Ladies and gentlemen, thank you for standing by. Welcome to Kohl's Q1 2016 Earnings Release Conference Call. Certain statements made on this call including projected financial results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Kohl's intends forward-looking terminology such as believes, expects, may, will, should, anticipates, plans or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause Kohl's actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties include but are not limited to those that are described in item 1-A in Kohl's most recent Annual Report on Form 10-K and as may be supplemented from time to time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference. Also please note that replays of this recording will not be updated, so if you are listening after May 12, 2016, it is possible that the information discussed is no longer current. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Mr. Wes McDonald, Chief Financial Officer of Kohl's Department Stores. Please go ahead. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thank you. Good morning. With me today is Kevin Mansell, our Chairman, CEO and President. I'll start today's call by walking through our operational results. Kevin will then provide more details on our Greatness Agenda initiatives and then we'll take some of your questions. Comp sales decreased 3.9% for the quarter. Transactions per store were down 4.8% for the quarter. Average transaction value increased 90 basis points comprised of…

And one moment please for our first question. And first we have the line of Matthew Boss with JPMorgan. Please go ahead.

Hey. Good morning, guys. So what are you guys seeing from a promotional standpoint at the mid-tier out there? Particularly how did your private label perform and while your inventories are in line, do you see any need to be more aggressive with price to drive traffic? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, pricing I mean, is definitely an element of our review in the comment that I made around marketing, Matt. Our private brands underperformed our national brands. National brand penetration went up almost 200 basis points again. The trend line on some of the private brands, particularly Sonoma, definitely improved when we relaunched it. Pricing is always a big factor. I don't know that we would call out any particularly noticeable promotional effort by other retailers that I see having a major effect on how we are going to go to market. But, when we think about improving the trend line from the disappointment in the first quarter to an improved number in the second quarter, we're definitely looking at pricing, we're definitely looking at marketing vehicles and the level of marketing we need to spend to get traction, particularly in our traffic in brick-and-mortar stores. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I mean I think it's less about price in the private brands and more about product. We have some private brands that are doing very well like SO in our Junior's area. Junior's continued its strength carried over from last fall, where others private brands are a little tougher. So, I think it's just a combination of both.

Got it. And then on a follow-up on capital allocation, Wes, what's the minimum cash balance you're comfortable with on the balance sheet and then just the best way to evaluate share repurchase versus almost a 5% dividend yield going forward? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, I think the number one priority for cash is to fund our growth so we'll continue to invest in digital technologies to drive that business. So our CapEx for this year is $825 million. That remains the case. We're committed to growing the dividend about 10% and the remainder of that would be left over for share repurchase. So we're still targeting $600 million for the year. We were a little light of that this quarter. We'll take a look at our grid and put in a new grid and target the same $150 million for this quarter. But at the end of the year, where we ended last year I think was around $700 million. That's about where we want to be. So I don't see any particular reason to go lower or higher than that. So given our projections, we would still be able to buy back $600 million this year.

Great. Best of luck. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thanks.

Our next question is from Mark Altschwager with Robert W. Baird. Please go ahead. Mark R. Altschwager - Robert W. Baird & Co., Inc. (Broker): Good morning and thanks for taking the question. Just on inventory, you did a nice job hitting your plans. However, given the much weaker than expected sales environment it is still running a bit ahead of comps. So I guess how much flexibility do you have just to take a further step down in those receipts for the back half of the year and then how should we think about that inventory progression? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I think the back half of the year is consistent with the second quarter. We would expect our inventories to be down mid-single-digits on a per-store basis, so further reduction from where we are today. And that's really going to be a function of buying less receipts, which we've already planned and worked with our vendors on. So I suspect absent any kind of change further downward, we should be able to hit those end of quarter goals. Kevin Mansell - Chairman, President & Chief Executive Officer: I mean the other thing I would add, Mark, is just there wasn't a lot to get very excited about in our first quarter performance, but one thing that I think the team did well and I think we're going to be well-positioned, regardless of where the business goes the remaining of the year is receipt flow and inventory. And we're down to last year. We're going to be down further than that as we go into the third quarter. And they've demonstrated I think an ability to be agile and bring on receipts as necessary, so that I think is a little bit…

