Greetings and welcome to the Burlington Stores first quarter fiscal 2017 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Bob LaPenta, Vice President and Treasurer for Burlington Stores. Thank you, you may begin.

Thank you, Operator. Good morning everyone. We appreciate everyone’s participation in today’s conference call to discuss Burlington’s 2017 first fiscal quarter operating results. Our presenters today are Tom Kingsbury, our Chairman and Chief Executive Officer, and Marc Katz, our Chief Financial Officer and Principal. Before I turn the call over to Tom, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our express permission. A replay of the call will be available until June 1. We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks and the Q&A that follows are copyrighted today by Burlington Stores. Remarks made on this call concerning future expectations, events, strategies, objectives, trends or projected financial results are subject to certain risks and uncertainties. Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company’s 10-K for fiscal year ’16 and in other filings with the SEC, all of which are expressly incorporated herein by reference. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today’s press release. Now here’s Tom.

Thank you, Bob. Good morning everyone. Our first quarter saw expansion in operating margin and a 39% increase in adjusted net income per share, which exceeded our guidance. As noted on our year-end call on March 2, first quarter sales got off to a slow start driven by the later timing of tax refunds. While February sales were down high single digits, we were pleased to see momentum build as the quarter progressed with the comp sales for the combined March and April period rising 4.5%. This gave us a 0.5% positive comp for the quarter on top of last year’s 4.3% increase. Total sales rose 5%, on track with our expectations, driven by comp growth and an increasing contribution from new and non-comp stores. It is worth noting that May is off to a solid start. A few other notable highlights for the first quarter include: this was our 17th consecutive quarter of positive comp sales growth. We delivered an 80 basis point expansion in gross margin which helped to drive a 70 basis point increase in adjusted EBITDA margin and our adjusted net income per share growth of 39%. Our top performing businesses were home, beauty, missy sportswear, men’s shoes, athletic shoes, and handbags. In terms of the territories, the west, southeast and northeast were the best performing regions, and the southwest and the midwest underperformed the company average. With regards to our inventory management this quarter, we were very pleased with how our merchandising team maintained a disciplined approach to managing our receipts, especially given that we came in at the lower end of our total sales guidance. In addition, we continued to see increases in our branded and better and best receipt unit penetration versus the prior year. Comparable store inventory decreased by 7% at quarter…

Thanks Tom and good morning everyone. Thank you for joining us today. We began the year by recording our 17th consecutive quarter of positive comparable store sales. In addition, we achieved strong contribution from new stores, expansion in gross margin, and strong SG&A control which combined delivered a 39% increase in adjusted net income per share. Turning to a review of the income statement, for the first quarter total sales increased 5% and comparable store sales increased 0.5% on top of last year’s 4.3% increase. As Tom noted, the delay in the issuance of tax refunds impacted February comparable store sales, and while we were pleased to see combined March and April sales rebound to a 4.5% comp, it was not enough to fully offset the slow start to the quarter for many of our comp metrics. We’re comparing March and April together because of the three-week shift in Easter this year versus last year. For the quarter, our comparable store sales performance was driven by increases in units per transaction while we experienced slight declines in traffic, conversion and average unit retail versus last year. For the combined March and April period, we did see an increase in traffic. It is worth noting that through the first three weeks of May, we have also seen an increase in traffic. The gross margin rate was 40.9%, an increase of 80 basis points versus last year driven primarily by increased merchandise margin. Product sourcing costs, which are included in SG&A and include the cost of processing goods through our supply chain and buying costs, improved 10 basis points from last year as a percentage of total sales. SG&A exclusive of product sourcing costs decreased to 26.6% and 26.7% last year. This improvement was driven by a decrease in marketing expenses, business…

Thanks Marc. In summary, we believe our results this quarter demonstrate the agility of our business model. We drove total sales in line with our expectations and earnings above our expectations despite the short-term impact on consumer spending from later tax refunds. We remain confident in our outlook and believe our focus on evolving our off-price model and the ability to capitalize on the rapidly changing retail landscape positions us well to bring more great brands, styles and value to our customers and increased value for our shareholders. With that, I’d like to turn the call over to the operator to begin the question and answer portion of the call. Operator?

[Operator instructions] Our first question comes from the line of Ike Boruchow with Wells Fargo. Please proceed with your question.

