Frederick Rowan, II - Chairman of the Board & Chief Executive Officer Joseph Pacifico - President Michael Casey - Chief Financial Officer & Executive Vice President. Eric Martin - Vice President of Investor Relations

Omar Saad – Credit Suisse Brad Stephens - Morgan Keegan Margaret Whitfield - Sterne Agee Jim Chartier – Monness, Crespi, Hardt & Co., Inc Robert Kaynor - Ramius Capital

Welcome to Carter's first quarter earnings conference call. On the call today are Fred Rowan, Chief Executive Officer; Joe Pacifico, President and Mike Casey, Chief Financial Officer. After today’s prepared remarks we will take questions as time allows. If you have any follow up questions after today’s call please direct them to Eric Martin, Vice President of Investor Relations. Mr. Martin’s direct telephone number is 404-745-2889; again that number is 404-745-2889. Carter’s issued its first quarter earnings press release yesterday after the market closed. The text of the release appears at Carter’s website at www.Carters.com under the press release section. Before we begin let me remind you that statements made on this conference call and in the Company’s press release other than those concerning historical information should be considered forward-looking statements and actual results may differ materially. For a detailed discussion of factors that could cause actual results to vary from those contained in the forward-looking statements, please refer to the Company’s most recent annual report filed with the Securities and Exchange Commission. Also, on this call the Company will reference various non-GAAP financial measurements. A reconciliation of these non-GAAP financial measurements to the GAAP financial measurements is provided in the Company’s earnings release. And now, I would like to turn the call over to Mr. Rowan. Please go ahead sir. Frederick Rowan, II: Good morning everyone and welcome to our call. It’s no surprise this remains an uncertain period. No one knows the depth of this recession, nor the timing of the recovery. Given that it makes it very difficult to gab market with any certainty. That dictates two things from us; one the very conservative which we are and two focus on what we have control of, which we are. Parts of our business units are performing quite well. A couple are having emerging successes. We are not pessimistic but we are realistic and determined. We have a clear focused and disciplined strategic agenda with muscle behind each of our major initiatives. We are committed to long-term quality growth, but we have to be sensible as we work through these headwinds. We have, however made materially -- strengthened our business through the new business models. You will hear this from Joe and Mike as we move through the models and more specifically about that and also during the questioning-and-answering period. To summarize our strategic agenda it goes as follows. The first is be certain we have and keep the core talent to execute the turnaround and position this company for long-term growth; secondly, to be the absolute leader at product value; third, to optimize both wholesale and the retail growth to powerful business models; fourth, to accelerate the turnaround of OshKosh; fifth, to make these key investments, both short and long-term and finally, substantially reduce our cost structure. I will turn the session now over to Joe Pacifico.

