Good morning ladies and gentlemen, and welcome to the Sally Beauty Holdings Conference Call to discuss the company’s Fiscal 2011 Third Quarter Results. All participants have been placed in listen-only mode. After management’s prepared remarks I’ll facilitate a question-and-answer session. And initially each caller will be limited to two questions. Additional instructions will be given at that time. As a reminder today’s conference is being recorded for replay. I would like to turn the call over to Karen Fugate, Vice President of Investor Relations.

Thank you. Before we begin I would like to remind you that certain comments including matters such as forecasted financial information, contractor business and trend information made during this call may contain forward-looking statements within the meaning of Section 21-E of the Securities Exchange Act of 1934. Many of these forward-looking statements can be identified by the use of words such as may, will, should, expect, anticipate, estimate, assume, continue, project, plan, believe or similar words or phrases. These matters are subject to a number of factors that could cause actual results to differ materially from expectations. Those factors are described in the Sally Beauty Holdings’ SEC filings, including its most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2010. The company does not undertake any obligation to publicly update or revise its forward-looking statements. The company has provided a detailed explanation and reconciliations of its adjusting item and non-GAAP financial measures on its earnings press release and on its website. With me on the call today are Gary Winterhalter, President and Chief Executive Officer, and Mark Flaherty, Senior Vice President and Chief Financial Officer. Now, I would like to turn the call over to Gary.

Thank you, Karen and good morning everyone. Thank you for joining us for our fiscal 2011 third quarter earnings call. I’ll begin today’s discussion with a high-level review of our financial results, followed by a review of our business initiatives. Mark will then take you through the fiscal 2011 third quarter in more detail. As you may have seen from our press release this morning we delivered another strong quarter of top and bottom line growth in both our businesses. On a consolidated basis same-store sales were up 5.9% and net sales grew 12.6%, marking our sixth quarter in a row for double-digit growth. Gross profit margin was 49.1%, up 50 basis points. Adjusted net earnings in the third quarter increased by 35.6% to $55.8 million or $0.30 per share after adjusting for an after-tax credit of $13.4 million from a litigation settlement, net of non-recurring expenses. Including this $13.4 million credit GAAP net earnings grew 68.2% to $69.1 million or $0.37 per diluted share. We ended the quarter with a total store count of 4262 an increase of 276 stores or growth of 6.9% over last year of which 4.8% was organic growth. Turning to our segment performance starting with Sally Beauty Supply. We continued to realize year-over-year growth in our international business. The initiatives we launched in the UK are coming together nicely and yielding positive returns. To-date 50% of our UK store base has been updated and rebranded. We believe our increased visibility and brand awareness to the retail consumer drove higher traffic, sales growth and gross margin expansion. Same-store sales for Sally Beauty Supply grew 6.1% versus 3.6% in the prior year. Net sales were $517.3 million, growth of 10.6%. The primary contributor of this strong performance was growth in same-store sales and new store openings.…

Thanks, Gary. Consolidated net sales for the third quarter were $836.6 million, an increase of 12.6%. This increase was driven by same-store sales growth of 5.9%, growth from acquisitions of 3.6%, new store growth of 1.8% and the favorable impact in foreign currency exchange rates of 1.7%. Consolidated gross profit was $410.5 million or 49.1% of sales, a 50 basis point improvement from the fiscal 2010 third quarter. Third quarter SG&A expenses were $259 million and include a $21.3 million credit from a litigation settlement net of non-recurring charges. This credit is reflected in the BSG segment and in the unallocated corporate expenses in the amount of $19 million and $2.3 million respectively. Including the credit consolidated SG&A as a percentage of sales was 31%, a 340 basis points improvement from the 2010 third quarter. Excluding the credit, SG&A as a percentage of sales would have also been favorable over the prior year. Unallocated corporate expenses, including share-based compensation, were $23.7 million or 2.8% of sales versus the fiscal 2010 third quarter expenses of $22.6 million or 3% of sales. Consolidated operating earnings in the third quarter increased 47.1% to reach $136.3 million. Operating margin was up 380 basis points to 16.3%. Third quarter performance was positively impacted by SG&A leverage, higher gross margins and a credit of $21.3 million from a litigation settlement net of non-recurring charges. Interest expense for the third quarter was $27.8 million. Interest expense decreased $514,000 over the prior year quarter due to lower outstanding principal balances on our senior term loans. For the fiscal 2011 third quarter, our effective tax rate was 36.3% versus 36.1% for the fiscal 2010 third quarter. Given our year-to-date effective tax rate experienced, we now estimate that our effective tax rate will be in the range of 36% to…

Thank you, Mark. In summary, our performance in the third quarter was strong. With three quarters of the year complete, we feel good about ending 2011 on a strong note positioning us for another robust year in fiscal 2012. We will now turn the call over to the operator to take your questions.

