Joe Cooper - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Interim Treasurer Charles Haubiel - Executive Vice President of Legal & Real Estate, Corporate Secretary, General Counsel and Member of Executive Committee Steven Fishman - Chairman, Chief Executive Officer and President Timothy Johnson - Vice President of Strategic Planning & Investor Relations

David Mann - Johnson Rice & Company, L.L.C. Peter Keith - JMP Securities LLC Patrick McKeever - Avondale Partners Joseph Feldman - Telsey Advisory Group Meredith Adler - Barclays Capital Laura Champine - Cowen and Company, LLC Mitchell Kaiser - Piper Jaffray Companies Charles Grom - JP Morgan Chase & Co

Good day, ladies and gentlemen. Welcome to the Big Lots First Quarter 2010 Teleconference. [Operator Instructions] At this time, I would like to introduce our first speaker today, Vice President, Strategic Planning, Investor Relations, Mr. Tim Johnson. Please go ahead.

Thanks, Jake, and thank you, everyone for joining us for our first quarter conference call. With me here in Columbus today are Steve Fishman, our Chairman and CEO; Joe Cooper, Executive Vice President and Chief Financial Officer; and Chuck Haubiel, Executive Vice President, Real Estate, Legal and General Counsel. Before we get started, I'd like to remind you that any forward-looking statements we make on today's call involve risks and uncertainties and are subject to our Safe Harbor provisions, as stated in our press release and our SEC filings, and that actual results can differ materially from those described in our forward-looking statements. As discussed in this morning's press release, our results include discontinued operations activity. Since we do not view discontinued operations as relevant to the ongoing operations of the business, our prepared comments will be based on the results from continuing operations. Given our Annual Meeting of Shareholders begins at 9 a.m. this morning, our comments will be brief to allow time for Q&A to be completed by 8:45. With that, I'll turn it over to Steve.

Thanks, TJ, and good morning, everyone. We continue to stay focused on and execute against our win strategy during Q1. And I'm very pleased with the results as we recorded our 14th consecutive quarter of record earnings per share from continuing operations, $0.68 per share versus last year's record at that time of $0.44. Operating profit dollars grew 49% behind the strength of our 6% sales comp, improvement in gross margin and significant SG&A leverage compared to a year ago. From a sales perspective, trends coming out of Q4 and the holiday were every bit as strong, if not stronger in Q1. And our 6% comp was the highest quarterly comp for this business in over seven years. We were very encouraged by the customers' continued focus on a discretionary purchase, whether it was furniture, home or seasonal-type merchandise. Also from a customer perspective, our comps were fairly consistent across income demographics, whether high income or more economically challenged. Comps were right around the 6% mark, which suggests to us that it's all about the extreme value that they were looking for and finding in our stores. In terms of merchandising, Furniture and Home led the way with double-digit comps for the quarter, followed by Hardlines and Seasonal, each of which were up mid-single digits. As many of you know, Q1 is historically the largest quarter of the year in the furniture industry and in our Furniture business as well. We experienced accelerating trends as our customer responded to new styles and upholstery and our first ever Furniture Roadshow event. Additionally, our Mattress business remained very strong and the large gallery of bankruptcy liquidation deal did extremely well. For the third consecutive quarter, Home was a key driver as comps were up in the low double digits. We continue to deliver newness and better quality goods into our stores, and the customer has responded. Our Echo Point Home Collection generated some very good results, whether it's Echo Point or our new Port 7 collection, or the Furniture Roadshow that I mentioned earlier, we believe we're getting better and better at creating and executing these types of engineered events. Our Seasonal business, primarily Lawn & Garden, performed well in the quarter, despite some unfriendly weather in most of the country in the last two weeks of April. I was particularly pleased with the business in larger ticket items, such as patio, furniture and grills. As I've said before, with our customers, it's not about price. It's about value. And right now, the customer's telling us that they see great value in our higher tickets seasonal assortment. In Hardlines, it was all about our Electronics business, which comped up in the high teens against a very strong business last year. The chainwide rollout of our videogame software program, that occurred last year, provide an incremental sales in Q1 and the availability of DVDs, digital cameras, printers and accessories continue to positively impact this category. We also drove record inventory turnover results during Q1, which not only helps from a markdown and cash flow perspective, but also helps our cost structure continue to become more efficient. In summary, Q1 surpassed even our highest expectations as sales increased 8%, gross margin dollars increased 9%, with expenses up only 2%, a very strong performance for the quarter. Operating profit dollars increased 49% to last year and our operating profit rate was up 200 basis points to 7.3%. We managed our business very prudently and generated significant cash flow. And we invested $150 million in our share repurchase program, while still ending Q1 with over $260 million of cash and no borrowings under the credit facility. Now Joe's going to give you some detail around the quarter and how we're looking at our forward guidance. Joe?