Hey, good morning everyone. Thanks for taking my question. I have a question for Tom and then I just have a follow-up for Marc. Tom, as we think about the business not making up the difference from the February drop-off, are there areas of the store that you can talk about that maybe you were disappointed in; and then I guess to that point, is it fair to assume that these areas are trending better throughout the quarter and into May?

Hi Ike. As I mentioned in the prepared remarks, we were really pleased with home, beauty, missy sportswear, men’s and athletic shoes, and handbags. They outperformed the chain average. But candidly, we were disappointed in our apparel business, it underperformed in the first quarter. We had the perfect storm - it was warm in February and cool in March versus the prior year, but the good news is that when the weather improved in April and so far in May, we’ve seen improvement across all apparel zones, including ladies, men’s and youth.

Great, and then Marc, just a follow-up, can you maybe provide some more color on the 80 BPs improvement in the gross margin relative to the 10 BPs decrease in the product sourcing costs. I think it’s been a while since we’ve seen leverage there, and then as we get into the back half of the year, should we start to see a little bit of favorability on the SG&A line as you lap, I think, $10 wages? Thanks.

Okay, let’s start with the 80 basis points of gross margin improvement. That beat was a combination of a lower markdown rate and improved IMU, with the markdown rate being a little heavier weighted there. The improved IMU is not new - we talked about that throughout last year. The markdown rate, we ended 2016 very clean from an aging point of view, so we were expecting good news in our gross margin rate, and even though we came in at the lower end of our sales guidance, it’s really a credit to our merchandising team for how well they managed receipts throughout the quarter. You know, it’s one of the great things about our model and really having liquidity, is the receipt dollars can be spent to chase trends when the trends are there, or not spend depending on the business need. So all in, Tom mentioned comp store inventories down 7%, aging down, felt really good about margin in total. As it relates to product sourcing costs, yes, you’re right - the 10 basis point reduction, I don’t think we saw that last year. We may have seen it in one quarter in ’15, but certainly something that’s atypical. It was driven by two factors, Ike. The first was labor savings in our DCs due to fewer units moving in and out of our storage locations within our DCs. As you know, we store pack and hold goods, and we store what we call short-stay inventory. That’s the inventory we use when we have multiple allocations of the same style to prevent too much item depth in our stores. That less movement in and out of the storage locations that we experienced in Q1, right now we do not have it planned for that same thing to happen…

Great. Thanks so much, guys.

You got it.

Thanks Ike.

Thank you. Our next question comes from the line of Matthew Boss with JP Morgan. Please proceed with your questions.

Thanks. So on your new store growth, what percent of your fleet is in the smaller format today, and can you just walk through the cash returns you’re seeing, payback period, and what level of comps do you see out of the gates versus your older legacy stores?

Okay, so our stores less than 60,000 square feet are still performing, Matt, well above the chain average. I think at the end of the year, we gave that stat at 17%, fair to assume that that hasn’t changed at all. Now here’s a stat I can give you on new stores as we watch these. As we continue to get smaller in size, they're more productive, and also just to add onto that, certainly the occupancy rates are higher in these stores because we’re more the retail hub. Let’s specifically talk about our 2013 and 2014 new store cohort, because I think you’re trying to get to how are they comping versus the chain. So in 2016, our 2013 and 2014 new store cohorts, they out-comped the chain by 260 basis points, and their EBIT rates increased 100 basis points over what the chain increased, so we are starting to see the gap between their overall EBITs come closer to the chain average, the ‘13s and the’14s as I said out-comped, and they had better improvements in their EBIT increase.

That’s great, and then just a follow-up. Tom, I guess if you dig further into same store sales and the traffic that you’ve seen basically for the last two and a half months - March, April and May so far, larger picture is there anything different in the performance versus what you were seeing pre-February, meaning is there any hangover effect whatsoever to consider here, and just given what you’ve seen in the past two and a half months, what’s been your biggest learning, and as we think about the back half, what do you think the biggest opportunity is in the cash versus last year from a top line perspective?

Okay, hi Matt. No, I don’t think there’s anything really structurally different than what we were experiencing prior to February. Again, as I mentioned, we were really in a deficit based on the--in February, based on the tax refund delay, but as we got into March and April and now in May, we’re back to where we were before, as I mentioned in the prepared remarks. We still think the biggest opportunity is what I have mentioned many times before, in the back half is continuing to drive our home business, continue to grow our beauty business, make up the differential we have in ladies apparel. So we’re still focused on those initiatives, and we really feel that those are going to really lead our business, not only this year for but years to come.

