Robert E. Campbell - Vice President of Investor Relations and Treasurer Blake W. Nordstrom - Principal Executive Officer, President and Director Michael G. Koppel - Chief Financial Officer and Executive Vice President Peter E. Nordstrom - Executive Vice President, President of Merchandising and Director Erik B. Nordstrom - Executive Vice President, President of Stores and Director James F. Nordstrom - Executive Vice President and President of Nordstrom Direct

Dorothy S. Lakner - Topeka Capital Markets Inc., Research Division Paul Trussell - Deutsche Bank AG, Research Division Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division Matthew R. Boss - JP Morgan Chase & Co, Research Division Kimberly C. Greenberger - Morgan Stanley, Research Division Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division Jennifer Black Neely J.N. Tamminga - Piper Jaffray Companies, Research Division Charles X. Grom - Sterne Agee & Leach Inc., Research Division Paul Lejuez - Wells Fargo Securities, LLC, Research Division Michael Binetti - UBS Investment Bank, Research Division Lizabeth Dunn - Macquarie Research Paul Swinand - Morningstar Inc., Research Division Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division Stephen W. Grambling - Goldman Sachs Group Inc., Research Division Dana Lauren Telsey - Telsey Advisory Group LLC Barbara Wyckoff - CLSA Limited, Research Division Rob Wilson - Tiburon Research Group, Inc.

