Ladies and gentlemen, thank you for standing by. Welcome to The (sic) TJX Companies' Third Quarter Fiscal 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded, November 14, 2017. I would like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc. Please go ahead, sir.

Thanks, Dory. Before we begin, Deb has some opening comments.

Thank you, Ernie, and good morning. The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the company's SEC filings including, without limitation, the Form 10-K filed March 28, 2017. Further, these comments and the Q&A that follows are copyrighted today by The TJX Companies, Inc. 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 on 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 Investors section of our website, TJX.com. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are posted on our website, TJX.com, in the Investors section. Thank you, and now I'll turn it back over to Ernie.

Good morning. Joining me and Deb on the call is Scott Goldenberg. I want to begin our call today by saying that our hearts go out to all of our associates, their families and everyone who was affected by the recent hurricanes. The personal stories we have heard from our team in the field make it clear how devastating the situation has been to so many people. As an organization, we have extended our help and support to our associates and their families in Texas, Florida and in Puerto Rico, where we opened relief centers in some of our stores. We have made significant corporate contributions to the relief efforts of the American Red Cross and Save the Children and the response to our in-store fundraising campaigns has been tremendous, thanks to the generosity of our customers. We know the recovery is ongoing and will be long-lasting. As the CEO of this company, I could not be prouder of how our organization, our associates and our customers have responded to provide their care and support during such a difficult time. Moving now to our third quarter results. Third quarter consolidated comp sales were flat versus a strong 5% increase last year. Earnings per share were $1 and at the high end of our plan. During the quarter, the hurricanes negatively impacted our top- and bottom-line results. Additionally, we believe that warmer temperatures in the U.S. during the quarter dampened demand for apparel at Marmaxx. Beyond this, we believe we could have done a better job in certain apparel categories in Marmaxx and, therefore, left some business on the table. That said, our non-apparel sales were strong. Also, as the weather turned more seasonable in the second half of October, we saw sales trends improve at Marmaxx. Importantly, I am very…

Thanks, Ernie, and good morning, everyone. Consolidated comparable store sales were flat versus a 5% increase last year. While sales were below our plan, we were very pleased that customer traffic was strong and up at all four major divisions. While overall traffic and the units sold were up, these increases were mostly offset by a lower average ticket. As a reminder, our comp store sales exclude the growth from e-commerce. Also, our comp store sales exclude 37 stores, mostly in Puerto Rico, that were significantly impacted by hurricanes during the quarter. I also want to mention that approximately 400 additional stores were impacted in Florida and Texas for a period of time due to the hurricanes and are still included in our comp store sales. Again, diluted earnings per share were $1 and at the high-end of our plan and over an adjusted $0.91 last year. We believe the combination of lost sales and other expenses due to the hurricanes in the third quarter negatively impacted EPS by about $0.03. The combination of foreign currency and transactional foreign exchange benefited EPS growth by 5%, and the change in accounting rules for share-based compensation benefited EPS growth by an additional 2%. As we anticipated, wage increases negatively impacted EPS growth by about 1%. As Ernie mentioned, we were very pleased that our merchandise margin increased in the third quarter. Further, our overall pre-tax profit margin exceeded the high-end of our guidance despite the below planned sales. This was mostly due to better-than-expected merchandise margin and expense savings on the flat comp. Again, this speaks to the flexibility of our off-price model and our ability to adjust and react to current trends. At the end of the third quarter, consolidated inventories on a per-store basis, including inventories held in warehouses but…

