Tom Lennox Michael S. Jeffries, Chairman and CEO Michael Kramer, Chief Financial Officer Brian Logan, Company Controller

Janet Kloppenberg - JJK Research Jeffrey Klinefelter - Piper Jaffray Paul Lejuez - Credit Suisse First Boston Kimberly Greenberger - Citigroup Jeffrey Black - Lehman Brothers Stacy Pak - Prudential Equity Group Dorothy Lakner - CIBC World Markets Meredith Love Kent - UBS Jennifer Black - Jennifer Black & Associates Christine Chen - Pacific Growth Equities Brian Tunick - J.P. Morgan Margaret Mager - Goldman Sachs Barbara Wyckoff - Buckingham Research Group Lauren Levitan - Cowen & Co. Robin Murchison - Suntrust Robinson Humphrey Dana Cohen - Banc Of America Securities Gabrielle Kivitz - Deutsche Bank

Thank you for standing by, everyone. Welcome to today’s Abercrombie & Fitch Q1 Earnings Results Conference Call. [Operator Instructions]. Now at this time, I would like to turn the conference over to Mr. Tom Lennox. Please go ahead, sir.

Good afternoon, and welcome to our First Quarter Conference Call. After the market closed we publicly released the quarterly sales and earnings release, balance sheet, income statement and an updated financial history. If you have not seen these materials, they are available on our website. This call is being taped and could be replayed by dialing 888-203-1112. You will need to reference the conference ID number, 403-1334. You may also access the replays through the Internet at www.abercrombie.com. With me today are Mike Jeffries, Chairman and CEO, Mike Kramer, Chief Financial Officer, Mike, VP of Finance, and Brian Logan, the company’s controller. Today’s earnings call will be limited to one hour. After our prepared comments, we will be available to take your questions for as long as time permits. Please limit yourself to one question so that we can speak with as many callers as possible. Before I begin I remind you that any forward-looking statements we may make today are subject to the safe harbor statements found in our earnings release and SEC filings. Now to Mike Kramer.

Good afternoon. Net sales for Q1 were $657.3 million, increasing 20% over the last year’s Q1 sales of $546.8 million. Comparable store sales increased 6% for the quarter. For the quarter, comps by brand were as follows; in the adult business Abercrombie & Fitch comparable store sales decreased 4%. Men’s comps decreased by a low single digit, women’s decreased by a mid-single digit. In the kids business, Abercrombie, comps increased 30% with boys comps increasing by low-20s and girls increasing by low-30s. Hollister same store sales increased 13% with June comps increasing by a high single digit and Betty’s increasing by low teens. All regions posted positive comps. Comps were strongest in the Southwest and weakest in the West. The first quarter gross profit rate was 65.4%, 10 basis points higher than last year’s rate of 65.3%. The increase in rate reflects the slight improvement in initial markup combined with a slightly lower mark down rate versus last year. We ended the first quarter with inventories up 38% per gross square foot at a cost versus last year. This is lower than the guidance we provided on our Q4 conference call when we estimated that Q1 ending inventory per square foot would reflect slightly less than 59% increase reported at the end of the Q4 of fiscal 2005. Going forward, we are planning for increases in inventory levels to continue to moderate ending the Q2 of 2006 with a lower increase per foot at cost when compared to the Q1 of fiscal 2006. For the fall season of fiscal 2006, we expect inventory levels to continue to moderate. Sales and distribution expense as a percentage of sales decreased to 130 basis points to 39.3% versus 40.6% last year. The decrease in rate primarily resulted from the company’s ability to leverage store related fixed cost combined with the reduction in store repairs and maintenance expense partially offset by increased payroll expense. For Q1, marketing, general and administrative expense as a percentage of sales increased 130 basis points to 13.6% from 12.3% last year. The increase in rate versus last year largely resulted from increased home office payroll, which includes approximately 90 basis points of expense attributable to the adoption of FAS 123(R). For Q1, operating income increased 23% to $84 million compared with $68.3 millions last year. The effective tax rate for Q1 was 35.5% as compared to 41.9% for Q1 of fiscal 2005. The tax rate in Q1 of 2006 includes the tax provision benefits related to the settlement of a tax audit. Net income for the quarter increased 39% to $56.2 million versus $40.4 million last year. Q1 net income per share on a fully diluted basis was $0.62 versus $0.45 representing an increase of 38% versus last year. The effect of the adoption of FAS 123(R) for Q1 of fiscal 2006 was $0.04 per share on a fully diluted basis. The Board also declared a quarterly dividend of $17.5 per share payable on June 20th, 2006 to shareholders of record as of May 30th, 2006. During the quarter, we open one Abercrombie & Fitch stores, nine Hollister stores and two RUEHL stores. We ended the Q1 with 340 Abercrombie & Fitch stores, 161 abercrombie stores, 327 Hollister stores and 10 RUEHL stores --