Hello, and welcome to the Nordstrom 2013 Third Quarter Conference Call. At the request of Nordstrom, today's conference call is being recorded. [Operator Instructions] I will now introduce Rob Campbell, Treasurer and Vice President of Investor Relations for Nordstrom. You may begin, sir. Robert E. Campbell: Hello, everyone. Thank you for joining us. Today's earnings call will last 45 minutes and will include about 30 minutes for your questions. As a reminder, all forward-looking statements on this call are subject to risks and uncertainties that could cause the company's actual results to differ materially from the expectations and assumptions discussed due to a variety of factors that affect the company, including the risks specified in the company's most recently filed Forms 10-K and 10-Q. Participating in today's call are Blake Nordstrom, President of Nordstrom, Inc.; and Mike Koppel, Executive Vice President and Chief Financial Officer, who will discuss the company's third quarter performance and outlook for fiscal 2013. Joining during the Q&A session will be Pete Nordstrom, President of Merchandising; Erik Nordstrom, President of Stores; and Jamie Nordstrom, President of Direct. Before we begin, I want to mention that Blake and Mike will be using slides, which can be viewed by going to nordstrom.com in the Investor Relations section. And now, I'll turn the call over to Blake. Blake W. Nordstrom: Thanks, Rob, and good afternoon, everyone. As you know, we're actively engaged in a number of initiatives as we execute our growth strategy, all of which fit under our overarching goals of striving to be the best in service and experience, increasing our relevance with existing and new customers and being the retailer of choice, whether in-store or online. There are benefits to create synergies across our businesses that promote a seamless customer experience. We'd like to use this time to provide an update. First, a comment on current trends. Our online business continues to deliver considerable growth, consistent with our expectations and reflective of the investments we're making to elevate the online shopping experience. We're encouraged that the Rack same-store sales, after a slower start to the year, have rebounded and were in line with our plan in the third quarter. As we've commented in previous quarters, we've experienced softness in our full-line store sales, with third quarter results consistent with recent trends but lower than what we anticipated as we started the year. We don't believe it's attributable to any one factor. That said, we know customers respond to freshness and fashion, and we're working to provide that, combined with ongoing efforts to enhance the store environment and overall execution. The momentum in our Women's Apparel business continued, benefiting from increased focus on key brands and improved shopping environment and product innovation. We're appealing to new customers with our repositioned Savvy department, featuring on-trend fashion at more accessible price points and with the expansion of Topshop into a greater number of stores. We started the year with Topshop in 14 stores and now, we're in 41, with more to come next year. The performance of these departments is meaningful individually, but also collectively, in terms of the impact they are having on our overall Women's business. In September, we relocated our full-line store in Glendale, California with opening sales exceeding plan. The interior design concepts, which reflect our customers' desire to make it easier to shop, emphasized selling floor flexibility through the ability to more quickly adjust and evolve departments over time. This is the approach we've taken with all of our 2013 remodels, including select stores in Southern California, Chicago, Seattle, Connecticut and Florida and will be included in our renovation program going forward. We're encouraged by the ongoing growth in our e-commerce business. We've had 2 consecutive years of at least 30% sales growth at nordstrom.com. And this year, we're on track to have a similar increase. Our efforts to personalize the customer experience based on customer preferences and purchase history continue. In addition, we are close to announcing a site for an East Coast fulfillment center to further enhance our ability to deliver on customers' expectations for fast, reliable delivery. Turning to the Rack. We opened 11 stores during the quarter, including 1 relocation. At least half represented new markets for us, including 2 that were in new states. This year, we've opened 24 Racks, including 2 relocations, and we plan to open roughly 30 Racks in 2014. As we expand the number of stores, we're also expanding the services we're offering. We recently added capabilities through our mobile point-of-sale devices in the Rack to locate and send the customers merchandise from any one of our Rack locations. In addition, we're enabling our Rack stores to accept HauteLook merchandise returns, which has added convenience for our customers while driving incremental traffic to our Racks and further integrating the customer experience across channels. Our HauteLook business has grown by over 25% year-to-date and now has nearly 15 million members. We recently opened a 900,000 square foot fulfillment center in San Bernardino that is much more automated than its predecessor. It has capacity for nearly 3 million units, which will support significant multi-channel growth. In addition, today, we're adding on HauteLook, a persistent selection of Nordstrom Rack merchandise to complement HauteLook's existing flash sale offering. We're pleased with the growth and integration taking place in this part of our business. While we're making improvements to each individual channel in which we operate, we recognize that the customer views us simply as Nordstrom. Increasingly, we're seeing the benefits not only of the growth at each channel but also the synergies between them, including customer acquisition and retention. We know that our most engaged customers shop us in multiple channels and spend 3x to 4x as much as other customers. Using enablers such as technology, Nordstrom Rewards, inventory access, supply chain, marketing and merchandise returns that we can leverage across the company are critical in making for a seamless customer experience. With that, I'll turn the call over to Mike. Michael G. Koppel: Thanks, Blake. We remain strongly committed to our growth strategy, which focuses on delivering a differentiated customer experience across all channels. We're working to achieve this while also being mindful of the daily execution of our business. After 3 quarters, we've been encouraged with the momentum we've experienced, particularly in our Direct and Rack businesses. Full-line sales trends during the year have been consistent, though less than planned, but we've been pleased with our execution around inventory and expenses, which has mitigated the top line softness in our full-line stores. Our third quarter earnings per diluted share of $0.69 were in line with our full year outlook. This reflected our Anniversary event shift, which represented an estimated decrease to earnings per diluted share of $0.06. Combined second and third quarter same-store sales, which eliminates the impact of the event shift, increased 2.4% and was comparable with the first quarter performance. As Blake mentioned, our overall sales performance was consistent with the full year outlook that we shared last quarter. We continued to see outsized growth in Direct, reflecting our ongoing efforts to expand merchandise selection and enhance the online experience. In addition, HauteLook generated a strong sales increase. We believe that the continued integration of HauteLook positions us well to serve more customers in the online off-price channel. Rack total sales increased 16% in the quarter, reflecting 20 stores opened since the third quarter of last year. Rack same-store sales showed improvement from earlier in the year, tracking in line with our plan. Full-line sales performance represented a continuation of sales trends experienced in the first half of the year. Top geographic performances were in the Southwest and Southern California regions. The notable improvement in the Southern California region in part reflected recent strategic investments, particularly in Women's Apparel. Merchandise category performance also showed consistency in terms of relative trends throughout the year. Top performing categories included Cosmetics, Women's Apparel and Women's Shoes. We've been encouraged with the strategic changes in Women's Apparel, which outperformed the Nordstrom average on a year-to-date basis. Now let's move onto inventory and expense performance, where our disciplined execution drove results that were in line with our plans. Inventory growth per square foot of 5.9% exceeded sales growth per square foot of 0.3%, primarily due to the Anniversary shift and investments in pack and hold inventory to fuel Racks growth. Third quarter gross profit rate decreased 41 basis points relative to last year, primarily due to higher occupancy costs related to the accelerated Rack store expansion. The strength in regular price selling continued with the percentage of regular price sales in line with last year's historical high for the third quarter. The growth in our Nordstrom Rewards program continued with more than 3.7 million active members, up 15% compared to last year and year-to-date card penetration of 38%, up from 36% a year ago. Our credit card portfolio performance remains healthy with delinquency and write-off rates around a 5-year low. Third quarter SG&A rate increased 65 basis points compared to last year, primarily due to deleverage from the event shift and planned growth investments including technology, fulfillment, the Rack and Canada expansion. This included $6 million of expenses related to Canada and Rack's growth or $16 million on a year-to-date basis, which is on track with our full year estimate of $20 million to $25 million. On a year-to-date basis, our SG&A rate improved 13 basis points relative to last year. Our 4-Wall business, which represents our full-line and Rack comparable stores, continued to generate year-over-year improvement in SG&A rate performance, demonstrating our ongoing disciplined execution. Our financial position is sound, with roughly $950 million of cash, total liquidity of nearly $2 billion and operating cash flow of over $700 million. Adjusted debt to EBITDAR of 2.1x is well within the range of investment grade. During the quarter, we repurchased 2.7 million shares for a total of $155 million with $824 million remaining under our existing authorizations. Year-to-date net capital expenditures were approximately $550 million, consistent with our full year expectations of $750 million to $790 million. At the end of the quarter, return on invested capital increased to 14% from 12.9% a year ago. As we've previously shared with you, these investments are fueling growth for the entire company. When reviewing the overall performance of our capital investments made over the past several years, they exceeded our expectations and were accretive to our total company return on invested capital. Our track record of successfully reinvesting in our business adds to our confidence and we -- as we move forward with our growth plans. In doing so, we continue to look for ways to make the store experience more compelling. We are encouraged with the initial results from our recent store investments in Women's Apparel, reflecting our efforts to cost effectively add selling floor flexibility to more strongly emphasize brands and to innovate with product. Our recent learnings are informing enhancements to our remodel strategy to touch more stores more frequently through a more targeted department focus. Finally, I'd like to address our updated outlook for the year. Our current outlook of earnings per diluted share is $3.65 to $3.70 compared to our prior outlook of $3.60 to $3.70. We expect the same-store sales increase of approximately 2.5%, which is consistent with our year-to-date trend. Included in our outlook are the following considerations: the 53rd week in the fourth quarter of 2012 represented a sales increase of approximately $162 million and earnings per diluted share increase of approximately $0.04, and we anticipate no material impact to fourth quarter sales related to the compression of holiday shopping days. In closing, we continue to make progress on improving the customer experience and look forward to the growth opportunities ahead. With that, I will turn the call over to Rob. Robert E. Campbell: Thank you, Mike. [Operator Instructions] So, Lisa, with that, let's take the first question.

