Ross Stores (ROST) 19 Aug 222022 Q2 Earnings call transcript

Good afternoon, and welcome to the Ross Stores Second Quarter 2022 Earnings Release Conference Call. The call will begin with prepared comments by management, followed by a question-and-answer session. [Operator Instructions] Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts, new store openings and other matters that are based on the Company's current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today's press release and the Company's fiscal 2021 Form 10-K and fiscal 2022 form 10-Q and 8-K on file with the SEC.

to Officer. call like Rentler, to would Executive Chief I turn over the Barbara Now,

afternoon. Good

me to Joining Executive call Group call Chief Chief our on Officer; Vice Operating President Hartshorn, Financial We'll Officer; and President, questions a with Group Investor updated second Afterwards, Adam begin Connie Orvos, for may second the our will outlook fiscal we and performance year. Vice Relations. and any XXXX today today quarter President Kao, of respond be have. happy half you review are our followed our to Michael and by

Comparable period. per XX% X% quarter, compared second year's due As billion strongest sales were period store retail XX was down impacted robust our today's last release, by environment. in for the Earnings with as the weeks for of which XXXX. below $X.XX incentive results increase share period range, above XXXX, to million Earnings customer a disappointed share sales XX, income resulting costs were inflationary guidance July X.X the the noted million. year's mounting Total well in are pressures we net came in second These versus last sales for ended end net plan are earnings the $XXX compared of per $X.XX $XXX base, to in which on promotional our on press performance. increasingly of results, billion as quarter. our to lower top-line prior X.X primarily year were from an

net the period year results share Sales on million. six half million share $X.XX income net billion of of earnings compared were XXXX earnings for in $XXX earnings These XXXX. per first to first day the of of mainly the merchandise due XX% both regions, were per to strong $X.X months, first and Florida with $X.XX on of For $XXX outperformance our were strongest Texas of to tourist the in in border locations. a the sales down X% top during half areas the XXXX. and versus Shoes gain performing men's were comparable the quarter,

meet said, to demands. up well the from the were That making are environment. income pressures first quarter, same mainly actions our low total Similar impact our consumers unable be retail merchandising due dd's period have adjustments to on customers. thus end, We DISCOUNTS and pressures quarter an the increasingly today's we changing in on far on income to moderate lower were quarter are offset mounting to below impact taken escalating to customer the financial the in to promotional versus second having a continue At performance XX% the XXXX. that larger inflationary dd's inventory consolidated Ross business

last pre-pandemic. store versus represented versus While inventories year the quarter inventory merchandise demand. meet when prior we levels we consumer in XX% when operated similar Packaway during average very were total the with compared of to year, packaways the robust to substantial same amount of XX% the XX% up of used period

packaways during chain in early and of fall we season. will second receipts that resulting supplies to in plan the above continue the merchandise ease stored congestions Additionally, throughout flow store the quarter

we expect ahead, quarter. the Looking the in and to fourth to appropriate inventory receipts have levels these early wage

to XX XXX our new addition of locations quarter. schedule expansion comprised the is open growth, We year in dd's with total XXXX second Ross this XX XX DISCOUNT dd's. store program remain approximately the a of to about Turning and on of locations Ross track and eight on

relocate stores. or As our reflect plans numbers XX usual, about not these close do

fiscal our further the Now, Adam will details provide for quarter and of XXXX. updated additional results second color our outlook on on remainder

Thank you, Barbara.

of by for a an transactions versus the was of comparable size were the year down average store decline the in basket. sales offset X% the prior our number quarter As the partially as previously increase in mentioned,

in quarter margin on escalate higher expenses XX.X% sales, markdowns, expense lower combination a not the XX.X% This incentive was of half decrease freight to when in XXXX. store operating from from deleveraging pressures the ongoing of begin due effect headwinds offset compared costs were Second last same was XXXX. by we to decline higher These outperformed partially until our to were costs higher second much significantly plans. that did year that and

sales margin basis a timing the second related year's versus goods points points period new decline period packaway and during deleverage lower levered incentive were offset by was center, XX We increased basis while last by costs XX by points. also for basis XX saw combination of expenses by costs due sold XX these points to offsetting a ocean basis freight to to SG&A points respectively. due and markdowns. from again, and rose our Cost by unfavorable costs higher occupancy of due both than and increased lower COVID in points lower distribution the the Merchandise of XX comparable expenses and declined buying basis deleverage quarter. costs. XXX XXX that more Partially higher incentives. from COVID freight Distribution as improved domestic expenses basis