Thank you. (Operator Instructions) Our first question comes from the line of Simeon Gutman with Credit Suisse. Please go ahead. Simeon Gutman – Credit Suisse: Good morning it is Simeon Gutman and thanks. Can you talk on the BSG side, the consultants are up. I think store growth isn’t. I recognize some of that’s coming from the acquisitions. Can you talk about how your new BSG sales people are ramping up and what the right balance of sales people to stores is over time in that segment.

Simeon this is Gary. I think that’s just going to be reflective of where the business is shifting as you heard us say over the last several years primarily due to the shift in the industry to booth running the business, BSG’s business has shifted more towards the stores and as that continues you’re constantly rationalizing the sales force so that the people that you do have out there are making a decent living and covering the saloons that need that kind of attention and when a saloon shifts to the booth running format those stylists generally become store customers and its mostly done through attrition but I think we stay on top of it pretty well. I don’t see any major shifts in that area, it will just kind of shift like I said as the business shifts either way.

This is Gary. Gary, just follow-up question. Could you talk about on the international side obviously you had really good results as you mentioned on the call, could you talk about Europe versus Latin America, where your priority is and also as you look at Europe throughout how comfortable are you as you move further along that it’s going to kind of emulate what you’re seeing in the U.S. over time. Thank you.

Well, Gary, I’m not sure that Europe will ever emulate the U.S. The U.S. is a terrific market for us, particularly for Sally with the retail business, it’s a wonderful market from a margin standpoint. However, it took many, many years to grow the retail business in the U.S. to the point that it is today and we are where we were 25 years ago in Europe relative to the retail business. I do think we’re ahead of where we were 25 years ago when it comes to the private and control label business in Europe. The parts of Europe that we’re primarily focused on and where we have our heaviest concentrations are Belgium, France, Germany and the U.K. So, we aren’t feeling some of the extreme difficulties that the economies are having in countries such as Italy, Ireland, although we have a presence in Ireland, it’s not a large one. Spain, we have a very small presence and it’s a very difficult market right now. But as far as our priorities go we have a much larger presence in Europe, we’ve been there a lot longer, and I think that it will continue to afford us some great expansion opportunities not only organically but via acquisition. Central and South America on the other hand are more like the Sally model and that the business is primarily retail, it’s just, it’s very difficult to get started in some of the key markets down there particularly Brazil and Argentina and unless you are in Brazil as an example and manufacturing in Brazil you just don’t go there and start opening stores and importing products, it’s very, very difficult to do that. So I think long-term that the margins in Central and South America can be better for us, but I think the growth will be more sporadic given that we, we once we get into a country we can grow rapidly within it which I think we’re proving in Chile. But getting into the country initially Chile was not a major problem, but I think Argentina and Brazil will be a bit more challenging. The, and getting back to Europe our, I mentioned our private and control label business is actually much stronger there than it was even 10 years ago here in the U.S. And we, from a store count standpoint we’ve been very successful over the last couple of years opening new stores in France and we will continue to do that. We still are somewhere in the 35 to 40 store range in France and we believe we can have three or four times that at a minimum. Simeon Gutman – Credit Suisse: Can I just sneak one last one in?

Yeah. Simeon Gutman – Credit Suisse: Can you just talk, just the balance between traffic and ticket in the Sally stores in the first quarter, and then, any inflation in any of the categories?

Not seeing much in the way of inflation yet, we are starting to see a little bit of price pressure particularly on hair extensions. And not only price pressure but some supply shortages. But we saw a nice growth in ticket and traffic in the quarter as we have all year for Sally. Simeon Gutman – Credit Suisse: Okay thanks. Thank you.

