Sabrina Simmons Below Quotations

August sales results were disappointing and merchandise margins were slightly below last year.

Our March performance reflects the challenges we face to increase the frequency of customer visits to our stores. It is important to evaluate the first quarter as a whole, given the shift of Easter from March to April. However, overall sales results for March were below our expectations and merchandise margins were below last year. Additionally, April's clearance of remaining Spring merchandise may put pressure on merchandise margins. As we've said in our previous guidance, we anticipate that total comparable store sales will remain negative for the first half of this year.

January was a clearance month. While customers responded to our brands' efforts to clear holiday merchandise, our merchandise margins were significantly below last year.