Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies’ First Quarter Fiscal 2015 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded, Tuesday, May 20, 2014. I would like to turn the conference call over to Ms. Carol Meyrowitz, Chief Executive Officer of The TJX Companies. Please go ahead, ma’am.

Thank you, Elan. And before we begin, Deb has a few comments.

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 1, 2014. Further, these comments and the Q&A that follows are copyrighted today by The TJX Companies. Any recording, retransmission, reproduction or other use of the same, for profit or otherwise, without prior consent of TJX is prohibited and a violation of United States copyright and other laws. Additionally, while we have approved the publishing of a transcript of this call by a third-party, we take no responsibility for inaccuracies that may appear in that transcript. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Also, we have detailed the impact of foreign exchange on our consolidated results and our international divisions in today’s press release in the Investor Information section of our website, tjx.com. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today’s press release or otherwise posted on our website, tjx.com, in the Investor Information section. Thank you. And now I’ll turn it over to Carol.

Thanks, Deb. And joining me and Deb on the call are Ernie Herrman; and Scott Goldenberg. Our first quarter consolidated comp sales increased 1% and earnings per share was $0.64 versus $0.62 last year. Our EPS results were $0.01 below our expectations as the negative impact of foreign currency exchange rates was $0.01 more than our guidance assumed. While sales were not as strong as we would have liked, especially in apparel, we were pleased to see overall business trends improve as the quarter progressed, and we are very well-positioned as we entered the second quarter. While we clearly saw dampened consumer demand for apparel in some of our North American regions during the first quarter, having learned from the fourth quarter I am pleased with the way manage our inventory. We were extremely strategic in how we flowed inventories to particular regions and categories. Expenses were also tightly controlled. All of this helped mitigate the impact of markdowns overall. Further, I could not be happier with TJX Europe, which delivered another spectacular quarter. This bodes very well for our future growth plans in Europe as we expand our international footprint. We entered the second quarter with lean inventories, and we see a marketplace absolutely loaded with buying opportunities for quality, branded merchandise. We are well-positioned to take advantage of these opportunities. We are maintaining our EPS and comp outlook for the remainder of the year and are confident we will achieve our plans for 2014. Scott will cover guidance later. On today’s call, I will reiterate the magnitude of the top and bottom line growth opportunities we see for our business. We remain convinced that TJX will grow to be a $40 billion company and beyond. But before I continue I will turn the call over to Scott to recap the numbers.

Thanks Carol, and good morning, everyone. Again, our first quarter consolidated comparable store sales increased 1%, and we were pleased to see sales trends pick up as we move through the quarter. Our first quarter comp was driven by an increase in ticket. While customer traffic was slightly down for the quarter, we did see improvement as the quarter progressed. Diluted earnings per share were $0.64 versus $0.62 last year, and $0.01 below the low end of our expected range. The mark-to-market adjustment on our inventory related hedges had a $0.02 negative impact on earnings per share, which was $0.01 more than we contemplated in our guidance. As a reminder, we had a $0.01 negative impact from FX last year. Consolidated pre-tax profit margin was 11.3% for the quarter, down 50 basis points versus last year due to a decline in gross margins. Gross profit margin was 27.9%, down 50 basis points versus the prior year. The decrease was primarily due to lower merchandise margins versus strong improvement last year and expense deleverage on the 1% comp. In addition, the mark-to-market adjustment I just mentioned also had a negative impact. SG&A expense as a percentage of sales was unchanged from last year's ratio as expenses were tightly managed. At the end of the first quarter, consolidated inventories on a per store basis, including the warehouses and excluding in-transit and e-commerce inventories were down 1% in constant currency. This was versus substantial decreases in the last couple of years. We begin the second quarter in a lean inventory position, which enables us to take advantage of the abundant buying opportunities in the marketplace. In terms of share repurchases, during the first quarter, we bought back $360 million of TJX stock retiring 6 million shares. We continue to anticipate buying back 1.6 billion to 1.7 billion of TJX stock this year. In addition, the Board of Directors approved a 21% increase in the per share dividend in April, marking the 18th consecutive year of dividend increases. Now, let me turn the call back to Carol, and I will recap our second quarter and full-year fiscal ‘15 guidance at the end of the call.

