Rodney Carter - CFO
We are reducing our second quarter comparable store sales expectations from up 1-2% to flat to slightly negative. This reduction reflects a cautious outlook on consumer spending.
And later in the Q&A:
Connie Wong - Cowen and Company
Okay, great. And then lastly, are you seeing any regional difference in your sales given some costs, other retailers have mentioned given the macro environment in California and Florida?
We are experiencing the same macro trend, in particular, in Florida, that is correct.
I clearly believe that it is macro. I think if you talk to vendors, we are tracking actually, slightly better than some of our competition. But, clearly mall traffic is down anywhere from 4-6% is what I hear. So, I think clearly, this will be a challenging macro environment, in particular, for mall jewelry. But again, we believe that we have opportunity because of some of the executional issues last year. But, clearly we are feeling the same trend. You know, the Middle American customer has been hit hard by whether it is the housing market bubble, whether it’s being overextended in credit in general, the high cost of gas, all of that is hitting our core customer which, you know, let’s say income in the $50-$100,000 range. So, clearly it’s a phenomenon that is affecting all retailers that have, especially have purchases that are discretionary. Then, on top of that you’re fighting for dollars with the iPod and flat screen TVs.
The Florida mention is a reference to Office Depot's comments about the impact of the weak Florida housing market on its sales.