Ladies and gentlemen, thank you for standing by. Welcome to the Kohl's Q1 2015 Earnings Release Conference Call. Certain statements made on this call, including projected financial results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Kohl's intends forward-looking terminology such as beliefs, expects, may, will, should, anticipates, plans or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in item 1A in Kohl's most recent annual report on Form 10-K and as may be supplemented from time to time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference. Also, please note that replays of this recording will not be updated so if you are listening after May 14, 2015, it is possible that the information discussed is no longer current. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. These instructions will be repeated when we're ready to begin the question-and-answer session. As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Mr. Wes McDonald, Chief Financial Officer of Kohl's Department Stores. Please go ahead. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thank you. Good morning. With me today is Kevin Mansell, our Chairman and CEO and President. I'll start today's call by walking through our operational results. Kevin will then provide more details on our Greatness Agenda initiatives and then we'll open up the call to your questions at the end. Comp sales increased 1.4% in…

Thank you. And one moment, please, for our first question. And that'll will be from Charles Grom with Sterne Agee CRT. Please go ahead. Charles Grom - Sterne, Agee & Leach, Inc.: Hi. Good morning. Kevin, Wes, could you guys walk us through the cadence of the comps in the quarter in a bit more detail, how bad was February you spoke to that in your release and how much improvement have you seen in March and April and any color on May, in the first two weeks? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, we wouldn't be able to provide any color on May obviously, but quarter developed very differently. February was very weak and the March-April combined period because we can't really look at March or April independently due to the Easter shift but the March-April combined period I think accelerated to around 200 basis points. Kevin Mansell - Chairman, President & Chief Executive Officer: Yeah, February slightly negative and March-April combined was around 200 basis points. Charles Grom - Sterne, Agee & Leach, Inc.: Around 200 basis points. Okay. Great. And then, Wes, just any difference in trend between credit versus non-credit? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: They were both positive. Non-credit was actually better than credit for the first time in a long time. We focused a lot of our efforts on loyalty and Kevin talked about and also really strengthened our lowest prices of the season event. In April we had our best event there in the last four years so a lot of things we're doing from a marketing perspective are to drive more occasional customers in more frequently but that's a good sign. We have to do that long-term to get the…

Our next question is from Matthew Boss with JPMorgan. Please go ahead.

Hey. Good morning, guys. So as we think about the margin profile longer-term, what would – I guess what would need to happen for you to see upside to the 9% EBIT margin target? And if you could just rank the gross margin drivers that you have from here to offset e-commerce and some of the mix headwinds? I think that would be really helpful. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Sure. In terms of operating margin, nothing's really changed from October. We said it was going to be 9%. We'd have to get better comps. That would probably be the number one driver of our performance in that. And then I guess the second biggest driver would be to see how big buy online, pickup in store can be to mitigate some of that shipping cost headwind which we've talked about in the past. As far as margin, how we got to be up the 17 basis points, it was a combination of better promotional markdowns and lower clearance markdowns offset by obviously a little bit lower IMU given the increase penetration in national brands. Headwinds from national brands continued to run in that sort of 4 basis points to 7 basis points per 100 basis points that I talked about, so for the quarter it was 16 basis points. National brand penetration increased 227 basis points, so you can do the math, so it was closer to the seven basis points because private brands were a little bit worse on the comp side and also had a little bit lower margin. Shipping costs were a little higher in the quarter than they are for the year, just because it's sort of a lower volume quarter. And we continued to work on the mix of online generated orders that get shipped from our stores versus our e-commerce fulfillment centers. So that continues to be a balance of cost and speed improvement if you ship it from the store but we have to continue to do a better job of making – we try to ship as many units together as we possibly can. So very happy with the margin performance this quarter, internally, it's the first time our merchants have hit margin plan since 2011. So, feeling very good about that and hopefully we can continue to do that going forward.

