Karen Hoguet – Chief Financial Officer

Matthew Boss – JPMorgan Paul Swinand – Morningstar, Inc. Paul Lejuez – Wells Fargo Oliver Ken – Cowen & Company Jeff Stein - Northcoast Research Paul Trussell – Deutsche Bank Kimberly Greenberger – Morgan Stanley Stephen W. Grambling - Goldman Sachs Group Inc., Research Division Lorraine Maikis Hutchinson – BofA Merrill Lynch, Research Division Bob Drbul – Nomura Securities Michael Binetti – UBS Dana Telsey – Telsey Advisory Group Richard Jaffe – Stifel David Glick – Buckingham Research Group Stacie Rabinowitz – Consumer Edge Research Bernard Sosnick – Gilford Securities

Good morning and welcome to Macy’s Inc. Third Quarter Earnings Release Conference Call. As a reminder today’s conference is being recorded. I would now like to turn the call over to your host, Karen Hoguet. Please go ahead.

Thank you. Good morning I am Karen Hoguet, CFO of the company. Any transcription or other reproduction of the statements made in this call without our consent is prohibited. A replay of the call will be available on our website www.macysinc.com, beginning approximately 2 hours after the call concludes. Please refer to the Investor Relations section of our website for discussion and reconciliations of any non-GAAP financial measures discussed this morning. Please keep in mind that all forward-looking statements are subject to risks and uncertainties that could cause the company’s actual results to differ materially from the expectations and assumptions mentioned today due to a variety of factors that affect the company, including the risks specified in the company’s most recently filed Form 10-K. We’re very pleased with our earnings in the third quarter especially in light of the weaker than expected sales. Some of the strengthen earnings relates to timing shifts with the fourth quarter, some asset sales happened earlier than anticipated and some expenses most notably in marketing were delayed in order to drive sales in the fourth quarter. However, earnings in the quarter still would have been strong without these shifts. As to the sales trend, we knew that year rounding on last year’s very strong third quarter sales performance would be challenging. In fact, on a two year basis our trend in the third quarter was essentially the same as it was in the first half of the year. Nonetheless, we were disappointed with our sales. We assume that we were not immune to the weaker than anticipated consumer spending which has been acknowledged or reported by other retailers. Clearly, the warmer temperatures throughout much of the country also hurt sales but that alone does not explain all of our sales shortfall in the third quarter. As we look at the fourth quarter however we are still feeling positive and better outlook and the opportunity for improved top line performance. And MOM’s strategies, my Macy's, Omnichannel and Magic Selling and our tactics for the fourth quarter will enable us to compete effectively. In addition economic conditions do seem to be strengthening and we had a relatively weaker fourth quarter last year which should be easier to improve upon then with the case in this third quarter. More on our fourth quarter assumptions in a few minutes let’s talk first about this third quarter. Sales in the quarter were $6,195 million down 1.3% versus last year. And on a comparable basis including license businesses sales were down 0.7% excluding the license businesses comp sales were down 1.4%. Remember that last year our comp sales including the license businesses were up 4.6% so on a two year basis we were up 1.9% per year. And this is about the same as the spring season trend. Our strongest businesses in the quarter were handbags, fragrances, active and millennial apparel. Our men’s business also strengthened through the quarter. We were disappointed however that we did not sustain the momentum of the strong start to our back to school business in Kids. Other weak categories in the quarter included our soft home businesses most notably housewares and textiles as well as women shoes, cosmetics and non-Millennial feminine apparel. Overall, in the quarter the numbers of transactions were down slightly versus last year. Units per transaction were down a little more and our average unit retail was up slightly. We believe that the flattish number of transactions in the quarter is in part to the shift in marketing spend from the third quarter to the fourth quarter. Our strongest performing markets continue to be in eh sale and as always there were stores and markets outside the self that also performed well. Most notably Herald Square and Colorado. The Omnichannel activity on desktops, tablets and smartphones continued to strong in the quarter. The interaction between all the various channels continues to increase as customer shop and buy in new ways. Buy Online Pickup in Store is gaining momentum and we believe it could be very important during the holiday period. Bloomingdales also fell below expectations to top line sales in the third quarter. The gross margin rate in the third quarter was flat two years ago. Our merchandise margin was down at 10 and delivery expenses were higher than last year but those factors were offset by the increase in the commissions earned on the sales of license businesses. We ended the quarter with inventory up approximately 1% versus last year. As always we took the needed markdowns to keep our inventory current. SG&A in the quarter was $2,007 million, behind 4.4% from last year or as a percentage sale down 110 basis points. We were very pleased with our ability to flex expense on the lower sales during the quarter. We also continue to benefit from the approximately $100 million in annual cost reduction initiatives that we implemented at yearend 2013 as well as lower retirement income and strong credit performance. Included in this third quarter were net gains on asset sales of approximately $48 million. These gains were mostly expected this year but not until the fourth quarter and remember that last year we had $58 million of gains on asset sales in the fourth quarter. In addition, as previously mentioned we shifted marketing expense to the fourth quarter. Retirement expense was $42 million below last year in the third quarter. This is actually better than expected and we are now trending to approximately $165 million lower retirement expense than last year for the full year versus our prior guidance of $150 million reduction. And depreciation and amortization in the quarter was $263 million or up $6 million over last year’s expected. Credit income was $182 million, $12 million higher than last year. Usage of our proprietary cards increased 10 basis points over the last year in the quarter reaching 48.7% and while on the subject of credit I want to point out that we signed over new loan expansions of our partnership with Citi that now goes until 2025 instead of 2016 expiration of our original contract. We are very pleased to be able to continue this very important partnership and to do so and substantially the same economic terms. Operating income in the