Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies Fourth 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 Instruction]. As a reminder, this conference call is being recorded on February 27, 2019. I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies Incorporated. Please go ahead, sir.

Thanks, Katie. 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 the 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 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 will turn it back over to Ernie.

Good morning. Joining me and Deb on the call is Scott Goldenberg. Let me begin by saying that we’re extremely pleased to report another quarter of outstanding results. Fourth quarter consolidated comp store sales increased a very strong 6% which is well above our plan and over a 4% increase last year. I’m most pleased with the consistency of the performance across our major divisions which all delivered comp sales growth between 4% and 7%. Further, each of our divisions drove their comp sales growth with significant customer traffic increases. This quarter marks the 18th consecutive quarter that customer traffic was up at TJX and Marmaxx. We also saw strength in both our apparel and home businesses. Fourth quarter adjusted earnings per share were $0.59, also above our expectations. We also delivered terrific full year results in 2017. Consolidated comp store sales were up 6%, well above our original plan. Each of our four major divisions posted strong comp sales growth driven by customer traffic increases. I am very pleased with the sharp execution of our teams across the company. Clearly, our great values and treasure hunt shopping experience continues to appeal consumers around the world. 2018 marks our 23rd consecutive year of comp sales growth, highlighting our long and steady track record. Full year adjusted earnings per share of $2.11 also exceeded our plans. Our excellent results underscore the fundamental strength and consistency of our flexible off-price business model. Over more than four decades as a company, we have adapted to many changes in the retail environment and have successfully navigated to both strong and weak economies. Above all, our commitment to value has never wavered. Looking ahead, the first quarter is off to a soli start. For 2019 we have many initiatives planned that we believe will keep driving sales and customer traffic. We are in a great inventory position and have plenty of liquidity to take advantage of the huge amount of quality merchandise we are seeing in the marketplace. We are confident in our full-year plans and feel great about the outlook for our business in 2019 and beyond. Before I continue, I will turn the call over to Scott to recap our fourth quarter and full year numbers. Scott?

Thanks, Ernie. And good morning, everyone. As Ernie mentioned, fourth quarter consolidated comparable store sales increased a very strong 6% and were significantly above our expectations. Once again customer traffic was up overall and was the primary driver of our comp sales increases at all divisions. As a reminder, our comp increase excludes the growth from our e-commerce businesses. Fourth quarter diluted earnings per share was $0.68 excluding an approximate $0.08 benefit from the 2017 Tax Act. Adjusted earnings per share were $0.59, which exceeded our plans by 2 pennies. Foreign currency negatively impacted our EPS growth by 2%. Despite the headwind from increased freight costs, merchandise margin was up significantly. Now to recap our fourth quarter performance by division. Marmaxx comps increased an outstanding 7% significantly exceeding our plan and over a 3% increase last year. We saw strong performance across all of our geographic regions and across income demographics. Once again we saw strength in both Marmaxx’s apparel and home businesses. Segment profit margin was down 50 basis points versus last year's adjusted segment profit margin of 13.8%. Expense leverage on the higher comp and merchandise margin improvements were more than offset by incentive compensation accruals, supply chain and other planned expenses. HomeGoods’ comp grew up strong 5% on top of last year's 3% increase. We are very pleased with HomeGoods’ continued comp growth and traffic increases. Although, segment profit margin was down 50 basis points, it was much better than we anticipated versus last year’s adjusted segment profit margin of 13%. HomeGoods delivered a strong merchandise margin increase despite significant freight costs. This was more than offset by higher expenses related to our distribution centers and other planned expenses. TJX Canada fourth quarter comps were up solid 4% over a 7% increase last year. We were pleased…

