Good morning and welcome to the Kohl's Corporation third quarter 2025 earnings conference call. All participants are in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. To ask a question at this time, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I'd now like to turn the call over to Trevor Novotny, Director of Investor Relations. Thank you. Please go ahead. Thank you. Certain statements made on this call, including those regarding our projected financial results, business outlook, and future initiatives, are forward-looking statements. These statements are based on current expectations and assumptions and are subject to certain risks and uncertainties that could cause Kohl's actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the factors described in Item 1A of 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 here and by reference. Forward-looking statements relate to the date initially made, and Kohl's undertakes no obligation to update them. We may refer to certain non-GAAP financial measures. Please refer to the cautionary statement and reconciliations of these non-GAAP measures included in the investor presentation filed as an exhibit to our Form 8-K, as filed with the SEC, and available on our investor relations website. Please note that this call will be recorded. However, replays of this call will not be updated. If you are listening to a replay, it is possible that the information discussed is no longer current, and Kohl's undertakes no obligation to update such information. With me this morning are John Schlifske, our Independent Chair of the Board, Michael Bender, our Chief Executive Officer, and Jill Timm, our Chief Financial Officer. I'll now turn the call over to John. Thank you, Trevor, and thank you for joining us this morning. I will be providing some brief introductory remarks, and then I'm going to turn it over to Michael and Jill to go over our third quarter performance, and then we'll take some Q&A. As announced yesterday, the board has appointed Michael Bender as Chief Executive Officer of Kohl's. Michael is a seasoned retail veteran who has a deep understanding of Kohl's business, serving as a board member since 2019, former Chair of the Board, and most recently as interim CEO since May. In addition to his Kohl's experience, Michael brings over 30 years of senior leadership experience across the retail and consumer goods industries. Over the last six months, the board has gone through an extensive search process to identify our new CEO, and we could not be more thrilled to have Michael as the next leader of this company. There's been a lot of change over the last year at Kohl's, and Michael has proven to be an effective leader, fostering a strong culture and providing stability through the transition. Additionally, during this time as interim CEO, Michael has made important strategic decisions, addressed key areas of opportunities, and helped deliver progressive improvements to the business. Kohl's has a solid foundation for the future, boasting over 1,100 stores and a vast digital platform that serves more than 60 million customers each year. We have the utmost confidence that Michael is the right leader for this company, and we're excited about the substantial opportunity that can be realized under his leadership. On behalf of the board, I'd like to congratulate Michael on his new position. We look forward to supporting him and the management team in this next chapter. With that, I'll now turn the call over to Michael. Thank you, John. Good morning, everyone, and thank you for joining Kohl's third quarter earnings conference call. I'm honored to assume the role as Chief Executive Officer of Kohl's, and I would like to thank John and the board for giving me the opportunity to lead this great company. Since I joined the team in May, I've been deeply impressed with the Kohl's team, their resilience, and their motivation to win. My commitment is to lead this organization, our associates, and our customers. Every day, Kohl's has the privilege of serving millions of customers, and we will continually strive to enhance their experience and meet their evolving needs. I'm excited about the opportunity that lies ahead and look forward to repositioning Kohl's for future success. Now, during our call today, I'd like to discuss three items with you. First, discuss our third quarter performance. Second, highlight the progress we're making against our 2025 initiatives. Lastly, give a brief overview of how we are positioned for the Q4 holiday season. Let me start with our third quarter results. We are pleased as we delivered both top-line and bottom-line performance ahead of our expectations for the third consecutive quarter. These results directly reflect the progress we're making against our 2025 initiatives, which are building momentum and continuing to resonate with our customers. While we are encouraged with the progressive improvement we're making, we want to acknowledge that this performance is not representative of where we aspire to be. Our team is working diligently to further execute against these 2025 initiatives to deliver quality products, great value, and a frictionless experience to our customers. Looking deeper into our top-line performance, our comparable sales performance continued to improve as we ran down 1.7% in the third quarter. We started the quarter with a better-than-expected performance in August and back-to-school season. However, in September, we experienced a slowdown as we faced unseasonably warmer weather impacting our fall seasonal businesses. October was the strongest month as we delivered a positive 1% comparable sales performance. The quarter was led by a strong digital performance, up 2% versus last year. As Jill will discuss in further detail later in the call, the improved performance was driven by an acceleration in our transactions versus prior quarter. This was particularly notable with our Kohl's Card customer, whose sales performance improved by over 500 basis points from Q2. This demonstrates important progress we're making with re-engaging our core customers. While these results are encouraging, we continue to operate in an environment where our customers are becoming increasingly choiceful as their discretionary income remains pressured. This is especially notable in our low-to-middle-income consumers as well as in our younger customers. These customers are becoming increasingly savvy and are seeking more value. We expect this customer behavior to continue into the fourth quarter as we believe the macroeconomic environment will remain uncertain. This leads into the progress we're making against our 2025 initiatives. These efforts are centered around three key priorities. First, offering a curated, more balanced assortment that fulfills