Good day, ladies and gentlemen, and welcome to the Urban Outfitters Third Quarter Fiscal 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce Ms. Oona McCullough, Director of Investor Relations. Ms. McCullough, you may begin.

Good afternoon, and welcome to the URBN Third Quarter Fiscal 2014 Conference Call. Earlier this afternoon, the company issued a press release outlining the financial and operating results for the 3- and 9-month periods ending October 31, 2013. The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the company's filings with the Securities and Exchange Commission. We will begin today's call with Frank Conforti, our Chief Financial Officer, who will provide financial highlights for the third quarter. Ted Marlow, CEO, Urban Outfitters brand, will provide a brief update on the Urban Outfitters brand. Richard Hayne, our Chief Executive Officer, will then comment on our broader strategic initiatives. Following that, we will be pleased to address your questions. Please note, new to this quarter's call is a slide show presentation to accompany Dick's commentary, which is available via the webcast link on our Investor Relations website, along with the text of today's conference call and the detailed management commentary. Each of the previous items is posted to our corporate website at www.urbanoutfittersinc.com. I'll now turn the call over to Frank.

Thank you, Oona, and good afternoon, everyone. I will begin my prepared commentary discussing our fiscal year 2014 third quarter record results versus the prior comparable quarter. Then I will share our thoughts concerning the fourth quarter. Total company sales for the quarter increased by 12% to a third quarter record of $774 million. This increase was driven by a strong retail segment comp rate of 7%, the opening of 9 new stores during the quarter, a $29 million increase in non-comparable sales and a 21% jump in Wholesale segment sales. The 7% increase in Retail segment comp sales was fueled by continued robust direct-to-consumer growth and positive comp store sales. Direct-to-consumer growth resulted from an improved conversion rate, higher average order value and an increase in visitors. Positive comp store sales were driven by increased units per transaction, which were partially offset by lower average unit selling prices, while transactions remain flat. By brand, our Retail segment comp rates increased 30% at Free People and 13% at Anthropologie and decreased 1% at Urban Outfitters. Free People Wholesale delivered another strong quarter as sales rose 21% to $50 million. These results came from double-digit sales growth at specialty stores and department stores. Gross profit for the quarter increased by 12% to $292 million, while gross profit rate improved by 11 basis points to 37.7%. The improvement in gross profit rate was primarily due to a reduction in merchandise markdowns and improved initial merchandise margins at the Anthropologie and Free People brands. These improvements were partially offset by an increase in merchandise markdowns at the Urban Outfitters brand in North America. The increased penetration of our direct-to-consumer channel continued to drive occupancy leverage while also driving delivery expense deleverage. Total selling, general and administrative expenses for the quarter increased by 12%…

Good afternoon. It is my pleasure to speak to you today regarding the quarter just completed for the Urban Outfitters brand and our thoughts on the road ahead for the brand. While the third quarter proved to be a challenging moment in time for our brand, it was filled with learnings that are driving progress on the execution of our brand strategy. Our most significant challenge in the quarter came from North America. I attribute the shortfall in the North American market to missed fashioned calls, off-pitch marketing and poor creative execution. Magnifying these issues, without doubt, was the extreme promotional environment which exists in the young adult market today. This type of operating environment demands that we execute our best work in product offer and experience. In a word, we came up short. First, let me say a few words about the environment. The hypercompetitive space that is the young adult market is not new to us. The foundation of our model is built on pleasing the customer through a differentiated creative experience combined with a compelling product offering. That offering must be eclectic, broad and of the moment. We have proven over many years to be experts at executing these 2 factors. During the quarter, we did not execute either factor as well as the previous year. Our women's fashion offer didn't strike a strong enough note to better last year's performance and was too narrow, too one-note. Our men's apparel also had difficulty driving needed volume. However, there were bright spots in the North American business. A number of women's and men's categories did produce excellent regular price sell-throughs. In addition, the home business posted another positive quarter of sales growth, driven by strong sales in the entertainment component of the business. At present, we feel we…

