Mike Rayden, chairman and CEO, said in the call that the companyfailed to meet expectations because it underestimated the impact ofschools in many markets moving their back-to-school start dateslater, as well as the current softness in retail. "We don't intendto make excuses for our miscalculation," Rayden said during thecall. "Our analysis clearly underestimated those shifts. We arealso experiencing a decline in transactions; these are infrequentshoppers who are not making as many trips to the mall, whether itbe because of higher gas prices, mortgage costs or whatever."

The company is estimating earnings per diluted share for thethird quarter ending Nov. 3 of 40 cents to 45 cents, below the 58cents per diluted share reported for the like period last year. Thereason is a revised estimate of the calendar shift on the company'squarterly sales and earnings comparisons. In accordance with the2007 retail calendar, the third quarter shifted the higher salesvolume first week of August into second quarter, and moved thelower volume first week of November into third quarter.

Justice opened 29 new stores during the second quarter, endingthe period at 213 stores, an increase of 98 stores over last year.Limited Too opened four stores in the quarter, remodeled 16 andclosed one, ending the quarter 573 stores. ""We plan on opening 100to 105 new Justice stores in 2007, and are delivering a store thatwill be 15% to 20% larger," says Ken Stevens, president and COO."We also plan to open a net increase of 25-30 Limited Too stores,and complete 40-50 remodels."