Thank you, Fred. Good morning. I will give you a brief overview of our first quarter performance and then Mike will provide additional details on our results. I will also share with you our strategic initiatives that we will begin implementing this fall. I will start with a quick overview of the Carter's brand and wholesale business. We had a good quarter in this segment with positive sales growth. Our over-the-counter selling of spring product was flat to last year and our top accounts in total saw a slight improvement in margin. The inventories are higher than last year at the end of the quarter but are at the appropriate level to support the second quarter retail sales brand, which is higher this year due to the calendar shift. As expected OshKosh wholesales were down in the quarter. In regards to over the counter selling, unit sales improved significantly. Our customer margins were up slightly to last year. Customer inventories are inline with plan and it should be cleaner at the end of second quarter than they were last year. Summer selling is off to a very good start. As we have told you before while spring was much improved as reflected in over the counter selling results, summer should be stronger and our goal is to build upon each subsequent line. Based on this product performance, we are rebuilding confidence with our accounts and we expect to see this reflected in our year-over-year bookings. I would like -- we would now like to focus on our strategic initiatives. I want to make sure you have a core understanding of the model that will kick off starting in fall ‘08. For the wholesale channel, we are implementing a far more competitive model. The model is stock-based and is supported by extensive research. There are five key components to the model. The first component is product leadership. Our strategy is to drive high velocity, essential core products. To be the market leader in color and art and to that end, we have and we will continue to increase our designs skills. At Carter's, we strengthen our creative department with a VP of Design. We have increased the number of our full-time artist, and have expanded our freelance network and it’s internal programs. At OshKosh, we have a new EVP of the OshKosh brand and a new Vice President of Merchandising and Design. We are also evaluating our product with the consumer and customer in our development process. The second component of the model is more competitive consumer pricing. Through extensive analysis including the help of an outside firm; we've looked at all of our competitor's; specialty stores, branded apparel and private label along with an historical over-the-counter sales to determine the price points and optimize revenue and margin for our core products. Based on the analysis, we are improving product value by lowering consumer prices 8% to 10% at Carter’s and 10% to 15% at OshKosh. At the same time we lowered wholesale prices to be able to execute an everyday value pricing strategy, which we feel optimizes performance and it supported by our research. The third component is branding. Based on our research, we are investing to improve the consumer shopping environment. For Carter’s, we have created 0 to 24 shops which pulled together all of our product markets, baby playwear and sleepwear in the newborn to 24 months size rates. The shops drive brand new wears are convenient for the mother to drive top-line growth and allow us to maintain and grow floor space. Carter's has positioned better than any other children’s brand to do this, because of our brand strength and baby being the foundation of these shops. Early cash flow results have been positive and we plan to rollout 300 shops in the third quarter, with 200 more following in the fourth quarter. We will also commit the servicing the floor to top doors of our top accounts by expanding our retail floor-servicing program. We will service over 1,000 doors in the second half of this year. The fourth component of the model is to increase our customer’s profit. To do this we plan to increase revenue through broader product, lower consumer prices and more impact full branding on the floor. Secondly, we’ve improved customer’s natural margins through the lower wholesale prices. Finally, the model is built to increase their profitability to increase turn, which will pickup as a result of everyday value pricing and inventory manage. The finally component of the model is joint business planning with our accounts. It is critical to get mutual agreement on strategic direction and for us to understand the metrics that are most important to our accounts. Execution of this model and its totality, along with the strength of our consumer brands, plus the ability we have to invest, should enable us to achieve or see our customer’s objectives. We believe that there is no one else in the children's space that has the ability to put together a model like this. We have already presented this model for some of our top accounts and the feedback has been extremely positive. Now, I will talk about the mass channel, our just one year business to target performed very well in the quarter with strong sales growth. We had very good selling at the floor and inventories are in good shape. We have all of our fall orders in hand which gives us good visibility into the second half of the year and we are expecting to see positive growth. The “Child of Mine” business at Wal-Mart struggled in the quarter. Product performance and certain spring programs has deteriorated more of than expected. We have moved aggressively to get the spring sales and inventories inline by the end of the season. For fall we feel we have corrected the issues, we are significantly elevating product benefits and lowering prices where necessary to improve the consumer value equation. Our fall deliveries will start shipping the last week of June, our new brand wall launches mid July, I am confident the second half would provide positive growth at Wal-Mart supported by the fall orders we have in hand. Turning to retail, I will begin with the Carter’s side of the brands business and then followed by OshKosh. Carter’s retail is the strength of our business right now, it's a great story finishing the quarter with its fixed rate quarter of positive accounts. All four of our product categories come positively in the quarter. For the quarter, we also have improved product margins over the last year and our inventories are in good shape. Carter's retail should provide good growth in the second half to better products then an improved value equation more significant assortment of opening price point product, an improved floor set and lastly more impactful consumer marketing and increased in pressures. OshKosh retail performed below plan in the quarter and is still a work in progress, however we are making progress. Margin and inventory management are really the issues and we expect to see improvement in those areas in the second half of this year. For the fall OshKosh's retail, we will have a significantly stronger business agenda. Better product expanding the opening price point programs, a strong denim offereing, better valued to the consumer, improved planning and allocation process, better store environment based on the investments we have made in fixture, manikins and install photography and more impact full consumer marketing. In closing, really I think our organization has done an excellent job in positioning us to succeed in this environment. We are being proactive and implementing our comprehensive business model for each of our brands and business segments that will kick off in the second half of this year. We believe that positive material chain store model, will provide an opportunity to gain share. I will now turn it over to Mike, to discuss financial performance.