Thanks, Scott. Now to some of our other business highlights in the third quarter. First, we opened our 4,000th store, a proud milestone for our company. This is a great reflection of our decades of operating expertise, both in the U.S. and internationally, and our disciplined approach to real estate. Second, we were thrilled with the openings of our first three HomeSense stores in the U.S. While still very early, initial customer response has been outstanding. Shoppers are loving the differentiated mix of home fashions at HomeSense, together with HomeGoods, we offer something for every room of the home. Next, we opened our first new TK Maxx stores in Australia. The response of Australian consumers to our great brands and values has been outstanding, and we like our long-term prospects in this region of the world. Lastly, we rolled out two major initiatives at TJX International. First, we are now offering our non-credit loyalty program, Treasure, in all of our stores in the UK and Ireland. Second, Click and Collect is now available at all of our TK Maxx locations in the UK. We are confident that both of these programs will help deepen customer engagement with TK Maxx. Now, I'll move to our fourth quarter opportunities. Most importantly, we are passionate about offering consumers tremendous off-price values on an eclectic mix of merchandise from around the world. We are in a great liquidity position to take advantage of the numerous opportunities we see and plan to buy seasonal product throughout December. We'll be flowing fresh merchandise to our stores and online multiple times a week, so shoppers can expect to see something new every time they visit. I am convinced that our stores will have the best gift-giving assortments out there this holiday season. Furthermore, every year, we work…

Thanks, Ernie. Before I begin, I want to remind everyone that both the fourth quarter and the full year include an extra week due to the 53rd week in the fiscal 2018 calendar, which we expect will benefit both periods by about $0.11. Now to our guidance, beginning with the fourth quarter. We expect GAAP earnings per share to be in the range of $1.25 to $1.27. Excluding an approximate $0.11 benefit from the extra week in the fourth quarter, we expect adjusted earnings per share to be in the range of $1.14 to $1.16, an 11% to 13% increase versus the prior year. This guidance assumes an expected negative impact to EPS growth of approximately 1% due to wage increases. It also includes a 1% benefit to EPS growth due to the combination of foreign currency and transactional FX. We're modeling fourth quarter consolidated sales in the range of $10.6 billion to $10.8 billion. This guidance assumes a positive impact to revenue of approximately 6% due to the extra week and a 2% positive impact to reported revenue due to translational FX. For comp store sales, we're assuming growth in the 1% to 2% range on both a consolidated basis and at Marmaxx. The comps exclude e-commerce and, by definition, the extra week. Fourth quarter pre-tax profit margin is planned in the 12.1% to 12.2% range versus the prior year's 11.6%. The extra week is expected to benefit pre-tax margin by approximately 50 basis points. We're anticipating fourth quarter gross profit margin to be in the range of 28.9% to 29.0% versus 28.3% last year. The extra week is expected to benefit the high end of gross profit margin by approximately 40 basis points. We're expecting SG&A as a percent of sales to be approximately 16.8%, up 10 basis…

Thank you. Our first question comes from Paul Lejuez. Your line is open.

Hey. Thanks guys. Any way you could quantify what you were seeing in the business overall, Marmaxx specifically prior to the unfavorable weather maybe having an impact and any quantification about how the fourth quarter has started? And just curious about regional differences throughout the quarter. Maybe help us understand how the weather impacted certain regions versus those that were not hurt by the less-than-seasonable weather out there? Thanks.

So, Paul, I'll just start. Overall, we believe that the hurricane and the weather impacts for the quarter, both from Marmaxx and TJX had approximately a 2% impact, or they would have been 2% higher had not been for both – those two factors. In terms of the weather, as the weather turned – and I'm speaking more toward Marmaxx at this point, as the weather turned, as we moved through October to the last part of it, we saw the comps increase at Marmaxx versus the trend we saw. September was a combination of both weather and hurricane and October, the first half of the month was a weather story. And then, I'll turn it over, we're not going to go into the comps by division at this point, but I'll let Ernie...

Yeah, Paul. I would just say, I think, part of your question was prior to the hurricanes and the unseasonable weather, we were tracking better at the beginning of September, actually. So we had high hopes and then it got derailed with a lot of bad weather issue. I would say besides that, and we didn't talk about it as much in the script, we did have a couple of areas that was our own execution and I would say, it was really more because of a lack of the appropriate fashion content. And that really did not help us. So that is an opportunity that we have since dug into. We've certainly got the teams together to look at that and feel that those areas that hurt us in the third quarter are in better shape going into the fourth quarter. So that has been something certainly self-inflicted that we, in addition to the weather, have focused on.