Thanks, Scott. I’m going to start with some 2018 highlights which I will bullet out for you. Beginning with the fourth quarter, we surpassed $11 billion in total sales, a company record. Next, each of our division delivered a terrific holiday season with excellent comp sales growth and strong customer traffic increases. Clearly, our great values and ever changing merchandise mix are resonating with consumers in stores and online. We are very pleased with our marketing initiatives across the company. Finally, our teams transitioned our stores very well post holiday. Now to our full year highlights. Annual sales were $39 billion. I want to highlight that our annual sales have more than doubled over the last 10 years in a changing retail environment. We saw great customer traffic across the company in every quarter. We are convinced that we captured additional market share in the US, Canada, Europe and Australia. Our research tells us that we saw growth in new customers at each of our divisions, including a significant share of millennial and Gen Z shoppers. We successfully grew our store base, opening a net 236 stores globally including expanding our newer businesses, HomeSense and Sierra in the US and T.K. Maxx in Australia. Lastly, we continued making important investments in our distribution capabilities and systems to support our growth plans. Now, I'd like to talk about why we believe TJX is so well positioned to continue its successful growth for many years to come. First, we operate four powerful divisions, each with exciting growth potential. All of our major divisions have 25 years or more of operating expertise. That's over two decades of developing thousands of vendor relationships, regional consumer knowledge and internal teams, infrastructures and supply chain. We see this as a tremendous advantage as we pursue our…

Thanks, Ernie. Now to fiscal ‘20 guidance beginning with the full year. For modeling purposes, we are comparing all fiscal ‘20 EPS estimates against fiscal ‘19 EPS results that include the benefit from the 2017 Tax Act. Again, we are taking this approach to show an apples-to-apples EPS comparison, now that this benefit from the Tax Act is in both years. We expect fiscal ‘20 earnings per share to be in the range of $2.55 to $2.60. This would represent a 4% to 6% increase over prior year's adjusted to $2.45 which excluded a $0.02 negative impact from a pension settlement charge. This EPS guidance assumes consolidated sales in the 41 billion to 41.2 billion range, a 5% to 6% increase over the prior year. We’re assuming 2% to 3% comp increase on a consolidated basis. We expect pre-tax profit margin to be in the range of 10.2% to 10.4%. This would be down 40 to 60 basis points versus the adjusted 10.8% in fiscal ‘19. We’re planning gross profit margin to be in the range of 28.1% to 28.2% compared to 28.6% last year. We’re expecting SG&A as a percentage of sales in the range of 17.8% to 17.9% versus 17.8% last year. For modeling purposes, we’re currently anticipating a tax rate of 26.0%, net interest expense of about 4 million and a weighted average share count of approximately 1.22 billion. Now to our full year guidance by division. At Marmaxx we’re planning comp growth of 2% to 3% on sales of 25.1 billion to 25.2 billion and segment profit margin in the range of 13.1% to 13.3%. At HomeGoods we expect comps to increase 2% to 3% on sales of 6.4 billion to 6.5 billion. We’re planning segment profit margin to be in the range of 10.2% to…

[Operator Instructions]. Our first question comes from Alexandra Walvis from Goldman Sachs. You may ask your question.

I will start with the guidance and particularly on the gross margin. So it looks like your guiding to around 90 basis points negative for the first quarter and then for the full year that moderates around 40 to 50 basis points. Can you talk us through what's contained within that guidance in particular, how much of it is freight and how should we think about when freight headwind starts to phase out for the business? Thank you.

This is Scott. So in talking about our Q1 guidance, just to be clear, the guidance is down about -- at the high end about a 100 basis points in the first quarter, which implies as we said in the prepared remarks that we are up 7% to 10% EPS growth in the back nine. And also, that means our EPS basis point is down 20 on the rest of the year, which correlates to that 7% to 10%. In terms of the gross profit, the down 90 is 70 ex-FX in the first quarter and down 30 basis points for the rest of the year for the last nine, approximately, which gets you to the 40 basis points down -- that were down on gross profit. So the gross profit is being impacted less next year for freight but it's still a significant impact to our gross margin. So we would be up on our merchandise margin is not for the freight impact next year. So it is moderating -- it's moderating for two primarily reasons. We have some large as you know rate increases this year. Our best estimates at this point is that we will still have large increases for the first couple of quarters and then if we expect based on what we see or what our intelligence say it’s going to moderate a bit in the back half of the year and we have freight mitigation strategies, which we believe are going to start impacting and benefiting us next year, and again, more likely in the back half of the year than the first half. So we feel good about that. Our supply chain pressure is slightly less next year than it is this year, again, more first half oriented and much bigger in the…

Our next question comes from Matthew Boss from J.P. Morgan. You may ask your question.