Plus 348 Abercrombie & Fitch stores.

For fiscal 2006, our current plans are to open 10 new Abercrombie & Fitch stores, 20 new abercrombie stores, 70 new Hollister stores and seven new RUEHL stores, for a total of 107 stores. Total square footage is expected to grow by approximately 11% in fiscal 2006. For fiscal 2006, we now expect planned capital expenditures to be between $400 million and $420 million, again approximately $260 million of this amount is allocated to new store construction, re-models conversion, and improvements to existing stores with the remainder related to home office, IT and distribution center investment. The new BC, which is currently under construction is on schedule and expected to be completed by early December. From an IT standpoint, we are focused on enhancing several key areas of our existing platforms. By improving our existing infrastructure, we can achieve greater scalability resulting in increased efficiency at both the store level and at home office. I would like to finish by discussing our profit outlook for the spring season. While the fundamentals of our business are solid, comparable store sales increases should continue to be modest as measured against last year. In fact, our most difficult comparisons from a comparable store sales and gross profit rate standpoint will occur during Q2. Although we are optimistic about future performance, we remain cautious in our expectations. At this point, we expect net income per fully diluted share for the first half of fiscal 2006 to be in the range of $1.28 to $1.33, including a charge of approximately $0.08 attributable to the adoption of FAS 123(R). Now, Mike will comment on the business. Michael S. Jeffries: Good afternoon. This is an excellent quarter for our company. We are continuing to achieve strong financial results against the results we posted in 2005. We made progress in Q1 including increased sales and margin while reducing the operating costs as a percentage of sales. This improvement resulting in 39% increase in net income represents a good start to fiscal 2006. Although our results will continue to be measured against the growth we obtained last year, I am confident that our brands are positioned to generate strong financial returns this year. At the Abercrombie & Fitch business, net sales grew by 4%. The brand is generating approximately $440 per square foot on a trailing 12-month basis while IMU reached its highest level during the quarter. More established when compared to other businesses, the Abercrombie & Fitch brand is generating returns. Its positioning is why we are confident that this can continue. We are focused on increasing quality and aspiration in every aspect of the business, most recently by eliminating seasonal sale events in our stores. While we will clear/reduce slower moving items when necessary, markdown merchandise will now be limited to the backrooms of the store ensuring that the front rooms offer full price merchandize even during the transition from one season to the next. Another initiative entails the investment of at least $50 million to refresh the A&F store base. This initiative, which reinforces many of the brand’s high-quality characteristics will enhance the in-store environment and includes the addition of leverage storefronts, more dramatic lighting and improved sound systems to name a few. The flagship A&F store in Fifth Avenue continues to exceed our expectations and is not only making meaningful contribution to this company’s strong sales and profit growth, but it is also making a statement about our brand. We are thrilled with what is happening there and comply with another flagship store to be opened at the Globe in LA in July, we know that the excitement being generated will help us in many ways including our long-term plans to bring our brands to other markets. In that regard, our Abercrombie & Fitch Canadian locations are outperforming many of their domestic spheres running at nearly three times to the volume of the average US based store, and we are now underway in London where we plan to open our first European location in the spring of 2007. Both Hollister and the Kids business; abercrombie, also had a strong Q1. Hollister’s net sales were up 45%, comparable store sales increased 13%, and its e-commerce business increased 14%. Hollister is now generating $537 sales per square foot on a trailing 12-month basis. Like the A&F stores, Hollister’s Canadian locations are also exceeding our expectations with productivity at three times above that of our average US Hollister stores. The kids business had another outstanding quarter. Net sales increased 26%, comparable stores sale increased 30%, the e-commerce grew by approximately 48% and IMU increased by 90 basis points compared to last year. On a two-year basis, net sales have grown more than 70% with gross margin and operating margin improving as well. RUEHL performed well during the Q1 achieving solid productivity improvements from a comparable store sales and net sales perspective. We also made progress from an initial markup standpoint, where IMU improved by approximately 14 percentage points. We recently opened stores at Ala Moana and Honolulu, and at the Oak Brook Center near Chicago. The real estate strategy, which includes securing highly productive mall locations in affluent areas includes the edition of approximately five new stores including locations at San Francisco Center and Aventura Mall in Florida. When we reported fiscal 2005 in February, we discussed the challenge of building on the strength of an extraordinary year. Frankly, we said that it would be difficult because it would seem that no matter what we did, our performance would pale by comparison. However, we view 2005 as a foundation for additional growth. We are off to a good start in fiscal 2006 and the Q1 only makes us more confident in our ability to meet the challenge of generating solid results for the reminder of fiscal 2006. Now we are available to take your questions. Please limit yourself to one question so that we can speak with as many callers as possible. After everyone has had a chance, we will be happy to take follow up questions. Thank you.

