Big 5 Sporting Goods Corp (BGFV) 2008 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Big 5 Sporting Goods second quarter 2008 earnings conference call. (OPERATOR INSTRUCTIONS) On the call today will be Mr. Steve Miller, President and CEO, and Mr. Barry Emerson, CFO. And now I would like to turn the call over to Mr. Steve Miller. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and welcome to our fiscal 2008 second quarter conference call. Today, we will review our financial results for the second quarter of 2008 and provide general updates on our business, as well as provide guidance. At the end of our remarks, we will open the call for questions. I will now turn the call over to Barry to read our Safe Harbor statement.

Thanks, Steve. Except for statements of historical fact, any remarks that we may make about our future expectations, plans and prospects constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in current and future periods to differ materially from forecasted results. These risks and uncertainties include those more fully described in our annual report on Form 10-K for fiscal 2007, our quarterly report on Form 10-Q for the first quarter of fiscal 2008, and other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statements that may be made from time to time by us or on our behalf.

Thank you, Barry. Given the challenging consumer environment, we are pleased with our operating performance during the second quarter. We improved product margins and achieved meaningful savings ahead of plan in several major expense areas of our business, including store level, our distribution center, advertising and corporate admin, and we continued with our strong inventory management. As a result, excluding the impact of an unanticipated one-time charge related to release accounting that Barry will discuss, our earnings came in at the high end of the guidance range that we provided on our last call in April.

Now for the numbers. In the second quarter, sales were $209 million, down 4.1% from $217.8 million for the second quarter of fiscal 2007. Our same store sales declined 7.6% for the second quarter. The decrease was primarily a traffic issue with a mid single digit decrease in customer traffic, and our average transaction size down low single digits. As anticipated, we experienced continued weakness in the roller shoe product which accounted for approximately 140 basis points of the same store sales decline during the second quarter.

While we expect roller shoe sales comparisons to remain weak through the remainder of the year, the impact of this category and overall results should diminish in the third quarter, and should be a relative nonissue by the fourth quarter.

Additionally, second quarter sales reflected one more shopping day during the quarter due to the shift of the Easter holiday when our stores are closed, out of the second quarter last year and into the first quarter this year. However, this was largely offset by our fiscal calendar which placed the fourth of July holiday two days further from the end of the second quarter. Thus, our third quarter will have the benefit of some additional fourth of July holiday business. Looking at our major merchandise categories, our apparel merchandise category was down low single-digits during the quarter. Hard goods was down mid to high single digits, and footwear was down high single digits, due in large part to the roller shoe business.

Excluding roller shoes, footwear was down low single digits. We are pleased that we were able to increase our product margins 11 basis points for the quarter, especially given the impact of the roller shoes. If you factor out roller shoe, product margins would have been up approximately 23 basis points for the quarter. Our margin improvement was made possible in part by our cleaner inventories, which resulted in fewer markdowns as well as the efforts of our experienced buying team to optimize pricing and protect product margins in this difficult environment.

We are experiencing inflation in the purchase costs of many products as the cost of raw goods, production and associated transportation continues to rise. As always, we are carefully evaluating pricing strategies in an effort to maximize both sales and margins. We believe that our product mix, which includes a strategy of opportunistic buying, allows us to provide compelling values for our customers while still earning margins that are very positive for our bottom line.

As I indicated, we are also very pleased with our inventory position. As of the end of the second quarter, our total chain-wide inventories were down from the prior year while operating 22 additional stores. Our inventories were down 6.3% on a per-store basis. We've made great strides in further improving inventory comparisons thus far in the third quarter. We feel our inventory management has put us in an outstanding position to take advantage of opportunistic buys as they become available.

Turning now to current trends. Like most retailers, we continue to face strong headwinds in the current economic environment. What we've experienced over the past several weeks has not been too dissimilar from what we experienced during the first half of the year. We, like everybody, are waiting to see some real and long-lasting stimulus to restore the economic health of our consumer. In the meantime, we remain very focused on refining and managing the controllable aspects of our business as efficiently as possible in order to position ourselves for growth when the consumer climate improves.

Our entire team worked very hard to achieve second quarter expense savings ahead of our plan, and we continue to evaluate all of our cost-saving levers.