Great, best of luck.

Thanks Matt.

Thank you.

Thank you. Our next question comes from the line of Lorraine Hutchinson with Bank of America. Please proceed with your question.

Thank you, good morning. Can you talk a little bit about the AUR pressure that you experienced in the first quarter and then how you see that metric trending for the remainder of the year?

Sure Lorraine. A decline in AUR for us obviously is not new - it’s been happening for many quarters now, and it’s really--it continues to be driven by two things. One is the mix shift just within our businesses. With home and beauty becoming a bigger part of our mix, they both have AURs lower than the chain; and secondly, our desire to continue to pass on value to our customers is also putting a drain on AUR. On the flipside, we have seen an increase in UPTs which has been offsetting that lower AUR and increasing overall basket, so we’re pleased with that. But in terms of going forward, I think that negative pressure is going to remain from a mix point of view. You know, Tom talked about home and beauty and they’re only going to grow in penetration, and it’s also going to remain from us passing on value to our customers, so we don’t see that going away. I guess somewhat of an offset will be as we continue to increase our better and best penetration, that should help offset it to some extent, but we’re still expecting a slight decrease in AUR.

Thank you.

Thank you. Our next question comes from the line of John Kernan with Cowen & Company. Please proceed with your question.

Good morning everyone. Thanks for taking my question.

Morning John.

Morning John.

On the theme of gross margin, the benefits of IMU, I think you’ve been benefiting from that for--you know, as we go back through last year. I just wonder how durable those benefits are and how much longer you think you can continue to get these higher IMUs to offset some of the markdowns within merchandise margin.

Yes, you faded out there at the end, John, but I heard your initial question - it’s just about IMUs and how many legs does that have. You know, it was strong all last year, it’s strong this year, I think, and we’re still seeing it across all buy types so it’s not limited just to certain buy type. I think it’s a credit to the merchandising team and I think each year as we get more mature, they just get better at buying and that’s a big piece of it. But I think it’s two things that will continue to play into our gross margins going forward - it’s that and we still think that, and we will plan our comp store inventories to be down mid to high single digits. We’re going to continue to turn faster, and that’s going to reduce markdowns for us. So in terms of the longer term play, we continue to see benefits coming from both areas, IMU and a lower markdown rate.

Okay, that’s helpful. Then just one quick follow-up, the expectations for merchandise margin as we go through the rest of the year and the back half of the year with your 50 to 60 basis points of EBITDA margin expansion.

Yes, so what we said was the 50 was the net between reported margin and product sourcing costs, and you can expect a little bit of deleverage in the product sourcing cost.

Thanks, best of luck.

Thanks.

Thank you.

Thank you. Our next question comes from the line of Lindsay Drucker Mann with Goldman Sachs. Please proceed with your question.

Thanks, good morning everyone. I was hoping you could describe the performance of your stores in close proximity or in the same malls as Macy’s that have closed, whether the going out of business sales impacted your business or whether you feel you’ve picked up market share or been negatively affected by weaker traffic in those areas.

Yes Lindsay, we really studied that with last year’s closings, to be honest with you, and as we were looking at the 2017 ones, it was following in a similar pattern. Long story short, after the course of the year and what happened in 2016, our stores that were co-located, so within 0.5 miles, so that was either right in the same mall or within half a mile, over the course of the year they saw a slight drop, we think just due to the overall traffic drop. Our stores that were between half a mile and five miles away from a Macy’s store over the course of the year saw a slight pick-up, so net-net in what we looked at in 2016 was a slight pick-up, but to be honest with you, it really wasn’t material overall. In terms of this year, we have 55 stores that are within five miles of their closing and 15 inside of 0.5 miles.

Great, thank you. Tom, you talked about the disruption in retail today creating opportunities. I was hoping you could describe how your team sees availability today versus--availability of buys today versus what you might typically see heading into this time of year.

Well, I think it’s pretty typical in terms of what’s available. We’ve always had a lot of merchandising opportunities to get product. It really hasn’t changed. It maybe accelerated a little bit more, but there’s always a lot of goods that we can buy. I’ve said this many times before - we turn down more deals every day than we accept, so as the disruption continues, I’m sure the flow of goods will be plentiful, but it’s pretty much same as always. There’s just a lot of goods available for us to purchase.

Great, thank you very much.

