ROST - Earnings call transcript Q2 2024

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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. the in Form release Form XX-K X-Ks file included company's in XX-Q are on XXXX fiscal and with factors today's and press the and Risk SEC. fiscal XXXX to And now Rentler, Executive Officer. the over to Chief turn I Barbara call like would

Barbara Rentler

afternoon. Good

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

from sales we results of period for per second the release, value for rose compared well $X.XX our year's million. with $X.XX As offerings inflationary and with earnings to our today's are with sales billion, our sales customers stores. noted quarter $X.X the results net expectations. Along up July pressures, net improved were ended throughout on income X%. Earnings comparable above in XXXX, on XX, These store while $X.X XX weeks share of easing the to press per $XXX our $XXX quarter. both last well pleased responded in million share earnings year, billion prior were second Total

comparable $X.XX X% of XXXX. of in year-to-date on X% For in million up net the million. to income half of year. on were share results months, billion, were first the $X.X of net earnings a earnings share X the per compared $X.XX half with last period XXXX of sales first per earnings versus decline These first $XXX Sales to $XXX

the performance the down XX% merchandise DISCOUNTS inventories Ross, and period were due while accessories the store X%. the geographic while consolidated merchandise XX% moderating also broad-based. total average was inflation. to versus up performance last total aforementioned merchandise inventories the better prior assortments quarter, across and end, dd's versus areas inventories same Similar areas were during improved in were of strongest quarter At Cosmetics Packaway XX% year, year. to of represented

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

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

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

Adam Orvos

Thank you, Barbara.

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

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

store wages higher XXX SG&A and offset Partially these leverage due XXX as benefits more delevered that incentives. mainly expenses than period to higher basis were higher incentive from points increased basis by for sales. offsetting points the buying costs the

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

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

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

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

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

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

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

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

X compensation last the XX% year primarily and quarter, incentive million stores higher benefit diluted be XX.X% from during is about We costs outstanding domestic the be benefit offset other and X.X% Operating are planned continue in store to wages. rate open expect margin is third increase and on be versus in to cash million. quarter from to $X.X Ross range versus locations. including as million our XX.X% and is to interest freight ocean expenses, XX to to we related expected XXX as balance. lower in dd's income tax approximately estimated $XX shares than approximately an XX more the XXXX rates projected for Net The to interest to be the

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

Barbara Rentler

you, Thank Adam.

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

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

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

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

Operator

of [Operator Instructions] And question the first JPMorgan. the with line from comes Matthew Boss

Matthew Boss

quarter. and Great. Thanks nice on congrats really a

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

Michael Hartshorn

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

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

Barbara Rentler

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

Matthew Boss

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

Adam Orvos

take Matt, the Thanks I'll is first piece. the for this Adam. Yes, question.

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

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

it a we'd again, versus moderate the costs call commented quarter points domestic continue good through the But freight news, that standpoint, stay to again, So we assuming fourth in third should -- the of From considerably second comparable XX fuel answer that be will standpoint. on quarter. expect balance XXXX. on same, in basis to of quarter

we've an big knew year coming be that the headwind a year against incentive as go Other We a lot up outperform underperforming movers, would XXXX. we and into this commented about cost.

costs and part, continue the So the the will most that but flowed comment third was incentive in also year's quarter quarter. that quarter big would way last we fourth and was a quarter, impactful moving second

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

Michael Hartshorn

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

Adam Orvos

markdown answer so didn't And that I think we also you question. asked

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

Matthew Boss

again. Great color. Congrats

Operator

of The next Bank question with line of America. Lorraine the Hutchinson comes from

Lorraine Maikis

term? you focus a in the are And line would rebuild . comp. over the comp expect SG&A Understanding there's I How of longer item SG&A what years? wanted on year, that to leverage need minute. a for to to incentive you this about out thinking

Adam Orvos

Lorraine, Adam. is this

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

Lorraine Maikis

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

Michael Hartshorn

DCs wages are stores stable. in Generally our Lorraine. Sure, and speaking, relatively

no So there the outlook for was XXXX. change to

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

Operator

comes with of [Operator next from Baird. Altschwager Mark Instructions] And line the question the

Mark Altschwager

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

Michael Hartshorn

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

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

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

Barbara Rentler

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

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

Operator

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

Charles Grom

me? hear guys you Can

Adam Orvos

can. We

Charles Grom

wanted I a see about if little are category the you to bit. guys talking home

accessories You also talk strong. largest could And I of about talked your cosmetics called with areas you being if of was and the end tie home about at peer wondering you and day, in happened what's the being that strength, out the bath.

