Christina Cheng - Director of Investor Relations Doug Probst - Chief Financial Officer, Executive Vice President Mike MacDonald - President, Chief Executive Officer, Director Debbie Ferree - Vice Chairman, Chief Merchandising Officer

Amy Noblin - William Blair Seth Sigman - Credit Suisse David Mann - Johnson Rice Chris Svezia - Susquehanna Financial Group Mark Montagna - Avondale Partner Sam Poser - Sterne Agee Camilo Lyon - Canaccord Genuity Kelly Chen - Telsey Advisory Taposh Bari - Goldman Sachs Jeff Van Sinderen - B. Riley Edward Yruma - KeyBanc

Good morning, and welcome to the DSW fourth quarter 2013 earnings conference call. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note, this event is being recorded. I would now like to turn the conference over to Ms. Christina Cheng, Director of Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to DSW's fourth quarter conference call. Earlier today, we issued a press release detailing the results of operations for the 13-week period ended February 1, 2014. Please note that the various remarks made about the future expectations, plans and prospects of the company constitute forward-looking statement. Actual results may differ materially from those indicated by these forward-looking statements due to various factors including those listed in today's press release and our public filings with the SEC. Joining us today are Mike MacDonald, President and CEO, Debbie Ferree, Chief Merchandising Officer and Doug Probst, Chief Financial Officer. Doug will start with a short discussion on our fourth quarter reported results, then highlight the details of our adjusted results for the fourth quarter and the full-year. Mike will then elaborate on our progress towards our strategic initiatives and discuss our outlook for the full-year. After our prepared remarks, we will open the floor for Q&A. With that, I will turn the call over to Doug.

Thanks, Christina and good morning, everyone. Our reported net income for the 13-week fourth quarter was $28.1 million or $0.30 per share, which included a $700,000 after-tax charge from our luxury test. This compares against last year's reported net income for the 14-week fourth quarter of $27.1 million or $0.30 per share, which included an after-tax loss of $4.2 million for legacy items related to the merger with RVI. Excluding these items, adjusted net income for the quarter was $28.7 million, or $0.31 per share compared to last year's adjusted net income of $31.4 million, or $0.34 a share, a decline of 9%. Excluding the estimated impact of $0.045 per share from the extra week in 2012, adjusted EPS increased by 5%. Excluding luxury, sales for the 13-week fourth quarter of fiscal 2013 decreased by 4% to $571 million compared to the 14-week fourth quarter of fiscal 2012. Again, excluding the extra week in fiscal 2012, fourth quarter sales increased by 4%. Comparable sales were flat on top of the 3.6% comp growth last year. For our DSW segment, which includes DSW.com, comps were flat on top of the 3.9% increase last year. The comp results were due mainly to an increase in store conversion, which offset a decrease in store traffic. Notably, total transaction for the DSW segment, which accounts for how the consumer shopping, both online and in-store, were flat. We opened one new DSW store in the fourth quarter for a total of 30 new stores in 2013 and their performance met our expectations. We estimate that sales cannibalization from these new stores reduced comp sales by approximately 1%. We plan to open approximately 35 new stores in 2014. In our Affiliated Business Group, fourth quarter comps increased by 1.8% and total revenues grew by 2.2%. ABG ended the quarter with a total of 365 departments including nine Loehmann's locations, which are now closed following the chain going out of business sale. Despite the lack of comp growth, our merchandise margin increased by 40 basis points to 41.7%. This was driven by various systems enhancements and good inventory management. Our occupancy rate for the quarter was 100 basis points higher than last year, largely due to the 53rd week in the prior year and flat comps in the current year. Despite one less week of sales, our SG&A rate in the fourth quarter improved 10 basis points to last year due to lower marketing, new store opening and IT expenses. The net result was a fourth quarter operating profit of 8.0% compared to 8.7% last year. For the year, sales increased by 4% to $2.4 billion. Excluding the extra week in fiscal 2012, sales increased by 6%. Comparable sales were 0.2% compared to last year's 5.5% comp growth. Comparable sales for the DSW segment, which includes dsw.com were flat and our affiliated business group comps grew by 1.8%. Our merchandise margin rate increased by 50 basis points to 45.1%, 10 basis point shy of the record rate we achieved or accomplished in 2011, despite a flat comp in a challenging environment. This was driven by higher penetration of private label merchandise, higher regular price mix and benefits from our systems. Our occupancy rate increased by 40 basis points to 11%, due mainly to the extra week of sales in fiscal 2012 and the flat comps in 2013. The net result was a 10 basis point improvement in gross profit to 32.2%. Our SG&A expenses improved by 80 basis points to 20.4% while remaining flat in total dollars due to the leveraging of store expenses and lower pre-opening cost, overhead, IT and incentive expense. As a result, we achieved our highest annual operating margin rate at 11.7%, an 80 basis point increase over last year. Our strong operating income performance combined with higher interest income and more favorable tax rate enabled our adjusted EPS to grow by 12% to a $1.88 per share. This excluded one-time charges of $0.13 per share from our luxury test and $0.10 per share for the termination of the pension plan assumed in conjunction with the RVI merger. To put things in perspective, we tried three new things in 2013. Those were the luxury test, the Loehmann's relationship and the jewelry test. The luxury test was not successful and the Loehmann's relationship ended prematurely, but we learned from both of these new initiatives and we demonstrated our organizational ability to implement new programs outside of our base business. As for the jewelry test, it was successful, and we are rolling it out to all stores right now. Turning to the balance sheet. On a cost per square foot basis, DSW segment inventories, excluding luxury last year, increased by 1.2%. We are pleased with the content and aging of our inventories. Capital expenditures for the fourth quarter were $19 million with $12 million for new store construction and store remodels and $7 million for system projects. For the full year, capital expenditures were $84 million compared to $100 million last year due to fewer store openings and lower supply chain spending. We plan to increase our capital expenditures to $130 million in 2014. Finally, we have increased our quarterly dividend by 50% to $0.1875 per share, from approximately 1.9% yield based on yesterday's closing price. Since initiating our dividend in 2011, we have distributed $262 million to our shareholders. With that, let me turn the call over to Mike.