[Operator Instructions] And our first question comes from Dorothy Lackner with Topeka Capital Markets. Dorothy S. Lakner - Topeka Capital Markets Inc., Research Division: I just wanted to go back to the full-line stores. Obviously, Rack has been -- has had a nice rebound here, direct is very strong and you're up against 3 years of some pretty strong numbers. So just wondering, if you look at the merchandise categories across the full-line businesses, is there anything that you're seeing that's kind of impeding the comp there, or is it simply the comparisons are tough? Peter E. Nordstrom: This is Pete. I don't think we would say that the comparisons really are so much the issue. I think, for us, the most challenging business that we've had that's sizable is the Women's Junior part of the business, and that's going on for, gosh, about a year now. It's been pretty challenging for us. I don't know if that's unique to us in the industry, but it's a sizable part of our business and something that we're -- and we feel like we're working the right things. Otherwise, the business has been relatively stable and consistent this year. And we talked about the divisions that are doing well, Cosmetics and Women's Apparel, Women's shoes. Our Men's business has been solid. So I don't -- there's not any big outliers there that I think are indicative of something that we need to change remarkably. I would say that the things that we think we're working on that are bearing fruit in particular, the success we've had in Women's. There's learnings there that we can continue to apply towards that division and also to other merchandise divisions.