Thanks, Steve, and good morning, everyone. Sales for the first quarter were $1.235 billion, compared to $1.142 billion for the first quarter of last year. Comparable store sales increased 6.0%. The key financial metric we watch to evaluate our performance is operating profit. And for Q1, both the operating profit rate and dollars were above LY. Our Q1 operating profit rate increased 200 basis points to 7.3% of sales, and operating profit dollars increased $29.8 million, or 49%. Looking at gross margin, our dollars grew faster than sales, as our rate of 40.6%, was 10 basis points above last year. The increase to last year was due to a lower markdown rate and a slightly favorable mix of business as our sales of our higher margin home product became a larger percent of the total sales. These improvements were partially offset by higher domestic freight costs due to higher fuel prices. Total SG&A dollars were $411.9 million, or up 2% compared to last year. The first quarter SG&A rate of 33.3% was down 190 basis points to last year. We experienced significant leverage in store payroll, distribution and transportation and occupancy as a result of our 6% comp. Additionally, as expected, our advertising dollars were down year-over-year due to certain cost savings initiatives, as we detailed earlier this year. Partially offsetting these areas of leverage is higher bonus expense incurred during the quarter given our record performance. And we also experienced higher equity-related compensation expense due to the acceleration of certain performance awards based on 2009's record year. And additionally, the equity awards for 2010 were valued at a significantly higher stock price compared to last year. Net interest expense was $0.2 million for the quarter compared to $0.3 million last year. Our tax rate for the first quarter of fiscal 2010 was 37.7% compared to 39.5% last year. The decrease in the tax rate was primarily due to the settlement of an uncertain tax position. When you add it all up for the first quarter of fiscal 2010, we reported income from continuing operations of $56.0 million or $0.68 per diluted share, compared to income from continuing operations of $36.3 million or $0.44 per diluted share a year ago. Our results of $0.68 per share was better than our guidance, which called for earnings of $0.60 to $0.65 per share. Compared to the high end of guidance, $0.01 of the favorability came from a slightly higher gross margin rate, $0.01 came from lower SG&A expenses and the last $0.01 was the result of the favorability in the tax rate. Turning to the balance sheet. Inventory ended the first quarter of fiscal 2010 at $745 million, compared to $718 million last year. The increase of 4% resulted from a 2% increase in store count compared to last year and a 2% increase in average store inventory to support our sales trends exiting Q1 and continuing into Q2. Cash flow, which we defined as cash provided by operating activities, less cash used in investing activities, was $96 million for the first quarter of fiscal 2010, which represents an $11 million increase compared to last year. This is directly attributable to higher earnings and better AP leverage partially offset by higher inventory levels. We ended the quarter with $261 million of cash and cash equivalents compared to $51 million last year. This change of $210 million is directly attributable to our cash generated over the last year, partially offset by share repurchase activity during Q1. We were active in the market repurchasing our stock during Q1 as we executed our $150 million Accelerated Share Repurchase program, or ASR. Our goal in executing the ASR was to ensure a base level of cash was returned to shareholders that discount to a straight dollar cost average approach and to offset estimated dilution since our last repurchase program. The ASR reduced our common shares outstanding by $3.6 million immediately. However, the total number of shares repurchased under the ASR will be based upon the volume weighted average price of our stock less the discount, over a predetermined period, and will not be known until that period ends, which by contract can be no later than January 26, 2011. The final settlement could increase or decrease the 3.6 million shares initially reduced from our outstanding common shares. We have 250 million remaining under our current authorization to repurchase shares, opportunistically, in the open market. For the first quarter, capital expenditures totaled $11.5 million. And depreciation expense for the quarter was $19.1 million. Moving on to guidance. We're forecasting a comp sales increase in the range of 4% to 5% for the second quarter. This forecast is consistent with our comps, and the combined period of March and April, as well as being consistent with the first two weeks of May, or prior to the impact of the Memorial Day shift. We expect the strong comp trends in Furniture, Home and Hardlines to continue and anticipate seasonal sales will accelerate in Q2, as weather reverts to more normal conditions throughout the country. We expect our Q2 gross margin rate will be up slightly to LY due to lower markdown rate and lower shrink costs. Partially offsetting this favorability is a higher forecast for both domestic and import trade costs. From an expense standpoint, we anticipate leverage in most major expense area's based on the forecasted comp and we expect dollar reductions in advertising and also utilities. This favorability is assumed to be partially offset by higher bonus expense, equity-related compensation expense and higher debit card fees, resulting from rate hikes being passed on by network providers. Based on these assumptions, Q2 EPS from continuing operations is estimated to be in the range of $0.44 to $0.49 per diluted share, compared to $0.35 per diluted share last year. For the full year, we've increased our guidance and now expect income from continuing operations for fiscal 2010 to be in a range of $2.75 to $2.85 per diluted share, compared to our original guidance of $2.65 to $2.75 per share. This range of EPS assumes a share count of approximately 82 million shares and does not contemplate any opportunistic share repurchase activity or use of the remaining 250 million currently authorized. For the full year of fiscal 2010, we now expect a comparable store sales increase in the range of 3.5% to 4.5%. Based on higher forecasted earnings for the year and tax payment favorability, related to the deductibility of option exercises and restricted stock activity, we're raising our cash flow forecast for the year to $220 million from $200 million. Now I'll turn it over to Chuck for an update on Real Estate.