the needs of our customers. Next, reestablishing Kohl's as a leader in value and quality. Lastly, delivering a frictionless shopping experience across our omnichannel platforms. Starting with our first initiative, offering a curated and more balanced assortment that fulfills the needs across all of our customers. By delivering an improved, rebalanced assortment, we are able to serve a broader range of customers. As we have previously communicated, our focus in recent years has been around attracting a new customer, which unintentionally led to not fully catering to our core loyal customers' needs. Each quarter this year, we have made meaningful improvements to our assortment offerings, which have translated to an improvement in transactions, particularly from our core customers. In addition, we're pleased to report that the new assortment continues to resonate with our non-Kohl's Card customers, driving a fourth consecutive quarter of positive sales growth. A category that is particularly important to this core customer and overall company performance is our women's business. Women's ran in line with company performance and experienced a significant improvement from the second quarter. This was led by positive performance in our proprietary brands, which heavily penetrate into our women's business. We continue to see the benefit from reinvesting inventory into key priority brands like Lauren Conrad, Simply Vera Vera Wang, and Tek Gear. Within the women's category, we experienced an acceleration in our juniors business, which ran a positive comp in the quarter. Juniors is a pivotal component to the women's performance as it is a faster-turning business and has reduced lead times on products. We saw strength in our key fall categories such as sweaters and fleece. We also benefited from the denim trend with national brands like Levi's and proprietary brands like SO. Lastly, we continue to see positive performance in petites as we benefit from reestablishing this category in all stores earlier this year. Building on this success, we are excited about expanding this presence next year with our proprietary brands Lauren Conrad and Simply Vera Vera Wang in all stores. Our men's business showed significant improvement in the quarter, running in line with company performance. This improvement from Q2 was driven by better clarity in our offering. As we enter Q4, we are continuing to make progress around clarity as receipts for our choice counts are down 10% and depth is up 5%. Customers leaned into proprietary brands, which ran a positive comp in the quarter as they looked for key brands like FLX and Tek Gear. In addition to solid proprietary brand performance, men's apparel also saw strong performance in the dress and tailored category with brands like Haggar and Apt. 9. Accessories continues to be a bright spot for the company, with Sephora, impulse, and jewelry collectively helping to deliver positive comparable sales in the quarter. Sephora ran up 2% in the quarter with comparable sales down 1%, with solid performance in categories like fragrance and hair care from brands like YSL, Valentino, and Summer Fridays. We continue to be pleased with this partnership, which delivered nearly a $2 billion business in four years. Sephora is outstanding at offering discovery, innovation, and newness to customers, and we are thrilled to announce that we will be offering MAC in 850 of our Sephora at Kohl's stores in spring of 2026. In September, we completed the rollout of 613 impulse queuing lines, establishing a presence in nearly all stores. Impulse ran up over 40% in the quarter as we continue to benefit from this white space opportunity that adds an additional unit to our customers' baskets. Jewelry ran up 10% in Q3 as we continue to gain traction in this category after we established the destination for accessories behind Sephora. Strength in jewelry came from both fashion and rich jewelry, as well as fine jewelry, both running positive comps in the quarter. We continue to test fine jewelry in 200 doors and believe this category will be an opportunity for us moving forward as its non-substitutable nature helps provide an incremental sale. Our home business showed the largest improvement in the quarter, running in line with company performance. Soft home categories like bedding and bath outperformed with strength from new proprietary brands like Hotelier and Miryana. Small electrics continue to underperform as expected, given the impact of price increases and buying quantities down based on our elasticity analyses. Lastly, footwear and kids remain challenged in the quarter. These categories remain an opportunity for us moving forward. In kids, we are looking for ways to highlight key proprietary brands like Jumping Beans and Little Co. The footwear business continues to underperform, with softness coming from active footwear and boots. We expect the boots business to remain soft in Q4 as we adjusted our buys down, given the pricing elasticities of this category. Dress and casual footwear showed strength in the quarter with brands like Apt. 9. Moving on now to our second initiative, reestablishing Kohl's as a leader in value and quality. What differentiates Kohl's is our ability to offer customers a blend of top national brands like Nike, Levi's, and Sephora, as well as proprietary brands that are exclusive to Kohl's. This complementary brand assortment is essential to our value proposition as it enables customers to find quality, relevance, and value when shopping at Kohl's. This value proposition is especially important to our core loyal customers who expect to find exceptional value when shopping at Kohl's. As our customers continue to be more choiceful and remain under pressure, we have the opportunity to meet their needs and offer more value with elevating our proprietary brands. We identified the opportunity to reinvest into our proprietary brands one year ago as we over-indexed into market brands, making it more challenging to find products at an opening price point. Since identifying this opportunity, we have made sequential improvement each quarter, delivering a positive proprietary sales performance in the third quarter. This performance was led by brands like SO in juniors, LC and Simply Vera Vera Wang in women's, and Tek Gear and FLX in men's. In addition to these well-established brands, we are seeking to find new opportunities to offer more value-oriented proprietary brands in categories like home and kids. In home, we recently launched three new brands: Hotelier, Mingle & Co., and Miryana, which serve our soft home and tabletop categories. Our customers have shown positive initial reactions to these introductions, and we are excited about these brands moving forward. Building off the success of our FLX brand, which