[Operator Instructions]. We will first go to Janet Kloppenberg with JJK Research. Janet Kloppenberg - JJK Research: Hi guys, congratulations. Michael S. Jeffries: Thank you. Janet Kloppenberg - JJK Research: Congratulations on a great quarter. Mike, I think for a lot of people, there has been emphasis on what’s going to happen with denim as we go through the Q2 where your denim business is so strong, and as we look to the back half. And I know it’s always going to be the base of your bottoms business, but maybe you could talk a little bit about the trends there and about what you see as far as denim growth goes for the rest of the year. Thanks so much. Michael S. Jeffries: Yeah, I do not want to give away any fashion information, as always. The denim business is a solid percentage of our business. I believe that we will not see denim increases for the balance of the year in either the feminine or the masculine business, but I believe that on a comps basis, the denim masculine business will be better than the female business. There are more non-denim options in the female business than the masculine business. Our inventories are very much coming into line, we are more being efficient with our denim inventories as we go forward, and very comfortable with where we are heading. Michael W. Kramer: Yeah, this is Mike Kramer, I’d like to add to that. In terms of Q1 results, even with the decline in denim, year-over-year as we expected, our bottoms business in both male and female were up, which I think is a very significant -- I think a concern with many people.

I think it’s very important to note that in the height of the denim big increases, our bottoms business in total was never as good as our tops business from a likes perspective. Janet Kloppenberg - JJK Research: Thanks.

Next question.

We will now take a question from Piper Jaffray’s, Jeff Klinefelter. Jeffrey Klinefelter - Piper Jaffray: Congratulation as well to everybody on a great Q1. Michael W. Kramer: Thank you, Jeff. Jeffrey Klinefelter - Piper Jaffray: Regarding the Q2 -- I don’t mean to focus too much on denim, Mike, but just maybe to put in perspective you know, last year you had an outstanding back-to-school season you know, in addition to a great year overall. I recall that you did have a great increase in denim, I think even referencing a May number you know, well over 100% comp. Michael S. Jeffries: That’s right. Jeffrey Klinefelter - Piper Jaffray: How much -- maybe to put in perspective, sort of your directional guidance here for the Q2, how much denim as a percent of total business did you do in the Q2? And would that be a abnormally high number for a bottoms category during that period of time? Or, help us put in perspective how to look at that from a productivity standpoint? Michael S. Jeffries: I don’t know what the percentage was. We can look it up and get back to you on that, Jeff. But --

Nor do we may want to disclose -- Michael S. Jeffries: Right. I think that -- I really have to repeat that with our great denim performance last year, our top likes were consistently better than our total bottoms likes. I think the key to this business is about balance, going forward. I’m sorry Jeff, I’ll get back to you on this. But I think the most important point is that we need to run a balanced bottoms business. I think we are maximizing the denim business that is there and working on building the other classifications, especially in female. Thank you.