Ernie, was it a fashion miss or was it more what you wanted to buy just wasn't available out there?

No, it was absolutely a fashion miss, Paul. And it had nothing to do – this was really, on our own part, a selection issue, and it had nothing to do with availability out there. And that would apply to the three areas that I'm thinking about. All three were a fashion miss from our own execution.

And is that already fixed? Or when do you expect it to be fixed?

I would say it's expected to be fixed. They are not already fixed. They are kind of work-in-progress. But they have both – the underlying trends relative to the store, in both cases, have improved a little bit. So that's a good sign. And I would say two of them, I am feeling, will be well improved by the fourth quarter. The third one might take a little bit longer. But the....

Thanks. Good luck.

The bulk of it will definitely be improved.

All right, thanks. Good luck guys.

Thank you.

Our next question comes from Lindsay Drucker Mann. Your line is open. Lindsay Drucker Mann - Goldman Sachs & Co. LLC: Thanks, good morning. I just wanted to clarify on the Marmaxx merchandise margin, which you said was up – I think you said was up nicely at the same time that it sounds like AUR was down. And you called out some execution issues and a general shortfall for comp trends. So could you help square the favorable merchandise margin behavior with those headwinds to merchandise margin?

Yes. I think that in terms, first is, I'll talk both on an absolute basis and versus guidance, Lindsay, in that throughout the – we ended up given that we're always we have a – always a considerable amount of open to buy in the quarter, like in the case, this case, the third quarter, for the third quarter, and we are able to buy, particularly in our mark-on, better than what we had guided to. So that was largely the uptick. In fact, the average ticket, although weighing on some of the overall costs for the business, was actually moderated a bit from what we originally guided to. So we had two pickups, the biggest, though, one, I would say, is in the mark-on that we bought better.

Yes, Lindsay, I would also jump in. Here's the dynamic that happened a little in the third quarter. And as we talked about, we strategically flowed a little differently. One of the things we did is stay a little bit leaner in the third quarter on our cold-weather apparel, flowed it later in the quarter. With that, unfortunately, we might have given up a little bit of top-line sales. But when you give out the top-line sales there and flow it later into November, that oftentimes helps you with the margin, even though you've given up some sales. And that's one of the benefits of doing that. Having said that, I think we probably waited a little bit too long and gave up a little bit more sales than we like. Now the market environment that we're in, where a lot of the retail traffic is awful around us, it's going to probably create even more opportunities, which we certainly started taking advantage of in the third quarter, absolutely placed to our business model, that's why we're able to hold in the strong merchandise margin even when the sales flattened. And our expectation would be we'll continue to take advantage in the fourth quarter, especially in November here, in this loaded market, with retail traffic across the board being pretty slow, our guys are seeing a lot of tremendous (30:47). I think it's going to keep that mark-on going in a strong direction. So, just thought that's added color for you in terms of how that dynamic has taken place.

And in terms of the Marmaxx overall margin, our entire miss from guidance was due to the hurricane and the deleverage on the low comp at Marmaxx which, again, was partially offset by the strong merchandise margin improvement we saw.

And just to jump in on one last thing here. It's really the strength, we've talked about it many times over the years, it is the strength of our business model that allows us to be so nimble and react to situations where our sales have slowed down in a business like Marmaxx. So we're able to then improve on our liquidity, adjust and really make up some headway on the margin side of the business, which I don't think a lot of other retail concepts are able to do that as quickly as this concept is. Lindsay Drucker Mann - Goldman Sachs & Co. LLC: Great. Just a quick – thank you for that, a quick follow-up. The up 2% traffic you called out for Marmaxx, can you talk about how that compares with trends earlier this year?

Hi, Lindsay, this is Scott. We didn't really break out that detail. So not going to go into the comp transaction that we saw earlier in the year. Lindsay Drucker Mann - Goldman Sachs & Co. LLC: Okay. Thanks anyway guys.