Great. And then just from a top line perspective, what would be the drivers of the embedded multiyear acceleration beyond this year? If you could just kind of walk through what you have this year but then what you have in 2016 and 2017? Kevin Mansell - Chairman, President & Chief Executive Officer: Well I think we've kind of laid that out, Matt, in pretty good detail to be honest with you. I mean, we guided to a 1.5% to 2.5% for the year so let's just say the midpoint is 2% over the course of the year. And we're expecting to accelerate that modestly in year two and three of the three-year plan we gave you. And each of the component parts of the both bold and essential moves we're making under each of the pillars contribute some level of increasing volume over the course of the three-year period. This year of course loyalty is very important. Longer-term, personalization is probably more important because as you know personalization has a big impact around the effectiveness of our marketing and driving more traffic into the stores. In all, transparency, I think the performance in the first quarter just increased our confidence that the three-year plan we laid out is very achievable.

Great. Best of luck. Thanks.

Our next question is from Dan Binder with Jefferies. Please go ahead.

Thank you. I was curious if you had any sense of impact from port issues if any, with inventory and whether or not that would affect markdowns in Q2? Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, generally port issues were a factor in first quarter selling in selected categories that are heavily impacted. But there's no question when we go to through the selling results that certain categories of classifications were negatively influenced by port delays. I don't expect any of those to have any impact looking forward on our merchandise margin. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: From an inventory perspective, it obviously delayed some receipts that came in later in the quarter. And the reaction when the port issues were occurring in the third and fourth quarter, we made some changes to pull up some receipts for back-to-school especially in active and footwear. So I would expect our inventory levels at the end of the second quarter to be up about where they are today. And then we continue to work towards ending the year with inventories on a unit basis at least down sort of that low single digit area but we wanted to make sure we protected the back-to-school business which is a big footwear time and obviously active has been a great business for us running up mid-teens this quarter so we wanted make sure we had enough inventory for that key season so we pulled up some receipt.

Have you tried to quantify the comp impact from those delays in Q1? Kevin Mansell - Chairman, President & Chief Executive Officer: No, because I mean at the end of the day, right, if there was any shortfall to our internal expectations on sales it was really about traffic. We're looking to drive increases in traffic and traffic was essentially flat in the first quarter. So the availability or non-availability of merchandise in a particular category really isn't influencing that.

You did mention that better or noted a more balanced promotional calendar. I'm not sure if we should – should we interpret as less promotions and do you think that affected traffic? Kevin Mansell - Chairman, President & Chief Executive Officer: I think that the way you should think about that is it's related to our effort to be more effective, particularly around personalization and around loyalty and to get a more consistent pattern of sales results from both our credit customer, who continues to be critical to our success, but also our noncredit customer. So I just think fundamentally it's kind of reinforced in our minds as a leadership team that the path we're on around marketing effectiveness, personalization impact, personalized touches – I mentioned that we're going to have almost 5 billion personalized touches in our customer marketing this year – and loyalty is all on the right path. It's all the right thing to do and it's getting us the results we're looking for. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I think from our perspective the bold moves delivered what we expected for the quarter. What really happened was the base business that doesn't really have any bold moves directly attached to it deteriorated a little bit. For example, juniors was really tough in the quarter, and that was a 90 basis points drag on our overall comp. So we expect to get that turned around in time for back-to-school. But that was a big part of the comp being a little bit lower than the higher end.

Got you. Thanks.

Our next question's from Lorraine Hutchinson with Bank of America Merrill Lynch. Please go ahead.

