I just have a couple of quick questions. First, can you talk a little bit more about your strategy regarding how you are evolving the PacSun concept? Specifically, we know that you have converted some of your stores to a more value-oriented format. Are you considering anything more sweeping in regards to that as far as the positioning of the concept, regarding price points and value orientation going forward?

Sally Frame Kasaks

Nothing more sweeping. I think as we noted in my earlier comments there are 525 stores that we see as our core Pac stores. That reflects the full expression of the brand. Our value stores, we have noticed during our real estate review that many of these were in areas where the customer demographic was the lower consumer income base and I have been out there looking at our value stores as our assortment comes through and am pleasantly surprised by it honestly with how compatible they are with the core brand. I think the execution of the way we reorganized the business in terms of using similar design teams and so forth to create the product and source the product definitely has the Pac hand. So do not look for wide disparities and I would not look for any sweeping changes in terms of how we merchandise and the price point.

I did note we have been more sensitive to opening price points in the core stores as well. I think you will see on opening price points we are going to be very sensitive to price points in that area. Does that answer your question?

Jeffrey Van Sinderen – B. Riley & Co.

Yes, that’s helpful. And just real quick follow-up on some of the other questions surrounding the denim strategy for back to school. How do you see the mix of products playing out there between private label and branded? Can you give us any commentary on how you see the price points and promotional cadence playing out versus last year?

Sally Frame Kasaks

Last year effectively, though we do carry some Levi’s, our denim business is practically all under our Bullhead label so we do see improving some of the brand presence as we go into back to school. From a promotional cadence point of view we do not see any change. In fact, in some categories and some styles we have actually seen that we can raise prices without reducing any unit sales. So when the styling is right price is not as big an issue as when perhaps the styling is too basic or too core. So our cadence, we are going to be pushing a lot more on the fashion of denim. Price is one component but fashion is going to be an important part of our projection to our customer.

Jeffrey Van Sinderen – B. Riley & Co.

Great. Thanks.

Sally Frame Kasaks

Thank you.

Operator

Thank you. And the next question comes from the line of Brian Tunick with JPMorgan.

Anna Andreeva – JPMorgan

Great. Thanks so much. It is Anna for Brian. Sally, I guess I’m just trying to still understand why would you see merchandise margin pressure in the second quarter given that your inventories are so lean and you talked about carry over at levels below last year. Do you think merchandise margins will be up in the back half? You certainly have a good opportunity coming up in the fourth quarter. That’s my first question.

Sally Frame Kasaks

We see an opportunity in the back half but it is hard to predict right now. Frankly, even with lower inventories it is a function of sales, the margins. Deep sales plan up side on sales will get up side on margins. Any down side on sales we are going to keep the inventories clean and turning. Until we can establish the bench line for sales that is why we are looking at the range we are talking about. I wish a couple of points in sales that would take care of it all but I think at this point we have all seen that predicting sales has been problematic at best.

Anna Andreeva – JPMorgan

Okay and then can you give us an update about your private label penetration? Is that something that you are still growing in juniors? How did your private label perform during the quarter?