Lindsay, the only thing I would throw into that is our traffic was up in all regions, except for Florida, of the strong traffic increase. So that was encouraging as well. Lindsay Drucker Mann - Goldman Sachs & Co. LLC: Great. Thanks very much.

Our next question comes from Mike Baker. Your line is open.

Thanks. A couple questions. One, we understand, I think, (32:40) hurricanes and weather had an impact. But what about, in a competitive situation, the department stores hung in reasonably well this quarter and closed out the gap between TJX and an average fashion department store has narrowed and actually a little bit better than Marmaxx. So are you seeing the department stores be a little bit more promotional or a little more competitive?

Mike, I'll jump in on that. That, to us, has really been a nonissue. Again, if you look at the weather being half the puzzle here, I would say the other part would be our own execution internally. Again, some of it might have been the delay in our cold weather business and how we shipped those, but I really think the fashion component execution in a couple of our bigger areas is really more our own doing and more of what affected us than any external execution by any other retailer out there. We don't really see any indicators. And we look at metrics t try to find that and we see no sign of that. It's really more because we can kind of look at our – and dollar out and figure out where we've created our own issues and that seems to be the bulk of it, along with the weather being, certainly, a really significant part, obviously.

Yeah, yeah, that makes sense. All right. And then if I could just sort of change directions and talk about the margins, a number of moving parts this year. Is it too early to think about next year or maybe just, more broadly, longer term margins? We've had a couple years of declines. At what point do you think the total company pre-tax margin starts to level off and even show some improvement on an annual basis?

Michael, I'll jump in. I think in – too early, we'll go in certainly more detail on the February call in terms of that, but we were not expecting margins at this point for next year to be flattening out. But I think we'll address what our expectations are longer term where, I think, we certainly would be more optimistic, as right now, the two major factors that are dragging on our business, well, there's three, we'll – I'll address two, and Ernie can address the third. One, is wages, although moderating as we move through the year, this year, the U.S. piece is still what we would have expected a slight moderation, a slight headwind next year. Up in Canada, in the last couple months, the Ontario Province has a very big increase of $11.60 up to about a 20% increase. So that will make our wage impact at this point slightly down, but close to the same level of a headwind as last year. The DC or supply chain costs, although moderating again in this fourth quarter, we're still going to see impact of that going forward. At least for next year, it's going to be up a bit lumpy as we're still building out to support the strong store growth that we have. One of the factors that has impacted us this year is the average retail and I'll let Ernie address that.

Yes, we see that, Mike, moderating, as we go into the fourth quarter here. We've been talking about that before and, obviously, in the past, had hoped it would moderate a little bit sooner. This has – we also talked about is a bottom-up-driven dynamic, where our merchants really determine where the average ticket is going based on sales opportunities within their own areas. But as we look out, and we're getting visibility, obviously, as more of that's bought, fourth quarter specifically, the ticket is moderating. So we're feeling very good about that and that is, from an expense standpoint, and also from a ticket going out the door to help drive sales standpoint, it would be a healthy thing. So we're feeling good about that.

Yes, going back to the overall guidance, we'll, again, go in the fourth quarter, we still expect it, we've used the word tick-up to be slightly higher than the plan we gave this year of the 5%. So no change on that at this moment, although there are always a lot of moving factors, I'd say, share-based compensation and tax rates, obviously, still up in the air. But overall, we do expect our plans to tick up from what this year's plans were.

Okay. Yeah, that's very helpful color. Thank you. Appreciate it.

Our next question comes from Matthew Boss. Your line is open.

Thanks. On merchandise margins, so product availability, you talked about being plentiful from your comments. And it's interesting because department store inventories actually seem to be more balanced. I guess, can you talk about the margin opportunity if pricing is more rational going forward in the marketplace? And how much, if any, do you really actually rely on the department stores for product availability these days?