Barbara Rentler

I piece With? didn't catch you sorry. last the said. I'm

Charles Grom

see If think could benefit bed, the you in quarters beyond. from just in and you to tie coming in the quarter any bath and could saw you expect

Barbara Rentler

From bed, bath and beyond.

above sorry. chain Okay, also Home performed average. the

there's we pretty across in lot broad-based so a for And that of feel board. home us, the growth left still

the we that to bed, lot where two have thoughts. One and happening a bath and that that overlap. of lost they carried classification of terms volume In is even prior beyond, they

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

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

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

Charles Grom

the And just quick several base a like you as quarters of starting category attrition? is home form follow-up. after now to Do a

Barbara Rentler

You in us mean you specifically to mean the or world.

Charles Grom

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

Barbara Rentler

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

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

businesses, help we if us so in grow develop we of and think to to it other some were those was to continue developed. as And business I everything as opposed that will every

within equal. businesses business are not all home So our created

so I we see Ross, think, And still opportunity.

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

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

Operator

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

Paul Lejuez

to relative performed dd's how Curious Ross.

curious basis on said I an dd's absolute performed. think you you both. how at improvement saw But

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

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

Michael Hartshorn

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

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

strategy very similar. Our here is

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

Operator

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

Adrienne Yih-Tennant

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

on do imports. My second import side, direct direct just don't the you is follow-up question much as

right? So curious mix I'm ocean ocean portion -- rail domestic, Is of model of the outbound, that ocean how trucking the I that Sort of of could air, rail much domestic the it the just outweighing versus ask suppose, if sort I trucking. air that.

Michael Hartshorn

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

Barbara Rentler

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

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

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

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

Adrienne Yih-Tennant

. if In both, you either. share can that? Probably

Barbara Rentler

Yes.

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

the a in, goods carrier the Now Obviously, goods arrived early, handle year released we ago, we when took the we issues. them.

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

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

Operator

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

Brooke Roach

Barbara, continue And better, in buys Was there good, following mix change the assortment the your best. improve some planning as good, quarter year? of best to early second between you opportunity you better, half to you those forward are assortment talked move how the about the this any gains. into your between of

Barbara Rentler

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

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

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

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

getting we for fall. much as what you're around the get can that we chasing, customer of goes I Obviously, really wanted a more have as market. what strategy chasing what voting would and we're kind And the to levels of And same on, when one each the chasing say in the votes hit thing But and is in good balance. those on values appropriate very the back did trying I of the the a customer because you every QX to floor, of day. merchants buckets job think of into

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

been looking great I for in merchants out deals, the market really really the have have out So and really, think which been there.

And And deals of But those QX in and it I all for so QX. one we each fluctuate looking would fluctuates. buckets them. great expect in are of and would it

Operator

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

Dana Telsey

the to results. nice see Nice

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

Michael Hartshorn

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

Barbara Rentler

traffic. about talk I'll

Michael Hartshorn

Traffic.

on So traffic. -- your on traffic question

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

Barbara Rentler

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

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

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

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

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

us continue. an the you that So will decide and again, and that the is that a on I job it think satisfy beginning team's should to our think end amount respond have ask and whatever level we merchant customer or I because job don't to will for her is.

Operator

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

Alexandra Straton

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

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

Barbara Rentler

a Sure. of and Well, value. offer obviously, they Shein's great doing lot business,

We apparel. is large -- pretty junior our have business for ladies us business a a in

So be would really can Shein. think most think to that myself I I compare comparable. I don't

reality whether is the a Shein, think assortments it's job to the Primark, able to offer be just whether there's of it that that arena, it's our I think satisfy lot competition so customer. I whether more -- it's in

And again, competitor. another they're just like

would competitor competitors, for ago if about In terms major share a of us. you so years that the right? lot been had a Department have stores all -- more think

know of market different watching the more are world mean, would than challenging I segments better you I know, think -- evolve I than you're others. would the and

to the to broad. types all we I is strong. why values opportunity want of so satisfy be And a This This customers. being is to one about is the have parts assortments want why that the unique be best think of we we off-price in

asking keeps everyone down about the customer. And trade

has think a that, I really your And I opportunity segment. particular versus I more getting unique another mean, off-price if is just do by to broadening assortment. customers think

different and the this merchants understand a and product we job would other the than we and offer think ago, offer value it where can best if what and can. So had all XX that we and Shein, study best if this discussion what discussion are been study very today. their there's be they -- at I give to obviously we years looked retailers to the is they the And

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

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

I So off-price the the place right think right in is at time.