We will next pick a question from Paul Lejuez with Credit Suisse. Paul Lejuez - Credit Suisse First Boston: Thanks guys. Could you just remind us a bit of the MG&A line? When did the big increases start and does it happen kind of step by step as your anniversary moving throughout this year, or is it one shot all in the Q3. Could you just kind of remind us at where we are going there? Michael W. Kramer: Yeah, this is Mike Kramer, I’ll speak to that. The MG&A; we actually started -- I would say, yes this is a step function. We actually started on significant increases at the home office back in Q4, 2004, Q1, 2005. You have also seen increases sequentially from that point in time, but at a much decelerated rate. And you will also on a go forward basis, continue to see increases as we invest in the business consistent with what we’ve talked about in terms of investments in IT, continue to invest in our merchant and design and you will just see that to continue on a go forward basis.

We will move onto Kimberly Greenberger of Citigroup. Kimberly Greenberger - Citigroup: Mike, could you talk about the clearance activity of Ezra Fitch specifically in denim? Thanks. Michael W. Kramer: Yeah, we are discontinuing the Ezra Fitch line. We found that we are selling products at those price lines, but the sub-brand Ezra Fitch meant very little to our customers, they are committed to Abercrombie & Fitch and that’s their first loyalty. So we are clearing the Ezra Fitch merchandise that we currently have in the chain, which includes fashion denim, and are going forward with price points that where the Ezra Fitch price points, but under the Abercrombie & Fitch brand. And that’s -- you’ll see we are back-to-school, that Ezra Fitch will have probably been totally clear in the company. Thank you.

We will move on to Jeff Black of Lehman Brothers Jeffrey Black - Lehman Brothers: Yeah, thanks a lot. I would have thought that the payroll was more of an opportunity in the near-term on the expense line although it does look really good, so congrats on that. But there is an opportunity to do better on that one, going forward and if so you know, what is it? And how should we think about the level of comps you really need to generate expense leverage this year versus last year? Thanks a lot. Michael S. Jeffries: With regard to the payroll, yes we believe there is an opportunity on a go-forward basis. We did not see leverage for the total quarter in our stores payroll line item. However, you did see leverage in the back half of the quarter. One thing that I would like to point out is, is as you know back in November, beginning of November, we actually opened our Fifth Avenue store. This was also prior to obviously the busiest time of the year. And this was basically a new venture for us to get into in terms of how to operate this size of a store and the complexity related with it. So it took us a while post-Christmas, to really gain an understanding of where our payroll should be on a non-holiday timeframe. So this was actually the big focus of ours and we think that we brought it in line towards the latter part of the quarter, thereby helping us to achieve that leverage in April and we will continue to see that on a go-forward basis. In terms of comps needed to generate leverage you know, we have really never really disclosed that, but anywhere from flat to 3%, we think we can manage to be able to leverage our stores and distribution only.

We will next take the question from Stacy Pak of Prudential Equity Group. Stacy Pak - Prudential Equity Group: Thanks. So I guess on the MG&A line, it looks like it grew at about -- in the 11% rate from Q4 of ‘05, and I’m wondering if we should you know, expect that same sort of growth rate in Q2, and I just want to confirm that in Q2, you would need a flat to 3% comp to leverage the store and distribution line, and perhaps you could approach the comp levers with us. I mean, I think the reason there’s so much focus on denim is people are worried about the price points and the ability to anniversary it from the top line. So you know, you’re not going to want to give us the comp estimate, I send, but maybe you can talk about some of the matrix behind comp and how you’re approaching those like AUR? Michael S. Jeffries: In terms of the growth of the MG&A line item, remember that a large portion of that growth was related to FAS 123(R). In terms of being able to estimate into Q2, I would give you guidance that the growth will be less than what you saw from Q1 to Q4. Keep in mind, we are investing in the business. In terms of the comp rate, I am going to conform to you, just like -- what I said in terms of being able to leverage from flat to moderate comp rate of 3%. And we believe strongly that on a go-forward basis that the comps are going to be coming back to us in terms of transaction growth. We see -- you know, right now we are not looking at taking any pricing action on a go forward basis.