So may be larger picture. Can you just speak to your confidence and may be some of the drivers behind your 2% to 3% comp forecast versus 1% to 2%, which I think really has started historically over the past five years, maybe just also the best way to think about the traffic in AUR components within the top-line guide?

Sure. Well, Matthew you can see from the momentum that we’ve been getting specifically as the year has gone on here has been pretty consistent and you look across the consistency of the divisions we had a spread from 4% comp to a 7% comp. Almost universally across all the divisions we have an enormous penetration and growth rate on key branded vendors and branded merchandise within the mix at every division. And I would say each division has had a significant increase in their top brands and this doesn’t necessarily mean that they are better brands, it’s just all well-known brands and in aggregate our top brands are actually up pretty significantly across the board, which is another great indicator. But I really like to quote that the name of the game here is value. And when we look at our value positioning in terms of how well we can execute going forward and this is where it gives us confidence in the upping our comp by 1 point is we are so well positioned in our ability to execute brand, fashion quality and at the value pricing, right, because those of the components of our value. We have stability in merchants across the four core divisions. That is helping ensure that we’re able to do that. If you look at the fourth quarter that was our highest the two-year stack of the year that we just finished. So that's a great indicator going into the New Year. Our average retail you mentioned that is moderating, and then actually recent has been picking up. So again that is something we have said repeatedly, Scott and myself, we don't -- keep in mind we don’t dictate that or drive that top down but that's the nature of what our merchants…

Thank you. Our next question comes from Chethan Mallela from Barclays.

Can you talk a little bit about the drivers of the merchandise margin improvement in the fourth quarter, which I think came despite continued elevated freight cost? It’s a little of a change from what we had seen over the first quarter -- three quarters of the year. And it also sounds like it’s a little bit different than your expectation in fiscal ‘20, where I think you may be looking for merchandise margin down a little bit. So just help us to think about any tailwinds in the quarter there?

Sure. Yes, the freight -- so the overall gross margin that’s down 10 basis point ex-FX, was driven again. The strong merchandise margin was primarily driven by improved markdowns. If you remember last year, some -- again a lot of it which was as we planned. Last year we had some flow issues at HomeGoods and some at Marmaxx so last year we had more markdowns in the fourth quarter. We took advantage of this year and more and we had good markdown improvement, a little bit offset in Canada where we took a bit more markdowns than we had anticipated, some of it was structural due to the timing of markdowns in the calendar but some of it was due to some softness that we saw, as there was some weather-related issues in January, just on that. But overall, that was the biggest driver. We did see freight pressure. But as we had said earlier in the year, our largest freight pressure was going to be in the third quarter. So we had less fright pressure in the fourth than the third, although, still was -- it was still significant. We did have some -- we had continued supply chain pressure and timing and we’ve talked about timing of expenses which all came in as potentially as planned and those were the drivers that offset the strong -- some of the strong comp. So we did see some occupancy leverage offsetting these timing expense supply chain offset some of the strong merchandise margin and comp benefit we got. We also had 10 basis points of pure hedge that hit us in the fourth quarter. But as other than that we were really pleased with the overall performance of our merchandise margin at all the operating levels in the fourth quarter.

Thank you. Our next question comes from Lorraine Hutchinson from Bank of America Merrill Lynch.

Can you talk a little bit about average ticket trends in the fourth and any expectations you have for this coming year?

