Gregory Melich (Morgan Stanley): The warranties and service revenues from Firedog were both down more than total sales but attachments were starting to improve sequentially. What’s the pricing strategy in the attachments?

Bruce H. Besanko: With respect to the warranty pricing, we made some changes in our pricing last summer. We took our price point down in the month of July and then took it back up slightly in the month of August and then later in the month of October. The two price increases in August and October were not nearly to the levels of the original price but were up from where we had adjusted it in July.
As a consequence of that, as we look at unit attachments on our warranty programs, particularly for televisions, our unit penetration, being the ability to attach a warranty program given that new price structure to a television purchase is up versus prior year has been up for most of the first quarter.
As it relates to Firedog pricing, we’ve not had any meaningful or material changes in our Firedog prices.

Dan Binder (Jefferies & Company): In the 50 stores that you did the incentive test, can you provide detail around the improvement in comp-store sales, margin rate, average employee increase in wages, close rates etc?

John T. Harlow: What we saw was significant enough over control groups that we believe that it would create enough margin impact to allow us to sustain not only the sales opportunity and the sales traction that we’ve seen year-to-date but allow us to create up-side in the back-half of the year. The movement was in a 50-store test versus control. It had to be quite significant for us to move in a 90-day timeframe to roll it to scale.

Philip J. Schoonover: You’re familiar with the company’s efforts in road shop. This is a very similar program to the program we’ve had in effect for a number of years in road shop. We had the analog of team-based incentives in the company and then we had the coupling of poor performance last fall. This compensation program as well as the training and other activities has improved the home theater performance enough that we felt that this was a good direction for the company to go.

John T. Harlow: The team-based component of it is creating a level of collaboration and it’s turned out to be very much customer-friendly as well as sales and financially friendly. That’s why we’ve moved forward with it.

Dan Binder (Jefferies & Company): Can we get an update on the POS systems?

John T. Harlow: We’ve chosen to move at a deliberate pace on this to make sure that we minimize the disruption at the store level. We’ve continued to make sure that not only the POS but the back of the house work that’s done on the POS system is on-course. To date, our plan is to continue to implement it in new stores and to continue to refine it in a group of stores. We are at about 200 stores today and then we will add a group more in the third quarter and the plan will be in the first half of next year to complete the chain once we are satisfied that the integration and infrastructure work are where we need them to be for scale.
As it relates to MST, we continue to be optimistic. Where we’ve gone so far with MST is we are actually in the later stages of implementation. We are about 80% of the way through and the work on the benefits from assortment and margin that we anticipated getting are taking hold at this point and the replenishment modules and core systems will be put in place over the next six to 12 months.

Dan Binder (Jefferies & Company): What were the comp store sales by month for this quarter?

Bruce H. Besanko: In the first half of the quarter we saw comps that were similar to what we saw in the fourth quarter. In the back half of April and moving in through May, there was a substantial change. We attribute that change in part to the traction that we are getting from our initiatives and the rebate checks. As a result of that, the comps in May were better than the earlier trend.