Good morning everyone and welcome to the DSW Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please also note that this event is being recorded. I would now like to turn the conference over to Christina Cheng, Senior Director of Investor Relations. Please go ahead.

Thank you, Denise. Good morning and welcome to DSW's third quarter conference call. Earlier today, we issued a press release detailing the results of operations for the 13-week period ended October 29, 2016. Please note that the various remarks made about the future expectations, plans and prospects of the Company constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements due to various factors, including those listed in today’s press release in our public filings with the SEC. Joining us today are Roger Rawlins, Chief Executive Officer; Debbie Ferrée, Vice Chairman and Chief Merchandising Officer; and Jared Poff, Chief Financial Officer. Let me now turn the call over to Roger.

Thank you, Christina. Our third quarter results demonstrated the progress we have made in stabilizing our business with improvements in gross margin and expense management resulting in year-over-year earnings increase after four consecutive quarters of decline. Actions we took to strengthen the content, freshness, and consistency of our assortment resulted in better regular price selling in women's dress and casual and a continued acceleration in our athletic business. These improvements were offset by a late start in boots which we partially anticipated. In contrast to last year we were able to manage inventories through cancellations and reorders allowing us to enhance our merchandise margin. While there is still plenty of opportunity for improvements including returning to positive comps, this quarter's results demonstrate the kind of success we can achieve when we focus on executing our models. Now let me congratulate Jared on being named CFO and let him provide some color on our Q3 performance and Q4 outlook.

Thanks Roger and good morning everyone. Solid execution during the third quarter resulted in much improved financial performance. On a GAAP basis earnings per share increased by 7% to $0.47 per share including acquisition related and restructuring expenses of $0.03 per share. Adjusted earnings per share increased by 16% to $0.51 per share, the balance of my comments refer to our adjusted results. The company revenues increased by 5% with the DSW segment and Ebuys each contributing to our sales growth this quarter. Comparable sales at the DSW segment decreased 2% with regular price comps down 1% while clearance comps decreased 6%. We opened 18 new stores this quarter including our first location in our 43rd State New Mexico. Year-to-date we have opened 30 net new stores compared to 34 last year. Our marketing activities drove a low single-digit increase in transactions with an improvement in new customer acquisition. Traffic improved modestly in both channels and store traffic turned positive during the back to school selling period. Average dollar sales remained below last year due to shifts in category mix. Digital demand increased in the low teens including strong growth from our drop ship business. Stores were filled close to 28% of digital demand this quarter led by the significant adoption of our buy online pickup and ship to stores program. Revenues at the ABG division remained flat driven by 5% comp decline and the opening of net 11 new locations for a total of 396 departments this quarter. We continue to work closely with our partners to manage the appropriate level of inventory. Ebuys contributed $21 million to DSW Inc. revenues and grew at a healthy pace. As we have more fully integrated Ebuys into our infrastructure and short-up our talent needs with experienced merchants and planners we thought…

Thanks Debbie. Increasing challenges in the U.S. retail industry have led to an ongoing consolidation with a significant number of players accelerating store closures if not exiting the business altogether. Footwear brands have experienced difficulties growing their U.S. wholesale distribution and in maintaining profitability within their company owned retail network. We’re also seeing online players continue to invest in their distribution networks in a race to offer same day delivery, an increasing number of e-commerce sites test, build and expand their physical presence in order to get even closer to the customer. Our customers are demanding more convenient shopping models. They want to walk into a store and find any item identified on their mobile devices and if not available that day they expect it to be available somewhere within our network for next day delivery. They want the entire process to be friction less and flexible. Research says that consumers who conduct a mobile search are much more likely to visit the store to make a purchase within two days. In addition these online shoppers are increasingly choosing to pick up their purchase in store whether to ascertain sizing and comfort or to secure ones purchase the same day. This evolving environment will create significant opportunities for survivors. Based on our renewed focus on the DSW customer, the investments we have made and will continue to make to support our customers and our history of innovation, we will be one of the few left standing. That’s why I am confident about that statement and our future. This quarter we demonstrated that when we focused our efforts on inventory management discipline, we can expand our merchandise margins, and grow our bottom line. I am happy we are able to demonstrate these defensive skills but it’s time we start playing offence…

[Operator Instructions]. And our first question will come from Scott Krasik of Buckingham Research Group. Please go ahead.