So Matthew, that's a great question and one – we talk about it strategically around here a lot. One of the dynamics that has created the department store relativity to lessen is because there was such a strong ecomm business in the world. That includes branded retailers vertically with their own sites, yes department stores with their own sites. And so what has happened in terms of availability, the brick-and-mortar got, rightfully so, they're all trying to lean up their brick-and-mortar. But now, there is more goods, as you can imagine, online. So in terms of availability, it's really, that's just been a shift for us. In terms of creating an umbrella of value, that shift is actually a little bit more visible online. So it creates an umbrella of what goods are being sold, that allows our consumers to really look into that more easily than ever before. So that whole dynamic, first of all, the amount of goods in the inventory, I believe, a lot of that is a reaction to Internet business because many manufacturers want to be able to supply an Internet business as well. But it's a little bit of left pocket, right pocket, which is probably one reason, as well as we're continually opening thousands of new vendors. We're up to 18,000 vendors today. And that clearly helps drive that. So a long-winded answer to your question, we will continue to think, yeah, there probably is some margin opportunity, given all of those dynamics.

Great. Best of luck.

Our next question comes from Daniel Hofkin. Your line is open. Daniel H. Hofkin - William Blair & Co. LLC: Good morning. Just a quick follow-up. If there's a way on the executional front, I don't know if you specifically quantified what impact do you think that had, you talked about weather, but on the execution front. And then I was just curious, you talked about the wage outlook. But given the announcement by one of the large discount retailers to bring their bottom of the scale up to $15 within three years, how does that affect what you'd think of as the wage trajectory the next few years?

So I'll start out on the wage. So we'll add no comment in terms of what other retailers are doing in terms of our adjustment. As I'd said, I think, at this point, we'll have a similar level of headwinds this year on wage next year, given the Canadian adjustment that I talked about on the earlier question. So that's about all, I think, we're going to talk about on the wage at this point.

And quantifying on things, that's just not something we give out. We don't break down the misses like that or what the dollars or the percent of the business is. Daniel H. Hofkin - William Blair & Co. LLC: Okay.

Other than, the only thing we think has been implied is that we had, the two points, and on top of that, what Ernie said, we gave up, we think we left additional business on the table.

Right. Daniel H. Hofkin - William Blair & Co. LLC: Okay. And then, I guess, maybe just regarding the recent pickup in the business. Is there any way to tell whether some of that is pent-up demand or early replenishment purchases following the impact of the storms?

I would say on that, Daniel, the good news with the recent trend is it's widespread across the businesses. So it's not just the cold weather business, which I'd talked about before. That is not the only, by any means, businesses driving our increased trend that we're seeing. So we're seeing it across all the families of business, which is very encouraging. We start to go from here into our major gift-giving posture for holiday, which, obviously, we're excited about every year, we do, I think, a really good job as we get to fourth quarter in terms of going after gift-giving. It's a place that we, I think, have executed better year-after-year. And we've also done a better job in our marketing year-after-year. So our goal there is just get them in the store. And because we deliver a lot of impulse buying throughout the store, we don't go after any one category anymore disproportionally than we do the year before, unless it's a hot trending category. So I would say the trends that we're seeing over the last couple weeks would bode well for the Christmas holiday. Daniel H. Hofkin - William Blair & Co. LLC: Okay.

Another way to talk on the sales is that, to address the pent-up demand is that the raw number is good. And it's also better than what we had planned, which we do take into consideration at the beginning of a month what our plans are going to be for the next month. So I can't go into any more level of detail. Daniel H. Hofkin - William Blair & Co. LLC: Understood. Okay. Thanks very much.

Thank you.

Our next question comes from Omar Saad. Your line is open.

Thanks. Good morning. I was wondering if you could talk a little bit more about what you're seeing in the marketplace with brands doing some of their own, doing clearance online through their own websites and retailers, how that affects your business. Feels like that something's been going on for a couple of years, but maybe now some of these brands are going to realize that you can't clear effectively an online channel and maintain your full-price umbrella. Is that something you're seeing? Are you seeing that affect your business in any way? How do you think about that dynamic in context of the role of T.J. Maxx in the broader kind of fashion apparel marketplace? Thanks.

