Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies First Quarter Fiscal 2019 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, May 22, 2018. I would like to turn the conference over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies Incorporated. Please go ahead, sir.

Thanks, Brad. 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 April 4, 2018. 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 in that transcript. We have detailed the impact of foreign exchange on our consolidated results in 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. Let me begin by saying that I am very pleased with our first quarter results. Both our consolidated comp store sales growth of 3% and adjusted earnings per share of $0.96 exceeded our expectations. I am particularly pleased with the 4% comp sales increase at Marmaxx and the strong performance across their apparel and home categories. I am also very pleased to say that we successfully addressed the third quarter execution issues that we discussed last year and they are now behind us. In the first quarter, customer traffic was once again the primary driver of our comp sales increases at all four of our divisions. Further, this quarter marks the 15th consecutive quarter of customer traffic increases for TJX and Marmaxx. We believe that this consistency in our customer traffic increases speaks to the strength of our underlying business, our ability to succeed through many types of economic and retail environments and our resiliency as online retail is growing. We are convinced that our outstanding values, great brands and treasure hunt shopping experience will allow us to continue gain market share around the world across our four major divisions. With our strong first quarter results, we are raising our outlook for our full year earnings, which Scott will detail in a moment. Looking ahead, the second quarter is off to a strong start and we see many opportunities to drive consumers to our retail banners. We see a marketplace that is loaded with quality branded merchandise. Our management team is laser-focused on achieving our plans, and as always will strive to surpass them. We are confident that we can continue to grow TJX around the globe today and for the future. Before I continue, I will turn the call over to Scott to recap our first quarter numbers. Scott?

Thanks, Ernie. And good morning, everyone. As Ernie mentioned, our 3% consolidated comparable store sales increase exceeded our expectations. To be clear, our comp sales in fiscal ‘19 are compared to a shifted fiscal ‘18 calendar, so that our comps are calculated on a like-for-like basis. Once again, customer traffic was up overall and the primary driver of our comp sales increases at each of our four major divisions. As a reminder, our comp increase excludes the growth from our e-commerce businesses. First quarter diluted earnings per share were $1.13. Excluding a $0.17 benefit from the 2017 tax act, adjusted earnings per share were $0.96, a 17% increase over last year’s $0.82. Adjusted EPS was $0.09 above our plan, primarily due to better than expected operating results which benefited EPS by an estimated $0.05. In addition, we had another four penny benefit from the combination of our mark-to-market gains on our inventory hedges and share based compensation coming in above plan. Overall, foreign currency benefited EPS growth by approximately 3% versus our plan of 1%. As expected wage increases negatively impacted EPS growth by about 2%. Consolidated pretax profit margin was 11%, up 30 basis points versus the prior year. This increase was due to several factors. These included expense savings, better flow through on a year-over-year sales improvement, a one-time lease buyout in Canada, and gains related to inventory hedges. These benefits were partially offset by higher supply chain costs, a decrease in merchandise margin and wage increases. At the end of the first quarter, consolidated inventories on a per store basis including inventories held in warehouses, but excluding in transit and e-commerce inventories were up 6% on a constant currency basis, versus a 7% decrease last year. We feel very comfortable with our inventory liquidity as we enter…

Thanks, Scott. I would like to reiterate the major reasons for our confidence in continuing to gain market share around the world. First and foremost, we are convinced that our excellent values, fashions and brands will continue to drive consumers to our stores. In today’s evolving retail environment, with the growth of e-commerce in general, we are delivering excellent value on comparable merchandise versus both brick and mortar and online retailers. In fact, we believe the growth of online retail has heightened the visibility of our values for consumers, which is very positive for our business. Second, we are confident in the enduring appeal of the treasure hunt shopping experience we offer. We are convinced that the ability to touch and feel the merchandise and the inspiration that our shopping experience elicits, leads to instant gratification, all important factors for shoppers. Further, we offer a wide variety of branded items across multiple categories in a simple easy-to-shop layout. We also locate our stores in convenient, easy-to-access locations. Our flexible store format and rapidly changing assortments allow us to quickly react to changing consumer trends. This helps us ensure that our stores are fresh and there is always something to surprise and excite our customers. Third, while we continue to attract customers of all target age groups in all divisions, we are especially pleased that we have been disproportionately attracting new millennial and Gen Z customers. This bodes very well for the future of TJX. Next, we are laser-focused on driving customer traffic and comp sales. We have many initiatives planned to attract new consumers, encourage more frequent visits and drive cross-banner shopping. We are excited about our marketing plans which are moving towards a more continuous media strategy to support our business throughout the year. This includes more reach on…