Our next question comes from Paul Trussell with Deutsche Bank. Paul Trussell - Deutsche Bank AG, Research Division: Could you speak to the health of your core consumer? How are they feeling right now? And if you can just comment on the trends in the later half of the quarter. Blake W. Nordstrom: Paul, this is Blake. Our trends, as both Mike and I tried to relay in our comments, have been very consistent throughout this year. And so, we are planning accordingly for the fourth quarter. We're taking those numbers and those results as we move forward. So we aren't planning for any change going forward. And beyond that, I mean, I don't -- we don't comment about economic or customer issues beyond how they vote with their dollars. Paul Trussell - Deutsche Bank AG, Research Division: Okay. That's helpful. And then, just -- is there any color you can provide just in terms of kind of the early '14 outlook, investment dollars expected for your entry into Canada, just how we should think about '14? Michael G. Koppel: Yes. Paul, this is Mike. We'll be commenting on that more in detail when we talk in February. We're right now in the process of developing and refining those plans. And we'll be happy to give you a little bit more insight into that when we report fourth quarter.

Our next question comes from Edward Yruma with KeyBanc. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: You've really ramped up the pace of the Rack store openings as you look to double the count by 2016. Can you give us any insights into some of the newer markets or stores you're entering? Are you seeing cannibalization? And are they ramping with the same productivity that you've seen out of some of your legacy stores? Blake W. Nordstrom: Yes. This is Blake. To-date, we've been very pleased with the accelerated growth and the results have exceeded our expectations. One of your questions was has it had any cannibalization on comps or what it's done on the productivity. Our productivity is maintained and even improved slightly. So at this juncture, we're really pleased with the execution of those stores, and we think it's reflected in the numbers. We were concerned about our ability to find good real estate, the talent needed for those stores, the customers' response and probably most importantly our ability to access inventory. And I guess, across all fronts at this moment, we couldn't be more encouraged by both the reception, the results and the opportunities. So we're forging ahead. Michael G. Koppel: Ed, I would just add a small comment. We included a slide that indicated the returns we're getting, and the Rack stores continue to deliver very consistent return year-over-year on each vintage of store opening. So again, to Blake's point, we're very happy with it.

Our next question comes from Matthew Boss with JPMorgan. Matthew R. Boss - JP Morgan Chase & Co, Research Division: Underlying the gross margin line, what's the trend that you're seeing with the core merchandise margins? How should we think about this going forward? And should we model continued occupancy pressure from Rack, as this continues to expand over the next couple of years? Michael G. Koppel: Yes. Matthew, this is Mike. In terms of overall merchandise margins, other than the impact of the mix of Rack growing faster than full-line, merchandise margins have been relatively constant. Most of the change that we're seeing in the gross profit as we report is a result of what I just mentioned earlier, the mix as well as the increased occupancy costs and the acceleration of the Rack. In addition, we have had some pressure from the Nordstrom Rewards program, although that is a little bit lighter than it was last year.

Our next question comes from Kimberly Greenberger with Morgan Stanley. Kimberly C. Greenberger - Morgan Stanley, Research Division: Mike, I'm wondering if you can talk to us about the inventory levels here coming into the fourth quarter. How are you feeling about your inventory levels? Is there any sort of color on how you think you'll exit the year? And if you can just talk to us about any kind of performance differentials relative to last year that you're seeing in your seasonal categories, that would be great. Michael G. Koppel: Sure, Kimberly. In terms of inventory levels, I would say our levels in execution have been relatively consistent throughout the year. We're transitioning from the third quarter to the fourth quarter with how we feel inventory to be in very good shape. The growth in the levels is primarily due to some timing relative to anniversary in a way that sales per square foot was calculated and then clearly the investments that we're making in growing the Rack with the pack-and-hold strategy. In terms of the aging of the categories and the segmenting of the inventory, it's all very healthy. So we feel good about it. We've clearly maintained a prudent outlook in terms of our sales projections and how we made commitments to inventory and that's helped us transition through this period. So we expect that coming out of the fourth quarter that unless there is some unusual, unforeseen event that our inventory levels should be in good shape going into 2014.