Okay, thanks Joe. Good morning, everybody. I will walk you through our results and also comment on our outlook for the balance of the year. For compared purposes keep in mind that our results in the first quarter of 2007 include the charge of $0.06 per share related to the closure of an OshKosh distribution center; because that charge impacts comparability I commented on our results excluding the impact of that charge. For the first quarter of 2008 we’re reporting earnings of $0.19 per share that’s down 14% to last year. Our earnings will lay down by an operating loss incurred at OshKosh, which was approximately $9 million in the first quarter or $0.09 per share. Net loss is about $6 million higher than the first quarter of 2007. Our earnings were also negatively impacted by disappointing performance of our “Child of Mine” brand. Partially offsetting the weakness at OshKosh and “Child of Mine” were significantly better performance, in our Carter’s retail segment and the strength of our “Just One Year” brand. With respect to sales in the first quarter total sales were up $10 million or 3% to last year. That growth was driven entirely by our Carter brands with sales up $80 million or 7%. Our growth in the quarter was led by the Carter's retail segment. Our Carter’s retail sales increased 15% with a 12% increase in comp stores sales. This increase was driven by a stronger products offering, a significantly better inventory position and better execution by the new retail team. We’re seeing acceleration in baby product sales, which is our highest margin business. Our brand stores continued outperform the outlets the brand store comps were up 18% in the first quarter, the outlets were up 11%. Sales in Carter’s wholesale segment grew 5% in the quarter. A good portion of this growth was in our sleepwear business, and was largely related to the timing of shipments. Wholesales for the first half are expected to be comparable for last year. Our mass channel sales increased 2% in the first quarter. As Joe discussed our business target has been terrific up 20% in the first quarter expected to be up 10% in the first half. Sales to Wal-Mart were down 9% in the quarter. We had at weak selling and certain component to the product offering, which were improving for fall 2008. At OshKosh wholesale sales decreased 26% in the first quarter. Most of this decline can be attributed to price reductions to improve the competitiveness of the product. Average wholesale prices for the year decline down about 12%. Our OshKosh retail sales decreased 3% in the first quarter with a 6.6% decline in comp store sales. The decline in sales was driven primarily by aggressive promotions to accelerate the clearance of excess levels of fall and holiday merchandise. With these aggressive promotions we are improving the level and mix of inventory in our OshKosh stores. In recent weeks we’ve started to see positive comps from these stores with better margins year-over-year. Our current model reflects meaningfully better profitability from the OshKosh stores beginning in the third quarter, with respect to profitability our gross margin declined 140 basis points to 31.8% of sales. This decline equates to approximately $4.5 million of margin erosion, a major component to that decline included erosion in Oshkosh margins due to product performance and early markdowns and lower margins earned uncertain components of our Child of Mine product line. Offsetting these declines was better profitability in our Carter’s retail segment, which earned higher margins in each product category. With respect to spending in the first quarter SG&A was 28% of sale that’s 90 basis points higher than last year due primarily to the investments made in upgrading the retail management team and the impact of expenses related to new stores. Our royalties from licensing activities were up 5% to last year, the increase was driven by our Carter’s domestic licensing business. On a consolidated basis our operating margin was 6.2% down 230 basis points compared to last year driven largely by the losses incurred at OshKosh. Interest expense in the first quarter, was down $1.2 million, or 21% driven by a lower interest rates. With respect to taxes, our effective tax rate in the first quarter was 27.9%, compared to 37.8% in the first quarter of 2007, this reflects a $1.6 million benefit from the reversal of income tax reserves following the completion of a recent tax audits. In terms of liquidity, cash flow from operations in the first quarter was $29 million that is $22 million higher than last year, due to primarily to the change in inventories. Our inventories at the end of the first quarter, were $174 million up 9% to last year, the growth in inventory reflects higher levels of inventories in our Carter's retail stores and the timing of shipments to our wholesale customers. In absolute dollars, inventories grew about $15 million year-over-year of that $15 million increase $9 million is in our Carter’s retail stores. As we discussed on previous calls in 2007, we were significantly under inventory in our Carter’s stores that had a negative impact on our results. We’re now at a level we believe that is appropriate to its poor demand. Inventories will trend higher during the second quarter they may be up 15% to 20% mid year. We've decided to bring an inventory earlier to help avoid any disruption in the core product that could result if there is a West Coast Sports Strike. We are projecting inventories up about 4% to 6% at the end of this year. CapEx for the first quarter was $2.5 million primarily from investments in systems including our new retail point of sale system, which were enrolling out this year. We planned to invest approximately $45 million in CapEx during the balance of the year primarily for retail store openings, our new point of sale system and fixturing to our wholesale customers. With respect to the share repurchase plan we purchased about $10 million worth of stock in the first quarter at an average price of $14.86 per share, till date have invested $74 million in the share repurchase plan, retiring 6% of our shares at an average price of less than $21 a share. With respect to guidance, we’re planning low to single-digit growth in sales this year; with respect to earnings on our last call we expected that we could achieve a level of earnings comparable to last year and while that level of performance is still possible given the continued weakness in consumers spending, and the performance at OshKosh, I think it’s reasonable to assume that earnings this year could be down 5% or more. It’s important to know, included in our earnings estimates are significant incremental investments in our retail segment this year, including the new leadership team, better systems and a new facility for our retail group. We’re also investing in the new fixturing program for our wholesale customers. We are investing in outside health to support deeper analysis of growth and cost opportunities and we are investing in consumer research. Our estimates also include funding incentives three or key employees who are leading the initiatives to strengthen our business. Near term you will see the impact to these investments on our second quarter performance. Our current model reflects sales in gross profit down low single-digits to last year. Second quarter spending will be slightly higher than the first quarter of this year and up about $10 million to 12% to last year. As a result higher investments we’re projecting second quarter results will be break-even to a small loss. Keep in mind our second quarter is the latest quarter of the year, in terms of sales contributing less then 20% of our annual sales. The incremental cost of these and other investments this year is about $18 million or about $0.18 per share. We believe the accumulative effect of these investments will position us for good growth beginning in 2009. That concludes our business update and we will open up the call to your questions.