Well, Lorraine, we’ve talked about this, it’s -- like we mentioned earlier, since we don’t directed it or top down manage it, as best we can closing on order within the market and availability and based on our hot categories that we chase after, again it’s bottom up driven from our merchandise managers and buyers, thus only go after certain categories. And right now as we’ve continued to doing, it’s working. We’re going after the hottest categories. We were fortunate as we went through this past year, some of the hotter categories helped our ticket. And so our ticket moderated, started to pick up a little and that’s how we came out of the year with up a little. We would like to say we’d hover maybe around there but again Scott and I are always hesitant to commit too far out because we buy still hand-to-mouth. So our visibility on the law and order, there were certain things we can bring in from it, like right now we can bring in that we’re highly branded on our law and order and we can -- that our values are terrific. We can tell that the ticket looks pretty good on what’s on order book. We still have a lot of open to buy. Our guess is it should moderate and pick up a little but again it’s -- don’t hold me to that up in the second quarter on telling you what we are down at. I don’t think it will be anything major like it was back a few years ago but we’re feeling like at the end of the day our best guess would be it moderates and picks up a little.

Our next question comes from Bob Drbul with Guggenheim Securities.

I just wondered if, in terms of product availability, I’m specifically interested in the tariff situation. Has it created any opportunities for you in certain categories?

So Bob we would say that right now a little bit but not much, nothing meaningful, however, we’re were looking at the tariff situation, it’s something -- first of all we’re just like everybody, we’re going to wait and see. We’re not probably immune to certain ramifications from tariff in the close-end situation. However, like anything in our business we believe longer-term it’s probably going to be a benefit for us because any uneasiness in the market or any chaotic change for the vendor community in terms of them having to bring goods and earlier or allocate differently or resource to different countries, we believe will ultimately benefit us. Just in the shorter term there could be some ramifications. Right now it's been so early. There's been probably little pockets of opportunities we’ve taken advantage of but there hasn’t been anything meaningful.

And I was just wondering if you can provide an update and just sort of a little bit more on the wage pressures and how you're managing that and sort of what you're seeing?

On the wage, so we bought in -- our philosophy on the wage situation is we’re proactive I would say market-by-market, would be our approach. So we have in many -- in like a third of the country we’re at $11 already. However, we don't believe in taking the blanket approach of upping our wages across multiple states all at the same level. Our attrition is fine. We have not had problem hiring in the stores. So what we are doing, obviously we will state-by-state go along with any of those policy changes and that will take care of those states. But in other markets, we don't feel the same to pay in a certain market down South as it is to pay in Greater New York City area. I mean it’s just that’s doesn't feel appropriate in terms of cost of living and our situation with our help in the stores wouldn’t tell us that that’s right thing to do.

Bob just to add to what Ernie said I mean we still have the same level in that 1% to 2% impact of wage on our EPS growth. Going back to Ernie, with the market conditions, we provide for a factor for what we think we will have to adjust during the year and last year that came in pretty close to what we thought and simply will provide for a built into our guidance what we will have to adjust for market conditions going forward. I would say that, that was a bit more than we anticipated this year, was in our supply chain, some of our distribution centers, where we had some more wage costs in the back half of the year that we had to adjust from a competitive point of view, but they are built into our guidance for next year.

It does Bob obviously as Scott said it does continue to be a headwind obviously for not just us but many retailers.

Our next question comes from Jamie Merriman from Bernstein. You may ask your question.

You talked about launching e-commerce for Marshalls later this year and I was wondering if you could just talk a little bit about how you’re thinking about that? And then I know in the UK you have started doing the sort of click and collect option for your e-commerce and wondering if it’s given much thought to potentially rolling that out in the US either with this Marshalls launch or with the T.J. Maxx?

Yes. Great questions, Jamie. So on the -- you just would like a little -- I think a little color on the Marshalls launch and what we’re thinking?

Yes.

