Carol M. Meyrowitz - Chief Executive Officer and Director Debra McConnell Scott Goldenberg - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Ernie L. Herrman - President

Daniel Hofkin - William Blair & Company L.L.C., Research Division Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division Oliver Chen - Citigroup Inc, Research Division Kimberly C. Greenberger - Morgan Stanley, Research Division Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division Michael Baker - Deutsche Bank AG, Research Division Stephen W. Grambling - Goldman Sachs Group Inc., Research Division Roxanne Meyer - UBS Investment Bank, Research Division Brian J. Tunick - JP Morgan Chase & Co, Research Division Paul Lejuez - Wells Fargo Securities, LLC, Research Division Howard Tubin - RBC Capital Markets, LLC, Research Division Jeffrey S. Stein - Northcoast Research Marni Shapiro - The Retail Tracker Dana Lauren Telsey - Telsey Advisory Group LLC Laura A. Champine - Canaccord Genuity, Research Division Mark K. Montagna - Avondale Partners, LLC, Research Division Patrick McKeever - MKM Partners LLC, Research Division David J. Glick - The Buckingham Research Group Incorporated

Ladies and gentlemen, thank you for standing by, and welcome to the TJX Companies Third Quarter Fiscal 2014 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded, today, November 19, 2013. I would like to turn the conference over to Ms. Carol Meyrowitz, Chief Executive Officer for The TJX Companies, Inc. Please go ahead, ma'am. Carol M. Meyrowitz: Thanks, Ally, and good morning, everyone. Before we begin this morning, I'd like to introduce Debra McDonald (sic) [McConnell], VP of Global Communications, with some opening statements. Debra, who has been with us for many years, is now leading TJX Investor Relations. Sherry Lang is taking on a more of an advisory role after more than 2 decades with our company. I want to thank Sherry for all of her years and many contributions to TJX. Go ahead, Deb.

Thanks, Carol. 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 April 2, 2013. 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 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 division 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 or otherwise posted on our website, www.tjx.com, in the Investor Information section. Thank you. And now I'll turn it over to Carol. Carol M. Meyrowitz: Thanks, Deb. And joining me and Debra on the call are Ernie Herrman and Scott Goldenberg. So let me begin by saying that I'm very pleased with -- to see our momentum continue in the third quarter. Adjusted earnings per share increased 21%, well above our original plan and achieved over last year's 17% growth. Consolidated comp store sales were up 5%, also above our plan and over last year's 7% reported increase. Once again, these results demonstrate our ability to drive strong performance regardless of the retail environment and on top of strong year-over-year comparisons. I'll keep my comments brief today since we just had our Investor Event on October 22. So as a reminder, the presentations and Q&A from the event are available on our website. We talked a lot about the magnitude of our near- and long-term growth opportunities, and why we're so confident that we will become a substantially bigger company, driving both the top and bottom line. We hope you're as excited as we are about the global-ness of our business and the path for growth that we see in front of us. The fourth quarter is off to a good start and we are pursuing many exciting opportunities for the holiday season and the remainder of the year. We're confident that we will achieve our plans and, at the same time, we are a management team passionate about striving to the surpass our goals. Before I continue, I'll turn the call over to Scott to recap the numbers.