Thanks, Ernie. I’ll begin with our full year fiscal 2019 guidance. For modeling purposes, I’ll remind you that fiscal 2019 is a 52-week year compared to fiscal 2018, which was a 53-week year. As we mentioned in our press release this morning, we are increasing the high-end of our adjusted EPS guidance by $0.02. Our full-year plan assumes that $0.07 of our $0.09 first quarter EPS beat will be offset by the following factors. First, we’re expecting a $0.03 negative impact due to a combination of factors. This is primarily due to significantly higher freight costs than we originally anticipated, partially offset by the stronger operational performance we now expect as we’ve seen our non-comps store results exceeding our plans. Second, we expect about $0.02 of the first quarter benefit from our inventory hedge gains to reverse throughout the remainder of the year. Lastly, we now expect the full year benefit from translational foreign exchange to come in $0.02 lower than we originally planned. I want to point out that we would have increased the high end of our EPS guidance further if not for the reduction of the expected translational FX benefit. On a GAAP basis, we expect fiscal ‘19 earnings per share to be in the range of $4.75 to $4.83. We now expect a benefit of $0.72 to $0.73 from items related to the 2017 tax act. This benefit is approximately $0.02 lower than our previous guidance as we continue to evaluate the impact from the 2017 tax act. Again, excluding this tax benefit, we are increasing our adjusted earnings per share guidance from $4.04 to $4.10. This would be a 5% to 6% increase versus the adjusted $3.85 in fiscal ‘18. Our guidance includes an assumption that wage increases will have a negative impact to EPS…

Thank you. [Operator Instructions] And our first question comes from Kimberly Greenberger. Your line is open.

Okay. Wonderful. Thank you so much. Good morning and congratulations on a really excellent first quarter. Scott, I wanted to ask about your commentary with regard to your global IT. I think, you said reorganizational restructuring. I know, you’ve been in process for a number of years now on improving the whole technology infrastructure. Can you just talk to us about the progress on that, the expected benefits, and the need to do this reorganization, just what’s driving that? Thanks.

Kimberly, it’s Ernie. I’ll jump in here for Scott. Really, this boils down to -- and by the way, this is certainly always a difficult thing to do for a number of reasons, but it boils down to positioning us for the future in terms of the IT area. And for our growth plans, we really don’t give out the specifics of what the benefit’s going to be. But, it is something, as Scott had said that we had in our plans contemplated already and felt it was necessary to take us into the next few years of the growth rates that we plan on achieving.

Ernie, can I just ask a follow-up on your commentary during the prepared remarks with regard to inventory availability? It seems very clear to us having followed the Company here for almost 20 years that that is never really an issue for you. But, we are still hearing sort of resurgent concerns out there, given the inventory position, it looks like you are able to find every bit as much inventory as you’d like to buy. But I thought I’d just give you a forum to opine on the availability of the inventory and the quality of goods you’re seeing. Thanks so much.

Kimberly, so first of all, I know you go way back with us for years and years. So, I actually appreciate you asking this question because you’ve seen the ups and downs in terms of what the market talks about on that front. And there has been times in the years past, although I can’t remember in the recent years, certainly not for the last five or six. Right now, there is an unusual degree of supply across all, I would call it, tiers of vendors and goods quality and brand level. So we are talking probably in general more better brands. And we hear by the way -- we get asked all the time, we hear all the dialogue that’s happening in the industry about vendors and manufacturers cutting back. It’s just nothing in our pipeline or with regard to our buyers, what they are experiencing reflects any of that dialogue. It’s been the complete opposite. And my team has never had it more challenging I would say to be selective on how much we buy how quickly. It’s been that plentiful out there, I would say. And the interesting thing is usually it varies more by -- well, it always varies by category, the degrees to the availability. But right now, it seems to be in most every category across most every tier or brand. So it’s a little puzzling to the degree. And then I here quote, I am glad you brought the question because we have the same question. So what you are hearing out there is exactly what we hear being at, it’s just not based on what we are experiencing in any way.