delivered another quarter of double-digit sales growth, we made the decision to expand this brand into our kids' department in September. Currently, we have FLX kids in 300 doors and are committed to expanding this to more doors next spring. As we continue to refine our balance between national and proprietary brands, we're committed to moving where our customer is leading us. The second action we took to deliver more value to our customers was through enhanced promotional strategies. Kohl's has traditionally offered incredible value to our customers through our coupon-led promotional strategy. After excluding a growing number of brands, our promotions became less impactful to our customers over recent years. This ultimately created unnecessary friction within our shopping experience, particularly with our Kohl's Card customers. In response to this, we identified a list of brands to be coupon-eligible at the end of the first quarter. Following the success of the initial wave of brand inclusion, we made the decision to add a second wave of brands into the coupon in late August. This second wave was smaller as it included roughly 50 brands that are more digitally native. We continue to see a positive impact to our digital channel as this channel experiences elevated pricing transparency. Additionally, we are encouraged by the improvements this is generating with our core Kohl's Card customers. We continue to test ways to drive customer awareness on brands that are now coupon-eligible through signage and graphics. Next, I would like to discuss our last priority, which is delivering a frictionless experience across our omnichannel platforms. We're focused on creating an elevated, more consistent experience across our store fleet and on our digital platforms. To capitalize on this opportunity, we're identifying ways to optimize our store layout, increase our inspiration, and restore trip assurance. We continue to see benefits after making edits to our store layout, following some preliminary adjacency analyses, specifically with juniors and accessories businesses. We decided to move juniors to the front of the store across from Sephora and establish an accessories pad behind Sephora. Since making these changes, both categories have shown progress. In accessories, excluding Sephora, we've seen three consecutive quarters of positive sales growth driven by initiatives like jewelry and impulse. For juniors, we achieved a positive comp in the third quarter as we benefit from Sephora cross-shoppers and investments we've made into our proprietary assortment. Moving forward, we're continuing to look for ways to optimize our store layout to enable us to capture incremental sales. In addition to the store layout, we are enhancing the shopping experience by increasing the inspiration in our stores. A few ways we are achieving this are by showcasing newness and relevant styles with mannequins and enhancing brand awareness and findability through in-store graphics. You will start seeing some of this in-store inspiration in Q4 with our holiday displays, with most of the inspiration to set in 2026. Digitally, we continue to make solid progress applying artificial intelligence to improve efficiency and elevate the customer experience. AI is helping our engineers work faster to complete site updates and enhance our app performance. In marketing, predictive AI is guiding media investments and personalizing offers, and generative tools are helping creative teams produce content faster. While many initiatives are still developing, we are already seeing benefits in productivity, agility, and customer engagement. We're taking a disciplined approach to scaling these capabilities as we continue to modernize the business and position Kohl's for long-term growth. Lastly, we remain extremely focused on restoring trip assurance to our customer experience. This is a core pillar of what Kohl's is known for, and our increased choice counts over recent years has resulted in limited depth in key essential items. We're making progress in this, specifically in our women's business with categories like intimates and dresses, both of which made edits to exit out of less productive styles. We're also investing into depth for key sizes, helping deliver improved sales performance in both categories. As we continue to prioritize this initiative, we're using AI to help optimize our inventory allocation, which will help provide a more consistent and reliable shopping experience going forward. Now, I would like to give a preview on how we're approaching the ever-important holiday season. We're excited about the momentum and opportunity we have heading into the holidays. The holidays are always a promotional time period, and we expect this to continue this year, especially given the state of the consumer. We have done a lot of great work throughout the year to show up for customers as a destination for exceptional value and gifting, a third of which will be exclusive to Kohl's. We entered the quarter in a better inventory position, particularly with our proprietary brands, which will be essential in offering value to our customers in holiday through our sweaters, knits, and fleece offerings. In Sephora, we expanded our holiday gifting sets, which have continued to resonate well with our customers. We're also building on new brand launches from Q3 with additional brands like Danessa Myricks, AESTURA, Biodance, and KAYALI, which has become our number one fragrance in women's. In addition to proprietary brands in Sephora, we're excited about the product offerings in our home category this year. In hard home business, we're thrilled to offer new items such as the GreenPan by Bobby Flay, alongside new innovative items from key brands like Ninja and Shark. On the soft home side, we're emphasizing our bedding with value-oriented brands like Cuddl Duds and Cozy Throws from Big One. Importantly, toys will be a key gifting category for us this holiday. We're excited about our offering of trending toys like Barbie, LEGO, and Tonies, too, as well as toys from favorite brands like Hot Wheels and Step 2. This year, we're also seeing great engagement with our trading card offerings like Pokémon. From a marketing standpoint, we're making a statement in front of the store that is designed to inspire, featuring everything customers need to welcome the holidays, find thoughtful gifts for the family, and host in style. We're leading with compelling value to our customers, leaning into Kohl's Cash and rewards, which helps drive repeat trips and increased engagement. Additionally, given the changes we made to our coupon inclusion this year, our customers will have more purchasing power this year compared to last year. Before I turn the call over, I want to reiterate the key messages