Ladies and gentlemen. Thank you for standing by. Welcome to The TJX Companies' third quarter fiscal 2011 financial results conference call. At this time, all participants are in a listen-only mode and later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded, Tuesday, November 16, 2010. I would like to turn the conference call over to Ms. Carol Meyrowitz, President and CEO for The TJX Companies, Inc. Please go ahead, ma'am.

Thank you, Elan and good morning, everyone. And before we get started, Sherry has a few comments.

Good morning. The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the company's SEC filings, including without limitation, the Form 10-K filed March 30, 2010. Further, these comments and the Q&A that follows are copyrighted today by The TJX Companies. Any recording, retransmission, rebroadcast, reproduction or other use of the same for profit or otherwise without prior consent of TJX is prohibited and a violation of the United States copyright and other laws. Additionally, while we have approved the publishing of a transcript of this call by a third party, we take no responsibility for inaccuracies that may appear in that transcript. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Also, we have detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and the Investor Information section of our website, www.tjx.com. As a reminder, the comparable store sales numbers that we talk about today are on a constant currency basis. With respect to the non-GAAP measures we discuss today, reconciliations to GAAP measures are included in today's press release and posted on our website, www.tjx.com in the Investor Information section. Thank you and now I’ll turn it over to Carol.

Thanks, Sherry and good morning, again and joining me on the call today with Sherry are Jeff Naylor and Ernie Herrman. Let me begin by saying that I'm very pleased with our 14% EPS growth in third quarter on top of 40% EPS growth last year. We drove this growth on a 1% comp increase over 7% increase last year demonstrating the power of our business model to deliver sustainable margins even at a lower level of comp. Our customer traffic was up over huge increases last year and we achieved these results despite average tickets still being slightly down. We continue to run the business with lower levels of inventory, which is driving faster inventory turns and stronger merchandise margin. We are very confident that this is sustainable. Further, we delivered these strong results despite unfavorable warm weather in September and October. We entered the fourth quarter with very lean inventories and even more open to buys for the quarter than we had at this time last year. This set us up extremely well to buy into the exciting opportunities we are currently seeing from great brands and fashions in the marketplace. I'll keep my comments brief today starting with the recap of our third quarter performance. First, I want to spend a moment on why we believe in the sustainability of our margin and how our supply chain improvements play into that. Next, although we are not going to get specific until our year-end call in February when we have finalized our plans, I will share with you some of our thinking about growth for next year. We continue to look for 5 to 6% square footage growth but currently plan to get there a little differently. I'll wrap up with our outlook and opportunities for the holidays and the fourth quarter. Before I continue let me turn the call over to Jeff to recap the numbers for the third quarter.

Yes, thanks Carol. Good morning, everybody. Let me recap the third quarter results. Net sales reached $5.5 billion, that's a 5% increase over last year. Third quarter consolidated comp stores sales were up 1% on top of last year's strong 7% increase and as Carol mentioned the increase was driven by growth in the number of transactions with the average ticket slightly down. Diluted EPS for the quarter was $0.92. That compares with last year's $0.81 per share and again, that's a 14% increase on top of last year's 40% EPS growth. Foreign currency rates negatively impacted our year-over-year EPS comparisons by two pennies. However, EPS comparisons were favorably impacted by a lower tax rate and reduced interest expense which, together essentially offset the foreign exchange impact so all those items in aggregate were neutral to the overall consolidated performance. Our consolidated pretax profit margin was 10.8%. That was unchanged from the prior year. However, if you exclude the impact of foreign currency, primarily a mark to market adjustment on the company’s inventory related hedges, our pre-tax profit margin was actually up 30 basis points. And we're very encouraged that we've sustained last year's significant increase in profit margins and that we've seen continued improvement in our merchandise margins over last years large increases. The gross profit margin, as we reported today, it was flat to last year. Higher merchandise margins, as well as buying and occupancy expense leverage were offset by the impact of mark to market adjustments on the company's inventory related hedges which, as I mentioned earlier significantly benefited last years results. I think the key point there is that our merchandise margins continue to be up and these merchandising margins were achieved. The merchandise market gain was achieved on top of a 240 basis point improvement in the third quarter of last year. Turning to SG&A expense for the quarter it was also flat to prior year. If you peel it back the benefit of cost savings initiatives and lower incentive compensation expense were basically offset by deleverage from the 1% comp store sales increase as well as increased preopening costs associated with a larger number of new stores this year versus last year. That said, our overall expense ratios if you include buying and occupancy costs, along with SG&A, decreased during the quarter compared to last year. As to inventories, at the end of the third quarter, consolidated inventories on a per-store basis including the warehouses were down 6% on top of a 5% decrease last year. Again, we're extremely happy with our inventory levels and our greater open to buy position as we enter the fourth quarter. Now to financial strengths. Our stores generate substantial amounts of cash, which we deploy with a careful balance between reinvesting in our businesses and distributions to shareholders through the buyback and through the dividends. In terms of share repurchases, we bought back $256 million of TJX stock during the third quarter, retiring 6.0 million shares. Year-to-date, we have bought back $845 million of TJX stock. We now expect to repurchase between 1.0 and 1.2 billion of TJX stock in Fiscal 2011, more than we had originally planned. Now, let me turn the call back to Carol and I'll recap the guidance for the fourth quarter and full year at the end of the call.