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

Hey. Thanks for the insight on inventory availability, Ernie. Scott, I wanted to ask you to maybe dive in a little bit deeper on the rising freight costs. You obviously have been dealing with payroll over the last few years. We are watching commodities and energy prices go up. Amazon is raising its prime membership fee. We are seeing rise in kind of transportation and freight costs across the industry. How are you guys thinking about this tactically over the next or two? And then, does it eventually evolve into a situation where kind of entire industry needs to elevate prices to accommodate the higher expenses to deliver goods to consumers?

So, let me just take you through, I think Ernie will comment a little bit about how that -- about the retails and that. I think, we had built in just a -- may be give you a little more color on some of the rising freight costs but obviously we have built increase into our year. At this point obviously it was not as much as we had anticipated. The largest impact to this is due to the strengthening of the government regulation that allows -- that monitors drivers, the kind of wheel. As a result of that we are seeing higher rate increases that more than we had anticipated, we had say mid single-digit increases and they are several points higher than we had anticipated. And it’s obviously impacting our cost related to how we do our logistics network. We’re also seeing higher fuel surcharges, as rates have gone up significantly over the last couple of weeks on fuel, and to a lesser extent higher volumes as both -- they really more relate to the rest of the year as we build in some additional sales into our forecast into the last nine months, primarily at Marmaxx. Finally, just to be clear, spot rates where you may have read our -- which are considerably higher is not a major us to for the vast majority of what we do or through contracted rates for our shipping. So, just to give you a little more color on the cost there.

And so, as a follow-up, do you guys see, anticipate an opportunity or response in terms of pricing as the company and other retailers presumably are synthesizing similar cost increases?

So, we’re trying to follow it closely. So, when it comes to retails, first of all, just so you know how we would operate and you’ve know us for a while as well. We would follow the leader, so to speak and we would adjust to make sure our out the door retail gives the appropriate savings relative to the out the door retail of other retail. So, your question of course is, will they start to increase their prices, and then by definition, could we go up. The only thing is right now, it’s a little -- there is not enough specifics out of the box on the news as to how much the other retails are affected. We might -- our model of business with the way we are shipping our frequency of delivery is perhaps our freight impact might be slightly, not meaningful but slightly increased versus some of the other retailers. So, we’re right now and when we’ve been monitoring it, a little on clear as to -- based on certain other retailers how big it is. Although it is being called out in fair amount of the releases. We just are trying to get a handle on it. And certainly nothing would happen right away. My long-winded answer is it could happen, to your point, if it continued to go that way. I don’t know, also, given all of the dynamics, Scott talked about if that continues to get actually worse in that situation that freight could up even more, I think that does lead to something you were just hinting at where retails do get moved up a notch. So, we’ll way to see. But, we are very sensitive to what you just asked about. So, a very good question.

Got it, Ernie. Great job. Thanks.

Thank you.

The next question comes from Oliver Chen. Your line is open.

Hi. Thank you. On the Marmaxx side, the ticket being up was encouraging and different from prior trends. Could you just help us understand what’s happening there in terms of what you’re thinking about categories? And a bigger picture question was around strategy and M&A. One of the markets that we’ve been following closely is resale and resale disruptors. What are your thoughts about that business and opportunity as it gets more mainstream and as millennials and new generations continue to be interested in different ways to drive value driven experience. Thank you.

So, Oliver, I’m going to let Scott take the average ticket one and then I’ll take the second one.