Thank you, sir. (Operator Instructions) For our first question we go to Omar Saad with Credit Suisse. Omar Saad – Credit Suisse: Good morning. Frederick Rowan, II: Good morning.

Good morning. Omar Saad – Credit Suisse: Quick question on the new model and I think it was very instructive laying out of that kind of five pieces to that model. On the sourcing side, especially as you look to increase customer profits and giving them better in that for margins and lowering pricing, how do you balance that on the souring side? There has been a lot of talk about inflation coming out of the Far East and you kind of always used that the agency model with you sourcing and restructuring. Have you thought about reconfiguring that or can you kind of give me your current thoughts on that side of the business?

Omar this is Mike. There is no question of cost in China, are going up. We’ve been staying very close to Li & Fung specifically; that agent model is kind of important part of our success and will continue to be. Because the costs are growing up in China, we’ve reduced our sourcing mix in China and we have shifted to lower costs countries like Bangladesh, Indonesia, Vietnam and we are seeing some very good performance from those countries. Our fabric as we talked about in prior calls, that’s the largest component of our product costs. So, for the past year we’ve been focused on nearing the scope of our fabrics, leveraging fabrics over multiple products and brands where appropriate. We equate complexity with costs, so we’ve been attacking complexity in the product development process, we’ve been narrowing the number skews particularly at OshKosh. We still feel as though the assortment for the consumer is too broad at OshKosh, for spring 2009, we’d estimate that we’ve cut the skews by about 20%. We’ll see a similar opportunity for fall, 2009 and the skew reduction enables a crisper point of view for the OshKosh product assortment for the consumer. It increases the efficiency in sourcing, enables us to increase our forecast accuracy and it also enables us to carry less inventory so there are a number of good initiatives that we feel so enables us to continue to lower cost structure and improve our margin. So I would say, we are making good progress and have a number of opportunities in the sourcing area and else where in the company to offset the rising costs in China. Omar Saad – Credit Suisse: Okay and so, but it is sounds like you are still very committed to the agency…