Our next question comes from the line of Crew Hartson representing Deutsche Bank. Please go ahead. Crew Hartson – Deutsche Bank: Good morning.

Hi Crew. Crew Hartson – Deutsche Bank: In terms of the product mix at Sally. I was wondering if you could provide a little color at what was helping drive that margin expansion there.

It’s the same thing that’s been driving the expansion. Our brands are growing much faster than our overall sales rate. So the margins on our brands obviously are significantly higher that’s helping margin and the customer mix. We continued to see very nice growth primarily driven by our Beauty Club Card and CRM programs on the retail side of our business and as you know that’s a higher margin sale for us as well. Crew Hartson – Deutsche Bank: In terms of the private or control brands what is that as a percentage of sales these days.

It’s approaching 44. Crew Hartson – Deutsche Bank: Okay so a little bit up there and then just lastly you guys reduced the term loan by $60 million, was that a required payment that you had to put the settlement proceeds there or I’m wondering why wouldn’t you have gone after the more expensive bond debt here.

So the bond debt is still trading well above par and in some cases it’s trading well above its first call in November of this year. Crew Hartson – Deutsche Bank: Do you think the market is trying to tell you guys something.

I hope so. Crew Hartson – Deutsche Bank: All right thank you very much guys.

Thank you Crew.

And our next question is from the line of Emily Shanks with Barclays Capital. Please go ahead. Emily Shanks – Barclays Capital: Hi, good morning. Can you update us on where your restrictive payments basket stands?

Yeah the restrictive payments basket right now is well over $300 million, it’s about $315 million, our general basket is roughly $52 million, so in total availability is about 367. Emily Shanks – Barclays Capital: Right, thank you. And then just as we think bigger picture for your capital structure, do you have a target leverage in mind that you want to operate this business at?

We’ve been comfortable all along with where our leverage is, certainly, where the company historically has been in terms of its ability to generate free cash flow. We’ve been very comfortable in good times and certainly in challenging times. As far as the targeted ratio in terms of optimizing kind of where we think our weighted average cost to capital is, certainly as we get into the 2.5 to 3 times which is pretty near where we are today we feel very comfortable with that. You get beyond that and you start to try to strive for investment grade type ratings, the law of diminishing return starts to kick in, in terms of pricing and our maximizing our capital structure in the market. So we are getting very closer to I think where ultimately down the road it’s a question of based on our success what we are going to be doing with some of the cash after we’ve satisfied our long-term strategy in terms of our organic growth, our acquisition trajectory and certainly the de-leveraging of the balance sheet. So those are good problems to have down the road and certainly we are not agnostic to one decision or another. Emily Shanks – Barclays Capital: Great, I really appreciate the color, terrific quarter.

Thank you.

Thank you.

And next we’ll go to Meredith Adler’s line representing Barclays Capital. Please go ahead. Meredith Adler – Barclays Capital: Hey, thanks guys. Congratulations, I thought it was a good quarter.

Thanks, Meredith. Meredith Adler – Barclays Capital: I’d like to just go back maybe to the question that was asked before about international. I understand that it’s mostly a professional customer that’s buying if it’s stores in Europe. Is there a given your name recognition in the market which is probably supporting limited and the general development of the market. Is there the potential to move it more towards the retail customer or is that just never going to happen in France or Germany?

No, I think it will happen throughout Europe, Meredith. But as we found in the U.S., this isn’t the kind of business that you can spend a lot of money in general consumer advertising and get a good return on, because our whole reason for being as far as the retail consumer is concerned is the availability of the professional products which for the most part are not well known to them until they start shopping via one of our stores or stumbled across one of these brands in the salon environment. So, the ability to push that alone rapidly is the inhibitor there. If we could put together creative TV or billboard or magazine or whatever would be effective in Europe campaign, that would be easy. However, the fact that that hasn’t worked is also one of the things that makes it very difficult to compete with us not only in Europe obviously but here in the U.S. We’ve got such a head start on anyone that would want to compete with us and obviously in the U.S. when 44% of what we’re selling are brands that we own, that’s difficult to compete with. So, what I would say to you is 25 years from now we may see the same type of percentages retail versus professional in Europe that we see here. But I don’t think that it’s going to grow much more rapidly that it did in the U.S. And I say it could grow a little more rapidly because of the things we’ve learned from the Beauty Club Card program and the CRM program. We fully expect to institute those programs in any of the markets once we get an established database of retail consumers that we can then profile which is how the CRM program works. And also that we can start advertising to via e-mail and other types of cost effective advertising to the existing Beauty Club Card base that we do have in some of those countries. Meredith Adler – Barclays Capital: Well, and then I guess I’ll follow up on that a little bit. I know that there are information forces in the U.S. that you find people who fit your profile. Does that same data exists in Europe?