Thanks, Joe. During the first quarter, we opened seven new stores and closed one store, leaving us with 1,367 stores and total selling square footage of 29.3 million at the end of the quarter. Three of the new stores were traditional Big Lots, meaning secondary or tertiary locations and primarily in strip centers. Four of the new stores were A locations. And we're on track to our goal to open 80 new stores in 2010, 50 in traditional locations and 30 in A locations. In terms of A locations, as we discussed on our last call, we see this as a major step forward for our company and has been made possible by the softening in the commercial real estate market and the strength of our improving performance over the last several years. Early indications suggest that we are attracting a new customer base in these locations, a customer who typically did not shop us or did not have a traditional store that was convenient for them to visit on a regular basis. We're finding that she is a more discretionary customer, meaning Furniture, Home and Seasonal are more important and Consumables, as a percentage of mix, is a little smaller. But again, these results are very early. From a financial standpoint, the eight A locations, that were in test mode beginning in 2009, continue to be very encouraging. These locations, on average, have exceeded our initial financial goals and are trained to sales of a little over $4 million per store, with the majority of the stores between $180 and $200 per selling square foot. Being a higher rent in these locations, however, at these sales locations and with our disciplines around inventory and expenses, we're well ahead of the pace needed to hit our profitability in cash return targets. In terms of our existing store base, we began our store refresh program during the month of May. And we'll complete approximately 45 stores during the second quarter. As a reminder, the majority of these stores will receive a new store layout. And we'll make capital improvements in all locations. In total, for 2010, we're now estimating that we'll refresh approximately 105 stores. Now I'll turn it back to Steve for some closing remarks.

