- Earnings call transcript Q3 2022

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Operator

Good afternoon and welcome to the Ross Stores Third Quarter 2022 Earnings Release Conference Call. [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-Qs and 8-Ks on file with the SEC. And now I’d like to turn the call over to Barbara Rentler, Chief Executive Officer. ma’am. you, Thank ahead. Please go

Barbara Rentler

afternoon. Good

President, me on President, President Michael Group Group today Chief our Operating Officer; call Vice Kao, Chief Connie Vice Officer; are Relations. Adam Financial Hartshorn, and Joining Investor Orvos, and Executive

respond a may year. We third of be Afterwards, update our we quarter today fourth have. the to an our outlook by will review for will to followed quarter call you begin on our any with questions performance, and happy fiscal

XX, release, third as of in the press versus share of timing results XX higher were sales robust value XXXX, As in to sales on our sales net expectations the share the compares X% on today’s XXXX. Earnings noted billion, year, costs. XX, margin deleveraging packaway-related quarter X.X% quarter above per our the from comparable markdowns weeks period or decline we throughout and for reflecting year, third the with in of prior of from XX.X% a for per XX quarter million XXXX. with down This top million. Total the $XXX XX% last were was stronger income as $XXX unfavorable delivered effect were of pressure ended ended October $X for $X.X net well stores. line Operating the October gain for earnings $X.XX comparable weeks the as

store increase XXXX. strong X% per year. the share for income to down period billion earnings Sales a $X.XX of months compared net in last $X.XX versus XX% with $XX.X of billion year-to-date same X first on billion, period for the comparable totaled net share sales The were on earnings per $X.X $X.X

versus to results border shoes ongoing sales the of last moderated performing total store having up are inflationary to to Average at the the inventory year significantly quarter the of For dd’s quarter Florida first were XX% during but the a we total by Forex improved of pre-pandemic Texas end trail Packaway used at the down as robust on pressures larger and business, and Ross inventories locations. X% year. were while compared the levels due half, up from the versus continue regions At Inventory XXXX dd’s consolidated half they year, outperformance loans. last represented top compared with quarter when sales to bolstered first and merchandise merchandise of was the to impact to packway were the performing that XX% XX% trends compared the, DISCOUNTS, best Ross’s customers. gains. fuel lower-income third

We third the Turning XX for expansion XXXX to quarter. XX of new store addition and with dd’s growth. Ross the program DISCOUNTS completed our in

DISCOUNTS. the For dd’s and for DISCOUNTS XX dd’s stores. XX end the year, with increase added total of XX of comprised now of X,XXX to locations Ross a stores Ross year expect locations we XX a We and XXX net

Now, Adam quarter quarter our details results fourth provide guidance. third and will on further

Adam Orvos

Thank Barbara. you,

quarter. in store comparable previously As were stated, X% the sales down

higher incentives. mainly points. to new costs from by due our from offset of up were costs XX mainly in offsetting Partially XXX quarter, and declined year. basis basis last timing decrease Although margin partially points declined XX of average buying of size. margin points, the center, while versus basis were a XXX basket primarily traffic sold Distribution down Cost third These it was the unfavorable grew goods due Operating the XXX by point packaway-related to points Merchandise costs, basis from points, year. for prior declines these occupancy lower improved higher a expenses markdowns. still second quarter from was quarter. in by distribution delevered XXX the deleverage higher X.X% basis basis

XX than basis of more offset we XX sales last the improved expenses freight improved by points domestic that anniversaried in from second freight basis headwinds the pressure for Lastly, points deleverage in comparable period SG&A began lower as half was negative quarter incentives. as and year. the eased by third the the from

third common stock of we year. quarter, a for million. of back repurchased for to total stock $XXX on cost X.X million track an remain the in of During million buy shares $XXX aggregate We the