Hey guys, this is Matt calling on for Scott. Congrats on your quarter and if I can just start of here, so if you guys look for category of presentation, what evidence is there that company can drive a positive comps next year, if you can address that on athletic and kids and highlight any other I guess that will be great? Deborah L. Ferrée: Yeah, good morning Matt. So, the athletic trend I will address the two categories you just asked me about. The athletic trend continues a very strong momentum and we have really not -- we have seen a continued strength in the performance and the fashion but then we also have this new category in non-athletic women's fashion that is also gaining traction. So, this category continues to have momentum. You can see in the third quarter, the typical downtrend at the end of the Q3, beginning of Q4 that you normally see. As a matter of fact it is sustaining everything that we expected from it. And there is a lot of new products and concepts and ideas for next year so I see this as a lifestyle shift and a trend that’s not going away anytime soon. As far as kids is concerned, as we just said we are very pleased with our early opening of our first 224 stores. The next tranche of stores between 70 to 80 stores will come in for March. We have learnt a lot from the first phase launch that we did and we’ve gotten some very positive encouraging results and we feel that this will just continue to translate into the next phase of stores we open.

Okay and then I guess -– has moved back to the high low strategy for the most part and you guys up from department stores can you maybe give us an update on the competitive environment from a high level? And then after the reset this quarter where do you guys expect to see Ebuys gross margin going forward in 4Q and into next year?

Matt, this is Roger. I will tell you from a competitive standpoint, right now our efforts are really, really focused internally and as Debbie mentioned the opportunities we have within our assortment that’s where we’re spending our time and efforts. And obviously we watch what others are doing but we’re trying to keep our organization very, very focused on delivering what we see the opportunities are within our own brand. That’s what I would tell you how we’re approaching it. Jared do you want to talk about…

Sure, from a gross margin standpoint for fall we are forecasting roughly flattish to maybe down just slightly to up just slightly. A big driver of our gross profit percentage will be driven by Ebuys which is obviously relative to our historic legacy gross margin. From a markdown standpoint we continue to believe there is a significant opportunity in our markdown performance just like in the third quarter for the balance of the year as we have planned inventory such that we won’t have to be as promotional as we were last year regarding slow moving inventory.

Okay, great. Thanks guys.

And your next question will come from Paul Trussell of Deutsche Bank. Please go ahead.

Hey, good morning. Just to continue the conversation around comps just wanted to dig a little bit into your expectations for the fourth quarter, is the view that the clearance comps will be down meaningfully once again and be a drag if you can just kind of clarify expectations around that versus fall price as well as any specific traffic in ticket headwinds that you are facing for 4Q?

Sure Paul, this is Jared. What I would say and then as you know we don’t give quarterly guidance but obviously we’re into the last quarter of the year so, your models can back it into sort of what we’re saying. But we are guiding to a mid single-digit comp decline for the fall. I think the two years stacks for the balance of the year will be similar to what we’ve experienced so far this fall. And that’s something that we are planning for, that something as we’ve talked with you guys about for much of this season. We positioned the inventory such that we should not have to take the drastic measures that we took last year. And our gross profit is rewarded by doing that. So the pressure on the top line I think is more than outweighed on that gross profit performance there.

Paul I think, this is Roger, I think one of the things we have been talking lot about is focus within our organization back on managing inventories. And we have some new folks who are brought into our organization, in our planning world that are helping us with that. But we’re really happy with how we are crossing into the fourth quarter inventories down 3.5% per square foot, that sets us up so that we do not have to run the same type of promotions we ran last year or the kind of direct mail campaigns we ran last year which were to deal with excess inventory. So this is the way we historically had operated the business. We’re not happy that we’re going to have negative comps in fourth quarter but long term we know we can get back to positive comps but there is just not a need to run those promotions over the fourth quarter.