Thanks, Doug. Before I begin, let me say a few words about Doug. As you know earlier this year, Doug announced his intention to retire from DSW. He has been at DSW for the past nine years, a period over which the company has grown both financially and operationally. On behalf of the entire leadership team at DSW, I want to publicly thank Doug for his contributions as both our Chief Financial Officer and as a key leader in our business. Doug will continue to be our CFO through the end of the first quarter of fiscal 2014. Now turning to business results. DSW's fourth quarter performance was a microcosm of our full-year results. The following statements are true for both Q4 and the 2013 fiscal year. Comparable sales results were flat. Strong sales increases in men's footwear and accessories were offset by sales declines in women's footwear. The South and West regions of the country produced comparable sales increases, while the Northeast, Mid-Atlantic and the Midwest experienced small comparable sales decreases. The DSW team managed through this very uneven selling environment quite well. We produced a best ever operating margin of 11.7% on the strength of both merchandise margin expansion and operating expense leverage. These performance improvements coupled with our overall sales growth of 4.1% allowed DSW to increase adjusted EPS by 12%. Again, given the environment, we were quite satisfied with our financial performance. Let me talk about the women's footwear business for a moment. In Q4, we posted a 3% comparable sales decline in women's footwear. The weakness in women's was not common to all categories. The seasonal categories of boots and sandals performed well, both in the quarter and for the year. In fact, after a late start to the fall selling season, we chased the strong boot demand and ended the fourth quarter with a high single-digit increase in women's boots. Our decision to distort the category drove strong results within all areas of our boot business not just in the cold weather category. As I said last quarter, we put our women shoe business under the microscope. We believe there are lifestyle shifts underway, and we are making specific product decisions to react to these changes. We also strengthened our merchant organization in women's footwear area earlier this year and we believe those changes will pay dividends down the road. We are also working with our suppliers to add freshness in the casual category and increasing opportunistic buys while simultaneously testing new resources. All in all, we are cautiously optimistic about our women's business. As noted before, we produced strong merchandise margin results in spite of our soft comparable sales results. As always, we controlled our merchandise receipts and inventories by category and by location. We also continued to benefit from our size optimization system that balances sizes in total and by location. I should also note that the good margin results came in spite of margin pressures from shipping charges related to the new charge-send system. We ended the year with very clean inventories. In fact, our clearance units per store were down 8% to the prior year as of year-end. Let me say a few words about charge-send. This system allows us to fulfill dotcom orders out of store inventories when the product is out-of-stock in our fulfillment center. This system also allows us to fulfill a customer's in-store shoe request from another store. The customer reaction to this new capability has been quite strong. We are still assessing how many of the sales from this system capability are incremental. However, we know that we are making many more customers happy and this has driven strong conversion across the chain, since the launch. Charge-send was the second step in our omnichannel journey. The first step came in 2010 when we implemented our shoephoria! system that allows in-store customers to get their wanted shoe from our dotcom fulfillment center when that shoe isn't in stock in their size at the store where they are shopping. Together, these two programs are producing sales at an annualized rate of approximately $75 million. We started marketing these capabilities during the fourth quarter and have seen an acceleration in the number of shoephoria! searches. We think this volume can grow further as customer awareness of this new capability increases. In the past, you have heard me refer to the shoephoria! and charge-send systems as reactive omnichannel capabilities. I call them reactive because the customer sees a shoe in one place and we get it to her from inventory located elsewhere. I believe that ultimately an even bigger opportunity will come from creating proactive omnichannel capability. This will happen when we electronically expose our entire assortment of 25,000 or so customer choices to customers regardless of whether they are shopping in a store on dotcom or on a mobile device. To create full proactive omnichannel capability, we will need to change some of our systems infrastructure and create some new processes that do not currently exist. We also need to move from operating separate store and dotcom channels to a single omnichannel mentality. We intend to pursue the omnichannel opportunity in an aggressive manner. A few weeks ago, we made some organizational changes in support of our omnichannel strategy. First, we established an eight person team to manage the implementation of our omni strategy. This team consists of talented individuals from all parts of the organization. The team will be led by Roger Rawlins, who had managed our dotcom business for the last three years, but has now been promoted to the newly created position of Executive Vice President for Omnichannel. Second, we merged the buying and planning organizations for both the stores and the dotcom channels. We did this in order to foster adoption of an omnichannel mindset even before we change the supporting systems infrastructure. We expect the omnichannel implementation will take place over the next three years. It will require an investment of both money and manpower. We estimate it will increase our operating expenses by $10 million in fiscal 2014. We expect the benefits from omni to exceed the omni costs in 2015 and thereafter. We are approaching the omni project as both a business necessity and an opportunity to create an competitive advantage. It's a business necessity because the customer expects to be able to shop seamlessly across channels. The rapid customer adoption of charge-send demonstrates that point very clearly. But our omnichannel capability can also create distance between DSW and single channel competitors as well as multichannel competitors who either don't operate in an omnichannel way or who don't define omnichannel as broadly as DSW intends to define it. Let me give you a small example of the power of omnichannel. In this past Q4, we opened two small format stores in smaller than normal communities. The stores are doing fine so far, but we think they could do even better if we were able to electronically make our full assortment available to the customers who frequent those stores. Turning to our full year guidance, we expect 2014 revenue growth of 6% to 7%, with comparable sales growth in the low single digit range and the opening of 35 new stores including five to six smaller format stores. We estimate square footage to Increase by 8%. Full-year earnings per share is expected to range between the $1.80 and $1.95 per share, including omnichannel related expenses of $10 million or approximately $0.07 per share. Excluding these expenses, earnings per share is expected to range between the $1.87 and $2.02 per share. This EPS range assume shares outstanding of 93 million, which includes the impact of stock option dilution and a tax rate of slightly less than 39%. We are still operating in an uncertain environment and we believe that value remains paramount to the consumer. Our women's team is introducing freshness and new brands, while sourcing sharper deals. We are enhancing our assortment with compelling bargains in both regular price and clearance. We are driving better customer engagement in the stores. Our systems initiatives will continue to raise in-stock rates and conversion. We have also started marketing our shoephoria! capability in the stores. Our omnichannel work is underway, and we have begun testing small format stores. For all of these reasons, we look to the future with a great deal of optimism. And with that, I will turn the call back over to the operator to open it up for your questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question will come from Amy Noblin of William Blair. Please go ahead. Amy Noblin - William Blair: Thanks, and congratulations on a great performance in 2013 in a very difficult environment. My first question relates to the guidance for 2014, specifically the difference between the comp guidance and the total revenue guidance. It looks to imply new store productivity somewhere in the vicinity of 50%, which is comparable to what you saw in 2013, but given that you are not going up against some of those larger volume stores, and your small market stores seem to be on par with what you did in 2013, I was hoping you could provide a little bit of additional color on that front, please? Thanks.

