Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies' Third Quarter Fiscal 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded, Tuesday, November 18, 2014. I would now like to turn the conference call over to Ms. Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc. Please go ahead, ma'am.

Thanks, Elan, good morning, everyone. Before we begin, Deb has a few words.

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 limitations, the Form 10-K filed April 1, 2014. 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 divisions in today's press release in the Investor Information section of our website, 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, tjx.com, in the Investor Information section. Thank you. And now I'll turn it over to Carol.

Thanks, Deb. And joining me and Deb on the call are Ernie Herrman and Scott Goldenberg. So let me begin by saying that I'm very pleased with our third quarter performance. On an adjusted basis, earnings per share increased 13% over last year's strong 21% increase. This was at the high end of our expected range and as Scott will detail in a moment despite not having the foreign currency benefit we anticipated for the quarter. Consolidated comp store sales grew 2% also at the high end of our plan and over a 5% increase last year. This marks our 23rd consecutive quarter of comp sales growth. We were also delighted that customer traffic was slightly up to the third quarter, as we continued to gain momentum from the first and second quarters. In addition, while we're pleased with our comp results, we believe they would have been stronger without the negative impact of the weather in the US and Europe. At Marmaxx, we saw solid trends in August and September, but with unseasonably warm temperatures across the country in October, apparel sales turned softer. That said, our Marmaxx home, jewelry and accessory businesses, which are less weather-sensitive, were outstanding for the quarter. Similarly, the weather turned extraordinarily warm across our European regions in September, which we believe hurt sales. With temperatures starting to cool in November, the fourth quarter is off to a very strong start for TJX overall. Before we share with you the numerous short and long-term growth opportunities we see for the company, I'll turn the call over to Scott to recap some of the numbers.

Thanks, Carol, and good morning, everyone. As Carol mentioned, our third quarter consolidated comparable store sales increased 2%, at the high end of our plan and over a 5% increase last year, our strongest quarterly comp in 2013. Our third quarter comp was driven by an increase in units sold, while customer traffic was slightly up and ticket was essentially flat. We were pleased with the sequential improvement in traffic from the first half of the year. As a reminder, our traffic calculation is based on the number of customer transactions. Diluted earnings per share were $0.85 compared with last year's reported $0.86. Last year's third quarter EPS included an $0.11 benefit. Excluding this benefit, earnings per share grew 13% over last year's adjusted EPS of $0.75. Foreign exchange was neutral to earnings per share, which is the same as last year. What our third quarter guidance had contemplated was $0.01 benefit. So clearly, FX was $0.01 worse than we expected. Consolidated pre-tax profit margin was 13% for the quarter, up 40 basis points versus strong growth last year. Gross profit margin was 29.4%, up 10 basis points versus last year's strong increase. Merchandise margins were slightly down primarily due to TJX Canada, which was hurt by FX. I should note that our Canadian organization did a great job of mitigating that impact. SG&A expense as a percent of sales was 16.2% for the quarter, 40 basis points improvement versus last year's ratio. The favorability versus the prior year was due to items related to our new home office facility last year and expense favorability. At the end of the third quarter, consolidated inventories on a per store basis, including the warehouses and excluding in-transit and e-commerce inventories, were up 3% on a constant currency basis versus a 4% decline last year, as we transitioned into gift-giving a bit earlier this year. We are very comfortable with our inventory position with excellent liquidity. I should also note that our in-store inventories are planned to be down at year-end versus the prior year. In terms of share repurchases, during the third quarter, we bought back $448 million of TJX stock, retiring 7.5 million shares. Year-to-date, we have retired 21.5 million shares, buying back $1.2 billion of stock. We continue to anticipate buying $1.6 billion to $1.7 billion of TJX stock this year. Now let me turn the call back to Carol, and I'll recap our fourth quarter and full year fiscal '15 guidance at the end of the call.