Our next question comes from Lorraine Hutchinson with Bank of America. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: Just hoping for a bit more of an update on the progress in Canada, how the team is progressing, do you have the people that you need? And also, how fast do you think you'll be able to open Racks once you have the full-line stores open? Michael G. Koppel: Erik, can you comment on that, please? Erik B. Nordstrom: Sure. Thanks, Lorraine. We're very happy with our progress in Canada. There's a lot of work. It's not the sexiest of work. It's a lot of operational issues to address. And we have our very best people we've assigned to that. Karen McKibbin, the President of Nordstrom Canada. For us, she's one of the great team. So I would say we're very encouraged. It certainly starts with we've got great real estate, and the locations we have really couldn't be better. And now, it's up to us and we've been working with our vendors a lot in the last several months. The vast, vast majority of our vendors have capabilities of distributing in Canada. So that -- there's a handful that we have to work with to get them up there. We really haven't gone to big hiring yet. That's coming right after the first year at Calgary to hire the people that will work in the store, hire the Canadians. We have a solid plan on that. As you know, service is, has to be, needs to be our point of difference. And we don't take that for granted, especially in the foreign land for us. So that's our focus. Not much to report on that yet. As for your second question on the Rack stores, the Rack stores can open fairly quickly, not quite as quick as here in the U.S. but fairly quickly after that. And we're -- we've been doing a lot of work and looking at some real estate. There are some good locations there. But we haven't quite finalized our opening schedule for the Rack yet.

Our next question comes from Jennifer Black with Jennifer Black & Associates.

I noticed that you're running a 10 point Fashion Rewards event at Rack, November 23 and 24. And I wondered if that was in response to the promotional environment possibly getting ahead of Black Friday. And also, can you tell us what kind of response you've had to 5 Rack customers for the Fashion Rewards program? And are you seeing growth in the number of Nordstrom credit card holders at Rack and what percent of your Rack customers still hold credit cards? Michael G. Koppel: Hello, Jennifer. This is Mike. I'm going to tackle those points. In terms of the Rack customers and the Nordstrom Rewards program, as you know, we opened it up to our Rack customers back in January of 2012 and since then, we've had roughly half of our new accounts that have been -- that have resulted from folks that the accounts have been opened at the Rack. So we continue to see a terrific response to those customers joining the Fashion Rewards customers. We also find that a lot of those customers tend to be a little younger and they tend to also open with our debit card. So we're very happy with that, and we see it as part of our overall event -- our overall effort to grow with our younger customers. As far as the 10 point event, that was a very limited event that was to a select group of customers. So it wasn't any response to any major promotion.

Our next question comes from Neely Tamminga with Piper Jaffray. Neely J.N. Tamminga - Piper Jaffray Companies, Research Division: Erik and Pete, I have some questions for you guys related just to the overall store environment. I just don't know which one of the two of you is going to [indiscernible] . So you've definitely have done a major undertaking on kind of redesigning the Savvy department in taking that over. I'm hearing from you still that BP or Junior is still underperforming. Is that a next sort of major candidate to be redesigned? And then, similarly to that, the customer service bays, at least in some of the stores we've been in, have been shut down and kind of pushed out back to the store associates. Is there an opportunity to really raise the productivity per foot by repurposing some of that dormant space? Peter E. Nordstrom: Yes. This is Pete. Gosh, related to BP, I think there's some of the residual effect from the success that we've had with Topshop and Savvy and the customers that we're trying to get after there. I mean, what we're really trying to do is not measure any of these departments so much in isolation but see how it all works together from end to end. And I think part of our theme all along in recent history has been trying to be more compelling to young customers and attract new customers and acquire new customers. And so, it's a big state to operate in. It's competitive. It's dynamic. And, yes, I think it's fair to say that we have got to work hard to address the issues that we have in BP. We're just not going to sit idly by and have that business be challenged. But it's part of how the whole thing works together with the other elements of Women's Apparel. I think we've got a pretty good plan based on some of the recent renovations that we've been able to do in Southern California in particular, that gives us a blueprint for success going forward in the stores. In terms of customer service, I think that's just part of our ongoing evolution, how we can serve customers better. And the most convenient way to serve customers is to have them be able to get the service they need wherever they want in the store rather than to go someplace special to get services provided for them. So it's in that spirit that we've tried to enable all our departments and our salespeople to be able to handle any number of issues that a customer may have. The byproduct of that is we might be able to repurpose some of that space and apply it in a way we have -- particularly in productive stores, where we can sell more. That would be true. But we handle those all kind of one at a time. And we're definitely, gradually and pragmatically evolving that whole process because the last thing you want to do is have any unintended consequence of giving worse service as a result of that. So we're being careful there.