We will move on to Dorothy Lakner with CIBC World Market. Dorothy Lakner - CIBC World Markets: Thanks, good afternoon everyone, and congratulations. I wondered if you could give us a little bit more color on -- this will be for Mike, on RUEHL and what’s working there And then secondly, on the IT initiatives you have going on this year. What kinds of things are you doing and if you could give us sort of the timetable as to the very things that you working on, thanks. Michael S. Jeffries: The RUEHL business is really coming around nicely. As I said in the past, we have worked very hard to make the offerings more casual and more of our kind of corporate mentality in terms of casual. The men’s business is performing at a better growth rate to women’s because I think it’s becoming better and faster, but there is very solid growth in women’s as well, and it’s across the classification, it’s across the apparel classification. In handbags, as I’ve also said, we are working to make the offering more casual. You’ll see a more casual handbag assortment for the July set. In all, I think we are really are on track and I’m very excited, and I think you guys can see that in the stores, they’re really coming together. In terms of number two, would you like to comment on IT, Mike? Michael W. Kramer: In terms of the IT initiative -- the timing. Actually they’re currently and ongoing. I would like to take this time to announce that we’ve hired a new chief IT officer. She will be joining us in June. Even through her joining the company will be in a month or so, we are continuing to assess our systems, and whether they’re scalable for us in the future, and if they accommodate us in terms of the needs of the business. Now I will tell you that we have already made great initiatives with regard to automating reporting. We are going to continue to do that. We were also trying to -- we were taking a look at initiatives within the organization to upgrade systems, to get us to where we want to go in the accelerated growth that we think that we will see from now through 2010. In addition to that you know, there’s a lot of processes that we believe that we’ve been looking at or doing from a manual perspective that we would like to automate and all three of these, I think are really going to help us really move the business forward without a lot of headcount addition.

We’ll take the next question from Meredith Kent of UBS. Meredith Love Kent - UBS: Thanks. I just wanted to follow up on Dorothy’s question on RUEHL. As the product is setting more casual, are the price points coming down? And then also are still in track for profitability by the end of ‘07, and how would you say this profitability is going to be relative to the other brands, abercrombie and Hollister? Michael S. Jeffries: I will comment on the price points one. The price points in RUEHL were reduced -- at about six months ago, we were approximately 30% higher than A&F. We are currently at about 12% higher, which is where I want them to be. So that took place about six months ago. With my comment, I think we are on the right path to the profitability, we described. I don’t think we’ve ever described what the profit rate was going to be. Now we’ve never discussed the profit rate with regards to RUEHL, but we are well on track in terms of reaching profits already by the end of 2007, we are very excited about this brand.

We will next take a question from Jennifer Black of Jennifer Black & Associates. Jennifer Black - Jennifer Black & Associates: Good afternoon and let me also add my congratulations.

Have you seen the new Washington Square store, Jen? Jennifer Black - Jennifer Black & Associates. : I certainly have.

And how did it look? Jennifer Black - Jennifer Black & Associates: It looks great. It looks well-staffed, it looked -- it’s a big door, it appears to be big.

Yeah, I haven’t made it out there yet, but I will. Jennifer Black - Jennifer Black & Associates: I am sure you’ll let me know, when. I wondered if you could talk of about you know, you talked about clearance and are you going to handle that different than how you are handling it now on the Internet? And I think that’s my only question.

The answer is that we continue to limit the amount of clearance on the Internet of the amounts that we’ve put up and the minimum price points. We have anniverseried that restriction and we took a hit in the Abercrombie & Fitch e-com business because of it that that business is now growing nicely against that phase. We’ll watch it very carefully. I would expect us to continue to wean ourselves out of that business as much as possible.

Having said that, we really were pleased with the results of our e-com business in Q1, the growth that we saw there in all three of our brands, particularly on the domestic side.

We’ll next take a question from Christine Chen of Pacific Growth Equities. Christine Chen - Pacific Growth Equities: Congratulation on a great quarter everyone.

Thank you. Christine Chen - Pacific Growth Equities: I also wanted to follow up a little bit on RUEHL. Can you share with us the impact that RUEHL had on Q1 of this year and how that compares to last year? And then, Mike -- and then I have question about the tax rate.

Christie, we are not going to disclose at this point, the Q1 effect on RUEHL. If you want to move to the tax rate we’ll help you with that. Christine Chen - Pacific Growth Equities: Okay, for this first half you had previously said it would be about 39%. Is that still the case even though you have a lower tax rate in Q1?

