Good afternoon and thank you for joining us. On today’s call are John Mackey and Walter Robb, Co-Chief Executive Officers; A.C.

Gallo, President; Glenda Flanagan, Executive Vice President and Chief Financial Officer; Jim Sud, Executive Vice President of Growth & Development; and David Lannon and Ken Meyer, Executive Vice Presidents of Operations. As a reminder, all forward-looking statements on this call are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions discussed today.

This may be due to a variety of factors, including the risks outlined in our Company’s most recently filed Form 10-K. Please note our press release and scripted remarks are available on our website.

We assume you have read our press release, so we will use this time to focus on highlights from the quarter as well as our future outlook. I will now turn the call over to Walter Robb.

Thank you, Cindy. Good afternoon everyone.

In Q1, we produced a 20% increase in earnings per share on a 14% increase in sales, delivering another quarter of strong sales and earnings growth. We opened 10 new stores, more than we ever have in a single quarter, and reported record Q1 results including a 22 basis point increase in gross margin to 35.0%; a 30 basis point decrease in direct store expenses to 25.4% of sales; a 52 basis point improvement in store contribution to 9.6% of sales; a 48 basis point increase in operating margin to 6.1%; a 41 basis point improvement in EBITDA margin to 8.8%; and a 24 basis point improvement in return on invested capital to 13.1%.

Our solid performance and capital discipline generated $148 million in free cash flow during the quarter. We produced $316 million in cash through a combination of $303 million in cash flow from operations and $9 million in proceeds from team member stock option exercises.

We invested $155 million in new and existing stores, repurchased $26 million of common stock, and returned $397 million in dividends to our shareholders, including a special dividend of $371 million. We ended the quarter with cash and investments of $1.2 billion and $446 million in share repurchase authority.

Turning to sales, our identical store sales increased 7.1%, or 15.3% on a two-year basis, in line with the idents we reported for the first five weeks of the first quarter. We saw a 5% increase in transaction count and 2% increase in basket size.

The moderation in our sales trends since the fourth quarter was broad-based across regions, store departments, and store age classes, which we attribute in part to a decline in consumer confidence and the macro environment. We also had a tougher comparison in transaction count, as we saw a nearly 200 basis point sequential increase in our transaction count growth from Q4 of 2011 to Q1 of 2012.

On a two-year basis, our 11% transaction count increase this quarter was approximately in line with last quarter. Transaction count increases continued to drive our growth, and the increase in our basket size was driven entirely by a higher average price per item, as we selectively passed through some product cost increases and as customers continued trading up.

In keeping with what we’ve reported over the last two years, we saw year-over-year shifts in sales towards exclusive brands and organic products, higher-priced tiers, and several discretionary categories, as well as a meaningful increase in $50 plus sized baskets. We are continuing to find ways to further differentiate our product offering.

Following last fall’s successful launch of 70 new exclusive brand frozen products, in January we launched the Engine 2 Plant-Strong product line. Developed in collaboration with Rip Esselstyn, author and founder of “The Engine 2 Diet,” these products complement our Health Start Here initiative, offering plant-based foods that are low in fat and sodium, contain minimal to no added sugar, and no animal products or added oils.