Question-and-Answer Session
Operator
(Operator Instructions). Chris Horvers, your line is open for your question. Please state your company name.
Chris Horvers - JPMorgan
Thank you. Chris Horvers, JPMorgan. First a couple of clarification questions. Within Retail International, when you talk about profit outlook for the fourth quarter, were you referring to rate or EBIT dollars in describing your outlook?
Chuck Rubin
Chris, we were talking about EBIT dollars looking slightly better than last year excluding the charge that we took on the impairment.
Charlie Brown
For international, Chris, it’s the same. It’s EBIT dollars.
Chris Horvers - JPMorgan
You mentioned that California seemed to slow down versus third quarter versus the second quarter. What do you think is driving it there? We have heard a lot of retailers talk about better California trends. Then bigger picture on BSD. You mentioned that perhaps contract would start to improve around year-end. What do you see there? Is that largely a comparison issue or something you are seeing in your business?
Steve Odland
I will ask Steve Schmidt to comment on it, but overall, our business in California has not improved and in fact we are worried about it. You know we have a large public sector business out there and the state has been challenged with falling tax revenues and so forth. So they are cutting back at every level in the public sector and that is spilling over into jobs and of course small businesses have been hurt too. So we are just not seeing any kind of recovery in California. Steve will further comment on the turn later this quarter.
Steve Schmidt
I would say that what we are seeing is on a sequential basis is, we are obviously overlapping the business that fell off significantly in the fourth quarter a year ago. It especially fell off in December as the public sector basically shut down, and so what we are seeing and we are forecasting as we go forward and the trends we are seeing in the fourth quarter, we continue to see that year-over-year decline appear to be getting better and so we see that continuing throughout the fourth quarter.
Chris Horvers - JPMorgan
Two more slide-in clarifications. When you mention retail sales much better than ones you’ve posted in this quarter. Is that kind of a minus high single-digit? With consensus in the fourth quarter you’re basically saying first call consensus looks good, a lower tax rate might actually make it look a little better? Is that right?
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