Thanks, Scott. Before moving to our global growth opportunities, I will share some comments on the first quarter performance by division. In the U.S., Marmaxx comps were flat with last year and segment profit margin decreased 60 basis points. This was primarily due to expense deleverage on the comp, as well as 10 basis points of deleverage from our e-commerce businesses and slightly higher utility costs. We are pleased that Marmaxx held merchandise margins relatively flat on a flat comp. This is a testament to Marmaxx slowing inventory vary strategically, feeding regions and categories where trends was stronger and maintaining lean inventories where business was softer. Where we weather was a factor, there was as much as 4 point comp spread with less impacted regions. We also see some execution issues in our junior and dress businesses that we are currently addressing. As always, we evaluate and work to improve what we are not happy with, and we are confident we will fix these issues. Our strongest category was total accessories and the jewelry businesses. Going forward, Marmaxx has some exciting marketing plans in order to drive traffic in the second quarter and the back half. Home Goods delivered a 3% comp increase on top of 7% growth last year, and segment profit margin was up 10 basis points over last year’s significant increase. We are very pleased with HomeGoods ability to continue driving strong performance over strong comparison. Now for international division, at TJX Canada, comp sales were down 1% and adjusted segment profit margin decreased 210 basis points. We believe the severe weather across Canada had a significant negative impact on both customer traffic and demand for spring apparel. Further, as we expected, the decline in Canadian dollar pressured our merchandise margins. We were encouraged to see business…

Thanks Carol. Now to fiscal ‘15 guidance, beginning with the full year. We now expect fiscal ‘15 earnings per share to be in the range of $3.05 to $3.17 over $2.94 in fiscal ‘14. We are lowering the high end of the range by $0.02 to reflect our first quarter results in maintaining our outlook for the remainder of the year. As a reminder, fiscal ‘14 included a tax benefit of $0.11. Excluding this benefit, our full year expected EPS would be 8% to 12% over the prior year's adjusted $2.83. We continue to expect consolidated comp store sales growth of 1% to 2%. For the year, we continue to expect pretax profit margins to be 12.0% to 12.3%. This would be down 10 to up 20 basis points versus 12.1% in fiscal ‘14. This now reflects expected gross margins of 28.3% to 28.6%, which would be down 20 basis points to up 10 basis points versus fiscal ‘14. And now -- and we now anticipate SG&A as a percent of sales to be approximately 16.2%, a 10 basis point improvement versus last year. Foreign currency exchange rates, assuming current levels are now expected to have a $0.02 negative impact on full year EPS versus $0.01 positive impact last year. Now to Q2 guidance. We expect earnings per share to be in the range of $0.70 to $0.74. This would be a 6% to 12% increase over the last year's $0.66 per share and on top of many years of double-digit EPS growth in the second quarter. We’re assuming second quarter consolidated sales in the $6.8 billion to $6.9 billion range. This is based on expected comp sales growth in the 2% to 3% range on both the consolidated basis and at the Marmaxx Group. Second quarter pretax profit margins are planned to be in the 11.7% to 12.1% range, down 30 to up 10 basis points versus the prior year. We're anticipating second quarter gross profit margin to be in the range of 28.5% to 28.8%, down 30 to flat versus the prior year. We're expecting SG&A as a percent of sales to be 16.6% versus 16.7% last year. Foreign currency rates, assuming current levels are expected to have a neutral impact on EPS this year, which is the same as last year. For modeling purposes, we're anticipating a tax rate of 37.7% and net interest expense of about $9 million. We anticipate a weighted average share count of approximately 708 million. Again, our guidance for the second quarter and full year assumes that currency exchange rates will remain unchanged from current levels. Now we are happy to take your questions. To keep the call on schedule, we're going to continue to ask you to please limit your questions to one per person. We appreciate your cooperation with this. Thanks. And we will now open it up for questions.

(Operator Instructions) Our first question today is from Oliver Chen.

Hi. Congrats on the global success here. We just had a question on your gross margin guidance going forward. What does that anticipate for merchandise margin and how should we think about -- how merchandise margin had trended throughout the quarter that just elapsed, and what are the strategies for looking at that line item going forward? Thank you.

Well, for Marmaxx in Q2, our merchandise margins are planned flat to slightly up. Scott, do you want to go over the aggregate?

Just to be clear, do you want more breakout on the first quarter gross profit margin?