Yes. In terms of strategies, we do not go into the exact details of what we are doing, other than some of this I’ll just go, Ernie said a bit, is that we’re seeing more -- a better mix, more best brands. So, that’s certainly a piece of it. The other piece indirectly is as you get a healthy mix of -- as both your parallel does well, that certainly helps, but I am not going to go into the specific categories that may have helped within that. I would say that one of the changes also for the second quarter is we have the retail plan flat at this point, I am talking at Marmaxx. So that is slightly better than we had anticipated with the back half retails planned slightly flat to slightly up. So again, we see less pressure there obviously for the first time in years and that we have -- so for the last couple of years, you’ve heard us talk about retail decreases at Marmaxx. So, this is a big change.

And Oliver, I will just jump in with something else there, as Scott mentioned it at the beginning, as far as the mix of departments and the way that has brought some back. So, just like in the beginning where we -- this was not a top down strategy and it was really down at merchandise managerial level, category level driving it and you mentioned categories in your question. So what’s happening and Scott was just trying to give a little more color here, some of the categories that are trending now are helping us with the -- it’s going the other way. And again, bottom up, not anything we are generating. I guess, I want you to understand the same way it got -- the ticket was driven down from not a top down approach. It’s also coming back also from that level from a merchandise managers and the buyer level and the GMM. So, it’s a good -- it’s a nice thing to see because generally when you see that happening just like it took us longer than we thought, it would moderate, it usually goes on to this cycle. So, hopefully, we will keep seeing the trend in those categories continuing, keep helping our ticket. On the retail market question, I think, I would tell you, when you asked about is that something down the road we would find appealing, or do we think there is likes to that or expandability to that if it goes more main stream I think you were asking. We actually do believe it’s interesting. It’s not at the level now where it’s big enough to be something that we would probably entertain that strongly. However, we look at everything and we are intrigued, A, by the sites we see it on. We are intrigued by the business that’s not dissimilar to what we do. There is real value and it’s probably branded. I like that retail market carries a lot of great designer, branded product which really is up a rally in terms of content and fashion and certainly the price that they are selling it at. So, obviously, we won’t commit anything on this conference call. We will just say it’s very intrigue. Good question.

Okay, thanks. And just a quick on the distribution centers in terms of supply chain, as you continue to really look at great opportunities in non-apparel. Are there things we should think about on a longer term basis? Because you have done a really good job entering categories which have very different dynamics in terms of handling and also differentiation with the pack sizes. So, what should happen there, just because it isn’t very easy to move around such, the home product et cetera?

Are you asking us about the ability to process goods more efficiently? Maybe…

And also the future of the DCs and how that might reorientate just in the nature of the non-apparel mix and that growing over time?

So, I mean, we have expanded our home area processing DCs. I think that’s part of where you’re getting, in terms of the new processes that we’re taking a look at to put that we can externally talk about that. But, we’re looking at always ways to increase our efficiency out of the DCs in the home area specifically. Because as you mentioned it is one of our least efficient categories for processing. However, obviously an enormous sales opportunity as we move forward. So, I don’t know, I guess Scott, do you have…

Yes. I think, the only thing I would say is that I think it goes back to one of the things where we said earlier in our prepared remarks that it’s a key differentiator as we do 30% plus of our business in home. And we think we are pretty efficient in the way we handle that bulky, difficult items to ship and I think that’s something that we do very well. And certainly with the growth of HomeGoods, we’ve been adding supply chain capacity to do that. And I think we do it very efficiently. Just to Ernie’s point of view, it’s obviously a slightly more expensive model to do. But, I think again, I think the big key differentiator is that we’re able to get all these items and do it in these -- with thousands of different of skews and do it very efficiently, compared to I think others that probably don’t do the same level of volume and have been doing it for a long.

Our next question comes from Lorraine Hutchinson. Your line is open.

Thank you. Good morning. I was hoping you could comment a little further on HomeGoods, what the challenges were early in the quarter. And then, do you feel that you’re back on track to put up positive merchandise margins for the remainder of the year at HomeGoods specifically?

