Michael Balmuth - President, Vice Chairman and Chief Executive Officer Norman Ferber - Chairman of the Board Gary Cribb - Executive Vice President and Chief Operations Officer Michael O'Sullivan - Executive Vice President and Chief Administrative Officer John Call - Senior Vice President, Chief Financial Officer and Corporate Secretary Katie Loughnot - Vice President of Investor Relations

Jeff Klinefelter - Piper Jaffray Michelle Clark - Morgan Stanley Kimberly Greenberger - Citigroup Jeff Black - Lehman Brothers Brian Tunick - JP Morgan Margaret Mager - Goldman Sachs Dana Telsey - Telsey Advisory Group Richard Jaffe - Stifel Nicolaus Marni Shapiro - Retail Tracker Rob Wilson - Tiburon Research

Good morning. Welcome to the Ross Stores third quarter 2006 earnings release conference call. The call will begin with prepared comments by Michael Balmuth, Vice President, Chairman and Chief Executive Officer, followed by a question-and-answer session. [Operator Instructions] At this time, I would like to turn the call over to Michael Balmuth, Vice Chairman, President and Chief Executive Officer.

Good morning. Joining me on our call today are Norman Ferber, Chairman of the Board; Gary Cribb, Executive Vice President and Chief Operations Officer; Michael O'Sullivan, Executive Vice President and Chief Administrative Officer; John Call, Senior Vice President and Chief Financial Officer; and Katie Loughnot, Vice President of Investor Relations. We'll begin our call today with a review of our third quarter and year-to-date performance followed by our outlook and sales and earnings assumptions for the fourth quarter and fiscal 2006. Afterwards we'll be happy respond to any questions you may have. Before we begin I want to note that our comments on this call will contain forward-looking statements regarding expectations about future growth and financial results and other matters that are based on management's current forecasts of aspects of the Company's future business. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from historical results or current expectations. These risk factors are detailed in today's press release and our fiscal 2005 Form 10-K and fiscal 2006 Form 8-Ks and 10-Qs on file with the SEC. Today we reported 2006 third quarter earnings per share of $0.31, up 24% from $0.25 in the third quarter of 2005. Net earnings for the third quarter of 2006 were $43.9 million compared to $36.3 million in the prior year. Our third quarter 2006 results include pre-tax stock option related expenses of $3.2 million or about $0.01 per share recognized pursuant to FAS 123(R) share based payment. Before the non-cash costs, earnings per share for the period grew 32% over the prior year. Sales for the third quarter increased 10% to $1.362 billion with comparable store sales up 4% on top of a strong 9% increase in the prior year. For the first nine months of the year, earnings per share grew 20% to $1.04 from $0.87 in the prior year. Net earnings for the nine-month period were $148.5 million compared to $128.7 million in the prior year. Our year-to-date results include pretax stock option related expenses of $10 million or about $0.04 per share. Before these non-cash option related costs, year-to-date earnings per share increased 24% over the same period in 2005. Sales for the first nine months of 2006 rose 12% to $3.962 billion. Same store sales rose a solid 5% on top of a 6% gain in the prior year period. Third quarter earnings results were better than planned benefiting from healthy sales trends and immeasurable improvement in operating margin. Regionally, the strongest sales performance during the quarter was in the Southwest and Texas, with same store sales gains in the high single digits. California, which experienced unseasonably warm weather in both August and September, generated a same store sales increase of 1% for the quarter on top of a 7% gain in the prior year. Home and Shoes remained the top-performing merchandise categories with comparable store sales gains in the high single to low double-digits. Before approximately 25 basis points in stock option related costs, earnings before interest and taxes increased about 65 basis points during the quarter. Improvements over the prior year period in shrink-related expenses and selling, general, and administrative costs were partially offset by higher supply chain and incentive plan costs along with slight increases in markdown and occupancy expenses. Higher supply chain costs during the quarter were driven by increases in freight and distribution expenses. We are encouraged by underlying productivity trends in the distribution centers that continue to show improvement over the prior year. However, timing of distribution costs related to packaway inventory levels drove a slight increase in total distribution expense as a percent of sales. Packaway units have higher distribution and handling costs related to movement in and out of our warehouse facilities. That said, we remain on track to achieve a targeted decline in total distribution costs in the range of 30 to 40 basis points for the full 2006 fiscal year compared to 2005. The slight increase in markdowns during the quarter was planned and resulted from higher clearance levels that we carried over from the second quarter. With inventories under control throughout the third quarter and sales ahead of plan, the markdown trend improved