So again we’re shooting for the back half of this year and the key component here as we did with tjmax.com and differently from most other retailers in the way they approach their e-com business is we stay high -- a high percentage of our mix is differentiated from online versus what's in the stores. And we find that that is the number one reason that we can get an incremental build off the business and not have cannibalization or lose visits to the store because we look at it as complementary and we want marshalls.com to be very complementary. And we want to encourage on returns and in shopping for first time consumers to go both the website and the store. So we will stay as rigorous on marshalls.com and making sure that mix online is differentiated as tjmaxx.com has been and that has worked really well for us. Conversions, customer awareness, returns to stores, conversion rates have been healthy for us. We’re going to look to -- we’ve learned a lot with tjmaxx.com. So all of those learnings we’ve had in terms of building customer awareness and building incremental trips to our store, we’re going to apply that to Marshalls. We really believe that it helps to drive incremental store traffic given that a large, large percentage of our returns online go back to our stores. And so it’s going to encourage cross-shopping. And by the way I think based on how we executed the fact that we’re going to now be in both is probably -- there’s probably a little build on that by having both of them involved. The click and collect overseas is a little bit of a different animal because in the UK they are set up, in many situations as you have to -- you can’t leave packages actually at the flats or the apartments. So a large percentage of that business innately would tend to be click and collect differently than here. Having said that, we are to look down the road here, probably doing some tests on it. We don't believe for our assorted business or our click and collect where your retailer brick-and-mortar to have the exact same SKUs in their stores they have online. You can do a click and collect and pick up the goods at the same day, that's one of the big benefits to those retailers that have a high click and collect business. That unfortunately never be something we can do because the nature of our treasure hunt and our footprints. Having said that, we’re probably going to test something about that here in the near future and find out what type of business it could be for us here. So great questions.

Our next question comes from John Kernan with Cowen.

Hey, Scott. Just curious, it was significant upside throughout the year, 2 comps, you come in at the high-end of the EPS guide. I am just wondering is there some type of variable cost or some type of other cost that kind of came in above your expectations throughout the year?

I guess just to be clear, our EPS if we went back to our original guidance was 6% EPS growth and we came in at a 9% EPS growth and we were hit with primarily with headwinds on the freight of 2% to 3% of EPS growth over what we had expected and also we had some additional cost as we talked on supply chain and incentive growth. So not that you want to say what your number would've been but if just even if it’s freight we would've had low double-digit EPS growth versus our 6% EPS growth on the sales that we flow through. So we would have thought that would have been -- is pretty good and ...

3, 4.

…. even with it. Yes. So having said, yes, so -- we’re -- nothing -- we feel really good about that. In terms of just in the in recent -- so the freight was a contributor to each quarter that we had not anticipated. It didn't get -- didn't change much from once we saw what was happening by the time we got to the first quarter call, so I would say it was pretty much has come as we had anticipated from that point in time. The only thing I would call out is in the last quarter we had a bit of a -- the timing expenses and supply chain pretty much came in, but as I said earlier we had the truing up of our incentive accruals because we had a great fourth quarter and you true-up the whole year in your fourth quarter, the incentive accruals being a piece of it more than we would've expected. And as I talked about early, we had some wage in -- DC wage impact. Other than that everything pretty came in as we thought. And again to clear up any confusion that may have happened today that we did beat our adjusted guidance by 2 pennies all due to operating performance. The fiscal -- the true up was in our tax reform which was worth 2 pennies less than what we’d contemplated. So we feel again really good about the operating performance that we did have.

Our next question comes from Kimberly Greenberger from Morgan Stanley. You may ask your question.

I thought it was intriguing that you’re looking out to the second, third and fourth quarter and getting back to that sort of high digit to 10% EPS growth once we get through Q1 with some of those unique pressures. And if I would reflect back on the past couple of years we’ve been sort of stuck in the mid single-digit EPS range, there have been a confluence of factor that have driven that. But I’m wondering if this foreshadows perhaps a stronger trend in your go forward EPS growth kind of looking out to 2020 and 2021. So I’m wondering if you can sort of reflect on where you think the more medium term outlook for the company might sit, and if this is an opportunity to see that sustainable EPS growth rate reaccelerate? Thank you so much.

