PetSmart Earnings Call Nuggets: Sales Guidance Details and Omnichannel Online
Sales Guidance Details
Matthew Fassler – Goldman Sachs & Co.: My question really relates to sales off in two quick parts. First of all, if you think about the traffic ticket combination implied in your sales guidance for the rest of the year, how would you see those mixing? Then secondly, you took up the low-end of your sales guidance, I’m interested and given that we had a very volatile quarter across retail, how the trends over the past eight or nine, 10 weeks since we last spoke to you influenced your thought process on the annual outlook?
Chip Molloy – EVP and CFO: Matt, it’s Chip. I would say that if you just take this quarter on the way that the composition of the sales, you have a little bit of traffic. You have units per ticket down a bit and overall comp units down a bit and you are picking it up in AUR. The primary drivers of that is a teeny bit of inflation call it 100 basis points and the rest is really the quality of goods continuing to go into the basket, driven a lot by the high-end foods that are continuing to perform extremely well. As I think about the rest of the year, I would suggest that the ticket – we like that higher traffic in point A and we are driving to try to do that, but as we sit today our expectations are that this is the world we are kind of living in for right now and our expectations are that the makeup will probably look fairly similar for the remainder of the year. We did pick up the bottom end. Just you got a quarter in the bank. So, it’s closer for the year, and also I would say that it was extremely volatile in the beginning of the quarter and started to stabilize somewhat and it’s a bit more stable and feels a bit more predictable today, than it did at the beginning of the quarter.
Gary Balter – Credit Suisse: The question is, I’m surprised you guys are even on this call, because the clients who call me tell me you’re about to go bankrupt because of the internet, could you talk about what you’re seeing in terms of more availability, pricing et cetera and any reactions you’ve done, because the quarter looked pretty good for a Company that’s going under…
David K. Lenhardt – President and COO: Yeah Gary, it’s David. We’ve talked in the past about this, as we think about what we call omnichannel online and e-commerce. Sales are a piece of that. We’ve seen that, that portion of our business in terms of the industry from our perspective remains relatively stable. We think it’s today growing at about 12% to 14% a year in terms of the industry, we think it’s about a 2% to 3% online penetration of the pet industry. We’ve continued to from our own e-commerce business outpace those growth rates, but we’ve seen a relatively – in terms of the customer response to the competitive environment out there from an online perspective, we’ve seen that, that 12%, 14% growth as best we can tell has remained pretty stable. Having said that, we continue to focus on improving our website experience. We continue to focus on building new omnichannel capabilities, because we do think it’s important to be relevant to our customers as they interact with us both online and in our stores.
Gary Balter – Credit Suisse: Just on a different topic, you had one of your big suppliers and I know you are not going to want to discuss specific suppliers but one of your bigger suppliers changed their format in their advertising approach and their pricing and I think the formulation of their products. Did that help or is that something that you view as a potential driver of your business for the next few quarters?
Robert F. Moran – Chairman and CEO: Yes. I mean again we work with all of our vendors and innovation is really important for us and I think each of our vendors adjusts and reacts and we partner with them very closely, our merchant team to deliver what we feel the customer needs. So I think as particular vendors work with the mix of everything you just said whether it be price, whether it be marketing, they are driving different results and I think – I wouldn’t point to any one vendor or anyone product. I think we are seeing momentum particularly on the consumables side across the board.
Gary Balter – Credit Suisse: Then finally and then I will get off. Is there any special feed for cicadas that you sell?
Robert F. Moran – Chairman and CEO: Gary, not that I can off the top of my head think. But I am glad you are thinking of us for that. We are going to ready 17 years from now.
A Closer Look: PetSmart Earnings Cheat Sheet>>