Thank you. Our next question comes from the line of Kimberly Greenberger with Morgan Stanley. Please proceed with your question.

Great, thank you. Good morning. Marc, I just had a clarification for you and then a question for Tom on ladies apparel. In terms of the shifting of expenses out of Q1 into Q2, it sounded like there is $3 million of SG&A that was a benefit in Q1, that will be a deficit in Q2. I think you said a $2.5 million sale of a tax credit that was supposed to land in Q1 but that’s getting pushed out to Q2. Do those effectively or nearly net out in each of those two quarters? I just want to make sure I understand the impact correctly.

Well said, well done. Exactly.

Okay, great. Then on ladies apparel, Tom, it sounds like one of your key strategies to grow your ladies apparel penetration is increasing, I think you said better and branded goods. I’m reading that to mean better and best - you can tell me if I’m reading that correctly, and is that a reflection of the fact that you’re seeing better availability in those nicer goods, or do you think that that’s simply just the more effective way to grow your market share in the category? Thanks.

It’s really strategic. We really feel that we’ve gotten really good response in better and best product, and we want to continue to really skew our buys into that type of product overall. The goods are available, but most importantly it’s really--it’s really a successful strategy for us and we want to just continue to do that.

Thanks.

Thank you.

Thank you. Our next question comes from the line of Paul Lejuez with Citi. Please proceed with your question.

Thanks, it’s Tracy Kogan filling in for Paul. I had two questions. The first is on the eight stores you’re closing. I was wondering, is there any commonality in terms of geography or real estate type of these stores, and are they all larger format? Then secondly in the home category, you’ve got a competitor introducing a new home concept this year, and we are just wondering if this changes your strategy at all in the home category or the subcategories you’ll be pursuing within home? Thanks.

I’ll answer the home question, then Marc can answer the closure question. No, not really. We’re still focused on the things that I talked about in the prepared remarks. We really feel that the strategy that we have put in place is really the best strategy to really grow the business overall, so no, not really. We’re not changing anything we’re doing in terms of home. We just want to continue to bridge the gap that we have versus our competitors.

As far as the eight stores, Tracy, they are low EBIT contributors. Their leases were coming up, and yes, they are predominantly bigger stores.

And no commonalty in terms of geography or real estate type or--

No, no.

Are any of them mall-based?

I don’t believe so, but I’d have to double-check that.

Okay, great. Thanks guys.

Thank you.

Thank you. Our next question comes from the line of John Morris with BMO Capital Markets. Please proceed with your question.

Thanks. Hey good morning, and let me just say congratulations on great execution in a very challenging environment.

Thanks John.

Marc, I think first question for you. It’s kind of a variation on some of the earlier real estate questions. I know we’re emphasizing the productivity, better productivity of the smaller stores, but as you think about your opening cadence of 30 this year, anything changing in consideration of the store formats as the mall itself and those kind of mall-type locations evolve, given the challenges of the department stores and what I would imagine would be available space coming over the years, some of that larger space. So I’m wondering the degree of flexibility or how you think about that with respect to the footprint size - like, would you take advantage of it, for example?

Well you know, one thing to keep in mind as you think about all the store closings that are happening, and John, you know them as well as I do, a lot of them are coming from either anchors or tenants in C and D malls, so that’s obviously--that’s not where we want to be, that’s not a real help to us. But with that said, when you have a retailer like a Sports Authority who goes out of business, you know, somebody that was strip mall located, that their store sizes were kind of a lot more right in our wheelhouse, those have been good opportunities for us, and John, we’ll probably end up with, as we look at our pipeline right now, we’ll probably look at obtaining over 20 Sports Authority locations by the time it’s all said and done.

And do the--sorry, go ahead?

I was just going to say, but we’re staying primarily strip mall focused, the retail hubs in strip malls, kind of where other people want to be too.

Yes, and the store closures that are happening are really in the malls that are not productive, so it really doesn’t lend itself to really, for us, as a big opportunity because obviously we want to be where there’s a lot of traffic.

Okay, good. My follow-up is you guys do a great job with your new customer acquisition initiative. Maybe if you can update us there and tell us a little bit about your approach in coming quarters and into the back half, and your progress on new customer acquisition initiatives. Did that one stump you guys?

