Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to the Ross Stores Second Quarter 2023 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. with in Form release Form XX-K X-Ks the included company's in XX-Q are on XXXX fiscal and file factors today's and press the and Risk SEC. the fiscal XXXX

Chief like I'd call Barbara turn And Executive now to Officer. over the to Rentler,

Barbara Rentler

Good afternoon.

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

XXXX review begin year. by performance our to quarter call questions our We'll the Afterwards fiscal may any you happy followed a updated and of for with be outlook respond our to have. second today second-half we'll

expectations. today's up comparable well stores. second release, both were Total earnings value with our Along noted are pleased period $X.X X%. inflationary billion, our from improved billion store our year, and sales press pressures, $X.X customers with quarter in to offerings easing responded results sales with our while throughout sales last the As above rose for we well

Earnings ended year net per in $X.XX of prior XXXX million share These million. quarter. on XX, XX-weeks compared per results $XXX July the of $XXX on net income the $X.XX earnings were second for share to

income million. first-half of per XXXX. earnings were the six of and million of earnings first $XXX per For months, $X.XX These to share $X.XX of on earnings share compared net $XXX results on net

X%. down end, inventories prior merchandised moderating Packaway year. the XX% better merchandise aforementioned areas of year, inventories a up based. X% same XX% store areas Cosmetics performance inflation. versus Sales and to of billion in decline was were geographic At year-to-date and last up merchandise total quarter total period also the versus average comparable were versus performance the dd’s X% were DISCOUNTS Similar quarter, during the the strongest XXXX first-half to period while improved represented broad while inventories Ross, due $X.X last accessories were in across to consolidated sales the of year. XX% with assortments

and nine store on Turning to of dd's. growth, the in locations about track we XX quarter. comprised approximately remain a XXX year, DISCOUNT second dd's and Ross open XX total to new Ross XX locations this of opened We

do about numbers reclose stores. to these plan close usual, or reflect -- not our XX As relocate

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

Adam Orvos

Barbara. you, Thank

As traffic. our higher mentioned, up for store quarter, previously comparable were, driven sales X% the by

Merchandise last XX.X%. XXX quarter of Second by operating to lower was XXX period basis ocean points, due goods primarily improved compared basis flat, margin points. Cost year at costs. during increased the margin sold freight to

mainly improved leverage incentives. Domestic points, points wages while as occupancy XX higher freight to store distribution basis cost points, that the than declined and Partially delevered offset offsetting period expenses costs XXX SG&A basis by points, sales. incentive more X XXX these points for the benefits by and basis higher buying were and XX basis higher from increased respectively. due basis

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

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

to and today’s customer moderation higher despite income As recent release, face low necessities. to noted inflation, our on moderate press Barbara the costs continues in persistently

prudent continue to the a is to result, it plan believe we cautiously. As business

performance earnings outlook. second-half sales we quarter raising second and improved our are given However, our

X% sales fourth and respectively. the X% XXXX planning for third to to We quarters be are comparable now of X% up to store X% and

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

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

Operating during freight as margin than the XX.X% is the open more to the increase Ross third expenses, range compensation X.X% primarily other wages. domestic to quarter in ocean dd's eight and from lower XX.X% store expect to quarter, XXXX, benefit an XX in incentive including to costs and planned stores be for We XX in and the locations. related versus offsets

are interest million. rate approximately benefit approximately to expected continue higher cash about shares XX% million year be $X.X million we is outstanding and estimated projected be $XXX The tax be is Net as from $XX versus and last rates to diluted income balance. interest to to our

over Barbara call closing the comments. turn I'll to Now for

Barbara Rentler

Thank you, Adam.

pleased are in above quarter, with environments geopolitical uncertain. retail the the we While second planned remain our and results macroeconomic,

remain the we ever than is an most remains bargains Moving as compelling keenly issue. motivated possible on to the seek prolonged delivering more inflation forward customer best branded focused as our values

business sales consistently the inventory our We to our our carefully us rigorous models will term, believe execution Longer we will also deliver to off-price earnings of growth. results. potential both manage allow and maximize and solid expenses for

up may At call this point, and to we'd like have. any you respond to questions the open