Thank you, Ted, and good afternoon, everyone. First, congratulations to our brand leaders and shared service heads for delivering another record quarter. Our results are especially gratifying given the difficult retail environment we faced. Even though, as Ted said in his comments, the Urban brand fell short of their internal goals, all brands delivered record sales for the quarter, and the Anthropologie and Free People brands produced record merchandise margins as well. Overall, URBN produced record third quarter revenues and operating profits. This demonstrates the strength of our model in 2 different ways: First, when one of our brands offers compelling products and a brand-enhancing creative experience, customers will respond regardless of the retail environment. Secondly, because URBN operates a portfolio of brands, if one brand has a disappointing quarter, the overall company can still achieve strong results. Speaking of strong results, the Anthropologie team produced an extremely strong quarter. David and his team continue to make significant improvements to all aspects of their business. The current product is more trend right and differentiated, and the marketing creative efforts are improved as well. Together, these improvements created a more compelling shopping experience and, based on our third quarter results, she responded. During the quarter for instance, the Anthropologie team launched a refresh of the website with dramatically improved visuals, which helped to drive strong direct-to-consumer sales gains. Inventory control of the Anthropologie brand was outstanding. This, along with better product, led to minimal markdowns, high-teen regular price comp sales and record merchandise margins and operating profits. Not to be outdone, the Free People team continued to deliver an exceptional performance that they established in the first half of the year. All channels of distribution produced solid double-digit sales gains. Regular price comp sales outpaced total sales growth in both the…

[Operator Instructions] And our first question comes from Kimberly Greenberger from Morgan Stanley.

Dick, I wanted to just follow up on the new responsibilities for Meg within the organization. She's obviously done an amazing job at Free People, and I'm sure the other divisions can benefit greatly from her perspective. How do you weigh the desire to sort of infuse that creative energy across all of your brands with the sort of other end, trying to keep each brand voice very distinctive from one another? In other words, how do you make sure that the 3 brands don't start looking a little more like one another with a common creative direction?

Kimberly, I'm going to let her talk about that, but I'll take a stab at it first. And her role as CCO is not about calling out the fashion for each brand and trying to introduce that fashion for the brand. Her role really is to help refine the creative concepts, and then also to attract and train and help the creative folks with processes and procedures. So it's not really about her dictating her creative vision. It's about her helping the teams that exist and adding to those teams to allow that creativity to flourish. But I'm going to ask her to say a couple of things because she's sitting right here.

Hi. I had the fortunate ability to work in all the brands since I've been with Urban Outfitters. I started at Urban Outfitters and did then Free People, and then helped start Anthropologie. So I recognize the difference in all of the brands and their unique quality that they offer to their customers. And I fully intend to be able to expand on that and use the creative talent that is within each organization and be able to have a strong voice and a strong line of communication from trends to imagery and experience in the store. So it's a great opportunity to connect all the dots within each brand and have the talent really rise to the occasion, to be able to express each brand differently.

And our next caller is Dana Telsey from Telsey Advisors.

As you think about this upcoming holiday season and the promotional environment, how do you see -- and the inventory levels are clean, how do you see Urban, Anthro and Free People? What type of events will you be using to drive traffic? And how do you plan to manage the expenses as you go through?

I think our various brand leaders should take a stab at that. David, do you want to start?

Certainly. For Anthro, We've been focused, like we have been all year, on having a better range of product across more occasions in her life and times of day, balancing the inventory and the presentation, continuing to present it in a compelling way and tell stories. We're tremendous storytellers, and we think we've done a good job all year. As it relates to holidays, we are entering with cleaner inventories and are planning to actually reduce the amount of promotional activity year-on-year like we've done, focusing on higher caliber or higher quality transactions. So less promotions. So we'll see ultimately. The customer will tell us how accurate we've been.

Yes, Dana, it's Ted. In regard to the Urban brand, we've mapped out the narratives that we plan to present over the next 6 weeks' worth of business. We've recently, as mentioned in the notes, made an update in regard to our website and some evolution in regard to the creative look in field [ph] of how we're marketing the narratives at present. And we're looking to do that as we go through the balance of the quarter. It's our intention really to drive the [indiscernible] of the quarter with product and strong product narratives as opposed to necessarily a promotional cadence in line with what's going on in the market. It's a great quarter to try to keep your wits about you and make all the margin you can, and that's the strategy that we're going with. And at the same time, we will come out clean at the end, one way or another.

Dave?

This is Dave Hayne with Free People. We have been operating throughout the year with a relatively strong average order value and a relatively strong maintain margin due to a nicely managed markdown situation at Free People. And we plan to continue that through the holiday season. That's the goal and that's the strategy.

And our next question comes from Janet Kloppenburg from JJK Research.