quarter was $422 million, up 17% over last year and 110 basis points above last year as a percentage of sales. Interest expense $96 million or equal to it over a year ago and tax expense was a $109 million with an effective tax rate of 33.4%. Net income was $217 million or up 23% over the last year. Average diluted share count was 357.7 million shares or 6% below a year ago. During this third quarter we utilized approximately $534 million to buy back 9 million shares. We have bought back over 25 million shares year-to-date for close to $1.5 billion. EPS on a diluted basis in this third quarter was $0.61 or up 30% above last year’s $0.47, cash provided by operations net of cash used for investing activities was $181 million year-to-date approximately $97 million below last year. There are lots of ins and outs on the cash flow but the big changes were the $112 million more in CapEx, the purchase of property and equipment as well as the capitalized software which is consistent with our planned $1.1 billion of CapEx for this year. Also the impact of the pension changes impact the cash flow that we made at the end of last year that impacts other assets and other liabilities when looking at it on a year-over-year basis. So overall, I would say that this third quarter was disappointed on the top line but strong in terms of the bottom line. So let’s move on to the fourth quarter. As I said earlier we have optimism surrounding our strategies and the strength in our execution capabilities we also see positive factors in the economy, lower gas prices, lower unemployment and healthy financial markets. We are however balancing these factors with the reality of the recent trend caused in part by customer spending more their disposable dollars on categories we don’t sell like cars, healthcare, electronics and home improvement. So as we evaluate all of these factors the positive and the negative we are assuming the comp sales including license businesses will increase by approximately 2% to 3% in the fourth quarter were 1.8% to 2.8% if we exclude our license businesses. Assuming we achieved this fourth quarter growth the comp growth including license businesses for the falls season would be 0.9% to 1.5% up or 0.5% to 1.1% without the license departments. And this compares to our prior guidance of 2% to 3% for the fall season. Some of the strategies behind our confidence in the outlook include the following: 1) We have lots of newness this year in our store gifts program with greater exclusivity and more better and best products. We have new vendors included this year including Kate Spade, Marc Jacobs and Fields. And our gifts program this year will be content versioned for different parts of the country. So we store gift from a vendor could be a heavy sweater in the north but a wealth ensure in a hard or a [indiscernible] or it could be different color pallets and say Kashmir, depending on the part of the country or a half zip in the north could be a half zip nylon jacket in the south. The importance of having the most wanted, well curetted assortment, location, eye location can absolutely not to be overlooked. 2) A second key strategy is a wholly revamped and very powerful transition approach as we move from late December into January when self purchasing becomes key. 3) Our biggest brands are healthy and that offers great news for us in the fourth quarter gift giving. 4) Our marketing will be key in communicating our value and newness messages. The calendar is loaded as it always is at this time of the year but the greater integration of the increased digital spend should help us drive business in all channels. 5) Our store teams have our stores looking better than ever and our associates are ready to engage with our customers and help to deliver great experiences throughout the season. 6) As I mentioned a few minutes ago Buy Online Pickup in Store has a potential of driving lots of last minute gift purchasing as convenience become so important to our busy shoppers. Having said all that we do expect the competition to be fierce but we are ready and we believe that we can deliver our sales expectations. We had discussed at the end of the second quarter that we had an expectation for a flat to slightly down gross margin rate in the back half of the year and that expectation has not changed, which means that the fourth quarter margin could be flat or could decline. We are expecting a slight decline in merchandise margin compounded by an increase in delivery expense but we are hoping to be able to offset these factors again through the license income. SG&A in the fourth quarter will be negatively impacted due to the timing of items mentioned earlier. Remember that last year in the fourth quarter we had $58 million of asset sale gains which we do want to expect to repeat given the $48 million in gains that occurred this year in the third quarter. We also shifted as I mentioned some of our marketing spends from the third quarter end of the fourth quarter. So while we expect SG&A as the percentage sales to improve versus last year for the fall season as a whole, it will likely not do so in the fourth quarter. Our EPS guidance for the year is now $4.25 to $4.35 on a diluted basis and this compares to our prior guidance of $4.40 to $4.50. This reduction is entirely due to the impact of the reduced sales performance in the third quarter and our assumption after the fourth quarter. This new guidance equates to fourth quarter EPS of approximately $2.30 to $2.40. As in prior years we are not including in our guidance any store closing related cost or asset impairment charges that could be incurred at yearend. Sort to summarize it may be an understatement to say that we have our accelerator pedal push to the floor this holiday season. You will see this in our stores, on our websites and in our new apps. We have very carefully strategized had a maximized each element of MOM. So the customer gets the fun, fashion, convenience, individualized service and value that she wants and expects from us. You should not overlooked the fact that giving a gift from Macy’s or from Bloomingdales means something special to many customers and we know that many shoppers come to us first at this time of year. We take this natural competitive advantage very seriously and we are using every chance to excite our customers at every time. We have all witnessed a fair amount of negativity and skepticism about the economy in the year much of that amplified by the recent election campaigning. Going forward we see signs that we might gain a bit more tailwind from improved customer sentiment, higher employment and lower gas prices. We are not counting on a lot of help from the economy this holiday but every little bit will help. But as always and as you heard me describe we have focused our energy and our resources and what we can control, which means executing a great plan in the fourth quarter, the table is set and we are all well prepared to drive the business as we convert customer traffic to profitable sales. And I will stop here now and take your questions.