repurchased second stock shares of common we the million. $XXX X.X for cost of million During an quarter, aggregate

program during repurchase XXXX $X.X XXXX. announced, two-year expect of extends previously back to billion fiscal $XXX stock under As we buy that million through fiscal common our

discuss our XXXX. of remainder let's for Now outlook the

the given more prudent conservative is release more press as the today's adopt to unpredictable increasingly environment, year. our balance believe in retail results in promotional as it outlook for well recent a landscape the noted macroeconomic of we Barbara today's As

now X% year. last on are ending a gain sales of XXXX comparable We XX% strong for decline X% the weeks XX top forecasting October XX, to to

XXXX. X% increase in X% quarter, store down last the quarter planned to sales are versus be For of to a the same X% fourth

year. share our noted press $X.XX guidance, for is fiscal planned $X.XX $X.XX updated to projected compared to a in now and the line half versus and are $X.XX $X.XX be XXXX. to last a earnings year Based second $X.XX first in in share third half performs quarter our to $X.XX range be sales fourth As the $X.XX of per the on for if to release, per $X.XX XXXX these in the second for assumptions, earnings half a a versus last with quarter to results

Now guidance of forecasted third for X% XXXX. assumptions X% sales quarter the to the to are year. prior versus let's declined our Total turn

expect XXXX quarter sales open X.X% deleverage the XX XX.X% quarter to We be Ross Operating on and in XX to locations planned during for the reflecting locations. the third same DISCOUNTS to versus the decline. X.X% including range in primarily dd's the store XX margin is

in by In addition, merchandise pressured be ocean costs. to is increases margin ongoing freight forecast

the higher pricing as adjust environment. inventory expect forecast given also We and are an projecting lower our revenue markdowns right to promotional we retail increasingly size levels,

Lastly, tax Interest million. third timing be of quarter is be packaway to approximately $XXX,XXX. to operating to The related margin XX% about be costs. XX% estimated to expected diluted XXX projected approximately rate and shares also are reflects unfavorable outstanding expenses

continues Finally, strong landscape. that Ross to in I today's position to emphasize economic be resources and financial to with retail significant want through a challenging manage

sheet in Our untapped and borrowing total with in $X.X healthy liquidity cash, billion X.X X.X capacity. billion balance includes billion in

XXXX. return be total billion stock a and We large our cumulative out of to paid with to programs cash stockholders amounts repurchase under of in expected dividend $X.X also continue to

Now, I closing comments. turn over Barbara will to the for call

Adam. Thank you,

year spending. focused a macroeconomic we and questions remain our to value facing and Though a that At will challenging may and our and continue very believe expect for likely through we uncertain customer's financial have. us environment XXXX you strain respond the strong time. to enable any model our will position pressures manage difficult these company, are discretionary business point, we'd We to rebound to call like will economic over up this our open

this Bank proceed a [Operator your Thank of from America. Lorraine Please we question-and-answer with At question. you. first be with will comes time, conducting question Instructions] Hutchinson of line the session. Our

a of in you comp about your fourth what So, XQ versus better fourth included improve? things also see and guidance. in gives opportunity will you've you quarter areas that that talk the the confidence quarter Can you

Hi, it's Michael Hartshorn.

multi-year nine we did on the look year. quarter the guidance you last alone, First compare, fourth a at if

this of in to So which really year the it's driver guidance. of compares, one the X% X% easiest the comps is

Lorraine, gifting terms last fourth would of I that gifting didn't that opportunities quarter, we of in areas So be around year. maximize our of terms in the think some

you. Thank

comes with Citigroup. Paul Please question Lejuez next proceed question. your of Our with the line from

home how they categories, also if in? missed also curious worse, Sorry the but that I if any those curious the about attribute execution all you issues get driven throughout I'm factored got quarter, have it, or And apparel? macro there in of the versus think sort if performance comp if trend was notable trends might any And shortfall of you better? were

strong in in quarter. weaker, Home performance that pretty of of in line had that similar line. business areas the were business were chain the average sales relatively are and so was apparel home of they the with Both businesses relatively for were areas and

could on in Paul, mean, we there of course, macro, have know I the done we things better the are business. that

trends terms is portion on so the the retail, the peaked across performance the half In environment. both think in And weakened single outperformed quarter. multiyear of quarter, Obviously, fuel in the earlier year the you June a looked macroeconomic driven we a think quarter, certainly back I I of on if in a during basis. prices people of by

that of bit share at have front? little you think on August. end into some improvement I also Anything July an the a seen of can

this Yes, we wouldn't comment within on quarter. trends next

you. Thank

with proceed line question. of with Greenberger your the from comes question next Stanley. Please Kimberly Morgan Our