I wondered if you could give us an idea of -- if you saw improvement in the business as the quarter unfolded and if you think that the assortments that will flow in for the holiday will help the assortments to be more eclectic and reflect a more diverse offering? And just a quick housekeeping for Frank. I think that you've been saying that gross margin for the back half of the year could be up at least 50 basis points. Can we use that guidance for the fourth quarter? Or how should we be thinking about it?

So, Janet, this is Frank. I'll take the back half of your commentary, and then I can let the brand leaders talk about their products for the fourth quarter. As it relates to the gross profit margin for the fourth quarter, as Ted mentioned earlier, the Urban brand in North America did not perform at plan in Q3, and we expect it to take some time to right that ship. And although Free People and Anthropologie continue to execute at a high level, all brands, including Urban, are up against a much more difficult comparison in Q4. We believe the holiday season could be more promotional than it has been in years past, and the calendar shift pertaining to the Thanksgiving holiday is certainly adding to our planning challenge. So we're going to remain cautious and certainly have our inventories planned conservatively heading into the quarter. As it relates to the trend during the third quarter, August was our strongest month but not by much. August and October were very comparable, with September coming in as the weakest month within the quarter. With that said, I'll hand it over to the brand leaders to talk about product.

I'll take that. And one other thing I'd like you to know, Janet, is while September was the weakest month of the 3, because we're on a calendar basis, not a 4 by 4, there is an extra Saturday that was in September last year. It is not in there this year, and that accounted for some. And also, we believe the weather, which was fairly warm during September, changed in October, and we saw an uptick in cold weather apparel. So we expect or hope, even though it's nearly 70 degrees here Philadelphia today, we expect that cold weather to come back and continue to drive the cold weather apparel.

Our next question comes from Neely Tamminga from Piper Jaffray.

So following up a little bit on that, Frank, could you maybe prioritize for us kind of the reasons as to why gross margin might be down in Q4 this year versus last year? Is it more about the external environment? Is it about planned additional promos? Or do you actually have some at-risk inventory that you have yet to clear in 1 or 2 of the divisions?

Neely, this is Dick. No, there's nothing hidden. The inventories are reasonably clean. I don't think -- it is actually a better situation than it was in the prior year. We're just conscious because it is a very promotional environment that we're in, and we don't know how that's going to translate this holiday. And we're also very cautious because of the calendar shift. And we went back and did a little research and found the last time the calendar shifted was none other than 2008. And that year was not a very good year, but of course, there could have been many, many reasons for that, not the least of which was the financial collapse. So I think the essence here is we don't know. We're not trying to predict or project. There's nothing that we know of that's hidden, and we're just being cautious.

Our next question comes from Brian Tunick from JPMorgan. Kate Fitzsimons - JP Morgan Chase & Co, Research Division: This is Kate on for Brian. As we look out onto the fourth quarter and into 2014, can you speak to any efforts to reduce lead times, particularly in the Urban Outfitters division, as you work to reaccelerate comps in that brand? And then also, how are you thinking about the mix between private label and branded product in an effort to drive newness to the stores?

Yes. I did talk about speed to market and said we'd have an update on the fourth quarter call. And your second question was? Okay. You're off.

And our next question comes from Adrienne Tennant from Janney Capital.

My question is actually for Ted on the UO division. It sounds like 3 of the 4 sort of issues that you outlined in your prepared remarks were within your control. I was wondering how quickly you've been able to touch the controllables as we enter the holiday and if you think that the improvement in October and perhaps early November, is it just because we got colder? Or what component of that is because you touched the product and were able to change that go forward?

Surely, Adrienne, happy to weigh in here. As I think of coming through the quarter, the third quarter, we were much more optimistic about our chances in third quarter than the quarter played out. We had made some fashion calls that perhaps were a bit too specific in regard to the amount of volume we attached to those fashion calls. As we came through the quarter, I feel like we had some good learnings in regard to adjustments to be made for both Q4, as well as development of some plates for the first half of next year. As much as we could affect to get a little broader in our feel in regard to customer appeal, broadening is referring to customer type, we have been able to make some changes for Q4. We do watch the performance of the inventory on an attribute basis, and we do have certain attributes that have over-performed as we've come through the year. We just did not distort those as heavily as we should have in Q3 and made some adjustments because we think that there is still plenty of action in those attributes for Q4 selling. So we've tried to make adjustments as best as possible, and the good news is there are some very strong categories in those attributes that we're doing good, regular-priced business on.