Thanks, Scott. Before moving to our near and long-term growth drivers, I will share some additional color on our third quarter performance by division, beginning in the US. I'll move straight to Marmaxx. Comps increased 1% over strong 4% increase last year. While we usually do not give color on monthly comps, I think it's important for some additional insight into the quarter. Again, we were very pleased with our comps and traffic in August and September. Trends in these months were significantly better than in October when we believe the unseasonably warm weather across the country had a dramatic impact on customer traffic and dampened demand for apparel. I would like to note that the fourth quarter is off to a very strong start. Also, our non-apparel businesses, including home, jewelry and accessories, were terrific in the third quarter. We are very encouraged by our customer traffic overall, which was slightly up for the quarter and represented sequential improvements from the first and second quarters. We are pleased that segment profit margin was 14.5% on a 1% comp, including the de-leverage from our e-commerce businesses. I'm confident about Marmaxx heading into the fourth quarter. We see a marketplace absolutely loaded with quality brand and merchandize and we are well positioned to buy into these opportunities. We also have great initiatives planned, which I'll discuss in a moment. HomeGoods delivered an outstanding quarter. Comps were up 7% over 10% growth last year, and segment profit margin was 13.9% million or up 80 basis points. We are thrilled with HomeGoods' continued excellent performance. I can't tell you how many people asked me when are we going to open a HomeGoods in their area. We are doing a lot of work on our supply chain to support the future growth of HomeGoods,…

Thanks Carol. Now to guidance beginning with the fourth quarter. We now expect fourth quarter earnings per share to be in the range of $0.86 to $0.90. This would be a 6% to an 11% increase over last year's $0.81 per share. This guidance now reflects a $0.02 negative impact from FX versus our prior assumption of FX being neutral. It also assumes a $0.02 negative impact due to a combination of additional expenses and investments. These include increased costs related to our supply chain and in-store marketing to improve the customer experience. We're also assuming some incremental expenses and additional investments as we prepare to open Austria and our next new country. It's important to note that our assumptions for comp sales growth and merchandize margin increases remain unchanged for the fourth quarter and full year. We're assuming fourth quarter consolidated sales in $8.1 billion to $8.2 billion range. This continues to be based on comps sales growth in the 1% to 2% range both on a consolidated basis and at Marmaxx. Fourth quarter pre-tax profit margins are planned in the 11.9% to 12.2% range, down 10 basis points to up 20 basis points versus the prior year. We're anticipating fourth quarter gross profit margin to be in the range 27.6% to 27.9%, flat to up 30 basis points versus the prior year. Again, this guidance continues to assume merchandize margins will be up and reflects our opportunities for improvement based on our learnings from the last year. We're expecting SG&A as a percent of sales to be about 15.6%, flat with last year. Again, foreign currency rates are expected to have $0.02 negative impact on EPS this year versus $0.01 positive impact last year and our prior assumption of FX being neutral. For modeling purposes, we're anticipating a…

[Operator Instructions] Our first question today is from Daniel Hofkin.

Just wanted to see if I could just parse through some of the weather and just ask if you could give your best sense for what would be underlying comp rate over the last couple of months through thus far in the fourth quarter in, let's say, Europe and Marmaxx.

Daniel, obviously we're not going to give the numbers out. But as I said, August and September for Marmaxx were pretty damn strong. October, when we saw that extreme warm weather, we got hit pretty hard. It came back very strong opening November. And Europe, again we're seeing Europe turn as soon as November's weather start to get a little bit cooler across the board and more consistent. So we're feeling pretty good about our start.

So Europe, you would say, back to positive territory. Is there anything aside from weather that you felt was an issue either domestically or overseas?

No. You could read it month-to-month. I mean August in Europe was sensational. August and September in Marmaxx was very strong as soon as we saw the change. And we had incredibly high comps in the accessory, jewelry. Those areas that were not weather-affected were high-single digits.

And then if I could just ask you to clarify within the $0.02 impact in the fourth quarter, what specifically were the expenses as opposed to the kind of investments for the future? What specifically were just the added expenses in the fourth quarter?

It is strictly math. You have $0.02 of FX. The $0.02 were really we have a slightly lower ticket in Marmaxx, which is very positive. We're giving a great value and we're shipping gift-giving a little bit earlier. Freight that was one part of the combination. The other is a little bit of systems and I'll talk more about it at our year-end call to get ready for the possibility of another country.