Our next question comes from Charles Grom with Sterne Agee. Charles X. Grom - Sterne Agee & Leach Inc., Research Division: Blake, when you take a step back and look at your overall comp trends year-to-date, you're running up about 2.5%. If you look a little bit further back the past 3 years from, say, '10 to '12, you've delivered close to an 8% comp. And I'm just trying to get a sense for when you think about beyond the fourth quarter just over the next couple of years, what's the right comp assumption for Nordstrom when you blend it all together between the Rack, between HauteLook, between a full-line and between e-com? Blake W. Nordstrom: Charles, that's a good question. And I think the main thing that we want to emphasize and hopefully is coming through is that it's super important that we don't get overbought and that we stay close to the customer and we maintain that flexibility. And so, it was asked earlier about our inventory, and I just give our team really high marks with some of these softer sales to continue to keep the inventories fresh and current and in line, so we can continue to try things and adjust. And so, when we think about our planning process, it's different than our goals. And so, we talked about fourth quarter, you just asked about how should we think about it for 2014. We're going to take the trends and the facts are where we're running right now and put that in from a budget planning point of view. But again, our hope is from a goal point of view that there will be some upside. But there's nothing today that would say to us we should dramatically change our plans. They're tied to performance. And so, our business, though, in total really produces a very strong bottom line at that 8% or mid- to high-single digit comp for the total organization. And so, what we are again continuing to evolve with is ensuring that each element of this business is maximizing their opportunities. But really, where it all comes together is to allow the customers to shop on their terms between all those different channels, and we think that's where the best outcome comes for the shareholder. Michael G. Koppel: Charles, this is Mike. I would also add one thing. As you know, we've been reiterating that our long-term goals are to grow the top line and that's total sales at a high-single digit. And so, within that, there will be variations on comp as the years go by. But in the long run, that is our overall goal. So that's something to consider.

Our next question comes from Paul Lejuez with Wells Fargo. Paul Lejuez - Wells Fargo Securities, LLC, Research Division: Just back on the topic of cannibalization as you've opened up more Rack stores, I'm just wondering what you're seeing in terms of the full price for cannibalization if you're measuring that and what you're seeing. And then, just one other follow-up on the HauteLook business. Could you just give us an update on the profitability of that business, where we're looking to end up this year versus last year? Blake W. Nordstrom: Paul, so this is Blake, and I'll take the Rack part of it. We've had an example or 2 where -- in an isolated situation, where Rack has opened and has had a short-term slight impact on a full-line store. But in aggregate and in total, it's been synergistic and complementary. And so, we view it as a real positive. There is a similar customer, and there is also a different customer and there are some cross-channel shopping. But to-date, it's been a real positive for the company to locate Racks next to our best full-line stores, and we're continuing with that strategy. Michael G. Koppel: Paul, this is Mike. In terms of the question on HauteLook's profitability, beginning in the third quarter of last year, we started generating operating profit in HauteLook. And we expect for the full year 2013 to generate operating profit. We're really excited with the progress we've made there, not only in our ability to continue to grow the top line through our -- through the integration we have with the rest of our business but also that we've developed a much more efficient model from the delivery and fulfillment standpoint, which has allowed us to become more profitable. So we'll give a little more color on that as we transition out of the year. But we feel good about the progress there.