Yes. I’m curious like on a month-to-month, and if that’s trended in any way, like that kind of corresponds to how we should think about them going forward? And then if the junior business is kind of related to this in terms of the opportunity you see there as well?

So Oliver, in terms of merchandise, I’m going to go back to Q1 for Marmaxx. Merchandise margins were fairly flat, which I think is a testament to the way they manage their inventories. But going forward, in Q2, we are planning them flat to slightly up. So I think we’re in pretty good shape. In terms of juniors, we missed some trends. The guys are working on it. We have a couple of execution issues, and I feel pretty good that we’re going to be fixing them in the near future, but are you asking -- did I answer your question or…?

Yeah. That’s clear. Thank you. Thank you. That’s encouraging.

Thank you. Our next question is from Stephen Grambling.

Good morning. Thanks for taking the question. I guess, one quick follow-up to that. Could you just provide a little bit more color on the puts and takes to the merch margin in the first quarter as it relates to kind of initial markups and -- versus markdowns?

Sure. So, on the gross profit margin decrease, I mean it was a combination as we said between the merch margin and deleverage on the one comp, so we had 10 basis points due to mark-to-market, a portion also due to buying and occupancy deleverage, and then the rest of it was due to merchandise margin miss. And again, that was a combination of a couple of items. It was due to Canada that we had a miss due to the currency -- the devaluation of the currency compared to the U.S., so the mark on dropped there. We also had some additional mark-ons at both Canada and Marmaxx due to the performance of sales versus our plan at the low end, and that was really -- but having said that as Carol said, Marmaxx still was relatively flat overall, in addition…

Yes. Most of it was driven by markdowns.

Markdowns.

Yes. Our markup is pretty healthy.

Great. That’s helpful. One other follow-up if I may. Just as you are talking about entering Austria in the first half of ‘15, can you provide a little bit more detail on the investments required to make that happen as it relates to talent, distribution, and maybe how quickly you think you can ramp there versus other markets? Thanks.

Pretty leveraged. Ernie, do you want to comment?

Yes, Steve, actually -- I was just over in Europe last week, and one of the things we talked about is how it’s a pretty seamless entry for us really. We get to leverage most of our central buying and planning areas. It’s more about talent acquisition in terms of the field, you know the first few stores that we open. So, on that front, very little talent needed on top of what we already have.

We think the mix is very similar to Germany, unlike going from the U.K. to Germany.

So, even talent would come from Germany versus pulling people in?

Yes.

Okay.

We didn’t need extra people, no.

Thanks so much. Best of luck.

Thank you.

Thank you. Our next question is from Omar Saad.

Thanks. I think a pretty good result given everything that’s going on out there. I would like to dive in a little bit on the power and flexibility of the model that served the company so well, the ability to react and respond. Can you talk about either big picture or maybe some examples of kind of what’s been happening last couple quarters? What you've learned, areas where you can be more flexible and some areas where maybe it's been a little bit harder? Especially from the -- with extremely cold weather, maybe how could you -- were there places where you could have been a little bit better positioned for that cold weather in terms of the business' ability to be flexible? Thanks.

You know what, we learn from every quarter and I think we learned from the fourth quarter, which is why Marmaxx merchandise margins were in pretty good shape. However, if I look back and I said what else could be learned for next year, which is what we do, I would probably feed the warmers zones a little bit heavier, and I would probably again pull back a little bit on the northern regions and switch a little bit in category. So they made some pretty big moves, but I still think there is some room there -- a spectacular quarter. But you know what, we move on and for the year, I am not going to use the world weather too many times because we are excited about the year, and we believe in the model for the year certainly.

Thanks, Carol.

Thank you. Our next question is from Daniel Hofkin. Daniel Hofkin - William Blair & Company: Hi, good morning. Just I guess a little bit of follow-up in thinking about the fourth quarter and then into the first quarter. Maybe just if you could kind of help us better understand the company’s strategy during let’s say a period when sales are a little bit light , I think a lot of us are so used to the company you are very nimble, you are able to react late in the season. What in terms of just the way you run the business let’s say results in a situation where you find that you are taking some greater markdowns. Given how lean you run the business and how kind of late you make buying decisions relative to full price? Thanks very much.