Before I turn the call over to Barry, I will comment on our distribution center and store openings. We continue to be extremely pleased with the productivity and efficiency levels at our distribution center. During the second quarter, our D.C. team lowered overall expenses from the prior year, despite supporting 22 more stores, and experiencing significant increases in trucking costs due to higher fuel prices.

Commenting on store growth during the second quarter, we opened six new stores. These stores were in Golden, Colorado, East Mesa, Arizona, Hermiston, Oregon, and Perris, Huntington Park and Ventura, California. The Ventura store was a relocation of a store that we closed early in the third quarter. We anticipate opening four stores during the third quarter.

We continue to focus on securing quality new store locations and expect to open approximately 20 net new stores during fiscal 2008. In line with our strategy of controlled growth, we continue to take a hard look at each potential new location and we are encouraged by the real estate opportunities we are finding. We believe these new locations will further solidify our market position and benefit us when the consumer climate improves.

Now, I will turn the call over to Barry, who will provide more information about the quarter and full year, as well as speak to our balance sheet, our capital expenditure, our cash flows, and provide guidance.

Thanks, Steve. Our gross profit margin for the second quarter was 32.7% of sales, compared to 34.3% of sales for the second quarter of 2007. The 11 basis point increase in product selling margins was offset by higher store occupancy costs due mainly to new store openings and the one-time charge relating to lease accounting that Steve mentioned.

During the quarter, we recorded a $1.5 million pretax charge to correct an error in our previously recognized straight-line rent expense, substantially all of which pertained to prior periods and accumulated over a period of 15 years. This error is primarily related to the timing of reflecting the impact of store lease amendments on our straight-line rent expense. This charge accounted for approximately 75 basis points of the decline in gross profit margin during the second quarter. We have determined this charge to be immaterial to our prior year and current year financial statements. As it was not anticipated, this charge was not included in the earnings guidance that we had provided on our last call.

Our selling and administrative expense as a percentage of net sales was 30.8% in the second quarter of fiscal 2008, versus 29.1% in the second quarter of the prior year. The higher rate year-over-year was primarily due to the softer sales conditions and higher store-related expenses reflecting an increased store count.

Now, looking at our bottom line, net income for the second quarter was $1.7 million or $0.08 per diluted share, compared to net income in the second quarter of fiscal 2007 of $5.9 million or $0.26 per diluted share.

Briefly reviewing our six month results, sales declined 3% for the 2008 year-to-date period to $421.9 million from $434.9 million during the same six month period in 2007. Same store sales decreased 6.4% versus the same period last year. Looking at the bottom line for the first half, net income was $5.8 million or $0.27 per diluted share, compared to net income of $13.5 million, or $0.59 per diluted share in the same period last year.

Earnings results for both the second quarter and first six months of fiscal 2008 include the charge related to straight-line rent expense, the aftertax effect of which was $0.9 million or $0.04 per diluted share.

Turning to our balance sheet, total chain inventories of $251.4 million at the end of fiscal 2008 second quarter were down slightly from both the end of fiscal 2007 and the second quarter last year. As Steve discussed, we continued to enhance our inventory position during the second quarter, and on a per store basis, quarter-end inventories were down approximately 6.3% from the same period last year.

Looking at our capital spending, CapEx excluding noncash acquisitions totaled $9.1 million for the first six months of fiscal 2008, reflecting expenditures for new stores, store-related remodeling, distribution center and corporate headquarter costs and IT purchases. We continue to expect total capital expenditures for fiscal 2008, excluding noncash acquisitions, of approximately $23 million to $24 million, primarily to fund the opening of approximately 20 net new stores, store-related remodeling, and new point-of-sale terminals at our stores, corporate office and distribution center improvements, and computer hardware and software purchases.

We generated cash flow from operations of $21.3 million in the first half of fiscal 2008, compared to $6.1 million for the same period last year. The difference is mainly due to reduced funding for working capital as we right-sized our inventories to align them with the weaker sales conditions. We will continue to evaluate the best use of cash, including paying shareholder dividends, reducing debt, or repurchasing the company's common stock.

Our long-term debt at the end of the second quarter of fiscal 2008 of $103.3 million compares to $103.4 million at the end of fiscal 2007, and $88.8 million at the end of the second quarter last year.