from this call. First, our improved performance in the third quarter is a direct reflection of momentum we're building to better serve all customers. Second, we're making great progress against our 2025 initiatives. We're encouraged with the results, but still have more work to do. Third, we're excited about how we are positioned to deliver exceptional value to our customers during this important 2025 holiday season. All this progress and momentum could not have been made without the incredible work from our Kohl's associates. We have made great strides together as a team, and each day I work with you, I am more and more impressed with our resilience and desire to win. The opportunity that lies ahead of us is clear and substantial, and we are committed to making more progress each quarter. With that, I would now like to hand the call over to Jill. Thank you, Michael. For today's call, I'll provide additional details on our third quarter results and give an update on our fiscal year 2025 guidance. Net sales declined 2.8% in the quarter and 4% year-to-date. Comparable sales declined 1.7% in Q3 and declined 3.2% year-to-date. The third quarter improvement was mainly driven by an increase in transactions versus prior quarter, while our average transaction value remained flat year-over-year. In addition, proprietary brands ran a positive comp in the quarter, with business accelerating as the quarter progressed. Digital sales outperformed stores again in Q3 and grew by 2.4% versus last year. This performance was driven by an increase in traffic throughout the quarter, going from high single digits in August to high teens in October. From a customer perspective, we saw significant improvement in our Kohl's Card customers, which were down high single digits in Q3, an increase in trend of over 500 basis points in the last quarter, with the improvement coming from both the store and digital channels. Moving down the P&L, other revenue, which primarily consists of our credit business, was $168 million in Q3, a 17% decline compared to last year. As a reminder, we launched our co-brand credit card last September, so on a comparable basis, starting this quarter, we are no longer receiving the incremental benefit seen in the first half of this year. In addition to this, we continue to face a headwind as we shifted some credit-related expenses from SG&A into other revenue. While our Kohl's Card still remains pressured, we have made meaningful progress re-engaging this customer throughout the year. We remain committed to furthering this progress as we continue into Q4 and next year. Gross margin in Q3 was 39.6%, an improvement of 51 basis points versus last year. This year-over-year improvement was driven primarily by strong inventory management and product mix benefits driven by our positive proprietary sales performance this quarter. Year-to-date, gross margin was 39.8%, an increase of 39 basis points to last year. SG&A expenses declined 2.1% to $1.3 billion in Q3, driven by lower spending in stores, marketing, and fulfillment, with additional savings stemming from a portion of credit expenses shifting into other revenue. Year-to-date, SG&A expenses have declined 3.8%. Depreciation expense was $176 million in Q3, a decrease of $8 million versus last year. The decrease was driven by lower capital expenditures and the impact from closed locations. Year-to-date, depreciation expense was $526 million, down $34 million to the prior year. Interest expense was $75 million in the third quarter and $229 million year-to-date. In the third quarter, we realized a benefit of $9 million within our adjusted tax line. This benefit was due to the release of tax reserves. We now expect our full-year tax rate to be roughly 18%. Adjusted net income in the third quarter was $11 million, equating to an adjusted diluted earnings per share of $0.10. Year-to-date, adjusted net income is $61 million, and adjusted diluted earnings per share is $0.54. Moving on to the balance sheet and cash flow. We ended Q3 with $144 million of cash and cash equivalents. Inventory decreased approximately 5% compared to last year in Q3. We are positioned well from an inventory perspective as we head into the holiday season, as we had a better flow of inventory this year and brought in inventory earlier than last year, which had elevated in-transit levels. Year-to-date, our operating cash flow is $630 million, and our adjusted free cash flow is $270 million. We remain on track to achieve $1.3 billion of operating cash flow and $900 million of free cash flow at the end of this fiscal year. Our borrowings on the revolver declined to $45 million at the end of Q3, over a $700 million decrease from last year. We remain committed to fully exiting the revolver by the end of this year. Capital expenditures ended at $308 million year-to-date. We are on track to spend approximately $400 million of CapEx this year, with the majority of these investments relating to the completion of our full chain Sephora rollout, implementing 613 additional impulse queue lines, and the expansion of one of our next-generation e-commerce fulfillment centers. Year-to-date, we have returned $42 million to shareholders through our dividends. As previously disclosed, the board on November 12th declared a quarterly cash dividend of $12.50 per share, payable to shareholders on December 24th. Next, I would like to provide an update to our 2025 outlook. As mentioned previously in this call, we made meaningful progress to date on our 2025 initiatives. Each quarter, we have made sequential improvements in our key areas of focus, including investments into our proprietary brands and depth counts, delivering competitive value through our promotional strategy and optimizing our store layouts, all of which are continuing to resonate with our customers. With that said, we continue to navigate a fluid and dynamic macroeconomic environment. We recognize that our middle- to low-income customers are experiencing persistent pressure and a tightening of their discretionary income. We aim to be mindful of this as we lay out our updated outlook. For the full year, we expect net sales decline of 3.5%-4%, comparable sales decline of 2.5%-3%, other revenue down 11%-12%, gross margin expansion of 30 basis points -35 basis points, an SG&A decline of 3.75%-4%, and adjusted diluted earnings per share of $1.25-$1.45. Lastly, I would like to emphasize my sincere appreciation of the incredible team here at Kohl's. We have been able to make significant progress in our goals despite navigating an uncertain and challenging environment, thanks to your continued commitment. I'm excited to continue this progress forward with all of you and want to reiterate the importance of your impact to both our customers and our organization. We are now happy to take your questions at this time. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. Our first question comes from Chuck Grom from Gordon Haskett. Please go ahead. Your line is open. Hey, good morning. And first of all, congrats, Michael, on the new responsibilities. At a high level, I'm just curious, as you guys add back brands to the coupon eligibility list and make changes to the store layout and bring more of the prop brands back, how you're connecting with former and lapsed customers to make them aware of the changes? Where do you think you are, I guess, on that recovery path at this point in time? I think, Chuck, the good news is with our core customers, they were still shopping us. We just lost some of their trips. We have a lot of data around that customer. We know what they like to shop with. We know when they shop. Our marketing team has been able to use a lot of that data to go after them from a marketing perspective. I would say that's been ramping up because as we've been bringing back in the items into the coupon, as we've been bringing the proprietary inventory back into our stores, we wanted to make sure when we did invite them in that we were in stock on the items that they were looking for. Similarly, with the jewelry brand and petites coming in because they actually over-penetrated into those brands as well. This past quarter, we did some personalization in terms of coupons because we know that resonates really well with them and actually made it in Kohl's Cash as well. We took away the exclusion headwind from that perspective as well. We've really seen high engagement from that. We're pleased with the trend improvement we've seen in the Kohl's charge customers. Up 500 basis points in the quarter. Clearly, we still have room to continue to move forward. I think as we bring back in those brands, we continue to market to them, we're going to get more of their footsteps, particularly during this key holiday period. Chuck, I would just add that the difference that we see between both the brick and mortar and the digital side of that question that you're asking, we see a more immediate response on the digital side. Obviously, when we're able to communicate the brands that are back in the coupon from a store perspective, we're still building that. We're doing things like making sure that when there's an item in the store that is coupon eligible, that we're placing a sign, for example, on the fixture that says, "This item now coupon eligible." That ramp-up will take a little bit more time than what you see from a digital perspective. We're excited, as Jill said, about the progress that we're making there and unifying those efforts. Our next question comes from Paul Lejuez from Citigroup. Please go ahead. Your line is open. Hey, thanks, guys. Jill, can you maybe break down that $1.3 billion of operating cash flow, just talk about the net income versus the one-time items versus working capital benefit within that? And then maybe if you can talk about CapEx. I think you said $400 million this year. How should we think about a CapEx number over the next several years? I just wanted to make sure I understood the traffic versus ticket in terms of the drivers of the comp this quarter. I think maybe you said what happened versus last quarter, but just curious on an absolute basis, year-over-year, what were the drivers of comps between traffic and ticket? Thanks. Sure. I think first, obviously, a billion three in operating cash flow. We feel really good with the momentum that we've made there in addition to paying off over $700 million on the revolver. We will clearly have an exit plan for that by the end of the year. I mean, a big portion of what you're seeing, we did have the one-time gain, as you alluded to, which was about $100 million that we recognized last quarter. The majority of this cash flow is coming through our strong inventory management. I think that's the big thing. Inventory down 5% on the quarter where we were down 1.7% from a comp perspective. We continue to expect to manage our inventory down in that low- to mid-single-digit number. I think that's really where we're seeing we had a better flow of goods coming into Q3 this year, which we do believe helped accelerate our business as the quarter progressed. We continue to flow those goods, I think more timely has been helpful to us, but it's also been beneficial from a cash flow perspective. I think I would really narrow it down to inventory management being a key unlock. We expect that to continue. We have opportunities to turn faster as an organization. We've had this conversation. The faster we turn, the more we can generate from a cash flow perspective. I feel very confident that this is a level of cash x the one time that we can continue to operate at. From a CapEx perspective, at $400 million, obviously, we completed the Sephora rollout. We accelerated the impulse lines given the fact that they were working so well in the front half of the year. We really leaned into them and to get them in almost all stores by the back half of the year. It is really an extra unit in the basket outsized impact in the stores. As we go into next year, I'd suggest that our level will probably be in that $350-$400 million range. Obviously, we'll ebb and flow based on any big projects. If we have a big new project to lay out, we would obviously call that out separately. I think that's a good run rate to use as we move forward. I think the third question from a traffic and ticket perspective, our average transaction value is relatively flat. The difference for the quarter from a comp perspective is really about traffic, but also the improvement from last quarter in that down four to the down one seven was all about improved traffic. The improvement we saw throughout the quarter with October actually getting to a positive comp was all driven by improvement in traffic. Those trends have continued to improve, helping drive the momentum that we've discussed. Thank you. Good luck. Thank you. Our next question comes from Mark Altschwager from Baird. Please go ahead. Your line is open. Good morning. Thank you. Congratulations, Michael. Thanks, Mark. Michael, which of the strategic initiatives outlined at the start of the year are showing the most promise? How are you evolving the strategy to stabilize comps based on the learnings year-to-date? Yeah, thanks for the question. Of the three initiatives that we started out with, I would say that one of the ones that I'm most proud of in terms of the progress that we're making is around this notion of building a more balanced assortment. We've focused a lot of attention over the last, call it six to nine months, on making sure that what we're offering to customers, particularly from a value perspective, is what