Operator

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

Unknown Analyst

Congrats follow-up seeing This is result of a accessories. more for AUR. Julianna on the shift we're cosmetic on on Ike. good there mix quarter. Maybe towards Is just quick a and moderation

saw there? For quarter. improving, as driving see home you upside example, And this see an we we performance that do

Michael Hartshorn

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

Barbara Rentler

in terms in we what we have listen, home, said, like -- opportunity And feel I I home. of

the And over believe time. versus businesses, time upside. is lead -- and Home do so longer I is things, I is but there not are home that compared there type businesses is think, other upside to company

Operator

of line the from comes question next Retail the with The Shapiro Tracker. Marni And

Marni Shapiro

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

Michael Hartshorn

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

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

Operator

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

Laura Champine

inventory of opinion, a sales the down in which was have to this the But digits, current that inventories given noted in quarter just double your do row trend? improvement enough be I you seems normalization. third in

Michael Hartshorn

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

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

So say, of inventory and with. happy I content would overall, the level we're the

Operator

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

Edward Yruma

quickly, strength of Kind there availability chasing availability a in inventory and curious long impact, cited in Obviously, would of accessories. on know M&A your Just you're space, there. I you that this cosmetics there's kind term? if proposed in accessory opinion,

great. like housekeeping model just that a be I out were then would year-over-year And question. payrolls noticed Any there you'd driver to materially call accrued up pretty and sequentially.

Adam Orvos

piece, last performance. really payroll, accrued our it's financial the On

this up. are And last costs when at year year look incentive So comparison. you that versus

Barbara Rentler

want I to what make accessory And cosmetic is. the question, availability just the know and sure you want to on

Edward Yruma

Yes.

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

Barbara Rentler

market, I said you're has But cosmetics Look, as market accessories what availability beginning, every is have business it class availability. almost upon for. not in in there's in the depending I availabilities just both every in mean, and every every looking

not second I'm of the question, The sure... piece

Michael Hartshorn

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

Operator

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

Aneesha Sherman

is it better execution comp half? models new Is acceleration Or the about it factors a product last you stack. the X-year quarter, Can a a to into on bringing about going moderating? what more to and guidance So also similar external you market? inflation confident like makes talk your second about about acceleration internal that

have Do then this back-to-school. about second, to become some the talked absorbing and across you promotional other back-to-school for discount quite doing And expect sector? price week and rollbacks fall retailers inflation

Michael Hartshorn

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

Operator

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

Corey Tarlowe

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

Michael Hartshorn

That about estate improved were growth me real let availability, estate mentioned, team that performance. Merchant-wise, of has again I'd trailed pipeline best businesses. prefer. the developing we to we're process it QX. we a the say, increased performed category our cosmetics plan Shoes as the a chain, versus real long-term the Apparel and types methodical estate support plans. performing retailers overall, although accessories, chain above Home Merchandise-wise, Sure. our and typically of there's and talk from said, above our the average. and . On interest other been real very healthy an

not under we're major obviously, rent, option have our of this terms in we're increases and point, in rent and costs. at And contract renewals, seeing,

Operator

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

Krista Zuber

John. Zuber behalf Krista of is on This

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

Adam Orvos

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

Operator

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

Jay Sole

it give guess if the back just year I now go Because buying ago? back us step a you inventory the just reopening just the excess to an in. how how I you to year a take as compares up if had right of and think a slowdown and overall of really ago, where time was environment inflation much a realized whole retailers a kick and inventory industry really been post started lot built sort idea of

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

Barbara Rentler

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

Operator

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

Barbara Rentler

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

Operator

today's teleconference. concludes This

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

Ross Stores (ROST) 17 Aug 232024 Q2 Earnings call transcript