Our next question is from Paul Lejuez.

It's Tracy filling in for Paul. Could you guys give us merchandize margin by division? I think you mentioned Canada was hurt by FX. But what were the merchandize margins at the other divisions?

I'm not going to break it down by division. But excluding Canada, again just as we had said earlier that we were relatively flat when you exclude Canada. Or said another way, we had some increases in freight. Again we're deliver to our stores more frequently than we have before, had a bit of cost due to the port slowdown. But again, I think we got ahead of that and really had very little impact. But overall, our mark-on and markdowns were relatively flat with last year. So we felt good about major components.

Is it fair to assume Marmaxx was up slightly?

Very slightly.

Again if you exclude the freight portion of it.

Our next question is from Lorraine Hutchinson.

I wanted to follow-up on your commentary around the new loyalty card, see that built through the quarter and if you view that as a big traffic driving opportunity for 4Q.

We saw a fairly dramatic increase in our soft loyalty program. We saw very dramatic increases. So we're very pleased with the program thus far. So we think that that is going to be certainly a part of our future traffic driving.

Our next question is from Mike Baker.

I wanted to ask you what you're seeing competitively from department stores. What we've seen is that their inventories are a little bit cleaner. Their gross margins look a little bit better. Are you seeing them being a little bit less promotional or have a little bit less clearance? And how does that impact you guys or your thinking heading into the fourth quarter?

I think there is a lot of dynamics going on. One is the port, and there is a bit of a payoff there, and that's not a wonderful thing, except for TJX it does tend to yield very positive things. We feel that we are incredible value. As I said, our average ticket is down, because we think we're giving very extreme value for the fourth quarter. So we're pretty excited about that. Our packaways are also up over last year, which is showing that slight increase in inventory. If you took that out, you'd be fairly flat. So we're feeling pretty good about value and we're feeling pretty good that our distance between everyone else out there is going to be very positive going into the fourth quarter.

You do sense in terms of your pricing, you mean?

Yes, our value.

Scott, sometimes you give your margin expectations by the segments. Is that something you can talk about for the fourth quarter?

We can give it out for the full year, our updated full year guidance. So we don't give out division and so forth. So for the full year, I'll start with Marmaxx to be doing, excluding FX when I talk about Canada and Europe, the comp increase for the full year for Marmaxx is 1%. The segment margin is 14.6% to 14.7%. Again, this is unchanged at the high from the last time we gave guidance. HomeGoods 4% to 5% for the year, 13.1% to 13.2%, again up from last time where we had 13% at the high. I'll go back to Marmaxx for a second for the sales. The sales are planned to be $18.6 billion to $18.7 billion. At HomeGoods, the sales for the full year are $3.3 billion to $3.4 billion. Moving to Canada, again ex-FX, the comps are planned 1% to 2%, the segment margin 13.1% to 13.2%, again higher by 30 basis points than the last time we gave the guidance on 08/19 on sales of $2.8 billion to $2.9 billion. At Europe, 3% to 4% comps, segment margins 8.2% to 8.3% on sales of $4.1 billion to $4.1 billion, again for out total numbers 1% to 2% comp at 12.2% to 12.3%. So on ex-FX, we're 20 basis points better than last year.

Your next question is from Stephen Grambling.

Now that you've lapped the e-commerce launch, you mentioned that you're also looking at some new vendors and categories. Can you just talk a little bit more about what you've seen over the year and what you're expecting going forward? And were there brands that were unwilling to sell to you online that are now opening the doors after seeing your results?

Yes, slowly, but surely we're definitely adding more brands. As I said, we've added hundreds of vendors, which we're pretty excited about. And we're loving the momentum. I mean we have huge increases, however that's on top of a very small business, but we're very pleased. It's better than we thought thus far. You'll see some new categories beginning next year or the first half of next year that I think will be very exciting. So looking forward to that. And we just continuously keep learning, but we're excited. The returns are going back to the stores. All the things we wanted not to cannibalize and to differentiate, we're feeling good about.