So obviously, our home business was spectacular as you saw in home goods in Europe. That was pretty consistent in terms of whether the business was great. I will reiterate, every quarter, we evaluate and we have certain businesses that are extremely strong and we are feeding into them. Our inventory position is spectacular right now. We are more open to buy than we had a year ago. We are actually turning faster in Marmaxx than we did a year ago, and as we go through the quarter and as we transition for each quarter, especially first and fourth quarter, we are going to take into consideration all of the patterns that we have seen and do some tweaking with that, and that’s usually how we get better each quarter. Daniel Hofkin - William Blair & Company: So is it fair to say that to some degree because you want to have the sales floor very fresh, that if you find that for whatever reason the product isn't quite selling the way you expected for weather or other reasons, that you just choose to basically move it out right then as opposed to holding it in the store?

What we do is, I mean, we look at every single category and we would see certain categories harder in the north that are less weather, we call weather proofing. And then we would see the southern zones of the warmers climate is a little bit heavier and that’s a tweaking we do.

And Daniel if I could just jump in. The other thing is we did keep it as Carol mentioned earlier. We kept inventories lean even in the places where we would get or categories we would get hit by the weather. And so really the liability in terms of any major lumps and the inventories don’t create, that’s one reason there are much nice margins held in there pretty well. Even with the category where the weather was hitting it, we will lean so the liability wasn’t major and that the flexibility. I think when you first talk -- when you talk fourth quarter and first quarter, that’s kind of how we run it all the time. And then we chase. So we generally don’t -- we chase the trends. So we don’t have to own a huge liability really in any category.

I mean ARPU we could have pushed inventories in Marmaxx and have higher sales, but we probably would have add more markdowns and you are always making -- you know you are always balancing that. Having said that, specifically, there are definitely areas that we could put more inventory into that would drives sales in areas that we don’t need to feed. And those are tweaks we would make.

Which we do ongoing all the time right every quarter… Daniel Hofkin - William Blair & Company: All right. Well, thanks,guys. I appreciate that.

Thank you. Our next question is from Brian Tunick.

Hi, good morning. This is (indiscernible) filling in for Brian. Thanks for taking our question. We wanted to ask about Europe. Comps have been clearing very strong now for 10 quarters in a row. So we’re wondering who you think you're gaining share from in Europe and how your marketing initiatives compare to the ones in U.S.? And now from a real estate perspective, you clearly have pretty ambitious store opening plans, actually both in the U.S. and Europe. But I guess it’s easier for us to see here where you may be getting these larger boxes that further downsizing at some department stores and maybe even consolidation among office suppliers retailers. So, wanted to see if real estate dynamics are similar in Europe as well and maybe if there are any retailers that you want to or look to co-locate within Europe. Thanks.

Look, first of all, we believe in Europe. We are taking a bit of share from everyone. I mean, we see everyone as our competition. Off-price is very new to Europe not to U.K. because we’ve been there for a long time. But in Germany, it is very new and people are very, very excited about it. In terms of the real estate Ernie and the team had put on quite a few additional people that are seeking sites which is why we are able to increase our count in Germany and obviously go into Austria and we will see how that goes. But it’s a matter of manning it and continuing to build and leverage the infrastructure that we have that took us 20 years to build.

Thank you.

Thank you. Our next question is from Michael Baker.

Hi, thanks. I just wanted to ask you if there’s anything we should think about in terms of market share. JCPenney did better this quarter in a quarter where your comps didn't do as well. I mean, its sounds to me as if it's a lot of weather. But just wondering if you think some of the JCPenney doing a little bit better has any impact. And I guess really after you answer that, just explain to us how you understand that. What specifically you look at to get an indication as to how a situation like that might be impacting you guys? Thanks.

Michael, we do a pretty deep analytical study on stores that are next to our stores, stores that are within a mile away, three miles away, five miles away. And quite frankly, we didn’t see the impact when Penney’s comps were substantially down and we’re really not seeing an impact going the other way, but we do a deep dive and we analyze it.

Okay. That’s helpful. One more quick one. It sounds like you said your outlook for the balance of the year isn’t changed, but you’re now looking at 2% to 3% comps in the second quarter. Is that what you would have been planning all along? Or does that -- a reflection of maybe you lost some weather business in the first quarter but think that comes back into the second quarter?

