator Instructions)
The first question is from Paul Lejuez from Credit Suisse.
Tracy Hogan- Credit Suisse
Thanks, it is Tracy Hogan filling in for Paul. Two questions: first, could you tell us how your expanded and relocated stores are performing; and secondly on the guidance, was the reduction primarily due to first quarter or have you reduced your view for the remainder of the year as well?
Mike Marchetti
I will take the first questions on the relo. The relocated stores are performing approximately 10 points above the company average. Their operating margins are slightly better than prior to relocating them; and the expanded stores are operating at about +5% of company average in sales and their operating margins are also slightly better than they were prior to expanding them.
As far as the guidance goes, the first quarter was impacted into the annual results and for the balance of the year we have slightly modified the go-forward numbers to reach the new guidance numbers. But most of the impact was from the first quarter.
Operator
The next question comes from Crystal Kallik of D.A. Davidson & Co.
Crystal Kallick- D.A. Davidson & Co.
Just a couple of questions as well, and to follow up on the guidance. It looks like you are still looking for a negative mid-single digit comp coming off the -17 in Q1. Can you talk about how you come up with the guidance what your assumptions are as far as the acceleration in comp improvement as we go through the next few quarters?
And then also it looks like you said CapEx would still be $10 million. Your thoughts on inventory and whether or not depreciation will change much from last year.
Mike Marchetti
The depreciation is going to be fairly consistent with last year. As far as the comps go we are looking at the back half of the year to be better comps than what we are seeing right now. Last year we had higher negative comps than what we had the year before and this first quarter we were down only 1.5% on comps this time last year. On a two-year basis they are fairly consistent.
We are looking at inventory to be consistent with last year on a per-store basis.
Crystal Kallick- D.A. Davidson & Co
So that flat is what you end the year with on a per-store basis?
Operator
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