Thanks, good morning. Just following up on the last question can you talk about each of the programs, the loyalty, cosmetics, e-commerce, etc. and how they impacted comp? And then what was the impact of the deterioration of the underlying or base business? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I don't think we're going to want to get into the individual quarter results in each of the bold moves under the pillars, to be honest, Lorraine. I would just broadly say and reinforce what Wes mentioned, which is that the bold moves drove the results that we expected them to. It just reinforced that we are on the right path and we should continue to aggressively implement them. Some of the base businesses were less exciting, and so they were more of a headwind in terms of our overall business. Just in listening to the questions, I get the sense that there is some disappointment in our results and to be totally honest with you the management team, I think we had a great quarter. We were basically right in line with our expectations on sales. Merchandise margin overachieved because of the effectiveness of some of the marketing initiatives we put in place around personalization and loyalty and the company did a good job of managing expenses. So we're actually pretty excited about the quarter we had, and I think I would just reinforce again what Wes said, which is the bold moves in the Greatness Agenda are working, and if anything we're getting more excited about them as we look forward over the course of the next three years. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, oversimplified, the bold moves delivered what you would expect, like a 2.5% comp, let's call it. I just told you juniors was 90 basis points drag, Jewelry was 30 basis points, that's 120 basis points. That gets us pretty close to the 1.4%.

I guess just looking at it differently, the 1.4% is below your full-year guidance and the fourth quarter, you're obviously up against a very strong results from last year. So, maybe if you could help us – just as it relates to the back half what you expect will accelerate by then to get you back into the range of your full-year comp guidance? Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, again, I don't think we want to get into quarterly results or monthly results and how each bold move impacts the overall results. I would only reinforce again our expectations for the year of a 1.5% to 2.5% comp with a pretty consistent result by quarter to get there. Of course there's always going to be differences. Weather in a particular quarter might impact it more positively or less positively. We feel really good about it.

Thanks. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I mean, in November, December comp in 2013 was the best performance we had in like three years. We were able to comp that last year. Sometimes you guys have the tendency to oversimplify things with the two- and three-year stack comp. We have a lot of marketing tools in our arsenal to try to drive business even if the comp comparisons are difficult. That's what we get paid to do. So I think we'll come up with a good marketing calendar that will allow us to get that comp for the 1.5%, 2.5% for the entire year.

Thank you.

Our next question is from Paul Swinand with Morningstar. Please go ahead.

Good morning and thanks for taking all the questions as usual. I just wanted to ask a little more color on the – your saying data algorithms and the billion touch points. Can you just give us a little more color on how it works? And then I guess a second part of that question as you get more and more touch points how do you ensure that you're not just adding more volume and the quality of touch increases, it doesn't start to lose engagement with the customer? Kevin Mansell - Chairman, President & Chief Executive Officer: Sure. I mean the key metrics to try to understand whether or not the implementation of the personalization initiatives, including the loyalty component, really is about marketing effectiveness, right? I mean, are we spending the same amount of marketing as we did before and generating more sales results hopefully due to traffic mainly. And that's what we're seeing happen. So I think we laid out, in some detail, the areas that we're most focused on. There is a focus around personalization as it pertains to print inserts. So we gave you some examples of markets in which we're testing that impact with really positive results with the expectation it's going to roll out nationally this fall. There's obviously a dramatic change in the way we're approaching direct mail, both on our big credit events which typically occur once a month and on our interim events which are things like pick a day so very big change there and we're getting really clearly better results on marketing there. And then the third piece of course which I touched on in the call is the impact of our ability to now with our customers deliver personalized offers to their wallet through the Kohl's app which as we said already has 7 million app downloads and growing. So the combination of all those things are sort of different examples one on the digital side, another on the print side and the third is direct mail of how personalization impacts how we spend money. The end result is we should expect that we're going to get a better sales results with spending no more money than we did before. And so far, both in the fourth quarter and the first quarter, the results have kind of reinforced that. Kevin Mansell - Chairman, President & Chief Executive Officer: Yeah, it doesn't necessarily mean an increase in frequency. It's just a better offering that's targeted more to you. If you buy men's clothes, it doesn't make sense to send you a mailer that's full of a lot of Lauren Conrad and Jennifer Lopez. So it's definitely not a frequency thing.

Okay, great. Thanks a lot for that.

Our next question is from Taposh Bari with Goldman Sachs. Please go ahead. Taposh Bari, your line open if you're on mute possibly. And we will move on to Bob Drbul with Nomura. Please go ahead.