Thanks, Jeff. Now to some comments on the third quarter, which again clearly demonstrates that our strong margins are sustainable even on a lower level of comp. First, I want to discuss our disappointing results at T.K. Maxx in the U.K. and Ireland and how we are addressing the issues there. As we discussed in our last conference call I believe that the weakness of T.K. Maxx is entirely about execution. Our merchandise mix got a bit too moderate and we lost some of our value equation. We did take aggressive markdowns in the third quarter which is what we do when we misstep. We clear out and move on. We're on a learning curve at T.K. Maxx mostly due to the newness within our buying ranks, as we are adding and teaching our new talent to support the growth of the business. In short we have gotten off track and need to get back to basics. The great quality, great fashion, great brands and great values this division is capable of delivering. I expect that we will continue to experience some of these growing pains in the fourth quarter and we are looking for improvement in the first half of next year. Our U.K. and our Ireland business is fundamentally very strong and over the four preceding years has driven comps in the mid to high single-digits and grown segment profit margins over 8%. I have every confidence that we will get back on track. We continue to be pleased with the performance of our new European businesses. T.K. Maxx in Germany and Poland and HomeSense in the U.K. In the aggregate, these businesses were close to breakeven in the third quarter and we expect to be profitable in the fourth quarter and the back half. I want to emphasize that we remain very confident in our European business and the opportunities that Europe presents to us for enormous growth for the future. Continuing on the third quarter with our U.S. businesses, Marmaxx achieved a very strong 13% segment profit margin, up 50 basis points over last years record results. Marmaxx drove this profit growth on a 1% comp increase versus the strong increase last year, demonstrating our margin sustainability even on a lower comp. Merchandise margins were up 40 basis points in the third quarter, over last years strong 270 basis points increase. Merchandise margins at Marmaxx have increased steadily in the last 10 years, largely due to the structural changes we have made in our business to run at substantially lower inventory. We believe we have even further room to improve in this area, which I'll discuss in a moment. HomeGoods continues to deliver strong top and bottom line increases over record results last year. It's important to note that this division lowered its inventory level more than any other division in 2009, which changed the face of this business in a very positive way. Operating with lower inventory has continued to pay dividends this year. Our mix is more exciting. Our values are sharper and our margins are stronger than ever before. Additionally, this organization is doing a great job with marketing the HomeGoods brand. HomeGoods is reaching record segment profit with profit margins that are well above what we initially anticipated for this business. While A.J. Wright’s third quarter performance was disappointing, we believe it was predominantly due to the negatively impacted weather. With its heavy concentration of stores in the Northeast, A.J. Wright was disproportionately impacted by the warm weather in September and October. To illustrate this, less weather sensitive non-apparel comps were 10 percent points higher than apparel costs. And outerwear, which is a significant category for A.J. Wright, was down 21%. I should also mention that this division was up against an l1% comp increase last year. We took aggressive markdowns in the apparel areas, which left us with a very liquid position as we enter the fourth quarter. Moving to Canada, TJX Canada continued its excellent year with comps up 3% and segment profit margins up 200 basis points, excluding the impact of foreign currency. I should mention that Canada also had unseasonably warm weather during the quarter and their results were driven by exceptionally strong comps. Customer traffic has been very strong in Canada. The continuation of strong trends at Winners and HomeSense bodes very well for our previously announced plans to bring Marshalls to Canada next year. Now let's talk about how important lean inventories are to driving sustainable margins and what we see as further opportunity in our supply chain. The improvements we made to our supply chain last year to run our business with historically low inventories is leading to sustainable strong margins as evidenced by our third quarter performance. As we continue to run leaner we are turning inventories faster and buying closer to need, which is reducing markdown and leading to sequential improvement in our merchandise margins. But while we hear a lot of discussion out there about the favorable buying environment benefiting us last year, we believe that our strong 2009 merchandise margin performance is far more a function of our improved inventory and management. In addition, as lean as we are I still believe we have opportunities to bring inventories even further down and deliver fresh goods even faster to our customer. One of our big rock initiatives is investing in our supply chain to enhance our planning and allocation capability as I discussed on prior calls. While we're already very good in this area, I believe we can become even more precise at getting the right goods to the right store at the right time. We see a lot of opportunity in this area in the next few years, which is an important reason for our confidence in our ability to provide continued top and bottom line growth. I mentioned at the top of the call that I'd share some of our thoughts about growth for the next year. We're still planning on a 5 to 6% square footage growth but we believe will achieve it a bit differently than originally planned. We intend to slightly slow growth in Europe to give this business time to get back on its very solid track and give new talent time to season. By year-end we will add a net of 54 stores in Europe this year and we took advantage of amazing real estate opportunities that we are confident will benefit our business long-term. While slightly slowing the pace in Europe we intend to accelerate growth a bit next year at Marmaxx and HomeGoods, which are achieving consistently strong performance. With increased store profitability with Marmaxx, we now see opportunities to open more stores at this division than we originally thought we could. Therefore, we intend to pick up the pace of growth slightly at Marmaxx next year. It's important to note that we have excellent visibility and for the level of capitalization from new stores and are achieving sold ROIs after (inaudible). We're also very excited about our store openings in Manhattan this fall, which I'm sure most of you have seen and been in. They were superb and they demonstrate the potential for more stores in urban locations. With HomeGoods consistent performance and strong profitability we also see opportunities to grow this store chain. Long-term we believe we can roughly double the number of HomeGoods stores. So at HomeGoods we intend to accelerate growth next year as well. We remain confident that we can ultimately grow over 2,800 stores today, over 4,300 stores long-term. This growth reflects only our current concept in our current markets now, including Marshalls in Canada. It does not capture the addition of new countries or new concepts. The areas of our business will be our prioritizing investments are performing very well and we're very confident in our long-term growth plans for TJX. Now to our outlook and opportunities for the fourth quarter. Like the third quarter we are up against extremely strong comparisons in the fourth quarter that are much more challenging than those facing most other retailers. We are guiding our comps in the fourth quarter to decrease 1% to 3% and EPS to be in the range of $0.89 to $0.94, which would be flat to down 5% versus last year. There are a number of factors that give us confidence in this fourth quarter performance. As always, we will strive to beat our plan and there are a number of factors. First, we just reported a very good third quarter on top of a 40% EPS growth last year despite unfavorable weather. Second, we entered the fourth quarter with very lean inventory. I like the quantity and the quality of the product we're seeing in the marketplace, which is superior to last year. I believe our brand and fashion penetration is even higher than it was a year ago. Third, our marketing will be even more powerful than last year with higher penetration and heightened campaigns. We are on network TV this month compared to no network TV in November last year. In the fourth quarter, we will be upping our presence on network TV and in addition we are showing triple branded commercials for the first time for T.J. Maxx, Marshalls and HomeGoods. You'll be seeing them very shortly and we're very excited about it. Fourth, we now have about 700 Marmaxx stores in the new prototype. We are seeing sales lift in these stores, which bodes very well for the holiday season. And lastly we have lots of merchandising initiatives for the holidays but of course I cannot share with you for obvious reasons. We have great opportunities to drive sales and margins this holiday season and we will be pursuing all of them. In closing, our strong third quarter overall results demonstrates our ability to deliver sustained sales and profit growth. We achieved 14% EPS growth over record results last year, which is in line with our long-term annual EPS growth model. Importantly, the factors driving this profit growth are sustainable. We have significantly improved our inventory management capability and are investing in the supply chain to run even faster and even better. Further, we have reduced our cost base and have additional cost reduction opportunity, which we believe will enable us to maintain our cost leverage point at a 2% comp. I feel very good about our business as we enter the fourth quarter. As the weather cools down in November sales momentum picked up. Our inventories are lean and clean. I am sure that we are one of the very few retailers out there that is buying in November and December for the holiday and we love it. We believe that value will continue to be uppermost in the consumers mind this holiday season and we will be flowing exciting gift giving selections in many categories throughout the season. Additionally, we plan to deliver more freshness this December than we ever have in the history of the company. We have many initiatives to drive sales and margins in the fourth quarter, including heightened marketing and upgrading our sales. We are planning our business appropriately over challenging comparisons to last year and at the same time I like the trends that we're seeing. TJX has proven year after year in good and bad economies that we do deliver. This year we expect to continue our record of only one negative comp in over 30 years and are sustaining profit margin growth. I'm excited about our opportunities and very confident in the continued successful growth of our company. Now, I'd like to turn it back to Jeff to go over guidance and then we will open it up for questions.