as the quarter progressed. Third quarter earnings per share also benefited by about $0.02 from better than planned shrink results from our recent annual physical inventory of our merchandise which is expected to result in about 10 basis points of operating margin improvement for the year. We are also pleased to report that sales and profit trend at dd's DISCOUNTS were better than expected. Our new concept, which we launched about two years ago, has delivered strong topline growth and better than planned profitability year-to-date in 2006. On a four-wall pre-tax basis, these stores are contributing to earnings. However, with only 26 locations today, their buying and distribution costs are still creating some earnings drag. We believe the results to-date at dd's validate that we have identified a customer segment that we were not reaching with our core Ross concept. As a result, we remain excited about its prospects and continue to believe that this business will be a viable growth vehicle over the longer term. For 2006, our store expansion plans remain on track with a net addition of 58 Ross and 6 dd's DISCOUNTS locations year-to-date. We plan to open one additional Ross store in November and close up to four older locations in January 2007 to end the current fiscal year with the total of about 795 stores in 27 states. As previously announced, we entered into an agreement in October to acquire 46 Albertsons real estate sites in California, Florida, Texas, Arizona, Colorado and Oklahoma. We plan to incorporate these leased properties into our 2007 expansion program for Ross and dd's DISCOUNTS, and are now projecting total unit growth of 11 to 12% for the year ending February 2nd, 2008. We are excited about this unique real estate opportunity, which gives us the ability to acquire a substantial number of store sites in several of our established top-performing markets. As we ended the third quarter, total consolidated inventories on an average store basis were down about 8% from the prior year. This decline was driven mainly by the recent supply chain efficiencies we have realized that are enabling us to operate our business with lower inventories. Packaway is estimated to be about 31% of total inventories at the end of October compared to 32% at the same time last year. Our balance sheet and cash flows as we ended the third quarter remain solid and healthy. Earlier in 2006 we paid $87 million to acquire our Fort Mill, South Carolina distribution center from the lessor. We also repaid a $50 million term loan that was used to finance equipment and systems at our Paris, California distribution center. Subsequently in October 2006, we entered into an agreement to issue $150 million of unsecured senior notes with funding expected in December 2006. We ended the third quarter with $127 million in cash and short term investments. We also continue to return capital to stockholders through our stock repurchase and dividend programs. During the first nine months of 2006, we repurchased 5.0 million shares of common stock for an aggregate of $147.7 million as part of the two-year $400 million program authorized by our Board of Directors in the fourth quarter of 2005. We ended the third quarter with 139.9 million shares of common stock issued and outstanding. Approximately $252.3 million remain available under the current stock repurchase authorization, which we expect to complete by the end of fiscal 2007. Earlier this month in our October sales release, we issued guidance for the fourth quarter, reiterating our prior forecast for same store sales gains of 1 to 3% for the quarter on top of a strong 6% increase in the prior year. We also indicated that we plan comparable store sales for each month in the quarter to be up 1 to 3% as well. Sales in November have started out slower than expected with comparable store sales month-to-date down 1% from the prior year. As you may recall, we also experienced a slow start to the third quarter in August and went on to realize solid sales and earnings results for the period. Hopefully, what we are seeing our business the last couple of weeks is a similar short-term trend of our customers shopping later and closer to needs. In addition, we are only at the very beginning of what is our biggest volume quarter. As a result, we are cautiously optimistic that sales trends will strengthen and that we will be able to achieve our projected fourth quarter same-store sales range of up 1% to 3%. Thus, we are not changing our earnings per share guidance of $0.59 to $0.65. If the fourth quarter performs in line with this forecast, then earnings per share for fiscal 2006 would be in the range of $1.63 to $1.69 for forecasted growth of 20% to 24% over the $1.36 we reported in 2005. To sum up, we are encouraged by the progress we are making in a number of areas. Sales trends for the first nine months outperform plan. Markdowns and shrink are both improving. Distribution center costs for the year are declining and operating margin is recovering. Longer-term for 2007 and beyond, we continue to plan for a combination of unit growth along with gradual ongoing improvement in store sales productivity and operating profitability throughout our business to drive 15% to 20% annual earnings per share growth over the next several years. At this point, we would like to open up the call and respond to any questions you may have.