Our next question comes from Michael Binetti with UBS. Michael Binetti - UBS Investment Bank, Research Division: We talked earlier in the year. I think you were surprised a little bit at how Rack sales have decelerated through the year. If we just step back in a bigger picture here, now that you've have seen quite of a gradual re-acceleration coming in, what can you tell us as you guys have done some soul-searching on that, what might have been holding it back? Do you think you figured it out at this point? Blake W. Nordstrom: Well, this is Blake. It's always lots of things. I don't think there's any one thing that we would point to. And, yes, you're correct, we were, towards the beginning of the year, coming in a little bit below our plan from a comp point of view. The new stores were continuing to exceed their plans. And we're pleased during the third quarter that it's gotten closer in range with our budget and it's improved. But there just are a number of initiatives that, that team has been working on and continues to work on. That's a very fluid and dynamic business. And every day, there's a whole host of challenges and opportunities. And so, it's encouraging to us to see that improve. And again, we've got to execute that through this busy time period in the fourth quarter and going forward. But at this juncture, we're really pleased how the customer is responding to that. But there isn't one that I would call out. We did mention, from an inventory point of view, the pack-and-hold subject and that has been a real plus to the business to be able to help turn the corner by season quicker to be able to open the amount of new stores that we have in a fresh and compelling way and to really provide some sizes in some of the top merchandise in our stores. So that's been a strategic advantage so far. Michael Binetti - UBS Investment Bank, Research Division: And if I could just ask one follow-up. Could we talk a little bit about the merchandise plan in the cold weather categories for the next few months? You guys stand out as really having done a great job in the past making brands like UGGs and others in boots really, really big in the winter when weather was even close to normal. So that's been a struggle for everybody for a couple of years. How do you think about setting the inventories for this year and how much you'll be able to chase sales if weather is normal? Peter E. Nordstrom: This is Pete. I think we give our teams a lot of credit for partnering with vendors because we're all dealing with the same issues. And I think any way that we can collaborate together to make most efficient use of inventory is the way to go. And UGG as an example, it's a big business for us, but we've been doing business together for a while and I think that every year it gets a little bit better in terms of the predictive modeling and how to flow inventory in the most efficient way. So we're doing well there. I think we fully expect that in the seasonal categories that it's going to be good for us. All indications are right now is from coats to boots or what have you that's all going well.

Our next question comes from Liz Dunn with Macquarie. Lizabeth Dunn - Macquarie Research: First, just a follow-up on that -- the Rack pack-and-hold. So is there a percentage of the inventory that you'll -- that you're looking to move to in that pack-and-hold category in Rack? And does that mean that's just necessarily the entire inventory turns for the organizational slowdown? Blake W. Nordstrom: So this is Blake. We have approximately $174 million in that pack-and-hold classification. It is from last year up considerably because as we're newer into this process and ramping up. But that's pretty fluid. And then, for the total, we're very comfortable with the percentage, how it fits in there. And the Rack merchandising team we think is really deploying it well. So at this juncture, it's a positive to the total. But it does have an impact from last year as we move it up. And there's a little bit of an apples and oranges. Hence, why we've been calling it out, but so far so good.

And our next question comes from Paul Swinand with Morningstar. Paul Swinand - Morningstar Inc., Research Division: Wanted to just get a little bit more about the online and I know everybody's in the thinking and agreement that online and the stores are synergistic. But are there some categories of goods that will just always be sold in stores like coats? In other words, are you seeing a pattern that certain items are bought more prevalently online and certain items are always more prevalent in the stores? James F. Nordstrom: Paul, this is Jamie. That's a good question. I think we talked a lot about that in previous years, as our online business was still in its infancy. And I think, at every corner, we've discovered that, no, that customers -- particularly our customers, they love fashion, they love freshness, they love to see something new. And increasingly, as we're seeing customers are using e-commerce and our website to find out what the new trend is and what's hot and [indiscernible] where they end up choosing to actually buy that item whether it's on our website or on their phone or coming into our store, we want to make that as great an experience as possible. So we don't really think about channel conflicts or channel shifts, we think about our customer and how they want to shop and how can we create a great environment for them.

Our next question comes from Richard Jaffe with Stifel. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: Two quick questions. One, the Direct business has done very well, and it appears that you're offering a lot more product, that's to say, more customer choices online than in stores. Could you quantify that, the additional either SKUs or choices that are available online versus stores? And then, I have a quick follow-on. Blake W. Nordstrom: Yes. I don't have the most recent numbers. But it's in the -- we'll call it a 50% increase roughly this year versus last year in terms of the breadth of offering on our website. And I think what you'll see today is, on our website, just about everything we offer in our stores with very, very few exceptions. And then, in certain categories, we're offering brands and styles that we don't have in our stores, not because we wouldn't want to carry that merchandise but because we just don't have the space. And there's a lot of great brands of footwear or Women's Apparel out there that we can't get to in our stores but can in our website and customers have responded. So we think that there's a lot of runway left for us on expanding that selection, and we'll be focused on that over the next couple of years. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Any limits to that [indiscernible] a multiple of what you have in stores? Blake W. Nordstrom: No. I don't think we can really put a number on it. I think we need to make sure that we do a good job of creating an online experience through navigation and personalization that makes a much larger assortment easy to navigate and fun to shop. And so, we've got to make sure that our investments along those lines keep up commensurate with the growth in our selection. And that's what our plan reflects.