[Operator Instructions] We will take our first question from Matthew Boss with JPMorgan. Matthew Boss – JPMorgan: Hey Karen, good morning.

Good morning Matt. Matthew Boss – JPMorgan: So clearly business has been more choppy the last 12 to 18 months, it’s not Macy specific but as we look beyond the holiday. If we assume that current conditions hold and maybe we don’t see some of these gas price benefits and things like that. I mean is it best to think about Macy as a one that you comp model or can you walk through some of the drivers to outperform this threshold just kind of trend and think about the go forward.

Yes, we are spending a lot of time thinking about that, a lot of that we believe relates to assortments and making sure that we have the best products in all categories for license businesses it helped us in some categories where we couldn’t get the right assortments like finish line or some glass and obviously Omnichannel is critical and all the new things going on but you may see Bloomingdales in terms of our size. So I would say we continue to focus on the fundamentals f retail and expect that we can do better compounded with all of the added benefits of being on new Omnichannel. Matthew Boss – JPMorgan: Great. And then so kind of follow on to that, if you look at the expense structure and assuming again this challenge top line environment holds, what kind of flexibility do you have, can Macy’s lever at one that you comp and any room or opportunity for us to think about in terms of comp sales similar to this year that you had?

I think you have found Macy’s has the ability to figure out the right expense structure and the right way of flexing expense we did it in the third quarter that something I think you can count on from us. Matthew Boss – JPMorgan: That’s great. Thanks.

We will take our next question from Paul Swinand with Morningstar, Inc. Paul Swinand – Morningstar, Inc.: Good morning and thanks for taking the questions.

