Question-and-Answer Session
Operator
(Operator Instructions)Your first question comes from Sam Poser - Sterne, Agee.
Sam Poser - Sterne, Agee
A question on the SG&A, how much of the SG&A is fixed versus variable in fixed costs,
Kerry?
Kerry Jackson
Sam, that’s a difficult question. We can adjust, if we can see perceive a sales trends coming down, we can adjust our expenses accordingly, we proved that in the past. However, if sale would be in a short term event then we have a difficult time adjusting our expense structure accordingly.
So we have a great deal flexibility, if we can see an opportunity coming. Now items like what we’re seeing in Q3, where we have a tax shift that benefited SG&A in Q2, whereas we incurred less advertising costs, but in Q3 we will incur more advertising cost. So there are certain elements out of our control just following the pattern of sales.
Sam Poser - Sterne, Agee
How should we look at the SG&A looking in the short term into Q3?
Kerry Jackson
Like I said, I think even though we’re going to incur more dollars in pure SG&A expense. We’re also incurred additional sales and we should be able to leverage the overall expense based on our expectation of higher sales.
Sam Poser - Sterne, Agee
You have an offset in the fourth quarter from last year, correct?
Kerry Jackson
We do. Last year, we took a charge for a store closing costs of about $2.4 million.
Sam Poser - Sterne, Agee
Then, Cliff just wanted to follow-up with you on some of the category. How is the wellness category shaping up for you so to speak?
Cliff Sifford
Sam, right now it’s one shoe or one style. We really don’t comment on a single category or style like that
Sam Poser - Sterne, Agee
I was told, I was allowed to ask about categories.
Cliff Sifford
I’m glad to talk to you about categories. In that category and one shoe and I’d just for competitive reasons, but now we’d rather or not talk about that one shoe.
Sam Poser - Sterne, Agee
Can you give us a little bit of color on the kids business and on where the action is there and where you see that going forward as well as you come to the boot business, is off to a good start and how you look at playing that to the balance of the year?
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