On our last conference call in early March, I made a statement that heading into 2010, I felt we were better positioned than in any other time in my nearly five years with the company. I believe the results from the first quarter demonstrates our plans were on target with the customer. And I'm firmly convinced we're prepared to deliver the balance of this year. From merchandising to stores to marketing, to the real estate opportunities that lie ahead, I feel very good about our future. Our merchandise content and the value message continues to improve. The flow of inventory and the availability of merchandise does not let up, and we're working hard to make sure that it doesn't. We recently held our third Vendor Summit year here, where we invited potentially new contacts to the office here in Columbus to share with them our strategies and financial strength and to encourage them to think of us as a new customer or a larger customer. We continue to make progress on our Ready for Business initiative and have probably three quarters of our stores to a standard that we believe is acceptable at this point. In the last 60 days, I've been in five or six different markets on unannounced visits and there's is a noticeable difference in store execution, customer service and merchandise presentation, compared to this time a year ago. Again, progress. But this is a multi-year initiative and we've taken it on in our stores. From our store associates to our marketing team, we're very focused on building the Buzz Club Rewards program for the future. In the last few weeks, our rewards program have exceeded the $3 million member plateau, over double where it was at the beginning of the year. Again, the program is only a few months old and we're in the stage of building memberships. So it's very difficult to say what level of impact this had on our Q1 results. The more tangible evidence, our opportunity, we believe, comes later in the year and on into 2011, when we begin to market directly to customers based on their buying behavior or history. We're busy implementing the tools to be in a position to do this in the back half of 2010. And finally, in terms of Real Estate, I believe we're very well positioned for the balance of 2010 and the foreseeable future. Similar to merchandising, the deal flow has been good and there's no charge of locations for us to look at and evaluate. In fact, Chuck and I were just at the ICSC Real Estate Conference earlier this week, and met with several landlords, who we do a small amount of business with or we have no locations with them at all. We tried to help them understand our financial model and the cash-rich nature of our company. We shared our approach to real estate and the types of locations we were most interested in negotiating. We updated them on our A store strategy, which is new and different and opens up more possible sites for them to consider for us. We reinforced with them that we're interested in all types of locations, low rent, higher rents, suburban, urban. We have an open to receive new ideas. We left the conference feeling encouraged about the opportunities to expand our landlord base in the future. To summarize, and then go to a brief Q&A, up against some very challenging comparisons from last year, we generated our 14th consecutive record quarter of EPS from continuing operations. Our in-store standards and the shopability of our stores have improved and we look better today than we ever have before. Our merchandise mix is highly discretionary, which positions us to be the beneficiary as consumer confidence continues to recover. We're continuing to make investments necessary to be successful, whether it's investing in systems, putting capital to work in our stores and distribution facilities or hiring talent where needed. We're growing our store base and have many years of growth ahead. And we generate lots of cash and invest it wisely. We happen to believe that great value will never go out of style, and discounts and saving money are likely here to stay. With that, I'll turn it back over to TJ.

Thanks, Steve. I think we'd like to go ahead and open up the lines for the Q&A at this time.

[Operator Instructions] Our first question will come from Charles Grom, JPMorgan. Charles Grom - JP Morgan Chase & Co: Just in the first quarter. If my math is right, you were probably running, say, 8% through the first 11 weeks. And like you said, the last two weeks were tough, say, flattish. And then they bounced back, I think what you said, it's 4% to 5% in the first two weeks in May. Can you just, kind of, walk us through what happened at the end of April? And I guess what's transpired since that time before the Memorial Day shift?

Chuck, this is Joe. We have, clearly, we're running hotter than through the first, say, 10 weeks of the first quarter. The last couple of weeks business did slow. You hear it a lot about that from other retailers as weather trends changed quite a bit. We're not going to get specific regarding the week-by-week trends. But we did see, as we said in our opening comments, comps in the first two weeks of May are running very consistent with our marketable comps and the comps that we are guiding to for the second quarter. Then in the third quarter, as you know, you start getting into the -- I mean the third week, you get into the Memorial Day shift, which we're starting to see the rebound from that this week as we prepare for Memorial Day next Monday. Charles Grom - JP Morgan Chase & Co: And then my second question is on the SG&A, Joe. Within the 190 basis points, can you walk through the buckets of leverage versus advertising dollars? And then to get back on bonus and the equity compensation -- and I guess on the advertising dollars, is your expectations that those cost savings that you outlined in February will continue or was that a one-time benefit here in the first quarter?

