On Thursday, Target Corp (NYSE:TGT) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Deborah Weinswig – Citi: Good morning and congratulations. Starting on the top line, could you just talk about the impact of either inflation or deflation and what you’re seeing in terms of either food or apparel at this point in the game?
John J. Mulligan – EVP and CFO: Deb, I don’t think we’re seeing really any material impact from the top line due to inflation in any of our categories – specific categories across the store and certainly as we would aggregate that across the store as has been the case for the past several years in aggregate inflation impact is immaterial to our results.
Deborah Weinswig – Citi: And then as looking at SG&A should we expect tech investments that are expensed to stay at the same run rate that was experienced in the third quarter?
John J. Mulligan – EVP and CFO: Yeah, I think that’s pretty reasonable. We continue to invest meaningfully in technology across the enterprise and as we’ve said we are also investing now in multi-channel initiatives across the enterprise and specifically around dotcom. But like I just said in the fourth quarter outlook, we expect to leverage SG&A expense in the fourth quarter despite those investments ongoing.
Deborah Weinswig – Citi: As your online performance continues to improve how do you think about the halo effect from the stores and leverage that. And then any thoughts on buying online and shipping to the store?
Kathryn A. Tesija – EVP, Merchandising and Supply Chain: We do think that there is a halo effect when our site is performing well. As you know, guests do a lot of research online, but then they want to come into stores and purchase. And of course there is a lot of people who come into the store see the product and perhaps want a different color that we offer online. So, after looking at the product decide to still order through Target.com because they want some things that we offer that’s different online. So, we see sales going back and forth between the two all the time which does make those channel blur quite a bit. But I think the health of our site certainly impacts the health of our stores. What was the second part of your question? Online ship to store. At this point we are not offering that service to our guests but it is something that we’ve been talking about.