Higher.
Scott Mushkin - Jefferies & Co.
Of course, that’s higher. Okay. Thanks.
Glenda J. Chamberlain
We had an expense in the quarter of about $10 million or $0.04 related to store closure reserve adjustments. That is included in the $0.32 that we reported.
Scott Mushkin - Jefferies & Co.
Right. So it is even better than you reported. The second thing is in…
Glenda J. Chamberlain
I just want to clarify that that is an ongoing expense for us. We have about $1 million of cash that we actually pay on those leases every quarter and we will continue every quarter to evaluate the reserves. And so it is possible that there may be more adjustments in the future. So, we don’t think of that as a one-time item that needs to be added back.
Scott Mushkin - Jefferies & Co.
Okay. So, just not to beat this to death, but was the adjustment a non-cash or was it some cash and some non-cash?
Glenda J. Chamberlain
We pay out about $1 million in cash every quarter. The amount in excess of that was an adjustment to the reserve balance to increase the number, the estimate of the number of months that we believe it will take to sublease those properties.
John P. Mackey
Non-cash.
Scott Mushkin - Jefferies & Co.]
Great. Then my second question I think maybe I asked something similar, but in our store walking we have noticed that some of the prepared foods sections have had some adjustments and New York area with more being done as the Everett Commissary and obviously your gross margins were pretty nice this quarter. Is there still more opportunities as you look at the prepared food offering to get the shrink down or slash, get the margins up to where you guys want them to be or is that really not a large opportunity going forward?
Walter Robb
I don’t think that’s a meaningful opportunity. I mean, the shrink is always an opportunity. We talked about that on the last couple of calls, Scott. Where we think we have opportunities to improve in that area, but if I was looking at the big picture I wouldn’t say that’s one of the biggest opportunities. So --
A.C. Gallo |