Ross Stores (ROST) 22 Aug 242025 Q2 Earnings call transcript

Company Profile

Participants

Barbara Rentler	executive
Adam Orvos	executive
Matthew Boss	analyst
Michael Hartshorn	executive
Charles Grom	analyst
Mark Altschwager	analyst
Paul Lejuez	analyst
Michael Binetti	analyst
Alexandra Straton	analyst
Lorraine Maikis	analyst
Dana Telsey	analyst
Brooke Roach	analyst
Robert Drbul	analyst
Adrienne Yih-Tennant	analyst
Irwin Boruchow	analyst
Marni Shapiro	analyst
John Kernan	analyst
Aneesha Sherman	analyst
Corey Tarlowe	analyst
Jay Sole	analyst
Laura Champine	analyst

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the Ross Stores Second Quarter 2024 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 in the company's fiscal 2023 Form 10-K and fiscal 2024 Form 10-Q and 8-Ks on file with the SEC.

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

Barbara Rentler

afternoon. Good

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

points today's $X.X second margin X%. XX.X%. our Operating store offerings billion the for As from press noted X% Total were stronger sales comparable with up earnings resonated sales improved above versus in $X.X sales as value to our billion, grew release, up basis period last quarter last customers. and to with year, our year expectations XXX increasing

$X.XX X, for share from the per year's for earnings are share results million. $X.XX Earnings income of ended per up in on XX August of second million last These net $XXX XXXX on $XXX weeks quarter. net

XXXX earnings first net of to $X.XX first the billion. were from of For X income billion net the compare of per half earnings $XXX prior These on results $X.XX share in for half million of the sales up XXXX. $X $XX.X the per on months, of Sales share earnings for first the $X.X to billion, year. XXXX year-to-date X%. period up grew for Comparable were

geographic stores. based. in the Ross, responded performance the fashions improved favorably value strongest merchandise to broad dd's Cosmetics offered as during Like also areas quarter, were in and while shoppers the children's DISCOUNTS' stronger performance was

versus last In addition, recent performance. benefiting year, faced easier their dd's compares

end, X% customer we total X% up up year. trends, assortments week inventories consolidated store While this merchandise XX% last diverse were of shift. inventories the Packaway more to XX% to improved adjust are year, due slightly encouraged by were was versus calendar quarter At in base. XXrd last to quarter while average up newer at from the inventories the markets continue address we total end,

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

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

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

Adam Orvos

Thank you, Barbara.

for sales mentioned, previously our a the comparable As traffic up were by combination basket and size. store X% higher quarter, of driven

up XX.X% Second operating was year. XX.X% last XXX margin quarter points over of basis

and higher margins. by as Our sales merchandise distribution partially and improved profitability lower lower benefited were planned offset that costs incentive from

by period goods basis of improved points. domestic XX sold and Cost costs XX the Distribution freight points. XX points, while basis declined by basis and costs by XX buying during levered respectively,

costs. As XX to basis sales and the points, by basis expected, margin points. incentive for merchandise mainly due SG&A by lower period decreased higher XX improved

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

result, the a for year. total stock buy billion $X.XX As in track a remain to we of back on

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

our release, moderate-income pressuring their spending. press to for high today's in face necessities, continue cost noted Barbara As low- discretionary to customers

of also is comparisons amidst Looking become external half environment challenging year during uncertain. more highly the the second ahead, an our prior year sales that

our maintain As a cautious result, we continue sales. a in approach to forecasting

planning growth fourth we quarters, X% and respectively, of gains, X% both and X% are the third comparable of top to XXXX. on For sales X% in

to for $X.XX to earnings versus per to guidance, be year $X.XX $X.XX $X.XX this are XXXX. now range share with This fourth line the performs in $X.XX and with in in quarter up additional last If forecast of achieve expect to perform of sales updated in earnings quarter the share to of reflects compared guidance expected If XXXX. half third $X.XX to second the the we $X.XX are full range $X to XXXX. be these half line in from for in projections, $X.XX, now the in fiscal the second year efficiencies earnings per

a As per from included year fourth XXXX both approximate reminder, full XXrd the quarter $X.XX an the benefit results week. and share