Yes. Thanks, Amy. There is a couple of different variables in those estimate that you referred to, and one being the volume per store for those new store openings in 2014 and the timing of those stores. There are more small-market stores in that 35 store openings that we estimate and outside of that, I can't tell you that there is any significant differences to the 2013 openings. So again, maybe there is some things we can talk about it in your models but we are pleased with the 2013 results and we think it's a decent estimate for the expectations of the 2014 openings as well. Amy Noblin - William Blair: Okay, thanks.

Our next question will come from Seth Sigman of Credit Suisse. Please go ahead. Seth Sigman - Credit Suisse: Okay, thanks. First, just a question on trends throughout the quarter. Any more color on how the business trended? And then, any early commentary on the first quarter so far? Thanks.

Yes. We don't give guidance on sales within the quarter that we are in. So I won't be able to answer the second part of your question. As to the first part of the question, the business was stronger in November and December and it got weaker in January when some of the weather difficulties hit. Seth Sigman - Credit Suisse: Okay, and then if you just go back to the 2014 guidance, any other commentary on some of the gross margin assumptions that are implied in the guidance? It seems like when you kind of back into the numbers, it doesn't really imply a whole lot of upside to gross margin, any commentary on that front? Thanks.

Yes. Basically at the low single-digit comps and given our performance in merchandise margin in 2013, which wasn't too bad, you would expect some flat merchandise margins, you would expect some flat to maybe deleveraged, depending on where it goes within that range for low single-digit comps on our occupancy charges and SG&A, as we already mentioned in the call that will be deleveraging there because of the omnichannel expenses. So all total, we would expect some contraction in the operating profit rate but again that's coming off an 11.7% in 2013. Seth Sigman - Credit Suisse: Maybe just a follow-up on the occupancy, though. Given the low single-digit comps and given that you will have some smaller stores, may be less expensive locations as well, why wouldn't there be more leverage baked in there?