Now, let’s quarter guidance. discuss fourth our

and and and promotional holiday in given fourth improved and guidance to the said, expect face to customers. continue easiest That earnings moderate-income pressure We assortments. headwinds inflationary a raising our holiday quarter our are ongoing sales very selling our our momentum low quarter season sales we to comparisons third

weeks expect X% down XX a sales to the ending year. X% prior of now be For XXXX, January in comparable on top to store we XX, the flat gain

share earnings the are statement projected forecasted to range quarter result, be to operating $X.XX. of support in sales our be the $X.XX per a fourth to include As are that assumptions to following: guidance up X%. The Total flat

the to reflects effect We mainly of $XX markdowns. cost income interest million. the incentives, in X.X% higher from unfavorable year. lower XX.X% offset expect is This deleveraging versus operating and sales, last same-store the of Net pressures ocean be timing and to by freight X.X% costs from margin range significant estimated about anniversarying of to lower be partially packaway-related

about $X.XX weighted guidance, be projected fourth diluted year-to-date of our Our approximately tax million. compared to $X.XX for rate to range are quarter projected last in fiscal on to And shares share are expected $X.XX is year. per be XXX the to to average be XXXX and Based now earnings results XX%. outstanding

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

Barbara Rentler

Adam. macroeconomic prospects. growth environment, you, few optimistic future many remain with the Thank our about challenges uncertain geopolitical over last the we Despite years, coupled and today’s

you our At open questions may profitability base named on any every heightened over day to merchandise is always and exciting our of would point, in future. and growing delivering locations. fresh will be at expand the ability and Our With store call respond convenience, brand compelling have. this up well we market value top consumers’ X,XXX and like our discounts and bodes to priority for in focus this share to the

Operator

Thank you. with comes Instructions] your our first And Please question line JPMorgan. question. with of from proceed Matthew the [Operator Boss

Matthew Boss

the to to rates nice see Thanks It’s and in congrats return on a great beat quarter. [ph].

Barbara, maybe expectations, to of you quarter could internal cadence from you then trends just in or traffic on speak the cited the see progressed? maybe comp relative And elaborate the your holiday third the that you So what could as to you release? assortments improved did

Michael Hartshorn

mentioned On the – is we Matt. as traffic trends, Hartshorn Michael on, this

did with prior the comp the in versus X%, for year. as mentioned, improve mentioned but comments, we it quarter, traffic still As the declined the prepared down

the more than the The was basket. So the decline offsetting the number offset basket basket traffic driven of higher UPTs increase AURs, average The in was by in was higher average while a by were declines transactions. flattish.

XXXX, move our improved saw what the the through we as compared so we As quarter. basis, progressed stacked through a trends quarter, on we to

Matthew Boss

It does embed that in and or that And the just the a Is assumptions moderation. maybe Great. competitive quarter? competitive maybe landscape on your have you comp macro the fourth something to embedded follow-up, fourth maybe prudent? the deterioration then quarter, relative more or Is guide? quarter elaborate in embedding backdrop it just you are third in that you seen the you macro could

Michael Hartshorn

we view, I do would to promotional. environment the macroeconomic but our from say uncertain, be going remains of is point holiday very think period that, that the obviously

year, two embedded trail Omicron easiest was retailers. then year, other main supply trailed point off be real And and chain cases. the at us for One last to reasons. spike for a the this the continued in the off. quarter reminder, that’s we sales compare, And end at what quarterly did then have the just It’s our guidance. So, into of last as a challenge

Matthew Boss

Great color. Congrats again.

Sorry, go ahead, Barbara.

Barbara Rentler

that’s Okay, holiday assortment. the

offering improved in the So the gift had have chain look, we based supply just both the from believe of to. bargains also, as assortment this holiday our Michael an congestion, off of and particularly will our imbalances year alluded branded marketplace because of we really giving, availability

a great So, we be values the between broader able strong offer to we those, assortment. two will brands, feel and of

Matthew Boss

Best of luck.

Barbara Rentler

Thank you.