Understood, thank you for that color. And then just in terms of a follow up Roger, you are having success from a digital standpoint across multiple platforms, I know you are not giving guidance for 2017 yet but just broadly speaking can you help us understand what DSW square footage outlook and opportunity as you think about those smaller stores versus a regular size store, Canada opportunity, etc? Thank you.

It is great question. I think we just opened our 500th store here in the United States and when we look at outlook for future periods there is still some store growth opportunities we have. What I am really excited about is as we have put more product in front of the consumer in our stores whether that was the kids product or there is the test of some athletic stores where we have really ramped up athletic in the stores, what we can see when we put more products in those locations we can do more sales. What we are trying to figure out is what is the right way to display those goods, how do we bring this whole warehouse experience to life in a bigger way going forward. And we think that can open up new opportunities whether it be smaller markets, smaller doors. And I really love the fact that up in Canada we operate an inline business with Town, we operate a smaller, more family kind of footwear business within our Shoe Warehouse brand and we operate our DSW store. So, because our team now has access and visibility to how all of those can play together and that creates some great opportunities longer term for us. So, we do believe there is significant growth opportunities for the DSW, Inc. enterprise and leveraging all of the learning we are getting from those things combined with Ebuys we think creates opportunities for the long haul.

Thanks and good luck.

Thank you.

The next question will be from Jeff Van Sinderen of B. Riley. Please go ahead.

Alright, good morning and I wonder if we can just follow-up a little bit on the comp. I don’t know to what extent you want to break it out but just wondering if there is anything you can add in terms of the brick and mortar comp versus e-com, it sounds like e-com is doing extremely well for you, just wondering anything you can break out in that? And then also can you just remind us if kids is included in the consolidated comp, that would be my first question?

Yes, kids is included in the consolidated comp and Jeff I will tell you we do not like using the word stores or dot com because as Jared has mentioned and I mentioned in the script that, that there was a significant amount of our digital demand that has been fulfilled by a store. And so we really don’t look at it as stores or dot com. It is about engaging with that customer and providing them what they want and where they want those goods, whether it be in the store or available digitally.

The only other thing Jeff I would mention about kids as Roger said, it is baked into our comp. We sell a very conservative at this point in our life cycle of kids, not even having a full year let alone a full season. This is something that we are still learning. So this is not something that we are majorly baking into the comp in any way, shape or form.

Okay, that is helpful and then just as a follow-up if I might, on some of the smaller markets you have opened in some of the newer stores there, I am just wondering if there is anything you can share in terms of performance metrics on those, what you are seeing there, and kind of what the outlook is I guess going into some of those smaller markets?

What we have seen is whenever we open doors into the smaller markets or even the smaller doors that we have opened, we like the performance. We are achieving our ROI targets and I think that the reason why we look to expand the number of doors is because one, it creates an incredible -- a platform for us to grow our digital presence as well. So it is not just about the brick and mortar, it is how does that create an opportunity to sell digitally. We love the fact that it allows our customer to have the ability to touch and feel the product in that local market, that they might not have access to today. So, there is multiple reasons why we like our small formats, small market strategy that we have been pursuing.

Okay, that's helpful. Thanks very much and good luck for holiday.

Thank you. Deborah L. Ferrée: Thank you.

The next question will come from Chris Svezia of Wedbush. Please go ahead.

