Trudy F. SullivanThank you, Julie. Good afternoon, everyone, and thanks for joining us. On Friday, May 25, 2012, we issued our first quarter 2012 earnings release. In a moment, I will discuss both results for the 13-week period ended April 28, 2012, and provide a brief update on our key strategic initiatives. Mike will cover our financial results in greater detail. Given our board's ongoing evaluation of strategic alternatives, this is a prerecorded, listen-only call and we will not be taking any questions at the conclusion of our prepared remarks. With that, I will proceed with the business review. Our first quarter net sales decreased 8.4%, in part due to reductions in our store portfolio under our store rationalization plan. We achieved profitability in the quarter, reporting adjusted operating income of $10.5 million and adjusted earnings per share from continuing operations of $0.09. This is an improvement over last year and was driven by a gain in gross margin, due in part to stronger margin performance in our accessories and women's businesses, as well as stronger inventory management, combined with tighter expense control as a result of the cost-reduction initiatives that we started to implement last December. We experienced positive momentum in customer response to our products, particularly with our April and May merchandise assortments, which were delivered in the first quarter and had stronger sell-throughs than prior year. From a product perspective, we saw positive comp sales performance in our knit tops, dresses and sportswear categories and improving performance in accessories and woven. We have made healthy strides in our women's and women's petite business, which delivered strong positive comps in the quarter. We are encouraged to see where we had made investments in fabric weight, color and the penetration of print and pattern, our customers' reactions has been favorable.
As we discussed on last quarter's call, we directed our marketing spend towards customer reengagement. Similar to last quarter, our customer file increased on the trailing 12-month basis, with growth coming from reactivated and new customers. In addition, we saw a significant increase in charge penetration compared to last year, resulting from differentiated offers and benefits made available to our credit card holders during the quarter, as well as a stepped-up effort to increase new accounts.In terms of our upscale outlet business, we opened 4 stores, ending the period with 47 upscale outlets. Upscale outlet comps continued to improve and for the first quarter, we drove a positive 10.4% comp, with increases in both traffic, dollars per transaction and average unit retail. Additionally, we launched an online outlet program with strong initial customer response. Our upscale outlet concept has proven to be successful and a profitable channel for us. I will now turn the call over to Mike to review our financials. Michael Scarpa Thank you, Trudy. Good afternoon. I will now cover the details of our first quarter financial performance. Total net sales were $276 million compared to $301 million last year, down 8.4%. Consolidated comp sales, including stores, direct marketing and excluding the stores closed or planned for closure under the store rationalization plan, were down 3.8%. First quarter cost of sales, buying and occupancy as a percent of net sales decreased 90 basis points from last year, at 63.5% of net sales versus 64.4% of net sales. This decrease was primarily due to a 60-basis-point improvement in merchandise margin, resulting from a slight improvement in both our mark-on and markdown rates. Occupancy expenses were also favorable in the quarter, decreasing 90 basis points as a percent of net sales, due in part to our store rationalization plan, partially offset by a 60-basis-point increase in buying expenses as a percent of net sales. Read the rest of this transcript for free on seekingalpha.com