And next go to Lorraine Hutchinson with Bank of America Merrill Lynch. Please go ahead

Thanks, good morning. You had previously guided to a zero to 1% comp for the year. Is that still on the table and can you just discuss the biggest drivers to try to turn that trend around over the next few quarters? Kevin Mansell - Chairman, President & Chief Executive Officer: Sure. I mean, I think our annual guidance, whether it was on the top line, which was... Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Plus or minus the 0.5%... Kevin Mansell - Chairman, President & Chief Executive Officer: Exactly. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: ... (20:58) was flat to 1%. Kevin Mansell - Chairman, President & Chief Executive Officer: Which as Wes said, was essentially flat total and a modest increase on a comp basis and also EPS. The first quarter as you know, Lorraine, is a really small percentage of the total year both on a sales basis but in particular on an EPS basis. I think for the first quarter, our expected earnings per share was probably around $0.40, which would be less than 10% of the annual expectation that we gave. So we're really just barely into the year. For us to look forward and make some forecast change based on a really sharp percentage of the year and a very small percentage of the total I think would just be wrong. We're obviously making plans for being more defensive around things, as Wes said, like inventory or like expenses to be prepared to bring down. But we still feel good that the sales trend will improve in the second quarter. And we definitely feel like it'll improve further as we go into the back half.

And what are the reasons behind the good feelings around comp improving? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I think on a comp basis, we've kind of articulated them in the beginning of the year guidance. One of the big things that you know that hurt us in the third and fourth quarter last year was a build-up in inventory that really took away all of our flexibility to adjust receipts into categories that were outperforming other areas. And so one of the big things I think Wes and I both feel really good about is our inventory position puts us in a space where we can feed the businesses that are performing. We do have some businesses that are outperforming other businesses. In spite of lower traffic levels, particularly lower traffic levels in March and April, we have categories that are actually doing well. We talked about some of those, and so we want to be in a role where we can feed those. I don't know if you want to add anything, Wes? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I mean, I think our expectation for the rest of the year would be flat to 1% for the remaining quarter so that when you do the math – you guys are smart – that probably puts you towards the lower end of the comp range just maybe even a little bit below, which is why we think we need to take our expenses down to achieve the earnings guidance that we gave. As Kevin mentioned, it's less than 10% of our expectations for earnings for the year, so we feel like there's a lot of room in front of us that we can do different things to try to make that earnings.

Great. And then is there any wiggle room on the CapEx? Are there places that you could potentially cut to help improve cash flow that way? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: No. I think I'd be more likely to try to put the screws to the inventory a little bit more. We have to invest for the long term. Much like Macy's who reported yesterday, we had a very strong February. It was the first positive comp we've run since 2011, and we saw a pretty dramatic drop off the same timing they mentioned. So we'll have to see if that drop-off is a macro-induced thing or if it's company specific. We will know a lot more as more companies report later this week. But it will get warm. We have shorts to sell and we're in a good inventory position. So I think at some point, people will need those clothes and will come buy them Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, the area I think Wes and I both agree, the areas that are probably getting more scrutiny, I don't know that it necessarily impacts this years' actual capital expenditure, but looking out this year through year two and year three forward are probably CapEx around technology. Wes is definitely getting more scrutiny from us as we look at whether or not the investments we're making are giving us the return that we expected to get from them. And the second thing is definitely capital that's dedicated towards fulfillment of our online-generated demand, regardless of whether that capital is in our stores or that capital is in technology or that capital is in a fulfillment center, either existing or future to come. Those two have probably risen to the top in terms of areas we're looking at now.