Operator

Thank you.

from session. now Matthew comes with with of And [Operator proceed Instructions] will question a be conducting first J.P. question. Morgan. Please We the Boss the line question-and-answer your

Matthew Boss

really a Great, thanks and congrats quarter. on nice

performance. offerings the on and made in elaborate proactive are you've progressed in and as second release August, that improved just changes quarter way that any think stores that would to that traffic be really you that contributing into versus the to If you you speak with the could improved you're assortment just cited the basket seeing value to helpful. Barbara, So trends

Adam Orvos

relatively On I sequential we trends, strong single year the provide a multiyear the just specifics, basis comp across basis. on but for quarter, both were quarter. let say me start trends and a Matthew, comps on wouldn't overall would

driver the was flat which the increase said slight AUR The -- an the On the units comp. the a we true with increase was was of chains. X% primary units for traffic per basket average in the offset both and per lower as That components, in transaction commentary, transaction.

Barbara Rentler

customer And our to area, chasing just that. then, and have offer amount are mean, said in across what for that's we've improved the values value offerings, everywhere, been and is the striving in we value really compelling customer. out low-to-moderate Matt, before, areas terms there to of bargains the company. buying closeouts, one merchants as the of are that's really do I we customers it's business, to because and availability income of really for particular and customer looking because been all the responding the bargains market, It's really not better-branded the able the

Matthew Boss

on I a in the pre-pandemic that just could are levels, within impediments you And expand operating merchandise year opportunity year we're mid-XXs? progresses balance the to margin multi-year, markdown this think to a as recapture how as ago And which the Great. margin we margin? follow-up, there returning structural then saw of think headwinds to then the meaning gross any year, to for about best just

Adam Orvos

Adam, this for first the the phase. question. thanks is Matt, Yes, take I'll

second quarter quarter. similar Third standpoint, the margin an components from operating will to look

in that a freight was I'll and will tailwind ocean started you But fourth we quarter. remind the year, the quarter continue for us in of to benefits third ocean significant see of So, last freight.

standpoint. So quarter. that should moderate But your be second-quarter comparable third-quarter on it considerably versus in will fourth answer again, to

fuel domestic a basis would a of XXXX. standpoint, about news, We'd incentive assuming freight we From commented that expect XX again, a the in same. we've call lot costs, we stay Other knew movers, continue that the to costs year. on the into a headwind big the through coming it be good points, commented balance

XXXX, year and that moving As against way quarter go last that into we and comment flowed but will this also quarter, underperforming year's outperformed was that most I a we so incentive quarter up the would big third quarter. the impactful and cost, part, the was second continue fourth an

but significant significant and second-quarter. in fourth-quarter be not a still but it's So third-quarter as headwind, as

Michael Hartshorn

Matthew, help will geopolitical offerings EBIT In in topline, our this drive growth our there that sales the assortment and the gradual on long-term throughout opportunities time. strong how going sustained we be we on price-value to achieve obviously over to P&L inflation key may still continue that we dependent to across can factors certainly general, outside believe strengthening growth achieve expansion EBIT including over comp macroeconomic entire and believe the highly time. say and can algorithm, To be unfold. growth is growth success. I'd are to improvement margin profitability that continue

Adam Orvos

question. markdowns, about we think I And also didn't that you answer asked

benefit as some fall So our Obviously, second elevated levels last move given expectations. for we should assuming the expect deliver the through sales we half.

Matthew Boss

Congrats again. color. Great

Adam Orvos

Thanks.