[Operator Instructions]. Our first question is coming from Jeff Klinefelter of Piper Jaffray. Jeff Klinefelter - Piper Jaffray: Yes. I have a question regarding your systems in terms of looking back over the last several quarters and really couple of years in implementing the new systems and looking at, you know, some of the -- I know it has been challenging. But in terms of highlights of productivity gains, could you point to anything this year trends going into the holiday season that might impact you positively next year in terms of new approaches to allocation improvements in your markdown management? How would you set the stage for '07 from the perspective? Michael O’Sullivan: Just elaborate on that question a little bit. I just want to understand a little bit where you're getting at. Jeff Klinefelter - Piper Jaffray: To elaborate on the question? Michael O’Sullivan: Yes. Jeff Klinefelter - Piper Jaffray: In terms of let's say improvements in the allocation and distribution process, improvements in markdown management, what would you point to for fiscal '07 in terms of an opportunity to, you know, expand or recover some of your margins purely from an inventory management systems perspective given what you've learned through the first three quarters of this year? Michael O’Sullivan: Sure. Okay. That's good. I guess I'd respond with a couple of things. First of all, you know, as you know, the systems -- the new systems investments that we made two or three years ago sort of gave us more data than we've had historically. And we are now in a position to sort of provide that data in terms of better, more accurate reports to the merchants and to our merchandise control group. And I think that sort of has two real benefits to the business. One is the merchants are able to get a better read on what's selling and what's not. And I think, you know, it's hard for us to quantify. But as we look at our sales trend, we've been ahead year-to-date 5% on a comp. At least a portion of that sales trend could be attributed to the fact that these merchants have good data to base their buying decisions on. So that's one piece of it. The second is that from a merchandise control point of view, we have I think a good sense of sort of our inventory needs and what levels of inventory we need to support sales. And that allowed us to some degree to turn faster. So one of the things you've heard over the last couple of earnings calls is that we've been able to reduce our inventories. And again, I would say that at least part of that has been attributed to the fact that we just have more visibility now into what our inventory levels are in store, better visibility than we used to have in the past. So I would expect both of those trends to continue into '07 that buyers will continue to have good information to base their buying decisions on. And secondly, we have good data to base our inventory levels on in the stores. Jeff Klinefelter - Piper Jaffray: Okay. Great. And then, Michael, could you just comment a little bit on the current state of product flows, brand availability, et cetera, with respect specifically to the department stores? We've gone through a clearance mode, gone through consolidation. Those department stores seem to be performing well. We've heard inventory levels remain pretty efficient and lean out there in the supply chain. Any perspective that you can provide on that?

Yes. Actually market availability in most product categories is absolutely fine, and we are pleased in the situation that we sit in being a buyers market in that regard. So the consolidation has not inhibited in any way our ability to access good bargains for our customers. Jeff Klinefelter - Piper Jaffray: Okay. Has it resulted in any improvements in availability or interest in even providing other opportunities for private-label products or other kind of potentially even down the line owned brands?

I would say in some markets, there's been an improvement. In other markets, it's been static. But overall, it's probably a slight plus right now. Jeff Klinefelter - Piper Jaffray: Okay. Great. Thank you.

Thank you. Our next question is coming from Michelle Clark of Morgan Stanley. Michelle Clark - Morgan Stanley: Yes, good morning. In terms of the sales weakness month to date, are there any callouts in terms of specific merchandise categories or geographic regions?

Really, I would say the performance has been broad-based. And I'd really want to couch this and keep that we all keep this in perspective. It's really a short period of time, and it's really a very small percentage of the important Novembers-December business. So we went through a similar situation in early August where our customers seemed to be shopping a little later. So you know, we are cautiously optimistic that will be fine. But that said, what we are seeing right now is broad-based… Michelle Clark - Morgan Stanley: And can you…

…in both geographics and… Michelle Clark - Morgan Stanley: Okay. Thank you. And can you detail some of the initiatives that you are undertaking to drive customers into the store over the next month?

Well, we really don't normally get into that from a competitive reason, but all our marketing has been television-based and will continue to be. And beyond that, I'd rather not elaborate on specific initiatives on a call like this. Michelle Clark - Morgan Stanley: Okay. And then just one last question. Can you detail the basis point impact of DC savings, merchandise margins, et cetera, on both gross margin and SG&A?

Sure, Michelle, let me take you through that. So for the quarter, shrink was better by about 170 basis points versus 195 that we lost last year third quarter. That was offset by about 20 basis points of deleverage and merchandise margin due to carryover markdowns. The supply chain costs and total costs of about 70 basis points split pretty evenly between freight and DCs. Additionally, we had incentive plan costs and option expensing that cost us 30 basis points and occupancy delevered by about a tenth. So if you sum that up, gross margin was better by 40. From a G&A perspective, we did have 15 basis points of leverage in G&A offset by 15 basis points of option expensing. So 40 basis points of improvement on the quarter, add back in the 25 basis points of stock option expensing. So apples-to-apples, it was 65 basis points better in the third quarter. Michelle Clark - Morgan Stanley: Great. Thank you.

