Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Christopher Kim – J.P. Morgan.
Christopher Kim – J.P. Morgan.
Lisa, in terms of the negative comp, the last data point we got, I believe trends were kind of up, low- to mid-single digits in the May period. It seemed like there was a pretty steep decline, it feels like inventories were just too lean. Is there any sort of change in philosophy as you approach the back half of the year in terms of inventory?
And in terms of the early fall receipts, how did that impact the margins in the second quarter, because I guess you had to replace that lower level of clearance with something else.
Lisa Rhodes
I think I got the question there. Total inventories, I think the positioning of total inventories, we [inaudible] going into the quarter with the appropriate level. I think the balance of inventory and its composition of spring/summer to fall/winter is where the negative impact came from. So we needed a bit more spring/summer inventory than we had, but not more total inventory.
And as far as the fall/winter inventory in the season, the first few weeks it was slower than I liked, because I pulled it in earlier, and then two and a half weeks into the season of its receipt, it kicked in very nicely. So I'm comfortable with the inventory levels and the tighter inventories. It's just key balance of ownership.
Christopher Kim – J.P. Morgan.
So the composition of inventories, you're much more comfortable with, and barring any sort of big change in the cadence of the business, the margin results in the first quarter likely will have a much better showing it seems like?
Lisa Rhodes
I think that the margins and the sales will be conservative, as we stated, and I'm comfortable with the position that we're in.
Armand Correia
I think I can add to that. I made a comment that I really felt that given the reduction in clearance levels at both brands, there was a margin opportunity going forward. And we'll leave it at that.
Christopher Kim – J.P. Morgan.
Keith, I was wondering if you could comment on some of these product tests, whether it's Jones Studio. I think there are some Calvin Klein in certain stores.
Keith Fulsher
The Jones Studio isn't really a test at this point. It's rolled out pretty aggressively in the spring with 500 Dress Barn and 400 Dress Barn Stores. So it's a pretty robust program right now and we will be looking to grow that going forward. And that, at the retail price points, is a much higher average check than the core of Dress Barn assorteds. So we're very pleased with that.
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