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

lower We and the to planned be build distribution to XX.X% and to the XX as reflects are lower is the diluted quarter, merchandise XX.X% are is outstanding million. including efforts freight costs for in The approximately locations. more XXXX incentive, be and XX%, shares priced margin expect rate to third XX% offer during interest to branded we stores $XX sharply in expected by on approximately This that XXXX. offset XX.X% bargains. XX estimated be be to million. Operating quarter is projected margins open our to Ross to X income XXX to compared Net dd's range, outlook tax

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

Barbara Rentler

Adam. Thank you,

While were uncertain above of and expectations, aware our earnings sales we the keenly external environment. quarter second remain

is for our face us expect pressures the customers given prospects especially In most in great addition, important gains delivering providing cost the we from branded bargains our Thus, they quality will shoppers on on ever, market that have high to that share recognize with the the more maximizing by stay off-price laser-focused necessities. continued than we from marketplace. the values come

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

Operator

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

Matthew Boss

nice quarter. on really a Congrats

Barbara Rentler

you. Thank

Matthew Boss

just as you you progression half that with saw value the could And elaborate the business as the quarter? progress trends during initiatives gross half? to drivers of amplify on gross year. And you opportunity how margin, brands Barbara, back margin to about availability on the the or speak your maybe the think mark-on of current back then So based into just could goods to for Adam, in on of best well

Michael Hartshorn

Matt, and basis. stack performance comp the with mid-quarter, a us, for during comps multiyear quarter. strongest Cadence-wise were a I'll single both on start year

Barbara Rentler

the in then progress offering the resonating with terms definitely on our value stronger customers. And is value of strategy,

the just to again, value on path. in high with in to to gain to And really So it continue out the And value that have the down necessities. share said think I season, this continue for there really improving now. that way market offering build is dealing in fall we're going is we us my customer opening, cost I

Adam Orvos

And this Matt, Adam. is

your so about the question through just specifically, walk year mark-on me and think let I some you of balance the parts. the of

DC basis quarter. XX in points about talked we by leverage the So cost

freight that's see centers. and a there. costs invested We to retention distribution our productivity were to DC incentives a continue in lower higher ocean us was in newer strong. favorable, and We mark-on expected, automation Buying slight in Houston environment, We've primary a neutral also specifically. the lift. factor The were providing there. but we benefit as regarding then And opened freight, hiring was domestic

the all step year And by of to is the strategy, we half that voiced that right? expect pressure of the pressure to as up margin our XX ramp move merchandise We margin, merchandise continues through into basis dropped second about we year. up and points. the we So move to that as our brand

Operator

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

Charles Grom

And anything to the on maybe where within cadence, talk you if back-to-school wondering trends apparel far. categories, could about on could on and in home you you the touch also the thus also was are the results I if speak the quarter.

Michael Hartshorn

us. trends about Cadence-wise, say comps -- inter-quarter Hartshorn. going into talk we wouldn't any Michael mid-quarter It's as for I said, strongest wouldn't we QX. But Sure. were

merchandise terms And cosmetics slightly then last the with categories, line it in chain in overall, areas, home the line while tough as compares lapped strongest Shoes apparel were was year. with average. the children's In of performed were and from chain. relatively below

Operator

next And the from with comes Altschwager Baird. Mark line of the question

Mark Altschwager

here, guide So guide your just thinking end the $X.XX high of the by EPS about you beat the quarter. in updated

I think at $X.XX. the the raising year end high you're for full

Second X% X% to range. half in still comp that

the the key versus margin were back outlook to half days talk of XX you us half the through the what changes just maybe any key operating for So ago. drivers year, for expecting back

that call I you maybe and some anything efficiencies, you think expand out. on can just mentioned additional else