No, that’s the other problem. Actually the company that we use here in the U.S. is just trying to put together and build a model for Canada. And they also would love to expand internationally, but the information on consumers is just not as readily available in a lot of countries if at all. So that’s another inhibitor to the CRM piece and to profiling and reaching out to prospective customers. However, once you have a Beauty Club Card customer you can then market to them just as we do here in the U.S. without the third piece of the CRM. The CRM program is designed to bring us new Beauty Club Card customers by going after these prospects. Meredith Adler – Barclays Capital: Got it. And then my final question is about hair extension and you said you’re beginning to see some price pressure, but kind of more broadly it seems that one of the drivers of that firm private label penetration has been hair extensions which are profitable. Is there any reason to believe that that’s going to lose popularity and is there is any way for us to, I don’t follow lot of hair care companies, to keep track of what those trends are that might be impacted? That’s it.

The best way to keep track of the trends is to stay close to us because that’s one thing that I think we are very good at and it’s – we attend all the major trade shows where these things are, where these trends are usually launched all over the world. As far as monitoring when these trends are going to really accelerate and when they are going to really slowdown hair extensions have been very popular now for at least the last four or five years. I don’t really see the trend slowing down but I do see some issues with the supply. Now keep in mind when I say the supply we are only talking about the human hair extensions. The synthetic hair extensions obviously are a manufactured product and there is no supply issue with those but there has been in the last four or five months a fairly tight squeeze getting human hair out of Asia and what we are hearing from the suppliers in Asia who actually buy most of this hair in India is that there is a shorter and you know I guess at some point hair takes a long time to grow and you whack up two feet of hair off of some woman’s head, she’s not going to be back around for a while to have it done again. But they’re trends. The flat irons were an enormous trend for gosh, close to ten years. It’s still a very strong business. But it isn’t growing like it did. However, curdles are coming back into fashion, so curling irons are taken off like a rocket but it’s from a smaller base than the current base of flat irons. So another trend that seems to be hot right now are these feathers. I…

Yeah, we look at both the leverage loan and the high yield market Meredith. And certainly as you’ve seen with the equity market particularly today and over the last month or so is, is that, the credit markets have backed up a little bit with some of the world events that have taken place. And also is that we’re an opportunistic refinancer. And it’s a lot about it is, is about economics pricing and that this, these transactions can be NPV positive to us. So we are, of the mindset is that when we start to see certain price points in our structure that make economic sense certainly, we will try to find an entry point whether that is in the leverage loan market or it’s in the high yield market. And both right now as far as opportunistic deals have been rather lackluster or non-existent. Meredith Adler – Barclays Capital: And was that different before this recent backup obviously you couldn’t take advantage of it before or were you seeing better sort of opportunities three four months ago?

I think we are seeing a little bit better opportunities three or four months ago in terms of where we wanted to be and what we were targeting that certainly is the case. But as far as, just kind of the true pull the trigger entry point, that I think that, it was, certainly attractive but not enough for us to pull the trigger. Meredith Adler – Barclays Capital: Okay, thank you very much.

Thanks Meredith.

And next we go to line of Linda Bolton Weiser with Caris. Please go ahead. Linda Bolton Weiser – Caris: Hi, how are you?

Hi, Linda. Linda Bolton Weiser – Caris: I just wanted, just a little question on BSG, I guess you said the gross margin was flattish year-over-year and if I recall correctly, I think you had been having some nice improvement year-over-year in gross margin there. Is there anything in particular that’s going on or you think give some more color on that?

