Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Benjamin Rowbotham - Goldman Sachs.
Benjamin Rowbotham - Goldman Sachs
My question really is centered on the same store sales trends. I know last quarter you talked about volatility in traffic. Has that smoothed out? Also, was the sequential improvement more traffic driven or ticket driven in up to date?
Emanuel Chirico
We’ve seen the comp store trends really solidify and stabilize. We’ve seen improvement month by month as the second quarter improves. Our comps in May were minus 5, our comps in June were minus 4, and then we moved to plus 1 in July and that trend continued into the first 2.5 weeks of August. So clearly it’s been much more stable. It’s been much more consistent, and obviously the last six weeks have been much more positive.
From a traffic point of view, traffic has improved somewhat but our conversion rates and our average unit retail at the door have also improved. So although the traffic trends are better, they’re not dramatically better from what they have been. We’re clearly outperforming the market and the environment that we’re in.
Michael A. Shaffer
Then as we look at the SG&A performance in the current quarter, I think that came in a bit ahead of plan. What exactly could that be attributed to? Were the cost savings being pulled forward?
Benjamin Rowbotham - Goldman Sachs
Michael A. Shaffer
It was a combination of a couple different things. We did experience some cost savings above our plan. We are actually ahead of ourselves in terms of our restructuring initiatives. We’ve executed on restructuring plans. In addition to that, we did have savings on the advertising which I mentioned in my commentary. We did collect some lesser revenues in advertising from the prior year which equates to less advertising expense.
Benjamin Rowbotham - Goldman Sachs
As you look to the back half and you look at the guidance, are you strategically more intent on taking market share or margin? Put differently, where is more upside probably lying?
Michael A. Shaffer
I think there’s opportunity on both areas. Just the way we built the margin plan and the estimate, there’s opportunity against our estimates which I think is pretty significant. I don’t want to lead anyone to believe, it’s still very promotional out there. What’s not happening is there’s not a lot of clearance merchandise to move and that’s the biggest cross when it comes to markdowns. But we are being aggressive on our opening price. When goods hit the floor, we’re hitting them early to keep the consumer engaged. We believe we really need to incentivize the consumer to drive sales, so we are coming out of the box very sharp on pricing and we think that’s gaining dividends for us from a market share point of view and it’s also keeping our inventories very clean and based on the way we built the plan, we clearly have margin opportunities in the third quarter but even more so on the fourth quarter.
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