Yes. Thanks Carol. Before I cover guidance, a quick comment on Canada. As you can see on the reconciliation tables that we provide on our Web site, the segment profit margin in our Canadian business this quarter was reported down 140 basis points. It would have increased 200 basis points, excluding the impact of foreign currency primarily due to the mark to market adjustment that they benefited from last year. In segment profit growth for Canada, which was reported essentially flat to last year in the quarter would have been up 18% on an invested basis. Okay, so with that out of the way let me now turn to the details of our guidance. First thing I want to make a point of is we haven’t adjusted the fourth quarter outlook that was implied in our prior guidance but we have raised the full year guidance to reflect the above performance in the third quarter. We now expect full fiscal 2011 EPS to be in the range of $3.35 to $3.40, excluding the non-operating item, which we detailed in today's press release, the estimated range of EPS is $3.33 to $3.38, an increase of 17 to 19% over last year. In terms of the underlying assumptions the range is based on an expected comp store sales increase of 2% to 3% for the full year. It also assumes reported pre-tax margins of 10.2 to 10.3%. Now if we exclude the non-operating item I just mentioned the adjusted full year pretax margins are planned at 10.1 to 10.2%, up 50 to 60 basis points over prior year and that's primarily due to continued strength in merchandising margins as well as some buying and occupancy expense leverage and SG&A ratios that are flat to slightly favorable to last year. So that's the full year. Our full year outlook assumes fourth quarter EPS of $0.89 to $0.94, which would be a flat to a 5% decrease versus last year and again is unchanged from our prior outlook. In terms of the underlying assumptions we're assuming a fourth quarter top line of 6.1 to 6.2 billion with comp sales planned to decrease 1% to 3% on a consolidated basis and at the Marmaxx group. Again, we're up against very challenging comparisons to last year when consolidated comps increased 12% and Marmaxx's comps increased 13% during the quarter. We're looking for average tickets to be flat to slightly up in the fourth quarter. As to monthly comps, in November we expect comps to increase 2% to 3% on a consolidated basis and 3% to 4% at the Marmaxx group. In both December and January, on both the consolidated basis and at the Marmaxx group, we expect comp sales decreases in the ranges of 3 to 5%. Pre-tax profit margins are planned in the 9.6% to 9.9% range, down 80 to 110 basis points over last years very strong 10.7%. We're anticipating fourth quarter gross profit margin to be 25.4% to 25.8% compared to 26.6% last year. It's important to note that we're up against a 410 basis point improvement last year and are planning this appropriately with the reduction evenly split between buying and occupancy de-leverage on the negative low single-digit comp and our merchandise margins which are slightly lower than last year. We expect SG&A as a percentage of sales to be about 15.7% to 15.8%, which is a flat to a 10-basis point improvement versus last year. For modeling purposes, we are anticipating a tax rate of 38.8%, net interest expense in the 8 to $9 million range and corporate expenses in the 51 to $54 million range. Finally we anticipate a weighted average share count of approximately 399 million. We'll now open it up to questions. We ask that you please limit your questions to one per person to keep the call on schedule. We're going to try to continue to enforce our one question limit and we appreciate your cooperation. Thanks. We'll take questions now. I'll turn it back to Elan.

