In short, taking all of these circumstances in to consideration, we believe we are well prepared for difficult economic times.

Now, turning to fiscal 2008 fourth quarter results. All comparisons mentioned in this commentary are to the fourth quarter of fiscal 2007. Total sales were $352 million this year versus $384 million last year, a decline of approximately 8%. We ended the quarter with 932 stores versus 954 stores last year.

Same-stores sales declined 10% for the quarter. e-Commerce sales grew 35% during the fourth quarter to nearly $18 million this year from $13 million last year. Gross margin declined to $57 million or 16.1% of sales this year from $122 million or 31.8% of sales last year. As a reminder, our primary goal for the fourth quarter was to significantly reduce inventories. We achieved our objective, although it severely impacted gross margin.

Merchandise gross margin declined 14.1 percentage points due to a highly promotional environment and our own aggressive efforts to clear fall inventories. Non-merchandise gross margin costs were up 160 basis points. Occupancy was up 190 basis points as a result of deleveraging these costs on a negative 10% same-store sales result.

Distribution expenses were down 30 basis points due to the consolidation of our distribution centers near the end of the first quarter of fiscal 2008. Buying costs were down slightly in dollars and flat as a percentage of sales. SG&A expenses including non-cash store asset impairment charges of approximately $12 million increased 440 basis points to $100 million or 28.4% of sales this year from $92 million or 24% of sales last year.

Asset impairments accounted for 290 basis points of this increase. Excluding non-cash impairment charges from both years, SG&A for the fourth quarter was down nearly $3 million from last year marking our third consecutive quarter of expense savings to the prior year. Although these expenses were down in dollars, they deleveraged 150 basis points in total due to the declining sales environment. Our income tax rate for the quarter was 31.6%.

Net loss from continuing operations was $27.6 million or $0.42 per diluted share versus income from continuing operations of $19.6 million or $0.28 per share last year. Results for the fourth quarter of fiscal 2008 include net gains from real estate transactions of approximately $5 million or $0.05 per diluted share which are reported within other income in our income statement.

Now, turning to the current quarter. As previously announced, we are now providing earnings guidance only on a quarter-to-quarter basis due to the unprecedented and uncertain nature of the current economic and consumer environment. Assuming a same-stores sales decline in the low 20% range we would expect to report a first quarter loss of $0.26 to $0.31 per diluted share. We expect occupancy expenses to deleverage by approximately 500 basis points which will more than offset expected merchandise margin gains and savings from our distribution and buying expenses.

We expect SG&A dollars to be in the high $80 million range for the quarter. Excluding non-cash impairment charges from both years, we would expect SG&A dollars to be down by approximately $4 million versus the first quarter of fiscal 2008. Finally, we currently expect our effective income tax rate for the quarter to be 40%.

So, in summary, we expect very challenging economic conditions to continue to pressure our sales and operating margin results over the near term. That said we have taken prudent steps to better position our company from a financial perspective and to help us weather the current economic storm. Sally, I turn it back to you.

Sally Frame Kasaks

Thank you Mike. We are very confident that we have taken appropriate defensive actions to preserve the balance sheet and to manage those things that we can control. Further, we believe that many of these actions will make us a stronger business when the inevitable but likely slow economic recovery occurs. But, we are not waiting for the external environment to turn. Yes, we may need to make some tactical business decisions in the short term around price points and selective promotions but we know that ultimately our business is about getting the product right and communicating with our customer around brands, fashion and the in-store experience.

We believe that we are providing differentiated assortments that will over time build our connection with youth culture and thus with our customer. So thank you again for joining us today. Operator, we will now take questions.

Question-and-Answer Session

Operator

At this time, I would like to remind everyone in order to ask a question, press “*” then the number “1” on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Paul Lejuez from Credit Suisse.

Paul Lejuez – Credit Suisse

You said that you pushed off some of your refreshes in to 2010 so how do we think about future cash backs? Is this $30 million a level of CapEx that you can maintain over time or will that need to pick up at some point or else you risk stores getting run down at that $30 million level?

Michael L. Henry

Paul, our CapEx number is going to be subject to change as we go through this environment. If we experience a 2009 that is as bad or worse than 2008, what we would be doing is continuing to negotiate with landlords to defer refresh projects even further than what we have so far. So, I wouldn’t suggest maybe that $30 million is the exact amount of CapEx to think about every year but maybe a $50 million number might be a good center of gravity for now understanding that we will be making adjustments depending on what the environment shows us as we finish the year.