Aeropostale, Inc. (NYSE:ARO) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Carla White – Jennifer Black & Associates: This is actually Carla White in for Jennifer Black. Can you talk about how the fashion has performed in your A malls versus your B and C malls? And do you feel like you have allocated heritage merchandise appropriately in your B and C mall?
Emilia Fabricant – EVP, Aeropostale Brand: Actually fashion by store type seems to be performing across all of them. Though we will be analyzing our store performance and reevaluating after this season our store clusters. As far as heritage doors, as you know we’ve implemented – we started implementing assortment planning, and we actually protected our heritage doors to a heritage mix.
Slow Customer Adoption
Paul Alexander – Bank of America: Could you guys talk a little bit more about the slow customer adoption. First off, what exactly does that mean? Does that mean that conversion is down in addition to traffic being down? Then in light of the slow customer adoption, I agree I think the fashion looks better, but what gives you the confidence that you’re doing the right thing with the assortment given what you’re seeing?
Thomas P. Johnson – CEO: The conversion has been flattish on the year, just very slightly down overall, which we think is okay. We, obviously, would love the conversion to be a little bit higher, but we do think that we are trading some of the business from a year ago and some of the very, very, very low priced commodity businesses, if you will, like the $5 T-shirt business that we’ve been in for many, many years. So, we do think it’s going to take a little bit of time. The good news is we see the fashion, as Emilia alluded to earlier, checking and in some cases checking very nicely with some very nice AURs, albeit not enough to offset the core product that we’ve had in the mix for quite some times. Our confidence level and that’s why we feel confident that we are directionally moving the right way.
Emilia Fabricant – EVP, Aeropostale Brand: The only thing I would add is we have done an extensive job of getting to know the 14 to 17-year old teen and we feel that while the teen has evolved in their fashion preferences we had not and we are playing catch-up. So, we feel confident that we continuously learn and move with the teenager and remain relevant.