Good morning. Paul Swinand – Morningstar, Inc.: Wanted to ask about all the Omnichannel initiatives and there was a press release on the September 15, obviously you updated us on progress that pick up of the store is now available and rolled out but you are testing Same Day Delivery. Can you just update us on the progress and any early reason what’s your expectation is for the impact of those?

I think it’s really early to give even answer to that we had said earlier that we probably take this fall and may be into the first quarter before we could really address it but so far we are optimistic on all of it Online Pickup in Store in the Same Day Delivery is available in eight markets and eight big markets in [indiscernible] and seems to be picking up. So again we just have to see more as we get through Christmas but we are optimistic. Paul Swinand – Morningstar, Inc.: Do you think that those are competitive advantages and can you actually do them better than other retailers or is this just cable stakes everybody is going to have to spend for the risk, and you are not going to be doing different than anyone else?

I think our store footprint gives us a huge advantage with us given where the Macy stores are located and the technology that we have built and as in place to utilize our stores to fulfill inventory, I’m sorry, internet orders even if it’s not somebody picking it up in store, I think as this is a huge advantage and we are working on take advantage of that as we go forward. So I actually do think this gives a competitive advantage. Paul Swinand – Morningstar, Inc.: Okay. Interesting. I will let somebody else go ahead and best of luck for holidays.

Thank you very much.

And we will take our next question from Paul Lejuez with Wells Fargo. Paul Lejuez – Wells Fargo: Hey! Thanks. Hey Karen. Just on the flat gross margin in the third quarter just wondering if you would say that that was because your promotions were actually consistent on year-over-year basis. So is there situation where you are getting a bit more help from vendors in terms of support and then totally separate just wondering if there are any examples, if there are any retail competitors out there where you have seen them close stores that you could look at and say we are clearly seeing the pickup in volume in one of your stores that are nearby to that close store and what are those retailers that you are seeing them. Thanks.

No. I don’t know the answer to the second question I have not heard of any pick up from when store closes sometimes when an anchor closes in a mall, we pick up a lot of business and sometimes the traffic in the mall gets hurt so that it doesn’t help us. So I don't think there is any one answer that I can give you on that. And on that smaller retailers we cannot see a big impact on the total store. In terms of promotion, this business has been very promotional for a while and you are not going to see big increases in promotions quarter to and then in any given time period. So I would say your statement on the third quarter it's essentially true which there is not lot more promotional activity. Paul Lejuez – Wells Fargo: Okay. Thanks. And can you just comment quick on the big ticket performance how that performed. I think it was better in the second quarter relative to the first. How did that do in the third?

Yes big ticket in the third did well. Which is was not one of the standard categories but it certainly wasn’t one of the weakest. Paul Lejuez – Wells Fargo: Okay. Thanks Karen. Good luck.

Thank you.

We will take our next question from Oliver Ken with Cowen & Company. Oliver Ken – Cowen & Company: Thank Karen. And congrats on the expense control, sharp. Regarding, it was nice that you are up slightly this quarter. Do you expect that trend may continue? I know you focused on value and you also focused on value and you’re also focused on newness and Omnichannel initiatives. So how these metrics evolve as we think about the aperture you are making in the assortment?

It's a very hard number to predict because of all of the mix impacts. So it's a hard question to answer but we are not expecting any significant change one way or the other in the fourth quarter. Oliver Ken – Cowen & Company: Okay and could you comment briefly on the inventory freshness? You guys were honest about what you are seeing this quarter and the trends and you are guiding to some caution on the merge merchant side so how do you feel about the freshness and where there are opportunities in terms of the composition of inventory?

Yes I mean this is something that Macy’s does very well. We are very focused on receipt flow, which is us clearing out the things that aren’t selling so you can always bring in the newness and within that 1% increase we think that we have got the appropriate level of freshness. Now that doesn't mean there aren’t pockets of inventory that are higher than we would like but overall, I think we do a terrific job on this freshness issue and really do focus on making sure the quality of the inventory is good not just the quantity. Oliver Ken – Cowen & Company: Great. Thank you. Best regards for holidays.

Thanks Oliver.