Operator

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

Lorraine Hutchinson

Good expect you. leverage incentive I Thank item need SG&A thinking the over longer-term, there Understanding rebuild for how on a to that what to afternoon. years? of and would focus this comp, about SG&A year line a is minute. out you're comps wanted you in to the

Adam Orvos

Yes, is hi, Adam. Lorraine. This

pressured by we question, this of be higher a I lever coming clearly in is X% store in costs the for SG&A in year incentive and fundamentally can that. of we think most we quarter although was SG&A longer-term wages comp that So into Also, to played costs, it hasn't was, incentive where a driven think us. part our but changed due second we'd and kind knew leverage SG&A, your deleverage clearly

Lorraine Hutchinson

this for the change to for Thank then, outlook pressures, you. any or on coming year either wage And years? your

Michael Hartshorn

was to for our Generally speaking, are so change the relatively Lorraine. stable, Sure, there and XXXX. outlook stores wages in DCs no

adjust be driven to environment. wage I few in last We going That's think really on years. appropriate we it's our Say growth staffing dependent over longer-term, market-by-market wages what's and a to the take to do continue were individual the markets. approach statutory

Lorraine Hutchinson

you. Thank

Operator

next with you. line And question. from the [Operator Instructions] Altschwager Baird. question Mark comes proceed the Please your with of Thank

Mark Altschwager

a to you. the Good great quarter. Thank afternoon, moment. top-line for Back

Ross to in of consumers next customers the do guess Just drive then I the value where bigger are the asked elsewhere? think need feeling can year? inflection can what's the today? when comps, resonating Do and we picture, think trade-down inflationary you're times that's would that And with X% your where level the is think we more way. that plus would Thank it positive pressure point confidence business trump your you you Tough the top-line. are you a you the seeing can hit way return you. in another X%, is

Adam Orvos

Here's can we speaking, the control can made answer We know second assortments Generally some our that progress we what we during how improving that. I'd control. quarter.

when we that guidance improvements. can outlook to We with in early our I is grow that more significantly or think a the talking that, year. also what when to longer-term, position And next start we know confidence we we continue make next better be there's us think give we'll earnings about comp can I year, gives see

to the uncertain what is which continue to offer economy we very in possible So remains to customers. we'll best monitor environment, do and very possible important value our can the this customer the we'll

Barbara Rentler

the gain income share across that continue really improve other our we we think if the think is that all offerings, customer to piece, to I value demographics. that's Mark, on way

So an strategy have opportunity and we more of if to a do we gain have values, good-better-best incredible we customers. more

Mark Altschwager

I'm you. in queue. the Thank

next question. Yes, question. next the take take the Just yes,

Operator

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

Chuck Grom

hear Can me? you guys

Michael Hartshorn

We can.

Adam Orvos

can. we

Chuck Grom

Okay.

you quarter. category I if I bit. the Okay, call great to wanted that. will the little talking home see on for a guys Thanks about

cosmetics areas strength. of called You and being accessories out

Bed largest also day and that and strong being other Bath? tie you in wondering I Your home talk could the what's about if with talked happened about peer was

Barbara Rentler

the piece I catch sorry, you last with? I'm didn't said

Chuck Grom

Bath the because to If you expect in coming any saw you in could and just the could from tie quarters Bed see quarter in and better Beyond? you think

Barbara Rentler

and Bath sorry. the okay above Beyond, also Home chain performed average. Bed From

And pretty for so left is there we home that lot feel broad-based and of growth across us a board. the

carried, they In overlap. lot is priorities, happening thoughts. and of we see classifications they lost Bed One that a buying Bath they of two and where the Beyond, have terms that what's

think very that's to think overlapping have time I locations. perhaps, And measure. I could to more but over we volume pick-up you hard have

sure really So, there's it. not to I to some I'm measure think opportunity how that. measure how

I have total think it still in as more broad-based. pretty of us we of of package. growth again lot We and homes like I a feel that's ahead a think home

Chuck Grom

And just follow-up. a as quick

base a category like you to quarters of attrition? home If now the is form starting after several

Barbara Rentler

You do the us you in mean mean or specifically world? to

Chuck Grom

I to people because guess seems both bottom. talk it home to are more about like starting a category form the starting

Barbara Rentler

business. home you where on depends as development it your think are I Look, in Yes. the

some we So businesses others. have are than that more developed

in to as to help business developed, us and those continue if And businesses grow equal. as so home so develop will created within business not of that we to we were businesses all I think that some our was opposed other everything every are