Operator

comes our of Alex Stratton line Please proceed from next [ph] question Morgan Stanley. question. with with And your the

Unidentified Analyst

Great. taking Thanks question. for much so my

updated could higher end about factors key it to lower or you talk that what could you there of either the guidance, kind to Thank the as you. of range? Just the drive that the perhaps new swing are relates

Adam Orvos

Alex, sure. is Yes, this Adam.

minus be as sales. in some Domestic neutral, impact will as some given see not quarter, X% as year fourth Ocean in guidance prices. comps, deleverage most fuel but be flat impactful we will benefit elevated freight, still last from of by third So than to tangible we our seeing Markdowns freight higher will us. the slightly offset in quarter. for rate, probably but tailwind have

were getting the into remember where rates significantly, high. we period As demand last was escalating are you year,

the year in us. And some QX depending outperformance given also. will then out, this and pressure likely versus costs finally, we’ll will a year And quarter packaway that year. incentive So timing end our tailwind last fourth the how of be from then underperformance be lower in for year, last see plays our

Unidentified Analyst

inventory you like pretty on super Great. helpful. which That’s your exiting up lean were levels? seems follow-up Maybe I I could said quarter, level. think double-digits a the low year-over-year they just

enough just you about you the fourth quarter feeling you into like have So are heading maybe could then how us, tell you and the do assortment? or feel the levels broader

Michael Hartshorn

end feel quarter. of really at are we good where third Overall, we the the about

the were year from packaway the big a over in when last remarks, up up second we improvement and prepared we As quarter XX% ended really – said was when XX%, we which inventory. we the increase about is

versus low XX% historical last our sales last And because were our a versus amount above well we XX% at were that substantial levels packaway we of was relatively year. use year to chase our So plan.

Unidentified Analyst

so much. Thank you

Operator

line Baird. with And the question question. our comes W. your next Robert of Altschwager from Please with proceed Mark

Mark Altschwager

of overall think be you my seeing the drivers on great. the this view taking trends could Thank you there, strategy for a you you improving trade-down expand that the if evidence assessments question. comp outlined you. occurring? quarter? this Do What now do Just reflection your you quarter? key you as is is thanks afternoon, that Good last AUR saw would the to Are

Barbara Rentler

assortment to From we third be in we our perspective, the values second in where to environment. to need this quarter they them the got reset quarter, very and went an believe and from Sure. promotional

markdowns some places. values in business, us same, And rightsized business, really branded our rightsized the fueled values on availability shifts we by of for our we quarter the which our in inventory And in go the and strong performed some shift other watching in relatively home and as on So the and best-performing places, really, but through apparel big we some was is market. products the some our was shoe were business. in

Michael Hartshorn

so And terms with customer moving to drivers improvement. parse the out individual the of of economy, parts in in the trade-down many difficult the it’s

not demographics, as role significant bargains it spending trends income consumer seen a have We our does. but the shift typically different delivering to most played better like across material in we

Mark Altschwager

Great. Thank you. Best of luck holiday. over

Operator

proceed Please America. from our next comes Lorraine Hutchinson the with of your question question. of with And line Bank

Lorraine Hutchinson

I Thank afternoon. you. square Good hoping of a was comments for us. couple could you just

about and talked You was sharp values price your resetting on the up. points, really AUR and focusing

talk AUR you on strategy go-forward views of about and basis? quarter can your in the then on So drivers the a the pricing

Barbara Rentler

Sure.

price So and Lorraine, are different value things. two

shopping going competitive So that constantly the from merchants and out assessing and seeing on what are pricing what’s is.

in in felt of of we’ve last be assortments the and of component too the higher, some places, some in was But different. shift some So themselves. the took businesses the the and would AUR we the places, in the marketplace, be And markdowns. we is might opportunities that high, value that just our but of off in went got then other mix AUR where based

obviously, business shoe our shoes, a example, much for higher been has strong. And AUR. So runs

in is the is merchants the that. ahead will with and a a where of there such back assessing that that promotional being trying would be values stay really to looks say environment are of But total things. in So what we’re I moving what to and that, variety market in, the highly like

mix, depend to AUR can could – brand. on on with that So again, question, the depend back that and

So a involved issues of variety is there there.