No, no. I was waiting for Marc. Well, you know, we have really done a nice job of really growing our customer base. We’re very pleased. Our TV commercials, as I mentioned in the prepared remarks, they’ve been really resonating with consumers, and as I’ve mentioned previously, we’re growing customers that make over $75,000 a year, and actually last year growing customers that made over $100,000 a year. It’s about what’s happening inside the store. The customer experience continues to get better and better, and our customer service scores continue to improve. Obviously that really helps and it brings in more customers. The fact that we’re continuously growing our better and best penetration in brands and our branded penetration in general, that is obviously helping us also in terms of getting a different customer. We’re finding customers that--you know, the band household income is $25,000 to $75,000. The customers that make less than $25,000, they’re leaving us, they’re going someplace else, so we feel good about the fact that we’re able to attract a higher income customer and it gives us obviously a broader base of customers.

Good, yes, I was wondering if that trend was continuing. Okay, thanks guys.

Thanks John.

Thank you. Our next question comes from the line of Dana Telsey with Telsey Advisor Group. Please proceed with your question.

Hi, good morning everyone. I’ve been noticing that you have been getting some of the better goods, whether it’s the Gucci’s, the Burberry’s, the Prada’s in there. As you think of your mix and your assortment, where does it go? Are you seeing higher margins on that, and given the store closures, are there categories or brands that you see an opportunity for that you didn’t before? Thank you.

Well most of the names that you mentioned are really only in their ecommerce site, so--but you know, in general we have more and more opportunities to bring in better goods, but it’s really more related to what I said previously. It’s more about the strategy that we’re embarking on in terms of garnering more better and best product overall. It doesn’t really have a whole lot to do with all the different store closures and stuff like that. It’s more about the strategy that we’re trying to accomplish.

Then as you think about the store closures that are happening out there, are you able to--are there any boxes that you would want? Would you ever think of entering the mall landscape at all? Is that something with some of the rents and deals that may be offered, that would be of appeal to you?

Well first of all, we look at every deal, and if there’s good economics, we may consider doing something in a mall. But in general, we really want to be in strip centers, and that is what our strategy is overall. But we are opportunistic as we are at buying product, and we would consider it, we would look at it, but we would prefer not to be in a mall.

Thank you.

Thank you. Our next question comes from the line of Pamela Quintiliano with SunTrust Robinson Humphrey. Please proceed with your question.

Hi, this is David for Pam. Thanks for taking our questions. Just a follow-up to the multiple real estate questions, given the store closures across the industry, how is that impacting your real estate opportunities in terms of lease renewals?

I’m sorry, could you repeat that question?

Given the store closures, how is that impacting your real estate opportunities in terms of lease renewals as you go forward, in terms of economics?

Yes, sure. So let’s talk about just what’s happening this year, 2017. So we had roughly the 68 leases that were expiring, so I’ll kind of give you a breakdown of them to give you a feel for what’s happening. In 44 locations, we’ve exercised our options and extended term. We were able to get rent reductions in six of the locations. As we talked about, we’re relo and closing 14 locations, and two of them we’re able to give space back to our landlords and then we’re able to remodel and actual get some lease incentive money for the other two, so that kind of gives you the complexion of the leases that we dealt with in ’17, which would probably be the go-forward proxy for future.

Great, thanks. Then in terms of ecommerce, I know it hasn’t been a major focus, but any updated thoughts on potentially expanding your presence?

Well you know, ecommerce is less than 1% of our business. We’ll see growth in ecommerce but not a lot of growth. It’s just really hard to replicate the off-price model online overall, and our main focus is growing our brick and mortar business. We feel we’ve done a very good job so far, and we want to continue to work on the customer experience, as I mentioned before, in our stores. So no, ecommerce is just not a huge focus for us overall because it’s a very small piece of our business.

Okay, thanks. Lastly, any updates on Baby Depot?

Yes, Baby Depot obviously is a small business for us overall, but it is an important differentiator for us. We didn’t do well in Baby Depot in the first quarter - it underperformed the chain average overall. I still feel that our strategy is a good strategy and that we should see growth in Baby Depot in the second quarter and the back half of the year, based on all the initiatives we’ve done; but in the first quarter, it underperformed the chain.

Great, thank you very much.

Okay, before we move on, Operator, I just want to clarify one of the answers. We were asked about the eight store closures this year. Four of our eight closures are going to be in malls. Thank you.

Thank you. Our next question comes from the line of Brian Tunick with RBC Capital Markets. Please proceed with your question.