Good morning and thank you for taking my question. I guess first Debbie for you, could you maybe talk about where you are seeing the improvement in non-athletic categories, sort of most typically where that is? And secondarily maybe if you can just talk about if you can break out how certain categories performed, athletics specifically and maybe if you can just talk about boots, you said it was little bit below your plan, just sort of how that performed and how you are thinking about that? And then I have a follow-up. Deborah L. Ferrée: Sure, good morning Chris. So let me start with this, so we planned boots down for Q3 to reflect the later start in the season that we thought would happen. And that in fact had happened after we saw. We read the results very early and started making necessary adjustments at the style level in boots. So, overall we saw a continued shift out of when the customer was ready to buy that category. We believe that if you really believe the buy now, wear now theory which I do that boots will continue into first quarter further than what we saw last year. Further than what we planned last year. So I would say the learning on the boots is that when you look at the weather pattern it’s just that that you have to recognize that category starts later and it extends later. And that’s how we planned it, I am happy with what we’re seeing right now and that’s the way we’ll address it for next year. Maybe been a little bit more dramatically pushing that boot business to start even a little bit later in third quarter. As far as non-athletic categories are concerned what I am really excited about…

Just real quickly to boots what was the comp in boots and what was the comp in total athletic in the quarter? Deborah L. Ferrée: So we’re not sharing specific numbers but the athletic business continues in very, very healthy double-digits and the boots were down like I said in third quarter because of the late start. So I’d rather talk about that after we close fourth quarter, I think that’s probably going to be more reasonable.

Okay, fair enough and Roger just one quick follow up for you, just on Town Shoes. I know you guys have or at least the investment group has a put option, I think in the spring, to put to you the balance of the business. I'm just curious, how has it been performing? I think you broke out $1 million there I think after your after tax and after your share, but it seems like maybe it's somewhat below what the overall DSW operating margin structure is. Can you just talk about what's going on at that business and maybe some opportunities to improve the operating performance there?

Chris, unfortunately we can’t get into that kind of detail. I will tell you I am happy with the work that our team is doing to help Town grow. Both top line and bottom line we have a lot of work, our home office team has been doing up there around IT and HR and some of the other disciplines. And so we’re really getting ourselves prepared for at some point in the future when we have the opportunity to own the entire Town enterprise that we want to make certain that's very successful but I don’t want to get into any details beyond just that.

Okay, appreciate it. Thank you, all the best around the holiday.

Thank you.

The next question will be from Randy Konik of Jefferies. Please go ahead.

Great, thanks a lot. I guess my first question is, can we get a little bit more clarity on, with the kids addition, you gave color on visits up, UPTs, or lease transaction value up. I guess what I want is to get a little more specific on the comp metric of the 200 plus stores with the kids versus without try to get some kind of perspective on how much lift it's giving to the stores, that would be very helpful? And then, you talked about, I think, you said in your commentary regarding, something regarding new-customer transactions. Is there any kind of, a little bit more detail you can share there, where it sounds like you are broadening out the customer base, which is very positive? And I guess, lastly, you have done a very good job of inventory control and just curious about what kind of process changes you have kind of implemented to the inventory planning process so that we can get very good comfort that this will be a nice solid controlled trend as we go throughout not just the fourth quarter, but into 2017 and beyond? Thanks.

Yes, from the kids perspective, this is Jared, and then I will turn the call over or turn that question over. From a kids perspective what I would say is as we had shared before we were launching this in a waved approach for several reasons. One, it is prudent to do so and two, we really had never taken an entirely new category of something that didn’t exist and drop it into an existing store. So, what we wanted to do was take all of the learning that we got from phase one and make sure we have that behind us and forward that as we work to figure out the right roll out strategy. What we saw and what we mentioned in the script was when the kids were rolled out and we saw them executed in a way that they needed to be we had absolute validation of our hypothesis. So, all of the metrics that we thought would happen, the incrementality happened in a way that we thought that it would and we are very excited about that. What we are going to do now is take those learning where we have got another 70 to 80 stores lined up in strength that we know can take kids and fit them into the adjusting store and they are going to perform I assume just like the ones that did in the fall. But then on phase three or their final roll out we are going to take our time and make sure we understand how to fit those into the stores. They are some of our most challenging layouts and not have to lose any existing footwear. So for this to be incremental we don’t want to take anything out. What we have seen is whenever we can put more product in front of the customer in our stores they find more shoes. And so this is an entirely incremental category and it is something that we are very excited about. We just wanted to get them the right away.