Thanks, Carol, and good morning, everyone. As I did last quarter, since most of the financial metrics were included in this morning's press release, I'll use my time to provide some additional color on our results. As Carol mentioned, our third quarter consolidated comp store sales increase of 5% over last year's 7% reported increase marked yet another quarter of strong comps on top of strong comps. Our third quarter comp was driven by a combination of increases in ticket and traffic. Diluted earnings per share were $0.86 compared with last year's $0.62. Our third quarter EPS includes an $0.11 benefit detailed in today's press release. Excluding this benefit, adjusted earnings per share were $0.75, a 21% increase over last year, marking 5 consecutive years of double-digit EPS growth. Foreign currency exchange rates had a $0.01 negative impact on earnings per share, compared with a neutral impact last year. Consolidated pretax profit margin was a record 12.6% for the quarter, up 90 basis points over last year's strong margin and above our plan. This increase was driven primarily by gross profit margins being up 50 basis points due to buying and occupancy leverage on the above-plan comp and improved merchandise margins. SG&A improved 40 basis points, primarily due to several items that negatively impacted third quarter margins by 60 basis points last year. There were several factors this year that partially offset the 60 basis points of year-over-year favorability. These included costs related to home office moves, increased advertising and e-commerce. In terms of inventories, we are in fantastic shape going into the fourth quarter. As to Marmaxx, comps increased 4%. Apparel comps were up 4% and home fashions were up 6%. We are particularly pleased to see both apparel and non-apparel categories do so well in this retail environment. Geographically, comps in the Northeast and West Coast were the strongest, and all other regions were around the chain average. Now let me turn the call back to Carol, and I'll recap our fourth quarter and full year fiscal '14 guidance at the end of the call. Carol M. Meyrowitz: Thanks, Scott. Before moving to our future growth potential, I'll recap third quarter divisional results. All of our divisions delivered strong performance over strong prior year comparisons and drove great bottom line flow-through. Our U.S. divisions, once again, achieved powerful results. Marmaxx posted a 4% comp increase over 7% growth last year and segment profit increased 80 basis points to 14.7%. HomeGoods delivered another outstanding quarter. Comps were up 10% and segment profit was up 110 basis points, 13.1%. Moving to our international businesses. TJX Europe continued it's very strong trends. Comps were up 5% over an 11% increase last year and segment profit was up 130 basis points to 10.4%. I was just in Germany last week and could not be more excited about our talent, product mix and real estate opportunity there. At TJX Canada, comps increased 2% and adjusted segment profit increased 30 basis points to 16.6%. Now to our growth catalyst, beginning with the holiday season in fourth quarter. Going into the fourth quarter, we are in great shape. We have plenty of open-to-buy and the marketplace is flooded with outstanding products. I believe our gift-giving selection this year will be the best we have ever had. You've heard me say this in the past year that I truly believe we get better and better every year as we keep raising the bar. We have many exciting initiatives up our sleeves. But you'll just have to shop our stores to see what they are. Second, our gift-giving selection will be extremely fresh. Our buyers will be in the marketplace in December and will be shipping to our stores right through the holidays. Third, our commercials will be on TV every single week in the U.S. throughout the holiday season and overall impressions will be up significantly. Our holiday campaigns just launched last week and I hope you love The Gifter as much as we do. We have also upped all of our social media penetration and are engaging consumers in more ways than ever. Plus, we are confident that our remodel programs will continue, upgrading our stores will be another draw this holiday season. Most importantly, we will be offering customers extreme value and we are convinced that value would be absolutely key to consumers when they shop this holiday season. Now to our future growth potential. Last November, I said on our earnings call that I have never been more excited about the future of TJX. I certainly continue to feel that way today. At our Investor Event, we focused on all of the elements that can help us achieve our vision to grow TJX to a $40 billion business and beyond. I'd like to briefly highlight the key themes from the day. First is the magnitude of TJX's growth potential, both near- and long-term. We are convinced that TJX is the retailer for today and the future. We talked a lot about that huge opportunities we see to gain market share and pursue the millions of untapped customers we see in both the U.S. and internationally. We also see enormous store growth potential for our brick-and-mortar businesses. We raised our long-term store growth potential to over 5,100 stores. That would be about 60% more stores than our current base, with growth in just our existing markets, with just our existing chains alone. The most significant driver of this increase is our belief that Marmaxx can be an even bigger business and grow to 3,000 stores. That's 400 more stores in the high end of our prior range and about 1,000 more stores than today. We also see home, overall as a category, as a substantial growth vehicle for the future. Between our pure home chain, HomeGoods and HomeSense and home products in all of our other stores, we believe there is great opportunity. Internationally, we see vast opportunities. We sized up our potential in Europe alone, which we see as tremendous and representing billions of dollars of growth just in brick-and-mortar and in just our current chain. We also raised our long-term segment profit margin target for TJX Europe to 10% plus, and discussed why we're so confident we will achieve these goals. I'll take a moment here to mention a few of the many factors we see on our side as we expand into Europe. We are a differentiated unconventional retailer with enormous flexibility, offering amazing brands and fashion all under one roof. More importantly, we are bringing consumers extreme values and we see value as a concept that's just growing more in Europe. In addition, there's a vast retail-light space in Europe. Beyond our current European markets, we see the opportunity to expand to other countries. In short, we believe that our value model resonates wherever consumers seek fashion, brands and quality at great prices. In terms of TJX Canada, we upped our long-term store growth potential to about 450 stores. That would be 30% more stores than our current base and reflects our potential to grow Marshalls in Canada. Beyond our brick-and-mortar businesses, we see e-commerce as another long-term growth catalyst. We want to be there for our customers when they want to shop online, and we see e-commerce as another platform to offer great, great values. While we were strategically low key about our launch of TJX tjmaxx.com in September, customer response has been terrific. We will continue with our deliberate approach and plan to grow smart. But we are very excited about giving consumers the ability and convenience to shop 24/7. We also continue to be very pleased with the smooth transition of Sierra Trading Post. Although we're in no rush, we can see e-commerce working for all our TJX brands. Now let me reiterate the key advantage that we believe differentiates TJX and sets us up extremely well to achieve our goals for growth. It all begins by offering extreme value. The value has been our mission since Day 1, and we believe it resonates in all environments. We have tremendous flexibility and consistency. We believe we have one of the widest demographic reaches in retail. We are leveraging 4 large synergistic divisions as we grow. We have successfully expanded internationally and have decades of experience operating outside of the U.S. We have a world-class buying organization of over 900 associates. Teaching and developing the next generation of leaders are top priorities for us. We have built a global sourcing machine over 36 years, which is not easily replicated. And we have a vendor universe of over 16,000 vendors. We keep improving our supply chain to support our growth. We're confident our supply chain investments will help us become even better at shipping the right goods to the right stores at the right time and drive growth on both top and bottom line. I truly believe we are leaders in innovation. We strive to be ahead of the curve, never complacent, and make our stores more exciting every day. This is our mission: always raising the bar in fashion, brands, quality and value every day. Summing up, our robust plan year-to-date performance demonstrates, once again, the ability of this company to drive sales and profit growth even in uncertain retail environments and over strong comparisons. We entered the fourth quarter with great momentum and in excellent position to pursue our many opportunities for the holiday selling season. We are convinced that our stores will be gift-giving destinations this holiday season. Longer term, we are very confident we will grow TJX to be a $40 billion business and well beyond. As a management team, we remain laser-focused on near-term execution and, at the same time, keep our sights set on strategic vision for the future. So now I'll turn it back to Scott to go through our guidance and then, we'll open it up for questions.