And see opportunity. so I us we for think still

world In are and in-home terms what people a of there back of the lot to lot you're offering. gas, outside it a of goes

So entire to are the take include the for we call whole that business right would if equation values under-developed. that grow home sure us to the and where I maximize to then have value would box I areas continue that in and we the still what making

Chuck Grom

you Thank answer. very much. Great

Operator

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

Paul Lejuez

Curious guys. to thanks, relative performed Hey, how Ross. dd's

improvement saw I'm both, but an at you said basis, performed. curious on you think absolute DDs how I

year about for underperforming been it's think a I now.

to continues into concept whatever or to do is Thanks. easier assumption? dd's your curious also cause underperformance perhaps if the outperform so that Ross comparisons built you start think And just

Michael Hartshorn

I dd's assortments dd's the sales Paul. in And first mentioned the like also Ross continued That Hi, we and inflation. combination improved say, performance trail quarter. versus trends moderating a quarter as we the would of to believe better Ross. said, commentary that's during

average income a $XX,XXX for more on to to especially dd's Ross. by $XX,XXX Their impacted inflation, to $XX,XXX $XX,XXX the is average reminder, income As household compared is necessities. the household

similar. very is here strategy Our

We very customer is offering which important are today. on strong values, to very dd's the focused

Operator

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

Adrienne Yih

mean I the a merchandise. that lower about just is the that more kind to Barbara, talk much the supply-chain that thank And wondering in if of versus year. short-stay about Great, I effectively. of intra-season pack-away much. to last short-stay than you I how you pack-away you short-stay? was you shade you can I much kind ask very of know assume annualized? allows to actually would more of sort then unlocked. Obviously, tend being do of play I wanted

sorry direct follow-up very don't so could I'm import imports. is that I question -- much much air just the Is ask model outweighing ocean the it do mix the portion ocean, on just of I second suppose, direct the much. rate My side, curious, if and rail, how as ocean the versus air, domestic outbound, domestic trucking. that? of that trucking rail, you Thank you

Michael Hartshorn

impact expectations, is driven domestic transportation, had freight separately despite in we gross a part first I'll the -- have fuel fact answer you versus can within direct sorry. our the rates it business, better than margin. It benefit year saw Ocean question our of our second-quarter, was the transportation. transportation. domestic that quarter see on our by freight, rates, is where the but within down a smaller the which ocean imports come The a the larger

Barbara Rentler

of as we means And stays next stays year, And time -- bring product. So guess terms it the be short then more along when very of packaway in short the mix what or this frame. of for happening of you're that right? that of would lines what defining packaway, stay define buying much kind something that if versus would on of this would you're you're depends buying, longer be

there's and So always fluctuates off what to what it again, that we mix looks based want of so find, what like. pack, we a

So possible there's customers. we best the that. that get about value can It's no to possible really what's for the formula deal,

terms stay you outside if or are And direct chain both. on talking the necessarily at a The world? the haven't in moves call, put of were of it's all applying this imports around. unlock it kind in you supply you short combination that our in your necessarily implying side. like a the But and you of put you're your haven't on time, is all So particular out in spring apparel hotel,

Adrienne Yih

probably so model either you that? In can both share

Barbara Rentler

Yes.

in the terms hotel hotel, So way we don't short unless we in stays big in necessarily in of have bring put the putting we in the that any ourselves to.

took goods early, arrived ago Now year issues the the carrier we obviously in, we the release goods them. we a had all

Sometimes something a But not home -- like why it's there reasons. we some. do we reasons do for own a a Container our imports. strategy in we we variety but that variety as there's for short do do, as large of a goods to put of big it, in stays sizes, we with

unlock to appropriate would manage business-as-usual Otherwise, So call been casual the our the goods those chain we of the to that. issues. other with customer. came that in. we variety had it in along the very at the metered it then timing out and have seasonality of of was this issues the in It all for timeframe where with supply a We Again, put times really prior carrier closely. last year