Michael Hartshorn

Sure.

on for and the the We're you'll strategy. planned year based how view thing in The from originally has back savings versus the did margin we on expense initiatives, be through more planned continuously the year. second nothing -- to changed quarter the more given business. cost ways we some notice one important for the the of the it's And our branded productive, even change, updated year. initiatives beat looking quarter, did efficiencies the an the On pressure gave across half that but of the merchandise flow-through the really we then of

through we started we when of projection a actually the had guidance. we bit and year. is see that a back that, ahead you what half So the We're flowed

Operator

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

Paul Lejuez

noticed just curious, in originally? behavior pressure, thinking I or you if you I think first current the then could behave you your you basis. size? if now Also is What the any under up. when in versus second were share is customer gave curious are your was you where know you but a AUR might basket Curious UPT. current could the maybe the you quarter customer change versus on talk second, basket dollar said about I'm how quarter wondering your you customer said if right in business, AUR And guidance

Michael Hartshorn

Sure, Paul.

on AUR. the First

For per unit up fewer a partially the items higher as quarter, basket the The driven offset was by a basket. average combination of retails were slightly and traffic was comp higher transaction. by average

price On better, value. a the on driving assortment basket. we're specific AUR focused best the actual product focused not don't rather great offering a at give the specifics or AUR, points, but We we're on on good,

necessities terms reports, performance now customer it's the quarter improved especially now, stubbornly us, But since industry from persistent what we for on it an based In say, macro the uncertain year-to-date, saw what our the an I both value economy. also is of I consumer, quarter, second say, on first seeking improvement. with, I'd of in and would inflation clearly the and in obviously, judging would health though, say,

As ever, value price a than for shop. more is her believe critical where we determining to result, when now

Paul Lejuez

hear up did bit, is right it was I And that down? a UPT AUR little

Michael Hartshorn

correct. Yes,

Paul Lejuez

what mix together value, more that explain on AUR? higher Just just the focus value? as the you curious But maybe tie value? that with would you being a to providing can Is more offer it there impact customer

Michael Hartshorn

Again, providing It's more increase with value, slight great -- our on Sure, Paul. in to the led that's focused a it and at branded aligns about strategy. brands we're AUR.

Operator

next Evercore question from Binetti ISI. line the of comes the with Michael And

Michael Binetti

great started unpack that point you one of think have out to the for the the -- I could most little I the include rolling a on the pressure planned quarter. quarter, in I know that a back product the thought just second pure maybe you in last half that strategy us merch some promotion was year-over-year at I margin in bit Congrats guess on year. do more. of since merchandise line. you margin

So little maybe as of XX upside driving And margin you get on if a always -- pressure the you point about points just I second is about bit for better product or speak separately, into sales, know a basis worse leverage. then XX of the unpack or your us. half. And that that to same-store

do there X wouldn't you Or that why favorability. the think the any the basis XX maybe on And if that about opportunity? you you contributors down got half? the top could continue points flow-through back Maybe end break better if in point I there there. beat is the on thoughts think to guys to

Michael Hartshorn

also the to to in in business. better driven your cost basis improvement a obviously for start saw expense flow-through. the And initiatives XX sale. have to we initiatives every The the upside XX points by point, point sales. with on we was about some that's of But Just and

back year. that's upside the forecasted based the so we And on that the in that, of half

Adam Orvos

were right? the QX. at Michael, still is that, benefit the was the pressure year, and in continue year, saw in Adam. year, number margin residual worse why And some of in as back QX. additional half. XX I'll side end about but penetration this did we on had see question, mentioned, start gradual freight some that's And pressure the prior this after brands, reported We jump going was more of step-up I our QX. in than bps increase right? really We the We of in as you the Yes, that the efforts last we'll we helping but to brands that points XX that ocean of basis

Operator

[Operator from next Instructions] comes Alex the Morgan of Our Straton question line with Stanley.