Great. Thank you. Kevin Mansell - Chairman, President & Chief Executive Officer: Thanks.

Our next question is from Paul Trussell with Deutsche Bank. Please go ahead.

Hi. Good morning. Just wanted to discuss a little bit further the composition and cadence of the comp. I believe in the fourth quarter and generally through 2015, transactions per store were roughly flattish. And so given the down 4.8% this quarter and the solid start in February, is it fair to assume that you were exiting the quarter those last four or five weeks kind of down 8%, 9%, 10%? And if so, maybe you can give a little bit more detail on the seasonal goods performance. Specifically, Wes I know you mentioned weather and that shorts weren't selling. So maybe you can give us a little bit more of a handle on what kind of bounce back you might expect if the weather does warm up. And then lastly on the comp, AUR was down 100 basis points. Wes, do you expect that to be just unique to the first quarter given the aggressive promotions? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, those are a lot of questions for one, but I'll try to answer most of them. The AUR was down mostly because of clearance, so I would expect that to be a one-time phenomenon in the first quarter. Your math on the comp for the balance of the quarter wasn't correct, but you were directionally correct. If you're positive in the first month, you got to be negative in the last two. From a seasonal perspective, our spring seasonal goods were good in February, poor in March and April, kind of consistent with the comps. They were worse than the company by a couple hundred basis points. It's a fairly significant part of the business, but as we mentioned, Home was the worst category which wouldn't have as much seasonality to…

That's very helpful color. Lastly from me, you stated that the comp guidance remains flat to 1% for the balance of the year. You modestly adjusted SG&A dollar growth I think to now kind of more flat to up 1% for the balance of the year. Just on the gross margins, Wes, flat to up 20%, is that still attainable in your view? And if so, should we maybe push a little bit more towards the third and fourth quarter as opposed to 2Q just given the channel still seeing some traffic weakness? Or just help us out on the gross margins Thanks. Kevin Mansell - Chairman, President & Chief Executive Officer: Before Wes mentions anything himself, I would just tell you, Paul, and just to be clear, we're not updating anything. We are not updating our sales, we're not updating our margin, we're not updating our SG&A, and we're definitely not updating net earnings. The first quarter is a small percentage of the year, and there's not enough information we see to put us in a position where we feel that we could knowledgeably tell you some type of update. We are just sort of targeting you to areas in which we're going to put more effort, and naturally if you have a disappointment at the beginning of the year in sales, one area that's going to bubble up and we're going to put a lot more effort around, is expense control and bringing down our ability to bring down expenses. Another area naturally is inventory and ensuring that we not only can meet the lower levels of inventory we had planned going into the second and third quarter, but actually give ourselves ability to even bring it down further. So I realize to some extent maybe it's nuanced, but I think it's an important distinction. So we're trying to be transparent, and these are the things we're doing in response to what we're seeing, but there is no update to anything. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: And in terms of the margin, I think we said at the beginning of the year we had more opportunity in the back half for gross margin improvement just given by our poor performance in the fourth quarter, that remains the same.

Fair enough. Thanks, guys.

Our next question is from Oliver Chen with Cowen & Company. Please go ahead. Oliver Chen - Cowen & Co. LLC: Hi. Thank you. Just as you do look back to this quarter, could you brief us on any of the things you might have done differently if that was possible? And then does this tweak in terms of how you think about the broader Greatness Agenda just as you think about your strategic plans? Also, on the traffic situation and regarding the softer pre-Easter and then the April, did you have any sense of if it was a different – if it was a specific demographic? Was there something going on with the younger generation versus older in terms of thinking about where you were more sensitive and losing traffic? Thanks. Kevin Mansell - Chairman, President & Chief Executive Officer: I can probably try to take a whack, Oliver, at the first part, and Wes can talk to you about the traffic drivers. Essentially I think what you're asking is, are there different actions you would have made had you known what was coming in terms of traffic into your stores. And, I can view that in the short-term and the long-term. On the long-term right now, we actually feel pretty confident that the things we're working on are the right things, and they remain the right things. Clearly, speed to get to where we want to be in our plan on those actions needs to be accelerated. We've got to get there faster, there's no question about that. Emphasis might change, so we typically mid-year kind of review our long-term plan and our moves underneath the Greatness Agenda, and we might emphasize more one move versus another based on what we are seeing. But I think fundamentally we…