Hi. Good morning. Kevin Mansell - Chairman, President & Chief Executive Officer: Good morning. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Hey, Bob.

I guess Kevin a couple of questions on you talked about expanding your Nike offering and the relaunch at Columbia. Can you just provide a little bit more detail sort of on the timing of that and what exactly is going on with both of those brands? Kevin Mansell - Chairman, President & Chief Executive Officer: Sure. I mean, the expansion of our Nike offering includes intensification in inventory levels overall. And broadening the mix of what we offer on a style basis as well. And it's ongoing throughout the year though I think there'll be an acceleration as we move into the third quarter. On the Columbia brand, I would put that in the context almost of a relaunch and that's been a great brand for us for a number of years that we haven't done as good a job as we should have in presenting to the customer. So there are levels of the Columbia brand relaunch but it includes entering much more aggressively into the sportswear category in addition to the traditional outerwear and cold weather accessories and to have a much bigger presence online. And then we've identified in the range of 300 to 350 stores that'll have a much different in-store presentation, an enhanced shop essentially in both women's and men's. So it's a pretty big deal, Bob. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I mean, Nike was up better than the active and wellness category it was up about 19% comp and Columbia on a very small base, was up 45%.

Got it. And just on the capital allocation piece of it can you just provide updated thoughts around that? And particularly are you contemplating would M&A be in the mix at all as you look at your cash flow from here going forward? Kevin Mansell - Chairman, President & Chief Executive Officer: Well I think it's always been in the mix. We covered that at the investor conference. I think we even reinforced it again at the beginning of the year. But it's within and through the filters of our Greatness Agenda, so as we look at possible acquisition opportunities, they would really need to provide leverage within the existing Kohl's business that we have today in addition to perhaps being a way for us to grow our overall sales. So, we're not really looking at any businesses that would just be a bolt-on, I mean, I think we want to stay true to the filters of the Greatness Agenda and regardless of the area that an acquisition might develop in it would really need to reinforce something we're doing in our pillars or our bold moves and in some way be leveraged inside of Kohl's to get the maximum benefit. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I mean, with that filter, I think it would be very unlikely that we would buy a wholesale brand because that would cause distribution that the brand may currently have to possibly go away and then so you're paying for a lot of sales that no longer exists. So, it would have to be a smaller type company that had growth outside of Kohl's but like Kevin said possibility is for us to bring it inside as well.

Great. Thank you very much. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thanks, Bob.

Our next question is from Matt McGinley with Evercore. Please go ahead.

Thanks for taking my questions. My first question is on the personalization effort as it relates to non-credit versus credit sales. I believe you said that the non-credit sales were higher than the credit sales in the quarter. What does a personalized offer look like for a non-credit recipient versus somebody that is actually on the credit program today? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, it's really so far through our lens of loyalty. So to try to use the data we have, that's really all the data we have so far in the non-credit card customer that's really actionable. So we try to take what they do as well and then broadly, which is less to do with personalization, it's strengthening events like friends and family and like the LPS to be stronger from a price perspective, and as Kevin mentioned earlier, trying to – basically it's just a reallocation of markdowns so we're moving some markdowns where we weren't getting a ton of incremental sales related to the credit portfolio and reinvesting them in broader vehicles like friends and family and LPS to drive the overall business. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I mean, the third piece is also just personalization as it relates to our app. Because roughly half of those downloads have been customers who are not credit customers. So we're continuing to utilize that as a way to reach them with more personalized offerings.

Next question is more of a modeling question on depreciation. In the beginning of the year you guided depreciation about $940 million and at the run rate you had in the first quarter is going to be pretty significantly under that. Is there some favorability you had in depreciation where there may have been a surge at the end of the year where that rate would come in for total dollars at a lower rate than what you had originally guided? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: No, I still expected it to be $940 million. We have a tendency to be conservative on that guidance given the fact that IT projects are not to the day delivered when we think they are so it's more likely than not we'll be under but I don't think it's going to be significant.

