Question-and-Answer Session
Operator
Thank you. (Operator Instructions) And we'll go first from Barrington Research, Derek Leckow.
Derek Leckow – Barrington Research
Yes, good morning. Thank you.
Martin E. Hanaka
Good morning.
Derek Leckow – Barrington Research
Yeah, Marty, just on the cost side, I wanted to say congratulations. This is the obviously great performance and I wondered if in your opinion, have you seen sort of the low watermark on the gross margins and also, perhaps, obviously operating margins are affected mobile the volume, but could gross margins continue to improve from here are you think?
Martin E. Hanaka
Yes, we do. We actually have a three-year plan and we expect that we'll have some good gross margin improvement sequentially over the next couple of years. A lot of that has to do with the proprietary the mix of business, the growth of our apparel business which is have been very strong for us recently and a mix of vendors. In fact, you'll see a lot of it in Q4, we here to be measurable and meaningful in Q4.
Derek Leckow – Barrington Research
And the margins on the direct side, are those tracking similarly to the margins of the store business?
Martin E. Hanaka
It's a very different business model, they're much lower but don't benefit the same as we move forward, yes.
Derek Leckow – Barrington Research
All right. Great, and then second question is on your gaining market share. That’s a pretty dramatic out performance there. I just wondered, are you still seeing competitors closed stores and well you said them there is some evidence that you saw that provides optimism around pent-up demand in comments like that. I wonder, if you could maybe elaborate on that a little bit?
Martin E. Hanaka
Yeah. Tom saw there is some research on that in his conclusion was that each of the last two years 70% to 75% of the core goal for his delayed its equipment purchases. And again in this economy, it's understandable, so the belief is that, yeah that's going to change and again the OEMs had got some great product out there and when the stars align and we think again this recession I think we'll here Thursday, that we have positive GDP growth again hopefully the consumer files that and we think a quarter to after that we could really, truly benefit in this discretionary category.
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