Our normalized effective tax rate right now is 39%, so I would expect that on a go-forward basis. Now having said that, we are aggressively going after a lot of very, very old audits in settling these. So you know, and obviously in these kinds of situations, we are not in the driver’s seat, but we are being very aggressive about this, but I would plan on a go-forward basis, 39% effective tax rate.

We will next hear from Brian Tunick of J.P Morgan. Brian Tunick - J.P. Morgan: Thanks. I guess for Mike and Mike, maybe we were wondering about the change in the promotional plan at the Abercrombie adult business. How does it affect your inventory close or open to buy and then what is the expected tradeoff between merchandise margins and volume? And the second question is on the share buyback program. It looks like the shares had actually went up substantially. Was it because of blackout period, what’s happening on that front?

Let me address the inventory flows. We are flowing more consistently in every brand, and that’s an important part of our strategy, Brian. And I think it addresses the issue that’s been raised about the denim. I’m not losing a ton of sleep over denim because what really is driving our business in all categories is weekly flow and that concept is specially true in the tops portion of the business where we have to win in every one of the brand. I think where we will take a volume hit, the last week of May and the first week of June, because we broke a major parents event last year, we are taking markdowns for this year, but doing it much more quietly and the number of units per store in each of the brand is going to be reduced versus last year, should result in higher margin although we will never predict that, but we are clearly a regular type business. And as you know, we don’t allow the term sales to be used in any of our businesses today. That was the first part of your question and the second --?

Brian, related to your question with regard to the stock buyback, we continue to review cash levels for product launches, store openings and other relative factors. While no repurchases were made during the quarter, we continued to consider repurchases from time to time based on market factors, cash availability and the factors just mentioned.

We move on to Margaret Mager with Goldman Sachs. Margaret Mager - Goldman Sachs: Hi, I have a couple of questions, and a great quarter, congrats on that.

Thank you, Margaret. Margaret Mager - Goldman Sachs: A couple of questions, first of all one of the things that comes up is just the -- how to interpret the abercrombie adult business comp store sales. You know, when we first saw that first down comp in February, it kind of -- you know, people really reacted to that. So I want to get your view of how that should be interpreted. How do you feel about it, is there a message there, about market share shifting, is Hollister part of the equation? You know, any kind of color you can give on that and then I’m curious on your total store count by concept, what are you thinking now? Do you think abercrombie adult could beyond 400, and then lastly on marketing any kind of interesting or major marketing initiatives by brand of specially Hollister, in the upcoming year, thanks.

Okay, let me address; the first question is comp store sales at A&F. I don’t view that as a market share shift. I think we are making enormous investments in the Abercrombie & Fitch brand to really cement that relationship with 18 to 22 year olds. I think it is -- as we mentioned, we are investing $15 millions in that brand to upgrade the stores, to upgrade the experience in the stores, and I am very excited about where we are taking it. I think that the negative comps if you look at some carefully, were driven by a women’s business, which was out of character with the women’s businesses in the other brand. I think we simply could have done better in that business. I don’t think that we flowed units and fashion as aggressively as we might have. We are concentrating very hard on this business to go forward. It’s always my first priority because it is the flagship business, and I anticipate better results and being in that business, we are certainly pushing for them. In terms of store counts, the AN&F -- go ahead, Mike -- Michael W. Kramer: Yeah, I’ll add to that, and then Mike can talk about the new initiatives. With regard to the store count for our adult brands you know, where it’s 348 right now and I would think 400 would be pushing it in terms of the domestic, but 400 in terms of the brand as a whole and our expansion internationally, I think is probably right in line. Michael S. Jeffries: Marketing initiatives; everything we do is in store and will continue to be. There was a program member of customer reward program in Hollister that has been completely eliminated. It was shown that it did nothing for us in terms of the business. Again, we run regular priced businesses that are not price promoted. So that has gone away with no effect on the volume. Again, marketing initiatives are totally in store, we continue to invest more on the in-store -- marketing and I think they’re getting better and better.

We will next hear from Barbara Wyckoff of Buckingham Research Group. Barbara Wyckoff - Buckingham Research Group: Great quarter. Couple of questions. Margins in prior quarters in the year have been slightly higher in Hollister than the core A&F with kids at two points bellow. You know, does this trend continue, did it continue in Q1 and then I have another follow up.