To update activity under our share repurchase program, in the second quarter we repurchased 210,474 shares of our stock, for a total of $1.7 million. As of the end of the second quarter, we had $15 million available for stock repurchases under our $20 million share repurchase program authorized in the fiscal 2007 fourth quarter.

Now I'll turn to guidance. Although results for the second quarter of fiscal 2008 were in line with our expectations, and our expense control was ahead of plan, the consumer environment remains challenging. With no near-term stimulus in sight, we are assuming that sales will continue to be impacted by a challenging consumer environment and are maintaining a cautious outlook. Based on that assumption, we are providing the following guidance.

For the third quarter, we expect a decline in same-store sales in the mid single digit range, and earnings per diluted share in the range of $0.14 to $0.20. And for the full year 2008, we expect a decline in same-store sales in the mid single digit range and earnings per diluted share in the range of $0.60 to $0.80. This full year guidance includes the $0.04 lease accounting charge that we previously discussed. A material improvement or decline in the overall consumer environment during the remainder of the year could materially impact our performance relative to this guidance.

Operator, I think we are now ready to turn the call back to you for questions and answers.

Thank you, sir. We will now begin the question-and-answer session. (OPERATOR INSTRUCTIONS) And we will take our first question from Sean McGowan with Needham & Company. Please go ahead.

Yes. Steve, could you give us some sense of maybe how the quarter flowed, month to month, and also whether there were any notable geographic disparity in the sales results?

Sure. I think how the quarter flowed -- April was our strongest month, although that was primarily a result of the shift of the Easter that gave April an extra sales day. We also moved an extra promotion out of May last year into April this year. May lost a promotion we moved to April and we experienced some, I'd call, additional softness around Memorial Day that we attribute to primarily to cooler weather in most of our markets during that important holiday period.

June was impacted as I mentioned -- the prepared remarks by the shift of the fourth of July holiday two days further into the third quarter, and we moved an associated promotion out of Q2 into Q3, so I think the bottom line if you really remove the effects of the calendar and promotional shifts, I would call our trends really not too dissimilar through the entire quarter, with perhaps a little extra softness around Memorial Day. I think to address --

Do you mean fourth of July? Oh, you mean Memorial Day itself?

Memorial Day. I'm saying our business transfer really remarkably consistent over the course of the quarter, other than we were arguably a little extra soft over the important Memorial Day weekend and the weather was not very cooperative for that important holiday.

Okay. And regarding geography?

Really, I think during the second quarter sales were -- it was relatively mixed across our market areas. We certainly had areas that performed better, some areas better than others. It's probably fair to say we saw some greater sales weakness in certain areas of California and other states that have been more impacted by the housing-related issues. I don't think the consumer climate was particularly robust in -- arguably in any of our market areas.

And, finally, any particularly strong product categories that you could call out?

We certainly had some areas of our business that performed reasonably well for us. But, I don't think we're going to get more specific than talking about our major merchandise categories, footwear, hard goods and apparel for competitive reasons. I will tell you I think we're really more recently and somewhat in the second quarter, I think we're seeing a trend of what I'll call stay-at-home products, staycation I hear it referred to. Stuff that you can use at or near your home and relatively inexpensively. In general, those kind of products seem to be outperforming categories that require you to get in your car, drive, in some cases pay to engage in an activity when you get there. Examples may be golf and water or boating-related items.

Okay. Well, thanks. That's helpful.

You're welcome.

Thank you. Our next question is from David Magee with SunTrust Robinson Humphrey. Please go ahead.

Hi, guys. Good afternoon.

Hi, David.

Has your back-to-school started yet?

Not really. Certainly not in most of our market areas, not at all.

Okay. So it's too early to get a read on that. It looks like just given the numbers -- the guidance that you've given for the year and for the third quarter that you have a shot here of showing flatter numbers in the fourth quarter. Is it possible as you're looking at next year, given the fact that you're going to have more apples to apples in the sales line -- your margins are stable, your expenses seem to be under pretty good control. Could you show in the same kind of environment some earnings growth during the early part of next year, do you think?

Well, we certainly hope so.

Yes, David, we'll -- we honestly haven't given any kind of guidance whatsoever for next year, and I know you're not asking necessarily for that.

Conceptually --

What we are doing of course is managing our expenses very, very carefully. We really are tapped in everything we can control from an inventory management, from a cost containment, from a product mix, advertising, all of those kinds of things. We're going to continue to press every one of those levers next year and -- but, again, sales is just the big question.

