Carol M. Meyrowitz - Chief Executive Officer and Director Sherry Lang - Senior Vice President of Global Communications Ernie Herrman - President Jeffrey Naylor - Chief Administrative Officer, Chief Financial Officer, Chief Accounting Officer and Senior Executive Vice President

David Weiner - Deutsche Bank AG, Research Division Paul Lejuez - Nomura Securities Co. Ltd., Research Division Stacy W. Pak - Barclays Capital, Research Division Roxanne Meyer - UBS Investment Bank, Research Division Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division Daniel Hofkin - William Blair & Company L.L.C., Research Division Pamela Nagler Quintiliano - Oppenheimer & Co. Inc., Research Division Brian X Tunick - JP Morgan Chase & Co, Research Division John D. Morris - BMO Capital Markets U.S. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division Kimberly C. Greenberger - Morgan Stanley, Research Division Mark K. Montagna - Avondale Partners, LLC, Research Division Adrianne Shapira - Goldman Sachs Group Inc., Research Division Jeffrey S. Stein - Northcoast Research Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies Third Quarter 2011 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, November 15, 2011. I would like to turn the conference call over to Ms. Carol Meyrowitz, Chief Executive Officer of the TJX Companies, Inc. Please go ahead, ma'am. Carol M. Meyrowitz: Thank you, Ellan, and good morning. Before we begin, Sherry Lang 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, 2011. Further, these comments and the Q&A that follows are copyrighted today by the TJX Companies. Any recording, retransmission, 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 in the Investor Information section of our website, www.tjx.com. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release and posted on our website, again, www.tjx.com, in the Investor Information section. In addition, that section of our website also includes reconciliations of guidance with respect to non-GAAP measures to guidance on a GAAP basis. Thank you. And I'll turn it back to Carol. Carol M. Meyrowitz: Joining Sherry and me on the call are Ernie Herrman and Jeff Naylor. Our 15% EPS growth in the third quarter was in line with our expectations, and on top of a 14% increase last year and 40% growth the year before that. Our strong results demonstrate once again our ability to sustain and grow profit margin. We achieved these results despite unseasonably warm weather in September and October in many key regions of the U.S. and Canada which hindered demand for fall apparel. As the weather turned cold, sales picked up nicely and we ended the quarter with a strong finish. Importantly, although it's early, November is off to a strong start. Jeff will go into more detail on this, but I want to point out that the combination of a higher tax rate and lesser benefits from FX than we anticipated in our most recent guidance had a $0.02 negative impact on our EPS compared to our guidance. So EPS would have been slightly above the high end of our expected range without these factors. Customer traffic was essentially flat for the quarter despite the seasonality issues. But again, strengthened when the weather turned cooler. Average ticket was slightly up, which bodes well for the fourth quarter. We are offering customers tremendous value and are convinced that the value will continue to be a top priority for the consumers' holiday season. Before I continue, I'll turn the call over to Jeff, who will recap the third quarter results, and then come back.