And next we'll go to Neely Tamminga with Piper Jaffray. Please go ahead. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): Great, good morning. I just wonder if you could talk a little bit more about the Home category. It seems like there were some things that are winning but some things that are not and they seem pretty dramatic that they are not working. Are they product cycle related? You've heard from like HSN who has called out Nutribullet and some other product cycles seem to be towards the end. So curious what's going on there for you guys. And then Wes, on the assortment planning initiatives which we think are really good, the whole localization effort makes a lot of sense for you guys. Wondering if you could share any sort of wins around the metrics whether it be top end or kind of margin improvements that you're seeing from those efforts? Thank you. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Sure. I think from a localization perspective we've seen a slight sales lift. Certainly given our comps, not enough to drive the business. And I suspect at the end of the spring we'll see a much improved margin in those categories. I think we mentioned on the call we're up like 70% entering the quarter. The margin benefit since about 30% were just brought on board in the first quarter probably won't occur till the fall, so I think that will be back half-loaded. But hopefully we can get some sales benefits as we move throughout the year. The Home business was difficult in areas like kitchen electrics. I think was a... Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, what I'd say... Wesley S. McDonald - CFO,…

Our next question's from Paul Lejuez with Citi. Please go ahead.

Hey, thanks guys. It sounds like you guys are leaving the door open that there may be some sort of bigger picture macro issue going on. So just curious if that is the case, if that is a consideration why the assumption that comps improve from what you saw in the first quarter? And I guess additionally I'm just trying to tie that together still with as inventories come down, it seems like it will be a little bit more of a challenge to drive comps. So just trying to tie that together, I think you guys have had some examples where you've been able to turn faster, if you could maybe share those with us and help connect those dots. Thanks. Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I'll let Wes talk about the last part. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I think that's a good question. He just really wants the steak I bet him on the inventory. Kevin Mansell - Chairman, President & Chief Executive Officer: So on the – one of the things we tried to make clear in the call, to be honest with you, Paul, is that right now I think we're having a hard time determining how much of our underperformance was more related to macro factors, which you're right, would have more implication on future performance and how much is related more to our company-specific factors which could have to do with inventory carryover, could have to do with marketing and effectiveness, particularly on events at critical times; could have to do with the transition because of weather, particularly in the Northeast and Midwest. I think we're still grappling a little bit with that, so we're definitely not in a position that we're…

Got you. And then just a follow-up, with the lower inventories coming, are we also to assume that tied to that would be a less promotional stance that you guys take as you manage inventory down mid single for the second half? Kevin Mansell - Chairman, President & Chief Executive Officer: I think we need to be aggressive on marketing because if you think about the possibility of just generally slower traffic in the sector, then the important thing is to take share. And so part of taking share has to do with certainly, the amount of marketing you do and part of it has to do with selectively and thoughtfully applying good pricing strategies, value strategies. I mean fundamentally, Paul, in the short term, if you are running the business like ours, when you are faced with a surprise because I think we really were surprised by the March, April underperformance. In the short term, you'll lower inventory, you'll lower expenses but you add marketing and drive value. That's what you do to change the trend of our business proactively. You can't wait and hope that things will get better and you have to sort of plan that things will continue this way, and therefore this is what you do. In the longer term, then other things come into play and you start thinking about capital allocation and how much money you are spending. But that's a much longer-term view, so we're doing the first part... Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I think we're going to be aggressive on promotional markdowns. Where we're going to save the money is on the permanent markdowns. That's what's getting us into trouble over the last couple years from a gross margin perspective. It's not because we've had to promote more than normal; it's we've ended the season with way too much inventory. So we have plenty. I know you and I are probably never going to agree on this inventory thing, but we have plenty of room to reduce our inventory without affecting comp. We're so far from where we need to be and are going to do it measured over the next five years. But I think it's not going to affect our ability to drive a comp. Getting people into the store is what's going to affect the ability to succeed from a comp perspective.