I'm of you to wondering, made Okay. are year? and through where that working that and progress evaluation know today, those started on the were go kinds last you pivot reposition categories where is how the compared were more the very the were quarter -- by to shift much Thanks. And in half and of you May significant types of on just toward Barbara, the to seeing second of and what about Great. in that inventory there your the Ross April you journey the shoppers about year. talk when second categories. talked in second you progress? we and quarter buying call, the here still you can the what's changed the I the of had sort sit you if products

The that us casual was product things the to into of Sure. more pivot wanted. take customer out

the more going from like apparel progress go. in QX whether would I now shift made or to are was have behind. expand better about were that So were products, more more we a assortments longer I main way really and there, out able been ladies, to the on where some to in social, certainly we've we felt we been because in those but where much where ready-to-wear. bit feel But little We've we of to where really some side. That's type rare work and shoes we men's

go and the whatever -- terms forward, customer then meet in demand to So going is. of we're

a better there, feel where wants highly environment, out we're So from we're there. and difficult what the to that when promotional with casual we'll everything customer make state and like the where then in products we a and But and us balance going tells men's let's is between, say, of in ready-to-work so see shift ladies. he more --

And to the last one you helpful, to vendors just Ross the an buying vendors XXXX? to robust two? follow-up for with vendors that new with really Barbara. year the is opportunity additional work environment or That's you I'm seen on if maybe come work you see haven't yielding Are didn't in Fantastic. just year that wondering, more starting product. last or maybe

the an perhaps extended merchandise the new for good and a that broad-based is The availability just pretty right in out yes. a period to availability products that seen now in country. or vendors gutters. It's all vendors answer we is time, from of Both of hadn't lot there

And doing they vendors I business. And if it an looking expand, us, to been was business think are themselves opportunity. have expand so, with their

yes, that -- and that's amount So probably in inventory continue I on the based think I will of the country. think that

much. so Thanks Terrific.

you. Thank

of the proceed next Grom question. Our Please Haskett. your question line Gordon Chuck with comes with from

ago marketplace I today I Barbara, to a in as should they we deals 'XX? the start P&L a up look months did showing you guess third you're that how in today deals Or guys? see fourth you do Because imagine of today. few getting a to than and down waiting deals that road? start do better a those lot in taking versus those better quarter for than Is we the great expect And balance advantage the the the for phenomenon? follow-up,

Okay.

products go. terms The in want it do product the a get really the what's was what the the lot is out product best the And market the out first, to want shopping It's we there's assess availability price. to better to good deal to of is. out a just today best are there. see Just there. What the where in see as of to product at deals, really best merchants get shopping to there happen, is you

trigger where you assessing lots, pull following might and it's of kind something not answer there's what for right? on think metered cookie-cutter best one it's desirable looks a to that's pack is the want it. So you most been out you merchants price the might of of really like, a the get the away that going lot availability, products you're get there are just buy voice mean, the really to the then So lots there's some in, to product sum product, able you if year. or haven't I There's you and really here. sharp

to very So value? the at understanding appropriate now when there, the buyers goods of what be now be attuned merchants really terms thing key you for really the environment. for out current buying strategic be you're to right value environment, the given to I is what the the inflationary think merchandise have So the to in promotional buying have that right? right is the is, customers

retail So more studying we and probably outside the it's believe heightened in more and quarter. I in I what's on think stores environment, all think in world much promotional inventory going with inventory going it's which fourth get inflated supply, to so a with the really is the is sitting

things So, to there of need are variety happen a that there.

quite it's think don't I cookie-cutter. So, the

we'll think this year. some I for to, get to So see

see and potentially some even be there be that and what fall, wait have but looks there'll spring, may some we packaway for wait packaway and think -- for like. see to I

Thank you.

with line question. Our proceed Matthew comes your question next from of the with Boss Please JPMorgan.