We are. Omar Saad – Credit Suisse: Agency, okay.

Yes we are. Omar Saad – Credit Suisse: All right switching gear a little bit on this, the store shops that we are talking about, how many are out there today? And I haven’t seen any of these, but are they radically different than the kind of your current format in the stores, and where can we go to see them? Frederick Rowan, II: Yes we think they are radically different, we have got three out there today, we are installing a few more before we get -- and the major push will start in the third quarter. Omar Saad – Credit Suisse: Okay and it is what Kohls and Penney's or which retailers are that going to… Frederick Rowan, II: Yeah Kohls and Macys and Penney's were working a plan on right now. Omar Saad – Credit Suisse: Got it. Okay and can you tell us where the three are that are out there today. Frederick Rowan, II: Yeah. Kohls in Sussex, Wisconsin. Macys is Dadeland and then -- Dadeland of Florida and then Apparel 34 Stream. Omar Saad – Credit Suisse: Got it. Thank you. Frederick Rowan, II: You are welcome.

For our next question we go to Brad Stephens with Morgan Keegan. Brad Stephens - Morgan Keegan: Hey guys good morning. It sounds like you guys actually have a pretty well laid out plan which I think Rob’s pretty excited about. The one question I think that I definitely have in the plan here is that you are going to take prices down and yet you expect margins to be up to the retailers, what does that mean for your margins though? Frederick Rowan, II: In terms of -- we are going to see near-term, we are going to see margins decline, our model support in the third quarter, margins would be comparably year-over-year, we see margins improving in the fourth quarter. Brad Stephens - Morgan Keegan: That’s from faster turn? Frederick Rowan, II: Yeah, that is primarily from correcting the inventory positions, if you think about the things that have weighed our margin down, it’s largely been OshKosh and the fact that we are out of balance in inventory, even in our retail stores -- Carter’s retail stores last year. If you’d look at these profitability of our Carter’s stores in the last couple of quarter the segment profitability is that they are up about 30% over the last two quarters. OshKosh was still the -- most of the decline in the first quarter came from the OshKosh retail stores in terms of much higher promotions year-over-year, but as we look at the models we’ll see some of that continuing to the second quarter, our models now show that the margins will improve meaningfully in the OshKosh stores in the second half of this year and in fact in the last couple of weeks, we’re starting to see the benefit of cleaning up the OshKosh retail store inventory. We put up positive comps with better margins year-over-year. So, we’re starting to see some signs of recovery and in my view I think we’re starting to see OshKosh kind of bottom out it’ll be helpful that we can see improvement from here. Brad Stephens - Morgan Keegan: Second question, Mike, to the inventory build, Q2, you said is going to be up 13% to 20% in part, to help alleviate any concerns about West Coast Dock Strike. How much of that is a build, you’re just bringing the shipments in early?

