Abercrombie & Fitch Company Class A Earnings Call Insights: Macro Conditions, Inventory Flow and International Business
Macro Conditions and Inventory Flow
Betty Chen – Wedbush Securities: I was wondering, Jonathan, if you can talk a little bit or Mike, about the guidance for Q1 comps of down high single-digit. I think you mentioned in your prepared remarks some impact maybe from macro conditions as well as the inventory flow. Is it also based upon some of the trends you’re seeing now in February and also why we should expect that to increase significantly in the second quarter and that will be really helpful?
Michael S. Jeffries – Chairman and CEO: Let me take a stab at this. We have commented in the first quarter knowing that we have tailwinds, primarily from the lack of cold weather inventory that we had on hand last year. We are anticipating sales losses due to that through the middle of March. We were also very concerned about the macroeconomic situation coming into the first quarter. Second quarter we see that we won’t have the same problem in terms of liquidating carryover merchandise. However, we also see that we will be in better position versus last year. If you’ll remember we had a real problem with flowing newness into the store. We also think that the cannibalization effect is diminishing in Europe. So, first quarter is really going to be a margin opportunity. We believe that for the reasons I just mentioned, second quarter, we’ll see resumption of healthier sales levels.