Thanks, Carol. Now to fiscal '14 guidance, beginning with the full year. For modeling purposes, I'll remind you that fiscal '14 is a 52-week, compared with the 53-week period in fiscal '13. The extra week last year contributed $0.08 to earnings per share in the fourth quarter and full year. As we noted in our press release today, we are raising full year earnings per share guidance to reflect our third quarter performance. Our guidance now calls for full year diluted earnings per share to be in the range of $2.91 to $2.94 over $2.55 last year. On an adjusted basis, excluding the $0.11 tax benefit in the third quarter, this guidance will be $2.80 to $2.83. This guidance will represent a 13% to 15% increase over the prior year's adjusted EPS of $2.47, which excludes the approximately $0.08 benefit from the 53rd week last year. In addition, our fiscal '14 guidance includes a negative $0.02 impact from foreign currency compared to a neutral impact last year. This outlook is now based on estimated consolidated comp store sales growth of 3% for the full year. We also expect pretax margins of 12.1% to 12.2%, which is 20 to 30 basis points higher than last year's margin of 11.9%. As a reminder, this guidance includes our e-commerce investments. And last year, the 53rd week positively impacted pretax margins by approximately 20 basis points. Our full year outlook continues to assume fourth quarter EPS in the range of $0.77 to $0.80 compared with $0.82 last year. Again, this included an approximately $0.08 benefit from the extra week last year. We expect fourth quarter EPS to be negatively impacted by $0.01 due to a higher tax rate this year versus last year. Now to further details on the fourth quarter. We are assuming fourth quarter sales in the $7.6 billion to $7.7 billion range. This is based on estimated comp sales growth of 1% to 2% on both a consolidated basis and at the Marmaxx Group. As a reminder, this guidance reflects 6 fewer days in the Christmas selling season compared to last year. Fourth quarter pretax profit margins are planned in the 11.9% to 12.2% range, down 60 to 30 basis points versus the prior year. As a reminder, the extra week had approximately 60 basis points positive impact on pretax margins in the fourth quarter last year. We're anticipating fourth quarter gross profit margins to be in the range of 27.7% to 27.9%, down 90 to 70 basis points on a reported basis versus the prior year. Again, last year had the benefit of the extra week, which almost all of the 60 basis points impact in gross margin. In addition, this year, we expect gross margins to be negatively impacted by 10 basis points due to foreign currency. In terms of SG&A as a percent of sales, for the fourth quarter, we are anticipating a rate of 15.7% to 15.6%, which is 30 to 40 basis points favorable to last year. As a reminder, last year's SG&A ratio was negatively impacted by a combination of items we called out last year, which together totaled about 50 basis points. Foreign exchange rates, assuming current levels, are expected to have a neutral impact on EPS in the fourth quarter, which is the same as last year. For modeling purposes, we're anticipating a tax rate of 38.2%, which as I just mentioned, would have a negative $0.01 impact on the fourth quarter EPS. We're expecting net interest expense of approximately $10 million. We anticipate a weighted average share count of approximately 720 million. Finally, our guidance for the remainder of the year assumes that currency exchange rates will remain unchanged from current levels. Now we are happy to take your questions. [Operator Instructions] Thanks, and now we will open it up for questions.

[Operator Instructions] Daniel Hofkin. Daniel Hofkin - William Blair & Company L.L.C., Research Division: I guess, speaking about the divisional performance, HomeGoods continues to be a standout. I mean, fairly, I guess consistent trends on a multiyear basis. But can you comment where you're seeing, you think, some of the biggest gains either by category or versus other competing formats? Carol M. Meyrowitz: Yes, Daniel, we don't usually go into categories. So I can just tell you that, overall, we're very pleased with the total home business and all the divisions, including HomeGoods and HomeSense. And as usual, we weatherproof our business and are very flexible with all of our categories through the season. So we tweak them up and we tweak them down as we see appropriate. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Okay. And I guess, just as it relates to Canada, obviously, it's a positive comp. It's the lowest growth of the divisions. Anything that you're seeing either execution-ally or is it weather or other factors that are maybe keeping that division below some of the others? Carol M. Meyrowitz: For us, the Canada division, they're actually doing a little bit better than what we planned for this year. We took into account the Marshalls store cannibalization. We took into account the fact that we invested dramatically in talent this year and last year and we are a little bit still in a teaching mode. We also took into consideration other retailers coming in, so actually, we're pretty pleased with Canada's business.