Hi, Kimberly. I would love to -- I think we’d love to say that but I think just to be fair I think our overall guidance of 4% to 6% based on what we’re seeing now is more indicative at least at this point in time, we were basically more or less we’re calling out the 7% to 10%, due to the -- again I don’t want to overstate timing and other factors that the way things were flowing within -- between -- we're trying to just call out the first quarter to the rest of the year. And so we did get some benefits of -- we did have some higher incentive accruals, and some of the restructuring costs last year, which we clearly called out and obviously we’re getting some of that benefit as we cycle over that in the back half of the year. So I don't want to overstate it, I will just go back. I think both Ernie and I are comfortable with our overall guidance. There are a lot of wild cards as we’ve always talked about on FX and Brexit tariffs ….

Wage.

… wage and we’ll have -- and supply chain, freight. We think hopefully we will get better, but too really -- at this point too early to make a call on that.

Our next question comes from John Morris from D. A. Davidson. You may ask your question.

One for Scott and one for Ernie. Scott, can you -- I mean given the comp quarter -- given the comp compares, the tough compares next year by quarter, can you give us a feel for how that would flow, would it just -- would it be evenly -- just want to make sure we are getting a read there by quarter? And then Ernie on -- let's say we got Payless, Gymboree, I guess Macy’s streamlining their inventory planning, SAC saw fit potential closings. I know that's a lot but can you give us the puts and takes and what you think about that from your experience, how do you read into this in terms of potential positive benefits?

Got it. Hi, John, not much to say on the comp other than they were 2% to 3% for the quarter and by definition 2% to 3% for the back, so that’s all we’re going to.

That helps.

So, John, clearly over the last couple of years, what we've been seeing is if stores have been closed they’ve been in some cases decreasing -- their sales have been decreasing specifically in brick-and-mortar. As you know some of the department stores you’ve had increased online business but decreased in brick-and-mortar. And so we tend to -- we do and I know Scott has talked about this before, we measure it and we look at the benefits to watch potentially, ironically it hasn’t been in either direction as much as we would think. So it’s tough for us to get a handle on the store closures, market share. What we do know at the end of the day is we’ve -- and clearly, domestically here we’re talking about both specific stores, we have clearly this last year gained major market share given those comps and new store growth. Do I believe indirectly there’s probably market share pieces here? I do. We tend to look at it by category for example. So in some of these cases, if it's a category for example, if it’s a retailer who is more private label and the retailer is -- they maybe in one of our categories but if they are private labeled based, it’s not like necessarily we’re going to get that same customer trading up to us. It’s more to me if there was a category that overlaps with us and similar demo brand-oriented customer then I think although tough to measure we have to believe we’re picking up some of that market share and that’s kind of how Scott and I have looked at it across the board. We have done analyses because we don’t even have to look at these few, we’ve done analyses last couple of years on all the different stores that have closed. Because by the way you’ve had a lot of retailers, have closed a chunk, 20% of their stores even though they haven’t close all their stores and we’ve looked and those -- they haven’t really seen the visibility to it.

Yes. I would just jump in there for a minute. The uniformity of our comps whether it’s in Canada, as we called out in the prepared remarks, the UK and particularly in Marmaxx in the US, there is very little differential between urban, rural, suburban, exurban and by geographic region at a pretty minute level. So it just feels like as Ernie has always talked about more due to the overall execution and less of -- that has to be the vast majority of it, not that in certain locales and store-by-store, we’re not certainly picking up. But it’s too broad-based in terms of how we are doing.

So one thing John though and it’s to your question that we have seen is whenever this type of thing happens, the event we do and this is probably something we have also felt with our influx of even more brands and more availability as we end up with some of those vendors that supply them reaching out to us. So that ends up being even at the retail level we can measure it, we end up with more goods served up to us because obviously all those vendors that are serving those, any of those retailers, they want to call us when they know that they are not going to have those outlets. Does that make sense?

Yes, no, it totally does. Maybe a way to read at this, because you’re focused on toys at holiday, how was the toy category for you guys?

So you know us well, we can’t give you that but ….

Well, qualitatively. Were you happy?