Lorraine Hutchinson

you. Thank

Operator

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

Chuck Grom

Hey, thanks. Good afternoon. Congrats quarter. on a great

out sent being of California, but a given You the which the bit that October. didn’t call strong regions, you out is Florida little called as and in checks out month Texas were surprising

us more bit little geographic So could I if the in just on just give performance quarter? a wonder you color

Adam Orvos

Yes. is Chuck. Florida and Adam, Yes, Texas outperformed This clearly for us.

locations. border the seeing in benefit We’re

the seeing tourism in clearly the and outperformers. locations, We’re were those benefit

On the in flipside, the California underperformed quarter.

Michael Hartshorn

the on we the so is, impact California, the come more the on remain didn’t out a it believe, And customer. the of material checks fuel to the end have didn’t of have squeezing than quarter, elevated country. significantly prices QX. In lower- moderate-income to California, rest That

Chuck Grom

Okay, thank you very much.

Operator

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

Paul Lejuez

We’ve perspective. a a from had Hey, going out, from of on shrink. guys. a think, call Curious I on what’s shrink couple companies drag

physical do guys XQ. I think count usually in you a

third seeing on million you’re on inventory. is curious above just quarter bucks then And also So a Typically, hundred inventory front. few that XQ. what

hundred few below. Now that’s a million

kind forward? Thanks. thinking and and how curious I’m terms quantity you’re So levels relative quality is of inventory just sales going about about thinking your in what to of

Michael Hartshorn

Well, on inventory quarter. had quarter, physical we – on we inventory physical during inventory, inventory, QX, then did the much too a than were was believe we slightly the and is it’s why take it And last versus in we year. higher levels which second down third

Paul Lejuez

And then go forward, Michael?

Michael Hartshorn

on wouldn’t be I the opportunities dependent year-end, on but – packaway marketplace. to comment going in it’s on the

Paul Lejuez

luck. Good Thanks. Great.

Operator

with of with your comes the And Brooke Please proceed from question. question line our Sachs. next Roach Goldman

Brooke Roach

on if you that margins the about based contemplate the consumer the of are And market next today, for How P&L that thank through competing you merch that for opportunity for quarters? see for afternoon. mark you you versus reflect in and comp talk goods on and so – to Barbara, taking quarters? taking the can you. next few additional value the availability wondering Good our branded few was outlook on could passing the and thinking question. I to Thank passing the over along that on much

Barbara Rentler

Sure.

As in It’s and really all it’s availability is know, the and there lot market, broad-based categories of brands. really or broad. you a

is think it customer, the In low-income think value. terms is of now really the our the focused we I moderate margin, to on way customer especially customer, about

it have of rightsized off brand in that when appropriately. we sits really will we what of us Because historically. some our told will pricing we and values brand, would nature the the value been as we look brand that’s and customer went how that every we competitive the world the based and competitive of we weren’t in as that at then of So

out putting it – of values, the make look customer from would to ultimately, please great better drive the there on floor, I better to at more values brands opportunity So sales. getting the then, and to

Brooke Roach

one of seeing just your portfolio? you’re within to any Can in follow-up, a that in Great. middle- quick improvement remarks the think mentioned to then high-income you that you dd’s. of more the customer sequential low-income And and of your talk I the change a at versus prepared maybe drivers customer behavior

Michael Hartshorn

it QX trail. dd’s, to the Ross, from was improvement to On Sure. similar to QX although continued

is for dd’s Ross. the reminder, a As income $XX,XXX to versus customer’s $XX,XXX $XX,XXX average to household $XX,XXX

So very improvement similar and QX QX. between

Operator

Credit Thank you. line Instructions] [Operator from proceed Suisse. comes question. Our next the Please your question of Michael Binetti with with

Michael Binetti

the for quarter. Thanks guys. Hi, on Congrats a great question.

to there. we some for biggest of of little you in of past you conservative your also lucky most the approach You’re conducive fuel a others Michael, this yesterday have in to couple speak what and intra-quarter, the you year, initial how is what the the we’re different flow-through normal like but normal going neutralize gives forward of looks a your the business, next I few you’ve the could mentioned about to a normal typically if how back And knowing than really guess, confidence on fourth quarters? market macro that market, your know is recent start then, here, view a for thoughts benefit on today be quarter. flow-through about a it what to softer I Any algorithm to about sales quarter, know your a enough comp? saw a raise industry target. what to thoughts contest a But look fourth in spoken you comes to won’t maybe Michael, specifically when guidance. And