(Operator Instructions) And our first question today is from Adrianne Shapira.

Thank you. Good morning, guys. Just on the acceleration of the Marmaxx square footage, maybe Jeff, if you could give us a little bit more quantification on the cannibalization you're seeing, maybe some of the new space productivity, kind of give us the confidence that there is, that makes sense in terms of the acceleration there to get to the 5 to 6% next year. Thanks.

Yes, on the cannibalization, we aren't public on the level of cannibalization Adrianne, but what I can tell you is that we estimate cannibalization for every new store, every new store we do a pro forma analysis of that new store. We estimate the sales, we treat the lease as capital and then we estimate the cannibalization of surrounding stores and we put all that together to calculate or turn on ROI, which typically is in the low to mid teens. So within those ROIs we make sure we can afford the level of cannibalization on the surrounding stores. And then we go back and we measure that level of cannibalization and what we've found is that our estimates are actually very, very good. We tend to be very close to the level, to the cannibalization estimates are very close to what we actually incur in that first year where the new stores impacting the existing stores so we feel that between charging cannibalization to the new store pro forma, making sure that we're getting a low to mid teen ROI including that cannibalization and then going back and measuring the cannibalization to make sure our estimates are on track. That gives us the confidence that we are growing our business profitably and preserving our financial returns.