Great. Barbara.

your mounting anything past And the while model models to disruption that's past model? target where about model on today as there the your your of actually seeing different convenience below time? sales this that of times So outperforms structural is than any pressure value over in on view? and your that affect there changes larger does you consumer are of consumer are customer, picture, then, margin the multiyear inflationary cited elements Adam, today, Or think we times you're than your underlying how

with and value. comes all terms of pressures, months, I slowing the strategic in escalating I consumer inflation, think inflationary few Matthew, the So mounting price made had over demand we initially last increases. the And to it think down

And so sure successful, that to because on that successful. that will really be highly make we us we really focused what for need ourselves the of the to value really, around understand us end, going what's us is and in on make get

customers to she's values and every that's from us years, before great branded That's bargains, day. for expect come the now. you Our expect what looking what

and knowing the being So down trigger drive to going that what merchants in the helps I because think comes XXXX us the understanding that what's to the market, that, issues also and it really availability, is us in there. on pressure then the out from to understanding ourselves that's here pull with customer the the that when in getting so help right think all what And I much XXXX. value are will macroeconomic come under to will when

And Matthew, Adam. this is

see of assumption. in dependent to we're the that the So, obviously aspects about the second anything profitability model, I key think be how model different have we still retail plan When bullish think about we XXXX, out on our critical see multiyear structurally about year, our going will next don't talk top the inflationary environment to That's feel and we in specifically, how environment, going variable line half. sales kind in forward. a the play is highly

changes we the in what around costs. those pre-pandemic really in break the both cost the costs to starting Matthew, I been down to have are domestic and places and over We're costs here that, half, to add on business, in think on the the import to time. see domestically some two different expect obviously, or whether especially in already back import transportation, those acutely the with come see and since to the imports just wages is

a which down, come be will those will to think benefit us. I So,

but is we tight, were when work still wage level. the say at at year last What wage the in now stable, about current think On different during least we much I were from demand is it are are right a increases I'd market COVID saw the people it's this we which is levels to back and the was there front, U.S. where structural getting and frenzy the at

I to comes So, going the opportunity there the demand lower in the as be down is in some think U.S. with cost transportation

Thank you.

proceed Yih next with from your Adrienne with Please line Our of Barclays. comes question the question.

just was discretionary guess promotions some for question you. I the opinion in you that And on. and share Walmart kind aren't as of the Barbara the might an more that believe they kind market I'm is Great. promotional, away. maybe taking of wondering going past, share when shifts Target of temporarily alleviate sort if that at of are are of market aggressive some

for can into price And my that. And that's very you holiday? about at And heading your very any? that you careful of pass-through So this point cost first Thank Michael, know talk about if kind much. unit guys look have question. what like then been average any attempts, I you does very,

a or consumer think competitor, to pertains whether to think the it whether it whether now whether opportunities it's Walmart it's we it's Macy's Target of organs and look other everyone buy lot a Walmart, as In I it's look, at there's I as is. off-pricers, whoever the Walmart, for

hard measure to that. us for so And it's

we where were. is a on customer. important is need value to shift need we value, where from the most with we understand And to really understand we to do we equation now the think the need that can I and that be

that. all hard it's it's they very their some more again, it's as think measure But we to for have very goods. been to know, So move aggressive in through us competition. both -- And pricing, I

our it. job understand So to that's

during we on what quarter, saw pricing, the On AUR.

So quarter. AURs were up the during

in of higher fall to As basket markdowns, we'd moderate commentary, traffic the the versus the driven higher we'd a year. with trying to function really for by basket a our the with value minus half and expect drive really over the we AURs AUR. X% lower and said season us expect of the first was comp the was What balance additional

you. Thank

Mark Altschwager the with Our of next line proceed Please question comes with Baird. your from question.

you sales better in Adam, guess the for QX, question. of versus slightly QX for the inflection. the outlook I margin my Michael is implied Thank or taking though magnitude

I think Is it's kind all in by markdowns that QX of expected cleared QX? going to on fairly that correctly. kind it of there? significant if through I'm Or are there reading things are be other that primarily are

goods I Omicron mentioned question, last a lowest that dampened all didn't as we comp the the the QX, wanted that bit. and one, year, congestion, was holiday there and function to also a get on Just traffic spike Christmas of to supply our we up in was leading chain was before stores in with that Lorraine's an

a store peak fourth the for it the So the last ocean the our of quarter, wage cost then business, whether and and in was the was or be staff DCs And including that in holiday. the versus freight staff, should benefit year. increases, cost incentives, increases,

will that, up last be a versus benefit year. and that we're So against

And this is Adam. Mark,

ocean quarter our in and a impact based on fourth versus probably third then headwinds favorability, from when quarter fourth specifically as is versus timing we comparison quarter Just quarter, probably look quarter then the probably in bit ocean to just I more at timing freight third fourth still freight third to some little move build in that, cost you quarter. into packaway on think in and

Thank you.