And we will take our next question from Jeff Stein with Northcoast Research. Jeff Stein - Northcoast Research: Good morning Karen. I am wondering if you can talk a little bit about your experience with buy online, pick up and store and if you are tracking the percent of those customers who are up for that service, what percent are actually buying something else when they come into the store?

Well, we are still tracking and I think it's early to claim victory. But we are finding a significant up spent in total on the customers that are coming into the store. Now what I don't know is how much of that is incremental to be honest with you because they may have bought it online, had they not come in store. But it almost doesn't matter because the good news is once they are in the store, frankly it's our job to see what else we can sell them and at least so far it seems to be working. Jeff Stein – Northcoast Research: Great. And I am wondering if the dark workers slow down in strikes that we have seen in the west coast pose any risk to the fourth quarter given the fact that you are going in with some pretty lean inventories?

Yes, we have been obviously working extraordinarily hard on this situation both in collaboration with the carriers but also our vendors. We have seen some delays but we don't think that it's really impacted our ability to meet the required arrival dates so we are expecting. So far I think we are okay and we got a ton of receipts in first week of November. So we are feeling good about that. But again it's a lot of hard work and a lot of people's part and finger crossed will be okay in total. Jeff Stein – Northcoast Research: Got it and final question, on the marketing _ ship I am wondering if you could quantify that a little bit for us because I am wondering obviously it raise the expense but if it's a big enough chunk hopefully it also drives incremental sales as well. So can you talk to us a little bit about the dollar movement between Q3?

Yes, it's approximately $10 million I think a little bit north of that. So it's big enough that it could have an impact. Jeff Stein – Northcoast Research: Great. Thank you very much.

We will take our next question from Paul Trussell with Deutsche Bank. Paul Trussell – Deutsche Bank: Good morning Karen.

Hi! Paul. Paul Trussell – Deutsche Bank: You mentioned the kids business wasn’t able to sustain solid start to the quarter. Could you just give us a little bit more detail on the overall sale cadence throughout 3Q and is there anything noteworthy over the past few weeks to call out that gives you confidence heading into the fourth quarter specially giving your assumption of an acceleration to two year trend?

Yes, I mean we had talked in August about the strong start to the back to school and early August, end of July and then in Feb was the case but it did the kid business trend didn’t last through September and October which was disappointing to us. So that was the call out there and as we look at the quarter August was great, September and October were less so. So that's really the trend there. We started November on a great path but again the fourth quarter is made up from the week in November. So I want to be careful there. Paul Trussell – Deutsche Bank: And Bloomingdale's, was there a major spread between Bloomingdale's performance in Macy’s or any just color what you’re seeing?

Well, the expectations was about the same. Paul Trussell – Deutsche Bank: Okay. And then lastly just on the expense management, obviously that’s been impressive not just this quarter but over the past two years but asset sales have been the part of it. Is this an ongoing opportunity and therefore won't be any hurdle major cycle next year?

If you would ask me last year I would have told you that 58 million was going to be really hard year around this year and in this quarter we have 48 million. So I don't know the answer to that. It feels hominess as we go to 2015 but I hope that it's possible. Paul Trussell - Deutsche Bank: Thank you for the color Karen.

We will take our next question from Kimberly Greenberger with Morgan Stanley. Kimberly Greenberger – Morgan Stanley: Great. Thanks. Karen I am wondering if you can just look at the totality of 2014 so far as compared to 2013 and other categories that were stronger in 2013 that are just showing some momentum and then I am wondering if there – does the – do the work courses in the assortment really change between fall and holiday or is it – do you tend to see the items and the categories that are performing very, very well in the third quarter also continuing to the fourth quarter?

Holiday does have some difference so for example the effect that fragrances was so strong in the third quarter bodes well in the fourth quarter because that tends to be a gift business. So there are categories that performed in Q3 that make us feel good about Q4. So I would say there are some differences. In terms of year-to-date versus last year, it's a centered categories most notably hand bags that is just continued to perform well but it did last year also. So that’s been a consistent performer. The non Millennial apparel, feminine apparel continues to struggle but it did last year also so again I don't think there is anything new with that. Men’s has been sort of more consistent and home had a better year last year than is this year. And again the third quarter as I mentioned was tough in terms of soft term, big ticket has been pretty good both years. Kimberly Greenberger - Morgan Stanley: Alright. Okay. Karen good luck for holiday.