So Randy I can -- I will take your second question about the customer base. This third quarter we took a different approach to our marketing than we had ever taken. We invested heavily in digital rather than TV. And we were excited to see the kind of response that we did receive and that we were able to grow our new non-customer base, we were able to attract people that historically might not have shopped at DSW location or website. I think that is something that we will continue to penetrate more heavily towards go forward. This fourth quarter I am sorry, we are doing some TV so that we can sort of balance the heavy digital campaign in third against how we do with from our TV in select markets in fourth quarter. So, we are learning as we go through this process. I think as every retailer is, how do you distort this marketing dollars. So, I feel really good about what our marketing team has delivered in the third quarter. I mentioned this in the script, we were really pleased with the kind of traffic that we are able to generate and a large chunk of that came from our strategy to go digital with a lot of our marketing spend. As it relates to inventory process changes, I will let Debbie take that question. Deborah L. Ferrée: Thank you Roger, so I will tell you it is concerning three big things that we did around the inventory and process change. We really took a look at how we plan. As I mentioned earlier we have a new leader and the planning and allocation function comes with a great amount of experience and discipline from his previous life. And he came in immediately and really assessed current state of where we were in process and he took a look at how we plan down at the category level. He took a look at how we manage with rigor and discipline, the inventories to match demand, and the biggest thing I think that was quite a shift from last year was we really took an early look at the early results that we saw happening at the beginning of Q3. Our other customers were voting on certain products and we reacted very quickly to that both reordering the big items and also cancelling things the customers showed that really weren’t interested in. So, I would just say that we took a look at the entire process and we are really getting back to basics and focusing on inventory management and disciplines around how we plan, how we allocate, and how we maximize the business. It is really pretty simple strategy.

I think really Randy, what is important is and I mentioned this also in my comments that I think we have done a -- we did a good job in third quarter of being conservative in our approach, in managing our inventories. That is a discipline that we will continue as we head into the spring season who we also are going to get more aggressive of identifying those key trends that Debbie mentioned and we are going to go after them. Because if we want to get positive comps you don’t get there by managing it through inventory reductions. So we’re going to go place some bets as we head into the spring season but they will be educated bets that we’re placing rather than across the entire assortment.

Thank you.

The next question will be from Christian Buss of Credit Suisse. Please go ahead. Christian Buss of Credit Suisse your line is open? We’ll move on to the next question which will be Steve Marotta of C.L. King & Associates. Please go ahead.

Good morning everybody. Can you talk about the penetration of athletic in the mix during the third quarter and what it was versus last year? And my follow-up with you is, besides the vulcanized, which would be benefiting from the denim trend, can you narrow a little bit and more specifically talk about what other styles you would expect to benefit from the denim trend? Deborah L. Ferrée: Good morning Steve. I am not going quote numbers in athletic but I will tell you the penetration as we said in the earnings call went up I believe 400 basis points. So we did see an increase there. As far as the other trends that are really happening are happening in the -- so there is continued strength in athletic and non-athletic sport. So without calling out brand names there are shoes that may have a vulcanized kind of a bottom but they’ve got more of a fashion that actually lives in the women’s business. But as far as other trends that are concerned when you looked at the shift in apparel it requires heavier shoes, heavier bottom, man tailored shoes that haven’t been in the industry for as many years as I can remember. So I think the key takeaway here, the big story is that there are styles and products that the customer is demanding based on the apparel trends and shifts that haven’t been in the market. They are not in her closet and we’re starting to see traction there. I believe we’ll continue through fourth quarter into the spring season. So it really allows our customers to buy a wardrobe of shoes now. It doesn’t limit them to two categories just sandals and boots like we have seen over the past few years.

That’s helpful, thank you. And Roger can you go into a little bit of detail regarding the relaunch of the website and I think you said spring of 2017, what are going to be the new capabilities, what would be the benefit to the consumer for the new look? Thanks.

