Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Lorraine Hutchinson – Banc of America
Lorraine Hutchinson – Banc of America
Just wanted to follow-up on your SG&A expectations, you made great progress this quarter cutting $30 million or so, can you put that into context with the new restructuring savings and then maybe talk about the pluses and minuses outside the restructuring program, where you’re saving and where you expect inflation on that SG&A line.
Mike Nicholson
In terms of the quarter as I mentioned in my opening comments, overall we were successful in reducing SG&A by about $30 million versus the prior year, $20 of the $30 comes out of four wall and the balance of it comes out, half of it with home office overhead and marketing.
In terms of restructuring savings for the quarter, we realized about $10 million of restructuring savings that’s reflected in the $30 million year on year reduction. In terms of how we’re thinking about SG&A for the second quarter, the $245, what I’d say is we are anticipating some incremental variable four wall expenses associated with a higher top line as well as some incremental marketing expenses in the back half of the second quarter as we position the brands as they move into the third quarter and fall season.
Lorraine Hutchinson – Banc of America
A quick follow-up on inventory, you sound really excited about the product coming into the stores in the second half, how are you thinking about ordering inventory, making sure that you’re still conservative enough in your plans.
Kay Krill
Well let me address the inventory right now, its really different by brand and at LOFT for example, our markdown inventory was particularly light entering Q1 and we saw very soft comps in the non full price product and much better comps in the full price product.
And we really think that in carrying more inventories in LOFT could have improved our comps somewhat but for Ann Taylor the comp benefit of carrying more inventory would have really been less significant and actually more risky because the product was not as compelling.
Going into the third quarter we have bought a little bit more in both divisions anticipating that we still will have a double-digit comp decline in the third quarter but not as significant as we’re experiencing the first quarter because we’re up against easier comps. So we have bought the second half lightly and conservatively but more then we bought the first half.
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