Okay. Thanks, Carol. Good morning, everybody. So for the third quarter, net sales reached $5.8 billion to 5% increase over last year, and our Q3 consolidated comp store sales increased 3%. And that was at the high-end of our original guidance, which was for comp store sales to increase in the 2% to 3% range. Diluted earnings per share were $1.06 compared with last year's $0.92 and, as Carol mentioned, that represents a 15% year-over-year increase. As we discussed previously, our tax rate was unfavorable to our original guidance, which had a $0.01 negative impact on our results. Additionally, with the surge in the Canadian dollar in the last few days of the quarter, the benefit of the mark-to-market adjustment on our inventory-related hedges was $0.01 less than we contemplated in that guidance. The higher tax rate is due to greater-than-expected levels of earnings at our domestic U.S. businesses, which have a higher marginal tax rate and lower-than-expected levels of earnings at our Canadian and European businesses, which have lower tax rates. So in essence, it's a mix issue. And while we expect to see a similar impact in the fourth quarter, which I'll cover when we get to guidance, we believe the tax rate becomes less of an issue going forward as the foreign businesses rebound. Consolidated pretax profit margin for the quarter was 11.5%, and that's up 70 basis points over prior year and above our original guidance. The mark-to-market adjustment on the company's inventory-related hedges contributed 20 basis points of this increase. And the remaining increase was primarily driven by improved gross profit margins. The gross profit margin improved 60 basis points during the quarter versus last year, which, again, was better than expected, primarily due to buying and occupancy leverage, as well as the 20 basis points positive impact on the mark-to-market adjustment that I just mentioned. Merchandise margins were essentially flat against large increases cumulatively over the past 3 years. SG&A expense was flat the prior year and in line with our expectations despite the leverage in our corporate expenses where we are funding investments in new systems, talent and e-commerce. As to inventories. At the end of the third quarter, consolidated inventories on a per-store basis, which include the warehouses, increased 14% versus the 6% decrease last year. So as we have been discussing on prior calls, this increase is primarily due to our having selectively taken advantage of a continued large quantities of available, branded, pack-away product at great value. And this includes goods we bought at the end of the summer season. It's important to know -- similar to the end of Q2, the increase is all in our distribution centers. Store inventories, so the actual -- the inventories that are in our stores, remain down versus prior year and are turning more quickly. Additionally, our forward purchase commitments remained down significantly compared to this time last year. So as a result, we remain liquid. We're in an excellent position to capitalize on the opportunities we're seeing in the marketplace. Lastly on inventories, as we look towards the year end, we would expect total inventories, on a per-store basis, to be up in the low to mid single-digit percentage range versus prior year, although this will ultimately depend on the level of pack-away at that time. Finally, in terms of shareholder distributions, we retired 5.5 million shares buying back $295 million worth of TJX stock during the quarter. Year-to-date, we have retired 18.6 million shares buying back $968 million of our stock. And we continue to anticipate buying back approximately $1.2 billion worth of TJX stock this year. Now let me turn the call back to Carol, and I'll come back at the end of the call with details on the fourth quarter and full year guidance. Carol M. Meyrowitz: Thanks, Jeff. I'll go through our 4 major divisions commenting on our third quarter results, and will then review our growth catalyst for the future. I'll wrap up by sharing with you our opportunity for the fourth quarter. We are particularly pleased with the continued excellent performance of our U.S. division. Marmaxx posted a 4% comp sales increase above our expectation. Segment profit margin also exceeded our plans reaching 13.2%, which was 20 basis points over last year and on top of big gains in the 2 preceding years underscoring our ability to sustain and grow profit margin. As we have already mentioned, these strong results were achieved despite unseasonably warm weather in many key regions, including demand for cold-weather apparel. Customers continue to respond extremely well to our assortments and values and advertising is just now kicking in. As to our growth opportunities at Marmaxx, we believe Marmaxx will be even bigger than we thought a year ago, and have increased the store growth potentially to approximately 2,400 stores. We have significantly widened the demographic reach of Marmaxx in all directions, and are capitalizing on real estate vacancies in urban markets and filling in smaller markets where we operate very profitable stores. Our new store performance exceeding our plans. And as we expand T.J. Maxx and Marshalls, our cannibalization levels are in line, all of which we're very encouraged by. HomeGoods continues to deliver outstanding results over tough comparisons with comps up by a strong 5% in the third quarter, and segment profit up 220 basis points to 11.5%. HomeGoods is becoming a more powerful brand every day, and we believe its notched-up advertising in the fourth quarter will help us continue to gain market share. As we have said before, we are really excited about our growth opportunities at HomeGoods. We have raised HomeGoods' long-term store potential from 600 stores to about 750 stores. We are now also comfortable modeling this position at a 10%-plus segment profit margin when we used to see this business around 9% to 10%. In addition, the fact that other U.S. home retail chains operate more than twice the number of stores as HomeGoods does gives us even greater confidence. Further, there are over 100 markets where we operate the T.J. Maxx or a Marshalls store but don't yet have a HomeGoods store. Moving to TJX Europe, comps were flat for the quarter, but up 5% in October. Thus far, we're seeing positive trends in November. Segment profit was slightly up over last year. I'm encouraged by what we're seeing in the U.K. as this was the area in which we focused first, and the region where we saw the greatest improvement in the third quarter. It tells us that what we've been working on is taking hold. Now we're beginning to see more progress in Germany, which we focused on after the U.K. More importantly, customers are voting and they're telling us they like our mix again. We like our stores. We like the way they look for the holiday selling season. And we remain confident that we'll continue to see even greater improvement as we move through the fourth quarter. As we have discussed before, we have slow growth but TJX Europe, this year, stabilized the business. And that said, we remain as confident as ever in the enormous growth opportunities that we have in Europe. We have a strong proven business in Europe. And with other retailers closing stores, we see great real estate and market share opportunity. We see the long-term potential to expand to the 700 to 875 stores in just -- with just our current concept, in just our current markets, without even having to think about the next country. At TJX Canada, comp sales decreased 2% and segment profit decreased 6%, excluding the impact of FX. We are making some progress with the issues we have discussed before and are beginning to see improvement in certain category. We also like our gift-giving focus for the fourth quarter, and believe that the Canadian business is heading in the right direction. We are continuing to keep our inventories lean as we have worked through fine tuning our mix. We are excited about Marshalls' promising start in Canada. Our first 6 stores are outperforming their performance, and we are seeing cannibalization in line or slightly above our expectations. We're particularly pleased with how well our expanded footwear departments at Marshalls are performing. We're thrilled to launch another growth vehicle in Canada where we're leveraging our existing infrastructure. Long term, we believe that Marshalls in Canada has the potential to be 90 to 100 stores. As to e-commerce, as we have said before, we clearly see online in our future. We view e-commerce as a way to further strengthen our powerful brand and leverage our brick-and-mortar business offering the customer great assortment, as well as convenience. We have a team in place and we'll be investing to support online growth, but we still have a lot of work to do. We'll be methodical with this initiative as always, and we'll take our time, test and retest. As you've heard me say before, we want to do it right and we want to make money. Importantly, as we pursue these catalysts for growth, our management team is concentrated on fewer, bigger businesses. Through the next year, we expect to expand square footage by about 5%, netting a total of 130 to 145 stores. Confident that TJX has the potential to grow to about 4,500 stores with just our current concepts and our current markets alone. Now to our plentiful opportunity for the fourth quarter. First, I believe that we will have the most exciting gift-giving initiatives we've ever had for the holiday season in every one of our divisions. Second, we will be shipping the highest percentages of freshness in our merchandise mix ever this holiday season. Even into 2, 3, 4 and fifth week of December, consumers will see fresh selections when they come to our store. We see this as a major differentiator between us and the other retailers. Third, I believe that our best brand penetration is even stronger this holiday than last year. Fourth, although our values will continue to be extremely sharp, we do see some opportunity to increase average ticket in the fourth quarter. This is our powerful marketing. This holiday season, we will only slightly increase our marketing investment, our marketing impressions, although, will be up 30% over last year in our U.S. division. And 6, we'll be more aggressive with our gift card program this year. Further, we believe that upgrading the shopping experience at our stores will continue to pay dividends this holiday season. We continue to see lists in our recently remodeled stores that are comparable to when we first started the program over 2 years ago. We will continue the program into next year and certainty beyond that. In closing, I feel very good about our business as we enter the fourth quarter. We ended the third quarter strongly and are off to a great start in November. Marmaxx and HomeGoods continue their excellent performance. At TJX Europe, we are seeing positive trends; in Canada, we are seeing progress and like our gift-giving focus for the holiday. For the holiday season, we believe we are very well-positioned with our fresh gift-giving selection, powerful marketing and upgraded store experience. And I'm convinced that value will remain uppermost in consumers' minds this holiday season, and we are all about value. Value is our mission and I am confident that as long as we execute well and keep delivering our extraordinary values on a rapidly changing assortment, TJX will be a key retailer for today and for the future. And now I'll turn the call over to Jeff, to go through our guidance, and then we'll open it up to questions.