Yes. I’ll just take it and Ernie will jump in. I think, as it relates to the merchandise margin, what -- we called that at end of -- on our year-end call that we did expect some markdown pressure in the first quarter, primarily due to some of the what we call the flow issues that we had as we move through the end of the year. I think, it lasted a bit longer than we would have anticipated and it clearly had an impact, both on our markdowns and our sales at the beginning of the quarter. But, I think as we indicated, the sales trends picked up to what we were seeing for the majority of last year. So, again, as we move through the quarter, the clearance and everything else was, as we move to middle of the quarter March and April was back to normal letters -- normal levels with a normal level of fresh flow. So, we would expect our -- at least the markdown component of that to be pretty normalize as we move through the rest of the year.

Yes. I will jump in Lorraine also in terms of the topline and the sales. It was a bit of a double-edged sword. As we came out of January, we ended up fourth quarter with the flow disruption that we had talked about a while ago. And as Scott said that impacted our markdowns in January and February and of course our sales as well. But to highlight a little bit more, our transactions for the quarter actually accelerated during the first quarter, as we moved through. So, from February to March to April, they got better each month. So, again, we were unfortunately kind of prepared based on the flow situation that we would start out of the gate a little slow, but we were encouraged at the end of the quarter. One other dynamic I’d like you to be aware of just going forward there, and it’s something -- it’s easy to forget, we were opportunistic in our real estate over the last couple of years. And so, just like anything we do -- and this is one reason our store count and new store openings at HomeGoods we had accelerated because we found very advantageous real estate deals in numerous pockets throughout the country. So, ironically, the last 15 months, we had opened -- prior to that quarter, we had opened 115 HomeGoods stores on a relatively small base. So that was, as you can imagine, with about a 20% growth of new stores, we were probably experiencing a tick more transfer sales coming out of our comp. And that is something that Scott and I have looked at actually going forward over the next couple of quarters. Anyway that probably ticks up a little bit further because again we have a lot more new store growth. So, if you guys take a look at our top-line growth in HomeGoods this year versus last year, it’s even greater because of so many of the new stores. So, the comp for the reasons we talked about was a little under where we would normally like it, but our top-line is in a good place, I guess, so to speak. So, just like you to keep that in mind as we look at a little bit more cannibalization over the next couple of quarters. Still the right thing to do that though. We are very happy, very happy with where positioned in HomeGoods. And throughout that we have all these stores because couple of years down the line, it will bode us very good income on these stores. So, great question, Lorraine.

Our next question comes from Paul Lejuez. Your line is open.

Ernie, that last point you made is actually going to be my question. I was curious, if there was any quantification of the stores, the HomeGoods stores that if you look at comps of the stores impacted by new store opening versus those that are not impacted, if you could share with us what the difference might be there? And then, also sticking with the home theme, the early reads on Homesense and the performance of HomeGoods stores nearby and anything that you are seeing there from a category perspective that might impact your thinking on HomeGoods? Thanks.

Yes. Paul, I will let Scott deal.

Yes. I will just -- again, I think it’s just reiterating what Ernie said. It’s a bit more cannibalization. But, I don’t think -- there’s not a large difference. I mean, it would be a difference in a store that got cannibalized versus a non-impacted store but overall versus the prior year, it’s a bit more. So, I don’t think there’s any -- I think, the point Ernie was trying to make in terms of when you have so many stores that are opening, what we still have not seen is pretty consistent among all the divisions is once you start getting into the first, second, third year of your comp -- of the age of the stores, those stores comp more. So, we should in the future, starting next year, start seeing a benefit to that as we will have couple of hundred stores that will be two years or less that are now just entering the -- as they start to enter the comp status. In terms of -- the one other thing I’d mention going back to the last call with question with Lorraine is, although most of the -- in terms of the merchandise margin, basically, all of the shortfall is due to markdowns. And I think this is across many of our divisions we are seeing strong mark-on. And the mark-on essentially offset most of our freight pressure, at least at HomeGoods for the last quarter. So just wanted to get that out.

And then, on Homesense, we look at this constantly. Their top -- their sales continued to outperform at the Homesense stores. And our nearby -- we are pleasantly surprise with the nearby HomeGoods stores are experiencing less transfer than planned. So, we are right now winning on both fronts. And really, the driver of that is -- and I think you were asking about certain categories et cetera. Well, the categories have been so differentiated that -- which is why even initially we pulled out soft home from Homesense to even accelerate the differentiation, which stores are so differentiated that’s why we think the cannibalization from nearby HomeGoods has been reduced beyond the plan. But we’re just so pleased with the Homesense top-line performance relative to the pro formas on the each new store. It’s just been better than we expected.