Operator

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

Brooke Roach

Good the best? you move your this afternoon, in into forward, you Barbara, question. and between year? opportunity assortment second-half some early about are buys the to how there better, thank quarter following you change And assortment good-better-best gains. for planning talked you improve taking you. Is those the mix to good, the as between of of continue our any Thank your

Barbara Rentler

I our Change a there's while significant there of good-better-best Best strategy. really the availability. out change good-better-best. was a lot in in a has there been don't in market been think

of this for the on So of the you effect floor have in chased the that was and of market. the what would quarter in terms a merchandise lot buckets three seen availability that past the what amount we of was

market the usual, not pretty good-better-best, since class, between And broad-based as point. in price mean, so availability every is the every I

what are the we've chase. assortments of think more reflective to I been able

really what market. goes we what the a is for chasing and we we on as as to in balance. get voting have can the chasing customer much can when what you're that the of Obviously, fall. would same I thing strategy But And around we're kind say

getting levels a merchants the into in to those floor, day. on customer votes did the every the of values appropriate each very more because wanted, buckets the you job of I one and trying of good chasing flex QX back hit think

So floor wants. on we that's could want a the the good-better-best customer not necessarily particular what

market So fluctuates out each but would which are great and I of deals deals, in out have them. it the looking QX, been the really and of I looking in and one QX fluctuate expect great have really for it merchants and would think for buckets all and we there those been in so

Operator

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

Dana Telsey

see Hi, results. and the everyone, good nice afternoon, nice to

environment, where consumer, mentioned the how the that are the we your think on you. on you is much to doing And quarter then any those increase your comparison be? given how Barbara, this saw progress versus there, As new-store how just how and much is it focus of time levels, consumers in I believe much you is improvement better the current you of traffic, about last want value relative a could you it where for you was productivity to it. that of do plan? How job are of had better and on are the better the value versus searching journey and for of it Thank brands, much updates your the

Adam Orvos

for productivity has averaged they the and that between XX% time. average mature store XX% levels, and They've the on Gain of over changed not changed. chain haven't

question on your traffic, on traffic. So

So, of traffic main the the the was for quarter. comp driver

Barbara Rentler

are customer to room moderating money. again, Where moderate-to-low-income a with our customers. think bit journey? on I little feeling the the is spend is inflation more the customers customer But

inflation of she the from faces her higher still front they because has to necessity spend. she in So has costs just

and what customer think out on. The of the on in journey and she are to and continual I the I values right? merchants a our the value votes floor, with think voting terms better it's buying is So goods responding better on customer process,

think think first I make offering her possible target the It's how It's to level can. quarter team that from a think did out better So, obviously, -- versus we'll just its seek and best really always and responds put I progress level. own we in better I quarter, assortments not want the and we on merchant the we continue in and or a second broader that values it have of job customer a to values will mind.

of And so really ability heightened in mind now awareness the that accelerate given to chase the have has have to and really some perhaps us those things. opportunity merchants an goods and they

So again, the amount. have I or it don't will beginning continue. end

ask that is I the because the and So for that job to we level satisfy think is. our and job us merchant's will think you in customer her decide should and respond teams' to whatever

Operator

Alex proceed the from comes question Morgan with question. of line next And with Please Stanley. your the Straton

Alex Straton

I even players these taking to landscape. congrats On the nice talk about our like for in low-price on question and of thanks a the we've years, wanted the witnessed quarter. recent e-commerce competitive Great, rise end, Shein.

just a competitive businesses few So think they what how you versus changed like has years even Ross for I'm of mean those lot. the wondering now ago? how or Barbara, landscape maybe, about Thanks a types

Barbara Rentler

is doing Shein offer a obviously Well, lot and of great they business value.

don't have We large ladies I really think most us business for compare would pretty can I is Shein. businesses think to comparable. that junior I apparel, in myself our so be a