It’s entirely due to bringing the shipments in early. We’re probably going to carry an extra 18 days of inventory just to give ourselves a kind of safety net in the event that strike occurs. We’re safe today; it’s probably less than a 50% chance that occurs but back in 2002 when they went out on strike we did a similar type strategy to bring goods in earlier and we didn’t have any disruption in the flow of product. If your to strip out those extra 18 days our inventory mid year would probably be up mid-single digit. So, it’s entirely related to that and we feel good about the outlook for inventory at the balance of the year that will back to about mid-single digit growth. Brad Stephens - Morgan Keegan: Great. Your commentary about on the last call or you kind of said you thought earnings is going to be flattish now that it can be down 5% when I look at -- kind of how I looked at OshKosh in Q1 there was about $6 million dealt in profitability. So, one will OshKosh be break even this year better or worse in expected? Frederick Rowan, II: No, it could – it could be Brad Stephens - Morgan Keegan: It could be, so it could be another year of a loss? Frederick Rowan, II: Yeah it could be it could be flat to down this year in terms of contribution. Brad Stephens - Morgan Keegan: So, then the -- so, then you are only change release your outlook is OshKosh? Frederick Rowan, II: Probably I think that’s fair to say primarily OshKosh. Brad Stephens - Morgan Keegan: Okay, and I know you said you’ve seen some improvement, but are there any, milestones along the way, that they said “Look it just doesn’t work.” Frederick Rowan, II: We actually think the worse is behind us, OshKosh. This think in summary we will get terrific leaderships here now with a brand leader at over the brand and over Soho, we got a good leader and GM in our retail stores. It’s a vastly more competitive model for our wholesale accounts. We’re actually seeing good results for the wholesales, brands are selling well and the summer is off to a far better start. So the product is evolving as we mentioned in previous calls it’s been validated by our consumers, our customers that are pre-lining it and given as input. There is far or less complexity and in-lined as Mike said, which helps the cost margins story and there is a return to the organic core at this big denim offering, we will have the big classifications that are important, as we moved through the year. Just reminds you it’s a season by season evolving story where we have had good top meetings so far with their customers, they have think the brands are important and we are optimistic. We just – it’s going to take some time as we move through the year. Brad Stephens - Morgan Keegan: Okay. Then one last one; Joe could you tell us -- compared to maybe last year or just historically what percent of bookings do you have in at this point and our retailers holding out longer and longer, to give you those bookings?

Yeah actually we have got our fall bookings and we have had them in for a while, so we are in pretty good shape with fall and I think we created mid single digits out in all the three product markets so a long way to go but the initial booking look good. Brad Stephens - Morgan Keegan: All right guys, best of luck. Frederick Rowan, II: Thank you.

Thanks Brad.

For our next question we will go to Margaret Whitfield with Sterne Agee. Margaret Whitfield - Sterne Agee: Good morning. I was impressed by your retail comps, I wonder if you could discuss if those trends have continued here in early Q2 and whether the comp and particularly in those brand stores were driven by ticket or traffic; if you could comment on how that work that’s the first question then I have wanted two more?