Lorraine Hutchinson. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: Just wanted to ask for your thoughts on the real estate environment, longer term. What are you seeing in terms of opportunity for the next year or so, both domestically and then for your expansion in Europe? Carol M. Meyrowitz: Okay. Well, actually, I'm going to turn it over to Ernie in a minute because we're pretty bullish on our real estate. And this year, we're over our account. And so Ernie, do you want to maybe talk about the opportunities, which were pretty terrific? Ernie L. Herrman: Sure. Lorraine, we see the environment as continuing to offer up opportunities. It's a healthy thing there, as Carol alluded to, whether domestically or in Europe. So in FY '14, for example, we are coming in over our original store count plan of 150 stores heading to -- we're projecting more like 165 stores. And one of the exciting parts of that is we think we're going to get an additional 7 stores in Europe for this year. Additional store in Canada, where the store count growth isn't as high. 5 more stores than planned in HomeGoods, which is obviously very exciting to us. And an additional 2 stores above the original plan in Marmaxx for the year. So that just bodes well, yes, for FY '14 going into FY '15. But we're confident as we move forward that we're going to be able to continue the real estate growth in the next couple of years based on the environment. So great question. Carol M. Meyrowitz: So Lorraine, we'll be talking about our store count at year-end going forward. But I assure you we're going to take advantage of every opportunity possible.

The next question comes from Oliver Chen. Oliver Chen - Citigroup Inc, Research Division: Regarding the environment now, are you seeing the volatility in traffic that we're noticing in the marketplace? And also the merchandise margins being up is very, very impressive. Given the promotional nature of holiday and how everyone's speaking to this, can you sustain the momentum in the merch margins? And if you could just brief us on what drove ticket, I'd appreciate it. Carol M. Meyrowitz: I'm sorry, what was the last one? What drove what? Oliver Chen - Citigroup Inc, Research Division: Ticket. Carol M. Meyrowitz: Okay. So our traffic increase was a combination -- it was a combination of average ticket being slightly up and traffic being up. So we were very pleased with the combination. In terms of the merchandise margins, we're just absolutely thrilled with our positioning in terms of our inventory and our open-to-buy. As I said before, we really have a flooded market and we're going to be buying straight into the holiday season. And I'm going to throw it over to Ernie. I think the guys are just absolutely thrilled with what they're seeing. Ernie L. Herrman: I think as we've said many times before, controlling the teams is probably our most difficult challenge. So the availability of desirable product is certainly consistent across most families of business. And the neat thing is it's in all the different areas of the business, whether it's in the moderate level or on the better level, it's pretty widespread. So with that, I think we've had a little bit of opportunity on the markup amidst all of that. Carol M. Meyrowitz: Yes, so Ernie and I have our hammers out and we're hoping the guys go in as of the last week of the holiday season, so that's what we're aiming for. So we really believe we're going to keep our outrageous values and be very competitive.

Next question comes from Kimberly Greenberger. Kimberly C. Greenberger - Morgan Stanley, Research Division: Terrific. And Ernie, I'm wondering, I'm looking at the total inventory number. It would suggest that maybe you've got a little more in-transit this year. Is that a reflection of those amazing fall buys that you guys were seeing during the third quarter? And how are you thinking about attacking holiday? And are you happy with what you've got still open-to-buy for fourth quarter? Ernie L. Herrman: Well, I'll let Scott -- Scott can talk a little bit about the in-transit. I think, that you're looking at it.

Yes. So Kimberly, you're exactly correct. The balance sheet inventory was up 11%. As we discussed in the press release, the average per store inventories were down 4%. Just as a reminder that the numbers exclude, on the average per store, the in-transit inventory and the e-commerce inventories, which clearly were -- we didn't have the STP business and the tjmaxx.com at this time last year. The in-transit inventory, as I'll briefly talk, and Ernie can add on to, are higher primarily due to the calendar shift at the end of the third quarter this year being closer to Christmas than last year, certainly speaking to the, I think, the fresh flow of our merchandise. And Ernie, do you want to add anything else there? Ernie L. Herrman: Well, I think -- and I think Carol referred to this earlier on, we are in better shape for our gift-giving holiday season. I think many buys were more gift-giving related this year, so we're feeling very good about that. We're also feeling good about buying later into the season than we did last year. So we're feeling -- we're going to be a little fresher. You have these -- you have the funky sixth day scenario where you're going into holiday, which actually, we are going to take advantage from a flow-it-later perspective. So I think Scott has kind of described to you what's going on with the in-transit, but we're feeling very good about the content of the goods that are on their way and the content of what's, a, in the store now obviously; but further -- furthermore, for our gift-giving, we're feeling terrific -- feeling very excited about that. And we have more families of business participating this year in the gift-giving initiative. So I think that answers your question, Kimberly.

The next question comes from Richard Jaffe. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: I guess a question about -- bookkeeping question about updated sales, comps, operating margin by division for the year. And then I think you've addressed, which is the product flow being later in the shorter Thanksgiving-to-Christmas period. But if you could talk about how that's going to work post-Christmas and how you're thinking about the whole period, call it, to-date through January 10? Carol M. Meyrowitz: First of all, the percent of freshness is up and that's what we strive for, which is pretty exciting. We also have a very good strategy coming out of the Christmas season, going into January and switching over. So where you're going to be the most -- you're going to see the most exciting change from Christmas into January that you've ever seen before. So we're pretty excited about that as a potential. Our Gift Cards are way up this year. We think our customers are going to come back. We're going to lure them back. And for the first time in Marmaxx, we're going to be doing some additional advertising in the month of January that we did not have last year. So we think this is going to be an interesting scenario between December and January. But we're doing everything to drive the customer back into our stores right after Christmas, in addition. Scott, you want to do year? And I'll do by quarter.