There is a little bit of pent-up demand. Ernie and I feel, there are couple of areas that we can execute a little bit better, and our marketing impressions are up 35% in Marmaxx and we're really excited about some of things that we are doing in our loyalty program in Marmaxx.

And you would view our all long plans for those impressions to be up, or that was a shift when you saw the business meter?

No, that was just our plan.

Okay. Thank you.

That's also part of our analyzing Q1 into Q2, the weather patterns, all of that. That's where we wanted to put our dollars.

Okay. Thank you.

And our next question is from Roxanne Meyer.

Great. Good morning. Just looking at 1Q, I know this is probably difficult to parse out, but you mentioned a 4% comp differential in weather impacted regions versus none. I'm just wondering if in total you can describe how much weather was an impact overall to our 1Q shortfall at Marmaxx versus the impact of dresses and juniors underperforming? And how do you feel about the inventory specifically in the dresses and juniors category and how long maybe it could take to right size that inventory? Thank you.

Well, as I said before, probably, we would certainly be at the high end of our range on looking at the numbers. We can’t come up with an exact specific number but it's pretty clear to us, when we look at the different regions and areas that it was probably about four points in Marmaxx. It was actually more than that in HomeGoods, so it did hit us. In terms of both categories, dresses and juniors are improving. I think we are going to see a substantial improvement in the second quarter and we are working on it. I can't give you specific numbers and I don’t usually do that. But we're working on it. And usually as a company, we fix things pretty quickly.

Great. Thank you so much.

I would also jump in at the weather analysis that Carol was talking about. If you ever did, I guess dollar it out to figure out the impact that would be far greater than junior dress business execution impact. Yeah impact, I think you had asked that in your question.

I see. Great. Thank you very much.

Thank you. Our next question is from Howard Tubin.

Thanks guys. Can you give any update you can give us on stores opened in the last one or two years, new store productivity kind of by chain, how does that look?

Actually the productivity of our new stores is sensational, to say the least. It just continues to be incredibly strong. We are getting better and better at our sites there. Brand new stores and their performance is incredible, both Marmaxx and HomeGoods actually every chain. We are very happy with new store performance.

That’s great. Thanks.

Thank you. Our next question is from Jeff Stein

Good morning, Carol. I would like to delve into your loyalty program a little bit. Can you talk about the number of members you have currently, the average spend and how you intend to, kind of get the word out that you don’t have to be a credit card holder to join the program?

So you are asking me for some things I’m not going to give you. But what I will tell you is we tested the loyalty program in several markets last year and we saw a substantial increase in the number of visits. And we are rolling that out across the country starting really today through June. So we're pretty excited about it, and there are a lot of special some things like stores opening early for that customer, giving them e-mail information on things that are coming into the store. We have several little trigger points that we have been testing over the last year. So this is very, very exciting to us. So, we will see what happens when it rolls out.

Can you talk at all about the average spend of the loyalty customer versus non-loyalty?

I don’t go -- our loyal customers spend a great deal more but more importantly, the visits are substantially up.

Got it. Okay. Great. Thank you.

Thank you. Our next question is from Marni Shapiro.

Hey, guys. Congrats. Great job in a miserable first quarter weather. If you could give me just a quick update on -- you talked about Home and HomeGoods but any update on it? Was it as strong as the Marmaxx Group? And then some of the smaller departments within Marmaxx tend to pick up where the peril is weak link like, whether it's beauty or fitness or footwear. Could you just talk about some of those offsets other than accessories which I think you touched on?

So, Marni, I don’t usually do a deep dive into our categories for competitive reasons. But HomeGoods and Marmaxx was pretty strong, big furniture. We had some issues with some of our big-ticket items. But generally, home across the board was certainly stronger than apparel. I will tell you that women's apparel has increased dramatically coming into May. So we are pretty pleased with that, but across-the-board, the categories were pretty similar in most divisions.

Fantastic. Thank you, guys. Best of luck for the second quarter.

Thanks.

Thank you. Our next question is from Bob Drbul.

Hi. Good morning. Just had a question on the -- in the movement around increasing marketing impressions in the U.S. and the U.K., can you give us, just an example over the last few quarters, when you were able to make those investments and where you sort of significantly outperformed the quarter and the confidence level that you have in sort of a change in the trend on traffic around these investments?