Great question, Omar. We're seeing that it's really supplemental to what's available in the market. It's not a market pie taker from us. It actually creates additional opportunities and we actually believe that's one of the pockets of business because liquidating goods that way for some retailers online is just, it's way more tedious than it is for them to sell the goods to somebody like us where we can ship it and sell it invisibly across 2,200 stores. And they get to hang with other brands in a very, how would I call it, conducive atmosphere that's actually a benefit to them in terms of their image and their brand. So we have been finding, and I think that's the nature of some of the increased availability is that more and more of those guys are realizing, the brands are realizing that they'd be better off liquidating with us than trying to liquidate on their own off their websites. So does that make sense?

Yeah. That's helpful, Ernie. Thank you. And then I just also wanted to ask, you guys often display kind of the flexibility of the business model and the buying, keeping that open-to-buy open as late as possible. Was that an issue this quarter with the lack of the right fashion content? Was it somewhere where the kind of the flexible model broke down? Or is it just some decisions that were made that shouldn't have been?

Yeah. So I wish, believe me, I wish I could say yes to the first way you asked that, that it was a process breakdown and not available in the market. But in these couple of cases, it was absolutely a strategy and a fashion execution entirely under our control and had nothing really to do with the execution of the model. It was really a fashion misstep of our own doing. I wish I could answer you the other way. I would rather. Unfortunately, I can't. I would say this is just our own execution or lack thereof.

Understood. Thanks, guys.

Thank you.

Our next question comes from Marni Shapiro. Your line is open.

Hey, everybody. Best of luck with the holiday season by the way.

Thank you, Marni.

Thanks. Can you talk a little bit you focused a little bit on AUR. But is anything impacting AUR as far as mix shift in the stores for the third quarter and going into the fourth quarter? Or is this a markdown conversation? If you could just clarify that as well because I know it's been a conversation all year that you were trying to lower some of your prices. So I'm curious, just for the third quarter and the fourth quarter, what the story is.

Yeah. I think, Marni, it's a combination of a lot of things, but one of them being a mix issue, some of the departments that we are going after happen to be high-ticket. And it doesn't mean that we were forcing going after those. That's just the way it was working out, that those departments were high-ticket. Some of the departments themselves have their tickets going up. And what was – that was in a department last year. So in a couple departments, we evidently hit the bottom last year. And so we're seeing an improvement in like-for-like departments. But believe me, part of it is the mix of departments. We're going up in some departments that are a greater percentage that happen to be higher ticket. I do believe that the nature of the availability of goods and some better goods in the market is also creating our ticket going up. And that is happening in numerous families of business where we're finding some better branded goods to a greater degree than we would have had last year. And as that flows in, that also is, I think, contributing to our average ticket moderating for the fourth quarter. The good news is we've got visibility to it and we can see that it's heading that way over the next 30, 45 days. So...

And I think that's on the apparel side for the most part, correct?

It is. It is in the apparel side for the most part. Yeah.

And men's and women's?

Well, it varies by department in men's and women's. But mostly – I think we'll just leave it at mostly apparel.

Excellent. Congratulations. Best of luck for the holidays.

Thank you, Marni.

Our next question comes from Ike Boruchow. Your line is open.

Hi. Good morning, everyone. I guess, Scott, my question for you was going to be – sorry, Ernie, I'll start with you. The fashion miss, I understand and appreciate you probably don't want to get into too much detail, but could you help us with maybe what category it was in? Did you buy too shallow? Did you buy too deep? Just trying to understand the dynamic there.

So I can't tell you what category it's in. And by the way, it was – it's in a few categories. It's not just one. And it wasn't about deep. It was about – it's when fashion can be the wrong fashion, or it can be too much fashion, the look itself can be too much fashion. And then if you have too much of that, and that applied to a couple of areas. And so, I can't tell you the areas, but it was really about that. So the goods themselves were too much on the edge and too great a proportion of the areas. Do you know what it means, like too big a proportion of the departments?