I think competition whether see is is. a more whether is Shein, it to of whether that it's lot Primark, in it it's arena, reality

our and just it's offer like I competitor. another are satisfy So that the just to customer again be able they assortments job to think

about think you stores right, had the ago competitors, years department share. if terms, lot In all more a

have would us. a been major for that So competitor

better customers. challenging I you off-price is different would mean, evolve. unique think we than I are parts of the think and the the about I so one all And being a know, than segments you're satisfy types have I an others would of opportunity world more best of watching know to that market

and keeps about strong, is want This we values to broad. everyone asking to the trade-down customer. we is the why want assortments be to This why be

is versus more opportunity another a has your to off-price segment. if that and by broadening may I think getting assortments I that just do unique really particular I think customers in

is this in, the best to the can to their And studies than obviously XX understand has best been, merchants value the different and we we and products offer where looked think what discussion study very will it give that and we be there have if and this what offer discussion ago, So today. all job and retailers they can. at the a they years we other I are

So retailing all probably we is I dynamic. agree think is

believe flex the I but -- wants. to and opportunity the so not customer on ability who off-price of what unique of has based flex has pigeon-holed And move that you into view do and customer products it because you're you carries this kind are, can the with and one

in the I the the So, time. think right right place prices at

Operator

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

Unidentified Analyst

Hi, on Is seeing Juliana as towards good we're of see do everyone. Thank quarter an that This upside more a is home improving, just example, on performance you on driving and Ike. follow-up for and there? moderation the accessories Maybe a see we first you. quarter. for Congrats quick the mix-shift cosmetic AURs. they're result

Michael Hartshorn

will don't traffic it AUR, of plan better business a or on transactions. have we customer. it the us AURs the mix if really forward of best going fundamentally dependent the is the on we impact we The will mix-shift be was combination an about think think both We On business. size providing that on and sales in values offer the way the values basket and traffic to

Barbara Rentler

home said, terms home. we have of And and we we what then opportunity like feel in in I

an I upsides to upside is and other businesses I think company And is so versus businesses over type longer there do that home. compared lead-time Home the is things, believe time. there to but

Operator

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

Marni Shapiro

early in sort lower curious a has looking events, guys quarter. and back-to-school. valley, is curious great little regions the general, holiday trends students in of much around a are on evened for I'm or it's And when Congratulations out for regions the of back-to-school just saw valleys the holiday are I'm your of and it guys. your what a if or lot pickup traffic in holidays and in seeing bit? are you the Thanks, it's peaks weekends like? you where traffic higher Curious if or most your traffic

Michael Hartshorn

intra-quarter back-to-school. we trends Marni, talk for about Hi, wouldn't

In of been I business, mentioned. valleys in peaks terms say, it's versus would very traffic, you our steady that and

Operator

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

Laura Champine

quarter my enough taking that a sales Thanks third which row down is given the double-digits, trend? for question. but in to be just the was in do I current you your of opinion, improvement this have seems inventory inventory normalization, noted in

Michael Hartshorn

inventory, as in year we Laura. really comparison and of higher down the reduction last Hi about receipts XX%, the that inventory. mentioned packaway where also and release was that we mentioned, as Yes, early had in versus in-transit store substantial we to facilities was in our the amount it had Barbara

good against We larger our overall up numbers stores. we're We year. those in So ended last up feel X% about our levels. inventory actually

of say So would are overall with. we content I the level inventory and the happy

Operator

comes line question from the next with And proceed Edward of the Yruma Piper Sandler. Please with your question.

Edward Yruma

accessories. chasing availability there. just Kind you I'm thanks you cited inventory there space. on of are quickly the proposed there's and M&A cosmetics Obviously, curious taking questions. strengthened the know the for Hey, I in if

drive I and there materially a payrolls then in like noticed pretty So to term. were would long just opinion, of great. that impact you'd Any out availability call up sequentially. model And question. be Thanks. your accessory kind year-over-year that housekeeping accrued

Michael Hartshorn

and last performance On that at comparison. our it's really the you incentive piece, and around accrued versus look financial this last payroll, when year year's

Barbara Rentler

availability want question you what just is? then cosmetic and know to on sure And the the to make want accessory

Edward Yruma

availability like kind in just accessories that space, your the seeing hamper happen that if based M&A of you're market may on the and curious you're if longer-term? Yeah, in this willing opine to in would good product

Barbara Rentler

availability what looking as we and just for. every have and has the is clinics as every market, almost there you're I've Look, is availability, market availability, business it in beginning. but in said every both class every I not mean, depending cosmetic upon

piece second sure what question, I'm the The is? not it of

Michael Hartshorn

the in wouldn't market. We on comment the M&A

Barbara Rentler

Okay.