If you've been shopping at Citadel, you will see that over the last, I'd say, three months, there's been more categories and vendors. And again, that's kind of an open book, so you can shop by yourself and see the growth in the amount of categories.

I think the other positive fact is that the average order keeps going up. So we're pretty happy with the overall spend.

And one follow-up to an earlier question just on inventory. With inventory in total up around 8% versus the in-store up low-single digits, how much of that delta is e-commerce versus in-transit?

In terms of the inventory, looking at the balance sheet inventory, they were up 8%. If you exclude the incremental packaways, total inventories would have been up less than the total sales growth of 6%. So we do have some incremental packaways versus the previous years.

We also have more opened by dollars than we had a year ago.

Our next question is from Roxanne Meyer.

My question is on the investments that you're making incrementally. I'm just wondering if you can elaborate on those incremental investments related to supply chain. And while early, how are you thinking about investments for next year, whether you think that it's going to follow through and we should see a step-up in investing going forward?

So, Roxanne, we're actually working on next year's plan while we speak, but our investments are pretty focused on making sure that we can open additional countries in Europe on our supply chain, so that we can deliver more frequently to our stores. We really believe that there is a benefit to shipping less more frequently to our stores. We continue to feel that there're better weather-proofing opportunities throughout the chain. Last year, I think we had some missteps in maximizing some of our sun belt business that we're focusing on this year. We're going to continue our in-store investments. We're learning a lot from our customer surveys and we'll continue to upgrade our stores. We have a Marshalls new prototype. It's one of my favorites actually. And we're going to be starting to roll that out. And we just believe upgrading the in-store is really, really important. We have some things going on in long term, so that it's easier for the customer to shop us. So those are really the primary things that we're focusing on. And obviously a big part of our capital goes to new stores, which we'll talk more about again at the end of the year, what our plans are for Europe and domestically or North America. And we'll continue our investment in the e-commerce carefully, but I think we're doing the right things. I feel very comfortable about the pace that we're keeping.

Our next question is from Omar Saad.

I wanted to ask some follow-up questions on the weather. It feels like not just The TJX Companies, but the industry in general, is having bigger impacts from weather changes over the past year and I'm wondering if I'm correct in assuming this. Are you guys feeling that in your business versus history and is there any possible explanation why the weather would be impacting the consumer more now than it has in the past or maybe I'm just off my rocker and it's kind of always been this way?

There's always volatility in weather. I look at the full year. And you're going to have days that are positive and you're going to have days that are negative. For the fourth quarter, obviously we like to plan conservatively. So if you look at the back-half of last year a year ago, I think we had eight major snowstorms and around major snowstorms you have deep freezes. So we know last year that we ran into December, we had pretty strong comps and January was very dismal. So we think there's certainly an opportunity there. But I think in the aggregate year-over-year by time you finish the year, there's going to be some impact. But I don't look at it by month; I look at it by how is the year. And I think what we learned from it is how to mitigate the weather. So we have huge, huge presence in the middle of the country and south I call it the cloud belt and the sun belt. So we have new initiatives this year to maximize those in addition to changing some categories up north that we know we can drive even through some tough weather. So you learn from that every single year. We call it weather-proofing and I look at it as an opportunity.

And then the flexibility of your open-to-buy, does that help you maybe flow the right weather-appropriate product into the stores?

Absolutely. I mean we have a whole coat strategy that's very different from last year, because we ended up with the end of December, which is why our margin in the fourth quarter last year wasn't where we liked it to be. We certainly hope to mitigate that this year.

Omar, our model does allow us to flex more, because we buy so close in. So I think in some cases when the weather goes this way, we would have taken a hit worse than what we do take, because we're able to mitigate it with our liquidity. And that creates additional opportunities in the market. So yeah, we'll get hit on traffic initially like anyone else, but in the end, we can advantage of the other opportunities like in cold weather purchases. So it kind of evens out over time like Carol was saying.

