Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jack Murphy with William Blair & Company.
Jack Murphy - William Blair & Company
First on the first quarter earnings report back in May you actually didn’t have specific guidance because of the economy and the uncertainty around the consumer. Beyond the sale trends improving somewhat, was there anything specific about what you’re seeing in the numbers that give you confidence to issue specific guidance? Then I am just wondering on the new sales guidance, if you could give us your thoughts on free cash flow for the full year 2009.
Marc Stolzman
I think you are right, we have continued to look at this year with cautious optimism and really the uncertainty that exists in the environment is what caused us to pull back on any specific guidance. With that said we are now two quarters past the economic challenges that we saw in the fourth quarter of last year and that has given us quite a bit of additional data to calibrate against what the Company has seen in 10 years of operating history of how each quarter responds to the previous quarter and the previous several quarters. So, it does give us some additional perspective and it has allowed us to tighten our thoughts on what we think will happen in Q3 and Q4.
With that said, and just echoing my comments earlier, we have provided that guidance with some caution of not knowing exactly how the fourth quarter will perform, but we did feel that given the directional guidance we have been providing over these last two quarters that we do know more and felt that we could provide this range with a greater degree of confidence.
I don’t have a specific comment about free cash flow and we haven’t provided any guidance regarding free cash flow, but certainly the range that we have predicted here and also the performance we have seen year-to-date with the reestablishment of a lot of our traditional working capital dynamics leaves us with a pretty good feeling about how free cash flow will perform.
Diane Irvine
I would just add that I think we have always felt we will always let you know our thoughts in terms of what our visibility is and I think that is what we want to do here today. I think we see great things in our business relative to the competition. We are a destination for value that is really resonating with consumers at this time. I think last quarter we talked a bit about some directional guidance on free cash flow. If anything I would say when you look at this quarter I think things are even better than when we talked last time, and certainly as we look ahead, while we don’t know anything more about the Christmas season we are very optimistic that with the comp we had last year that we will perform very well.
- To read the full transcript on Seeking Alpha, click here »