So could you perhaps break that in terms of the 5 to 6% square footage growth? How much will be coming from Marmaxx, HomeGoods acceleration versus the slower rate European growth next year?

Yes, we're not ready to do it at this time because we are still developing our plans for next year but we will be doing that on our February call later.

Thank you. Our next question is from Paul Lejuez.

Hey, thanks guys. Just wondering about your outlook for A.J. Wright? Has anything changed in terms of your long-term view in terms of the number of stores you think that concept can have and is there anything you can share I think us on the growth plans for A.J. for next year or your outlook for the fourth quarter? Thanks.

Paul, what’s important with A.J.'s is now I want to see more consistency and so we're going to take it slow and we can afford to take it slow so I think we want to get, we want to see consistency quarter by quarter and then we'll start to accelerate. So we still believe in the same number of stores that we put out there but we will be conservative in terms of number of stores.

Okay and if I could just touch on the guidance briefly? For the fourth quarter we are planning A.J. comps flat to plus two. That's on an 8% last year so like every one of our businesses they take some tough comparisons and on that we're planning profits essentially flat year-over-year. You know when you look at the full year for A.J. we think we've got profits planned up roughly 3, 4, $5 million versus LY for the full year continued increased in profit margins. It'll be about a 2% total profit margin compared with break even two years ago so we're continuing to make progress with A.J. although as Carol said, it's been a little bit uneven and we want to see some consistency before we really ramp up the investment.

So does that mean no store growth at A.J. next year?

We'll probably keep the number probably around 10, in that range.

Yes, keep consistent with what we did this year.

Gotcha. Thanks, guys. Good luck.

Thank you. Our next question is from Brian Tunick.

Thanks, congrats. I guess two quick ones. Jeff, just trying to understand 300 basis points swing at Winners? Can you just maybe help us understand it a little more on the off margins segment and sort of give us some color on how you're thinking upon Q4? And then on product cost inflation talk about how you think that impacts your business as we look at next year, it doesn't really feel like on the cost side but can it help you if department stores take up pricing under your umbrella?

Brian, let me answer your second question and then Jeff can go on to the Winners numbers. Everybody's hearing huge increases in cost and prices and everything else and we are moving from a slightly down ticket to a slightly up ticket, which is, we're certainly positive. We look at all of this as a positive because we're all about the consistency between us and everybody else out there. So we take the inflation piece again as a positive move for our business and what we need to do is just make sure that we're competitively priced correctly and we will be. So we see the effect in our business more of a positive than a negative.

Yes and Brian, where it was a question about the third quarter, that swing?

Yes, exactly. What's happening? I didn't see the currency move?

No, the issue was it wasn't so much in translation. Its two impacts, two international businesses. One is translating the results from the local currency into U.S. dollars. The other of these mark to market impacts where we hedged, we hedge our inventories so when we place an inventory buy it's based upon evaluation and we hedge it to lock in our margin. At the end of the year, each quarter under the accounting rules we have to mark those hedges to market. So, you may have a gain or a loss in the derivative but you also have an offsetting gain or loss in the margin of the goods. We only recognize one side of that for accounting purposes. So last year in the case of Winners we had $19 million of benefit from mark to market adjustments. That was last year in the third quarter. This year it was essentially diminutive. So basically we had $19 million of benefits last year that we did an anniversary this year. So that impacted both the profit growth and has had a significant impact on the operating margin. So that's how you get from 140 basis points decline this year on a reported basis to a 200 basis point improvement because there was almost a 3.0 points of margin last year that benefited to Winners that came from this mark to market adjustment.

Thank you. Our next question is from Evren Kopelman. Great. Thank you. Question if you can get into the issues a little bit more in Europe? So, one question there is the terms there is, the turns I believe, the inventory turns are very quick which makes me wonder why maybe you don't anticipate some of the issues to be fixed a little more quickly? And the second question is your inventory strategy has worked so well at Marmaxx, at HomeGoods and maybe have you, not implemented there, maybe talk about the inventory strategy as well for the U.K. business? Thank you.