Thanks. I appreciate it Kimberly.

We will take our next question from Stephen W. Grambling with Goldman. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Hi! Karen. Good morning.

Hi Stephen. Good morning. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Just to follow-up on some of your earlier questions on SG&A it looks like the core expense growth rate there was likely flat this past quarter just hoping you could maybe expand on some of the things that are being done in store with the Omnichannel business to keep that down and also as the flow through changed as online has become just the bigger percentage of sales?

Well the business model is changing with Omnichannel. We talked about that for a long time that a lot of the online orders that are shipped have a higher variable cost component than when you walk in a store and walk out. But that sort of become part of the model at this point and I think we are managing it quite well. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: That's helpful and then changing gears, just is there any update that you can provide on the opportunity from the Nike training club or active more broadly as we move into the holiday and beyond?

Well Active has been as you know a very strong category for us and it continues to do so. Obviously the Nike training club has been a big success but the business in total where we don't have those training clubs are also doing quite well. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: So, is there an opportunity to expand the assortment there, is there plans in place that you can help quantify?

Well, we are constantly looking for ways of growing the active business more aggressively with some new vendors with some new approaches and new assortments. So you will see that continue to be a focal point for us. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Great. Thanks so much. Best of luck.

Thank you.

We will take our next question from Lorraine Maikis Hutchinson with Bank of America. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: Thanks. Good morning. Karen you said you made a comment that the economic condition seemed to be strengthening. Could you just elaborate a little bit about what you are seeing out there.

Well I think I am seeing what everybody is also seeing which is lower unemployment, lower gas prices, and relatively healthy financial markets. So all of that should do well. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: And have you found a strong correlation between gas prices and your consumer and their willingness to spend on discretionary items?

Well I believe we have seen some relationship in terms of discretionary spending gas prices. But I think customers are choosing to spend their disposable dollars in different ways that's part of the reason why we are not more optimistic about the lower gas prices. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: Okay. Great. Thank you.

We will take our next question from Bob Drbul with Nomura Securities. Bob Drbul - Nomura Securities: Hi Karen. Good morning.

Hey Bob. Good morning. Bob Drbul - Nomura Securities: I just wanted to double check a couple of numbers. On the SG&A so was it $48 million from the asset sale gain, $42 million from pension, $12 million from credit. So excluding those three numbers, SG&A was up $10 million. are those numbers --?

Why would you exclude those numbers? Bob Drbul - Nomura Securities: No, no I am just trying to look at the core --?

Credit is core. Retirement is core. Bob Drbul - Nomura Securities: Okay. No I am just --?

No. No. seriously the only thing that I wouldn't call core was the asset sales and then the question that was -- is that becoming core, the answer maybe yes but in any case $48 million you could take up with others or really part of the operation. Bob Drbul - Nomura Securities: Okay. Right. You talked about the men's business I think strengthening throughout the quarter, can you just elaborate on what you are seeing there?

Yes I mean the business did pick up as we went through the third quarter particularly in the sports wear area. Bob Drbul - Nomura Securities: Okay. And then on the new store openings can you just give us an update on where you stand this year but in the next year as well?

Sure I mean as we look at this year, we opened in August the new store in the Bronx the Bay plaza and then we have just recently opened three stores Summerland in Los Vegas and Macy store, UTC University Town center [indiscernible] which is the Macy store, and then Bloomingdale's opened a replacement store at the center out in -- and I admit I have not seen these but I hear from the people who have that looks spectacular and hopefully I will get to see them before along, as we go to next year, in 2015 we have two announced openings one in Porto Rico from Macy and then really exciting Bloomingdale's store in Hawaii. Bob Drbul - Nomura Securities: Great. And then I guess the last question I will have, you always share with us like recent my Macy victories, are there any like stories that you could share with in terms of what you are still doing in my Macy side that have been there?

I think the best example right now is some of the examples I gave in terms of the holiday gifting strategy. We are doing – I think what we will prove to be a much better job in having the right gifts in the right stores and thinking about color pallets by stores that just keeps getting better so I think those are some of the best examples of like. Bob Drbul - Nomura Securities: Right. Thank you very much.