Okay. Thank you.

Our next question is from Neely Tamminga with Piper Jaffray. Please go ahead. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): Great. Good morning. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Good morning. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): Kevin, could you speak a little bit more about some of your product categories? So two product categories in one region, that's what I'd love to chat about. So home did really well. Could you give us a little sense of what's going on there since it performed above the chain average? Is it national brands? Is it around decors and around essentials? Like any sort of color would be helpful. Then on the flipside on the other end of the spectrum women's it sounds like Columbia is part of an initiative to maybe boost up some national name brand in sportswear. There are there other maybe unannounced yet initiatives going on in women's to kind of boost that up may be in the second half? Then Wes for you on South-Central being negative you guys dug deep into oil-based economy type situations, are you seeing particular weakness in local economies that are really dependent on oil? That would be helpful. Thanks. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: I'll actually take one merchant question, believe it or not. So on the home side, a lot of it's about electrics and the wellness side of things, so Fitbit and Jawbone and some of those things we've brought in to support wellness Gaiam and then also bedding and bath were very strong. And then from some things that were a little bit weaker, luggage was slightly negative and then tabletop was pretty tough. On the South Central region,…

And we'll go to Michael Binetti with UBS. Please go ahead.

Hey guys so a question on loyalty, as you look at lapping the loyalty launch program nationally I know you said you're focused on lapping that which is a big boost to trends late in the year last year. I think you said you're testing some new components in the same markets that were your pilot markets for the loyalty program last year. Can we hear a little bit more about those tests, what you're seeing and how do those tests roll through the year this year? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, there is a plan. Let's break it down into pieces. On loyalty overall, when we developed the multiyear plan we gave you, which included the 1.5% to 2.5% comp this year, loyalty growth was a component part of that. It really was only a component part of that through the first three quarters. We did not include any expectation for our loyalty list in the fourth quarter at all. What we now think is that given the growth, which has been significantly higher than our expectations were, and given the results we're getting, that that could provide a boost in the fourth quarter from our original expectation. And the reason we feel that way is we're putting together sort of an anniversary of the launch last year in combination with the testing that we're doing. So we kind of covered a few of the testing things in the call, I think relative... Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, we're not going to give you the results of the tests, but we're testing a lot of different things and we'll use those in our playbook as we move through the fourth quarter and then into next year. And the other obvious thing is we're going to have probably 35 million people on loyalty going into the fourth quarter, which is double what we had in the fourth – going into the fourth quarter last year. Kevin Mansell - Chairman, President & Chief Executive Officer: So really, I mean, I think Wes and I both agree that the really important component as we go into the holiday season of our change overall in customer engagement probably is around personalization, because personalization really had little to any impact in the fourth quarter of last year and we expect it to have a massive impact on our performance this year.

Okay. All right. So if we could talk about e-commerce margins for a minute, you've talked about the disadvantage that you guys have structurally from your lower AURs and how that hurts as you participate in the cost of business, let's call it free shipping. Can you talk about any new initiatives you're looking at that can help you fight back from traditional e-tailers like Amazon with their big Prime program to help you boost margins in e-commerce against that kind of an industry backdrop? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, we're focusing more on omni-channel as the lines are getting all blurred, but your question is relevant in terms of shipping costs. The biggest, I think, advantage that we're going to use is buy online pickup in store. We just launched it. It's early. We had a couple of days where we had 6% or 7% of the business was – on an order perspective – was buy online pickup in store, which saves you $5 a box on average from shipping cost and we're seeing attachments rates between 15% and 20%. So that's the biggest thing I think that will help us against not only Amazon and others but just in improving the overall profitability of that online generated order business against last year. I think that's the biggest one. And then like I mentioned in my comments, we're doing a much better job in e-fulfillment, our UPH and the DCs was up I think over 20% this quarter and we still believe there's continued room there. The most difficult problem we have is trying to figure out the balance between where to host the inventory in the stores versus the EFC and where to fulfill the order. There's a lot of unlocked opportunity there from a maximizing store inventory productivity but it has to also be balanced off against the extra cost that you have to split shipments because that just adds another $5 to your shipping cost. So we're learning there. We've got all of our smartest people on it from e-com perspective, fulfillment perspective, IT perspective but it's going to be a learning year on that for this. This would be the first year where we've really significantly done ship from store in all four quarters.

