Kohl's is having a major disconnect with its customers. The company's inventory growth is outpacing sales and I think their problems will continue into the fourth quarter and even the first quarter next year.

We believe this update is a combination of management's typical conservatism and sales sluggishness from the unusually warm weather.

Wal-Mart continues to show strong momentum and operating performance. Its food and apparel sales did well, which fits in with our thesis that Wal-Mart is really taking on the supermarkets. By adding new apparel name brands like Levi's, I think it's in a position to see tremendous success in apparel too.

We have now registered our fourth consecutive quarter of strong sales growth and our third consecutive quarter of higher earnings, excluding special items,

We're very encouraged by the growth in digital sales. And while international sales still has a ways to go, there is a lot of upside.

Sales growth should compare less favorably with peers. The brand has now reached a mature stage of development.