Thanks. Before I get to guidance, a couple of clarifying comments about the third quarter and our results. First, with respect to foreign currency. The benefit that we described primarily impacted the Canadian numbers, as the impact on our European results was not meaningful. So while we reported an 11% increase in Canada segment profit margin for the quarter, this was entirely due to the mark-to-market gains on our inventory-related hedges. Excluding the impact of foreign exchange, the segment profit declined 6% during the quarter, as Carol mentioned. It's a little bit better than we'd expect on a negative 2 comp, with Canada doing a good job controlling inventories and limiting markdowns. Second, since we're talking about currency. Regarding overall currency, while it can have a significant impact on an individual quarter, our experience is that it tends to moderate over time. So over the past 5 years, including the current year's -- our current year forecast, the FX impact has ranged annually from a $0.04 benefit to a $0.05 hit. Clearly, not a significant factor. And cumulatively, the EPS impact from foreign exchange movements over the past 5 years has been essentially neutral. So while we call out FX impacts and they have significantly impacted certain quarters, it hasn't been a significant factor to our overall annual or multi-year results in the past. Finally, as a reminder, tables are available on our website, which layout the impact of foreign exchange on our consolidated results, as well as the results of our international businesses. And that will help you kind of understand the difference between reported and adjusted results for those businesses. Turning now to guidance. As you can see from today's release, we provided fiscal 2012 guidance on both a GAAP basis and on an adjusted basis, which excludes the impact of the A.J. Wright consolidation, and also excludes a benefit from a nonoperating item in fiscal 2011. And details of all of this, along with the related reconciliation to GAAP financial information can be found on the table in the Investor section on our website, and I encourage you to refer to these. Today, I'm going to speak to the adjusted numbers. So for the full year, we have raised the lower end of our previous range of guidance to reflect Q3 performance. The prior range for adjusted EPS was $3.89 to $3.97 for the full year. The new range is $3.93 to $3.97, which would represent a 13% to 14% increase over the adjusted $3.49 in fiscal 2011. I'd also point out this increase would be on top of an adjusted EPS increase of 23% last year and 48% the year before that, so we're pleased with the sequential increases that we're seeing. This guidance is based on estimates for 3% comp store sales increase and adjusted pretax margins in the 10.7% to 10.8% range, which is up 10 to 20 basis points over the adjusted fiscal 2011 pretax margin of 10.6%. The full year outlook assumes fourth quarter EPS in the range of $1.19 to $1.23, up 13% to 17% over the adjusted $1.05 last year, and this is unchanged from our prior guidance. So now I'll get into some of the details of the fourth quarter. First, with respect to sales, we're estimating Q4 sales of approximately $6.5 billion to $6.6 billion, with comp store sales increases of 2% to 3% on both the consolidated basis and at the Marmaxx group. As you can see from the release today, we have raised our comp sales guidance from our previous outlook which called for a 1% to 2% increase with the current outlook of 2% to 3%. The benefit of the projected additional sales, which reflects a stronger underlying trend in our business, is offset by foreign exchange rate and tax rate unfavorability versus our prior forecast. The underlying math here is that the extra point of comp would be worth about $0.03, while the increased tax rate would negatively impact us by about $0.01 and the movement in FX rates that are lower than our original guidance would negatively impact us by about $0.02 in the quarter. As to monthly comps, both on a consolidated basis and at the Marmaxx group, we expect comps to increase 3% to 5% in November; 1% to 2% in December; and 1% to 3% in January. With respect to free cash profit margins, we now have them planned in the range of 11.4% to 11.7%, which is up 20 to 50 basis points versus the adjusted 11.2% last year. This represents an increase over our prior guidance and reflects the flow-through benefit from the expected incremental comp store sales. We're planning our fourth quarter gross profit margin in the range of 27.2% to 27.4%; that's up 30 to 50 basis points over the prior year. And we expect SG&A, as a percent of sales, to be in the range of 15.6 to 15.7, which is flat to up 10 basis points over the last year and about what we'd expect on a 2% to 3% comp. For modeling purposes, we're planning a tax rate of 38.7%; net interest expense in the $8 million to $9 million range; and weighted average shares of approximately $381 million. Finally, on guidance, our outlook for the remainder of the year assumes seems that currency exchange rates will remain unchanged from their current levels. We'll now open the call up for questions. [Operator Instructions] So thank you. We'll take questions now, and Ellan will go and open it up.

[Operator Instructions] Our first question is from Daniel Hofkin. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Just if I could ask for a little bit more detail regarding your expectations for margin performance by division in the fourth quarter. Do you think Europe, in particular, is likely to show year-over-year improvement on an underlying basis in the profit margin? And maybe some guidance for the other segments too. Carol M. Meyrowitz: Daniel, we're not on giving specific divisions and the details, in terms of the margins by division. But maybe, I can give you some color on Europe. Europe for the full year, we're expecting between $95 million and $102 million, which implies a pretty substantial increase in the fourth quarter. So I think that reads to our confidence in Europe, going forward.

Yes, we're also, Daniel, we're -- for the fourth quarter, we do think gross profit margins would be up 30 to 50 basis points. And a portion of that is merchandise margin, a portion of that is buying and occupancy expense leverage. And as I said, Europe is up against some big decreases last year so that is really helping drive a lot of that. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Is that marked down, in other words, is that reduced markdowns year-over-year, is that a factor in Europe or is it more? Carol M. Meyrowitz: All of it.