Adrienne, this is Dick. I want to make sure that I didn't mislead you when talking about October, November. October was better than September, and that is correct. And as I said, it is in part due to an extra weekend in the calendar month of October. It's also due, I believe, to the weather turning more seasonal. November, I didn't -- have not given any flavor about, and I almost hesitate to do it because of the change in calendar. You can well imagine the comps over this past weekend were not particularly strong in any of the brands, and that is because last year, it was the weekend before Thanksgiving holiday, which is usually a very strong weekend. And so I don't want to give any flavor to November. We believe that it would be misleading no matter what we said. So we will give an accurate reading of that on the 10-Q, but it is a very, very difficult, treacherous calendar to try to read into.

And our next question comes from Lorraine Hutchinson from Bank of America.

Just wanted to follow-up on the new share repurchase authorization. Are there any updates on potential acquisitions? And if we don't hear something from you, could you really step up the share buyback activity in the coming quarters?

We have a share buyback, as Frank talked about, and we have a methodology behind that share buyback. And we have followed it, and we intend to continue to follow it. So depending on a number of factors, we will continue to buy shares back as appropriate to that methodology, which was, by the way, approved by the Board of Directors. As it concerns acquisitions and partnerships, we've announced that we are actively engaged in that process. We remain actively engaged, and we certainly hope that at some point in the future we will have announcements to make in that regard.

Our next question comes from Paul Lejuez from Wells Fargo.

Just wondering on the Urban division. What's working in stores versus online? And as you saw that business slow in the third quarter, was there a difference between the 2 channels? Or did both slow equally?

Sure, Paul. We don’t give a lot of color in regard to specific categories that are working. And based on what I'm seeing going on in the market, I certainly don't intend to start doing that now. I will say that the categories that performed well in-store did perform well online, and there are some categories that are performing stronger online than in-store, just based on investment that's been made and the way the strategies have been put together, specifically home. The decorative side of the home business, we built inventory into that to service that opportunity out of direct. And we are realizing most of our home opportunity in-store based on space through various categories of what we referred to as entertain. So there are some categories that are over-penetrating in direct versus the retail stores. But the categories that are strong in each -- I mean, in the retail channel are strong in direct as well.

Our next question comes from Simeon Siegel from Nomura.

So just a quick question. Do you see any overlap between the Free People and Urban shopper? And if so, are there any learnings you can apply from one to the other over there? And then, Frank, just -- can you quantify the puts and takes of occupancy leverage versus the delivery expense deleverage as the direct -- as the DTC business continues to grow?

I'll take the first part of your question. We see overlap in some of our customers in each of the brands. Amazingly enough, the biggest overlap is between the Urban customer and the Anthropologie customer, which doesn't seem necessarily intuitive, but that's what our research would tell us. So yes, there is overlap. And are there learnings from one to the other? There are learnings, but I believe -- we think that there are significant differences as well, and we always respect those differences. But yes, we're always taking a look at, let's say, categories or silhouettes that are selling from one brand and the brand leaders apply it to their brand and then give their special twist to make that category uniquely brand-appropriate.

And, Simeon, this Frank. As it pertains to occupancy and delivery deleverage related to the increased penetration of DTC, they, for the most part, about offset themselves in the third quarter, and I think that's generally a pretty good rule of thumb to use. The delivery expense deleverage was lower in Q3 than it was in the first half of the year because we'd now anniversari-ed the launch of our pick, pack and ship initiative, as well as the Reno fulfillment center, which we opened up last year. Now obviously, there will always be some puts and takes in the quarter as it relates to store openings and where comps fall out, but generally speaking, they should be pretty close to each other as it relates to the DTC increase in penetration.

Our next question comes from Anna Andreeva from Oppenheimer. Anna A. Andreeva - Oppenheimer & Co. Inc., Research Division: A question on SG&A. It came in better than guidance for -- of mid-teens. Are there any projects that shifted into the fourth quarter? And given the fact that expenses have been coming in ahead of expectations, maybe give us some of the initial thoughts on direction of SG&A into 2014? I guess, should we expect to see SG&A leverage next year? And just a follow-up on gross margins. Did you guys say you are expecting gross margins to be down for the fourth quarter?