they're looking for. Kohl's has historically been known for being able to offer choice, but also depth so that there's trip assurance. That's the piece that we underscore quite a bit about making sure that that's what we're known for. If you take categories like in women's dresses, intimates, there's been an awful lot of work done in those two categories in particular to reset and edit some of the choices that we've had and make sure that the depth is available for our customers. There's still work to be done in that instance, but we feel really good about that work. I would say, secondly, in general, the focus on proprietary brands and making sure that we're bringing those forward and achieving, I'll say, what is the proper mix. Again, we don't have a target, but we have a customer-led mindset about where we need to be with proprietary brands. The curation of that assortment has been a big positive for the business, as Jill noted, in terms of the progress that we're making and the performance that we're seeing from our efforts there. It dovetails nicely into being able to support opening price points for customers who are pressured these days. It marries nicely with where the customer mindset is right now. Those are a couple of areas that I would focus on. That's great. Do you think you have the pieces in place to deliver top-line growth as we look into 2026? Separately, as a follow-up for Jill, how should we think about the further opportunity for cost savings on the SG&A line and the ability to sustain SG&A dollars down year-over-year over the next several quarters? Thank you. Yeah. Mark, I would say on your question about our trajectory toward growth, clearly, that's what we talk about on a daily basis here internally. I think the performance that we've shown consecutively now over the last three quarters of the progression toward growth is an indicator that the kinds of things that we're focused on delivering on behalf of the customers is what we should be working on. I don't like to put a timetable on it and say on April 21st, that's when you'll see growth. We've shown in October, I think, is a good example of we have the ability to get to a positive growth trajectory in the business. That's what we're doing every day in the work that we're advancing here. From a cost perspective, I think we have a history, I think, of managing our business with good cost discipline. Obviously, our costs being down 2% in the quarter on the down 17% comp. We continue to find ways to be much more efficient. I think this is just instilled in our organization. It is something that we are constantly looking for is how can we do things more efficiently, more productively? How can we leverage technology in what we're doing day in and day out? We've introduced a lot of new technology, whether it be within our new e-fulfillment centers, within our stores to help us have those efficiencies. I feel like the model and the discipline that has been established within the organization will help us continue to sustain that cost discipline. I think the variable model we run runs really well. If we get to positive growth, we should be adding those expenses in to support that as well. I think that's the model. As you know, we think we can leverage typically around that 1% comp. We have done better than that this year as we have really known we needed to tighten so we could open up funds to help us continue to drive into the initiatives that we have outlined to really help drive the progressive improvement you see on the top line. Mark, I would just say, in answering your earlier question a little bit further too around what is going to help us get to a positive growth trajectory, we spend a lot of time inside the business since I have been on board focusing on product and making sure that is at the center of how we actually drive the business. We do well with promotions. We have that down. To the extent that there's a focus on product and making sure that we are both relevant, styles are right, and it speaks to the customer in a compelling way, that's where we've been spending a lot of time making sure that we're focusing our efforts in that regard. That is one of the things, one of the big things that's helping us show some of the results that we're speaking about today. Thank you. Happy Thanksgiving and best of luck over holidays. Thank you, Mark. Thanks. Our next question comes from Bob Drbul from BTIG. Please go ahead. Your line is open. Hi. Good morning. Michael, congratulations. Jill, question for you. On the gross margin side, when you think about sort of the fourth quarter, and I think just when you generally look at some of the adjustments and changes that you're making to the promotional cadence and exclusions, can you just talk us through the bigger drivers of your outlook and how you think about the opportunities with private brands, etc., contributed? Thanks. Sure. I think obviously, first, if I start with where we were in Q3, up 50 basis points, we really benefited, one, from the inventory management I spoke to. By flowing goods more current and trend right, we're able to have a better reg selling price. That will continue as we move into Q4. Also, we benefited from mix in a couple of different ways. One, our proprietary brand portfolio running a positive comp in that side of the business obviously has an outsized impact to our margins to the good side. Second, if you underlook the categories from a home perspective, we knew electrics would underperform. We knew that there was going to be some pressure there and brought that down based on our elasticity analysis of where prices were moving. We overperformed in our soft home, which has a better margin structure for us. Overall, we start seeing mix really benefiting us. I think those things will continue to persist as we get into Q4. A couple of the headwinds, which is why we guided that margin a little softer than you saw in Q3, one is digital becomes a bigger portion of our business in Q4. We will have added pressure from a cost of shipping perspective. We also expect it is a highly promotional time. We know that we have a low and middle-income customer that are going to be more choiceful, and they're really seeking value. We wanted to be set up so we could have that ability to really lean into value and our promotions during that time of year to ensure that we are meeting the customer where they needed to be met and also grabbing those sales from that customer, particularly that core credit customer who loves the deal. Great. Thanks, Jill. I just had a question on the, I guess, on the debt and with the progress you made on the revolver. Can you just talk us through sort of rebuilding the cash balances, like how you think about your debt position at this point and any sort of