Yes, last year, we had a big mark down hit in the fourth quarter and -- I'll check it in my records. But I believe, it's sort of in a 350 to 400 basis point range with the decline in the merchandise margin in Europe. It's an opportunity to get some of that back. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Okay. And I guess, if I could, one other quick question regarding what you're seeing right now in terms of the ability to pass through cost inflation and maybe what that rate of inflation is doing right now, relative to 3 or 6 months ago? Carol M. Meyrowitz: Well, as I said before, our ticket is trending slightly up. But it always comes back to us keeping the gap between us and everything one else. So we're very, very focused on just giving extreme, extreme value in the fourth quarter. So cotton prices are coming down. There is a variance by fabric going on, some are going up, some are going down. But we are seeing tickets slightly up. So we're planning traffic slightly up in the fourth quarter and ticket slightly up.

And to be clear, traffic and ticket up slightly, but also we got a comp of 2 to 3 and we got the margin planned up slightly. So I think, we don't really see any kind of negative margin hit coming from inflation here, the way we plan the business.

Our next question is from Evren Kopelman. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: I wanted to ask about inventories. You mentioned at the end of this quarter, they were down on a per-store basis, and you're expecting them to be up at the end of, I believe you said, the year. Thinking about kind of inventory philosophy, is this a change in that, you're kind of done with -- being able to run positive comps with down store inventories or is this for next year? I know it's early, but can we still see in-store inventories down and continue to help the merchandise margins? Carol M. Meyrowitz: No. Far from it. When we say our inventories are down per store, our inventories will be down per store and they will continue. We still see opportunity, certainly going forward. But when we talk to total inventory, it's in the DC, and it's a combination of DCs, which is pack-aways. But it has nothing to do with our in-store inventory. In addition, our future on order, we have more open to buy than we had a year ago. We're less committed. We're in great shape going forward.

Evren, just a thought. We may have confused you with some of the language in the release, so just to walk you through it briefly. So at the end of Q3, our inventory per store was up 14%. That includes the distribution centers. Our inventories that were actually physically in our stores was down, and the inventory that was in our DCs was up. As we look towards year end, we would see that total inventory numbers, that's up 14% per store as of the end of Q3. That being up in the low to mid single-digit percentage range, and which implies a reduction in our distribution centers, and we will continue to have inventories that are actually physically in our stores down year-over-year.

Our next question is from Stacy Pak. Stacy W. Pak - Barclays Capital, Research Division: I was hoping you could dig into HomeGoods a little bit more. It was a pretty impressive margin increase. And I'm wondering what does that store model look like, relative to Marmaxx? How does it change as you open more in the Midwest, Central and West, which is sort of what it looked like on your expansion? And why are you saying HomeGoods long-term segment margin is only a high of 9.7% when it looks like they'll finish above that this year? Carol M. Meyrowitz: Stacy, we actually change the model to above 10% segment profit. We changed that model a short time ago. And we're changing the number of stores. We moved it from 600 to 750. Is that the end number? I couldn't tell you today, as we grow and we learn and we leverage, and hopefully, we'll come back to you at some point and that number will get raised. But we have already raised the segment profit going forward.

Yes, our four-wall -- not the four-wall, the segment profit margin for HomeGoods this year that's implied. We're happy to give full year guidance numbers here, by division. But HomeGoods is -- the segment profit margins for full year for HomeGoods is 10.3% to 10.4%, that's what our guidance would imply. So we're already above that 10%. And obviously, to the extent we can comp greater than 2% and if you can get leverage from these stores, you may be able to do better than that, but we'll prove that to ourselves over time. Stacy W. Pak - Barclays Capital, Research Division: And is there a change, Jeff, if you go to some of these less-dense markets, in the central and upper United States?

No, typically, what you find as you go through to these -- the less dense, we found with Marmaxx, our experience has been is that, that you typically have lower levels of sales but you also have lower rents. And on a percentage basis, your four-wall contribution is actually equal to or a little bit better than the chain. So no, I don't -- we don't see any margin dilution coming from that. Carol M. Meyrowitz: We actually love our small-market stores and our single-market stores. They're terrific for us.

Yes, I think -- and as you think about the margin potential -- I guess, just a final thought there, as you think about the margin potential of HomeGoods, the four-wall contributions are pretty comparable, little bit below Marmaxx because of just the up -- size of it and volumes we do per store, but pretty comparable. And the issue really becomes -- Marmaxx is a 13% business because it's also a $15 billion business. And so they get tremendous leverage on some of their SG&A cost in their distribution network. And we see a lot of potential for HomeGoods. We don't ever see it being a $15 billion business getting that kind of leverage. So the answer is probably somewhere between 10 and 13 over time, although, Carol's scowling at me right now. Maybe we can get it to $15 billion business. Carol M. Meyrowitz: What's exciting about HomeGoods this year, Stacy, is that for the first time, we're going to be on network TV, and you saw our tri-brand commercial hopefully. So that would go in markets that have never seen HomeGoods commercials before. So that's pretty exciting. And it also sets us up for the future as we start to go into new markets, new stores.

Our next question is from Richard Jaffe. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: A question on inventory again. Just the level of pack-away as a percent to total and how you see that growing or becoming an integral part of your business. Or is it just a seasonal thing that we shouldn't expect to see ever again? And then I have a follow-on question for corporate expenses. Carol M. Meyrowitz: Okay. Let me start, pack-aways and then I'll have Jeff go through the corporate expenses. Our pack-away is really never more than 10% of our total purchases. So it's higher than last year, this year and we'll probably end the year slightly higher because we are seeing some terrific deals. So again, it depends on the season, it depends on the category, but we have no tremendous strategy of philosophical change in the business going forward. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: That's great. Jeff, just wanted to know about that general corporate expense increase year-over-year was surprising, and wondering where the money is going?