Well, we'll see. Thanks, and good luck.

Our next question is from Brian Tunick with RBC Capital Markets. Please go ahead.

Thanks. Good morning, guys. Kevin Mansell - Chairman, President & Chief Executive Officer: Good morning.

Two questions. One is on digital. I think you guys said that digital grew mid-teens. I think you've originally talked about a 20% growth rate, so just curious on maybe what was happening there? Was that sort of a slowdown in the broader environment or was there a change in some marketing tact? And from a margin perspective in digital, how do you think about the profitability of your e-comm business today versus the bricks-and-mortar business? And then the second question on your store base, I guess the closing of these 18 stores, maybe what metrics will you be watching for as you think about what the right size of your store base should be I guess in this new world? Thanks very much. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: You are pretty new to the story so I've been an early I guess realist on e-comm versus brick-and-mortar. It's not as profitable and I think everybody is coming around to that. Having said that, I think we missed our plan slightly in digital, it was only on a couple of days, so I don't think there's a material slowdown. The same things that affect traffic in the stores, you don't need shorts you're not going to buy them online just because it's easier, and can ship to your house for free. You will buy it when you need it. So I'm not too worried about digital from that perspective, we kind of guided to a 15% to 20% increase in our three-year plan. And we saw the biggest increase last year in the back half, and I suspect that will be the case this year too as people find it more convenient in the fourth quarter to shop online. From a store base prospective,…

Super. Thanks very much; good luck.

Next we will go to Dan Binder with Jefferies. Please go ahead.

Thank you. My question is regarding your comments earlier about expecting improvement in Q2. And I was just wondering if that was in part based on what you were seeing in the last couple of weeks. Kevin Mansell - Chairman, President & Chief Executive Officer: So when we look at performance over time, Dan, it's really fundamentally driven by actions that we take. So we always assume that whatever the underlying trend is, it's not going to change unless we do something to make it change. So we would never give you a forecast for the quarter or for the year based on some performance we had over the last 10 days at the beginning of the quarter. It's always driven by a look back into underperformance, or sometimes over performance, and then actions we take, so they're usually tied together.

That said, has there been some sequential improvement in the last couple weeks? Kevin Mansell - Chairman, President & Chief Executive Officer: We never talk about performance inside the quarter, Dan.

I thought I'd try. My second question is with regard to just market share. I know, you've talked about, Wes, Amazon I guess showing up in the top 10 on apparel now maybe towards the bottom of the list. I'm just curious as you look at market share data recognizing that you and others were soft, how does your individual market share data look for different categories that you're selling? Kevin Mansell - Chairman, President & Chief Executive Officer: It will be a little better informed on that, Dan, in probably about a month. That shared data is typically not as tightly timed to the end of reporting periods. But we'll have a look little better insight. I mean, I don't think there's going to be any big news in there. I suspect companies who are given up more share in particular categories will continue to give up more share. We have been able to hold our share, but not gain in our share. And I'm not going to be surprised if that wasn't more of the same in the first quarter because generally you've heard some big retailers who have large share in our categories report and they've had underperformance as well. So I don't think there's going to be any big news in there. I really don't.

And my last question if I could, just on product. You talked about the importance of that. You've obviously had some activity this quarter with some brand launches and relaunches. Can you give us a sense as to whether or not there are new national brands? Even if you can't talk about specifics, if there are more that you expect to announce this year and what other product relaunches you may expect over the balance of the year as well. Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I definitely would expect to continue to be able to talk about new brands coming into the store over the year. You kind of know well the lifetime cycle on brand introductions, and it's next to impossible to be able to share with you a new brand that would actually launch in the same year. So any news we have on brand launches coming, and I do expect that there will be some, will really impact our 2017 performance.