At low single-digit, let's say 2 to 3, it that's what came out to, there would be a little bit of leverage in that occupancy rate but not much. So that's, plain and simple, we have always said that we get some leverage at that level, but you get below the 2%, you don't leverage occupancy in our business with incremental charges coming through occupancy.

And as to the smaller stores, I think even though we pay less per square foot, oftentimes the sales per square foot of the unit in those smaller stores is lower. So on a percent of sales basis, it is really not that much different.

Our next question will come from David Mann of Johnson Rice. Please go ahead. David Mann - Johnson Rice: Yes, thank you. Congratulations, Doug on your tenure and contributions.

Thanks, Dave. David Mann - Johnson Rice: First question on the ladies business. Can you provide a little more detail there on some of the changes that you are making, perhaps by category and how quickly you expect some of these changes to have impact through 2014?

Sure, David, this is Debbie. Good morning, and will take that question. First of all, we are really happy to have been able to have promoted some internal candidates into these key jobs that really will help us define not only the turnaround in women's, but what the future looks like for the women's business. These are strong impact players that have been with the company for many, many years, 10 plus years and we are very, very confident that they will be able to make the contribution that we need to deliver in the women's business. As far as the women's business is concerned, there is a couple of things that I will mention as it relates to Q4. We continue to have very, very strong boot business and the contribution of boots to our total women's business continue to accelerate. So the penetration to women's, increased by 500 basis points in boots and to the total DSW business, it increased to 200 basis points. So we are continuing to see the shift from, really, shoes into boots in Q4 and actually continued, David, that has continued into Q1. As far as some of the meaningful shifts that we are making in the women's business going forward, the dress category has stabilized. We think we have identified some of the key trends and looks that are really driving the business right now and I am hopeful we will be able to maximize those. We are working with our partners in the market right now to do that. Some early spring trends have started to resonate very strongly in our business. I will just make a couple of this call out, anything that's opened up ,could be an opened up sandal, an opened up flat, and even in spite of the weather being not working really in our favor for the first six weeks of the season, we have started to see some nice business in the opened up category. And then the other category that everyone is talking about, which is vulcanized and that's really taking hold across the entire business. In addition to that, the men's business continues to remain very, very strong, and we continue to see growth there. David Mann - Johnson Rice: That's very helpful. Just a quick follow-up on the jewelry expansion. Can you talk a little bit about any of the metrics that you are seeing there in terms of attachment rate, average unit retail on jewelry and how impactful you expect that rollout to be to annual comps?

Well, first of all, we just rolled it out to the chain within the last couple of weeks. So we are still in the beginning stages of that. Both from a content and average unit retail and a sellthrough perspective, all of those KPI's, they are hitting exactly where we need them to hit right now. For the original guidance we gave you around jewelry, we are keeping that in play and I am hoping there is an upside to that. David Mann - Johnson Rice: Thank you.

Our next question will come from Chris Svezia of Susquehanna Financial Group. Please go ahead. Chris Svezia - Susquehanna Financial Group: Good morning, everyone. Congratulations, Doug, to you. In honor of your time, I actually have got three questions. First, just going back on the women's products, Debbie, for you, when you dig a little deeper in women's casual, definitely seasonal product as it pertains to sandals and open toe looks really spot on in terms of what you are doing in-store, but maybe if you can talk about opportunities on the casual side. If you have the ability in terms of opportunistic buys, what you can really think can begin to move the needle on that front in terms of product assortment? That's my first question?

Well, so let me take that one first. The casual business really has two parts. There is a fashion component and there is more of a classic investment component. The classic piece, which we had been able to rely on for many, many quarters, I think I read last night in the Q3 earnings call, we said that we had 10 consecutive quarters of comp increases in the classic casual area. That hit a wall fourth quarter and I think that's totally due to lack of freshness in the market. So what we have done is we have really dissected that business, and we have gone in and we said where do we have the pain, what are the brands, what are the styles and we worked with those manufacturers, to either pull them back where they don't show the capability of delivering freshness and/or working with them on development so that they would make some product for us, develop some product that was specific to DSW that would help fuel our business. So there is a part of the business that I think is just due from lack of freshness. The other part of the business, the fashion piece, actually we are pretty happy with and there is a young component of that. The vulcanized is what I talked about it. There is the opened up component which we are really starting to sell opened up footwear quite nicely now. And that's across the entire business. So I think its a blend, working with manufacturers that we need to maybe push a little bit to take a little bit more risk and get out there and not just refresh their product but actually revolutionize their product and then some of the actual trends that we identified six months ago that we thought were going to hit in fact, are hitting, and we will maximize those. Opportunistic buying is a discipline. We will follow it across our entire business. It doesn't really just pertain to flats. So we are going to be increasing that percentage as we called out at the last earnings call. Those decisions have already been made. Orders have been written and we are already starting to see the beginnings of some of those results in opportunistic buys and that will continue into the future of DSW. Chris Svezia - Susquehanna Financial Group: Okay, thank you, Debbie. I appreciate that. The other two, one just Doug for you, timing of the investments and I guess they are all in SG&A but just the cadence when you think about the year? And the last question I had is, just on buyback. Just how you are thinking about that, even with higher dividend, somewhat higher CapEx, you are still throwing off a substantial amount of free cash flow. So just curious how you think as an organization about buybacks as we move forward and to the shareholder value?