Right. So I'm going to update the full year current guidance. Again, just as a couple of things to point out, I'm going to give the numbers on a 52-week over 52-week basis, including the FX impact. Also, just as a reminder, the division segment numbers I'm going to talk about are posted on our website as well. So starting with Marmaxx, a comp of 2% versus 6% last year, segment margins of 14.7% to 14.7%, again, versus last year's 14.5% on sales of $17.8 billion to $17.9 billion. Just as a point there, the impact of the e-commerce businesses is about 20 basis points year-over-year to Marmaxx. HomeGoods, 6 to 7 comp versus last year's 7 comp, 12.8% to 13% versus last year's 12% or 80 to 100 basis points higher than last year. TJX Canada, 0 to 1 comp versus last year's 5 comp. 13.6% to 13.7% versus last year's 14% on $2.9 billion. Europe, 4% to 5% versus last year's 10%; 7.3% to 7.5% versus last year's 6.4%, 90 to 110 basis points higher than last year and on $3.5 billion to $3.6 billion. Just as a point, all of the businesses had segment margin increases higher than the guidance we gave in August. Marmaxx would be 10 basis points higher; HomeGoods would be 20; Canada, 30; and Europe, 10. And just to repeat, on the full year, we're 3% comp against last year's 7%, 12.1% to 12.2% versus last year's 11.7%. 40 to 50 basis points higher on $27.2 billion to $27.3 billion.

Next question comes from Mike Baker. Michael Baker - Deutsche Bank AG, Research Division: So a couple -- I wanted to ask about the merchandise margins expectations in the fourth quarter. You talked about gross margins being down and all that seemed to be the occupancy from the extra week. But what do you -- how do you think about merchandise margins in the fourth quarter? And I guess related to that, and Ernie touched on this, the merchandise margins in the third quarter, you mentioned higher markups. Are you also associating lower markdowns, i.e. better inventory productivity? Carol M. Meyrowitz: Yes, it's a combination. You want to -- Scott, you want to go through the merchandise margins for the fourth quarter?

Yes. Hold on 1 second here. Merchandise margins, basically at the high end of the range, 27.9% versus last year's 28%. Again, a 10 basis points impact due to FX. So essentially flat on a 2 comp. So about what we would expect. Carol M. Meyrowitz: And Mike, we'll always try to beat it. Michael Baker - Deutsche Bank AG, Research Division: Right, understood. And are you still seeing benefits from lower markdowns? Carol M. Meyrowitz: We are seeing some benefit from markdowns, yes. We are turning our inventories faster than a year ago.

And just as a point, in terms of cash -- Carol talked about the turns being faster than they were last year, certainly, through the first 3 quarters. We entered -- we talked about the overall average store and warehouse inventory on a per-store basis. We also enter the fourth quarter with inventories still down in the low-single digits on a per-store basis on the in-store only inventory. Carol M. Meyrowitz: Right. And we still see some opportunities there. So as a result of that, yes, we do have a slight -- a decrease in markdowns, quicker turns. So we are seeing that and, hopefully, we'll continue to see some benefits there in the future, too. Michael Baker - Deutsche Bank AG, Research Division: Right. Fair enough. And then 1 more, if I could. Carol, you did a great job -- we're talking some of the Analyst Day takeaways. One thing that I thought was interesting at the Analyst Day, which I don't believe you recapped, was the store remodel and refresh program that you're going back and touching all your stores again. So if you can just talk about some of the things that you're doing in the store and how many you've done and how long that will be around for? Carol M. Meyrowitz: Yes. So far, we have done 315, I think. We started the year saying we would remodel a little over 300 stores. We're probably going to continue at that pace and we'll talk to that at year end. You saw T.J. Maxx, believe it or not, we just started our remodels. So between that and new stores, we already have 159 done to date. So we're pretty excited about that. We're pretty aggressive on touching our stores in every division and we're going to continue that pace.

Stephen Grambling. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: I realize it's still early, but can you provide some initial color on the e-commerce results, specifically, how the category mix and customer base may vary versus the store on your expectations, as well as, maybe what the response has been from brands that are online? Carol M. Meyrowitz: We are very pleased with our results. And I've said it a million times, be it small, we're pretty excited about it. We're not going to discuss specific categories but we certainly have a differentiation strategy and we are pleased with that. We're learning every single day, the combination of the buy of STP has been absolutely sensational. So we are very, very pleased and we're going to continue to invest appropriately. I'll keep coming back to Marmaxx, if you take the e-com number out, it's going to make a 15% segment profit. So I think slow growth smart and slow and steady will win the race in the end. But we're going to continue. We're very excited about it. Stephen W. Grambling - Goldman Sachs Group Inc., Research Division: Okay. And just a very quick follow-up to that would just be, are there any brands that maybe weren't on there now that we're waiting to see, kind of, how things initially trended that maybe can be brought back? And we saw that there's this Maxx flash element to the site now, I don't know if that's another way to get new brands brought in? Carol M. Meyrowitz: Hopefully, you'll shop some of our -- we've had our -- an interesting Maxx flash recently. We're going to continue to do that, and you'll see some things that we'll be testing through the holiday season. Some of the buyers are getting more excited and we're going to keep building this. I have all the faith in the world that we're going to build it the same way we built our business with great brands.