The strong performance as continues the second quarter. So, we are really encouraged by the progress we’re making in the Carter’s retail stores. Margaret Whitfield - Sterne Agee: And is it fueled by ticket transaction, do you have those numbers? Frederick Rowan, II: I will get you the actual results, let me speak to Carter’s specifically and the first quarter of the 12 comp, it was driven largely by strengthen units per transaction. I mean the consumer loved what they saw and perceived the deal. The number of transactions were up about 4% and prices were up about 1%, so, nice to see a strong comp with a stronger margin and prices that were comparable to the last year. Margaret Whitfield - Sterne Agee: Okay and then on the investments spending I think you have said Q2 $10 million did I hear that incremental investment. Frederick Rowan, II: Correct. Margaret Whitfield - Sterne Agee: $18 million for the year, so would the reminder be primarily in the third quarter and if so what would be some offsets to that investment stand? Frederick Rowan, II: Yeah, actually Margaret, just the level of spending, the SG&A will be up $10 million for the year. We would say that incremental spending would be about $18 million. So, that included in that $10 million increase in spending on the second quarter are investments and it’s the other whole focus was on getting the right team in place in retail. You can see the benefit from that investment and the Carter’s retail performance. We are hopeful that Joe and his team could replicate that same type of performance beginning with second half of this year with OshKosh. I think, as Joe said, every key position in retail was upgraded, beginning with Joe and maybe your last year, so we didn’t have that expenses of the team in the first half and for the last year we were confident we are getting started now. We are funding incentives. Incentives this year will probably be some portion of the $9 million that were not in our spending last year and our new systems for retail, we have the fixturing program, the new shops that Joe talked about. We are investing in what we call retail marketers; people, were actually down and we’ll make sure those shops are executed properly and supported with good inventories, we get the inventory out of the back room and onto the fixtures, so, it’s a comprehensive approach to strengthen the presentation of the brand on the floor, if we are investing at research consulting, so 2008 were characterizing it is going to be a year of investment. Our whole focus is to make sure we are taking all the important steps necessary to get our sales back on our growth path we are getting it next year. Margaret Whitfield - Sterne Agee: Well, it sounds like a lot these investments are going to fall also in Q3. Frederick Rowan, II: Sure. Margaret Whitfield - Sterne Agee: But I take with you are planning on volume to offset it. Frederick Rowan, II: Actually, I think you should focus on four quarters, we are going to start to see the strength in the business. I think I would set your expectations that the growth this year, will start to come in the fourth quarter because, we are starting to roll these shops out and I think it is important for everybody to break the business down into its components at Carter's, these shops will start to roll out these new born shops in the third quarter, that will hit the floor sometime during the third quarter, but the full impact what we see until the fourth quarter. Carter's retail, we are going to continue to see terrific performance that we are seeing over the past couple of quarters, in the mass channel. Now we have had some issues with the Child of Mine brand in the first half. The dollars start to be corrected at is beginning in the third quarter but the full impact what we are seeing until the fourth quarter. When you go to OshKosh retail, the OshKosh retail is 80% of the sales and all of the profitability. So, we are going to see the performance getting better with OshKosh retail stores first and I will suggest that at beginning the third quarter and will continue to the fourth quarter. OshKosh wholesale are just encouraging, it is the smallest component of our business and will probably out lag the turnaround in OshKosh retail. Retail is the leading indicator and then OshKosh wholesale will follow book. To Fred’s point we are starting to see some pretty good selling over the counter with spring products and we are hopeful that's an indication thing that there are better days are ahead. Margaret Whitfield - Sterne Agee: In terms of the wholesale I know you spoke earlier they were inventory cut backs early in the year mark down money request if those traditions continued here in Q2 with further cutbacks beyond your expectations. Frederick Rowan, II: Yeah, everything is in our plan and we have accounted for everything, combinations other than be budget and we think we actually been more proactive this year looking out at our order fall. So, we think we feel good about. Margaret Whitfield - Sterne Agee: Okay. Thanks and best of luck. Frederick Rowan, II: Thank you.

We will go next to Jim Chartier with Monness, Crespi, Hardt. Jim Chartier – Monness, Crespi, Hardt & Co., Inc: Good morning. Just few questions on the direct balance side for the Carter’s and OshKosh, yeah, were you pleased with that and can you give us some metrics that enjoys the performance there? Frederick Rowan, II: We have significantly increased via model impressions and I think the payback we are still analyzing that, but with I think its definitely effective in the Carter revenue, it’s and in quarter two we expect to have about $17 million impressions for each brand. So, we are increasing the presence and we are starting to, track with our new point of sale system, and our CRM. But, I would say the -- I don’t have an exact number and redemption we can get back to you with an exact number, but it has been positive. Jim Chartier – Monness, Crespi, Hardt & Co., Inc: Okay and then how many -- you said you are going to service 1000 doors in the second half of the year. How many doors, you are servicing now, and how many where you servicing in the second half of last year? Frederick Rowan, II: I would say it’s probably, at least twice as in early more part around the 300 to 400 range this year, really out to 1000 in the second half. And then we planned to expand that in 2009. We think just potentially probably 2500 doors we would like target.