All right, Anna. I'll start off on SG&A. So we said that we thought we would be in the low teens. We came in around 12%. There was some expenses that fell out of the quarter as it relates to incentive comp. As it relates to the fourth quarter, we're planning for low- to mid-teens. As you can expect, a lot of that -- those expenses related to SG&A in the fourth quarter are variable, related to how the sales and how the business is going to perform. With that said, we absolutely remain committed to investing in the growth of this business and investing in technology, investing in marketing, investing in people, to continue to drive a strong, healthy top line growth rate for this business. As it relates to gross profit margin, what we said was, for the various reasons we described, we were planning gross profit conservatively and have planned inventory accordingly heading into the fourth quarter.

Our next question comes from Lindsay Drucker Mann from Goldman Sachs.

I have 2 questions. First, for Ted, you talked about some of the execution challenges for Urban, and you mentioned some fashion misses perhaps and an off-pitch marketing message. These sound like issues which perhaps could be fixable within the next couple of quarters as you get product right and fine-tune your message. Is that how we should be thinking about the opportunity to change the course of business for UO? And then secondly, as you come into what you expect will be a hypercompetitive holiday season, for you guys, your value messaging and your focus on promotions and discounts is a lot quieter than a number of the competitors that you come up against. Can you talk about your strategy on how to compete on a value message in a promotional environment this season, while still kind of staying true to how you think about your brand position?

Sure. I'll back up to the front side of the question. I really don't want to put a time frame in place in regard to commentary on the work at hand. We're working every single day in regard to making headway on our strategy, and that doesn't really necessarily tie to the business performing the way we want it to or not performing the way we want it to. It's part of what goes on every single day around here. I see headway in the business this week to last week in regard to the creative messaging and the brand, and that's something that -- as the direct side of the business has become more heavily penetrated in our business model, we're learning as we go. We're -- I think the number that I was given recently is 70% of our emails are being opened on mobile devices. There's a lot of work going on around here on the subject of mobile and how to make that an engaging experience, more engaging experience for our customers. So we're pushing on that every single day. And as I said, I don't really think of it so much as what is a turnaround moment as I do things that we can do to make the brand experience better. And that's our point of competition. We have always had to compete with -- whether it was a business that was more highly penetrated in retail a few years ago, we've always had to compete with people in our age group that have been offering more aggressive promotional stance than our stance. We're very much a believer in selling our product at regular price and creating an experience that differentiates and gives the customer a reason to come see us versus simply utilizing price to get them in the door. That remains our strategy. And I, as mentioned in the comments, am confident we can craft a product assortment and a marketing strategy that engages them accordingly. As I -- in closing, I would just comment that about a year ago, the European business was giving us a bit of a challenge. And as I look at some of the creative work that's gone on there and the work that they've done in regard to their product assortment and management of their product assortment, they're competing in a hyper priced, intensive high street dominated market and getting more than their fair share. So there's a way.

And our next question comes from John Morris from BMO Capital.

Question about online traffic. I guess, if I'm reading this right, it looks like maybe it's decelerated a little bit over the last couple of quarters. I think it was maybe up 16% last quarter and is up, I think, you said 7% this quarter. And I'm wondering if you can shed some insights there and what to make of that in terms of its impact on DTC growth?

We have seen some de-acceleration in that metric, and some of that has to do with how the brands are reporting it. Some brands are reporting mobile and trips to the app as traffic and some aren't. So it's a little off skew, but I think in general we see a flattening out of the curve -- direct-to-consumer curve.

I think another thing too, this is Frank, that we're seeing is we're doing a better job of driving the right traffic. Certainly, all traffic is good, but I think as we've invested in marketing initiatives and marketing talent here, I think we've done a better job on segmentation and driving the right traffic to our website, which can be seen in our improvement in conversion, which has improved for several quarters in a row now, which is something we're extremely proud of.

And the addition to that is that the retention is up. So I think that Frank is right. We're getting higher-quality traffic.

Our next question comes from Matt McClintock from Barclays.

I was actually wondering if we could talk a little bit about international for a second. Ted, you talked a little bit about how competitive it is in Europe. Could you perhaps help us understand the level of differentiation that your merchandise mix has in Europe relative to key competitors there versus the level of differentiation that your merchandise mix has in the U.S. relative to key competitors here?