Michael Hartshorn

Sure.

gives what us guidance. the the on confidence On

is QX the what quarter. the multiyear stack in than lower achieved third actually we the So in

the we And be very be on the about to assortment we for and confident any We’re environment think what macroeconomic conservatism that would have holidays. a going holiday. promotional based the very, is

sales improvement achieve on over growth In pressures year, sustained operating inflationary say, terms some we you But highly the margin dependent cost think the strong I’d will gradual and in longer-term, next of would flow-through subside. can the for then we of how as time profitability. be expect, over quickly improvements

for currently, the the able this SG&A. reset will we’re we year, opportunities have As will And our a next midst update and also, places year. better XXXX on headwind we ocean will domestic in and would to profitability keep baseline costs the and like our of with year benefited for our macro freight. in say be mind, I the be have have a in sense next of year incentive an in thus, year-end that incentives will we call. to economy And the process budgeting provide we specifically, entering lower

Michael Binetti

Okay, that’s helpful. Thanks, Mick.

Operator

question line with with Yih Barclays. question. Adrienne the our And Please comes your next from proceed

Adrienne Yih

quarter? excuse you afternoon. has much past buying XX since Thank Good me. a And last Thank say, to how much. talk Barbara, to XX take from, very gotten get product you ready your sale stores? to about very it then and able much, environment better how you long in perhaps does in available contract it the can for the negotiation days and that be

Barbara Rentler

Sure. broader, old gotten has more brands, even environment buying better, Yes, the classification.

it some XX perhaps in move we So merchandise. want us also has weren’t resources want to absolutely the merchandise days XX doing vendors to the more purchase and that more before with business also new to last

just a yes, So there lot the of Adrienne, second out of to is supply question your part there. again.

Adrienne Yih

negotiated... the wondering Yes. that you from I actually time was

Barbara Rentler

X I rule, is there here, what basically, are what could X from, – the can goods weeks, between they lot as it Adrienne, X Well, weeks. buy on in So shipping upon probably would X quickly vendor But and week, where vendor Monday depending say, a ship a about the variables ship, general of to to a somewhere right? how a depends assuming I takes [indiscernible].

Adrienne Yih

for luck Congrats. of Best Fantastic. holiday. Okay.

Operator

of our from line Please with next question Champine Laura And proceed the question. comes you. with your Loop Capital. Thank

Laura Champine

stores Thanks off-price year up those year? holding and ring for versus of between looks questions. the like the more is a I’m versus taking this my your contrast raise umbrella department kind stores to pricing what promotional last the interested mall-based in bit. this How effort

Barbara Rentler

which that is The Laura, see can deep guidance and fourth went some we there, the been values we do in markdowns we we supply revaluing shore additional the of yourself, went it’s are of there. Well, The going are into so promotional – couple inventory in what’s or that we we need to need ‘XX, and of actually built But off historically. ‘XX, that based to – why we that’s in in looked be But to continue out calendar our our quarter, ‘XX. to just have either we than the promotional promotional will and there it’s we some as the going have and on staying businesses, right-sized in I things places. through say mean up values everyone out to is know some to are calendar, that, little you we the merchants that to you as right price it we move is are up in a buying get there assessing as a then some all think you value. deeper as and trying think is the as it

how course, world. logic of the as the outside now kind value every And brand that’s world. the out is in so merchants fits of that in making dependent the they outside the the of purchases are headset And then and have there upon

Laura Champine

it. Got

Michael Hartshorn

Thank you.

Operator

with And your the question. Please Marni proceed with the Shapiro Tracker. line from next comes of question Retail

Marni Shapiro

holiday. of great and a on Congratulations guys. best Hi for luck quarter,

about having is given product the first next is general, is for mix bit referring your guidance just not to so there. but fair third will there the to you lot and a you then the environment? holiday quarter good same a giving I inventory for that assume versus Barbara, there time? But wanted much you is thinking just to or we – dd’s openings store year, change are more on And you are or season. If were Clearly, the I just think, the any it chase improved for versus out the of I could into be on know said in half a yet little improved ‘XX mix versus there ‘XX,

Michael Hartshorn

for both real we changes front, very more report on ‘XX year-end. currently we Marni, we estate no the to when Certainly, confident and remain our have will chains plans. expansion in provide details

Marni Shapiro

Okay.