Sachs. line your question of question. with next Our the from Roach Goldman proceed with Brook Please comes

down your I'd any be adjust line you And time Can you're seeing to trade more stores? business, third customer Barbara, and ask levels in more when the from markdowns pricing plans to might achieve customers and bit and magnitude shop don't if then you the quarter. evidence seeing normalized are you markdown and beyond on you little above maybe traditional typically commented a in Ross any that as a new like a comment of you to the level clean? on follow-up, acquisition

to the have our consistent. that's we're stimulus not our would I quarter we where take trade-down and that in our lap and customer no there's second would that I that consumer, own with that the comps If our composition been to of data suggest the to last consumer. happening. relatively change, from started been year, relatively the On since seeing end comps The when if surveys pressure compare we're lower first consistent. the any have on it is performance suggest really the indication seeing customer, But certainly

a customers. Today, do But serve range of wide serve we wide customers. a range of we

So adjustments and merchandising we're going we'll to watch then trends closely make accordingly.

to some because us So our are would it customers time range broad. so probably take see of

Thank you.

from proceed comes line Suisse. Binetti question your next of Michael Credit with with Our Please the question.

I I thinking I'm have just I alongside sure model. understand. make you the on guys

step can some I Is three-year based to industry customer. at quarter two- bringing way Do help a for the hopeful that down curious three-point mentioned growth in what deceleration that happen but down your that a some like to like about in deceleration. based assume good fourth markdowns time? quarter? which thinking shot just in, the give bake on? in deceleration? on I you're we Maybe think that fourth fourth is to rate, slowing insights period that trade ramp, is on to how guiding take quarter the in and of Is the not you're quarter expecting you of -- would you you're you're after that I'm new third as Barbara, the a that start or look

going being -- we fourth serves we so two top think well after environment. are on and a row quarter, in be both cautious, a in our quarter. it's promotional really us quarters cautious the very It's missing it's very biggest Michael, especially function. do to It be to line, a

based it's on, right. what that's So

to line we're in it able to we be that. think to lines on fact, turns based also, the out trends be better some And going of the is, in supply world, chase than if, the

you. Thank

proceed next Wells from Our question. of Ike Please line comes Boruchow question the your Fargo. with with

percent are to buying basically seeing like any at I year-over-year specifics, that months to talk curiously, the up versus, a level again, to ago, know, going of today XX maybe the about closeout about guys just months I I you're I but just know up don't maybe can and margins, dollars a months in margins starting up? into they inventory in talk want interesting. ramp go a -- as does pretty XX said, the meaningfully. inventory ago would are high you or you high ago, packaway level, look Where not kind how versus, of be at XX Just versus history? color maybe

what in we First, on on the -- packaway. have

We in year, experiencing are merchandise, we as And inventory, mainly product. there happened the of comp were early year frenzy for second having lead packaway includes lot total of also, when home top we're products a up a that's demand and now in that on using of receipts is XXXX. that but then against which getting last the on difficulty were packaway what longer was last and our time And percentage plan. up our is right We quarter, times.

quarter year in those we the did were demand times of L.A. lead about ordering times played quarter this in actually So saw times times U.S., What lead kept those we longer is lead first extended Neither the but we first also coming risks COVID port improved. what surprisingly, concerned the in in improved, out because lead shutdowns continuing our and and -- labor we our into China. is the in the with COVID second lower negotiations quarter cycle. in

in receipts of and the home have So that of the year. stored half early will we back flow packaway

of versus margins I year to to this compare one terms historically. I and on bought closeouts as compare had upfront, what what the it's it's to year hard In hard another

it's necessarily to as pitch as it. So simple going on quite not just as

what floor So I we think seen on to values and kind people be want it. we've what put move rates need the on the closeout availability seen to when remains of to

you. Thank

your Our Please next the of line question Sole comes question. Jay with UBS. with from proceed