But it sounds like to me that things are bumping along here at a lull and not getting worse or any better, and maybe you're operating better than you were six months ago within this environment.

We think so, but obviously there's a tremendous unknown on what I'll call the health of the consumer and where our general economy is going to go.

And do you anticipate opening up the same number of stores next year as you did this year, as you are this year?

Yes, we've made no real seat change in our overall thought process in terms of our strategy of controlled growth. We're certainly looking hard in this environment at each and every potential new store location and we're encouraged about the real estate opportunities. We're finding -- I'd argue that we never really grew out of control in better times, and at this point in time we believe that maintaining our positive but controlled growth will allow us to further secure market position and benefits over the long-term when the consumer climate improves.

Are you seeing more opportunities on the real estate side than you were a year ago?

I think we're seeing better opportunities and arguably better, perhaps better pricing, and I think with the number of store closings that we're hearing and reading about, it might even get better.

David, in addition to that, for this year we're still anticipating free cash flow excess of $20 million, and we're of course evaluate the best use of our cash consistently, and looking at both store -- opening new stores and the dividend and stock buyback and paydown of debt, those kinds of things. We're going to continue to look at that real carefully and watch our financial condition very carefully at the same time, and if things continue to stay the same, or if things, in fact, start to deteriorate, we're of course going to have reevaluate the use of cash.

Okay. Thanks a lot. Good luck, guys.

Thank you.

Thank you. Our next question is from Ian Corydon with B. Riley & Company. Please go ahead.

Thanks. I believe you said that the first half trend pretty much continued into July, but the third quarter same store sales guidance is for mid single digit-negative, which seems like an improvement from the second quarter, and roller shoes impact that, but could you just talk about what else went into your Q3 comp guidance.

I'm not sure. I think we're saying it in general. We're looking for a similar sales trend as we had in the second quarter and I think we're splitting hairs on anything else.

There's a slight improvement as we mentioned going through the year relative to the roller shoes. But, we're really not anticipating improvement necessarily in our back half of the year.

Okay. So the back half of the year if that was a minus 7 comp, that would be in the range of down mid single digits, the way you guys think of it?

Year-to-date, we're down for the first half of the year, we're down 6.4%, which I would characterize as mid single digits and that's pretty much what we factored in for the third quarter. We'll get a little -- we'll have a little less hit from roller shoes. I think we got a little extra hit in the Q2 around Memorial Day. All things being equal, should be a similar -- we're guiding toward a similar-type quarter.

Going into the fourth quarter, we're going against some 4.7 negative last year and we haven't gone against a negative quarter like that in 11 or 12 years. So, we do have, if you calculate it out, a low single digit comp here for the fourth quarter, but, again, that's not necessarily -- that's basically going against a weak comp. We're also expecting a slow -- improvement in the roller shoe category in the fourth quarter and hopefully -- and we believe we're going to go against less competitive openings in the fourth quarter, or cycling competitive openings as well.

Okay. That's helpful. And interest expense in the quarter came in a little lower than I would have thought. Is there -- are there any unusual items there?

No, there aren't any unusual items. It's just all about interest rates and debt levels.

Thank you.

Thank you. Our next question is from Rick Nelson with Stephens Inc. Please go ahead.

Hi. This is Eric Hollowaty on the call on Rick's behalf. Few questions. The first is, did you or could you provide a D&A number for Q2?

I can provide it. But why don't you keep going and I will provide it to you.

Sure thing. Second question is, I believe you said that traffic was down mid single digits in the quarter, but ticket was down low single. What in your opinion accounts for the difference between those?

Well, I think in a difficult consumer environment we're just getting fewer people through the doors.

Is the lower ticket -- excuse me, the lower reduction in the ticket versus the traffic a function of the fewer markdowns that you referred to vis-a-vis the inventory, or what do you think accounted for the relative strength of the ticket versus the traffic, I suppose is what I should have originally asked.

Our ticket was down so I don't think we had relative -- particular relative strength in the ticket. The ticket was still down. I think some of that may be just product mix shift and perhaps missing some -- arguably some higher ticket items for us.

Okay.

Eric, the D&A number for the second quarter was $4.7 million, and for the year-to-date it's $9.5 million.