Great. Can you just touch on Home versus apparel in Canada and Europe?

Yes. Home has been performing -- we won’t give you the numbers, but it’s been performing -- put it this way, healthy in both. How’s that?

Outperforming apparel though?

We will not -- we don’t want to give that right now.

The next question comes from Adrienne Yih Your line is open.

Good morning. Congratulations on the great start to the year.

Thank you.

You’re welcome. Ernie, I wanted to follow up on the inventory supply sources. Is there inventory growth that’s coming from pure play e-commerce brands? And then, Scott, can you talk about the e-commerce strategy, the percent it is today, how aggressively you want to build that? Thank you very much.

Hey, Adrienne. So, addressing your first question, I don’t know if you caught in the script, the prewritten script that A, the online players and that would apply to the vertical as well as non, it creates an umbrella of value for us in terms of compare at value. So, that’s been a side benefit of the online business. But secondly, the availability from whether they are vertical or not vertical, we’ve been able to buy goods from both of those markets and type of situations. And prediction is that will continue to grow actually. So, if you look at, we all believe that the online vertical retailers and omnichannel, et cetera are all going to continue to expand over the next few years. I can’t see any reason why availability of merchandise -- because those businesses by the way are harder to predict and harder for those merchants, as you know, to flow the appropriate amount, quantity of goods up from what they’re going to sell on the sites. So, I think it’s a harder challenge for them. And what we’ve seen is they enjoy the benefit of knowing they can come to us and those goods, which are visible online, will get very dispersed into a treasure hunt format with other strong brands, which also we mentioned in the script in the terms of they’re really appreciating the fact that they hang with other strong brands in a T.J. Maxx and a Marshalls. So, we see this as not only is it something, yes, we’re already doing, but we see it as a growing opportunity.

Great. Very helpful.

Yes. In terms of the e-commerce -- I’ll let Ernie talk a little bit about the strategy going forward. In terms of what we’re seeing, certainly at tjmaxx.com and our tkmaxx.com business, we’ve seen very strong increases in the first quarter. We also like a lot of the metrics around what we’re seeing, the awareness of both those sites is up; the customer satisfaction scores are up. In the UK, particularly pleased with the percent that we’ve grown in the business. Our sales in terms of a percentage of the business in the UK is up almost 200 basis points in the quarter versus the prior year, so some pretty significant growth; have a few advantages there that we do click and collect in virtually all our stores in the UK and about 40% of the online business is done through click and collect. So, a nice advantage that we have there. So, real pleased with the results. In terms of growing it, I think we’re growing it -- I think we’re going -- hope to see similar rates of growth. It’s still a small part of the business, but certainly we like what we’re seeing in terms of the incremental visits we’re getting. We believe that -- and due to the nature, we also get returns back to the store. I think, we view it as certainly adding positive business to TJX overall.

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

Thanks. Ernie, is it fair to think about the execution issues that both HomeGoods and Marmaxx is now fully in the rearview mirror and any key learnings or maybe guardrails that you’ve now put in place to reduce the likelihood of reoccurrence?

Matthew, good question. Yes. On the Marmaxx, execution issues are in the rearview mirror. We put guardrail -- we traditionally have the guardrails in. And what happens is this isn’t -- how do I put this? It isn’t a totally structured, rigid business that we’re in. Right? It’s a little gray. So, if you remember, the Marmaxx issues were more fashion-oriented issues. And when you have fashion-oriented issues, it’s dealing with a bit of a subjective taste and balance to the look of the goods that you’re buying and to what degree you have that amount of goods. And so, certainly -- the likelihood of it happening is less. And it’s impossible to put up firm guardrails. Does that make sense, Matthew? But the good news is, in our model of business, as you could see, we were very able to quickly, as we have over all the years, quickly identify and fix and really minimize the impact of any of those missed execution issues. So that -- I’m just being conservative on my answer because I would tell you, yes, we put guardrails, we spent a lot of time re-strategizing those areas and put things in place that would help to minimize the likelihood. It’s just -- I know from past experience something can always happen, especially if it involves a qualitative aspect or a bit of an art form part of the business, then it is a little tougher. But, we do pride ourselves on our past on our ability to quickly fix and recover from any type of execution issue that we have. And that I think, we’ve had years of proof in the pudding. Great question.