And our next question comes from Stephen Grambling with Goldman Sachs. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Just a quick follow-up on Paul's question earlier, you had mentioned Women's Juniors is one of the more challenged categories in full-line. Does that differ versus the Direct channel versus in-store for that category in particular? Blake W. Nordstrom: It's been relatively consistent across all channels for us. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Okay. And then, one other follow-up is just on the gross margin line. It just seems like, based on the D&A deleverage and occupancy deleverage, gross margin would have been potentially up. I'm just wondering maybe I'm off there and any kind of color you can provide. Michael G. Koppel: Well, yes. Stephen, this is Mike. We still would not have seen, I would say, expansion in gross profit percent because we do have the impact of the additional occupancy costs that's flowing through there. So I would say it's safe to say that, at best, that would have been even.

Our next question comes from Dana Telsey with Telsey Advisory Group. Dana Lauren Telsey - Telsey Advisory Group LLC: Can you -- as you think about this upcoming holiday season with the 6 fewer days, how do you see this shorter holiday season differ than others in the past that have been shorter? And are there any calendar shifts and event timing this year as compared to last year? Peter E. Nordstrom: I guess, I'll take it. This is Pete. I don't think we really think that the calendar is going to pose any significant changes for us, and we don't have any different plans in terms of the rhythm of our business and what we're doing. All of the things that we've talked about, there's a bunch of little things that we're trying to improve on to add up to a better experience. And I think the fact that our inventories have been in really good shape all year long is probably the best indicator of optimism for us coming into the holiday season because we have a lot of newness. We're not bogged down with a bunch of clearance, which for us usually isn't the most important inventory. The most important inventory for us is new [ph] and so, those plans are all going forward. And I think that it should be very similar to last year just in terms of the rhythm of it all. Michael G. Koppel: Dana, just -- I would add just one more thing. This is Mike. We've looked at this over the years and years where we've had more days and years where we've had less days. And we tend to see that the overall shopping bag is relatively the same. So we plan accordingly, and we expect a good holiday season.

Our next question comes from Barbara Wyckoff with CLSA. Barbara Wyckoff - CLSA Limited, Research Division: Could you talk about the premium denim business? What is the trend like? And have you seen any actions in some of these newer silhouettes like the Baby Boot and Skinny Flare? Peter E. Nordstrom: The premium denim business has held up well. We've had good success both in Men's and Women's. And I think, in terms of specific styles that you're talking about, I don't really have any color to add to that.

And our final question comes from Rob Wilson with Tiburon Research. Rob Wilson - Tiburon Research Group, Inc.: Mike, can you go back to that HauteLook profitability question? Can you confirm that it's been profitable thus far for the first 3 quarters of the year? Michael G. Koppel: Yes, from an operating profit standpoint, it has. Rob Wilson - Tiburon Research Group, Inc.: Okay. And one last question. On Topshop merchandise, does that merchandise have a higher or lower merchandise margin than the remainder of the store? Peter E. Nordstrom: I'm really not going to get into that in detail because, frankly, the relationship and the collaboration we have with Topshop is somewhat unique. We do have a wholesale relationship with them, but it's -- I would just say it's different maybe than the other relationships we have. I would say probably one of the things that's important to contemplate when talking about Topshop is just not what the pure margin is, but the degree to which that margin is new or accretive and also the degree to which it's bringing in new and different customers, which we know to be true. So that's -- when you kind of view the totality, it's definitely been a positive -- very positive thing for us. Robert E. Campbell: Thank you for joining us today. As a reminder, a webcast replay of this call, along with our slide presentation, will be available for 1 year on the Investor Relations section of nordstrom.com under Webcasts. In addition, we provided an overview of our performance and growth strategy at the end of our slide presentation. Thank you for your interest in Nordstrom. Goodbye.

This does conclude today's conference. Thank you for participating, and you may now disconnect.