These sales declines will result in significant markdowns, which will be booked in the third and fourth quarters,

Although we are only one month into the second quarter, we are concerned by the May sales trend, ... We are hopeful that more seasonably warm weather in June, combined with the boost to the economy from lower interest rates and anticipated federal tax rebates, will trigger a strengthening of sales as we move into the summer. Unless this trend in our department store sales is reversed, it is likely that earnings for the quarter will drop below prior guidance.

Our December department store sales were disappointing, which we think is attributable at least in part to heightened consumer concerns over a slowing economy,

This was a solid third quarter for Federated, propelled by strong sales and earnings in our department store segment and a level of performance in our direct-to-customer catalog and e-commerce businesses that was in line with what we had anticipated, ... We are entering the fourth quarter with our inventories in good shape, and we remain optimistic that it will be a good retail Christmas season.

Since implementation is always a wild card as China struggles to build nationwide uniformity in the legal system, there will always be concerns about inconsistent or selective application of the law.

We might not see retail sales numbers that are that strong yet, but they will pick up toward the end of the year.