Alexandra Straton

quarter. on Congrats a nice

are? back the more you're bit those some of say or SG&A examples more those benefits you that are or us that in they Just and you COGS little color expect Can you what savings a benefits half. expense give finding, And cost more both? around just

Michael Hartshorn

Sure.

guess, Just to leveraging automation I of through, the certainly couple talk examples. in We're a DCs.

there We and continue the to stores. make business, and DCs improvements including throughout

give Just in to robots the we've as SG&A not inventory, COGS. stores store, a to move an you sort as couple to examples the well and to which DCs, automated systems implemented to of build vehicles automated be at inventory -- would cartons the

to We a have associates. augment select self-checkout locations. We of number work in things the piloted for

We handheld and take help rolling to in stores productive currently have inventory, us out are into be devices scheduling more tasks flexible introduced that the new to check and managed markdowns will stores.

Adam Orvos

given domestic where freight rates, it that found what the fuel in help seeing bit in we've being costs. of multiple through Alex, the and on sense our to from I'd flow primary to rate probably our P&L. we're one of from thought parts a back And example, speak structure as We little contracted a specifically half. that efficiencies made building bit,

Operator

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

Lorraine Maikis

And any further in Can that year? the additional second half? margin pressure available you offset you're merchandise quantify operating are merch margin efficiencies into the to there decline expecting next

Adam Orvos

-- XX Adam. be is this impact basis other it than Lorraine, reported in we saying amount Yes. the we points of margin higher the QX. will not We're the just than to it that expect quantifying merchandise

the on that offsets category. I have commented probably think That's in half, freight. I primary the we'll back just domestic

improvement cost be distribution That another and would our there. on touched category. Michael

As good incentive standpoint, costs. we've first some a still up a profitability the significant far to we're year news expect against so in because have -- experienced we from these half, so in projections, with

the into As terms probably parts would move to I moving merchandise of the the offsets biggest margin. we back in say half, those are

Michael Hartshorn

just XXXX. through at too We're about early Lorraine, process this to point, starting And budget it's to go our talk year. next for

Operator

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

Dana Telsey

you move the their And half you this home thinking pricing forward mind about on the focus, the ladies focus businesses? about how on on performance Barbara, as those value, As think back any into brands of in business, each we in updates your business, and year? of are of the

Barbara Rentler

Sure.

assortments, So you know, is our values getting we're in business, -- of the branded, in obviously adding more that's shifting the to more the ladies business, because focuses critical, one critical of business. ladies as terms our entire is

We keep adding as learned. going, of learning trying we've different a lot again, vendors, So we're new values.

ladies, And to going so as need that's just going to kind we're of and we go. continue, to as we adjust

-- I talk afraid I'm pricing. equation, value say The to got value would in most we've in value pricing, When it. we

I'm segment focus and a value, So door whether other we're much all the value price. department compared focused the the on retailers, the I'm in, to it on depending The not of is from our out or the upon what value. a so value, store promotional in mass,

world as in isn't for home outside the example. home, ladies or obviously even kids In or business branded the as men's

businesses on it the more is in the in business, focused really home where specific outside we're branded world. So

where business every shift in sure we're We'd again, incredible we to So against where it figuring a the to is our comparing make we go be comparison really we're market process. driving a it good value and -- to we figuring good strategy have again, have the out customer out, that is a value compare the I when want because that points able different we're and could you're in really strategy. mean show, so brand. sales. is it at But

it. So do to going we're just continue to

a AUR. terms We're planning really planning we're really an absolute value. pricing, In of not

in we any good, because the have want alienate don't we better, customer. to best assortment brands with Now will that,

price still broad we make a So have products we assortment a we broad in of assortment to want sure of where stores. points have the

want to important an don't the hunt. because we So part treasure that's that lose of

of Michael we're But absolute AUR. not in terms before, as specific pricing, planning said

Recognizing we'll in all their the do time: a are world outside is now the forward, about comparing and reporting drill same But track out-the-door value that can that of at run follow really talking same pricing path. we looking and through promoting sales outdoor retailers and competitive us, merchants strategy. as the pricing, really that. So see front shop, it going

You really got her every she's want come like incredible to the feel day a and deal in to week. an of

businesses in at kind again, points different at different So journey, the are that's but where we this of moment.