Great. Thank you.

Our next question is from Stephen Grambling with Goldman Sachs. Please go ahead. Stephen Grambling - Goldman Sachs & Co.: Hey, good morning, thanks for taking the questions. I have two follow-ups I guess on Brian's questions earlier. First, what amount of sales recapture from the closed stores are you factoring into your guidance? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Factored zero in it. Stephen Grambling - Goldman Sachs & Co.: All right, and then second, you highlight these macro concerns impacting traffic, but there's certainly some secular undercurrents around online. If the weak traffic at your stores and perhaps across the group was to persist, how would you evaluate the potential need or even the potential benefits from consolidation as a strategic alternative? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I mean, as a regular matter of business in our regular discussions at the board level, we're always looking at every single option that we have looking forward, Stephen. So there's nothing that's currently happened that in my mind would accelerate that discussion, and at the same time, there's nothing that's currently happened that would decelerate it. I think it's always on the table. We generally have had a view that share in categories that we operate in is really important, so having scale is an important factor to long-term success. And so right now, the plan that we've described to you gets us to scale by driving essentially our business organically. We certainly have these new tasks which I think have the possibility of paying off in things like our Off/Aisle concept or our outlet concept; the first one is with the FILA brand. And I still think that the small 35K store is going to be a meaningful contributor…

Our next question is from Richard Jaffe with Stifel. Please go ahead. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: Thanks very much guys. And just a follow-on question. Regarding the content of the inventory, obviously dollars are down. Are you guys convinced the balance is correct national brands to private label and that the seasonality is also where it should be given it's already May? And then just a follow-up question regarding marketing. Thanks. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: National versus private, I think we're pretty well... Kevin Mansell - Chairman, President & Chief Executive Officer: Yeah, national is up and the other two are down. And that mirrors our comp so I feel good about that. It always helps to sell more seasonal goods earlier in the season than it does to sell them later, you know that really well. So having a little less seasonal goods is always a good thing but we actually do have less seasonal goods than last year so I think we're positioned well but I get it, there's no other answer than to say hey, if you've had a tough seasonal performance in the first quarter isn't it nice to have a lot less going into the second quarter. Yes, of course it is but we just have to deal with what we have right now, it's not a big factor. I think Wes probably knows better. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, we bought spring receipts down 9%. So I feel comfortable that we'll be in a good inventory position at the end of the second quarter unless we see a step change down from where we ran. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: Don't say it that Wes. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: And marketing, you mentioned that that'd be a source of more tension and I assume more expenditures. Can you talk about perhaps how much and also... Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I don't think it's going to be more expenditures I think it's going to be looking at what we're doing and shifting weight within the various vehicles. I don't think it's necessarily going to be more spending Richard Jaffe - Stifel, Nicolaus & Co., Inc.: Okay. And any more specifics about direction or just wait-and-see? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: We have a team of our best and brightest trying to investigate everything right now. So at a high level, I would think we'd be trying to test a little bit more weight into print and direct mail and maybe pull back from digital a little bit. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: Great. Thank you very much. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thanks, Richard.

Our next question is from Bob Drbul with Nomura. Please go ahead.

Hey. Good morning, guys. Kevin Mansell - Chairman, President & Chief Executive Officer: Morning.