Thank you. Our next question is coming from Kimberly Greenberger, Citigroup. Kimberly Greenberger - Citigroup: Great. Thank you. Good afternoon. I was wondering, Michael, if you could talk about the acquisition of the Albertsons stores, those 46? If you've given any preliminary thoughts to the number of stores that you'll likely turn into Ross Stores versus dd's? And then I know that you mentioned on a four-wall basis that your dd's stores are profitable. At what number of stores do you believe the dd's chain will be big enough to absorb the buying and distribution costs such that it will be neutral to earnings and then presumably begin to be profitable?…

Okay. I will take the first part of that. And essentially, we're working through how we'll utilize all the real estate and we'll be in a position to discuss that on our call reporting January sales at the very beginning of February as we walk you through all our objectives for '07. Michael O’Sullivan: So on the second part of that question, Kimberly, when we will breakeven at dd's, you know, we are putting plans together; as Michael indicated, more information to come on that. That's what I would say. Kimberly Greenberger - Citigroup: Okay. And then, if you could just give us any color, I think you, Michael, you indicated that dd's profitability is running better than you expected. Is that driven by sales that are running higher than where you thought they would run or merchandise margins? Can you just give us, sort of, ballpark color on what's driving that upside?

On a very broad basis, sales are running better than we expected. The expense lines are well under control. And we're very pleased with the progress we've made in gross margins. So it's coming from a lot of different areas. Kimberly Greenberger - Citigroup: Great. Thank you. Good luck for holiday.

Thank you. Michael O’Sullivan: Thanks.

Thank you. Our next question is coming from Jeff Black of Lehman Brothers. Jeff Black - Lehman Brothers: Yes. Thank you very much. I guess, Michael, have we seen, you know, a commensurate improvement in stores in the Southeast and in the mid-Atlantic region in the quarter? And also, additionally, on the inventory side, are we now where we want to be in terms of sales or inventory per store? Thank you very much.

I'd say on the Southeast our performance has moved commensurate with the quarter with the chain. Okay, certainly, we still know we have a lot of work to do there. And I'm sorry, your second part of the question was --? Jeff Black - Lehman Brothers: Second part of the question was inventory per store. I know we said we could work with lower levels of inventory, but is that where we want it? And how is the inventory mix looking as a move into the holiday period? Thanks.

We think our inventory -- we're comfortable in how we got in line, coming from Q2 into Q3. Assuming that we are on the sales trend that we are projecting, we're very comfortable with our inventory levels. We think we have gotten ourselves in line now. Jeff Black - Lehman Brothers: Great. Thanks and good luck.

Thank you. Our next question is coming from Brian Tunick of JP Morgan. Brian Tunick - JP Morgan: Hi. Thanks. Mike, I guess first question on maybe you know how the month has started. Can you maybe give us an idea of how last year's month trended by week? Do comps get easier or tougher for the last two weeks for you guys?

I would say that the comps actually last November -- it's kind of a mixed bag, kind of even throughout the month. So obviously, the last week of the month you have a little compression. So I would say pretty evenhanded. Brian Tunick - JP Morgan: Are there any specific regions -- I'm sorry if you already answered this -- that you were seeing the weakness?

It is pretty broad-based. Brian Tunick - JP Morgan: Yes. That's what I thought you said. And then, in terms, you know, I think last quarter you guys sort of felt like you've turned the corner as far as the systems initiatives. I was just wondering maybe you could talk to us about some highlights, some of the things you have already seen from the benefits of and maybe some things you still hope to get as we look into '07 and people's hard to imagine that your operating margins can get back to the 8% plus area, maybe just some color there? Michael O’Sullivan: Sure. This is Michael O'Sullivan, Brian. Let me try and answer that. When you think about systems investments, they really fall into two buckets. There were sort of the information systems and then, there was the distribution network related systems. Let me just talk about the information systems. And then, Gary might want to just comment on the highlight of the distribution side. On the information systems, we are very happy with what the system is allowing us to do right now, in terms of providing information to the buyers as I spoke about a moment ago and to our merchandise control group. And we think that to some degree that information is helping us drive that business and manage our inventories reasonably tidily. But I think the other thing to sort of point out is that we're looking at additional things like micro merchandising, which again we commented on in the past, which is only made possible by the systems that we have. We have a good platform with the appropriate level of data to support what we are calling micro merchandising, which is really just a label for more detailed planning and trending. So I think we've seen some upside already as, I say, in terms of helping us drive our comp and manage our inventories. But we're hoping for more, in terms of some of the additional things we can do with the information systems.