Operator

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

Brooke Roach

marketplace inventory seeing better for level in a the any you to And talk available margins? you seeing the in you are of Are inventory additional vendor rate at opportunities can for Barbara, quality opportunities mark-on new come today? partnerships? and

Barbara Rentler

availability, So more say, than pretty in broad as the it's some but favorable. businesses inventory terms based, It's I just normally there. would still availability remains others, of out having

is the quality Again, products In quality second Brooke, that One availability. of just terms question brands is what of itself, of kind it's of you availability. said? the one was all the in there are. here

Michael Hartshorn

vendors. New

Barbara Rentler

new vendors. Oh,

Brooke Roach

you're Just not or getting vendors. new whether

Barbara Rentler

Yes. Sure.

market, -- first mix. base. of value of of vendors, the vendors are vendors vendor your relationships to adding answer terms business one In our out into are on business. in build actually certain are challenging, and question, more to part adding of Vendors with all, we're our are being to do vendors, expanding particularly vendors that's we're the -- looking That's definitely segments the and

is sector more so that, do with obviously, price business. to sector a is And that certainly while as continuing a

right vendors of the the to out place build together, would in from these new right at out And so we're package relationships. add I that, the to terms time total and going say we're probably -- in

Operator

the come question will of Drbul next Guggenheim. Bob line with And the from

Robert Drbul

I sort on a if stores within talk just you how the your And throughout I'd little and and third wondering they're and doing And could how rates Can the seeing ones. comment California guess of wage be quick chain. just versus sort like labor that questions, shrink curious your of chain. bit about, and performing business? pressures you one couple it's a you're of Just that about wage just

Michael Hartshorn

Sure.

So let I'll of these. me all take --

very retail to It with to let's theft certainly shrink, what a be difficult So and continues start immune I'd say that. shrink. environment, we're not

But and own the do We also at place on shrink to of to hold have that in prevention we're invest have in bay. our measures today. we focused loss execution continue we'll initiatives frankly,

point said this last guidance was for will as quarter, from based. geographic shrink some commentary, the in third comps we and fairly true-up We broad -- the geographically, in deterioration at our so assumes year. On

For the during Texas was our Florida largest was partially and average, that due below market, California while Hurricane in through was the quarter. chain outperformed Beryl rolled that line; the chain; impact to from the slightly

On of relatively speaking, wage increases the I Most are this generally say, states. in would certain and stores to been year wages, stable. our wages related statutory markets have DCs in increases and wage

we'll you approach to And from to. so of continue to is if wage, a see what where staffing the appropriate, we'll adjust take most and, us wages need market-by-market we

You Part lower means very that the earlier tenured heard DC of in DCs. Adam to for which is improvement the a and productivity associates. turnover about sector, labor market more stable from more productivity in due talked the productivity us

Operator

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

Adrienne Yih-Tennant

just a if lows pre-pandemic, little the congratulations. are your what to I me traffic consumer you the things highs quieter, to high, patterns. bit add of are going was are talk a back Let very seeing that my you're lot buying Barbara, behavioral the need. heard target days kind when in closer we've wondering Obviously, about can

promotional be your promotional even sharper spread, talk as want your able the retail, you to spread? gets about gains? to to environment the be the do at drive -- a is more bit still Or strategy historical to market a little share get And or you even bit can that. incremental to then If little maintain