Roxanne Meyer. Roxanne Meyer - UBS Investment Bank, Research Division: I just got 2 follow-ups. One on the e-commerce, certainly it's early days, but we are seeing some unbelievable brands showing up. And just, overall, the assortment does seem to skew upper- and middle-income and with price points probably higher than what's in your store. Just wondering if that's the strategy that you think you're going to be pursuing over the longer term? And then secondly, on the remodel program, I'm just wondering if you've got any plans for some of your other divisions to get remodeled? Carol M. Meyrowitz: Yes, that 315 isn't just Marmaxx. We have a remodel program in every division. And next year, each division is going to come back to Ernie and myself with their proposal of remodeling, and usually we're pretty aggressive with it. So we want to make sure that all of our stores are very current. In terms of e-com, we're just -- the strategy is going to build and build and build. And we're adding more product everyday. We have home product we're adding, we're learning. This is going to be a combination of good, better and best products on e-com. This is a great way to reach a customer. We don't have runway, we don't have some of our product that can reach across the U.S. today. So it gives us the ability to do that. But our strategy is going to be all levels, all good, better and best going forward. So we're pretty excited. It all seems to be working.

Brian Tunick, your line is open. Brian J. Tunick - JP Morgan Chase & Co, Research Division: I guess, Carol, given you're now almost as large as the biggest department store player, we're just wondering, are you still focused on that delta below department store pricing? Or do you -- does your model now have more pricing power today given the market share gains and your overall buying power with the vendors? And then our second question is, if you could just give us some color on marketing spend, either dollars or rate, for Q4 versus last year? Carol M. Meyrowitz: So our advertising spend is up 10 basis points for the year, I believe. It's up that for Q4, Scott?

Yes. Carol M. Meyrowitz: Yes, so it's about 10 basis points, Brian. As far as the power of pricing, we just continue -- with the number of vendors and our buying getting smarter and smarter and we keep teaching -- and the growth of our buying group, we just try to keep raising the bar. In the end, it's all about vendor relationships. And we build a business with each vendor, that helps them make money and it helps us make money. And that's really our strategy going forward. We're going to continue that. So to us, it's all about the relationships. That's not going to change. Brian J. Tunick - JP Morgan Chase & Co, Research Division: Right. So my question, I guess, was on the ticket as far as sort of what your pricing ability is. Do you still monitor all the department stores to see where they're at going out the door or do you now have more pricing power yourself given the category? Ernie L. Herrman: Brian, we still monitor -- a big part of what our merchants do is to monitor the out-the-door prices at other retailers. So we always want to show the appropriate value gap between us and the other retailers. I'm not sure, is that what you're asking or? Brian J. Tunick - JP Morgan Chase & Co, Research Division: Yes, exactly. Ernie L. Herrman: Back to Carol's point, that will not change. And that approach, regardless of the buying power -- yes, and I know what you're saying, our buying power has gone up exponentially over the last 5 years. It does not affect that approach to us because, really, we want to offer the customer, in the end, the best value. Carol M. Meyrowitz: We have to be competitive, that's who we are and that's what we'll continue to be. It's always the distance between us and the department stores.

The next question comes from Paul Lejuez. Paul Lejuez - Wells Fargo Securities, LLC, Research Division: Just a big picture question. As I look back over the last 10 years, your SG&A rate has been in the band between 16.3% and 17% of sales. And I'm just wondering if you see -- and this is probably best for Scott, if you see that moving out of that band at some point, in theory, to the lower end? I think you said closer to lower end right now. Can you move even lower? And then Carol, just a quick one for you, just in the near term, who do you see as the greatest threat from a competition perspective -- competitive landscape perspective?

Paul, a couple of things, actually, I'm just going to add on a previous question or 2 about our remodels. Of the 315 remodels that Carol talked about that would be done this year, approximately 2/3 get -- of that get done in Marmaxx and then in the 30 to 40 range, which is proportionate to keeping all of those stores fresh. That's always an ongoing thing. And as Carol said, in that 30 to 40 range, sometimes, we tweak it up higher depending on the state of the stores at that point. But again, just wanted to reiterate that. In terms of the expense structure, just as a point, part of the benefit we've been getting on expenses is through the leverage in the gross profit on the buying and occupancy. So clearly we, over the years, don't break out exactly what that has been over a many year period. But clearly, we've been leveraging in that line due to our above-plan comps and I think the great deals we've been getting. In terms of the SG&A, a lot will depend on what the comps will be. We think our expenses -- at this point, we haven't done our plan for next year. Certainly, we'd expect to be, on a 2 comp, relatively level. But I think long term, it depends on the amount of investment spend that we will be doing and other initiatives and how much we'd want to put in advertising, et cetera. But certainly, we want to stay at the low end of the number you talked about. Carol M. Meyrowitz: Yes. I mean, Paul, I think we also want to leave ourselves some flexibility in terms of e-com because as that -- we like the initial results. If that starts to take off, we may be a little bit more aggressive in years 1 and 2 to fund for the future, but that remains to be seen. Again, I keep saying we need to grow smart and evaluate that. In terms of what do we see as the greatest threat. I know this is going to sound a little hokey, but the greatest threat is us being complacent. If we do our job and we keep raising the bar on the products and the value and the brand and what we're giving the customer, I sleep very well at night. So I really look at it internally in how we're doing versus all competition. There isn't 1 threat. To me, I look at everybody as a threat, and we all do. So it's really within us and our execution and that's what's going to make us continue to grow.