Got it. And then, Scott, this year’s current guide at tax reform I think now calls for 5% to 6% bottom line growth. If we were to look through some of the more transitory items, I guess, can you talk to some of the margin efficiency initiatives as we look forward and just maybe how to think about the earnings profile in the years ahead?

Nothing really new to add there. We will -- we’re not going to really talk about what we could be doing at this point. But, I think what we said on the earlier -- when we said on the year-end call that our plan at the moment is to continue to tick up the EPS growth and no real change to that. Obviously, that implies both a healthy merchandise margin and very strong expense control.

And the final question for today comes from Marni Shapiro. Your line is open.

I hope you left me for last because you’re closing with the best.

That’s very good, Marni.

I just wanted to follow up on a couple of things that over the years you’ve put into work and we haven’t -- we’ve focused so much on a strategy miss here, technology here, foreign exchange. If you could just maybe bring us up to speed on things like is THE RUNWAY still rolling out? Are you bringing -- is it international and what about the CUBE? You’ve talked about the shoe departments at Marmaxx and the beauty departments in general. And all of it sort have taken a back seat to what’s been pressing. But, are all of these things still in the works? And are they in the works internationally? Like, are you putting them into Australia, for example?

Okay. So, let’s deal with the first couple. So, it’s good, Marni, because that was like a…

Ten part?

It’s one question but it’s with five mini parts. On THE RUNWAY, we’ve added, and you’ve been watching us for years -- we’ve added RUNWAY stores little by little and you probably haven’t heard an update. And that’s something that Scott could even circle back to you on. But, yes, we have been adding THE RUNWAY stores. And now some clarity -- and by the way, we love what we’ve been doing there. It’s obviously we put THE RUNWAY in certain stores and we do it. We want to be careful that we don’t do it in the wrong stores, or rob some of our other RUNWAY stores for a new store that may not be the appropriate RUNWAY store, if that makes any sense. But clarify to me your question on shoes? What on shoes you’re asking?

There was a push for an extended expanded shoe department at Marshalls at one point. And you guys rolled it out into a whole bunch stores. And then, again, like all these little sub-segments, you went a little radio silent on it. And I didn’t know where that stood.

Yes. We just don’t -- the shoe -- the expanded shoe format has gone into all of our Marshalls stores. And I think, we went radio silent because it became ingrained in the business. It is actually a key differentiator for us between T.J. Maxx and Marshalls. We have expanded it into Canada when we opened Marshalls in Canada. We have not done that over in the UK because we have to deal with each business separately. So, when you go over to the UK, they don’t have the amount of real estate square footage of space. So, we are stuck with the rack situation there. So that -- albeit we have upgraded those racks, but it’s still more rack. So, it’s more like T.J. Maxx. But we did expand. So every new Marshalls you see to this day has that expanded footwear area in it. Then, the other -- what was the other category?

Beauty and personal care which you guys have been growing pretty significantly across, for sure in T.J. Maxx. What does that department look like today and what are your thoughts there? It’s been a very -- obviously a very hot category, but it’s also had a lot of puts and takes in the last 6 to 12 months I’d say.

Yes. We can’t give specifics on category. I would tell you that as you could see from in the store, yes, we’ve taken a pretty good position in it. But, we don’t -- we can’t give you future -- we don’t like to give out future department strategy in terms of what we’re thinking if expanding or not, until it’s a little bit more in the rearview mirror, so to speak. And we cannot give out some of the secret sauce, so.

Yes, yes. Fair enough. Best of luck with the summer.

Thank you, Marni. Same to you. I think, was that our last caller?

Yes.

At this point, I would really like to thank all of you for joining us today. And I look forward to updating you on our second quarter earnings call in August. Thank you, everybody.

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