With regards to Hollister, on a go-forward basis you’re going actually see the margins in terms of Hollister a little bit with regard to we are pricing our product to be a direct competitor with American Eagle. And I think that you might see a little bit of pricing with regards to Hollister in terms of bringing that back down in line on a small amount. You know --

I think we’ve said that on occasion, the Hollister operating margin and the comparability may be a little better, I wouldn’t say that there -- were dramatic as --

-- really significant. They don’t fall right in line with the others. There’s not going to be any dramatic change one way or the other. Michael S. Jeffries: These margins are all very close to one another -- consistently have been.

Kids -- we have said kids was lower in the past but fairly caught up.

We will next take a question from Lauren Levitan of Cowen & Co. Lauren Levitan - Cowen & Co.: Thanks, good afternoon. I had a couple of clarifying questions and then one thing I thought you could delve in a little more on clarifying, could you give us a sense, Mike you talked about the priorities for share repurchase. Have you at all, altered that target balance of 300 to 350 million in cash on the balance sheet? And my other clarifying question relates to the changes in the promotional stance, will Hollister and the kids business also be reducing that signage in promotional cadence and there is season clearance, and does this also mean that at adult abercrombie we should not look for a post-Christmas event and on the issue I was hoping you could talk about is Mike, you talked about that $50 million will be investing in the adult brand to refresh those stores. How many stores will that investment allow you to touch and what percent of the fleet will you have consistent with what you would like the brand to be saying by the end of the year? Thanks very much. Michael S. Jeffries: Boy, we’ve got a lot of questions here. I’ll take the first one with regard to the cash balance. There’s been no alteration whatsoever with regards to the 300 million target on the balance sheet. Our strategy with regards to the buyback is the same as it always has been.

Let me work on the list. All divisions are affected by the lack of major indices and season promotional event and signage, and you will see a post-Christmas clearance that will be much less aggressive than it has been in the past in all divisions. Smaller percentage of the inventory and we believe the smaller percentage of the business. The $50 million investment in the A&F fleet will touch all 350 stores. There would be visible changes in all 350 stores by the third week of June. By the end of this full year, it would be even more physical obvious changes in 100 of the 350 stores and those major changes would be rolled out over next year. So I expect a see some differences there.

We will take another question from Robin Murchison, of Suntrust Robinson Humphrey. Robin Murchison - Suntrust Robinson Humphrey: I thank you. My questions have been answered.

We will move on to Dana Cohen, with Banc Of America. Dana Cohen - Banc Of America Securities: Hey guys, one clarification and then a question. On the SG&A, I just want to clarify you were saying on the entire line of stores and distribution, do you think (inaudible) adults to be flat to 3% comps and then second, given where you’re putting the new stores, and sort of the store profile may be evolving you know, different from what you might have thought a year ago in terms of you know, what the business was about and where it works, from a real estate location?

I will take the first question. Yes, we do think that we will be able to leverage the entire stores and distribution line for the balance of the year, on a moderate comp of zero to 3%. Michael S. Jeffries: Second question about rules, no, it’s the same customer profile that we’ve always targeted. We are obviously chewing off some of the better centers in the country at the top of the list, but we are looking for a more balanced portfolio go forward.

We will next pick a follow up from Paul Lejuez, with Credit Suisse. Paul Lejuez - Credit Suisse First Boston: Thanks guys. Do you think about store payroll as a percent of sales and maybe you don’t think about it this way, I was just wondering if there’s an optimal level or an optimal level, what percent of the sales store payroll be in -- how does it differ by brand?

I’ll take that question. There is relatively no difference by brand other than maybe a couple of differences with regards to (inaudible) but let’s go forward in terms of talking about payroll percentage. Now that’s not how I look at it. Basically how we look at it is, we look at basically minimum staffing coverage on a store level basis based on a sales volume and ensuring that we have the appropriate customer service let’s say at the lowest volume that a store might hit though a seasonality. Then we actually flex up and add more selling payroll as well as impact program payroll to the back office as the sales increase. So our percentage of sales obviously changes on a sales volume i.e. leverage and you are going to see much more leverage in Q4 than you would do in the other three seasons as well as you’ll see more leverage in your higher volume stores mostly, than you will see on your average volume stores or lower volume stores.