Actually Evren I'm very happy with the inventory strategy in Europe and it's really not about our turns. It's truly about the mix and we got off-track and we got very moderate, our average ticket was way down and this is definitely fixable but I'm certainly not going to look at the month of November and say that we can turn this business around on a dime because it does take a little bit more time than that. They know what they've done wrong. I think there's tremendous clarity. I think they have a great strategy in place. We can certainly afford to take the period of time that we need to take to get this organization to where they need to be but I think next year is going to be a good year and I feel good about it but it doesn't turn on a dime.

Thanks.

Thank you. Our next question is from Jeff Stein.

Sure, wondering if you reallocate capital and open more units domestically? Are there enough locations available to meet your plan and can you also talk about the kind of lift you're getting from the remodels and how many you have yet to go?

Okay, well Jeff we don't really talk about our list so I'm not going to go into that but we're certainly happy with it. In terms of the real estate we feel we are semi ready to lay our next years plans. The acceleration in both Marmaxx and HomeGoods, we have absolute locations and we are in very good shape. We don't accelerate until we know we can. So we're pretty pleased with the real estate and we're in very good position to again, move that up a bit and then just be a little more conservative on Europe. We're in a very good position.

And how many, Carol, how many remodels do you have yet to go in Marmaxx?

Well we have 700 to date but those are big remodels. We'll continue next year with the fairly aggressive remodel program. Some of it will be full store, some of it will be just painting and cleaning up but we'll continue to make this chain a top-notch chain.

Thank you.

Thank you. Our next question is from Laura Champine.

Good morning. It looks to me as if you're comp guidance is better than what I would have expected for November, a little worse than December and January? Can you talk about what's happening? I know your comps get tougher but is there anything else that's pressuring the comp expectation in that December, January timeframe?

Well Laura, I mean December in Marmaxx were up against the 15 comp so I think it's prudent for us to plan the way we did. In January I think we're up against 13 or is it 14, Jeff?

Just checking. We're up against 13 I believe.

Yes, now is there an opportunity on a two year basis possibly, but quite frankly we've never gone up against comps like that before so we will do our absolute best to beat them but I think it's smart to plan that way and to keep our inventories nice and lean.

Yes. We're up against 14 and a 12 in TJX and a 15 and a 13 in Marmaxx in November and December respectively and I think, if you look on two and three year stack bases you'll see it's a pretty consistent in terms of how we laid it out Laura. And there's nothing else that (inaudible), there's nothing else under; it's really just a factor of what we're going up against in terms of how we accept the plans.

Got it. Thank you.

Thank you. Our next question is from Kimberly Greenberger.

Kimberly? Hello?

Kimberly, please either lift the handset or check your mute feature?

We'll just move on to the next question. Our next question is from Richard Jaffe.

Thanks very much, guys. A couple of quick questions. In the past you've spoken about acquisition opportunities, could you comment on that, where you stand on that subject and also the Internet initiative that we've heard about overseas?

Well Richard, we don't talk about acquisitions and the Internet overseas is going quite well. We're pleased with it. We're moving slowly. Again we have three countries Internet, we have a lot going on there but we're very pleased with what we're seeing. We're learning a lot about the consumer. We're learning a lot about what categories sell so this to me is fantastic in terms of our learning and our knowledge and maybe some day we'll bring to the States.

Thanks very much.

Thank you. Our next question is from Daniel Hofkin.

Good morning. Just I guess a question particularly given your strong track record doing better relative to guidance. For the fourth quarter if coming out of the quarter if there's one or two key things that might enable you to end up ahead of your EPS guidance, would it be do you think customer traffic, continued merchandise margins coming in better than your guidance, what do you think would be one or two key things that?

I think it's really our inventory positioning right now. We're very lean. We love what we're seeing and as I stated before our percent of freshness in December and January is much higher than last year, which just creates a lot of excitement. Our merchants are still in the market. We're going to be in later than we've ever have before so I can't answer all your questions because who knows what’s going to happen in the next three months, in the next three weeks even before the Christmas season starts but I love the position we're in so those are really the two factors.

Great. Thank you.

Thank you. Our next question is from Todd Slater.

Hi, it's actually Jennifer for Todd. A couple of quick ones. First, Jeff could you talk about, I think you said you were planning fourth quarter average ticket flat to slightly up so are you already starting to see that? And then secondly could I get a little clarification on guidance? Carol, you talked about that sustainability of margins and I mean we clearly believe that and I think that third quarter results prove that and you're planning inventory down and it is down going into the fourth quarter but yet I think you're planning merchandise margins down so is that just based on being conservative or I guess maybe could you address how should we think about Marmaxx margins in the fourth quarter? Thanks.

