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SKS reported -$0.04 for the quarter vs. the Street at -$0.26.  On the surface it looks like a huge beat driven by much better gross margins and huge expense cuts.  However, a huge clearance event was pushed out into 2Q, which positively benefited the quarter by about $0.05.  Net, net still a better number but 2Q will be hit on the gross margin line by the clearance shift.

Inventory not well controlled relative to sales, which has been a consistent issue here.  Total inventory down only 7.3% vs. sales down 27%.  They talk about getting inventories more in line by 3Q, but they are not suggesting huge cuts here but rather more gradual pruning.  

As for trends in the quarter, all regions, categories, geographies, and channels were weak.  Notably the NYC flagship was worse than the overall average of down 27.6%.  This confirms other anecdotal commentary that the NYC market is still very soft.

Eric Levine