Howard Tubin. Howard Tubin - RBC Capital Markets, LLC, Research Division: Can you just maybe give us an update on new store productivity, how that's been trending in your stores over the last couple of years? Carol M. Meyrowitz: I can tell you that our new stores are performing above plan. We are very, very happy, which is why we started to increase our store count. Our old stores continue to comp, and that's what's so amazing about our business, that we're getting it really across the board. We don't give specific numbers but I can tell you that we're very excited about our new store performance.

Howard, I'll just -- give just a little here on -- in terms of our -- in terms of our Marmaxx and HomeGoods, as we've said for many years, for several -- for a long period of time at Marmaxx, we've been beating it by -- in the mid to -- mid double digit, that 10% to 15% range. HomeGoods, we've had great performance also in the last few years. And clearly, by the way, we've been bullish about Europe. We've been beating our pro formas there for the last several years as well. And in Canada, we've had very good performance as well. So really, Marmaxx, a long period of time but all the other divisions are quite strong, and in many cases, it's been in that low double-digit amount.

Jeff Stein. Jeffrey S. Stein - Northcoast Research: Carol, a question for you on gifting. And I suppose everything in your store can qualify as a gift, but as you define it internally, I'm wondering if you could just give us some guesstimate in terms of what percent of your fourth quarter sales would be defined as gifts? And I'm speaking of the type of items when you set up these tables in the stores and have items for -- under $10 gifts, under $20 gifts and so forth. And secondly, can you talk to us a little bit about what families of business you're expanding the gifting categories to this year that you did not offer last year? Carol M. Meyrowitz: Well, you're not going to like my answer because we really don't talk about the family of businesses that we would expand or decrease. In addition, we have so much and more open-to-buy that we can't even tell you what the percentage of gift-giving is because we're wide open to go in. And if it ends up being like crazy coats at outrageous value, you don't categorize that as gift-giving but it's going to be -- we want it to be mind-blowing, so to speak. So it's very hard, today, in November, to tell you what percentage it's going to be. We're going to continue the tables. We have great, great flow. Our stores are set up to understand that whatever product comes in, they know how to take the product and set it up as gift-giving. But we wanted -- the buyers are very, very focused on it being extreme, extreme value. So just about anything that comes into our store from now on should be outrageous gift-giving product.

Marni Shapiro. Marni Shapiro - The Retail Tracker: I was curious about something that you haven't really talked about and it seems the department stores have continually spoken about shoes and accessories and handbags as a particular interest, a strong point in their own businesses. And obviously, one of your competitors has standalone footwear and accessory store. If you can talk about -- update on the Marshalls shoes and an update on this segment and your thoughts around the segment as either its own entity or as a shop-in-shop like the runway or what you have going on with shoes across many of your chains? Carol M. Meyrowitz: First of all, the categories are all very, very strong for us and they continue to be. I think we are definitely a destination for handbags, shoes and accessories. So that is growing dramatically for us. We love the fact of flexibility. So we really have been very careful not to set up a store that's too small. It doesn't have the ability to have many family of businesses and give us the flexibility. Today, it could be outrageous, tomorrow, it could not be outrageous. And so we don't ever want to put ourselves in a position that we're focused on 1 or 2 or 3 categories alone. We just find that our model is perfect to have many, many, many categories in that flexibility.

Dana Telsey. Dana Lauren Telsey - Telsey Advisory Group LLC: Carol, tremendous results, and as you think about the allocation of store space in the store, with home doing well, and other categories doing well, how do you see the store size, what you think about is the right size going forward given the expansion of categories? Carol M. Meyrowitz: Well, as we've reduced our inventories, we're kind of loving our store size. It gives us tremendous flexibility and we still think there's a little bit of room. Actually, I walk into the stores today and I think both Ernie and I say, "Oh, we could probably bring the inventories down a little bit more and create more freshness." But we're very, very pleased with our store size. As you know, we have all kinds of sizes and shapes, and the ability to be able to do that. In Europe, we have many stores that are on 2 and 3 floors. We take advantage of the space that is available. If it's a good deal, we're going to go after it. But it's not like we're going to look at 80,000 square-foot stores. However, we do have some ideas, as always.

Laura Champine. Laura A. Champine - Canaccord Genuity, Research Division: Obviously, a lot of retailers got caught with too much inventories. What's the status of your packaway? Have you been building that? And any quantification you can do with that as a percentage of inventories will be great. Carol M. Meyrowitz: It's pretty flat for last year and we remain -- it's not a big part of our business. Our packaway remains pretty small as a percent of our business because more importantly, we want to be current. We want to be the most current fashion. So we don't build tremendous packaways. We'll take advantage, but today we're pretty much flat to last year, which is very comfortable for us.