Okay, well, first on the cadence of omni. To be quite honest, we are still developing some of those plans. It will likely ramp up as we go through the year. We have been making a lot of those. The team has just got put together. We are looking at a lot of those spending plans. The most important part of the decision on that spending is the sequencing and the capability of the business to adopt the changes and those kinds of things. So we are going to be very deliberative to the timing. I am not trying to be evasive at all. It's just that those plans are still developing, but we do believe that over the course of the year that $10 million number is a fair number to assume at this point. You want to take the buyback question?

Yes. Chris, we did actually buyback relatively a small number of shares in Q4 in a private transaction. I don't want you to get too excited about it. It was small, but it does prove that we will do share buybacks and the way we are thinking about it is that it's one of the tools we have to enhance shareholder value but we need to do that when two things are in place. One when the share price is attractive, and two, when we have an open window. So we need both of those things to be present. Not just one. Chris Svezia - Susquehanna Financial Group: Okay, fair enough. Thanks, and all the best you guys.

Thank you.

The next question will come from Mark Montagna of Avondale Partners. Please go ahead. Mark Montagna - Avondale Partner: Hi, good morning. Two questions. First, Debbie, third quarter. I am wondering if we would be looking out to the third quarter before we see women's where you really wanted to be? Then second question really is just looking at the small market stores. Is there a income demographic change versus larger markets? And are you have to alter, say, the product mix to perhaps be targeting a little bit lower income? Thank you.

Good morning, Mark, First of all, I just want to make an overall statement that the women's business, we have made changes in the women's business. We continue to make changes in the product assortment to rightsize that assortments for what customers want. The women's business is not strong right now, though. It is still weak coming out of Q4. We are starting to see some nice signs of positive result but we still have a lot of work to do. So I just wanted to level set that. Going into the third quarter, I think that we are looking to make sure that we deliver on the back half. I believe the second quarter, there is an opportunity to deliver on our results but we have got some timing issues on getting some of the products that we want as we shifted part of our strategy. So we have some timing issues there on getting in the product that we need and that we are hoping that through some reorders, and through some opportunistic buys, we will be able to protect as much of the women's business in second quarter as we possibly can but third quarter, to your point and going forward, we feel very, very strongly about that. So I hope that answered your question on that. Mark. I am quite sure. Mark Montagna - Avondale Partner: Yes. No, that was fantastic.

Okay. As far as a small format stores, so we would really look at assortment architecture in small format stores as there is a core product assortment that we put in all stores for DSW. And we really start with that. And then we try to rightsize those stores based on what we really know about that particular market. There are no major shifts that we actually need to take right now that we can see in the changing of the core assortments and even the extended assortment that's really different in those small stores than we have from the bigger stores. The only difference is really the number of customer choice, but what we do is, one year prior to opening the store, we go into that market and we study it, we identify it and we follow that store for one year after we open the store. So we hope that going in, we have made the appropriate assortment selections and that we made those adjustments the 12 months after as we study and see what that customer demand looks like. Mark Montagna - Avondale Partner: Okay, that's fantastic. Thank you.

The next question will come from Sam Poser of Sterne Agee. Please go ahead. Sam Poser - Sterne Agee: Good morning. Thanks for taking my question. I have got two. Number one, well, Doug, congratulations first of all.

Thanks, Sam. Sam Poser - Sterne Agee: And first question is, could you just go through what the comps were by category. You mentioned women's. Could you go through men's athletic and accessories for the quarter?

Yes, Sam. The men's business was up double-digits, low double digits. The athletic business was down mid-single-digit and that was really -- the athletic business was down mid-single and men's really was weaker than the women's. The accessory business up strong single-digits. So the two places that continue to show opportunity, big upside opportunity, is the men's business and the accessory business. Athletic, I think is just a function of timing because when you look under the covers, we are actually pretty pleased with what we see between the technical piece of athletic and the fashion piece. And the fashion piece of athletic is coming along very, very nicely. So I think you are going to see more of a balance in athletic, more towards the fashion piece and a little bit out of the technical and running. But I think the running weakness right now is mostly predicated on just the weather. So we feel very, very good about the assortment going forward there. Sam Poser - Sterne Agee: Debbie, just following up on that, is there enough, given how late this season is getting started. Is this sort of just the clock is ticking a little faster than it was a year ago, given the way the weather is, later Easter and so on? It is very hard to make up business? Am I think about that correctly, even though there are signs of some good activity, I would assume where the weather is a little bit better but --