Barbara Rentler

the terms chain year – wide would I the Okay. And back of missed issue. say of in Marni, whole last QX, the going we going of lot to back a opportunity carrier mix, to gifting because

So, one QX, it. to that’s piece specifically of

brands the there. In entire a year, is terms lot just there out more of

there I being and it pricing both is in combination the of think better holes, better So, literally And to closeouts holes able really piece where other of great our a get brands. where and assortment. just

both. it’s So,

Marni Shapiro

for of Best holiday, guys. luck great. That’s

Michael Hartshorn

Thank you, Marni.

Operator

And the with our question. Kernan Please next of from line with proceed John question your Cowen. comes

John Kernan

Great. my holiday. Thanks taking question. on into Congrats for momentum the

get So, at there Is you levels. look and – it’s the per have year, is of leverage? margin it sales sight you per clearest merchandise creates to margin. like pre-COVID seems quarter in if of of sight terms profitability? of think What to in might store, it back it do pre-COVID into of do your momentum simply the sales we where is line foot, above through Michael, and you terms below, SG&A you next think pre-COVID fourth is how do it square freight? What but The the obviously clearest is margin? levels have sales to productivity operating line path of levels – Is just back operating

Michael Hartshorn

freight for is should structural prices dependent above to a now. you Well, had changes domestic but across that well, going sales, are get are think to freight number be going ocean say fuel would wages in XXXX. don’t into diesel will be are on tailwind as to going pre-COVID. that back that be I $X you one. the Certainly, partly the that a us I tailwind labor U.S., but There

most dependent importantly, partly line will on But it sales. top fuel. it on happens what depend with so will And be

John Kernan

you. Thank it. Got

Operator

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

Jay Sole

you not buys have Thank new just terms seeing footwear, much. it that categories Great. are but categories, expand the My out the with many business inventory are so good? in into maybe new question is there, the and apparel so any just, before and just all areas opportunities to of you you because

Barbara Rentler

say Look, Often availability out are does the for vendors there yes, we with resources, opening are merchants some buys. that the people. the new up that kinds there, out I would of looking have, you wind happen. as and all up And which looking to partner

it’s that, mean that’s So, I it. both. of we absolutely piece and a are doing

Jay Sole

continue? And Barbara, do can you think that

Barbara Rentler

open if start think if merchandise that resource, up. or resource, back, even things I going the once keep resets minute, you up time, a a you usually, open doesn’t resource have will shopping the you over even

this Yes, this really, do sight of full into a set what to to in is just – there will died – front think know. so go down, next is really much expect and – November. us full after because supply there we product is since yes, year of we just double I don’t Then think have there that’s really lot I I I be it merchandise. of line don’t I think

we could that whole categories are are businesses, there not and some we into within upon. could expand think some different go businesses in opportunities I businesses categories, there but

Jay Sole

much. so you Thank it. Got

Operator

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

Jesse Sobelson

look think the around a maybe pre-COVID over Thanks be question. mentioned were XX% hovering pre-COVID years, about were we I just a costs structural Ike. taking such should Hi higher for thinking pre-COVID, guys you my How you levels? somewhere Q&A, wages. we was it few is everyone. it? next attainable those bit margins, about below This We margin some as as little Sobelson pre-COVID mentioned earlier thinking the for This Jesse but but to in or on wondering, recovery, you sometime still are is landing

Michael Hartshorn

have land profitability it going and than expect I would I any Jesse, improved predict number would of We overnight. a wouldn’t over over answer Sure. where wouldn’t way time other to is happen return would question. that to happen it’s the years

Jesse Sobelson

you. Thank

Operator

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

Aneesha Sherman

value Thank earlier lean easing the you to pick be And markdowns? sequentially continue point about up then, Yes. lean you an on turns Adam, And you Barbara, as resetting is that what your inventories an drove you. to seen the expectation on mentioned through so proposition, have in in-store of Thank QX. and are be into seen of on continue Should value quarter reaching of proposition quarter? level you markdowns where strong interpret the exiting turns now with you and a strong we are stay Have to the of the your you that in happy turns through quarter you. is? kind that now QX?