Sure. Happy to touch on that. We -- the product mix that we offer in the European assortment, we do venture into a bit more collection product than we do in the North American mix. We have essentially street-oriented retail in pretty much all of our locations in Europe. We're involved in only a few mall locations. And the nature of the competition on this -- in street retail is driven by high-street price [ph] or a shopkeeper with differential products. And we've chosen to put together assortment that is a bit of a blend of the 2 that carries value but, at the same time, carries a very strong fashion message. In the North American market, we have a higher penetration of product that is our own brand development, and we complement that with collaborations that carry a bit more qualitative note, but we don't drive as much volume off of that product in our current business model. I think with the brief penetration of direct in the mix, information and coverage related to collaboration product increases desirability of that product, and we'll probably see more of that product working its way into our mix as we go forward. We get the response on it through the direct channel. It does carry large -- I mean, lower-margin components as you know.

Our next question comes from Betty Chen from Mizuho Securities.

I was wondering -- I was curious about your commentary and Ted's commentary regarding the pop-up test in Paris. And curious on how that makes you think about the new store format opportunities and whether that may sort of enlarge the number of store count, you've opened the 2 in the past regarding Europe. And then also, separately, in terms of Asia, it sounds like Free People has already entered the market with some really good reads in Japan. Is it possible for you to start to think about the number of store count that could be supported in the Asia region or think of examples of the Japanese market?

Okay. I'm going to ask Ted to take the first part of the question and Dave to take the second.

Sure, Betty. In regard to the project with Galeries Lafayette, it's about a 1,200 square foot shop that we are currently operating in. In regard to what it's done with our thoughts based on the productivity of the space is the consideration of potential other partners to develop shop ideas along those lines. There are markets in the European as well as Asian markets that strong department store players are the dominant player in the market. So I would say we have a more open point of view in regard to that opportunity in our business model than before this particular test.

And let me add a little bit to that, Betty. There are certain markets in Europe which are very difficult to penetrate, particularly for U.S. companies. So this was a very, very good way for us to get into the French market and, as I said in my commentary, allow some of the French customers to participate in our brands. And I think one of the things that helped to do is it helped generate a lot of business on the direct side in France, and that's one way that we're thinking about approaching a roll out in some of these countries that are more difficult to open stores in. Dave, you want to talk about Japan.

Yes. Betty, we are, at this point, about 3 weeks into the selling cycle of our new stores. So it's still very much an early game for us. So we're in the mode now of kind of understanding what's working and what's not and looking at the business and how it's performing. We are in discussions with our partner in Japan to begin to narrow into a store opening strategy and a shop opening strategy for the next few years. But we haven't solidified anything yet.

Our next question comes from Jeff Black from Avondale Partners.

Just staying on that last topic for a bit. In Europe, Dick, on the suburban Anthro store, what are the rent dynamics there? Are they better there? And does -- it sounds like if you go to Europe in a more concerted fashion or with a more aggressive posture, it's direct in stores or am I hearing that you're going to build more stores in Europe? Just how do we think about that the next couple of years?

Are you speaking specifically about Anthropologie or in general?

In general.

I think in general we think that the best way to think about it is a combination of the 2. The stores are fine. As you probably know, the occupancy in Europe is higher than it is in the U.S. And while we don't mind working for the landlord a little bit, we don't want to work for him fully. So we would just assume -- use some of the store fronts across Europe to help drive some of the direct business. So we will probably, in each of the brands, do a combination of both.

And our next question comes from Oliver Chen from Citigroup.

Regarding the Urban Outfitters division and becoming too narrow, could you just highlight the controls in place that you have as you kind of post-gamed it in terms of trying to prevent this in the future? And secondly, Dick, as a retail visionary, could you speak to your longer-term view of how this promotional environment will evolve in 2014? Is it temporary, or is it permanent? And if you could update us on the online side of the business in terms of where you're getting to with shipping speed in the marketplace, that would be great.

Okay. Well, I think that the first time everybody had a little chuckle here with the idea of a retail visionary. I've never thought of myself as that, so I think we should correct that on the record for -- how do I think about promotional activity? I think it's always been here. I think it'll always be here, and it's gotten probably more intense in my 40-some years of being in business. But it's always been here. We've always felt that we encourage competition, we like competition. It makes us all better and appreciated. So we are happy that all of our competitors are here, and we're not afraid to go head-to-head with them. If they want to promote, let them promote. I think in the final say, it's not a particularly good strategy given the markets that we're going after. My experience is most of the customers that we try to serve, they'll not particularly like promotional activities. So it's fine if everybody else is there. Online?

The follow-up question was he asked about shipping speed. And I think in the fourth quarter we'll get...

Yes, yes. We said that we would give you an update at the end of the fourth quarter on metrics that we have. We put in place initiatives to increase our speed to market, and we are still making progress there. But our -- haven't compiled all the metrics yet. We'll give you an update end of the fourth quarter.