We will get our next question from Michael Binetti with UBS. Michael Binetti - UBS: Hey Karen. Good morning.

Hi Michael. Good morning. Michael Binetti - UBS: I guess on the category to follow-up on two things, could you mentioned cosmetics little bit slower for productivity and I think margins for you guys over long period maybe talk about what you think going on there and then any ideas on your recent comment there on why men sportswear might have been improving in the quarter.

Yes. In terms of cosmetics, in some cases the couple of the vendors reduced the marketing spent which had a negative impact on the business. Some of the impulse parts of cosmetics that younger brands actually had a decent quarter. So hopefully it will get better as we get to the fourth quarter. And hopefully some of those issues will be addressed. Michael Binetti - UBS: Okay and then sportswear in the quarter you said improved.

Yes it has, men's. b Any reason why we haven’t heard that one, little while just curious.

Well, I think the sportsmen look better from what I have heard but again I can't be specific brand to brand. Michael Binetti - UBS: Okay. And is there any way you can help us think as we look at 2015 what retirement expense should look like obviously there is lot of moving parts in the cost structure this year that I think lot of people are trying to figure out as we turn our eyes to 2015 here in the next --?

Yes, it will not be the improvement you have seen this year. So I don't know whether it will yet, but obviously when we get 2015 guidance, we will share that. Michael Binetti - UBS: Okay. Thanks a lot.

We will take our next question from Dana Telsey with Telsey Advisory Group. Dana Telsey - Telsey Advisory Group: Hi Karen.

Hi Dana. Dana Telsey - Telsey Advisory Group: As you think of private brand versus national brand, any update on how those are performing and then in the execution of Omnichannel and online, it certainly seems better than last year and just more advanced, were you on the journey deliver expense moving little bit higher, how do you see delivery fitting in and certainly with that press release with all the initiatives, how do you – where is Omnichannel in the cadence and it seems like a bigger part of cap as we move forward?

Thank you. Let me start with the second question. There is no question that we are executing Omnichannel better this year than last year and we will do better next year than this year because it really is changing some of the fundamental ways we do business and so we do keep getting better and better. And managing it in a way that makes it more profitable. So I think on both of those accounts we will continue to do better and I don't know where we are in the journey but there is no question it's going to continue to help us get us ways to service the customers better and better. And as I mentioned earlier I really do think our store footprint gives us a real benefit when it comes to servicing customers who like to shop online. So I think all of that is good and very positive for the future and clearly we are spending a big percentage of our capital budget on technology and supporting this business but frankly I don't know how you can compete as a retailer today without doing so. So I feel really good – I think we are ahead of the game when it comes to bricks and model retailers as you know we started Macy.com approximately 15 years ago and has been on a steady improvement ever since interestingly under the same management of Messi.com so I think that's going to be continue to be a key competitive advantage for us and that's true for Bloomingdale's as well. In terms to your question on brands, our private brands have done extremely well this year and we just see more and more upside and I think as you all know we are launching a major brand after the first of the year, I think in February and at the routine customer name [indiscernible] that we are extraordinarily excited about. So I think the ability of our private brand team to work with our merchants really is going to continue to be help us as we go forward. Dana Telsey - Telsey Advisory Group: Thank you.

We will get our next question from Richard Jaffe with Stifel. Richard Jaffe - Stifel: Thanks very much and thank you Karen. As you look into the pipeline the deliveries that fortunately for you’re -- seem to be on time I am wondering if there is anything that you are uncomfortable with or just the opposite is it mix that you are seeing has very well assorted based on Q trend?

Deliveries not sure I understand. Richard Jaffe - Stifel: The goods that are yet to be put in stores, the merchandise --

You are talking about the port issue? Richard Jaffe - Stifel: Port issue on one hand and then the content of what's coming in. so --

Well in terms of our ability to award the inventory properly and flowing it properly I have I have a lot of confidence with the team did a great job. In terms of any disruptions from the port, we have a spectacular team managing that situation and I feel really good about their ability to manage it to the best to their abilities. I am sure there will be some vendors and some product that doesn't get to us on time but I am really hoping it doesn't become a major issue for the company as a whole. Richard Jaffe - Stifel: Great. Thank you.