Sam, I think obviously when you lose anything in the beginning of a quarter, you always ask yourself, are you able to make that up? My personal feeling is that we started to see signs, positive signs of some of the opened up product and the vulcanized that we thought were going to be good. We have already started to see that open up for us. So that part of the business is actually pretty good. But I think there is pent-up demand that we are going to start to see, because once the weather does turn and believe me, I do not attribute all of my merchandising challenges to weather, but it certainly is a piece of it. So I think there is partly a pent-up demand that we are going to see, especially in the sandal business once things break loose because the one thing I do now is that the product that we have on hand and on order is the right product. Sam Poser - Sterne Agee: Thanks, and then lastly, Doug, the $10 million, is that really this year's story or do you think that the investments in omnichannel are going to continue? Are we going to have another in $7 million next year, just as an ongoing investment? You mentioned you expect to see out-performance relative to the investment in 2015, but will that be sort of a zero investment there or will it just be will a lesser investments, sort of an ongoing thing? This is just a big nut at the beginning.

Yes, it's the incremental expenses in the beginning because there is really no benefits associated with it until 2015 starts to come. So there will continue to be made investments, but in 2015 we expect that the results and the impact of those investments will start to come. So the benefits will outweigh the expenses, but there will certainly be incremental cost going into 2015. But again, they will be offset by the incremental benefit. So more spending, but benefits to come in 2015 and beyond.

The next question will come from Camilo Lyon of Canaccord Genuity. Please go ahead. Camilo Lyon - Canaccord Genuity: Thanks, and Doug, all the best in your next life. I know there is not much life after DSW but I am sure you will enjoy yourself. So I have two questions. My first one is on the competitive landscape. A fairy tale fourth quarter for many retailers. I wondered it gave you guys a sense as to what do you see on a competitive front and if there is a change in the value proposition that you are offering to consumer or that you need to offer to your consumer to continue to drive that traffic into your stores, given what some of your competitors did in the quarter?

So, yes. Good morning. I will take that question. So we stay very, very close to what's happening in the competitive landscape. And no question, there was a tremendous amount of promotional activity out there in fourth quarter. What did we do as an everyday value proposition business to be able to stay competitive in the customers minds? The first thing we are doing is we did go out and we bought some opportunistic buys. We really ramped that up from where we had been before and we saw some very, very good results there. So we will continue to add that to the merchandising mix, in addition to being able to offer very, very sharp price points in the merchandise that we negotiate on the floor every single day. The next thing we did from a marketing perspective is we really wanted to try to deliver sharper and crisper messaging around those big deals, those big values that we have in our business, and we did that and we saw very positive results. Specific examples, where around the Thanksgiving time, where we took real strong position on certain key item boots that we have and we communicated that to the customer through email and other ways. So we have been looking at the competitive landscape. We think that we are going to be able to compete very effectively with some of the changes that we have made. And we are an everyday value business proposition and that's what we are. So we just have to get sharper and sharper on the floor everyday with the kind of value we pass to our customers. Camilo Lyon - Canaccord Genuity: Thanks for that, Debbie. Just following up on that. Do you think that you need to bring in more full priced brands into the top side and balance that opportunistic component?

I am not sure I understand that question. Camilo Lyon - Canaccord Genuity: Meaning, do you think that you need to have other brands in the store that you currently don't carry that might not want to be sold at a discount, but might still be relevant to the consumer?

Sure. So I will tell you, I have a very open mind for that. Our business model is everyday value but today, you will even see selected items on the floor that we really have at full price. It's a handful but it's a price that we didn't think that we needed to offer a pricing discount. So I would tell you, it's not part of a strategy where I am looking to acquire a brand that are missing just to bring them in at regular price. We will look at any brand that we think the DSW customer wants to buy in the store and we will make those decisions whether it is an everyday value, what is the value we pass in pricing on every day or if we want it to be a full price brand. So we are very open. Those discussions are very open as we look forward. But there are only a couple of brands that I don't have in the store right now that I would bring in at regular price if the opportunity was afforded. Camilo Lyon - Canaccord Genuity: Okay, and just my second question is, you talked about the second quarter and potentially having to timing issues in getting product on the floor. Is that to say that right now you have cuts some of your receipts and you are planning to chase once spring weather breaks across all your markets? Is that how we should interpret that language?