Yes. What we've -- many of the investments that we're making, Richard, are being funded through the corporate -- that corporate line. So if you think about some of the investments that we're making in systems, which consists of new merchandise, investments we're making, Carol talked about before, new merchandising and supply chain systems. We are also investing in a new data center. Our existing data center is over 25 years old and so we are actually having to make some reinvestments there that are very meaningful. We're investing in talent in 2 ways: we have bench money available to bring executives in that we can develop before they go into assignments. We also have TJX University, which is our group that helps develop people in our organization, principally merchants. And then we are also making investments in e-commerce. So all of that is flowing through that, that corporate line. It represents -- the investments we're making represent more than 50% of the increase you're seeing year-over-year. But I think, the thing I want to point out is that, if you look at the G&A in Q3, we had a flat G&A ratio on a 3 comp with that increase. So we are more than covering that in other areas of our business through both cost reduction and end product today. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: Absolutely. Can you just elaborate on your last point, I think the word was e-commerce?

Yes, we are investing in e-commerce. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: Any chance of elaborating on that? Carol M. Meyrowitz: Yes. I'll elaborate and I'll repeat what I said. We have a team in place. We're doing a lot of work. We are investing. As you see, our corporate expense in dollars is increasing. However, we do continue to remain with our model, going forward, with 10% to 13%, so we continue to invest, and E-commerce is certainly a big chunk of that. But we're going to take our time and we'll let you know as we get closer -- where we are. We've got Europe testing and helping us get some additional information, which is terrific. And I could say it in a million times, I want to do it right, and we want to make money and we want to leverage our brick-and-mortar. So that's really where we are with e-commerce.

Yes, nothing imminent, Richard.

Our next question comes from John Morris. John D. Morris - BMO Capital Markets U.S.: Can you talk a little bit more about Canada, your progress there. I guess, I'm interested in where the sources of weaknesses, where the challenges have been other than weather, and what you're doing for the improvements? And kind of similar to that, you said you were encouraged towards the business, particularly in the U.K. where you've really focused quite a bit. And you've seen some improvement. So what is it that you're doing there that's working just beyond the easy comparison and easy markdowns to a year ago, so both Canada and the U.K.? Carol M. Meyrowitz: Well, first of all, I'm going to -- in terms of U.K., I'm going to have Ernie walk through the 2 divisions for you. The most important message I want to give is we're liking the mix. And that is absolutely key and the customer is voting that they like the mix. So that is the overview, and the same thing, in terms of working on Canada. But Ernie, you want to talk to the specifics?

Yes, John, I think in Canada, you ask for specifically one thing besides weather, and I would tell you that the ladies business up there has been something we've been looking at very diligently. Our execution there has not been as strong as we'd like. As you know, our Lady's Apparel business is a key driver for our total business. So we've been making some progress there. We've been really taking a look at what we've been buying, and being more selective. We go through all of the things we do without getting too specific with you. Which is look at vendors, look at values, look at where we're buying the goods, look at how we we're retailing the goods, et cetera. So we're feeling better. Looking at being more and more of a solid track by the end of the year. But we still feel like there's work to do. John D. Morris - BMO Capital Markets U.S.: Ernie, when Carol's talking about the mix, whether it is the U.K. or Canada, what is the mix between -- within apparel categories or between apparel and hardlines, or what's happening there?

When she came to mix, she's referring to the quality, I think, of the mix throughout every category. Meaning the brand value kind of the fashion, the price, the quality. Not necessarily the mix of the departments of the categories within the store. But the actual quality level, the brands, the price, et cetera, within every department. And so in Lady's in Canada, that's really been a focus as getting the mix. In improving the mix in that area in Canada. John D. Morris - BMO Capital Markets U.S.: And of course, the buyers are helping you all there, have you changed up the buying talent, to help in that identification of the better brands for the mix?

That's a piece. Sometimes, it's also a training and leadership thing, where we get in there and we try to regroup on what our strategies have been because sometimes it's not the people that need to be changed the strategy that needs to be changed. When we go to the U.K., it's a very different story, and we talked about this before. In the U.K., we probably grew too fast and we weren't ready for some of the growth as quickly as we grew. On the other hand, over the last 9 months to 1 year, I think we've made great progress, and really training some of the new people that were put in place figuring out some of the logistics involved between expanding in Germany. We talked about this at our Investor Day. So we have a lot of people in place that I think we're going to reap benefits. As Carol said, we like our mix there, I think that's accurate. We have been feeling really strong about what's been happening throughout the mix for all the different departments in Europe. And so I think, we're in a good position there. Carol M. Meyrowitz: I think what's key, too, is that in Germany, we have the German brands that the German consumer wants and the same thing in the U.K. And we sort of talked about in the past that when you grow into the next country, we were not country-centric enough. So the guys there are very, very focused on the right brands for the particular country, and that makes a very big difference.

And I think, also, the right fashion is the other thing we've learned there, because that has varied between England and Germany, as well.

Our next question is from Brian Tunick. Brian X Tunick - JP Morgan Chase & Co, Research Division: I think -- I guess that's a great lead in. And I was trying to get a better sense maybe on the TJX Europe business, if you look at the full year, sort of operating margin guidance implied, maybe can you talk about sort of Germany versus the U.K. from a profitability standpoint? I know you've talked about how the Germany store maturity curve has weighed on the margins there. But just hoping you could break out where those 2 major countries are? And then second question on the Filene's and Syms liquidation, just how many centers do you guys have in common with them? Carol M. Meyrowitz: Well, we don't talk about -- I'll come back to Europe in a minute. In terms of Filene's, obviously, we don't talk about our particular deals but we will certainly take advantage of everything that makes sense. We have -- our real estate group is looking at everything. I don't know the exact number that will overlap, but there's obviously could be potential there. So we're always excited about any new opportunity for us, in terms of real estate or destoring whether it's in the United States or in Europe. Brian, we really don't break out the countries, the same thing we don't do and winners -- we don't break out the different divisions. I can tell you that we have seen a real positive trend in the U.K. in terms of both sales and margin and we're starting to see that in Germany. So we are absolutely moving in the right direction in both countries. And that's obviously why we're giving, as I said before, for the full year $95 million to $102 million implies a pretty big increase in the fourth quarter in terms of the last 3 quarter trend.

