Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation Fourth Quarter Earnings Release Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will invite you to participate in a question-and-answer session. As a reminder, this conference is being recorded Wednesday, February 26, 2014.
I would now like to turn the conference over to Mr. Gregg Steinhafel, Chairman, President and Chief Executive Officer. Please go ahead.
Gregg W. Steinhafel - Chairman, President and CEO: Good morning, and welcome to our 2013 fourth quarter earnings conference call. On the line with me today are Kathee Tesija, Executive Vice President of Merchandising; and John Mulligan, Executive Vice President and Chief Financial Officer.
This morning, I'll provide a high level summary of our fourth quarter results and strategic priorities for the year ahead. Then Kathee will discuss category results, guest insights, and the holiday season. Finally, John will provide more detail on our financial performance along with our financial outlook for 2014. Following John's remarks, we'll open the phone lines for a question-and-answer session.
As a reminder, we're joined on this conference call by investors and others who are listening to our comments via webcast. Following this conference call, John Hulbert and John Mulligan will be available throughout the day to answer any follow-up questions you may have.
Also, as a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, the most important of which are described in the 8-K we filed this morning.
Finally, in these remarks, we refer to adjusted earnings per share, which is a non-GAAP financial measure. A reconciliation to our GAAP results is included in this morning's press release posted on our Investor Relations website.
Target's fourth quarter financial results reflect better than expected U.S. Segment's performance through the first three weeks of the holiday season, followed by meaningfully softer results following our December 19 announcement that criminals had gained access to guests' payment card data in our U.S. stores. In total, fourth quarter comparable sales decreased 2.5%, consistent with our updated guidance in January.
Throughout the quarter, our team managed the business extremely well, adjusting both inventory and expenses to match the rapidly changing pace of sales. As a result, our U.S. operations generated fourth quarter adjusted earnings per share of $1.30, at the high end of the updated guidance we provided in January.
In Canada, we worked diligently to leverage holiday traffic in an effort to clear excess inventory. Markdowns resulting from this effort drove a very low gross margin rate, but allowed us to reduce average inventory per store in Canada by approximately 30% between the beginning and end of the fourth quarter.
Canadian Segment EPS dilution was $0.40 in the quarter, $0.05 better than the updated guidance we provided in January. We're pleased that our early-cycle Canadian stores have seen the most improvement, giving us confidence that we'll continue to see continued improvement across all our Canadian stores in 2014.