Yes, let's start with advertising. Advertising, we do believe, for the year, will be down year-over-year. And consequently, obviously, we'll leverage so that -- I won't say specific dollar trends. But clearly, we'll continue to see advertising save through the balance of the year. Stores and distribution, transportation, those costs, as we indicated on our March call, we expect dollars to be up year-over-year but well-leveraged. And we've said that should be a trend for the year as well as the first quarter. When you get to the stock compensation, clearly, the value -- the price of our stock was significantly higher when our restricted stock and stock options were valued in 2010. And under accounting rules, you use that value at grant date to amortize the cost over the vesting; period. So that's accounting. So that's a significant increase in just the equity compensation piece and bonus. We did have a good first quarter. So therefore, we did accrue a higher bonus for the year in the first quarter.

[Operator Instructions] Now moving on to Mitch Kaiser, Piper Jaffray. Mitchell Kaiser - Piper Jaffray Companies: Steve, could you talk a little bit about what you saw from your Vendor Summit, a little more detail on what you're seeing on the product side? And then also, if you could comment on what you're seeing on the closeout side as well? That would be helpful.

Mitch, we'd run those Vendor Summits before. In fact, I've done it, basically, every other year. And what we like to do is -- our strategy is to increase the vendor base that we have instead of contracted. The more people we do business with that know us, the better opportunities we have. We invited a significant number of vendors, who again, either don't know us real well or don't know us at all. And I spent the morning as I always do going through what our strategy is and share with them the financial strength of the company and the concepts of how they can contribute and be a part of our business. Then we spent the afternoon with one on ones of anybody who wants to spend time directly with our merchants. There is just a lot of positive relationships that people are looking to build, as actually the retail environment has contracted over the last four or five years. And people are looking for financially strong and healthy people to want to do business with. And if we hadn't been on the radar screens before, they're certainly figuring out how to develop relationships with us through end-of-life product or product that they can engineer for us. We're extremely excited about the response that we got from the conference. And in fact, had a number of those vendors back in our office within four weeks after the conference, with all kinds of great ideas for the third and the fourth quarter of our year, that I want to share with you but you clearly will see in our stores if you're in our stores at Back to School and then at Christmastime. So that's number one. The deal flow, as far as what you call closeouts or what we have traditionally known as one-time deals, continues to be very consistent. And it's across-the-board in just about all segments of our business. This is traditionally a time when certain areas of business get near ends of quarters and end of years. So we see a nice flow of product coming into the second and third quarter of the year. So we're real excited about that. And then there's been no real change whatsoever from what's been going on, I would say, in the last 12 to 18 months. So we feel pretty good about it. I actually think we're better positioned right now for the balance of this year than we've ever been before. And I said that on the end-of-the-year conference call and I said it in statement before. And I really do feel that way. We're looking pretty good between now and through the end of the year. We've got a really good plan that we feel real comfortable with. Mitchell Kaiser - Piper Jaffray Companies: So you feel pretty good about the visibility?

Yes, we have as good a visibility as we've ever had before, and maybe better in projecting what our needs are going to be. And I would say in most aspects of the business have real good control over it. There's typical surprises that will pop up. But that's traditional retail. I mean there's no difference for us as there is for any other retailer.

And now we'll hear from David Mann, Johnson Rice. David Mann - Johnson Rice & Company, L.L.C.: On the ocean-freight rates, I guess last quarter, you hadn't renegotiated that yet. Can you just talk a little bit about how that came to fruition. And also any issues in terms of finding space on containers to get stuff in on time for later in the year.