Thank you.

Sure.

And our next question is from Shawn Naughton with Piper Jaffray. Please go ahead.

Hey, guys. It's actually Mitch Kaiser. Quick question. Did you see any benefit from the tax rebates? Did you see -- I know, Steve, you didn't really mention anything particularly in June, but is there any way that you could maybe break that out, or how should we think about that?

I don't think we can -- grander scheme of things could see any direct benefit of the tax breaks. I think it probably paid for a couple of tanks of gas and that's about it.

Yes. Yes, it does, particularly in California. I think we're hearing from a number of retailers that you're seeing some of this trade-down effect that people are looking for off-price and value, and I know that certainly you have some closeout product and then you have the branded exclusive which is more of a value brand as well. Are you seeing any mix shift down to some of those categories, or are you seeing that similar dynamic to others?

I think we're feeling that. It's hard to slice and dice it to that degree. I think what we do believe is that the fact that we offer compelling values to our consumers, popular price points in many categories. That hopefully plays well for us and is allowing allowed us to be reasonably competitive in a very difficult environment.

Right. I guess when you look at the traffic number being down mid single digits, it's more of a traffic issue than it is a ticket issue, so. Okay, thanks guys. Good luck.

Thanks, Mitch.

Thank you. And our next question is from the line of Bill Dezellem with Titan Capital Management. Please go ahead.

Thank you. We have a group of questions. First of all, with -- relative to roller shoes, do you see where you have any issues with your inventory that's problematic at this point?

Absolutely not. We're -- it's in terrific position. We're making healthy margins in our roller shoe product. It's not quite as healthy as it was a year ago. We're really in a buying mode for that product. We're freshening up our product mix. We really expect roller shoes will be an ongoing category for us, just unfortunately not to the wonderful place it was a year or two ago.

Thank you. And then relative to store openings. You've had to stay very systematic plan in the past and articulated that that's what you are going to be doing going forward. Given the difficult retail environment and your comment that you might be seeing even better real estate come available, is there an argument that could be made for accelerating your store openings?

Well, I think we're going to maintain a position of controlled growth. If there were opportunities that to a degree and the level that we have not previously seen, it may be something that we'd consider. We'll never say never about situations like that, but we have to -- there's really a balance between having some better opportunities and a softer consumer climate -- the duration of the softness is really unknown. So, I think we want to be prudent and thoughtful in terms of how we maintain our growth.

And then relative to expense reductions, you alluded in the press release and your comments here today about expense reductions in the second quarter. Would you discuss those in more detail, please, and also what go-forward plans you have for expense reduction?

Sure. Bill, as you know, we've historically operated a generally lean business and that being said, some of our larger expense items that we always evaluate include store labor, advertising, distribution center, administrative, those kinds of things. We've made a number of advances in expense savings across our business, which individually may not be overly material individually, but taken together add up to some pretty healthy savings for us.

Our store labor hours -- we monitor those very carefully and adjust those based on sales forecasts. Safety enhancements are favorably impacting our workers' comp for example. We're looking at light retrofits. We have reduction in our supply costs and courier expenses. We are slightly trimming our ad spend and making adjustments to the ad calendar to most efficiently deploy our ad dollars. We are -- have been able to reduce our overall insurance costs. So those are some of the things that we're doing.

And are there any things that you will be doing on a go-forward basis that will individually be standouts?

You know, Bill, obviously store labor is critical for us, and so that's something that we evaluate daily. And, we'll continue to do that. It's obviously our largest expense. We're really looking at everything. We always look at everything and we continue to look at everything, and fortunately we've had some success in several areas. And we will continue to do that going forward.

Great, thank you. And, then, one balance sheet point question. Their long-term liabilities were $7.7 million, up from $2.5 million in the first quarter. Would you address the $5 million jump?

Yes, Bill. We reclassified our workers comp accrual. We had classified all of our workers' comp in current liabilities previously and we -- with our actuaries work to try and estimate what the long-term portion of workers' comp was, and determined that and went ahead and did a reclass for -- or actually classified our long-term portion of workers' comp down below in long-term liabilities for the second quarter and went back and reclassified on a comparable basis those same balances as of 12/30/07.

Great, thank you. And one final question. You all have been through California housing market ups and specifically downs in the past. Would you please discuss what took place over time with those past downturns, and if there are some dissimilarities with this downturn that maybe makes my question irrelevant?