I mean, it’s hard to measure very specifically, but I think it's usually a combination of how you market and the number of impressions. So we have a group of things going on, which you will see from TV, social media, Facebook which we have millions and millions of people and it's really a combination. So we are pretty excited about our plans. But I think a big piece of it is going to the loyalty piece of it also. But you can’t measure specific question equal this.

Okay. Okay. And then just on the store expansion plans, are you seeing increased competition for real estate that's impacting your plans at all?

Well, there is always competition for real estate but we are not having any issues in selling the number of stores we need at the appropriate ROI. And we think that there will probably be some opportunities going forward. There are some specific changes that are certainly not in business and are planning on closing quite a few stores. I think that is going to be an opportunity for us.

No difference than in the past.

Yeah.

Okay.

And just to mention, we are really in a good place in terms of where we are positioned on new store opening targets going forward, so we are feeling very good about where we look going forward.

We are filling to our open to buy hopefully. And Ernie has a complete open-to-buy in Europe, if it’s beyond the 40 stores.

Thank you. Our next question is from Laura Champine

Good morning. Carol, you mentioned stepping up your marketing this quarter, when was that decision made and what drove that decision? Is it an expectation that people want more apparel now that the weather is more normal or am I reading too much into it?

No. We’ve laid it out. It was a strategy that we laid out at the end of the year. Again, we learned from the fourth quarter. We look at -- we look at each corner and what it can be. We try to mitigate what we think of the negative impacts. We try to take advantage of what we think are positive and we felt that this was a very good strategy.

Great. Thank you.

Thank you. And our next question is from Mark Montagna.

Hi. A question about inventory, you've been reducing some of the levels per store. Are we at the point where you've gotten halfway down to where your target is, or if there is more to go? And then within juniors, Carol, do you expect the merchandise to be at your level of expectations by back-to-school?

I would hope so. I’m answering that question either way.

Okay.

Yeah. As far as our inventory levels, we are certainly halfway is not -- we are not going to be halfway leaner, but what we are going to do is continue to deliver the stores more frequently, more freshness, which allows you to have leaner inventories. So there are two things. We still have some room there but in addition, we have some opportunities to feed the stores individually, what's driving their individual sales and that’s what all this investment in systems is all about to the future. And we’re doing some different foundational things that are going to allow us to expand internationally a little bit better than we are today. So we’re really setting things up and investing for the future. That will give us an opportunity to hopefully move a little bit faster.

Okay. Yeah. When I said halfway, I mean, is it fair to say that the majority of your per-store inventory reductions are in the past and there's a little bit less more to go?

There’s less more to go, but I think there could be some sales opportunity.

Okay. Perfect. Thank you.

Thank you. Our next question is from Patrick McKeever.

Thanks. Good morning, everyone. Just wondering if you could give us a little additional color on tjmaxx.com -- just how it's ramping since the launch in the fall and if anything there has surprised you, either positively or negatively? Just also wondering if you're still as bullish on that opportunity as you were in the fall and what the plans might be for perhaps a marshalls.com or to extend it into other concepts? Thanks.

I think, what we’re learning is we’re increasing our SKUs, we’re increasing our categories. We’re very pleased with the business, certainly since the launch. We have in our plans to continue the investment and we're very pleased with it. We want to again make sure that we’re differentiating because we want to build the thing the right way and we keep learning. And I think once we cycle a year, we’ll have a lot more information on newness in customer, what’s bringing us back into brick-and-mortar. We are seeing most of returns coming back to the stores which is terrific. But we’ll have a lot more analytics to it. But our goal right now is just build tjmaxx.com as big as we can get it.

And then just a question on, what was said earlier on the weather impact at Marmaxx. Did you say it was about 4 points of same-store sales?

Versus the -- yeah. Just in the group of stores that we felt was impacted by weather.

Okay. So four point. Okay. Thanks for that.

It would have been closer to the high end of guidance.

Okay. Okay. Thanks for that.

Thank you. Our next question is from John Kernan.

Hi. This is Jerry Gray on for John. I just have a question about the assumptions that are built into your SG&A guidance. It seems like you have some increased marketing dollars and then some investments in the real estate team and accelerating store growth in Europe. And I was just wondering if you could give us some more details on what's driving the leverage in your assumptions? Thank you. - Cowen: Hi. This is Jerry Gray on for John. I just have a question about the assumptions that are built into your SG&A guidance. It seems like you have some increased marketing dollars and then some investments in the real estate team and accelerating store growth in Europe. And I was just wondering if you could give us some more details on what's driving the leverage in your assumptions? Thank you.