And I will take the top mains with our accounts this far it is going to land for the zero to 24 shops and servicing the slower managing and housekeeping at the floor. Jim Chartier – Monness, Crespi, Hardt & Co., Inc: All right and

We are very encourage about that Jim Chartier – Monness, Crespi, Hardt & Co., Inc: Okay. And then what is the inventory plans for OshKosh retails. It sounds like you have had some additional promotional activities are you taking inventories down there to moderate promotional dividend? Frederick Rowan, II: This is the levels year-over-year our comparable selling opportunity reduced as further its not so much the levels that is the mix we have talking with our sales with too much far and how they carry always we got promotional on that we have actually helped the retail group by taking some of what they would have other rise taking in spring and we are moving it out to be our price channel and taking some charges related to that. Our whole focus is and Jims plan is to make sure that is we are into that third quarter we got a better mix in level of the inventory as I mentioned you can see a significant decrease in the level, but the mix of the inventories what we’re focused on improving. Jim Chartier – Monness, Crespi, Hardt & Co., Inc: And how -- are you happy with the mix of the end of the first quarter.

Well, no, no, no. The mix of that inventory won’t get better until early in the third quarter. Jim Chartier – Monness, Crespi, Hardt & Co., Inc: Right, good luck, thanks.

Thank you.

(Operator Instructions) We will go next to Bob Kaynor with Ramius Capital.. Robert Kaynor - Ramius Capital: Hi, thanks for taking my question. You talked about the potential for the West Coast Strike and the inventory build to mitigate that risk, are there incremental cost in the P&L that you are modeling for should the strike occur.

Yes. We are. Yes. Robert Kaynor - Ramius Capital: Okay, can you put a number to that?

No, I would rather not to be specific and that really we're working into the estimates. Robert Kaynor - Ramius Capital: Are those some costs or would you get those back if the strike doesn’t occur?

Yeah, a good question; if that strike doesn’t occur, that there is an opportunities to save the. Robert Kaynor - Ramius Capital: Okay. And it just a quick question, what was D&A in the quarter?

Bear with me a second. Robert Kaynor - Ramius Capital: And then maybe why you are looking for that and how much is left on the share repurchase authorization?

That about 22 million, about $23 million. D&A in the quarter was roughly $7 million. Robert Kaynor - Ramius Capital: Okay and can you just talk about the share repurchase plan, we are clearly an uncertain retail environment and you have a little bit of leverage can you just help us understand why that's a -- now it's a good time to be buying back or to be using that capital to buyback shares?

The program was put in place last year. I’d say the pace that we’ve been repurchasing shares has not been aggressive; its clearly an opportunity. Our leverage today is less than two times current EBITDA level of leverage we’re very comfortable with. Yeah, that’s clearly an economic benefit of repurchasing shares given what current valuation is relative to taking down fairly low cost debt. Our after-tax cost is borrowing is less than 4% and clearly we see a better economic benefit repurchasing this year. With that said our focus on the user cash is to fund our growth initiatives and to the extent we feel comfortable with per days is excess cash, those dollars will initially go to the share repurchase plan and then to debt reduction. If you look at our balance sheet we are carrying over $60 million of cash, we’re very clearly being cautious under how aggressively we get on that share repurchase plan. We will do it thoughtfully and we will do it over time, and you shouldn’t expect that we are going to get a really aggressively line of share repurchase. Robert Kaynor - Ramius Capital: I should probably know this but what’s the maturities schedule on that debt?

On the debt 2012. Robert Kaynor - Ramius Capital: Okay

It’s a fairly modest amortization requirements between now and then. Robert Kaynor - Ramius Capital: Okay alright thanks for taking my question.

You are welcome

And with that ladies and gentlemen we have no further question on our roster. Therefore Mr. Rowan I’ll turn the conference back over to you for any closing remarks. Frederick Rowan, II: Just a few comments in closing while these are rocky waters we are in we want to remind you and I will say this in just it’s not our first review. We have a history of dealing with this appointment, we have always believed in and continued to believe in the teams with the best talent and the best business models win. We think we have both there as we have unprecedented investments and people on our business models. We are much closer to the consumer and the customer. We feel the worst is behind us with OshKosh. We have a very disciplined approach to decision making and we will have a lower cost Company; all of which I feel is going to position us for quality growth. We always thank you for your participation and your quality questions. We look forward to our next call.