No, the first thing is, on all of our core items we have backups, a .planned backup that we planned with our business partners. So if business is up or if it's down we rightsize those backups to make sure that we support the big key items. What I was talking about mostly is that the supply chain in footwear kind of works against how the customer is really thinking. The customer wants every retailer to be very responsive, instant gratification and they want what they want right now and they are very impatient. When you look at the timeline that it takes to reorder certain shoes if the manufacturer doesn't have a stock position on it, that could be 90 to 120 days. So if there is an item that emerges that we have not identified as a big item, and I say if, and we want to get back into that, we have to work closely with the manufacturer to see if they can honor the delivery date that we need. There is still a lot of time for spring. I think the game has just begun. We got six, seven weeks behind us but I actually think customers, in their mind, the spring and summer is just starting right now. So I think we do have time to get the kind of product we need on the floor. If there is something that hits that we haven't predicted, it is going to be good.

Our next question will come from Kelly Chen of Telsey Advisory. Please go ahead. Kelly Chen - Telsey Advisory: Hi, guys. Nice job managing through the tough environment, and Doug, congratulations from me as well. You will be missed.

Thanks, Kelly. Kelly Chen - Telsey Advisory: Just going back to 2014 guidance for a minute. I understand the omnichannel spend that's going to be in place for 2014 but excluding that you guys have always talked about the ability to leverage SG&A on a low single-digit comp. I just wanted to clarify, is that still the case or is there anything else to know on SG&A in 2014 on marketing or incentive compensation or anything like that?

I will take that one, Kelly. I think there is some reinvestment in several corporate expense areas where you we saved some money in 2013, and we did that to manage the business in a difficult environment, but we don't want to that long-term. We want to manage the business for the long term. So that's a pressure point. Another pressure point is slightly higher pre-opening expenses. So all of those things worked against us in terms of leveraging expenses in a low sales increase environment. Kelly Chen - Telsey Advisory: Got you, and then one other thing I wanted to talk about was, in the press release you guys mentioned that you increased the store build out potential, just 500 to 550. I just wanted to clarify, does that not include the small format stores? So could there be even more upside on top of that? What was the thinking behind that? What were you seeing that was giving you confidence to take back floor target up higher? And if you could give us some, you talked a little bit about the smaller format stores but how are the unit economics on that comparing to the full price stores?

Okay, well first of all, the 500 to 550 number does not include small format. So just to be clear on that. In terms of the economics of a small format stores, we are subjected to the same rate of return requirements as any other new store investment. And that was the third part of your question? Kelly Chen - Telsey Advisory: That was actually one more on just private label. You guys mentioned that it increased this quarter. Could you just remind us what percentage of sales is that now and how much higher are the margins there?

Private brand is about just slightly less than 12% right now. I think when we started talking about this as a strategy, it was probably 7%. So that was four or five years ago. And I think we have said publicly that we think we could get it to 15% but we manage that on a category by category basis, because we don't want to have too much of a selection in a given category to represent private brand. So whatever it settles out to utilizing that guideline is how we are going to think about it.

Our next question will come from Taposh Bari of Goldman Sachs. Please go ahead. Taposh Bari - Goldman Sachs: Hi, good morning, everyone. Just trying to get a level of confidence in your ability to achieve that low single-digit comp growth for the year. You just to flat in the fourth quarter, so you are guiding for an acceleration. If I look back at your past, guidance practice over the past several years, you have typically guided to a comp deceleration from what you have done in the fourth quarter. So just trying to get some more context around the different scenarios there.

Well, I think if you look at our business Q4 and for the year, men's was very healthy and accessories was quite healthy, athletic was solid for the full-year, it was softened a little bit in Q4, but it was solid on a full-year basis. And even within the women's category, the seasonal categories of sandals and boots, we were not just pleased with. In fact, I think Debbie commented on how we really capitalized on boots in Q4. So what we really have is a shoe, a women's shoe issue and that's what we are working on. And that's why were trying to bring in fresh looks in existing resources. That's why we are testing new resources. That's why we are increasing our penetration of special buys. And that's why we have made two very important organizational changes that we believe will strengthen our ability to get that business going again. So look, to be brutally honest, we need to turn around the women's business in order to achieve those sales comp guidance numbers. And it is different but that's really the issue with our business is turning around women's shoes. So that's what we are focused on and we are committed to doing it. Taposh Bari - Goldman Sachs: That's helpful. I guess just comp to follow-up on the question. The men's in athletic and even accessories growth. Help us understand what's been driving that over the past couple of years? Is shares? Is it just underlying category growth? Is that ASP/ Just trying to get a better idea of how sustainable those growth rates are throughout the next 12 months?