Hi, good morning. This is [indiscernible] for Brian. Thanks for taking our question. I guess first on SG&A, I think you mentioned lower marketing expense in the quarter. Just wanted to see if that was a response to the traffic trends in the quarter or are you getting more efficient with your marketing, maybe shifting the mix more towards digital and social media? And then the shrink piece in gross margins, last year you were more prudent with shrink accruals through the year and that turned into a benefit in Q4, so just wanted to see how you’re accruing for shrink this year maybe versus last year.

Sure. As far as the marketing goes, yes, I would say that it was predominantly more efficient marketing within the quarter, and then we did have some timing in marketing as well, so we had grand opening costs for four new stores that shifted from Q1 to Q2, so marketing actually played a role in both of those things. As far as shrink goes, we’re recording it what last year’s final rate was for the first three quarters, so it is a slight good guy for the first three quarters and then we expect a slight bad guy in Q4, based on what happened last year. But overall on a full year basis, the shrink accrual that’s baked into our guidance is just a few basis points lower than last year.

Okay, thanks very much.

Thank you. Our next question comes from the line of Bob Drbul with Guggenheim Securities. Please proceed with your question.

Hi, good morning. This is Andrew Roberge on for Bob. Our question was just around the athletic space. Could you just give a little bit more on your performance there in both apparel and footwear? Thanks.

Okay. As I mentioned in the prepared remarks, we had strong performance really across the board in all the active wear in terms of apparel, and our athletic shoe business was very strong too, so we see that continuing in the second quarter and the back half of the year.

Okay, great. Thank you.

Thank you, our next question comes from the line of Roxanne Meyer with MKM Partners. Please proceed with your questions.

Good morning and thanks for taking my question. You talked about performance of your relatively newer stores over the past few years. I’m wondering if you can give us an update on the performance of both your renovated and relocated stores, and then as a follow-up, you mentioned that traffic was up in May. I’m just wondering if it’s fair to say that comps are in line with your guidance so far for the quarter. Thanks.

Roxanne, we typically--for the remodels that we’ve done in the past, we have seen a nice lift in sales there, so stores that we have remodeled historically have out-comped the chain average. And then your second question was on--?

Was on whether it’s fair to say that your comps so far are in line with your plan given that traffic is up.

Yes, our 2% to 3% guidance is the typical guidance that we give in a quarter. We believe that it’s prudent to plan conservatively because that’s the expense base and receipts that we plan on that lower sales base, and we really think that our merchants are very adept at chasing business when it’s there. Our intent obviously is to beat the 2% to 3% guidance, but it incorporates everything - where we are now and what we think is going to happen in the rest of the quarter.

Okay, great. Thanks a lot.

Operator, we have time for one more question.

Thank you. Our final question for this morning will come from the line of Adrienne Yih with Wolfe Research. Please proceed with your question.

Thank you, good morning. Let me add my congratulations. My first question is on--just to understand the inventory strategy, obviously much more disciplined. When you take a look at the much smaller footprint stores, the 45,000, 44,000 square foot versus the legacy stores, when we think about that, are you planning inventory per store or inventory per square foot, right, so is it in the absolute sense on a per-store basis? Then secondarily on the ladies apparel or the apparel business underperforming in the first quarter, has that continued into May or is it back to plan, and do you think it was a transitory, sort of tax refund, weather issue, or is there something going on in apparel that’s highly promotional, because obviously apparel is pretty weak across the board in general. Thank you very much.

I’ll take the inventory per store first, then I’ll kick it over to Tom. We’ve made, Adrienne, drastic reductions in our comp store inventories over time. Tom’s taken out, I want to say 60% of the inventory since he started here, so we just flat out don’t need the 80,000 square foot boxes anymore, so going to the smaller stores gives us plenty of room to put in the inventory that we need. But the inventory is really more of a function of the sales that we think the store’s going to do, and that’s how we merchandise it.

Thank you.

So as far as ladies apparel goes, we’ve seen improvement, as I mentioned in the prepared remarks, we’ve seen an improvement actually starting in April and continuing in May, once the weather normalized. But we really feel with a warmer February and a cooler March, it had a negative impact on apparel really across the company. But no, as it normalized, weather normalized, our performance improves.

Very good. Thank you very much. Best of luck.

Thank you.

Thank you.

Thanks for joining us today. We look forward to speaking with you when we report second quarter results in August.

Have a great weekend.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.