We will take the next question from Gabrielle Kivitz of Deutsche Bank. Gabrielle Kivitz - Deutsche Bank: Good afternoon, your month end rate in Q1 was slightly lower than last year. Is that sustainable in subsequent quarters? I know you are up against tough comparisons, but can you continue to moderate the rate of increase of inventory per square foot while still having a markdown rate that’s lower than last year like you did in Q1. And then the second part of the question is, your comp conversions obviously get much more difficult in upcoming quarters and if we assume a similar run rate from Q1 for the business and consider comparisons on a two year basis, that would actually suggest a flat comp in Q2 and Q3 and negative comps in Q4. I think Mike Kramer you mentioned tech specs modest comp increases. If you could just help us understand what is going to help the business accelerate, I guess from Q1 trends, what’s going to be more favorable in Q2 through Q4 that would be helpful, thanks very much. Michael W. Kramer: Well, first and foremost I think you need to bifurcate the sales pattern through the quarter of Q1 in terms of February, March and April, and we did see some momentum. Yes, there was a calendar shift that took place, but we also felt the momentum through the quarter. But -- and we really don’t give guidance on a go-forward basis. As I said, we continued to extract what we would say, to be moderate comps, and that’s really all that I can guide you to.

We will next take a follow up from Barbara Wyckoff. Barbara Wyckoff - Buckingham Research Group: Hi, could you talk about the composition of the customer in the New York flagship, I guess foreign versus local, and then has there been any affect on the seaport business?

The answer is then there’s been a major effect on the seaport business, as we expected there to be. And the customer profile was pretty much what we expected as well, it is a very large percentage international customer. Very large percentage European, and I think there -- I have to repeat this most exciting news that Mike Kramer just gave me about the four wall possibility of that store in April, which was in fact higher than the chains. So we are thrilled with that business, we are thrilled with what we are learning about running high volume store and it does give us huge confidence for the international potential of this brand.

We will next take a follow-up from Stacy Pak. Stacy Pak - Prudential: Thanks. I was just wondering if you could tell us when you think inventories might be directly in line with sales, and also if you would care to tell us of a good leverage point for MG&A for the rest of the year since you’ve given us so much on stores and distribution.

Well, I really don’t want to clarify anymore than we have with regards to MG&A. You know, again I’ve said that we will be adding to our home office payroll that had a much, much lower pace than what we were last year. Now keeping in mind also the impact of FAS 123(R) there as well. In terms of inventory, we are you know, we are obviously targeting you know, continued movement with regards to lower year-over-year growth. But you know, that will also fluctuate based on the sales that we actually started seeing you know, on a go-forward basis. Again this is an evolving thing, but we are very comfortable with our inventory positioning today both on an overall basis and quite frankly by a key item basis.

Stacy, I think if you were to apply -- I’m not suggesting you do this, but if you were to apply the differential from the increase at the end of Q4 to the increase at the end of Q1, which was essentially up 59 up to 38 with a 21 differential and then you’re probably pretty close to what a sales growth was for Q1 right now. So who knows what will happen but I think the point is we’re getting closer and closer to having the thing moderate more closely in line with the sales growth, which I know you’ve mentioned before.

We’ll next take a follow-up from Margaret Mager. Margaret Mager - Goldman Sachs: On your inventory, what is it on a unit basis if that’s an irrelevant number to know? And can you talk about the mix of the inventory? You know, fashion basics versus fashion products and how that relates to say the mix of sales in the store?

I’ll take the first one and then I’ll let Mike answer the last one. On a unit basis, the year-over-year growth was 28%, again a decrease. And if you wanted to talk about the terminology that I’ve brought to the forefront in terms of weeks of supplies, we are well within that same target range that I’ve previously talked about.

In terms of the categories, Margaret, the increases are in fashion basics, personal care, and those are the biggest increases for May BOM as we are going forward, the increases -- I’m not going to say where it’s going to net out, but the increase will be in fashion and you’ll see decreases in the denim classification. If that’s helpful to you?

Next question?

And there actually appear to be no further question at this point.

Excellent. Okay, thank you for calling. Michael S. Jeffries: Thank you.

That does conclude this conference call. Thank you all for joining us, and have a wonderful day.