Operator: Good day, ladies and gentlemen and welcome to the lululemon athletica Q2 2010 Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions).
As a reminder today's conference call is being recorded. I'd now like to turn the conference over to your host Ms. Melissa McKay from ICR. Please go ahead.
Melissa Mackay - ICR: Good morning. Thank you for joining lululemon athletica's conference call to discuss second quarter 2010 results. A copy of today's press release is available on the Investor Relations section of the Company's website at www.lululemon.com or furnished on Form 8-K with the SEC available on the commission's website at www.sec.gov.
Today's call is being recorded and will be available to replay for 30 days shortly after the call in the Investor Relations section of the Company's website.
Hosting today's call is Christine Day, the Company's President and Chief Executive Officer and John Currie, the Company's Chief Financial Officer.
Before we get started, I would like to remind you of the Company's Safe Harbor language. Statements contained in this conference call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results might differ materially from these projected and such statements due a number of risks and uncertainties all of which are described in the Company's filings with the SEC
Now, I'd like to turn the call over to Christine Day, lululemon athletica's Chief Executive Officer.
Christine Day - CEO: Thank you, Melissa. Good morning, everyone and thank you for joining us to discuss our second quarter results.
With me again this morning are John Currie, our CFO; Sheree Waterson, our EVP General Merchandise Management and Sourcing; Delaney Schweitzer, our EVP of Stores; and Deanne Schweitzer, our Head of Strategy and e-Commerce.
Following my opening remarks I'll turn the call over to John who will discuss the quarter's financial details as well as our outlook for the remainder of the year.
In our second quarter our strong first quarter growth momentum continued with a 31% stores sales increase and net income that more than doubled last year's second quarter results.
Second quarter earnings were also more than 85% higher than our previous second quarter earnings peak in 2008 catching up to our pre-recession trajectory.
The strong sales results were driven by consistent execution of our key strategies, grassroots community to drive traffic, our core lines of running, yoga and our focus on our in-store guest experience.
The comp improvement in the quarter was again driven by traffic and transactions, which we believe is simply a continued increase in brand recognition and proof that our community effort and overall strategy and market positioning are resonating with our guests.
We also improved our inventory position in core and key items, in particular, in sizes two, four and six allowing us to be in stock to drive sales.