Actually our operating margins have been what’s been improving nicely at BSG more than the gross profit margin. Actually, we just went over 14% in gross margin for the first time I believe in Q3 or Q2, well, and once last year I believe. But for us to stay above 40 in gross margin for BSG is pretty good keeping in mind that we don’t have the private label business in BSG and we don’t have the retail business in BSG. So, our margin driver at BSG is the business shifting more towards the stores because the gross profit margin in the store business is better than the sales consultant business for several reasons. So, when I say stay at 40, I don’t mean that it will stay flat at 40, but the growth rate there will be slower than it is accelerate because the only driver you really have there is the shift to the store business. And then, we have somewhat of a driver in the some of the brands that we’ve been bringing on our better margin brands. And also when you look at our acquisitions, when we bring in a large acquisition like we did a year ago with Schoeneman in this year with Aerial, we generally find that either from purchasing differences or just merchandising differences that their margins are generally a little lower than BSG’s and it takes us a year or so to get those equalized so to speak but then as happened with Schoeneman you get that equalized and then you turn around and you have Aerial right on top of that. So, it’s like you take two steps forward and one step back. So but I am quite pleased with where our gross profit margins are at BSG, there is room for improvement and as I just said, it will improve primarily for those two reasons. But I don’t look at being flat to last year especially with significant acquisition like Aerial coming on board as a negative at all. Linda Bolton Weiser – Caris: Okay and just on the sales of BSG, I guess, maybe the acquisition revenue was a little bit lighter than what I have projected, it looked a little bit less than in last quarter, is the integration of Aerial going okay or is there anything unexpected in that business or...

No, not at all, actually the Aerial acquisition, we’re ahead of our plan for the revenue dollars on the acquisition. Linda Bolton Weiser – Caris: And is now particular kind of seasonality that would make one quarter different from another on sales there?

No, I mean we have slight differences from quarter-to-quarter but they’re not really seasonal. It may be somewhat seasonal relative to our industry but there is no significant seasonality in either side of our business. Linda Bolton Weiser – Caris: Okay, all right, that’s all I have, thanks a lot.

Okay, Linda, thank you.

Our next question comes from the line of Erika Maschmeyer with Robert W. Baird. Please go ahead. Erika Maschmeyer – Robert W. Baird: Thanks. Nice quarter.

Thanks Erika. Erika Maschmeyer – Robert W. Baird: You said you touched 5 million customers this last quarter, I guess could you give us a sense of what decile you are right now, as you think of that population that you have targeted and how far have you moved down? And I think on the last call you said that so still far you’ve reached out to 23 million customers, do you have an updated number for that?

Well, the easiest way to update that would be to add the 5 million to the 23 million but, I’ve been trying to explain in the last few quarters we don’t really look at this as decile or an inning or anything else. The CRM program and the Beauty Club Card program will be doing exactly what it’s doing today well after we’re all have gone. It isn’t the kind of program where you got X number of customers that you are going to approach and when you get to that number it’s over. It builds on itself which is critically important. And the customer mix and the prospective customers that we profiled continue to change. So you really can’t look at that as what inning are we in or what decile are we down to. We are working in different ways with all the deciles now and in some cases it’s a decile seven or eight customer that we haven’t seen for seven or eight months and prior to that was a every three or four months customer so we shot to that customer in a different way. And all these things have had very nice results for us, so I just don’t look to be saying to you at some point in time while well, we got to the end of the rope on this and we are going to have to bring up something else. It’s a customer relationship program and getting them into the Beauty Club Card program is the number one objective because then we have an ongoing communication with these customers. And we, we because they have a card and because we track their purchases after they become a card holder we’re able to really understand what is they use, and what it is maybe more importantly that they don’t use and we go after expanding the categories that they buy from us and their frequency of visit. Erika Maschmeyer – Robert W. Baird: Got you, that makes a lot of sense and it’s helpful. So the 5 million number that you put out those are the, the new customers that you are talking to, if I know that it’s takes multiple touch points I think you’ve said before maybe you got to send something to someone like four times to get them to respond. So you’re, so you are now reaching on to kind of 5 million new people plus all of the other customers like the 3 million that you started contacting last quarter is that the right way to think about it?

Yeah, that’s a good way to think about it. And I think when you look at the fact that our Club memberships for the quarter were up 21% over last year. And it was like I think at this time last year we were somewhere around 4.5 million, we’re now over 5. So that’s significant and that doesn’t seem to be slowing down. And I think that as I said it will continue to evolve as does the process in which we select who those prospect customers are. Erika Maschmeyer – Robert W. Baird: Got you. And then do you have any sense of how much potential there is for Cosmoprof in the U.S. kind of given the size of market is now, how many stores do you think you could have I mean and do you think it could ever, match the number of Sally stores?

