The increase in comparable store sales was a result of an increase in the average customer transaction amount, which offset a decline in customer traffic, as measured by the number of register transactions.
Gross profit, as a percentage of net sales, was 33.5% in the second quarter of fiscal 2007 compared to 32.9% in the second quarter of fiscal 2006. Stronger sales of prepaid services, better purchase markups and lower inventory shrinkage offset higher markdown expense, resulting in an improvement in gross profit, as a percentage of sales.
Selling, general and administrative ("SG&A") expenses, as a percentage of sales, increased to 26.1% in the second quarter of fiscal 2007 from 25.2% in the second quarter of fiscal 2006.
During fiscal 2007, the Company expects to open approximately 300 stores and close 45 stores. As a result of the ongoing rollout of the Company's food strategy, the impact from "Treasure Hunt" merchandise sales and a continued focus on driving better returns in the Urban Initiative markets, the Company expects comparable store sales to accelerate modestly during the remainder of the 53-week fiscal year ending September 1, 2007.