So in the men's business, at one point in time, many, many years ago, we were at 20% penetration in men's. We distorted our efforts toward women, got the women's business moving. So we kind of took our eye off of men's. So part of the men's growth, and I think, it's two reasons, part of it is what is really owed to DSW. We have a very, very strong customer base. I didn't think we had the right assortment in men's and we kind of have taken the eye off the ball a little bit there. So if you remember, the DMM that was running that area really flipped that business on its head, put new fashion merchandise in which is consistent with what you are reading in all the articles today where men are really dressing back up and really taking a lot of care in terms of changing how they dress going from really more jeans to just dressing up in a nicer way. So what we did is, we made our assortment more consistent with what the men's apparel business was really saying was happening in the men's industry. So that business has been strong for us. We have increased penetration to total DSW. We have had strong comp growth. We have had strong gross margin growth. And there is still quite a bit more growth there to be had. And so, I don't really see that stopping. To help that, you have got a whole men's accessory business that has been actually doing very nicely for us. So if you really look at those two components, men's footwear and men's accessories, I think we have an opportunity to have a real domination in that category for men. Total handbag and accessory business has also been on a pretty dramatic ramp-up and part of that is the assortment was incorrect. If you remember, two years ago what we did is, we really changed the assortment there to better reflect what our women's footwear customers were buying. So we changed the mix, the assortment, our architecture, the brand's architecture and have really seen positive results there. That business, I think, still has a tremendous upside. We penetrated fourth quarter, a little less than 10% in the handbag and accessory area, and I think that I will just let that business float as high as it wants to go, because there is no signs in sellthrough that the customer is resisting anything that we are doing in that category. So both of those areas, I think, are solid and I think they will continue to grow.

The next question will come from Jeff Van Sinderen of B. Riley. Please go ahead. Jeff Van Sinderen - B. Riley: Good morning. I guess I just had a follow-up on the ladies dress shoe business. Just wondering how important you feel that is to turning around that business? How big that could be? Or is that just a more minor component of the overall turnaround in the women's business?

So I look at the entire women's business and a few things, I think, it's the casualization of what women are wearing. So dress shoes, they are not dress shoes the way you think about them in the old traditional way. Dress shoes can be different heel heights. They can be changing in material and I think that dress is smaller piece of the business in women's. I think it is much more important to have category domination in boots, in sandals and flats but dress is an important piece. So we have to figure out that dress piece. But it in no way indicates that if the particular dress category isn't turned around that we cannot have good results in the women's area. Jeff Van Sinderen - B. Riley: Okay, but are you starting to see improvement? I think you said stabilization in women's dress?

Yes, we have seen stabilization there, and that's really come from our contemporary fashion area that was really weak. We made some changes there as well and not only in content, but in the brands that we bought for the business and the kind of fashion we put on the floor. So we have made some changes there. Early results have been, we have see a couple of different trends that are really spring forward facing that started selling for us actually back in December and those are actually selling pretty strongly for us. So I am seeing hints. I am seeing indications that the business is turning around. I say stabilized because I haven't seen it on a high single-digit, double-digit growth trajectory. That's where I want it to be. But it has stabilized. I think it has seen its bottom. Jeff Van Sinderen - B. Riley: Okay, and then in the running category. I know you touched on that a little bit and I am just wondering, it sounds like you feel that is largely weather-related, and I am not sure how you are looking at sort of the product cycle and introduction of newness and so forth. Just wondering how you can rule out at this point that it might be a broader slowdown in the running category?

So in the running category, we actually have some overall upside opportunity in athletic. We really were underpenetrated based on where I thought that business should be in our business. I think we are really in a pre-peak life cycle on the curve to be able to grow the athletic business. I think running is mostly weather predicated right now but what we did, I think we may have taken a little bit out of the opening price point in running and put maybe a little too much into the technical which was the over $85 product. So we are kind of trying to right size that mix right now. So I think running definitely is a function of customers be able to get out and actually use that product for what was intended for. So that part is weather-related, but I think we are just trying to balance our mix a little bit more into some more opening price points along with the over $85 product. We are delivering freshness every single month. That's really not the issue. It's us just being able to right size the mix a little bit more than we have right now.

And we have time for one more question, and that will come from Edward Yruma of KeyBanc. Please go ahead. Edward Yruma - KeyBanc: Hi, thanks so much for taking my question, and best of luck, Doug. As it relates to the e-com initiative, I know that you said it won't be accretive per se till 2015 but should we expect any kind of functional improvements to you e-com capabilities in 2014? I guess, is there a piece of the investment other than the $10 million SG&A impact that will be capitalized this year?

It's Mike. I don't want to get too much into the details of the omni strategy specifically, but we will deliver some increased capability on our website yet this year that we believe will begin to generate additional sales this year. So, yes. And to your point about, is there capital? Absolutely, there is capital. All we did was identify the expense portion. But that goes back to Doug's comment before of this is not one year investment. It's a multiyear investments. And I think we have said, beginning at least one maybe two quarters ago as we developed this plan, we were trying to do it in sequence and in a way that minimizes the financial pain in any year, and that's what hopefully we have done for 2014. Edward Yruma - KeyBanc: Great. Thanks so much.

Ladies and gentlemen, that will conclude our question-and-answer session. I would like to turn the conference over to Michael MacDonald for any closing remarks.

Thanks. As always, I want to thank you all for your interest in DSW and your support for DSW. We are keenly aware of our obligation to maximize shareholder value while managing the business with a long-term perspective and you can count on DSW team to continue to do that in 2014 and in the years to come. So thank you very much for your participation in today's call. Have a great day.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.