Our next question is from Jennifer Davis. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: I have a couple of clarifications. First, Jeff, did I understand this right? Versus your original guidance, ForEx and a higher tax rate, higher than you anticipated, negatively impacted earnings by $0.02. So have that not happened, EPS would have been $1.08. Am I understanding that right?

Yes, and you can see that clearly, and what the tax rate was -- hang on with the tax rate. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: 38.8%

Yes, but that was versus 38 -- the expectation was 38.1%, so if you can do a math on that, that is $0.01. And then what happens is during the very end of the quarter, the Canadian dollar went basically surged from $0.98 up to $1.01. And when that happened, that meant that there were less gains in our hedges, Jennifer, so that's that other $0.01. Believe it or not, from the time of the investor event, until that -- 2 days later when we closed the books, we lost $0.01 because of the mark-to-market impact on the hedges of the higher Canadian dollar. Carol M. Meyrowitz: If you look at FX, long term, over the last 5 years, it's equivalent to $0.04 or $0.05 negative or positive. So over time, it really doesn't impact the business. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: Right, right, I understand. And then did you guys comment on merchandise margins in the U.S.? Carol M. Meyrowitz: No, we haven't. They have been relatively flat. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: Will you?

Yes, I mean, they've been relatively flat. Carol M. Meyrowitz: Yes. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: Okay. And then in terms of pack-aways, do you ticket those when you buy the merchandise or when you flow it into the stores? I'm just trying to get a sense on of higher ticket prices are factored in there. Carol M. Meyrowitz: We ticket the goods according to the value of what we think our merchandise is. We will, if we have a pack-away, and if we feel time goes on and that pack-away is a different value, we will re-address it. So that's typically -- we look at the best value we can for our pack-aways.

Yes, you're not locked in at the time that you make the deal. Carol M. Meyrowitz: Right.

Our next question is from Adrianne Shapira. Adrianne Shapira - Goldman Sachs Group Inc., Research Division: Carol and Jeff, just my question really relates to gross margin. You obviously have made great progress. Merchandise margin's flat, it sounds as if you're optimistic on ticket and sort of 30 to 50 basis points in gross margin opportunity in the fourth quarter. But in this earnings season, we're definitely hearing a consistent message from many retailers that it's costing more to get back customers' attention, everyone from JCPenney and Saks, it sounds as if perhaps it is a need to intensify their price investment. So if you could help us reconcile. You clearly are looking to maintain that value message and maintain that gap, with what potentially could be a more intensified environment heading into the holiday season. Help us think about the margin outlook. Carol M. Meyrowitz: Well, I think what you've got to -- again, realize about our business is that we still have tremendous open-to-buy. And so we have tremendous open-to-buy, and Ernie and I are shutting down this place because there is more deals. It is very, very plentiful. We're really in a situation where not only is it it plentiful, but plentiful with brands and fashion and everything that we absolutely love. So that will allow us to not only buy to the right value, but buy to the right value up to the last minute. And that is what our business is about. And it's the best way to explain it, that we are wide open. Adrianne Shapira - Goldman Sachs Group Inc., Research Division: Great. And you would characterize it -- considering where you'd like to be at this point heading into the holiday season probably better, more encouraging, more open, more liquid than you probably would have expected maybe a few months ago? Carol M. Meyrowitz: We made sure that we stay very, very liquid. So we're very, very happy with the position that we're in today. We have also planned on shipping a higher percent of fresh merchandise, which is really critical to the newness, the excitement, and again, coming back to making sure that you have the greatest value. So we are up to the minute. We can price it up to the minute, we can buy it up to the minute. That's what's different about our business, in the flexibility.

Adrianne, it's that flexible business model that we've talked about before. And this is what Carol is talking about is really the epitome of it. So this time frame when the environment gets difficult, there's a delayed effect we'd take advantage of that and we can flex with that. The other thing we've worked on, our logistics areas over the past couple of years so that when Carol was talking about we will buy to the last minute, we are more able to turn the goods through faster and that allows our merchants to actually pace themselves and stay open to be buying for the very last minute, more so than even a few years ago. And we said today in the release that our goods on-order are significantly below where they were last year at this time. So we've got a lot of flexibility. Carol M. Meyrowitz: When we talk about our investments in systems on the supply chain, this is a constant goal for us to get better and better at it. And we definitely see opportunity. I talked a lot about getting the right goods to the right store at the right time. And this is a big part of now improvement and to the future.

Our next question is from Paul Lejuez. Paul Lejuez - Nomura Securities Co. Ltd., Research Division: Jeff, can you maybe talk a little bit about merchandise margins in the third quarter by division -- which were up, which were down. And I believe you said you expected fourth quarter merch margin to be up a bit. Maybe if you could just break that down for us, where you expect to see improvement versus any of the divisions that might be going the other way.