Dave, this is Chuck. Since I was over there last -- I'll take the question. The answer is it's still a challenging environment. The container companies have basically not put more ships on line, although we are in good shape. We've expanded our base of carriers to make sure that we do get the capacity that we need. And I think there's probably two strategies out there right now. The first strategy was people who basically try to, for lack of a better term, overpay in order to secure space and then people that have, kind of, held the line like we have. And said, "Look, we've got new contracts. We've increased our rates on those contracts. We will work with the individuals who will work with us. But I think right now, we feel good about the capacity that we have in order to get the product delivered." I think the big question's going to be during next quarter, there's always some noise out there about an additional surcharge, if you will, for peak season. And that's something that you're starting to hear a little bit about, but frankly, hasn't impacted us yet. David Mann - Johnson Rice & Company, L.L.C.: If I could follow up on what you're doing with advertising, sort of, the cost reduction there. Is that all rate driven? And in terms of the test that you're doing, where you're actually pulling back on print circulation, can you just give us an update on how that's going in terms of the performance in those markets?

David, it's TJ. There's a couple of different things going on in advertising. As you know, we have done a significant amount of testing in the last 12 to 18 months, primarily focused on print distribution. As the Buzz Club grows, as the rewards program grows and as stores mature, what level of print distribution is appropriate by store? And that's what we've been testing to. We first tested through advo [ph] And the first test [ph] component of our distribution. We're now starting to look at newspapers. So it's a several quarters worth of testing you had to do. And it's something that we think we're partway through but not complete. So that's, kind of, I'll call it volume-based. But the rate side of it, clearly, the lower number of newspapers today versus a year ago, and probably lower than that going forward, it's still pretty competitive out there right now. So rates have swung a little bit more in our favor, probably like every other retailer. So that's really what's driving the majority of the change. And we did see a reduction in advertising dollars in the first quarter and are forecasting it for the year. Please understand quarter-to-quarter, the numbers could be a little bit different, based on how we want to go to market. But we're comfortable for the year. Dollars will be down in 3.5% to 4.5% comp; with dollars down clearly, there's been a fair amount of leverage opportunity there.

Our next question will come from Meredith Adler, Barclays Capital. Meredith Adler - Barclays Capital: I wanted to talk just a little bit about the gross margin, and maybe, kind of, similar what you did with expenses. Break It down just a little bit. Because I think the mix was more attractive this quarter and yet the gross margin only improved by about 10 basis points.

Well, we did get a slight benefit from the mix, and from the improvement in the home category. So that's there. We also had some offsets, as we said, on fuel prices.

Meredith,, in terms of the gross margin rate, and this is the best gross margin rate we've had in the first quarter in probably five years now and with record inventory turnover. So our guidance was for a flattish gross margin rate, we did slightly better than that. Again, that's in the last five years in a record turn. Home definitely helps on the margin side because it is better margin. But keep in mind, Electronics is a growing business for us. And that's not better margin. It's good margin for Electronics, but it's not near our company average. So there are some give and takes. But at 40.6%, we felt very good about that number.

Markdowns definitely. Markdown dollars were essentially flat but when you have a 6% comp, you're leveraging those markdown dollars on a higher sales base. So that was clearly a benefit to the margin rate also. Meredith Adler - Barclays Capital: And then I was just wondering if you could talk about how your mix is shifting between engineered product and closeouts. It sounds to me like it is moving more towards engineered. What does it look like now? And where does it get in the next couple of years?

In all actuality, it really sounds like it, Meredith, but it hasn't. Our pure closeout part of our business is actually slightly up. Although -- I mean it's so small, it wouldn't matter. The engineered part of the business is just trying to be intelligent in protecting businesses based upon what had happened the year before and not knowing if it's going to happen again. The road show's probably as good of an example as anything. We put the road show together because we've had a significant furniture closeout the last two years, it turns out the last three now from one of the major furniture players in the business. But not knowing 12 months in advanced what you have to work on, programs like that to be prepared for the fact that we may not be capable of finding that kind of inventory. The first quarter was a good example of we had the engineered part of the program and we turned around, and we found out we were getting the closeout part of the business as we did before. But the actual piece of the business hasn't shifted significantly at all.