Mark Montagna. Mark K. Montagna - Avondale Partners, LLC, Research Division: A question just about the merchandise margin. So it sounds -- merchandise margin is up, and you've gotten some gains on lower markdowns. But is higher IMU helping? And if so, which quarter did the higher IMU start? And then just for Ernie, you said the market is flooded with merchandise, would you say it's more flooded this year versus last year? Ernie L. Herrman: Mark, in terms of the market, yes, I would say there are more goods this year than last year. It might vary by certain families of business or departments, but in total, there's more merchandise. I think your first question, though, was about markup? Mark-on... Carol M. Meyrowitz: Mark, you want to know the mark-on? Mark K. Montagna - Avondale Partners, LLC, Research Division: What I'm trying to understand is you've got the higher -- you're getting the higher merchandise margin, and some of that is lower markdowns, but is some of it also higher IMU? And then, if so... Carol M. Meyrowitz: Yes, it's a combination. It's a combination. And we don't break that up by quarter. But again, as you have -- as you're buying closer to need, you have the opportunity to gain on the mark-on and the markdowns because you're more current, you're more fresh. And as our trends continue, you get the benefit of both. But there are outrageous deals out there and we have plenty of open-to-buy. So that's always going to be a positive.

Patrick McKeever. Patrick McKeever - MKM Partners LLC, Research Division: I know Black Friday is not a big deal for you but certainly those -- the whole Thanksgiving weekend is an important time for the company. And so I'm just wondering, with so much more going on, on Thanksgiving Day, some competitors, department stores opening up at 8:00 and some even earlier than that. What you're thinking about, just from a strategic standpoint, over the Thanksgiving weekend? Carol M. Meyrowitz: We're going to do what we always do. It's have outrageous products. I mean, we don't play in special deals and special discounting, but we have some outrageous goods going out and we are very excited about that. We're not planning on being open on Thanksgiving. We have a handful of stores that have to deal with some leases. But we really would like our employees to enjoy Thanksgiving with their family. We just feel, culturally, it's very important. So we're really not going to play in that arena. But we feel very good about our product that's coming in through the holiday season. Patrick McKeever - MKM Partners LLC, Research Division: Did you see an impact last year from these Thanksgiving store openings, either to the negative or even, perhaps, to the positive by seeing more business on Black Friday morning than you might have seen otherwise? Ernie L. Herrman: Patrick, we have really not seen a lot of impact. We've studied this over the years, and because we haven't jumped into the promotional play, we're not up against it. So what happens is we kind of -- I think our customers know that and they aren't expecting it. We have, over the years, looked at the hours and we've taken care of that but essentially, now, there's no change in that, like Carol said. Carol M. Meyrowitz: Yes. Quite frankly, I've gotten some incredible positive e-mails from customers actually thanking us for not being open on Thanksgiving. I mean, we believe that's important. Patrick McKeever - MKM Partners LLC, Research Division: I'll throw my thanks in as well as an analyst. And then a quick one on the tax rate, what would the tax rate have been absent that pickup? What would it have been on a normalized basis in the quarter?

Sure. Give me 1 second here. It's approximately, for the third quarter, 38.1% so -- versus last year's 38.3%. So down. And the reason it was down versus last year, because we had the benefit of Worker's Opportunity Tax Credit, which Congress passed last year during the fourth quarter. One of the reasons why we're down in the fourth quarter tax rate that I called out earlier and had the benefit in our -- slight benefit in our overall tax rate due to the composition of our income with more of our -- a little more of that income coming from Europe, so that helped benefit. So 38.1% versus last year's 38.3%. Carol M. Meyrowitz: Okay. I think we only have time for one more question.

And that comes from David Glick. David J. Glick - The Buckingham Research Group Incorporated: Just a question for Ernie. I was just wondering how you're thinking about and strategizing the seasonal categories. I mean, they've been tough the last few fourth quarters. And your business has been strong despite that. And I'm wondering if that's part of the flood of merchandise that you're seeing and if that's part of your flow strategy to be able to potentially take advantage of a more favorable outlook for seasonal categories? And whether that could be a positive catalyst for your ticket and transaction value and in particular, where your comp store sits at? Ernie L. Herrman: So David, let me just get a little clarification. When you say seasonal categories, you're talking about... David J. Glick - The Buckingham Research Group Incorporated: Outerwears, sweaters. Ernie L. Herrman: Yes, outerwears, sweaters, cold weather goods, et cetera? David J. Glick - The Buckingham Research Group Incorporated: Yes, sorry. Ernie L. Herrman: Yes, we -- first of all, some of those categories are very gift-giving related, if you actually think about it. So we have not run into a shortfall of goods there, so that's been good. So those are categories that we plan to be in, in a meaningful way. I cannot tell you whether it's dramatically different than last year. We can't give that information out. But we had good success there last year. I think we're a little more excited this year because there's some fashion going on in some of those categories, more so this year than last year, which generally, in our environment, bodes well for being more successful there. So I think if you're asking do we plan on seasonal categories being more important this year? I would say yes, to a degree. Does that make sense? Does that answer it? David J. Glick - The Buckingham Research Group Incorporated: Yes. And I'm just also wondering if there's a lot of incremental availability and if weather kind of moves your way, whether that's something you can take advantage of as the quarter unfolds and [indiscernible] Ernie L. Herrman: Yes. We can -- in other words, if the trend gets even better there, as the model -- and this is what's great about our model, we can chase those businesses more aggressively because, yes, there is availability. Not in every seasonal category, but in a fair amount of them, I would say. So yes, we can do that. Carol M. Meyrowitz: However, David, we don't want to get into the fray of everybody marking down certain categories. We have very exciting newness coming in, as I said, as we transition out of December into January. So we'll take advantage of it, but to the degree that we feel is appropriate for our business. Thanks, everyone. And we look forward to coming back fourth quarter. And have a wonderful holiday season. Thank you.

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