Kevin, can you talk a little bit about the launch of the REED business? I guess what you've learned in stores versus online, the different categories, handbags versus clothing, price points at this point so far? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I mean generally, I think we'd characterize it as a success for sure. I actually don't know the specifics on the online versus brick-and-mortar, Wes probably does. I think generally and probably not surprising to you, the handbags performance was really good. The apparel performance was a mixed bag and so I think we're taking a look at that and trying to react accordingly. But I would definitely call it a big success. I mean people have responded really well to the product fundamentally and the price points which as you know were more elevated have not been a factor at all in the success. So it does say to you that, new ideas that are on target, in spite of a general sales slump, do well, they can do well. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I think we always do a little thing with the online business where they get early access to launches and things like that so there's always a pretty big spike on that but I don't think there's been a material difference between the two after you've had a shake out for a few months.

Okay. And then on the Women's business has it been largely strength in Women's active or has it been sort of broader? And I was just wondering if fit and flare dresses are really driving at all any of the success that you're seeing in Women's? Kevin Mansell - Chairman, President & Chief Executive Officer: I like the fact that you have a sense of humor Bob in a tough environment. Women's active is really good, trying to put a more serious note on that. Women's active I think is really good and continues to be good just like active in general is good. The category in Women's I think that outperformed significantly and Wes can jump in, but is our Junior's business, there was a big outperformance in Junior's in the first quarter and that business – we didn't want to get into this in the call because it's relatively a short period of time and a small percentage of our total Women's business, but that business has implemented a new supply chain strategy to move much more quickly on product and I think it is definitely benefiting them in a huge way and so that's a learning that we're incorporating into other areas as well. I don't know if you want to add anything in there Wes? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: No. I think that's good.

Thanks very much. Kevin Mansell - Chairman, President & Chief Executive Officer: Yeah.

Next we'll go to Patrick McKeever with MKM Partners. Please go ahead.

Thanks. Just a couple, first on loyalty I think the last time you gave a number there was back in the fall, 34 million members if I'm not mistaken. So just wondering where that number stands currently? And what you're seeing in terms of the impact on the business from the loyalty program? And does that, I mean I know you had talked about tweaking the marketing and tweaking the program, have you done much there and does that factor into the view that same-store sales will start to improve a bit from here through the balance of the year? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, I think the loyalty numbers have definitely increased. I don't have a up-to-date number in front of me but it's probably pushing close to 40 million. Some of those are duplicates, so not real unique people that we can measure because people like myself have multiple members on a card and they have different loyalty numbers associated with them. We never looked for a year to bump. One of the things that we're looking for and didn't plan that in our past – the $21 billion that we laid out a couple years ago. So we really didn't build any incrementality into it past last year in the fourth quarter. We are making a concerted effort in the back half after we roll out a new point-of-sale system, to use the loyalty information if they've completed their profile to do a pre-screen on them for our credit card and try to get people to move along the value path from not having a loyalty card to having a Yes2You rewards card and then hopefully getting them to sign up for our credit card. So we'll have more to talk to you about that probably at the end of the fourth quarter. The new point-of-sale system isn't rolling out until late in the third quarter, so we won't have a lot of data on that until after holiday.

Okay, and then just a second quick one on beauty. Just wondering there, too, if you have an update? Is that's still driving I think you it said 100 basis points to 200 basis points of incremental comp at stores that had it? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, we just completed the last store rollout of a couple hundred stores in the first quarter. It was consistent throughout that. They did not roll out until the end of April, so I don't have any numbers from them yet. But I would suspect that would be consistent and beauty continues to be one of the better performing areas of the company.

Got it. Thank you, Wes.

And that will conclude the question-and-answer session. Any closing comments from our presenters? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: No, I think an hour is enough. Thanks a lot, everybody.

Thank you. And, ladies and gentlemen, this conference will be available for replay after 11:00 AM. Eastern Daylight Time today through June 12 at midnight Eastern Daylight Time. You may access the AT&T TeleConference replay system at any time by dialing 1-800-475-6701 and entering the access code 386534. International participants please dial 320-365-3844. Those numbers again are 1-800-475-6701 and 320-365-3844. The access code 386534. That does conclude our conference for today. Thank you for your participation and for using AT&T Executive TeleConference service. You may now disconnect.