Good day, everyone, and welcome to the Golfsmith International Holdings, Inc. Second Quarter 2011 Earnings Conference Call. Today’s call is being recorded. For opening remarks and introductions, I would like to turn the call over to Jean Fontana of ICR. Please go ahead, ma’am.

Thank you. Good morning, everyone. Thank you for joining us today to discuss Golfsmith’s second quarter 2011 earnings results. As a reminder, our presentation includes and responses to various questions may include forward-looking statements about the company’s financial results and about future plans and objectives. Any such statements are subject to risks and uncertainties, which could cause the actual results and the implementation of the company’s plans and operations to vary materially. These risks are discussed in the company’s annual report on Form 10-K filed with the SEC. We issued a press release this morning. If you have not received a copy, you can find it on our website or by calling Investor Relations at 203-682-8200. Presenting on the call today, we have Golfsmith’s Chairman and CEO, Martin Hanaka, as well as Chief Financial Officer and Chief Operating Officer, Sue Gove. With that, I’ll turn the call over to Marty.

Great, thank you, Jean, and good morning, everyone. Business momentum continued through the key selling season of Q2, which is the biggest quarter of the year for Golfsmith. Our results reflect great execution and several key initiatives and I’d like to congratulate our entire team both in Austin and all of our stores for terrific job. With that ten straight months of solid comps, now three straight quarters, 6.4% in Q4 last year, 13.3% in Q1 and now 7.1% in the all important second quarter. We continue to focus on strengthening our product offering differentiating, marketing and assortments, building our Web business, expanding what is proven to be a very successful store model and enhancing our selling culture. In fact we continue to gain meaningful market share as the industry continues to consolidate and if you look at the core segment with Golf Datatech reports, we’ve had double digit share gains again, and that’s both in units and dollar shares. Then you probably know you’ve spent the last few years strengthening our business model, and are well positioned to capitalize on competitive closings and demographic changes that should benefit the Golf industry as a well. We’re really proud of our team and look forward to continue momentum as we remain committed to delivering great product, excellent service, and a dynamic activity rich shopping environment. Some of the numbers, net revenues increased over 10% to $130.2 million compared to $118 million in the second quarter of last year. Comparable store sales, as I said earlier were up 7% with our direct sales increasing 9% and that’s net of a 27% growth on our Web business let down by a continued decrease in clubmaking and a reduction in our circulation of the consumer catalog, so a net number of 9% in the…

All right. Thank you Martin, good morning everyone. For the second quarter again net revenue increased 10.3% to $130.2 million compared to $180 million in the second quarter of 2010. The sales growth was driven by a 7% comparable store sales increase and 9% growth in our direct-to-consumer business. In addition, sales benefitted from the opening of one net new store, we opened four new stores and closed three since the second quarter of last year. comparable store sales were driven by higher conversion rate, increased AOV as well as a slight improvement in traffic. We believe this strong comp store sales growth is a reflection of our efforts to drive store traffic to enhance marketing efforts, as well as enhancements to our merchandize assortment and selling culture that we have been employing over the last several quarters. Also as Martin mentioned, round played for the five months ended May 2011 decreased 6.3% as compared to the same period in 2010. We are growing our market share despite challenging industry trends. Gross margin for the second quarter increased 10 basis points to 35.1% as compared to 35% for the same period last year. The gross margin improvement consisted of a 70 basis points increase in merchandize margin, primarily due to a sales mix shift towards our higher margin goods such as shoes and apparel consistent with our strategy. This was partially offset by an increased shipping and freight cost related to free shipping offers as well as higher freight costs resulting from fuel surcharges and increased inventory receipts compared to 2010. SG&A expense increased 5.5% to $35.6 million in the second quarter compared to $33.7 million in the same period last year. As a percentage of net revenue, SG&A decreased to 27.3% in the current quarter compared to 28.6% in…

Thank you, Sue. Obviously you can see that we’ve add a good consistent string of three good operating results quarter after quarter, successive months of comps, with equally well positioned and now we can accelerate our growth somewhat, our original goal is seven new stores next year to 10. and really believe that our web business will continue to grow close to 20% for the foreseeable future. With that remarks we will open the questions.

We’ll go first to Jennifer Davis of Lazard Capital Markets.

Hey, guys congratulations on another great quarter.

Thank you.

$0.32 for the first half, it’s a very good start to year return to profitability. Couple of questions on the new stores, I think you guys said apparel is about 28% of the sales, and now you’ll have new fixturnig in your old stores, just wondering if there is anything else you can take from the new stores and apply to the old store to may be increase the apparel penetration?

Yeah one of the things that we really done at new stores as made apparel the center piece. It’s in the center of the store, it’s gotten to expand is square footage. It’s got an extended brands and we have tried to do that in all of our, old stores going backwards. And for the last three years, we re-fixtured every single apparel for we have and as we remodel stores, we are trying to again follow the new store path. So expanding it, relocating it and we have rationalize tennis in a number of stores to expand apparel and to the extend we can execute that get apparel more prominence, more square footage, extending assortments, we think we can accelerate that growth track to approach the new store experience. But we are really thrilled with the new stores and I think the customer is rolling that way.

Thanks. And can you talk a little bit about comps, I think you said that conversion increased, traffic increased, slightly average order value increased, can you may be break that out a little bit and what’s driving that higher average order value, is that kind of sales of those 399 drivers and higher priced merchandize and how does the apparel sales impact that?

Yeah, sorry, absolutely I am sorry. Apparel sales bring that down because our average order is roughly, I’d say $100 for modelling purposes. Our traffic is just up slightly flattish and I think that’s function of fact that rounds played are down. So if rounds played are down 7%, everyday people are consuming less of that clubs and balls and would stop that meaningless traffic into the stores. So it’s a combination of conversions, which is over our plan and AOV, which is over our plan and the whole selling culture trying to get the people by that one more item. So just a so-called pressure I am taking care of the customer like never before. It’s also a function of us, not just selling higher price, then certainly ’11 is a good example of 399, D2 Titleist, but yesterday we started taking pre-orders for Pagan and their drivers at 330, so it’s a mix of different initiatives and the one thing that we didn’t talk about really is the custom fitting, we have over 30% last year in custom fitting orders, we’re up double-digit again this year and that customer gets custom fits spends more money. So we have to keep hitting on all cylinders selling an extra item, selling the premium goods, selling custom fitting, and make sure that every that we get our best win.

All right, great thanks and then two last questions. I think you’re going to open 10 new stores next year, do you think that you can kind of continue at that rate going forward and how many stores do you think you can ultimately operate in the US.

We have targeted 105 locations for growth. Based on our productive model, it looks at a number of factors you can imagine, but really couples the fluency of the golfer and then the number of target customers that are in a given geography. So it is built from the ground up, there is 105 place that we know we want to go and we have targeted that over the next four years, we will open at least 10 stores per year. It is a combination of new markets and a combination of back filling existing markets, where we now we have some holes.

All right, great. Thanks and best of luck.

Thank you.

Thank you.

(Operator Instructions)

Operator we can wrap it up.

All right. And now I’ll turn the conference back to you. Do you have any closing or additional remarks?

Very good. I just want to thank all the people in Austin for a terrific effort in job, and dedication, and all the people on the stores. Well done, we appreciate your efforts. Look forward to Q3, thank you.

And again that does concludes today’s conference call. Thank you for your participation.