Margaret Whitfield (Sterne Agee): Do you have any comment on May sales trends thus far?
Chuck Crovitz: No.
Brian Tunick (JP Morgan): The SG&A came in better than expected. Are you still endorsing flattish for the rest of the year and was there any timing in the marketing shifting out of the first into the second quarter?
Sue Riley: We will see leverage this year versus last year on a continuing operations basis. That is consistent with what we had said. We expect to see most of the savings from our restructuring kick in starting this quarter and into the second half. You can expect to see some leverage year-on-year. With regard to marketing spend the first quarter we are going to see more of that in the second half than we expect to see in the second quarter. We are putting more emphasis on back-to-school and holiday.
Brian Tunick (JP Morgan): Do you have any comment on shoes?
Dina Sweeney: We are still focusing on shoes. We have identified some key learnings. We see some opportunity in narrowing the overall SKU assortment we have given the stores. We are looking at re-evaluating the square footage as we continue to open in new locations.
We also are playing with the longevity of specific categories as we continue to move forward. We are also finding ways to improve and leverage our clothing to our shoe locations. So it is something we are focused on.
Brian Tunick (JP Morgan): Can you make any comments on Ezra given the 90-day standstill agreement?
Chuck Crovitz: In terms of Ezra there is not a lot new to say on this. He remains an active, engaged member of our Board and we continue to work with Lehman Brothers. The Board is committed to addressing any qualified offers we might receive. There has not been much change on that.
Janet Kloppenburg (JJK Research): Where do you think the shared services expense of $107 million will come out as a stand alone business for The Children''s Place?
Sue Riley: What you are referring to is shared services expense from last year. As you look at The Children''s Place what you can expect to see is we could not restructure all of that out but the number you see here in SG&A is comparable to that. The concept of shared service no longer exists. If you look at SG&A last year on a Children''s Place only basis and look at SG&A this year I expect to see some moderate levels of leverage.
Janet Kloppenburg (JJK Research): Have you delineated that for us?
Sue Riley: We have not yet because we have to restate 2007 to pull out the Disney business.
Janet Kloppenburg (JJK Research): When will we get that?
Sue Riley: You will see it in the first quarter and then Rich Paradise and his team are working on the remainder of the year. We should have that in the next month or so.
Janet Kloppenburg (JJK Research): Do you expect the IMU to be down for the rest of the year?
Sue Riley: We are looking at IMU being down moderately for the year this year compared to last, yes. Driven by primarily product mix. We are SKU’ing more into “good” as opposed to “best.” Primarily it is mix driven.
Janet Kloppenburg (JJK Research): As mark downs go lower and as you anniversary some promotional, high inventory periods, could you offset some of that lower IMU with lower mark downs?
Sue Riley: That is the plan. Although we are cautious about back-to-school.
Janet Kloppenburg (JJK Research): The interest expense was much lower than expected in the quarter. Can you give some guidance going forward?
Sue Riley: We are not giving guidance at this point. Interest expense was lower in the quarter primarily because we had cash oversees that was still invested during the quarter so we were able to mitigate some of the expense. Beyond that it is best if we wait until we have the financing we want to obtain secured and then we will give some guidance on what you can expect.
Janet Kloppenburg (JJK Research): Could that benefit that you saw in the first quarter trickle into the second and third quarters as well?
Sue Riley: Second quarter we come into a trough because of buy back and inventory so I would say not.
Janet Kloppenburg (JJK Research): The depreciation level was about $17 million in the quarter. Should we be using that as the go forward for the quarter?
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