No, I doubt that it can match the number of Sally stores simply because it’s dealing with only stylist. And as you know very well, the majority of Sally’s business today is retail. So, I don’t believe it will ever be even close to the number of Sally stores. But I do believe that our 4% or so growth that we’ve kind of been looking at on not only Cosmoprof but Sally as well can continue for several years into the future. Erika Maschmeyer – Robert W. Baird: Great. And then just a couple of quick follow-ups, how many stores do you have in Chile right now and give a sense of how many Beauty Club members or the proportion of that base is outside of the U.S.?

The Chile store count I believe right now is 25 and we’ll end the year with two or three more. And could you repeat the second part of your question? Erika Maschmeyer – Robert W. Baird: I guess yeah, how many Beauty Club Card members do you have outside of the U.S.?

We don’t. Well, I take that back. We do have some in Canada. But as I said earlier in the call, that’s one of the opportunities that we’re looking forward to get started. We are starting the program in the UK. So, we probably have some there, but at this point, it isn’t significant. And the other thing, I’ve said in the past is when you bring a customer on to the Beauty Club Card program that’s great information but until you have at least a year preferably two years or more of data and history on that customer, it’s difficult to really understand them as a customer and be able to utilize that data to drive your business forward and your relationship with that customer forward. Erika Maschmeyer – Robert W. Baird: Great. Thanks so much.

Thank you.

Next we’ll be going to Carla Casella’s representing JPMorgan. Please go ahead. Carla Casella – JPMorgan: Hi, most of my questions have been answered but when you talk about the Beauty Club cardholders, you’ve given some stats in the past on how much greater their purchases are, has that changed much as you expand the number of holders significantly?

No, it hasn’t changed a lot Carla, I think what we are starting to see even more positive reaction to is when we sign up a new card member, I think I’ve told you in the past or one of the numbers that we quote is, in general, the retail consumer who joins the Club goes from being an average four-time-a-year customer to an average five-time-a-year customer and some of the things that our marketing group is doing to the Beauty Club, to the new Beauty Club Card member is stimulating those visits to be even more than just one additional visit during the year and they’re doing a marvelous job in sensing that customer when they initially sign up with Beauty Club Card program to stimulate a quicker return visit. Carla Casella – JPMorgan: Okay, great. Thank you.

Welcome.

And next we’ll go to Joe Altobello’s line with Oppenheimer. Please go ahead. Joseph Altobello – Oppenheimer: Thanks good morning guys. Most of my questions have been answered as well. Just one quick one. I think Gary, earlier you said that you continue to see some pretty good growth both in terms of ticket and traffic ex Sally, and I was curious either late in the quarter into July did you notice any slowdown on the ticket side at all any trade down for example?

Well, this quarter was through June, Joe and didn’t notice any of that through the end of June, no. Joseph Altobello – Oppenheimer: And how about for July at least the early indication?

Well, I really don’t want to comment on July but all I will say is July didn’t show us anything unexpected. Joseph Altobello – Oppenheimer: Okay. Thank you very much.

And next we go to Jason Gere’s line with RBC. Please go ahead. Jason Gere – RBC: Okay, thanks. Just one question, I guess just talking about Sally and the operating margin at 20% that you hit this quarter, obviously it was a nice acceleration even from when you peaked in the second quarter, peak is that word. I guess what do you see is the long-term operating margins target that you can have this business especially as you grow more on the international side and get more leverage there, can you just may be give us like three to five year kind of context on the operating margins side on Sally? Thanks.

