JWN
#<UNK>, this is <UNK>.
I'll take the first part of the question regarding the mobile app, and Trunk Club, and some of our newer businesses.
Our plan is to over time certainly include those businesses on that program.
But we're in the process right now of building out some new foundations for our loyalty program.
We're going to introduce a non-tender this fall.
And I think the important thing is we focus on getting that done first, and getting our larger businesses supported by that.
And then subsequent to that, we will put the functionality in for some of our newer businesses.
This is <UNK>.
With regards to the NPG question, thanks for noticing, yes.
We've had good NPG business, and our sales are growing faster in NPG than it is across our branded business and it's good.
It's just been part of our intention and plans, and it's been working out well.
I'd say in particular, some of the strong places where we've been performing is we've introduced Rack NPG in a much more purposeful way.
And that's gone very well.
The successful price point particularly in some of those more trend and young customer departments that we talked about earlier.
In women's, in particular I think BP and SAVVY.
That's gone extremely well, and also in TBD.
So across the board, NPG is performing well.
It's important part of our strategy, and we will continue to let it find its level.
Hello, <UNK>, this is <UNK>.
I'd say overall, it's just what <UNK> said earlier, that our plan is to provide the customer of choices to shop.
How they want to shop.
One of the interesting things about launching <UNK>Rack.com, is seeing the difference in customers between that business and our HauteLook business.
The [flashtail] business is still a very viable business, a big business.
It's one that we think is really additive to what we do, and there is a synergy there that foundation that HauteLook had was it allowed us to launch rack.com much sooner than we would have been on our own.
So we're seeing synergies of those businesses in things like a product, I think our product in <UNK>Rack.com has improved significantly since launch.
We're continuing to explore some synergies with marketing.
But again, there's a point while there's some customers who go back and forth, they are a separate customer.
Some customers prefer flash, some categories are stronger in flash, and some prefer persistence.
So we really like the combination.
Yes.
Thanks.
Sure, <UNK>.
First on the CapEx, as we said, we expect in the forward years after this year that the CapEx as to percent of sales will start to be below the average of 5%.
Next year should be measurably lower than it is this year, and we should see it gradually even off after that.
In terms of capital, I would just reiterate at this point in time, that we've had a very balanced approach in terms of how we not only invest our capital, but also how we return it to our shareholders.
And so should we be successful with the sale of the credit receivables, then we'll apply those lenses and we'll study what the most appropriate way is to deal with that excess capital.
And we will certainly let you know what we decide.
Sure.
The Rack, as we've stated in the past, behaves a little differently than our regular priced business.
But when it comes to the contribution, the four wall contribution, it's very similar to the full-line business.
So as that business continues to grow, it's contributing positively to the overall earnings growth of the Company.
Now that being said, as you go through the investment cycle we're going through right now, it looks a little different.
But long-term, that has a very positive contribution.
Thank you.
<UNK> this is <UNK>.
Regarding the port, we are no different than any other business that had some minor impact to that.
But we just didn't think it was material, and for it to create this later date to call out.
So for us, it didn't have an impact on the figure that warranted further explanation.
In terms of the business, we've talked about it a little bit.
We debated a little bit prior to the call till we go through some of the very minor nuances that maybe could have contributed to the Rack having a slight decrease, again, we've just seen some improvement there.
We're going against from last year, the best performance we had in the two-year time period in terms of the Q1.
But there were a number of little contributions that created that decrease.
But we're very confident about our plans for the year, and our ability to continue with the trends we've had in the past, and the budget we have of low single digits.
And again, we think the results of late are demonstrating that, and so we feel good about it.
Yes, <UNK>, I don't think any change in the sales pattern, particularly on the upside, is going to change our current game plan for the year.
We've got a lot on our plate.
We're running real hard to get everything done.
So if we are able to generate some incremental flow-through, that would likely be the case.
Hello, <UNK>, this is <UNK>.
We don't release expectations around rack.com's growth rate.
So I'll stay away from that one.
Okay, so I guess I'll answer the second part of that question.
This year in terms of free cash flow, I think we've said that this is going to be a year where we're not going to generate excess free cash flow, mostly because of our CapEx plan.
By the end of the year, cash levels will be approximately where they are now.
I think they are roughly about $800 million right now, they'll probably be between $600 million to $800 million depending on how the business performs.
Yes, <UNK>.
Well first, with the kind of growth plans we have, it's frankly tough to imagine that SG&A would decline.
Hopefully, we're in a position that we continue to grow, and we're funding that growth.
So I don't envision SG&A declining.
If you're going to get leverage, it's going to come from the top line.
We continue to look for opportunities I think to recalibrate elements of our business, to make it more efficient as customer preferences are changing, and that's helping us.
But in terms of expectations that SG&A would decline, I wouldn't factor that into your models.
Sure.
Well first with the gross margin, there's a few things going on there.
I'll tell you from a merchandise margin standpoint, we're relatively even with last year.
We had some deleverage in some components of the expense, and some leverage in other components of the expense that make up that line.
The other thing to understand is as the Rack becomes a large percentage total of the business, Rack has a lower merchandise margin than the rest of the business.
And so you're going to have just by the very nature a mix impact to that.
But our margins overall were on plan, so we felt good about the performance there.
In terms of share repurchase, we, every quarter, we recalibrate our buyback matrix.
We still have a substantial amount of authorization left to buy back shares, and we are still committed to a balanced approach to allocating that capital.
So I think what you should see in the future would be consistent with what we've done in the past.
Sure, <UNK>, this is <UNK>.
In terms of the inventory levels, we included on our slides there was a chart that I think directionally indicated where those increases were coming from.
We didn't share exact numbers, but I think you can certainly imply qualitatively where the growth was coming from from those slides.
In terms of Rack product that is coming from full line, <UNK> is going to handle that.
So it has a function of the sell throughs within the full-line stores, which where, as <UNK> talked about, we're always working on to be more efficient.
But as we add more stores, percentage-wise it comes down a little bit.
I do think it's important to note that you should look at it as well as the full priced business and off-priced business.
So as we have a more robust e-commerce business in full price, there's a portion of goods there too that we cleared through the Rack.
So it's not just a function of store count from full-line to Rack.