Jennifer, I mean we're planning the margins, again we're up against huge, huge numbers a year ago so I'm just going to come back to I like to plan prudently, carefully, conservatively and we certainly hope to beat those plans. I just think it's a smart way to plan our business.

Yes, I think on the, in terms of planning the tickets flat to slightly up, obviously we try to plan based on what we're seeing and we have visibility into our on orders of some of the trends and our plans kind of do reflect what we're seeing. So I think we're reasonably confident in that flat to slightly up and it is reflective of trends we're seeing in the business.

Okay, great. Good luck.

Thanks.

Thank you. Our next question is from David Glick.

Yes, good morning. I just wanted a follow-up on the T.K. business. I was just wondering if you could give us some, help us understand how your trend there is performing across different parts of the U.K. and Ireland and then are you succeeding in Germany and Poland despite some of these execution issues or are they also being impacted by the assortments? I'm just curious if that's been, had any impact or do you think you can do better in those new geographies?

Well actually our business again, we're pretty pleased with Germany and Poland and HomeSense. And in the aggregate all three of them are going to end you making money in the back half, which we’re very, pleased about. Again, having said that I still think there's much opportunity there and as we get the overall mix to a place where we feel terrific that's only going to accelerate Germany and Poland and HomeSense. Europe, it is pretty much across the board and I'm going to come back to, we know what we did wrong, we know what we need to do and I was just over there this past week and the guys know how to fix it. So I think we've just got a little bit off track and I think we were running a bit too quickly to fill (inaudible) and they now know exactly what to do. We have a lot of people who have been there for many years. They’re spending time with the new people and I feel very confident that this team will turn it around.

Okay. Carol, if I could follow-up on your comment on inflation being a positive? Can you help us understand here which elements for that environment make you feel optimistic? I mean is it the higher, potential higher average tickets? Can you maintain a merchandise margin in that kind of environment or is it just value becomes more of a premium as the pricing umbrella lifts in the department store channel?

Again, we keep coming back to our job is to keep the distance between us and the department stores and obviously as pricing goes up, the consumer is still going to want value. It's not like we're looking at an economy that's getter 10 times better so it bodes well for us because it's, everyone else goes up in price and we go up proportionally in price. I think it's really going to drive the customer to us. Average ticket going up obviously is a benefit to our comp and it's certainly a benefit to our costs. So, that's all we focus on is making sure we have that great value versus everyone else and this entire organization is very aware and very much on board. The other element of our business again, I just keep coming back to flexibility is that we can move categories faster than anyone else can. Move our floors around faster than anyone else can so we take advantage of all those elements. Any disruption or change in the marketplace usually tends to benefit us and every year there's usually something else going on and our job is to take full advantage of that for TJX.

What's driving the improvement in Q4, you know, product availability or quality and quantity? Is it late shipments from China? Is it the inventories have gotten a little bit, not out of whack, but a little bit higher in the department stores? What do you think the drivers are?

It's a piece of it. That's a piece of it. Another large piece of it is that we continue to invest in our supply chain; our number of buyers are all over the world and our relationship with the brand. So all of those elements make us keep, we're always raising the bar in our mix and that's what our job is.

Thank you very much. Good luck in the fourth quarter.

Thank you.

Thank you. Our next question is from Howard Tubin.

Thanks. Carol as you look out to 2011 in terms of inventory, do you think there's still opportunities to reduce inventories or should we expect inventories to maybe flatten out next year?

No we think there's opportunities to reduce inventory. We absolutely do. There are two elements to this. We're speeding up our supply chain at the same time as decreasing our inventory levels and creating more freshness so we're investing where we need to invest. In addition we will get better at shipping the right merchandise to the right store at the right time so. I don't know how many years we have of improving but it's not a one-year pony as they say.

And there's still variability between our divisions Howard. Not all divisions are turning at the pace of the fastest division, which tells you there's probably a little bit of opportunity left.

Got it. Thanks.

Thank you. Our next question is from Mami Shapiro.

Hey guys, congratulations.

Thank you.

I have a marketing question. You talked a little bit about the multi brand marketing. I was curious where that leaves A.J., are they included in that or are they their own entity and if you could update us on European marketing?

A.J.'s is separate and the demographics of Marshalls, Maxx and HomeGoods is really a sweet spot to triple brand together. So we're testing that. You're going to see that very shortly. We're very excited about it. That'll be on network TV. What we're also hoping is that it really brings the consumer closer to being aware of the HomeGoods brand as we improve, as we increase the numbers of stores in HomeGoods, I think this is really going to be beneficial if we hit new markets. So that's the game plan there. As of today, we don’t have A.J.'s as part of that campaign, but hey, you never know.