Great. going Are of I of just to traffic and share try you're to for alleviate use the the that year. as AUR issue dig strategy the to AUR saying some back you've to half lever want take had a recently? that into the you

of based in and Yes. strategic has business. voted Listen, customer, the think we've pressures needs where doesn't the on And is it increases. she -- some couple And the made value that be. slowing the demand price inflationary really value quarters, in we're last we've necessarily to

products get So the value. offer yes, right, our off around can if because could what doesn't and mean move. line, more customer depending the we the want upon to of the it we to in of AUR And mix, want we more get have AUR -- you move types on based necessarily floor, AUR can

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our that what need need what on value. under, outsides doing all we I to we So based need that's is we're that where and understand We and mean the the better strategy. really the customer pressure is offer is do. is she to to

Thank you.

Telsey Advisory comes proceed with from question the Telsey your question. of next Our Dana with line Please Group.

Good everyone. afternoon,

And As you of chain, or between magnitude half differences your traffic see is are dd's dd's the year? saying? with Ross differences different and at the it's strategy you're the what product back of two AUR and terms the the whether whether in all for it's and what sell-through, between Ross the the

household sensitive has this to performance QX, dd's customer. to larger so pressure is income although gross, customer continued obviously average dd's, be is pressures in the inflationary therefore, costs to half focus against The inflationary and to in in low-income the higher but we a and impact provide even similar $XX,XXX below up on very on well Dana the QX year. DT's here more robust is dd's $XX,XXX the food last purchases. would even on to back and bargains, built year. our in need And say we fuel like delivering value greater like other best markdowns of Ross, Ross, the customer. the to I DT's

Thank you. you. Thank

question with Loop question. comes line your the Our with next proceed Please Laura Capital. Champine of from

I've got a couple.

logistics When secondly, assuming goal do you clearance opportunities when And costs in given packaway see? activity that you do with ease? think then trends, So you that's QX. sales line think you start mentioned come to inventories a the in more more will that

Laura, and We're started it's down. -- them to already seemed logistics Mike on already they've peaked come seeing have to cost. have

and it's think domestic ocean between I different freight.

market contract come below the ocean long-term take a are to rate. may lot of think noncontract it that I down. time There some is freight. But contracts current the certainly,

we're neutral some But saw on we to the contract we least come last movement over to year. half of So, at rising suspect pre-pandemic back time, and of in starting the in costs see us, both not rates. back because them them even down will maybe I seeing domestic half we expect though. levels to relatively be started the Domestic for that

then our as the and the in we liquidity. comfortable with moving it level we're terms liquidity, fall. goes And with have of that down, coming that, we see inventory throughout But

to buy of have advantage to take opportunities. And we so open

on So the things going at of it's going kind on two things same time.

Thank you.

with proceed of comes Aneesha Please your question. the Sherman question Our with from line Bernstein. next

at So the with the if levels I saw what in-store in line about right, moment heard you pre-pandemic. it inventory are

Or higher just the markdowns is of categories environment into the promotional? becoming you seeing markdowns trends trying to your that's slowing it for more product rebalancing? more mix the as as and external half. you're certain now the the the understand expect? it about benchmarking What's driver to the in doing rationale in So about you're Is well bigger second

make need watching that. and be cadence aggressively. promotional of so it's of promotional always that time then aren't in -- very markdowns they it. and that There's And the more is to outside just AUR the there of businesses offering we're the that conscious a part or that's she good and the aggressive Otherwise, that it's world in combination and But and always always on move to gotten very, customer I environment the But there's is. a really we so that's understanding -- goods. where really take short the need the of the I think value played think both. a such has not period needs wants big

the better that faster will wants to be. value get equation we she really So performance the our getting the

you. Thank

comes Tarlowe question./ Please with your of with Corey Our from question Jefferies. next the line proceed

Barbara, cost with year? are you place that have And to the you initiatives to you in there help goals the to the to for value savings needs realigning mentioned think any underpin of that it this the profit and equation remainder be? have that, profitability of you where kind

is say big we stores absolutely pockets in in or the in would structure increase to standpoint, put distribution and centers, our using which and expense of places We've distribution an costs. capabilities continued expense. to stores I efficiency new the have reduce in add automation our from technology centers in whether

estate to renewals, store your seeing anything rent and relates as on it real side opportunity as you are lease the then incrementally And helpful Great. and expense there and structures the well? the

at And expansion XXX I this rents, stores this wouldn't new comment, say process, nothing open there's to we there's would I on continue that in say, But but any open will stores, overall see our changes the the specifically. anything in we'll year. call and that don't we plans. renewal out I'd material renewals as said point, the in