In complementing that, the road show was the Galleria deal...

That was closed off.

We did not have last year, which is -- and clearly, it closed out in the contributor to the first quarter.

Now we'll hear from Joe Feldman, Telsey Advisory Group. Joseph Feldman - Telsey Advisory Group: I was hoping to get a little more color on the A stores. Just any updates that you can share with things maybe you're learning and are you attracting a different customer? And maybe a higher end customer and just any more color or just to update the current projection.

I'll tell you, Joe, let me speak to what the 80 stores look like and then I'll turn it over to Steve or Joe. Certainly, they've, kind of, talked about the customers. But the fact of the matter is, we're really looking hard at A stores. Obviously, it's, kind of, a newer concept for us. But we've been very pleased with the results. And I think what it's about is the demographics will be different, because quite frankly, the tenant mix is different. And it seems to us, right now, that we haven't been disappointed whatsoever. What Steve and I spent a lot of time, the first part of this week out of ICSC was helping landlords understand -- and I'll say some of the prouder landlords, maybe that's not the right term. But understand why they want us there because if you -- and you've been to some of our A stores, our A stores look different than the traditional stores. And we understand that there's a slight need of maybe some additional capital. But also we want to look like the in-line retailer when you drive by and you've got Best Buy perhaps on one side and Target on the other. We want to look like we belong there. And we focus very hard on that. And I think as more and more landlords recognize what we're doing and what our store operators are doing to allow us to be in those site and fit, makes a huge difference. And I'll turn it over to Joe or Steve, if you guys want to talk about the customer.

Joe, I want to start up by saying this is very early on. And we still have only the information through the first quarter of this year. What we do know is that the mix of the business is a little bit better. The home parts of the business, the furniture parts of the business and the seasonal parts of the business, as a percent of total, are little bit higher in the mix, which is just fine with us because of margin standpoint. As far as the mix of the customer base, just the economics of who shops those areas, you have to assume it's higher. Although I will tell you, we have spent time, effort and money to find out if that's really true or not in a way of a study. And those results are being presented to us in the next week. So I don't want to guesstimate what those results are going to say. But I'd be more than happy to share them publicly when we find out what it says. My guess is that we're finding this clearly a different economic customer base from our traditional average customer, whether they like us, don't like us, whether they're shopping us, coming back to us, whether they're new customers, which we'd love to think that they are, we'll find out and share with you when we find that out.

Our next question will come from Patrick McKeever, MKM Partners. Patrick McKeever - Avondale Partners: Just a question on guidance for the year. I know you had previously said that you were thinking gross margin would be flattish for the year. And I'm assuming that's still the case. But you beat the midpoint of your first quarter guided range by $0.05 and you took the year up, essentially, $0.10. So my question is where is the difference in over the balance of the year, in terms of how you're looking at the remaining three quarters of the year?

Yes, the balance is really in the second quarter, Patrick. What you'll find in the back half of the year, there's a slight adjustment in a number of shares. So on the EPS line, you'll see a slight adjustment there. If you look at the shares outstanding guidance that we're giving, we've raised that a little bit, which has some impact on the EPS. But principally, the increase in guidance is residing in the second quarter. As we've said before, there's some caution around the back half of the year. And we still feel very good about the trends in the business. But we're not in a position to address that guidance at this time. Patrick McKeever - Avondale Partners: And then just a real quick one on Home, if I could. The Home category. Are there any call outs there, in terms of particular products that are driving the strength in that category? Or is it across-the-board?