So when you look at DC systems, I think that the DC systems are the enabler for the improvement that we've experienced in our distribution centers. For the year, we are on track to reducing DC expenses by about 40 basis points and we believe that as we move forward, over time that we will be able to continue to improve upon the performance that we've seen. And clearly, are systems are enabling us to do that. Brian Tunick - JP Morgan: Okay. Thanks. Good luck.

Thanks

Thank you. Our next question is coming from Margaret Mager of Goldman Sachs. Margaret Mager - Goldman Sachs: Hi. I wanted to ask about the slow start to November and would you -- you would -- it sounds based on your comments of shopping later you would attribute that mostly to traffic related issues -- traffic issue, if you will. And I was just wondering, if you're doing any advertising this year versus last year or if there was any change on that front that might make that softness specific to Ross? Thanks.

As I said earlier in the call, our specific advertising changes that we have out for the rest of the month really we wouldn't be elaborating in a call like this. But our primary advertising medium is television and it will continue to be throughout the month and throughout the holiday season. Margaret Mager - Goldman Sachs: Yes. I actually mean historical looking back over the past two weeks versus looking forward. Was there something that --?

No. No major change. Margaret Mager - Goldman Sachs: No major change.

No major change in these two weeks. Margaret Mager - Goldman Sachs: So you think it's really just people waiting to shop?

It's speculative. That's what we experienced in Q3 and it makes us believe that it is very possible that that's what's going on now. Margaret Mager - Goldman Sachs: It's pretty different than what you saw in October, too. So that is true? Or was there a weakening trend through October? Michael O’Sullivan: It's true, but I think, Margaret, the key thing is it really is only two weeks. So we could sit here and extrapolate off that but as Michael said it would be speculative. So we're taking it for what it is right now, which is two weeks. Margaret Mager - Goldman Sachs: I agree. But it does also seem to be specific to you as well. So thanks for the answer.

Thank you. Our next question is coming from Dana Telsey of Telsey Advisory Group. Dana Telsey - Telsey Advisory Group: Hi. Can you talk a little bit about the shrink results and where you are in relation to your goal and timing of when you expect to get there? Given the weaker sales that you discussed, is there -- how do you see it transforming go forward versus merchandise margin versus shrink results? Is there IMU opportunity anywhere? Thank you.

Hi, Dana, I'll take the shrink part of that question. As I mentioned, we were covered 175 basis points of the 195 that we lost last year. That leaves us with 25 basis points to recover to get back to more normalized levels. As we look at the next quarter and the first half of '07, what I anticipate would bring our shrink accrual rate down by about 10 basis points or so, kind of anchor it in history maybe slightly better and continue the programs that we have been executing believe that the trend is going in the right direction. So actually pretty bullish about where shrink may end up as we come through '07. Dana Telsey - Telsey Advisory Group: Okay. And then on the merchandise margin, is there opportunity there. Is it from any particular categories?

As we go forward, certainly we carried considerably more inventory than we needed in the first half of the spring. So I would look at the opportunity really more at the markdown line. Dana Telsey - Telsey Advisory Group: Got it. Thank you.

Thank you. Our next question is coming from Richard Jaffe of Stifel Nicolaus. Richard Jaffe - Stifel Nicolaus: Thanks very much guys. Just a question about dd's DISCOUNTS. If it’s working on a four-wall basis, is the challenge just getting to scale to be able to leverage the corporate expenses, the distribution? And if that is the case, will the Albertsons situation accelerate the turn to profitability for the whole division, dd's DISCOUNTS or is there more to it than that? And then if you could just follow on with your outlook for unit growth regionally for both the Ross and dd's DISCOUNTS?

Okay. It is a scale issue and as we said we will elaborate on the store breakout that would apply to Ross and dd's when we speak in February. That said, we opened up six stores with dd's this year. We will open up something north of that next year. And there was another part to that question? I am sorry. Richard Jaffe - Stifel Nicolaus: Just there's been some challenges in terms of unit growth and you guys have sort of waited for your systems to catch up before you're going to detail out your plans for unit growth either in adjacent markets or filling in existing markets. I'm wondering what your thought process is on that today?