Thank you.

with question. comes Our Please Markets. from Capital of question BMO with Simeon your Siegel next proceed the line

-- Did could to question, help mix what's the that color. driven probably I markdown AUR sorry, like-for-like And can dumb then I to out top bottom qualify the pressures disposal the have line if AUR? to and lower you with trying the at Just made or plan you line it sales. what the because miss you maybe versus worse? cost on how means sales lower that just understand comment get your incentive parse the of earnings guess, on shifts money think maybe you about align a because just trying but guess levers you, the more AUR what

there On at of of costs, incentive would the close end level, a have would range. on fairly earnings. we low this the If comp lower we the been been earnings have comment function was to

be stark we for but things the can great other a are structure. in structure, could get going decline long the if there certainly, decisions wouldn't term do greater cost with saw structure, probably expense we cost in our of sales. are certainly more we into They terms In XXXX,

say you again? first about repeat markdowns. that just you Could the AUR question the could And just

Yes, sure.

is mix given driven So just guess, may offering. to AUR, by within just tough your like-for-like AUR, way through have how shift I versus much been But think any product like-for-like? if

that year lines was of mix AUR. businesses were Part like last maximize driven of because it supply because they shoes, example, things by a shift we didn't for, for higher which runs

of higher. -- last from we of the drive mix. within shifts couldn't part we the get needed the part mix, other increased from we where have year, sales assortment a it to strategically strategically, enough fast prices where But just other comes some for the potentially So we it supply comes

where higher of now, And activewear. hard product quantify work to where it's AURs product kind to work comparing has we're saying so, than really to casual product because the that

really we just and So, it base, -- it's I really definitely shoes get is a and a to It's would you Certainly, all AUR the could AUR apparel raise last a we because tell supply the helps raises needed the of mix. to year. compared both. product casual it's I mix couldn't different

So, those calls main up that. two on my would be

you. Thank

from Our with Please proceed comes your Marni Retail final question Shapiro of question. line Tracker. the with

of have Can Are changes a any this then, there give year? the And I on about quick question, a for Barbara, store and just bigger you update? openings use packway just back-to-school. picture the

kids the what off difference back-to-school what her getting holding back-to-school, set are what in are fashion top, but going are for And is on a she she's kids meaning shopping, need As think clothing. buying they were you her you needs she new seeing wants, you well do uniform in maybe and up the she back-to-school? and way

balance no locations real change, expect the open that's on estate, year. over we XX XXX the and of to stores Marni,

would and markdowns child buying And she short they all thought on say, she in when buying earlier. you did them was back-to-school, terms taking back-to-school is the that short uniforms of backpacks have what think I for bought products. start might and definitely necessities what of her part people also I she's those of

kind it's it's of they think go after we I much time, over time customer get So school closer about a back-to-school if bought were they mixed talking think or with immediately three I of tell hard It's read both, think pandemic, to years of school. having a history or in real much combination on the the but it's merchandise to so, bag. to And to right? historically But has the I two so. it, any very now without

like I feels to guess Right. back-to-school this It sense. later a makes it's her. anyway with that year pressure on going be

she's feels pause. so buying kind everything what and of take could needs she it else a And like

a at whatever weather just traffic, but in had were you one then hit is. inventories break holiday or it And so there's had your point maybe some clean, in And Omicron last year, On last. we December. -- also

stores know, just so, gamma feels assuming period there's a gifting. the the in of new time, traffic variance some, during And even like there's real or driving opportunity five whatever And it that variants, I not for is. to it don't

You're right, getting Marni. we chain. we had approaching were supply through goods Omicron. the Christmas good year, with our within then holiday impacted, Last performance, And especially own difficulty

Okay.

of the luck guys So I of want Best Paul. and with rest after-school you to confirm, great.

the remarks. and Ladies session. we to over closing gentlemen, question-and-answer the end Barbara you. for turn will Rentler Thank back the reached call of now I have

Thank in for us and today interest joining Ross Stores. your you for

you at and today's your may for This disconnect Thank lines time. your a day. conference, participation, you concludes and wonderful this have