It's fairly much across-the-board. And we do have what I call, two separate businesses, or the way you traditionally understand it. Linens and Domestics seems to be doing quite well. Bedding is decent. Bath is decent and Window Coverings is pretty good, and Textile's up. The Basic Housewares part of the business is particularly strong. And the Decorative Accessory area are partly because of the closeout deal flow that we've been getting and we alluded to the Galleria deal. It wasn't just in the Furniture category. It was also in the Home Accessory category. That's done very, very well. We're coming off of a second closeout deal from a manufacturer on the West Coast that was new to us last year, that we've established a relationship with, that is utilizing us for end-of-life product. And that's predominantly in the accessory area. And that's doing very, very well. I think you'll find, if you're in our stores, there was a very large cookware closeout that's just being set on end caps and stores right now that really didn't affect much in the first quarter, but will affect the second quarter and the Basic Housewares areas. So almost everyone of the Home business is across-the-board or doing pretty well right now.

And now we'll hear from Laura Champine with Cowen. Laura Champine - Cowen and Company, LLC: So I did hear your comments that, in May, things slowed a bit. Are you having more difficult comparisons with comps from a year ago because obviously, we don't see the month-to-month comps.

I think we said May was slow.

Laura, we didn't say May slowed, actually. What we said is the last couple of weeks of April, the first quarter trend slowed when the weather reversed. As you probably recall, the early spring weather was pretty nice, and then it turned on a diamond. We had a number of weeks to just crappy weather. So that's what we were really referring to. We've had the first two weeks of May. We're consistent with marble in four to five, and consistent with the guidance that we're giving for the second quarter. Laura Champine - Cowen and Company, LLC: And I think that your margines among categories really aren't that different. But if you do see a sustained shift away from consumables and towards discretionary, will that move the needle on gross margins?

It's dependent on what category in discretionary, Laura, and how you, kind of, define that. If you're say move volume from Consumables to Seasonal or Home, then the answer there is clearly yes. Furniture, as a discretionary category, that margin is pretty comparable to company average. It's better than Consumables also. Electronics, if you consider that as discretionary category, that's below company average. So really it's dependent on which category we see growing as a percent of total. In the first quarter, it was a slight benefit. But it's really dependent on where the business shifts.

Yes, and Laura, just to expand. In the first quarter, when we talked about the significance of the benefits, markdowns was more significant. And the mix, to TJ's point, was a slight benefit. So don't overstate the benefit of the strength in Home because of the strength in the other categories, principally, Electronics.

The second part of your question, Laura, around May, we typically do not -- we don't release monthly comps as you know. We did say last year though that the comps declined for the second quarter of roughly 2.5%, was fairly consistent across the months. If there's any months that was better than that, it would've been July, but only [ph] slightly. So there's not a wide disparity in comps by month in the LY that we were up against in first couple of weeks in May.

And now we'll hear from Peter Keith with JMP Securities. Peter Keith - JMP Securities LLC: I was wondering on the initial markup, this would be the first quarter in quite some time that you didn't call it out as a benefit. Now certainly, you did have it in your guidance. But as you're looking at good that are going to be coming in the stores over the coming quarters, could you provide us an idea of, kind of, how the pricing might shake out? And should we continue to expect that to not be a benefit this year?

Peter, it's TJ. Early on in the year, we called out that IMU. We expected to remain pretty confident that we had some pretty solid performance last year. And we thought that it would be good performance in 2010 to hold on to all that progress. Clearly, there's some gives and takes depending on what we deliver. But I think we still feel very good about the IMU potential of the business for the balance of this year. But you are correct, the last year, it was -- for us and for most of Retail, kind of, the perfect storm from an IMU and a cost perspective. Again, we think holding on to that benefit this year is pretty good performance. And instead, we're going to look to areas like markdowns, lower levels of markdowns, faster turn, certainly, given our comp guidance and shrink in some of the controls and disciplines that we're putting in, in the stores and lost prevention organizations. We feel very good about the opportunity that are there this year. Peter Keith - JMP Securities LLC: Going in stores, I haven't seen the Jennifer Farrell set yet. You guys have done it the last two years. It looks like you've got Port 7 merchandising stores. Should we expect some type of engineered closeout around that Jennifer Farrell brand this year.

Port 7, you saw it. that's it. At this time, we're going to go ahead and wrap up the call. So we can head off to our Annual Meeting. We appreciate everybody's interest, and we look forward to talking to you in the latter part of August. Thank you.

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