And I think the other thing is Europe is an unbelievable example to have a negative 1% comp on top of 5% comp a year ago and have the same 10.4% against 10.4% is really to reach the flexibility of the model. Those guys just kept their inventories in line. They switched categories. And that market is just loaded with goods. So the flexibility of our business is incredible.

Our next question is from Bob Drbul.

I just have two questions. On categories, on the accessories category, are you seeing an increased availability of product? And can you talk a little about the denim category and sort of trends that you're seeing there and availability of product as well?

Ernie can chime in. There's so much product out there that the two of us are doing our hammer act around the building. It is so plentiful in beauty. It's so plentiful in all the accessories areas. And there's isn't an area that there isn't.

Bob, both categories you just talked about, I mean accessories have also a lot of different categories. We have big availability really across the board. So our challenge, like I think Carol was alluding to, is just pacing it and controlling how much we buy, how fast. And in denim, we can't give specifics, but denim performs really by a vendor and a fabrication issue. So we can't really get into specifics of what works there. But it works when you have the right item. I mean the availability is very strong there as well. It's really hard to find a category right now where there isn't a fair amount of goods.

And then just a question on the marketing. With increased aggressive marketing on e-commerce, both in the stores, but also the media and the TV side, is that percentage of sales, is it stable? Is it increasing? How should we think about that, the way the business is operating today?

I think we're more focused on where we get the better bang for the buck. So like in Canada, we've increased TV. In the United States and Marmaxx, we're doing a little bit more social media. So we're changing it up a bit. And then we do leverage. Now we have our tri-branding. And then in Canada, we leverage commercials from the US. So we're really able to keep our spend flat to slightly up, but we think we get a bigger bang to the buck. And the same thing in Europe as they're learning and leveraging between the UK and Germany.

Our next question is from Richard Jaffe.

Carol, I had two questions. One, you mentioned the dock strike and availability. I've got to believe that that's got to make your life a little bit easier. We've seen dramatic developments in e-commerce both in the technology, the look of the sites, the ability to blend store experience plus online experience. And you guys have been a late adopter. You watched, you saw. And now there's great visibility on what's working, what's not. Should we anticipate an acceleration in the investment in bringing the e-commerce business in terms of look and integration closer to the 21st century, closer to what some of the industry leaders are doing?

I think we have to balance everything. That's what we're digging in and looking at very carefully, because as you know, our brick-and-mortar business makes so much money that we want to balance where we make our investments. So we're running all of our returns on investment and we're going to lay out next year's plan and decide where we feel we are doing the right thing. However, I think as we go along the way with tjmaxx.com, if you'll see on our site the site changes, the size of the pictures change, we have a lot of initiatives. And we will certainly look at the investment and if we feel that we should increase the investment, we will. But we want to make sure that we communicate what we're getting for that investment.

So it's really a wait-and-see approach than a change in the strategy you've had to date.

Well, I'm not going to sit there and come back to you and say, let's just throw $1 billion at it. Europe is very exciting and the idea of opening additional countries, we make a lot of money with our brick-and-mortar. So we have to really balance our spend. See our trading store, the two stores we're very pleased with. It's another big opportunity. It's kind of a wonderful problem to have, but we want to be very smart on how we do all of this.

Our next question is from Jeff Stein.

Carol, a question on packaway. Several of your competitors have a much higher percentage of packaway inventory relative to what you have had historically. And I'm wondering in the latest quarter with the increase you're seeing in packaway, are you doing that for defensive reasons to try to get the first call on goods that are out there or was this just opportunistic? And second question I have is I'm wondering if you could just address the issue of inventory turns in your e-commerce business compared to brick-and-mortar.

Yeah, well, we don't talk about our turns in our e-com business. But our packaways are all about great deals. And the guys will go out there for the fabulous brand. It's the right fashion, they're going to do it. However I don't like packaways being too high a percent of our business, because I want us to be as current as possible. I want these guys going in every single week and being very current and making the best deal possible. So you always have to again balance what the premium brands are, what we love. We know that with the ports, there'll be a lot of goods coming at us, and we just want to make sure that we're current, we have an incredibly eclectic mix. And it's all about balance, Jeff. That's what it is.

