Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Black - Barclays Capital.
Jeff Black - Barclays Capital
John or Michael, if you could just remind us, how much of the product classifications are currently being touched by the micro-merchandising initiative and what are the learnings thus far this year as you expand that out? What I'm really get at is the margin is up at 9-ish this year; as we look ahead to next year, what prevents us from going higher or what gets us to the next level?
Michael O'Sullivan
We've rolled out micro-merchandising to about two-thirds of the chain in terms of product category and we expect to have rolled out to the whole chain by the end of the year.
We're monitoring it very closely. We're very happy with how it's working. It's doing the right things in terms of sending the right product to the right stores.
But with that said, we always believed it would take a couple of seasons for it to have a meaningful impact in the stores, so we continue to believe we won't really see a significant benefit until 2010.
In terms of our current business, I think if you're looking for drivers of our current business I wouldn't look at micro-merchandising. I think it might be having a margin benefit, but the real benefits we're getting are from the lower inventory that Michael mentioned, pressure assortments, the better merchandise, the trade-down customer, the exit of the other retailers. All of those factors I think are really what's driving our current trend.
Jeff Black - Barclays Capital
And then just in terms of the comp trend, if you could just comment on what's driving those, more specifically, traffic, full price, etc.?
John Call
In terms of comp trends, our traffic is up high single digits, offset by the basket, which is down low single digits, driving the comp number. So that trend has continued.
Operator
Your next question comes from Sean Noughton - Piper Jaffray.
Sean Noughton - Piper Jaffray
Another follow up on the gross margins; obviously, very impressive in the quarter. Can you remind us, obviously, as the freight benefit mitigates in the back half, can you remind us of the gross margin benefit you had in Q3 and Q4 of last year?
John Call
Sure. You're right, Sean, that freight benefit will decrease somewhat in the back half. We're looking for about 35 basis points of benefit in the third quarter. And actually it evens out in the fourth quarter, so we're up against the numbers we had last year; so roughly no benefit in the fourth quarter.
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