Our next question comes from David Glick with Buckingham Research Group. David Glick - Buckingham Research Group: Thank you. Good morning Karen. I am just follow-up on couple of categories obviously it's tough to be successful overall if the ready-to-wear, non-ready to wear and women shoes are challenging categories, I’m just wondering how much improvement you really counting on as per your Q4 plan, how much you think weather may have played on those businesses and the boot category and some of the seasonal categories and ready to wear and there any science or life there in those categories.

I just agree with you basic that we can't do well without ready to wear and shoes helping. Having said that we do hope that they will help not counting on huge improvement and trend clearly weather was a factor and if you think about AUR or boot versus shoes when you are not selling boots it’s going to hurt your business, ready to wear obviously gets impacted by weather but in our guidance for the fourth quarter we are not counting on enormous numbers some either of those category. David Glick - Buckingham Research Group: Great. Thanks for the clarification. Good luck. Thanks.

Thank you.

And we will take our next question from Stacie Rabinowitz with Consumer Edge Research. Stacie Rabinowitz – Consumer Edge Research: Hi, I actually wanted to ask something some more but I guess in a very different. The strength in Millennial Apparel this quarter is really amazing and you guys had strategies for that category and put concentrated effort behind it. Women’s Apparel has been weak for a while and it’s been weak across the space but are there any specific plans to target that category for growths going ahead.

The order Millennial? I’m sorry the non- Millennial? Stacie Rabinowitz – Consumer Edge Research: The non- Millennial women.

Yes, I mean absolutely we’ve got a team working on it. They are very excited about some of the things happening in the spring not necessarily the fourth quarter and we have to see in part it’s a new brand that I talked to you about and the Latino customer which really came out of the lot of our Macy’s work that we have a need for a brand that would address the said color and style preferences of that customer, yes we had some things underway and we are hoping that in this time next year we will be talking about The non- Millennial women’s apparels being a strong category. Stacie Rabinowitz – Consumer Edge Research: Great. Thanks.

And we will take our next question from Bernard Sosnick with Gilford Securities. Bernard Sosnick – Gilford Securities: Good morning.

Hi, good morning. Bernard Sosnick – Gilford Securities: For Millennial strategies worked very well and I’m wondering you sided that, there is a change in consumer spending behavior and what would technology, a lot of it is being done by the Millennial, is there any thought being given it may see including new categories of merchandise, more in the technology area, getting back to what department stores used to be at least on one small --?

I think you have seen us think about lots of new categories and technology. In some cases others and obviously not always having to be controlled by us finish line to me is a perfect example of that where we won't be able to do the active footwear business as well as we thought we needed to but view that as a key part of our Millennial strategy, so we found a way to do that. So I expect that there will be other opportunities like this to expand the breadth of categories that we carry within the store. Bernard Sosnick – Gilford Securities: And you are including hard lines perhaps.

Absolutely. I mean anything, we are looking to see what is our customer bind and what they want and we are just Macy’s credibility. Bernard Sosnick – Gilford Securities: Okay, thank you very much.

[Operator Instructions] We will take our next question from [Indiscernible] with Macquarie.

Good morning and thank you for taking my question. One of the recent press release has announced that partnership with Altair for Macy’s International location in the UAE, is there a roadmap for how many stores you can see in the Gulf region and could you see additional partnerships outside the Gulf region over the next few years?

As you know we have a Bloomingdale in Dubai with the same partner and so this is an extension of that partnership which has worked extraordinarily well, how many more stores could happen we don’t know for either Bloomingdale or Macy’s in the Middle East but we are extraordinarily pleased with Dubai. Interestingly one of the benefits of Bloomingdale is opening there -- also help to business in the U.S. with the global tourist. So we are excited that we will hopefully get the same benefit on the Macy’s side and it is possible that we could do partnerships like this in other parts of the world but again at this point the only place where we have got something to talk about is the Middle East.

Okay, great. Best of luck.

Thank you.

And at this time there are no other questions I will turn it back over to Karen Hoguet for any closing remarks.

We thank you all for your interest, your support and as always if you have other questions call me, call Matt, Sarah and will do our best to get you the answers as quick as we can, thanks and take care.

And that concludes today’s conference call and we appreciate your participation.