Oh, I don't know or recall arguably a downturn quite as significant as what we are seeing today. We're certainly seen ups and downs and the national economy and the California economy and we've obviously played very positively through those and we expect to this time as well. Clearly, we're in very unusual times from a -- California and arguably the national economy and we'll certainly see how it plays out.

Thank you both.

Thanks, Bill.

Thank you. And our next question is from Jeff Mintz with Wedbush. Please go ahead.

Thanks very much. Just one question that hasn't been answered. On the inventory reductions, and obviously you've done a great job controlling inventory. Do you feel you're starting to get to the upper limit of those reductions? At some point you have to have enough product in the store to sell.

No, absolutely. I don't know the upper limit. I think there's still some fine-tuning and opportunities to bring inventories down. Really, we're just bringing it down in line with our sales, and we feel very positive about the steps that we've taken. We think we've put ourselves in an outstanding position to be able to consider and take advantage of appropriate opportunistic situations. I wouldn't say that we've reached the upper limit of the reductions, all things being equal though.

Would you say you're taking more advantage or doing more of those opportunistic buys than you've done in the past? Has the slowdown in the consumer led to more of that or less, would you say?

I think it's beginning to become arguably more favorable. Things are pretty dynamic now and you're seeing a growing number of retailers closing stores or filing for bankruptcy protection. I think that creates some excess inventory in the pipeline. On the other hand, I'll say there's a little balance because I think the vendor community is being very careful about what products they produce. But I think overall the flow of opportunistic buys is certainly staying steady. I think there's a reasonable possibility that it's going to improve going forward and we think we're well-positioned to hopefully benefit from that.

Okay. Thank you very much. Good luck.

And our next question is from Anthony Lebiedzinski with Sidoti & Company. Please go ahead.

Yes, good afternoon. I was wondering if you guys could comment on the competitive landscape now and the promotions from your competitors. Are they being more promotional or less, or about the same? Any color on that topic would be helpful. Thanks.

I think for the most part I would say the promotional activity that we're seeing is reasonably similar to what we've experienced in the past. I think we're faced -- certainly facing a number of competitive openings in our marketplace, reasonably similar to what we have seen in prior years. I think our research suggests that we may be facing fewer competitive openings over the back half of the year and -- but nothing really out of the ordinary at this point in time from a competitive environment.

And also if you -- could you guys comment on the impact of increased gas prices on your distribution costs and what have you done to try to minimize those costs?

Yes, Anthony. Of course, the cost that we're feeling on the fuel is significant, as you might imagine. Our transportation costs were significantly impacted by the higher fuel costs to the tune of -- year-over-year basis based on comparing '08 to '07 we're expecting those costs to be up $2 million to $3 million. We're examining the frequency and the routing of some of our store deliveries, and we believe there's potential for savings there with little or no impact on our sales.

And the $2 million to $3 million number that you gave, that's for the year, right?

For the year.

Gotcha, okay. And in terms of your ad spending, is it still primarily circulars or are you looking at other media, perhaps doing maybe more online advertising? And what's your thoughts on that?

It's certainly primarily circulars delivered via newspapers and mail typically to nonsubscribers of newspapers. We are exploring ways -- other ways to reach customers via the Internet and other media, but certainly our primary focus is still in the print circulars.

Okay. My last question is about the July 4th shift from the -- because the holiday like you mentioned before that your quarter ended a little bit earlier last year versus the July 4th. How much of an impact is that going to have on the third quarter comps?

It should benefit the third quarter comps -- maybe in the neighborhood of 60, 70 basis points.

Okay. Alright, well, thanks.

Thank you. And at this time there are no further questions in the queue. I'll turn it back to Mr. Miller.

Thank you, operator. Well, we certainly thank you for being on the call. We appreciate your interest in Big 5 Sporting Goods and look forward to speaking with you again soon.

Ladies and gentlemen, this concludes the Big 5 Sporting Goods second quarter 2008 earnings results conference call. This conference will be available for replay after 5:00 PM Pacific Standard Time today through August 14th at midnight. You may access the replay system at any time by dialing 1-800-406-7325 or 303-590-3030 and entering the access code of 3903618. Thank you for your participation. You may now disconnect.