Just as a quick follow-on is the buy online, pick up in store savings in the attachment rates, are those in the early days here, are those trending roughly in line with what you saw when you pointed us to e-commerce margins improving mid single digit? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, I had no expectation honestly. I put in like 1% for BOPUS. So anything above one would be a benefit and the attachment rates are kind of in line with what we expected but that's nothing we really built into that three-year plan. So as that continues to mature that could provide some upside to it. Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, the other upside is buy online pickup in store while we finished the launch nationally at the end of the first quarter and the results Wes is talking about have to do with that, it's only available as we mentioned in the call right now on desktop and laptop and so mobile which rolls out in the second quarter essentially could be a huge lift to the impact of BOPUS because, as you know, mobile traffic is what's driving the business.

Thanks, guys.

Our next question is from Oliver Chen with Cowen & Company. Please go ahead. Oliver Chen - Cowen & Co. LLC: Hi, thank you. As you do kind of post-game February what are your thoughts on changes you might have been able to make in the marketing or inventory management of product. It sounds like that was more of a one-time trend in nature. I was just curious about that. And then we also wanted to ask about how you're feeling about the inventory freshness now in terms of your inventories relative to your sales? And what kind of near-term strategies you might have as you think about that? Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Well, I'll take the inventory. AP as percent of inventory is up 500 basis points versus last year so I feel very good about the freshness of the inventory. As I mentioned on the call, it's materially invested in national brands which have very little markdown risk and supports the active and wellness initiatives primarily which are up mid-teens. So I don't – there's not going to be a margin problem in the second quarter. Kevin Mansell - Chairman, President & Chief Executive Officer: On the marketing, I mean, honestly, I don't think there's anything, I mean, there's always things in any individual event that we would do differently every week of the year. But in general, I don't think we felt that there were any problems at all with the marketing effort in February. To be honest with you, I think it was probably functionally a low traffic month that was heavily hindered and hampered in certain parts of the country by weather. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, we spent $5 million…

Our next question is from Mark Altschwager with Baird. Please go ahead. Mark R. Altschwager - Robert W. Baird & Co., Inc. (Broker): Good morning and thanks for taking the question. Kevin you talked about performance in the base business versus the bold moves and obviously the full-year plan is for total comp. So if you are seeing some unexpected weakness in specific categories like juniors can you just talk about what gives you the increased confidence that the bold moves will be enough to offset that through the year? Then specifically do you expect comp trend to improve through the year or will the ramping initiatives be somewhat offset by some of these other headwinds that you identified? Kevin Mansell - Chairman, President & Chief Executive Officer: On the overall question which has to do with comp trends, I think the fact that we had 1.4% comp in the first quarter and we're reinforcing that we believe even more strongly in the 1.5% to 2.5% for the year sort of implies that we expect there will be an acceleration of comp trends. And there's a whole bunch of reasons behind that, most of which we've kind of already covered. The bold moves versus the base, essentially the bold moves met or exceeded in every single case our expectation. And yes, I would say there's a couple of areas that were a surprise. We didn't expect the slowdown in juniors to be to the degree that it was. We didn't expect the slowdown in jewelry to be to the degree it was. But to be honest Mark, there are always businesses and categories in the store that sort of cycle through positives and negative periods and quarters and we've been pretty good at being able to address those and deal…

And next we'll go to Bernard Sosnick with Gilford Securities. Please go ahead.