I mentioned how mobile is really the front door to our brand. I think what you are going to see with our new responsive design that we’ll role out after holiday we didn’t want to launch it right before cyber Monday. But it’s going to be much, much more mobile friendly and that is where the vast majority of our traffic is coming from and right now frankly our experience is not great in that space. And so I am excited with where it is going -- how it’s going to show in the mobile space that’s what I would tell you is the biggest thing Steve because that is again where the vast majority of our traffic is coming from.

Great, thank you very much.

You are welcome.

The next question will be from Kelly Chen of Telsey Advisory Group. Please go ahead.

Hey guys, thanks for taking my question. I know that one other areas you guys have been working on is opportunistic buyers and I noticed that in the release you guys talked about I think lower opportunistic buys and you talked about the inventory but could you talk about where you’re trending now with opportunistic buys as a percentage of sales, what you’re expecting over the next couple of quarters and just in general how you’re feeling about the inventory content that you’re seeing there given that across the channel within retail everybody seems to be much more disciplined with inventory heading into holiday? Deborah L. Ferrée: Sure, good morning Kelly. So the way I look at opportunistic buys is there are a lot of goods in the market right now but are there enough of the right goods. Our opportunistic by percentage, I am not going to quote that but I would tell you it’s flat to slightly down from last year. But that is totally indicative of being able to identify the right items that we see in the market and be able to translate them into values for the customer. So we get lift on every single week, the lift -- we’re seeing a lot of lifts right now and we’re taking advantage of those things that we think are right for the business, to be able to pass value to the consumer.

Great, thanks and then just as a follow up Debbie, I was wondering if you could talk -- I know you have talked about athletic quite a bit if you look at the assortment now how do you feel about the brands that you have, do you feel like you have all the brands that you want, how do you feel you are positioned price wise in terms of we run to the doors that feels like the percentage off on athletic is a little bit less than the rest of the store. I don’t know if that’s true or not but how do you feel like you are messaging the value proposition there and then also what are you doing in the test stores that are over assorted to athletic, more color on that please? Thank you. Deborah L. Ferrée: You know, we could spend an entire day talking about athletics because there is so much excitement there and I’ll just call out. In the past few weeks when I would have expected it to decelerate a bit, if you just look at historical numbers it’s not what happened at all. So this lifestyle shift is here to stay. How do I like the brand assortment architecture that I have in athletics, I love it. The brands that we have in the true athletic space, are great, great partners to us. We continue to get not only their important hot items but we’re also working with them now on exclusive and things that will bring differentiation to DSW. I like our value proposition there. It’s not as deep as what you would see across the rest of the enterprise but when you have a category based on supply and demand where the customer is really coming aggressively at you for more of this big shift, this lifestyle shift, I am not so concerned about lowering the prices and how cheap can you go. Because the customer is telling us they want the brand, they want the item that we have, and that is being demonstrated in the comps that we’re delivering there. As far as what does the future look like for athletic, I see one of the biggest increased opportunities is in the non-athletic women piece of the sport business and make no mistake you have been in our store, you can see some of the real fun fashion brands that are really knocking it out of the park in terms of styling. But the other thing I am looking for is new brands that don’t exist, that are massly distributed across retail in the United States. And I do that by attending lots of different trade shows and are looking for new exciting things that will continue to fuel the excitement and style desire of the customer and as category. So its -- I am excited about it, I continue to be excited about it and I think it’s a big part of DSW’s business going forward.