Our next question comes from Marni Shapiro from the Retail Tracker.

So, Ted, my question was actually for you. I think -- first of all, the new website does look amazing. But I was curious if you can talk a little bit more about, I guess, some of the metrics from the attributes you felt like were missing. I feel like when I walk into stores today, they feel a lot prettier, a little bit sexier, and maybe some of that was what was missing. And if you can also just touch a little bit on some of the accessories like handbags and scarves and the men's business, which you guys -- pretty much, you glossed over. I'm just curious, a little bit more insight into the men's business.

Sure, Marni. I'll try to touch on each quickly. Regarding the attributes, more feminine attributes, to some degree, more Bohemian attributes have performed well for us as we've come through the year. Our message for back-to-school was a little harder edged, but we still had, I think, a good representation of that type of product in the market -- I mean, in our assortments. That product, the more feminine product, over performed. For us, we probably could have realized more volume than we did. Thus, perhaps what you're noticing in regards to a bit prettier now. Of course, we're in that time of the year when things do get a little bit prettier by nature. But we're a little more hard edge in regard to our approach to back to school. We choose to offset significant business that was done last year in the denim category with a strong statement of pants in the quarter that we did meaningful business on. But perhaps it was -- our investment there was more aggressive than the appetite across our total store population. That's what's known as the fashion business. So we placed a bet, and we didn't cover the volume that we wanted to cover on that. And that's a significant chunk of volume during that time of the year. In regard to the men's assortment, again, changes going on in the men's assortment, we have made investments there that are paying off nicely for us, where the action is. We're actually chasing business where the fashion direction is evolving. It is a moment of change in men's, and I think that we've got very good clues in the direction in which it's going and are positioning our inventories accordingly.

Our next question comes from Richard Jaffe from Stifel. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: I guess a quick follow-up on Anthropologie and if you could spend some time talking about its consistent success, a real -- dramatically successful in what's been a tough environment. I know you don't want to go into specific merchandising categories, but if you could talk about price, the selection, the changes we've seen over the last 2 years, that'd be really helpful.

Richard, David here. When Dick invited me to join, something that was very clear was Anthropologie's brand was exceptionally strong and resonated with the customer. And we have a very talented field organization and we needed to get back to understanding her and her needs and merchandising and designing it accordingly, and we have a team in place that's increasingly focused on that. I think the Anthropologie brand is very rich and has -- and the customer set is one we love and believe we're still at the very early stages of exploring how to grow that worldwide and across product categories. We have -- the home business had been strong throughout the difficulties with the brand. Accessories and apparel had struggled, and we have spent energy getting those course-corrected, getting inventories in line, better storytelling and then starting to understand the times of day and uses and occasions within her. And so we've worked across the board. Again, we are far from perfect and we know we have many, many things to do, but it's still in terms of opportunities ahead. So we've worked across romantic, Bohemian, evolving our casual business, our desk-to-dinner work. There's just -- I can go on and on, probably spend an entire call talking about the opportunities we have still to surprise and delight her in the categories we have existing and new ones ahead.

And our final question for today comes from Roxanne Meyer from UBS.

You are one of the few retailers that is truly omnichannel, and I believe is anniversary-ing the launch of that platform last year in third quarter. So now that you have a year under your belt, what do you see as the biggest opportunity for capturing and managing sales going forward across channels?

The biggest opportunity. Hah! Anybody here want to take a stab at the biggest opportunity? I think that you know that the direct business, we have increased our product assortments, and we've seen a lot of success in increasing product assortment. And I think that what that has taught us is that it's not just in the direct channel. And when you think of omnichannel, we believe the same to be true. In other words, we think there's an opportunity to make the stores larger. I know that goes against conventional wisdom that stores should shrink as the direct channel increases, but we're sort of -- I guess I've always had a sort of contrarian streak to me, and I think that this -- it's coming out again. I think that what we are learning is that the customer is responding to the brand, and the brand, when it's on target, is responding to her needs and her needs across many categories of product. And as we expand the product offering and the category offering, she is liking what we do and is responding to it. So I think that, that's our biggest opportunity both in direct and in the stores.

I would now like to hand the conference back over to Mr. Dick Hayne for closing comments.

Okay. Well, thank you all very much. We appreciate your continued support, and we look forward to having another conference in 3 months.

Thanks.

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program, and you may have a wonderful day.