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Sabrina Simmons

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Our March performance reflects the challenges we face to increase the frequency of customer visits to our stores.

We began October with continued traffic challenges. However, traffic improved at the end of the month, likely due to favorable weather trends and the delivery of our holiday merchandise.

July was a transitional month as our brands continued to clear summer merchandise.

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

Positive customer response to holiday product assortments across all brands helped drive momentum in the month and enabled us to clear merchandise at better markdown margins.

While our merchandise margins were slightly lower than last year, our markdown margins were significantly better.

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

Overall February sales results were disappointing.

In February, traffic worsened versus fourth quarter trends, which caused lower unit sales velocity. This led to significantly lower merchandise margins. Looking ahead, we are focused on driving traffic with improved product and new marketing campaigns that begin this week.

In February, traffic worsened versus fourth quarter trends, which caused lower unit sales velocity.

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.

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