Yes, I think, as you look at Q3, Marmaxx was essentially flat; HomeGoods was up; Europe was up; and Canada was down, and that all blended out to essentially flat for the quarter. I would expect a similar kind of profile, I guess, profile -- similar kind of profile for the fourth quarter, Paul, as we look forward. I think we get a little bit more lift because Europe is up against easier comparisons. We had much, much bigger markdown hit last year in the fourth quarter than we did in the third quarter for Europe. So with the continuing improvement there, I think, the magnitude of the year-over-year improvement for Europe will be much greater in the fourth than it was in the third, and on a consolidated basis that will help drive our merchandise margins up a little bit. Paul Lejuez - Nomura Securities Co. Ltd., Research Division: Got you. And just quickly, did you guys see any impact from Ross's entry into the Chicago market if you might comment on that? Carol M. Meyrowitz: Not really.

Yes, Paul, it's not something that we really want to comment on. But I think when you look at our comps, and as we've been talking about comps, it's been -- they're pretty much have been following the trends that they have been following. So clearly, we haven't seen any impact on the regional comps as we report them.

Our next question is from David Weiner. David Weiner - Deutsche Bank AG, Research Division: Just a quick question, and a lot of my questions have been asked. But I guess I want to follow up on Europe and Canada, and specifically in seasonality. I know that for both of those regions, seasonality temperature has been a problem over the last couple of months. Is that relative to the product that you have in the store right now, in both Canada and, I guess, U.K. and Germany? Are you starting to see the seasonality, the types of temperatures that you want to see kind of improve? So it's less of an impact on your comp? Carol M. Meyrowitz: Yes, I mean, towards the end of the month, we definitely saw certainly, yes, in both divisions, when Europe did turn colder, absolutely trigger the business. The home to nonapparel areas were stronger, certainly, than in the apparel areas in Canada. Outerwear was down 22%.

That was in Canada. Carol M. Meyrowitz: It's just no getting around that. So that's absolutely a factor. But as we get into the fourth quarter, when you're a little more gift giving, the impact of the seasonality isn't as critical and it doesn't affect the business to the same degree that the third quarter is. And we always have more volatility in the third quarter.

Our next question is from Kimberly Greenberger. Kimberly C. Greenberger - Morgan Stanley, Research Division: Carol, it's clear that you're execution in Europe... Carol M. Meyrowitz: I can't hear you, I'm sorry. Could you be a little louder? Kimberly C. Greenberger - Morgan Stanley, Research Division: Sorry about that. It's clear that your execution in Europe and the U.K., in particular, is driving the improvement in your comps there. But I'm wondering if you can talk about your view of the health of the consumer, either in the U.K. or Europe. What are you hearing from your organizations on the ground there about the general health and are you seeing any signs improvement at all there? Carol M. Meyrowitz: Well, I mean, I think you hear the news that we hear every single day. This morning, they had a conversation about why the pound is still at $1.35. So every day is another story. I think the important point about Europe is number one, is we needed to fix our execution, which we're on the way. And that's really the key factor. Number two, there is de-storing going on in the U.K. There are many, many businesses that are closing, which bodes well for us getting a bigger piece of the pie. And as we do what we're supposed to do, is execute every day. We believe that we're going to get a bigger piece of that pie in the U.K. And we've talked about fixing that and then fixing Germany, and I really think that we're in a pretty good position going forward. Next year, we won't be adding a ton of stores. We want to make sure the infrastructure is really, really solid. And then we'll start to move from there. However, we will take advantage of any great real estate deal. We're seeing, certainly, in the London area some fabulous deals and we will take advantage of that. Kimberly C. Greenberger - Morgan Stanley, Research Division: Terrific. And just one clarification, on the 3% comp during the third quarter. I think you said ticket was up slightly and traffic was up slightly, I just wanted to make sure I heard you correctly. Carol M. Meyrowitz: Traffic was flat in the third quarter; ticket was slightly up. Going into the fourth quarter, we're planning both ticket and traffic slightly up.

Our next question is from Jeff Stein. Jeffrey S. Stein - Northcoast Research: Two questions real quickly, one for Jeff. Jeff, the growth in corporate expenses, can you give us a little bit of guidance of what we should expect in Q4? And then on a go-forward basis, have you pretty much year-rounded this new phase of investing and should we see a kind of a growth rate in corporate expenses more in line with inflation?

I think, as you look at Q4, I think, we would expect -- I mean we're continuing to invest it at the same level and the things that we're investing in. So I think, you're thinking comparable year-over-year impacts, Jeff, Q4 versus Q3. And if I think directionally, that would be a good assumption as you build the model. And I think as we look at next year, we remain comfortable with our 3-year model of 10% to 13% EPS growth. And in terms of those components, I'd like to reserve the right to comment -- wait to comment on that till we get to our February call. We're still pulling some of our plans together. In any planning process, you have to make choices between things you want to do and things you don't want to do. But just -- feel confident that we have a model of 10% to 13% EPS growth. We're comfortable next year, we'll fit into that model, but as to the individual components to the plan that still -- we still have to finalize all that. Jeffrey S. Stein - Northcoast Research: Got it. And you're just -- why are you modeling your December comps lower than November? Because you have an extra selling day in December this year, wouldn't that tend to give you a little bit more of a boost in December?

Yes, it's a tougher comparison. Carol M. Meyrowitz: Yes.

But if you look at Q3, 4 years back, Jeff, it all lines up at -- December has been a very, very strong month for us now for -- last year was 2 on top of 14 in the year before that, where the comparisons aren't as daunting in the November.

Our next question is from Roxanne Meyer. Roxanne Meyer - UBS Investment Bank, Research Division: You raised your comp outlook to 2% to 3%. I'm just wondering how, if any at all, you've contemplated the Syms liquidation that's going on in November and December? And then as a follow-up, is that part of the reason why you feel that you're getting access to some of the -- what you called best products out there or can you just elaborate on what you're seeing and if that's going to become a bigger part of your strategy going forward? Carol M. Meyrowitz: No, Roxanne. At Syms, it has absolutely nothing to do with our projections or any opportunity, which is running our business the way we run our business every day. Jeff went through why we raised the comp, you want to run through that one?