Got it, got it. Okay, that's helpful. And then, just Scott, a quick follow-up to a comment you made earlier about not really – you shouldn't really expect margins to flatten out next year. I assume you're talking about a 52-week to 52-week basis, (50:05) margin, is that correct?

Yeah. Everything I was – everything I said was adjusting for the $0.11 out and then taking out and adjusting at the benefit we got – the 20 basis points benefit we got on 53-week versus 52-week.

Got it. Thanks so much.

Yeah. Welcome.

Our next question comes from Kimberly Greenberger. Your line is open. Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC: Great. Thank you so much. Scott, I wanted to ask about inventory. I'm wondering if you can help me close the gap between the 4% decline that you talked about in inventory, excluding in-transit, e-commerce. I think, you said that was on a per-store basis. That 4% decline versus what we're seeing on the balance sheet, it looks like about a 7.8% increase in total inventories. So, can you just help us sort of understand how to get from the plus 7.8% to the minus 4%?

Yes. So, yes, you're exactly right. I'll just take a one minor step, is, on a constant currency basis, it would still be the same delta, 7% on the balance sheet versus the second quarter where we'd be on a constant currency minus one. So, that 8%, and that's why we did the excluding, when you did on a per-store basis, where the variance between the second and the third quarter is a bit less than – it's 2% or slightly less, where we're down 6% versus down 4% on a per store. It's entirely – virtually entirely due to the change just in in-transit. So, the in-transit was up significantly in the end of the third quarter versus being down in the second quarter. So – and the definition of the in-transit is, those are goods that are arriving, that are not booked in, but are arriving basically within the week into your DC. So, a lot of fresh goods coming into the DCs at the end of the third quarter, obviously, flowing out to the stores right now. So, entirely due to the in-transit inventory and that's why, I think, the better metric is looking at the all-in, excluding in-transit and e-commerce inventories, on a per-store basis. Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC: Great. Thanks so much, Scott.

Our next question comes from Oliver Chen. Your line is open. Oliver Chen - Cowen & Co. LLC: Hi. Thank you. Good morning. I was curious about the nature of the opportunities in apparel. What's the framework for which ones will be easier and quicker to course correct versus longer-term in nature? And then, another topic was just the topic of customer engagement and loyalty. What's your vision for where the opportunities are here and how you want to pursue it in a way that's unique to you and the off-price business model? Just curious about where you see that going over time and what customers want and how you balance engagement versus value versus delivering what customers want with those programs? Thank you.

Okay, great. Oliver, on the apparel areas, in terms of course correcting, again, the other advantage to our business model is nothing takes very long, and the areas that are of the few areas we're talking about, two out of the three are fairly flexible and close order. We buy so much so soon and close in, in those areas. And then, even the third one, relatively speaking, might take an extra month or two. But nothing as long, like nothing will drag into pass the fourth quarter at all. I think, most of it gets corrected in over the next 30 days, actually. So, that's just the nature of the way we buy. It's another advantage when we stub our toe, we are able to fix things pretty quickly. And, as I said, there isn't even one of them, even the other one I'm thinking about could take an extra 30 days beyond that. But two out of the three are being fixed as we speak and where we will see improvements on them over the next few weeks. So, we're feeling really good about that. And that would apply, by the way, if it wasn't just apparel, even in our – some of our accessories or hardline business or home area, we can generally react and fix execution issues pretty close in. So, it's really not just an apparel thing. Loyalty has been, obviously, we had it in the script, that's been a very positive program, which we have been pushing in every division. And even in the divisions where we don't have the hard credit card, our soft rewards programs there have been growing aggressively. And our customer growth in the loyalty is actually up significantly this year. We'll continue to be pleased with the metrics, by the way, that – we look at the metrics associated with our U.S. credit card program. Loyalty will be going on our apps at varying times over the next year, which is going to be interesting, because many customers have been asking about that. We've been in the mobile space, really trying to institute a global mobile app roadmap. And we currently have mobile apps for Maxx, HomeGoods and STP, where, as you know, from all of those retailers around us, whether it's coffee shops or traditional retailers, the ability to interact and connect mobile marketing to reach consumers is continuing to become greater an importance as we move forward. So, we are putting a strong push on that in every one of our divisions. But we're really trying to get the loyalty program on our apps over the next year that we have in place because we think that will be our next surge that we can really look forward to in driving our loyalty programs.