targets as you think about heading into 2026? Yeah. I mean, first, if I look at just the debt outstanding, I think we're about $1.5 billion of debt outstanding. So I actually look at our net debt leverage at about a 1%, 2%. Obviously, our leases, which, as you know, we had to reset a lot of our leases when we put in the Sephora shops in all of our stores. When you add in the leases, that's what really brings our leverage ratio up. If I break that into two pieces, we're really signed in for our first term of an extended lease payment, which averages about four years. If you add that back in, it brings our lease leverage ratio to about 2.6 x. When you add in the extended term, which is what we're using on our balance sheet because that's what we're depreciating our asset over, it brings you to the four and a half times leverage. I actually feel very good with $1.5 billion outstanding. We just refied our long-term debt. We have nothing coming. We don't have a stack coming due for five years. As you saw, we deleveraged our balance sheet by about $700 million from last year. We'll be completely out of the revolver by the end of this year, which gives us additional liquidity of $1.5 billion as well. I feel very well positioned from a balance sheet perspective. Then as we talked about generating $1.3 billion of operating cash flow, really benefiting from that inventory management, which we think will be a continued benefit for us into 2026 as well. Great. Thank you. Happy holidays. Thanks. To you as well. Our next question comes from Oliver Chen from TD Cowen. Please go ahead. Your line is open. Hi, Michael and Jill. On the progress you made, how might you rank order some of the progress in terms of the opportunities on that positive comp opportunity with categories and/or strategies? Also, Jill, was credit card income in line with what you expected and anything we should know in terms of making sure we model that correctly going forward? On the topics of speed and the organization, what's ahead for driving that? I know it's critical for merchandising, and there's lots of AI opportunities, and the demand volatility has been unprecedented. Kohl's Cash is also iconic, and I know that program has been an opportunity to simplify. Any updates there as well? Thank you. Great. That's four questions in there. We'll try to address those. Oliver, the first one in terms of rank order of the growth and initiatives work, I would say that, again, the focus that we've had on getting the assortment right, I rank is probably at the top of the list. Inclusive in that, as I had mentioned around proprietary brands and getting the mix between national and proprietary brands in a better place. I feel like we've made some really good progress on that front. Reassorting ourselves in terms of the style and relevancy of the product and the focus that we have there. I've spent a lot of time myself with the teams, particularly on the women's side of the business since I've been on board because, as you know, women's here at Kohl's drives Kohl's. That has been the focus for me in the first, call it, couple of months or so of really digging in with the merchant organization. I would say also that what you should see going forward from us and what I'm excited about also, you saw that we hired in the last three months or so a new CTO, Steve Dee, as well as a new Chief Digital Officer, Arianne Parisi, and building out an experience that's truly omnichannel. To your point, modernizing the business, they have leaned in very quickly, both of them, on helping us think through from a more commercial standpoint what needs to happen in the business from that perspective. Those are a couple of areas that I would highlight in answering that first question. Do you have a—Jill, you want to take credit and. Sure. From a credit perspective, it did come in where we expected it to be. Obviously, we had guided it down as we lapped the launch of the co-brand last year. You can see in the implied guide that it will get slightly better in Q4. What I would say is our Kohl's Card customer sales did improve that 500 basis points. As you know, it just takes a little bit of a leg for that AR to build and then revolve. It is always going to be legged based off performance before it hits into the credit line. The other thing I would call is our payment rates do remain above last year. That comes back into not building as much from an AR perspective and also a little bit less late fee income. Although our loss rates are elevated, we actually did see them down slightly in Q3. I feel pretty good with the health of the portfolio. It is really just continuing to get that credit card customer coming in, shopping, and letting their balances revolve to bring that back in. We are expecting a little bit of benefit into Q4. You should see more of that benefit as we enter into 2026, just given the leg of how that credit line runs. I think from a Kohl's Cash perspective, I mean, you nailed it. It is iconic. We did actually celebrate our Kohl's Cash Anniversary and put a whole event around it during this quarter, which was great. I think hopefully you saw that all throughout on our social media because it was well attended by many as we were giving out some Kohl's Cash gifts, and people really love what that looks like. As we move into the holidays, we'll continue to leverage this as well. We have events planned around it. It's a way for us to get around. Obviously, it could be used in everything. There is no exclusions. You earn it. You can come back and redeem it. People love to earn it on gifts that they're giving and use it on a self-gift during the holiday period. I think this is definitely something that has set Kohl's apart and really resonates with both our Kohl's charge and non-Kohl's charge customer. Our marketing team has done a really great job of exploiting that. Okay. Thanks. I had a follow-up. Michael, the company has been on this journey with merchandising in the past, and differentiation has been important in making sure that the brands do not all seem the same or trend right. I guess what is different this time, or what are your plans in terms of what is going to be distinguished? That should be a really easy compare. What should we know about the compare versus momentum? It is a compare nonetheless. Sephora being negative, was that—I know that business is remarkable, but was it a surprise that it was negative? Beauty has been overall pretty vibrant. Thank you. Yeah. I will take the Sephora question. Jill, please chime in too if there is more to say about it. The Sephora business is something that we are really excited about. As I have mentioned in the past, it is approaching a $2 billion business for us over a four-year time period. We feel good about the progress that we're