I think we would elaborate more on that in February too. But essentially -- I'm sorry, I need you to elaborate on your question before I go further. Richard Jaffe - Stifel Nicolaus: Okay. You started with 15% to 20% EPS growth for the next several years. I'm assuming a component of that will be -- a significant component will be square foot growth and trying to understand how you see that developing over the next year, whether it will be driven by Ross Stores, Ross and dd's, whether it will be a national expansion in adjacent markets as you've done in the past? Or filling in existing markets as you pulled back to -- and trying to understand how that thought process has changed as your results have improved and your systems have become more effective for you?

Sure, Richard. As we look at '07, we look to grow our units -- translated onto footage growth because we don't believe the box size will change measurably. So we look at the store count growing 11% to 12% with the Albertsons deal would look in '08 although we haven’t – don’t have any specific plans in '08 around count. We think that would come back down around 8 or 9 and take that going forward. Relative to where the stores are going to go for the footprint of '07. We haven’t come out with that but would say in our existing markets. And we’ll have to apply out the Albertsons and the other stores and again, more information to come on that. Richard Jaffe - Stifel Nicolaus: Okay. But the challenges you felt in moving in existing markets, the real estate challenge you felt a year ago should be viewed as put to bed or effectively addressed? Michael O’Sullivan: There are two pieces of it, Richard, that are important to understand. One is the Albertsons deal I think is very important to be clear. The Albertsons deal involves locations that are in our existing markets, strong markets for us and that's why we felt very good about that deal. And that’s why next year you should expect a acceleration in our unit growth, which is kind of the way John just described it. Thereafter, we do have as we spoke about in the past, we do have work to do on our new markets and some of that work is around better assortments. Some of the micro merchandising initiatives I described, and frankly those efforts are going to take a couple of years to reach a point we're going to be happy with. So I wouldn't say the Albertsons deal signals that we are getting more aggressive in new markets because that isn't what the deal was really about. Our attitude in new markets will be driven by sort of our plans around improving assortments in those markets, which as I say are in [decade] I think is in other dds.

Right. And the bottom line of it, we haven't changed our position. Richard Jaffe - Stifel Nicolaus: Yeah. That's very clear. Thank you.

Thank you. Our next question is coming from Marni Shapiro of [Retail Track]. Marni Shapiro - Retail Tracker: Hi, guys. Could you talk a little bit about some of the categories, juniors, men's, and kids in particular had started going into the fall season a little bit softer. Can you talk about the trends going into the holiday season in those areas?

Yeah. I would say men's has strengthened a little. Kid's has strengthened a little and junior's is still a little sluggish. Marni Shapiro - Retail Tracker: And are you buying into whether at dd's or at Ross Stores into the kid's space in different regions, in different areas, whether it would be toys or furniture, things like that?

I am sorry -- I need you to elaborate on the question. Marni Shapiro - Retail Tracker: As you go into the holiday season you've know talked a lot about giftables. So in the kid's area is there something that you are doing differently there or in the junior's area, is there something that you're doing differently there?

Well, we’ve been over the last couple of years we’ve converted more of our investment certainly in some of the areas you just outlined into more giftables, and we have expanded that again this year. Marni Shapiro - Retail Tracker: Okay. Great. Good luck, you guys.

Thank you.

Thank you. Our next question is coming from Rob Wilson of Tiburon Research. Rob Wilson - Tiburon: Yes. Thank you. John, could you go back to Q3 of last year when you guys had the shrink charge? I believe 130 basis points last year was shrink and 65 basis points was related to an accounts payable adjustment. And I just want to reconcile that with your comments today on 195 basis points.

You are correct. Last year's 195 basis points was the sum of those two components. And so this year we got back all the 25 basis points that was related to shrink. Rob Wilson - Tiburon: You're lumping those two together?

That is correct. Rob Wilson - Tiburon: Okay. And also did I get that right? You were down 120 basis points in merchandise margin in Q3 this year?

No. Down 20. Rob Wilson - Tiburon: 20, okay. I am sorry.

20. And that was due to markdown carryovers from the second quarter. I think as has been iterated on the call we're actually pretty pleased with where inventory balances are today, assuming we do the sales levels we need to do in the fourth quarter. Rob Wilson - Tiburon: All right. Thank you.

[Operator Instructions] There appear to be no further questions at this time.

Okay. I just want to thank you all for attending and have a good day.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day.