Our next question is from Patrick McKeever.

So my question is on Sierra and how the acquisition has affected your Marmaxx business. Just without mentioning any brands, I would say that I've seen some really high-end brands in outerwear, particularly at Marshalls, thinking brands you might see when you're climbing up Mount Everest.

So you know about that. I said so you know about that?

And I've seen some kayaks on display at Marshalls. So I've got to assume that merchandise is coming through Sierra in some way. And I would think that would be just a huge win for Marshalls, for Marmaxx, just given the growth in active lifestyles and active wear and that sort of thing?

Yeah, it's all about the category. Sierra and Marmaxx do share information and they'll go to show it together, so that again we leverage as a corporation. But Marmaxx is definitely on the outdoor theme, and it's another great opportunity. It's another initiative.

Yeah, Patrick, I would say it's really been an independently-driven situation like the Marmaxx merchants have, and I think Carol just pointed to, some of that outdoor goods. Whether we had Sierra Trading or not, we would be going after that. So even the kayaks that you saw, that was something they actually initiated at Marmaxx and it had nothing to do with Sierra. And some of the outerwear pieces you were talking about, which I feel I like some of those goods there, personally appealing and I think you probably find it exciting merchandize. They communicate, but they don't really drive each other's buys that way.

Patrick, you know what else is happening is a lot of the brands is German. There's some fantastic brands from Europe. And now they're all collaborating and vendors in Europe are now used to doing business with us. So that's helping too back and forth. Same thing in Europe, some of the American brands. So it's a combination of everybody globally working together. Again, you want that assortment in Sierra. You want Marmaxx hitting all the brands. You want the European brands. So that's what's making the mix exciting.

How do you think about your outerwear assortment just today versus a year ago overall?

I think it's definitely upgraded.

Yeah, we're happy with it.

Our next question is from Ike Boruchow.

The Marmaxx Group continues to outperform in the US clearly when you look at the specialty apparel guys. But based on your guidance for Marmaxx, the 1% to 2%, this would be the slowest comp that Marmaxx has seen since '08. And I'm just curious, Carol, when you think about the off-price industry, there's a lot of footage, there's a lot of competition, there's online players that are trying to jump into it. At a very high level, how do you think about the industry over the next five years?

Again, I think every year there's always competition. We're not players that go out and say we expect these huge comps. However, I would certainly believe that Marmaxx can do pretty well in the fourth quarter, and I really love their initiatives. And as I said, they're off to a good start. So would I be happy with that comp? Probably not.

Our next question is from Pam Quintiliano.

So just quickly on gift-giving, it looks really great what we're seeing in the stores right now. Can you talk a little about the changes in timing in terms of the flows into the stores from where you would be historically and just thought-process behind gifts and what you're doing differently there?

So, Pam, every year we look at our gift-giving and we also do a lot of research with our customers, which is why our marketing campaign changed quite a bit. So we know where the opportunities were by category. So we re-evaluated all of that and we made a decision that we wanted to convert a little bit earlier. We like the flow and we're going to continue that flow. But the guys have done an incredible job of a combination of just globally getting together. And every single week, it's going to change into more and more of an exciting mix. So you saw those kayaks as an example. I'm holding my open-to-buy, because I just think it's going to be spectacular, and we worked very hard on it. So I'm very proud of the guys.

As one with children, I can say not only the kayaks, but also the amount of frozen merchandise you have is pretty phenomenal and full price everywhere else.

Just keep coming.

And if I could ask one to follow-up, when I think about this year with October being unseasonably warm and the port delays and you've been talking very favorably about the opportunity for product, so incrementally it seems like every call you always say there's so much opportunity out there for product. But it sounds like there's even an uptick from how much you normally see out there. Is that a safe assumption to make in terms of the quality?

A little disruption usually yields very positive for TJX. I mean it's not a good thing in the world. But, yes, and we will take full advantage of it.

And that's a benefit near term and longer term, right?

Yes.

Our next question is from David Mann.