Michael Hartshorn

the again, Aneesha, year. will the always absolute year, in And customer but to been in-store, to over we continue inventory prefer run forward. But inventory chase. the levels, these have were are levels this the of be in last the do pre-pandemic on level. versus running throughout levels, We inventory down front model will is the way going and the typically we so – up we

Adam Orvos

Yes. Aneesha, building on that a bit. little

really a see will our have for promotional we how this that’s be we driven. to markets guidance, into know and promotional it that. year is, be last layered the largely but highly prepared and about going markdowns We to question is versus some quarter just Your fourth highly environment, want additional

Aneesha Sherman

say But you so quarter? last versus I right to it’s this but were that year, is easing it’s Adam, versus sequentially clarify, it up can where

Adam Orvos

absolutely. Yes, Yes.

Aneesha Sherman

Thank Okay. you.

Operator

question. our your with Please And Tarlowe line question Corey the with from Jefferies. next of proceed comes

Corey Tarlowe

taking and on thanks for my afternoon. question. Good the Hi. quarter Congrats

looking discuss if completing little can you how color productivity, was benchmarks new stores, could wondering additional a bit specifically was you about add are wondering versus you performance? on know I new on the about just that’s if plans. any – I your you store I So, talked what that new your store growth and XXXX store

Michael Hartshorn

Sure.

overall the of of out openings box on new the average, store last us, store of the of case, XX% XX% at for over fleet in continues even come to to typically will the years. the a chain So, new couple that stores be the and

Corey Tarlowe

luck. Great. Thank Best much. of you very

Operator

the from line Guggenheim your Securities. of comes question next our proceed Drbul question. Please with And with Bob

Bob Drbul

Hi.

Just Texas, of opportunity or sales do third in your you you for dd’s with terms versus your two Florida Thanks. of share you of terms Could think outperformed And where guess it, questions. state the would performance? then the On, formats performances, are most, in holding that what expectation surprised the side that both the terms categories, you which what like of versus us? I in Ross, quarter, the mix in quick true in your say? California, is I just on other said, categories you

Michael Hartshorn

Sure.

the question, dd’s would we into the would overall, to state don’t just what we that, on but very the consolidated the say, get I again, is basis, On was similar dd’s discussed. really trail. – to across improvement, dd’s performance Ross, reiterate is typically continued I board We – which a

Barbara Rentler

mean really in of And merchandise of mix I performance terms outperform, shoes outperformed.

The the of some be businesses. a term perspective, plan. From other the standard that businesses that outperformed core be would would

Bob Drbul

you. Thank Great.

Operator

And question comes Markets. of with Simeon our your Capital Please final from line proceed question. with the Siegel BMO

Dan Stroller

This for question. taking for Thanks Simeon. my Stroller Hi. on is Dan

reductions. or have DCs recapture, think added efficiency On the leveraging about talked for the you at margin and the topic in cost of I past technology in-store

more you to you Thank are inning what wondering that you. if in chapter? in regard Just or there where come, stand is basically that

Michael Hartshorn

constantly are I we would or fourth saying by answer third that the in inning.

from investments in the are automation in have we in ranging DCs, always the include Those making. stores. robotics new DCs. They So, automated we are

where And we productive in also for we more markdowns And associates. constantly piloting ways inventory business. be the more investments stores, the to and are trying to in take efficient the are stores. store and our efficient self-checkout check We in have

Dan Stroller

Great. Thank you. luck. of Best

Operator

Barbara over questions to turn any back would Rentler this comments. further for floor no are at closing the time. And I to There like

Barbara Rentler

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

Operator

you. teleconference. today’s This Thank concludes

at lines day. you your great disconnect may Thank your and You participation, this have time. for a

Ross Stores (ROST) 18 Nov 222022 Q3 Earnings call transcript