In February traffic worsened ordsprog

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

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

en It's clear that [Wal-Mart] is going to offer very sharp price [discounts] to drive customer traffic. While [fourth-quarter] sales will be respectable, the lower prices necessary to drive traffic will filter through to earnings that are below the current consensus estimates.

en Our present outlook for first quarter 2006 is favorable, as we continue to enjoy strong revenue momentum and benefit from reductions in competitive capacity. Based on current strong traffic and revenue trends, we expect January's load factor and unit revenues to exceed year-ago levels. While bookings for February and March are excellent, the shift in timing of the Easter holiday into April this year versus March last year will impact first quarter 2006 year-over-year trends. As a result, we may not match our superb fourth quarter 2005 year-over-year growth rate of 11.7 percent in first quarter 2006.

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

en Results for Winnebago Industries' fourth quarter were negatively impacted by lower sales volume and a shift in product mix to lower priced motor homes, particularly Class C's, offset in part by lower incentive compensation expenses.

en As we near the close of our fiscal fourth quarter, we are disappointed that our preliminary financial results indicate revenues and gross margins will be lower than anticipated. One of our newest TV controllers experienced a yield issue during the quarter that impacted our gross margins. Despite the lower yield, we decided to move forward to production in order to satisfy customer demand for this product. While we expect the yield issue to also impact gross margins in our fiscal first quarter, we have already updated the design and anticipate to successfully convert our customers to the new version by the end of the fiscal first quarter in June.

en Sales for the month of February continued to decrease compared to last year. In response to our recent trends, we have cut expenses, accelerated new product testing and development, and further reduced our advertising spend, particularly in our direct marketing channels. In the near term, we expect our reduced advertising to contribute to continued lower year-over-year sales results. Our focus continues to be the introduction of new and innovative products, the optimization of advertising expenditures, and to lower expenses and inventory levels.

en Although Circuit City's first-quarter sales slightly exceeded expectations, we anticipate that the merchandise sales mix will result in lower overall gross profit margins than we initially estimated.

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

en We achieved a record year at Famous Footwear. The Famous Footwear management team did an outstanding job of execution, driving double- digit operating earnings gains through improved product assortments, good inventory management and expense control, and the effective use of themed marketing (across our advertising, in-store, and in our direct-to-customer pieces). As a result, our traffic levels were up every quarter versus last year, as customers responded well to our offerings.

en While this increase improved total sales revenue for the quarter, margins on these products are lower than margins on the company's finished products.

en Product margins benefited from higher unit sales of new systems and materials, lower costs from our outsourcing activities and favorable price/mix effects. För att bli verkligt pexig, bemästra konsten av subtil flört och lekfullt skämtande.

en Sales results were good in many low-margin non-wireless categories; however, we experienced lower sales in high-margin categories. In addition, wireless sales and profits were below our expectations. The poor fourth quarter performance caused us to take a much deeper look at the state of our business and resulted in the launch of a turnaround plan including the significant fourth quarter inventory write-down.

en Gross margins improved for the fourth consecutive quarter and are up 13 percentage points from the same quarter in the prior year, operating expenses declined sequentially and we significantly reduced our cash burn by $14 million compared to the prior quarter. Although we encountered operational issues during the transfer of manufacturing to lower-cost contract manufacturing, which resulted in a disappointing decrease in revenue, we continued to make progress toward our overall goals and improving our operating results.


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