Sure. So all the above is built into the plans and all those were built into the original plans. So just to reiterate what Carol said today, our plans for the back half of the year in the second quarter were what we gave or reflected in our February guidance. But in terms of the SG&A, again no major changes. There is some leverage due to anniversarying some spend in our technology investments, some of that is due to our datacenter move which is almost complete, so that some of the benefit in the rest of the year. And also, we had expenses last year in the back half of the year related to some of our home office moves, again which were anniversarying and are built into some of the favorability that are implied in our guidance for the rest of the year.

Thank you. Our next question is from David Mann.

Yes. Thank you. Good morning. In terms of what you’re seeing in the channel, in terms of merchandise availability, can you talk a little bit about the pricing you’re seeing of goods, or any material change there one way or the other?

Yes, David. The market also as Carol mentioned earlier is really loaded and across most categories and across most sectors whether it’s more moderate goods or the better brands. And with that, there is often time, especially given the weather situation, many vendors and manufacturers experienced ramifications of that weather. So we’re seeing some pricing than we’ve seen in the past. Our objective is to always maintain strong relationships with our vendors. So amidst all the better pricing we want to have the consistent approach that is a partnership with our vendor community, but the pricing has definitely gotten sharper over the last I would say 60 days.

I would also tell you David that I think we’re even opening more some additional very unique vendors. So it’s pretty exciting out there.

And then generally speaking, when you see a period like this where it might see some incremental improvement in pricing to you, is your intention to bank that or potentially -- you think you're going to need to use that to be more aggressive in pricing to the customer?

I think it’s up to each buyer and what they do is really balance their mix, so we may buy something that are like zero margin and then we think it's appropriate. We put them out. There might be a mix that has high margin. But as I said we’re generally planning our margins slightly up in our big box and we feel we will achieve that with outrageous values.

Great. Thank you. Good luck.

Thank you. Our next question is from Bridget Weishaar.

Yes. Good morning. In the past, you've discussed that differentiating between the brands is key to placing stores close together. Can you discuss how you're going about doing this and how you would like to define the brands within the increased marketing messaging?

Yeah. Bridget, we don’t talk about how we differentiate. In fact, specifically the brands have separate marketing agencies, teams. The way we brand is very different and we differentiate in many, many ways and we look at that every day. The buyer that buys for T.J. Maxx and Marshalls is the same buyer, so they have the ability to differentiate. And they know exactly how to ship to a store to make it look different. So that’s been since day one.

We physically -- and you’re in the U.S. if you look at even the way our HomeGoods stores are fixtured physically from where our Marmaxx stores in the home areas are fixtured, we take a different approach. We make sure that Marshalls and T.J. Maxx physically they look different in size, in addition to what Carol have mentioned. So on all fronts, whether it’s marketing or the physical plan or certainly the merchandise mix, we have plans in place for differentiation.

However, the one thing they do, do is leverage together. It’s great because they can see and say, I want to put this here, I want to put this there. So they really all know what's going on with each other and are able to leverage it.

Thank you.

Thank you. And our final question is from Sandra Barker. Sandra Barker - Montag & Caldwell: Yes, just to clarify on traffic, was it back to positive by the end of the quarter? You said it improved. And then just more broadly on the competitive environment, obviously it's hard to tease out how much was weather. But as you see -- it's already been talked about that Penny is recovering, but some department stores did better. And then Rack also, Nordstrom Rack, had a very strong comp, obviously they are somewhat differently located geographically. But could you just take about the competitive environment more broadly? So two questions, traffic and weather?

Yeah. I mean, we’ll start with the competitive environment. We have that all the time. As weather hit a lot of people, most people got aggressive. I think they'll continue to, I think there is a promotional environment. But I think our business model in itself is absolutely terrific and provide very well in all environment. And we will take full advantage of it. Not going to specifically talk about traffic each month but I mean, we’ll improve and it did improve. And we were slightly down with our ticket up for the quarter.

And I’m showing no further questions at this time.

I want to thank everyone. And we look forward to reporting on our second quarter. Thank you and thanks Élan.

Thank you. And this does conclude today's conference. You may disconnect at this time.