I wish I could. Here is what I will tell you. The margin drivers that are driving Sally North America’s business today are in place. I don’t expect them to change because they are, they are natural and they are just kind of a function of the business. Those are the product mix moving more to brands we own. The customer mix moving more towards the consumer and we are getting a slight pickup every quarter in low country or low cost sourcing activities. Now, the – we will get margin improvement and leverage as the European business and any the international businesses grow; however, in Europe where most of our concentration is because we do not have a significant retail business there, those margins will be significantly less. So if that business starts growing very quickly and becomes an increasing percentage of the overall Sally business that will put some downward pressure on Sally’s operating margin percentage. So even though the Sally North American business I believe can continue to grow about a half of point a year as it’s done for many, many years. The fact that the international business operates at a significantly lower gross and operating margin percentage the larger that becomes the more of a drag it will. However, I would much prefer having the opportunity to double the size of this business over the next five, six years or whatever by having that international business available to us. Even though our margins on a percentage basis may take a hit. Last time I checked you don’t pay shareholders or bank that are earning out with percentages it’s going to be dollar or so. Jason Gere – RBC: Okay, great. Thanks Gary.

You are welcome.

And our next question comes from the line of Jill Caruthers representing Johnson Rice. Please go ahead. Jill Caruthers – Johnson Rice: Good morning. Just a follow-up on your previous comment, could you talk about within the Sally division international it seems as though it’s being growing positive past couple consecutive quarters but you haven’t really seen on the degradation on the net Sally margin. Could you talk about, are you seeing huge improvements in international margins as well?

We are seeing some of our international business but margins improve significantly but also keep in mind that international is still only about 18% of the business, so and if that grows which on a percentage basis our international business is growing much faster than our domestic. And if that grows to be 25% or 30% of the total business and that margin is just for the sake of conversation say 10% or 11% versus Sally’s 22, 23, whatever it is, it’s going to have some pressure. But again, I would much rather have an 18% operating margin on 5 billion in sales than a 22% operating margin on 3 billion in sales. Jill Caruthers – Johnson Rice: Understood, understood. Could you talk about the margin favorability between the customer mix, I know it’s always been a driver as you increase the retail. Can you quantify that difference or any type of range of magnitude between the retail and the professional customer?

Are you talking about the international business or in general? Jill Caruthers – Johnson Rice: I’m sorry, in general at Sally here.

Yeah, at Sally, the retail consumer business is at least 10 gross profit points above the professional. Jill Caruthers – Johnson Rice: Okay, okay. And then just quick one on Easter shift, it seems that, that holiday period shifted into this past quarter. Could you quantify any benefit or it was pretty small?

This year, it was almost invisible. Jill Caruthers – Johnson Rice: Okay.

It was kind of a strange Easter. We actually expected it to be softer in March and as you said, a little more of a shift in to April and it really didn’t happen that way. When I look at April and March and April together which is really the right way to look I believe at Easter, it was fine but we didn’t see the soft March and significant increase in April. Jill Caruthers – Johnson Rice: Okay, I appreciate it. Thank you.

Thank you.

(Operator Instructions) And we do a follow-up from Erika Maschmeyer with Robert W. Baird. Please go ahead. Erika Maschmeyer – Robert W. Baird: Hi, great. Thanks, one other follow-up here, could you talk a little bit about which area do you think might be opportunities for you on the low cost sourcing side and how much each point contributes to gross margin as you add categories there?

Well, the way to look at that Erika, is about 30% of what we sell in North America is originates in Asia, manufactured in Asia. We have about 7% or about 25% of that 30% that we are importing on a direct basis today. We have said and believe that we over the long haul can probably double that 7% and get to the point where about half of the product that we sell that originates in Asia is being done on a direct import basis. So, how that impacts gross margin, you’d have to put some numbers to that but I would tell you to get from that 7 to the 14% or 15% is a long haul that could be over the next 8 to 10 years. The other 15% or the other half of the Asia produced product are branded goods that we carry and has no intention of walking away from. There are many very valuable brands that we carry that are sourced in Asia, they’re professional products from Conair, they’re professional products from Helen of Troy, those are two of our very valued and very large electrical suppliers. And even though we do import some electricals on our own, we have no intention of trying to replace them as suppliers, because their names are well-known in the industry and they are great partners. Erika Maschmeyer – Robert W. Baird: Very helpful, thank you.

You’re welcome.

And there are no further questions at this time. We will turn the call back over to Gary Winterhalter. Please go ahead.

Thanks, operator. To summarize, we had a terrific quarter, positioning us well to end fiscal 2011 with another record year. As always thank you again for your interest in Sally Beauty Holdings and we look forward to seeing you all soon.

And ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive Teleconference service. You may now disconnect.