Thank you. With regard to your last comment about women's being flat that of course includes the juniors. And flat I can see from your mix of sales the women's down to 30% of the total in 2014, 260 basis points lower than in 2007. Flat is quite good. So could you tell us a little bit more about what's happened in women's because in fact you just said earlier that much more is expected in the fall. Could you flesh that out? Kevin Mansell - Chairman, President & Chief Executive Officer: Well there's a lot of pieces to that, Bernie. In our overall Women's business, of course we include our traditional Missy and plus size business. We include our intimate business. We include, of course, our juniors business. The performance in the first quarter in Women's was better in total than it has been. So we had a better trend. In particular, though, which is the area we're most focused on because it's our core customer, our Missy business was significantly better and actually ran – I think, Wes, better than the store did. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, Missy was up about 2%. Kevin Mansell - Chairman, President & Chief Executive Officer: So there's been a lot of attention given to I would say two big things. One we're benefiting from a really strong position in active and wellness in women, and that business is running way better than the overall women's business is. And that's being driven essentially by both national proprietary brands, Nike on the national brand side and both Fila Sport and Tech Gear on the proprietary side. We also launched at the very end of the quarter, though it didn't have a meaningful impact on the quarter results, it's going to on the year, a new yoga brand, an initiative with Gaiam, and that's going to be a significant lift as well. So active has influenced it positively. The effort around clarity of offering I think is influencing it positively, and the combination of both of those things are getting our Women's business back to where it needs to be. And as you said, Women's is important because essentially that's our core customer.

One other thing in that regard, juniors actually I think you said at the meeting in the fall had been running favorably, an improvement over a weak trend and then suddenly there was a reversal in the first quarter. Now these things happen in the fashion business but why do you believe there was such an extreme change? Kevin Mansell - Chairman, President & Chief Executive Officer: Well, I mean, typically when you see – my experience has been over time, when you typically see that, it's about product. And as you said, faster businesses, younger businesses can have more reactions in an interim period as it relates to the product that's being offered. So I would say the primary driver of the poor performance in juniors has to do with the product offering we gave the customer and that's what we've got to address. What's nice is that it's a fast-moving business, so you can address it really, really quickly. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Yeah, you can fix really quickly.

Thank you very much. That's helpful. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thanks, Bernie.

And we have time for one final question and that will be from Patrick McKeever with MKM Partners. Please go ahead.

All right. Thanks. So just a couple. First of all just wondering if you are feeling any wage pressure just given what's going on in retail with some of the bigger retailers raising wages? And then just secondly Kevin and Wes wondering if you could give us an overall assessment of the consumer and any thoughts around gas prices being down $1 or so year-over-year and perhaps why more of that is not going to retail or at least that's what appears to be the case? Thanks. Kevin Mansell - Chairman, President & Chief Executive Officer: I mean, overall in wages, Pat, our expectation is wages will continue to rise and we've put that into our thinking over the course of the year and my expectation is wages will probably continue to rise and we've always managed that. I feel pretty effectively because we really taken a sort of trade area by trade area approach to it. The pay what is necessary to get the kind of quality associate we need and combine it with the kinds of other benefits and working environment that kind of retains them. So while it is a headwind I guess you would say over the course of the near-term, it's built into our thinking already. On the consumer, I know some of the sales results in the first quarter around some of the retail companies have been probably less than expectations were. First of all, we don't endorse expectations on a quarterly basis. One of the reasons we do annual guidance is because we look at this business over the course of a much longer-term. And individual quarterly results just like in the past individual monthly results don't really provide a gauge for the underlying consumer sentiment. So we're pretty happy with the results in the first quarter. And there isn't anything that we're seeing with the consumer that would change our view for the year. I think it's still generally positive versus last year. So we think over the course of time, the consumer is in a better place and is going to have a positive impact on our sales.

Good stuff. Got it. Thanks. Kevin Mansell - Chairman, President & Chief Executive Officer: Okay. Thanks, Pat. Wesley S. McDonald - CFO, Senior Executive VP & Head-Investor Relations: Thanks, everybody.

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