Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Mandel – FTN Equity Capital Markets Corp.
Mark Mandel – FTN Equity Capital Markets Corp.
I just wanted to drill down a little bit further on the traffic versus ticket. David, I think you said for the month of June that traffic was flat but the basket was down $0.75. First of all, that $0.75 decline was that for the month of June or was that for the full quarter?
David Abelman
That was for the full quarter.
Mark Mandel – FTN Equity Capital Markets Corp.
So if you look at the month of June, were your comps positive for the month of June or at least flat?
David Abelman
Our comps showed improvement over the quarterly trend but they were still down.
Mark Mandel – FTN Equity Capital Markets Corp.
As far as the second half, you made some positive comments again, are you anticipating a return to positive comps either in the third or fourth quarters of this year?
Rick A. Lepley
I think that it’s too much to expect that we could get back to zero I think in that period. We have a better chance of doing that in the fourth quarter than the third quarter I think. We realize that our competitors are flat which is pretty good in this environment but we’re also doing a lot of other things here obviously at this time than just focusing on trying to drive our comps. So, we expect improvement but I don’t think we would want to give any sort of guidance that we would get back to flat.
Mark Mandel – FTN Equity Capital Markets Corp.
With respect to the gross margin and SG&A could you provide some further details? I know the gross margin was up 20 basis points, if you could break that down in any greater detail? And also, if you can quantify the components of the SG&A that you gave on the call I would appreciate it.
David Stern
Although we haven’t released publically and we continue not to release tremendous detail, there was if you recall from last year’s call a decrease in our gross margin related to clearance activity for stores that were to be closed later in the year. So, we got a little bit of a bump related to that and that was partially offset by deleveraging of our warehousing, purchasing and receiving costs over a lower store sales base.
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