Yeah, I'd just add a little, Oliver, that as Ernie said, the loyalty program or the credit card program in the United States is very healthy that we offer to Marmaxx, HomeGoods and Sierra Trading Post. We started in the third quarter a loyalty program in the UK, early days, but have added hundreds of thousands of people signing up for that. So, too early to talk about the results, but, I think, it's something that will benefit us as we go forward to the fourth quarter and beyond. And we feel good about the overall marketing campaigns, both for digital and TV on the broadcast and what we're doing in digital in the fourth quarter across-the-board. Oliver Chen - Cowen & Co. LLC: And Ernie and Scott, you've always done a great job at gifting, like, every year I've been very impressed. So, do you have any rough thoughts on what will be incremental this year versus last? That's our last question. I'm just curious about these catalysts, because I'm sure you're going to do a really good job as well, but I'm curious about what might be different.

When you talk, Oliver, in terms of different gifting, are you talking about impact at the store level or...? Oliver Chen - Cowen & Co. LLC: Yeah, in terms of what you're most encouraged about as you look to fourth quarter and what we should focus on as key catalysts in addition to what sounds like impactful marketing programs across social, the statement around gifting or other ideas, initiatives that are different versus last year?

Yeah. So, we – it's one of the areas I am most proud of our teams on, because they work at our holiday gift-giving in an extremely cohesive team approach. So, it's from our merchants, our supply chain and our marketing team and the field executives – our store guys are phenomenal about this. So, what happens is, the merchants, I would say, one of the big pushes on their end is to deliver freshness even later into December, which we do every year better so, and we've done it the last December, and it's very successful. That applies to Marmaxx, HomeGoods, Europe, Canada, every division has a mission to flow freshness later. Secondly, internal execution, signing packages, customer service, turning customers through the registers and is expedient a format as possible, also a big push for us. Thirdly, our logistics supply chain, we are all over and, I think, we've talked about this at various investor meetings; we have improved on our ability with our supply chain to process goods and get them from the vendor to the stores significantly faster than we ever had before. So, what that has allowed us to do is, when we keep some of the – keep some of our open buy for the holiday gift-giving open and there's great gift-giving buys in the marketplace, we can actually get them in pre-Christmas for that late shipping better than we have ever been able to do it before. And the marketing, what I'm pleased about, and this is also for holiday gift-giving, I guess, you would call this incremental like you call that, Oliver, is, we continue – we're going to obvious continue to emphasize our standout values. But we are – we stay the course. We stay the course on going after diverse customer base. We don't try to pigeonhole and go too narrow. Every format, we're going to try to talk about the many ways that we're going to provide value. We talk about our model in the marketing, which is to get away from a less chaotic shopping experience and have authentic value. And you know indirectly in all of our marketing will be basically explaining that we don't do a high-low in our business and that we're going to provide a true value to consumers. So, three out of the four big business, I know, have a campaign that will continue to educate consumers. And then, lastly, one thing I'm very happy about is, we're going to continue to, obviously, spend a lot more in digital, which are all, yes, the younger audiences, but more people in general are watching digital and there's more impact there. But we're pleased because a lot of our growth in new customers has been with younger customers under the age of 34. So, a lot of those things are in play for fourth quarter in the gift-giving time period, and we're thinking we have the guns loaded, so to speak.

And, thank you. At this time, I'd like to now turn it back to our hosts for closing remarks.

Okay. We would like to thank all of you for joining us today, and we look forward to updating you on our year-end earnings call in February. Thank you, everybody.

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