making there. We've mentioned in the past that with this being now a four-year-old business, you see similar to how a store matures, that business looking that way in some cases. Sephora also, as we've mentioned, has an incredible pipeline of opportunity to bring newness and innovation. We've mentioned MAC coming in the spring of next year. Those are the kinds of things that will continue to fuel the growth of that business. We feel very good about where Sephora sits. I have no concerns at all about that at a ll. I think in terms of where you're talking about updates from a branding perspective, I think the big thing, and Michael's called this out a couple of times, is we're really listening to the customer. Moving back into proprietary brands, we're void of an opening price point, Oliver, in our store. Our customer came to look for value. They came to look for the brands that they had known at Kohl's, and they couldn't find that on the floor. We're making that investment back into our proprietary brands, but we're doing it in a really thoughtful manner. We're not overcorrecting. Our inventory last year in Q3 in proprietary brands was down about 30%. This year, we're up about 11%. Still on a two-year stack basis, we're down, but we're making those moves and making the right investments. We're doing that in a better timely manner than what we have seen in the past. We are also editing out some of the redundancy we're seeing on the floor so that these brands can stand out more. We've made reductions so that we can have, from a dress perspective, we can have a really great dress assortment, but we're going to do it on half the racks that you've seen in the past because that's really what the customer was shopping, and we saw our most productivity out of it. We're starting to make some of those adjacency analysis and making those moves within our store. We've talked a lot about accessories and juniors. We know there's more to come from that as well. How can we take advantage of what we know the customer is putting in their basket and what could be that next item that they're looking to purchase for as well? I think the big thing is trip assurance that we've talked about. That's probably in the more early innings of things. We are starting to see, particularly as we move into Q4, that you're going to see our receipts are going to be more about adding depth on the floor and less choice count and really being able to drive back that trip assurance our customer had come to know us for that we really disappointed her with. I feel like the progress we've made is we got back into the coupon that's really resonated with our Kohl's Card customer. We moved into the proprietary brands and jewelry and petites, all of which have outperformed and our customers voted yes on. Now we're going to start making some of those changes with our floor pad as well as investing more into depth, especially as we move into 2026. You're also going to see, as we move into 2026, a better way of transitioning our goods. We're going to see a much more transitional time in January and into February. Given the strong inventory management we've had, it's allowing us to have those moments and flow goods more timely so we can take advantage of that first mover opportunity that we probably missed out on the last couple of years. Okay. Thanks. Happy holidays. To you as well. Thank you, Oliver. Our next question comes from Dana Telsey from Telsey Group. Please go ahead. Your line is open. Hi. Good morning, everyone. Congratulations, Michael, and nice to see the progress. Obviously, a lot of talk about a lot of talk about proprietary brands and the progress and enhancements being made there. Certainly seems like women's is the core. Any other brands you would call out or categories that you would call out on proprietary to watch for that can be meaningful? What does it mean at all if anything changes on the tariff side? Jill, what does that mean to margins? How are you thinking about it? And then just brand inclusion and coupons. Are you done with that? Where are you on the coupon cycle with brands? Thank you. I'll start with that first question, Dana. In terms of the bucket of coupon inclusions, I think for now we're where we want to be. We've done two tranches, a big one back in April and the latest one in August. We feel good about the progress that we're making there and what we're seeing from customers, particularly as it relates to the Kohl's credit card customer mouthful. That's one of the things that we're excited about in terms of what we're seeing there. As far as other brands or categories that we see, for me, there are several, but one that I'll highlight would be in the active side. Both Tek and FLX are areas that are important for us. We mentioned earlier in the comments about the fact that we feel so good about FLX that we've extended into kids and 300 stores. There'll be 300 more in the spring and then a full almost to every store by June of next year is where we're headed with that. That is an example of the kinds of things that we're focused on in terms of additional focus on proprietary brands and extending it outside of categories that we currently have. Your question on tariffs, Dana, I think obviously this quarter we did well. I think we saw less of an impact. I really want to give a shout-out to our merchant and sourcing teams. They've done an incredible job navigating this dynamic environment and letting it really end up in a great place in terms of how we showed our margins. We do expect that this will be a little bit more pressure as we go into Q4 and into 2026, first because we'll have a full year of this exposure. Also, I think just there's more certainty around what these tariffs mean. We're going to have a little bit more pressure as we do move into 2026, but we feel good with our ability and how we've offset them to date. I just think with the certainty, we're going to see a lot more movement there as we go into 2026, both with our proprietary brands and international vendors. Got it. Just one last thing that had not been mentioned. Anything on the store portfolio, how you are thinking about openings, closings, relocations going forward? Thank you. Yeah. I would just say that is a normal hygiene practice for us to review our store fleet. The good news is that the vast majority of our stores, well over 90%, are profitable and productive for us. As we do at the beginning of every year, we will take a look at our stores. If we deem there to be any necessary adjustments, we will make that. As we did last year in closing 20 or so stores, we will take a look. That process is underway. Thank you. We are out of time for questions today. This will conclude today's conference call. Thank you for your participation. You may now disconnect.