And Kelly I want to share with you a year ago I had the opportunity to move into this role and the three words that I used to describe sort of the way we were going to operate as a leadership team was focused tempo and disruption. And I think this athletic space is one where we have demonstrated that. Debbie and team have done a good job with the brands we have and other brands that she’s attracting to our business. We have been very focused to make that happen. But we’ve operated with a different tempo and an example was on one evening or one afternoon we are having a conversation about wouldn’t it be cool if we could really figure out how big we can make athletic. And within a week we were able to have the store up and running with a significant increase in athletic presence. And what we have seen is that can be very disruptive and in a healthy way to our competitors and where we can play. What we got to figure out now is how can we take what we learnt through the three stores we tested and do it without removing other footwear from the floor because that’s when we are going to roll it in a bigger way. So I am really excited about some of the things that we have been doing as an organization that led us to develop some new fixturing that you will see in our Power 35 stores that we call it SKU over SKU but it allows us to get more choices on the floor and we also have some new displays we’re working on that will allow us to bring a category like athletic or kids or booties, things we really want to stand forward for the consumer how we can bring those to life in both the brick and mortar and digital space. So I think the athletic area has really allowed us to go play and think differently as an organization.

Great, thank you guys.

The next question will be from Jessica Schmidt of KeyBanc Capital Markets. Please go ahead.

Hi, thanks for taking my question. Can you talk about the initiatives you’ve taken with some of your private label business. I guess how are these private brands performing with some of the changes and emphasis you placed on them and do you think that they are driving traffic? Deborah L. Ferrée: Good morning Jessica. So as far as private brand is concerned I would say that prior to our new partnership with our new partner that is helping us evolve, private labels into private brands we probably weren’t as tight and important in those private brands as we will be in the future because they really were labels more than brands. Our new partnership has allowed us to put focus on a specific number of our private brand to develop, further develop the DNAs and the brands the marketing strategy, the assortment strategy. So I like very much the new partnership that we have just forged to be able to take these from labels to brands. They’re performing very well. The margins are healthier and they should be for private brands I don’t want to over emphasize private brand to make the domestic brands seem like a dilutive conversation now because private brand is important to us. It brings differentiation, it brings value to the floor. When you look at some of the searches that we get in DSW, the customers are really in love with two or three of the kind of private brands that we have now and really think of them as very big, almost mature domestic brand. So very happy with the performance there but the real focus, a bigger part of our assortment is on the domestic brands. And we’re spending just as much time if not more there developing those brands and those products and those exclusives with those brands as we are with private brands.

Great, thanks and just a quick follow up. I am just wondering do you have any update on the handbag category, are you seeing any kind of improvement there? Deborah L. Ferrée: Not a lot of improvement Jessica. Handbags continues to be a challenge as I will just reinforce that we did right size and down size the handbag area and we focus on fashion and we focus on affordable price points there. But that business as in the industry has been really, really tough and what we’re trying to do is we’re trying to be very focused and specific on the key looks, the items, the brands that are really doing well. And we will tell you we’re making progress in the gross margin piece of that because we’ve managed the assortment and the inventory more rigorously than we have before. So I am pleased with the progress we’re making in the profitability but I am not real happy with the handbag business in general. Or actually in many of the things I am seeing in the industry to be able to drive new comps right now. So I am hoping that the market is going to be able to start showing us some things that will get us excited.

Thanks, I’ll pass it along.

And the next question will be from Camilo Lyon of Canaccord Genuity. Please go ahead.

Thanks, good morning everyone. I want to just step back a little bit and just talk about what you have done in the third quarter specifically with respect to when you had promotions running and when you didn’t have promotions running and what commensurate traffic was during those on and off periods. And what insights does that give you with respect to how you can actually drive traffic into your stores, also driving gross margin expansion?

Well, I can take that question. I think we have the luxury of having access to 24 million rewards numbers and so where we spend our efforts is really trying to figure out how do we attract two kinds as customer base. One, our existing rewards member and what we are really working on is how can we do that without having to offer a promo. And that’s the work that Debbie and team are doing on a differentiated assortment, killer price points, the closed out opportunities that come our way. And then the second group of customers obviously those people who don’t know us and that’s where we’ve gone after the digital space to really trying to attract that customer. I will tell you we don’t see a significant gap in traffic when we are communicating between our promotional kind of communications to our rewards numbers versus non-promotional. So there isn't anything I would tell you in particular that we see that drives in activity. I mean obviously if you give dollars off you are going to get them but that’s not where we want to go. We want it to be about the product, about the differentiation in our product, and that’s what is attracting them to our store.