In terms of HomeGoods, can you talk a little bit about any of the drivers behind the acceleration there and whether you think you're just catching a tailwind from the industry or really taking a lot of share?

I think HomeGoods is probably one of the most unique businesses out there, and I don't think there's anybody that does business the way HomeGoods does. And I think they are so global in their sourcing and so unique, their turns are just insane. And it's a brand that everybody loves and I think it's got a long runway. And I'm excited about it. I think some day, it will be both online. And we give a number of how many stores, but I keep looking at the other home businesses and the number of stores that they have out there is far greater than HomeGoods. So I just think it's an amazing group that executes very well, and we have created an extremely exciting brand. So we all love it. And that's all we hear. I have to stop telling people I can't put a HomeGoods near their house.

Just curiously on Marmaxx during the quarter, were there any regional call-outs when you think about some of the trends that occurred during that quarter?

Well, definitely, the northeast, the cooler climate weather, it got very warm, got hurt the most.

Our next question is from Mark Montagna.

A couple of questions about the ports and also winter coats. So first, the ports. I just want to verify, the port delays that are being experienced in the industry, it sounds like that has raised the amount of availability greater than what you had anticipated back in August when you hosted the last call. And then regarding winter coats, you alluded to some negative issue in the winter coats last December. Can you just remind us of what that negative issue was?

I think last year honestly, we just shipped too many too late. And we have a different strategy. And also, the weight of the coats. We've looked at it really by region, from the north to, I call it the cloud belt, to the south, so that we're much more regionally weight-wise appropriate. And that was a big opportunity. I think the ports are going to be a greater opportunity going forward. We did bring our gift-giving. Part of that increase in expense was bringing in our gift-giving early and making sure that we weren't caught by the ports. So we're in great position. But I think later, we're going to yield a great opportunity from the goods that haven't gotten through for most vendors and retailers as of yet.

And then just getting back to the issue at the winter coats, historically when you have in the early cold fourth quarter, like we're having right now, does the industry have a run-out of winter coats, because so many retailers over the past 10 years have been burned on winter coats and it seems like a lot had cut back?

It hasn't. Over the years, Mark, I've watched that cycle. We try to predict that as well based on the one year that's warmer, will they cut back, because they think next year will be warm again. Across the whole industry, it all kind of evens out, because some guys know that you can't predict it that way. It's not that simple. The weather doesn't always follow like in every other year, you know what I mean, which I think is what you're getting at, every other year pattern. We have run into maybe not the exact specific coats, but we haven't run into like enough coats in total if we wanted to continue to do it, and to drive the business. In addition, our relationships in Europe are just at a different level than they've ever been. And Europe offers a number of new resources for us in the outerwear area that we've been already capitalizing on. But when it comes to fourth quarter, we can go after some of those vendors even harder. So I think we have more doors to open now. And that's not really a concern. One of the things we have been doing also is starting off with a little different weight of goods. I think Carol mentioned that. So that's also helped us to have a better flow in the way we go in. And I think probably some of the vendors realizing they're trying to draw a middle ground in the type of goods they carry, and I think that probably helps in getting a little more bullish on cutting goods as well.

Our final question today is from Laura Champine.

So, Carol, it sounds like you're pretty excited about the holidays and availability is great, but you've maintained the guidance for sales for Q4. Why not go ahead and raise Q4 sales guidance?

Why would I do that? I would rather beat it. It's important to be conservative. We feel very good and our job is to try to beat it.

You don't give monthly comps anymore, but is there any color you can give us on how the quarter progressed last year?

The only thing I can tell you is we had a strong November, but as I said, we're off to a very strong start. We had a strong December last year, and we got hit very hard in January with the weather. So I do think that we probably won't get hit as hard in the weather, because there were a lot of storms. I think our strategy is much better in terms of weather-proofing and where we're shipping our goods. I think our gift-giving is much stronger than a year ago. I think our flow is better than a year ago. And I think our marketing just in general is a lot stronger. So I look at all of those as opportunities.

Got it. Thank you.

Thanks, everyone, and I look forward to reporting the fourth quarter to you. And have a great holiday.