Operator

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

Aneesha Sherman

you. Thank

or quarter, guidance about acceleration factors it new it is the last you And price about you internal half? similar product retailers going execution back-to-school, on to you moderating acceleration makes comp and about other like absorbing into across have second, a that also do your inflation some promotional the second Can you. four-year week market? So external confident a models to quite inflation back-to-school discount a doing to what bringing Is the about more this talked in better about for stack. become fall expect and then sector? Thank rollbacks talk

Michael Hartshorn

guidance, a confidence customer. the get our function the We the quarter. it's think fourth say to providing season. in performed be fourth we quarter In the second I'd the holiday the see closer. promotional quarter, On deceleration, what's Aneesha, as of we in the we'll our very that's quarter we're how and we driving guidance assortments a that a actually third could and in update

Operator

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

Corey Tarlowe

Great, thanks.

about real you're from rates and on the there rates terms estate rental you're on you're if a any returns accessories could impact perform touch footwear of wondering you chain on your look look bit average. availability higher You talked just in and real what's like? the as that either was relative And to estate, also that apparel, higher potentially down on or is seeing? the impact interest you seeing pipeline I that agreements how seeing anything little and home. on cosmetics And then there, did

Michael Hartshorn

improved mentioned, Sure. talk the above although cosmetics about as the above versus merchandise-wise, performed QX. category average. plan we Merchant-wise, it were chain and Shoes again the the businesses. chain, best and accessories, Home our trailed performance. let me Apparel performing we're and

and interest very there's estate That the other a and On long-term developing said, increases our renewals, healthy real point, at an that say, our obviously, methodical real estate this under pipeline we of rent costs. seeing, of prefer. have of estate option plans. types increased terms we're contract support and overall, typically has retailers we're growth in And not rent, a our team in from process real I'd to availability, been major

Operator

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

Krista Zuber

Krista Good afternoon. behalf of John. This on is Zuber

margin relation I guidance? and you you of still or the to sort your how half Thank directionally, if sharper operating environment given broadly see QX highly you. proposition. rather heading retail broadly your merchandise promotional just your into talk second across Just to margin wonder could value

Adam Orvos

Hey, mentioned be a a all had benefit. margin. by components markdown will have bit Krista. we will that's major just to earlier, Merchandise ocean to we as see elevated continue levels freight I moving really us us little tailwind primarily margin from as within will help merchandise of be that driven and we

Operator

We of for one Please from UBS. coming final question. have question with the line time Jay proceed with Sole your

Jay Sole

where a Great, an overall thank just to you inventory starting really was the of it environment really the we buying year-ago how retailers inflation sort if had and to guess take a slowdown a how give now inventory my lot much taking go step-back reopening a I idea compares and question. and you industry just excess us of whole because realized just back kick-in. just of been in if right a year-ago, post time taking built-up a for

a than of just bit be little relative So us would context of how now it Is kind better, worse you. environment it as is is a think helpful? idea could you the worse, give them? to or Thank an lot it good, you there any about

Barbara Rentler

was again, it's last now. again, there lot there's availability lot year supply. year. of and this There last every And It it's definitely Obviously, not there of was and business broad-based. year a there single availability again a but of classification is

Operator

are this no floor any and I'd for over comments. closing like turn time, Barbara further Rentler back at to the There questions to

Barbara Rentler

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

Operator

This concludes today's teleconference.

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

Ross Stores (ROST) 17 Aug 232023 Q2 Earnings call transcript