You know one thing I will add to that is our continued out performance to the index. We measure our store traffic versus a basket of other retailers as most people do. And we have continuously outperformed that index. It goes up or down, our overall performance does sometimes based on some of our promotional activities but pretty much through and through we’re consistently outperforming the index on store traffic.

I guess to that point the implied comp for the fourth quarter seems to be about negative 6ish in that range, what is the composition that you expect that to be from traffic as you’re lapping lot of these promos from last year?

The vast majority of that decline is going to come from let’s say more conversion than anything just simply because of the fact that we’re not going to run those promotions this year that we ran last year. And as we mentioned we had 350 basis points of decline in comp that we built in that was specific to these promotional activities last year.

Okay and then just longer-term, I know you have kind of worked through the anniversary of the promos from last. Can you level-set the store and you are bringing in more merchandize and then more on trend product, where do you think this business can really comp at consistently?

I think the low single-digit that’s what we are looking for as we grow the DSW brand. And we think that’s where we should be. Debbie or Jared, do you want to share anything?

I agree with what Robert thought was a journey and what you are seeing from our performance now and the performance at our gross profit as well. It’s not an overnight turnaround but absolutely I think a low single-digit comp performance is where we ought to be in a healthy trajectory. Deborah L. Ferrée: And Camilo I would echo that and everything starts with product and if I were to base on what I have seen in the market and the opportunities around having different kinds of products to be able to drive customer demand, customer sales I am encouraged by what I am seeing right now. And as we look forward into spring of next year.

Thank you for that and Debbie do you have just the category comps that you’ve provided in the past men’s and women’s? Deborah L. Ferrée: We’re not providing specifics Camilo, so we’re not doing that.

Okay, thanks very much. Good luck in holiday.

The next question will come from Tom Nikic of Wells Fargo. Please go ahead.

Hey, good morning everyone, thanks for taking my question. I try to ask around the operating expenses. I know there is kind of lot of lumpiness with the bonus accrual last year and the cost savings initiatives that you’re seeing and I think you mentioned a shift of marketing expenses which I assume is shift into Q4. So I am basically just kind of wondering like how we should think about operating expenses not only for Q4 but kind of as we get into 2017? Thanks.

Sure, this is Jared. What I will say is we talked last quarter about an expense savings initiative what we had identified roughly $25 million of opportunity that we feel very good about. And should see a full annualized amount of that full $25 million in 2017 but for 2016 we thought that there was about $7 million of that $25 million available immediately and so that leaves an incremental $18 million for 2017. As we have been laying the ground work to start recognizing that incremental $18 million next year. Obviously something’s can be seen this year and so with that we’ve found a little bit of additional save on top of that $7 million yet for 2016 which we’re very excited about. So I think it’s working more like probably about 10 million in 2016 and 15 million in 2017 versus the 7 million in 2018 that we had talked about last quarter. Overall when you look at our performance from an SG&A standpoint for fall, I think where we have been guiding to a mid single-digit increase in SG&A dollars I think it’s now going to be just modest growth, flattish to modest growth for the fall as we continue to see there is the benefits of the expense initiatives that we have going on.

Okay, just a quick clarification, so some of those cost savings, 10 million (Technical Difficulty)?

I am sorry Tom you are breaking up, I can't hear.

Sorry about that. I was just saying so just a clarification so, you did get some savings from the cost savings initiatives in Q3 and then a little bit more in Q4 as well right?

Yes, that is correct.

Alright, great, thanks very much.

And ladies and gentlemen that concludes our question-and-answer session. I would like to hand the conference back over to Roger Rawlins for any closing remarks.

Thanks everyone for taking the time. Hope everybody has a great holiday season and most importantly Go Bucks. Bye-bye.

Thank you. Ladies and gentlemen the conference has concluded. Thank you for attending today's presentation. You may now disconnect your lines.