Well qualitatively you could -- if you looked in the stores I think we had a good mix across the store, and so I think toys looked also like a good mix. But I can’t give you how things performed.

Understood all right, great. Good luck for spring.

I would look at it as an opportunity for supply chain for us of additional vendors.

Our final question today comes from Dana Telsey from Telsey Advisors Group. You may ask your question.

As you think about the CapEx spend remodel have been a part of the equation, what’s in the pipeline for remodels and can you just remind us about the list that you saw in remodels? And you also mentioned about marketing and have these new initiatives coming. Is the penetration moving higher, what should we see on marketing? Thank you.

I will jump in first, Ernie will jump in on the second part of that, Dana. Thanks, Dana, a couple of things you reminded me that I didn’t address one. Remodels we don’t really specifically talk about the lift I would say that certainly what we do is we take -- we adjust and at each round of remodels that we do we think we take the best from what we’re doing across all of our banners. And so we do think it’s been a positive, but not like when we used to talk about it eight, nine years ago when we were doing a lot of things different. But we have increased our remodels this year by almost 20 remodels getting close to the 300 level, a little over north of 275 and that number will continue to go up and will keep our stores fresh. Also it's an opportunity, we do a lot of relocations as we have a lot of leases coming due each year and we tend to move, we’ve talked about this and we do get a significant benefit from relos and we’re doing a substantial number of relocations this year, greater than 50 at the most we've ever done. So we feel good about that. So those two things. In terms of marketing and advertising I will turn it over to Ernie.

Yes, Dana, great question. So our marketing spend if you want to look at it that way is pretty much in line with where it’s been, nothing of substance moving. Having said that, we have as you know over the last few years been moving a greater portion of our working media to digital and we continue to find that obviously we're going to go where the customers are looking and spending their time. Most importantly, I am so proud of all of the marketing executives across all the divisions as well as the head of our marketing and corporate and all of the creative execution that we've done. I think you’ve probably seen some of it, I don’t know if you’ve seen some of the international but our creative I think has really gone to a new level and that’s at every division, whether it's Marmaxx or HomeGoods or Sierra, Canada, Europe, things like the MaxxLife campaign, MarshallsSurprise campaign, HomeGoods’ Go Finding. These have all resonated very strongly with consumers and I give our guys credit because there is a spend, we’re never going to be one of the big spenders because of our word-of-mouth everyday traffic type of retail, but we have had a lot of breakthrough campaigns that I really give our teams a lot of credit. And we review these constantly throughout the year. That we just had a big review about a month ago with the teams. And when I looked out for this coming FY ‘20 I love the different iterations we have going for the campaigns. So I would say it’s a smarter use, obviously more effective use of dollars that we’re spending and we're feeling really good about it. And obviously we’ve been measuring a lot of the effectiveness over the last year or two and clearly including capturing some more younger customers as a greater percent of the new customers has been a big benefit and that has been a focus you know that I’ve talked about before. In addition to just driving traffic we’re also trying to drive traffic, which is setting a foundation for us for the future with younger customers.

Yes. And just to jump in, going back to your other comment related to the new customers but also our customer satisfaction scores continue to be strong and going up virtually across all of our banners, which I think is an important thing and I think a lot of that has to do with as Ernie has talked from time-to-time and related to remodels, keeping the stores fresh but also being prudent and not cutting back on our store operating hours and other things when it affects the standards of the store and I think we've been pretty consistent about keeping that our store standards healthy and I think all that relates to keeping our customer satisfaction scores good. Obviously with a great mix of product that the customer wants.

Yes. So it’s a great question Dana because we struggle with all of the challenges in terms of how do you balance, how much you put. So for now basically, our marketing dollars are pretty much flattish I would say this year than last year but our creative I would say is more effective. And it has been by the way.

Alright. That is the end of the call. Thank you all for joining us today. And I look forward to updating you on our first quarter earnings call in May. Have a good day, everybody.

Ladies and gentleman that concludes your conference call for today. You may all disconnect. Thank you for participation.