Yes, we raised the guidance because we saw a stronger underlying trend and we're comfortable doing that. But we don't granularly build it up based upon our competition and -- that would be a very challenging modeling exercise, to say the least. So we look more at the underlying trends in our business, what's going with traffic versus ticket. Our thoughts on our mix, the comparisons that we're up against. And those are the kind of things that inform the estimates we make, Roxanne. But I think if a competitor -- particularly, a competitor with that size isn't likely to have a significant impact on our year-over-year growth, or the availability of goods for that matter.

Our next question is from Pamela Quintiliano. Pamela Nagler Quintiliano - Oppenheimer & Co. Inc., Research Division: Just a few questions. I was wondering if I could get more information on your higher store growth opportunity, and when I think about real estate availability versus a larger addressable market, more sustainable availability of products with new vendors, just how should we think about it? And then if you could go through again -- I believe you have the stats on who's familiar with the brand? How many people are actually shopping at domestically and internationally, and where you see the opportunity there? Carol M. Meyrowitz: So Pamela, that was 4 questions. You're only allowed one. All right, Jeff, you want to go through the store growth?

Yes, the store growth, we've got 2,300 to 2,400 stores at Marmaxx. We used to say 2,000. That's really a result of shutting A.J. Wright and the additional opportunities that we have in those markets. HomeGoods, we raised it from 600 to 750. Again, that's a function of the performance that we're seeing from the division, a bottoms-up assessment, in terms of the real estate opportunity based upon potential sites and in cities and markets, and also a comparison to where our competitors are on some of the store growth -- the store potential numbers that some of our competitors put out on the street really lead us to believe that there's an opportunity for HomeGoods. At Winners, we really haven't adjusted that. It's 240 stores. HomeSense, we think, has an opportunity of 90. So between HomeSense and Winners, 330 stores. Although, we have said that we think Marshalls Canada can be 90 to 100 stores and have 6 today. Our estimates for T.K. Maxx really haven't changed, that's still in that 300 to 325 range. Really, our estimates for T.K. and for HomeSense Germany and -- excuse me, our estimates for T.K. Maxx, HomeSense U.K., Germany and Poland really, really haven't changed. So really, the change to store growth estimates come from Marmaxx and from HomeGoods and from the incremental opportunity given us by Marshalls in Canada. Pamela Nagler Quintiliano - Oppenheimer & Co. Inc., Research Division: And then just those stats. Again, I know, you've given them before about people who are familiar with your brand or have shopped, who haven't shopped?

If we want that, in the U.S. ... Carol M. Meyrowitz: Right. Basically, there's 75% of adults in the U.S. that have not shopped with us, which is a much higher percent than typically the department stores, which really gives us a lot of opportunities for growth. So that's generally what we are going after. Pamela Nagler Quintiliano - Oppenheimer & Co. Inc., Research Division: And do you have those stats on international basis or your pricing? Carol M. Meyrowitz: I don't have that on the international -- again, the de-storing, what's going on in Europe is still a tremendous opportunity for us, and the additional brand of Marshalls. We are finding that in Canada, they're well aware of the Marshalls brand, so we're pretty excited about bringing the brand across the border. As far as product goes, Pamela, I mean, there's always abundance of product. I could say it a million times. We will get to $40 billion, and we would still have an abundance of products. It's not the issue. The issue is really us, actually, controlling it.

Our final question today is from Mark Montagna. Mark K. Montagna - Avondale Partners, LLC, Research Division: Just my question is really more looking long term in terms of earnings. Carol, in the past, you have mentioned that you feel that TJX is a long way from getting the right merchandise in the right stores at the right time. You've obviously been growing your earnings pretty well. I'm wondering what are you doing to improve that notion? Is there some sort of systems upgrade or is it just training or how exactly are you doing that, or do you plan to do that? Carol M. Meyrowitz: Yes, part of our corporate expense is investment in systems. As Jeff said, we have a new data center, but along with that, we have a fairly aggressive plan in merchandising systems. As much as we have gotten better and better, you sort of wouldn't believe how much we have to do manually. So we really see that as a big rock, specially to the next 2 to 3 years. In addition to that supply-chain, where our plans will be another DC on the West Coast, and this is all in our model going forward. So we continue to see the opportunity to reduce our inventories to bring more freshness into the stores. But more importantly, again, to target the stores, to do the right goods at the right time, and the right stores -- right stores, right time, right product. Still lots of room there. Mark K. Montagna - Avondale Partners, LLC, Research Division: Okay. And are you going to target one division at a time to just kind of beta test the different changes? Carol M. Meyrowitz: Yes, when we started slow, we have a test -- we'll actually test by category. It's a very detailed and very methodical progression and in terms of cost over time.

Yes, it's designed to mitigate risk, Mark, so we're not -- there's no big thing in here. It will be one category, one division. We'll roll it out slowly. The downside is it will take us longer to get the benefit, but the upside is we don't put the business at risk. So that's what the way we we'll tend to deal with it. Carol M. Meyrowitz: We don't turn off anything until we know we can shut it off. Mark K. Montagna - Avondale Partners, LLC, Research Division: Okay. Just lastly on that, when -- have you already started that or is that something that we're looking for next year? Carol M. Meyrowitz: We started to look at what it should be. We're probably looking at 2 years out for the benefit, but we also have some things in the next 2 years built in our plan that we still think we can take advantage of.

[indiscernible] is not dependent on that. Carol M. Meyrowitz: I want to thank everyone, and we're looking forward to the fourth quarter. And we hope you'll shop, for those of you that are near Wall Street, our store opens November 18. Please buy -- the 17th, excuse me, the 17th. I just got corrected. So have fun. Thanks.

Thank you, all. We appreciate you joining us today and we'll speak to you soon.