Well that makes sense. Well good luck for the holiday and any opportunity does it mater at all, what happened to Loehmann's for you guys or do you feel guilty about putting them out of business again?

There's always real estate opportunities. There's always opportunities but I have no comment.

Good luck, guys.

Thank you. Our next question is from Dana Telsey.

Good morning, everyone and congratulations. Can you talk a little bit about, you've had, going into the holiday season in past years you've talked about the increased emphasis on marketing spend? What opportunities do you see in marketing spend in this year and then next year and the other element on expenses you've talked in the past about reduction opportunities in procurement? Is that still the case and is there a change in the comp increase you need to leverage expenses? Thank you.

Yes, Dana in terms of expenses, we're slightly above where we thought we would be. I think we gave you 50 to 75 million, we're probably half way through some of the initiatives but we're always adding initiatives so we're going to continue on our expense reductions. Our marketing spend, again we'll, we look to get greater and better penetration so we haven't laid out our plans. We're certainly not going to be looking at our marketing budget and saying let's increase it dramatically. We just hope to get smarter and smarter which is what we believe we've done this year. So we'll continue that, we'll continue that path and where we believe we need to up (inaudible), we will but its not a matter of looking at a tremendous increase in spend for next year.

And Dana in terms of our three-year model we have on the street right now. We're assuming at 2% comp leverage point and we believe we have enough cost saving initiatives to allow us to do that for the next several years. So as Carol mentioned beyond that we're trying to put some seeds in the ground now that will take us beyond three years out and give us the ability to continue to leverage at a two comp. We really like setting up our model on a low comp, putting in enough cost reduction to allow us to maintain our profit margin and then, if and when we beat the sales you get tremendous flow throughs and we've seen that each of the last three, four years. So we want to continue to plan that way.

Thank you very much.

Thank you. Our final question is from John Morris.

Thanks. My congratulations as well. Drilling down a little bit deeper on the marketing spend, Carol I'm just wondering is there much of a mix or can you give us the mix shift between TV versus Print and other, are you spending a lot more on TV? I'm kind of wondering what's going there and then on A.J. Wright, you know you talked about the weather disappointment, I'm wondering is, it sounds like it was hitting A.J. a little bit more than some of the other businesses, excluding T.K. obviously separate issues? Is not the other business sort of have the same kind of weather component to them, is it that much of a geographic difference but also weather aside for A.J. where are you seeing the progress and where are you seeing the improvement at A.J.? Thanks.

I'm going to answer a couple of questions and then Ernie's going to chime in.

Great.

First of all when we talk about Winners, which probably had weather. They had an opportunity in their home business because they had a fairly weak home business a year ago. So that increase was fairly substantial in Home up at Winners. And as I said in A.J.'s the outerwear business, which is a bigger part of A.J.'s business was down substantially over 20%, which was a big hit and there are some other factors there that Ernie will go into. In terms of our marketing we don't discuss that, that's really not our strategy. So I'd rather not comment on our percent of mix. What I an tell you that we continue to increase on network TV and we continue to increase the penetration. It is increasing in traffic and we do see the needle moving every single year that more customers or more people that have never shopped TJX that is increasing every year so that that is our goal.

Yes, that's what I was getting at.

Do you want to talk a little bit about A.J.?

John, real simply on A.J. one of the things that happened there was obviously based on where we're Northeast Chicago driven on the real estate locations we did not do a good job on transitioning so we had I think, we were a little too deep in some categories, a little too dark and the weights weren't really as appropriate as they should have been and I think Carol actually mentioned some markdowns in apparel so really that's the gist of what I think was a self inflicted execution issue at A.J. We did take our markdowns, we're in a better position now for the fourth quarter and we're going to learn from that.

Yes. That's great. That's great. But Carol, also the progress in improvement, you guys clearly have made a good degree of progress at A.J. What are the elements that you're particularly happy about?

Well we like the remodels of the new prototype. They're working very well. I think the guys are understanding what the mixes and I think they're understanding the demographics better and the Hispanic customer.

I think we beginning to get the fashion more right, more food and hair, most of the merchants are learning over the lat year.

Yes and I think they're really understanding what brands this customer likes.

Great. Thanks a lot. Good luck for holiday.

Thank you. We look forward to the next call and everybody have a great holiday. Thank you.

Ladies and gentlemen, this concludes your conference call for today. You may all disconnect. Thank you for participating.