Michael Hartshorn

the patterns, weekends are the haven't quarter we seen haven't during the the towards important. shift. On change. far during during week seen or Certainly, traffic traffic as or we But events, more a significant significant a events or as the

Barbara Rentler

on, promotional, they're don't environment the seeing merchants we say, And do monitoring would what's as they're historical if out What they're more gets shopping, standard a, happening. have spreads. a the going what's I

when think where key And to they're especially going periods. if going is doing you retailer that, you're anticipate almost go sometimes through have you a to and

price We're have spread. sharply don't we as can a possibly going price So historical as it. we it to

So is to we're with to that, educated the we're value seeing going those going path strategy But that We're for at that. make look this really decisions, us. decisions.

the strong, it, and really think way value do we'll obviously, strong. in of then process terms So we the we setting done historically have very that be is

Adrienne Yih-Tennant

And just branded the how last? brands the branded want it. on are clarifying flat? merch it's and one the you of is to have, curious it year however question you this AUR product lower on relatively merch margin much the whether -- do aspect higher, the margins How match product? the then just AUR more And over the AUR they the but direction. the because Are branded characterize I'm

Adam Orvos

that Adrienne, mix this is margin of to Adam. speak We in. non-branded. and is merchandise I'll penetration. how in to business, branded our to of brand pressure related But kind spoke wouldn't the much all strategy step-up that the jump the and I is

Operator

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

Irwin Boruchow

that? of So I'm Is a it we you more to level, unlock ride this is guess, are I this and high for it you pretty just a move kind early a be robust. going just as strategy duration? up you're plans strategy. curious, Just late let for a just year kind us of last and know XXXX I your would been forward multiyear of is step beyond, to this curious. just has successful. level, not I it's at it, of in The a quick of comps year give high at I guys me functions that mix without kind is? on strategy have you Clearly, there the but terms that question, guess quantifying branded as

Barbara Rentler

what mix, think by I learning the we're still penetrations the on the are what right business. strategy, right brand

lot build goal is learnings we're sales. sure to success of line could fall. learnings lot we telling so our to we've off Obviously, in So of the I'm had have answer But had We us. going is the drive that based learnings for we'll today. on customer spring. far. I what think those a of more learnings top a don't quite And

Operator

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

Marni Shapiro

into about if Congratulations the curious business good for can tough. assortments looked especially assortments, a kids trends talk minute. we can inclusive the on any some us the in The which back-to-school? you -- quarter. kind Is been is the boys the are -- of I was stores, have recent really of has the And if I'm or not, give I And sight back-to-school you line of any changing seeing seasonal holidays back-to-school to Halloween their in or items behavior curious about need. buying talked delay look a if closer July anything seasonal like that. or not purchasing big you're on what August? like like like then not in X know or their customers

Barbara Rentler

Okay.

clearly, not Look, behalf of kids in point, still talk to the it. compliment ]. for at back-to-school First on we're because all, on this kids thank [ the of going we're about you

So there's we as still us some in go. front of

in. In a delays now, with stuff, mean, wear slight my I'm buying did shorts back purchasing, in I'm terms kid I'm scenario. school like to buying [ What of calendar to short going say in I of some shift. go of were to it, you now pair the buy wear for timing ] there new know I some terms if I would

go years a of that on now. seen we've couple for think I

mix a have I make think conversion. to that you and have

one they're we that need own. if go I example trick do of that But still well. shorts, use shorts. set, denim So kind school the we has pretty you balance with They to then long the And actually, and both own before would that the much. performing of think perhaps is get of that to that in shorts kids actually think I to out actually back amount denim, last and too

Marni Shapiro

Great. like and X, buy not did there. And late to white red, tell July a change seeing very early or they Halloween? too blue You're on things

store. people how come the You know into

from I whatever seeing buy rush feel advance stores the been that in seen But a customers like mad makes just past, of in more like is, there's far before sense. lately, and in event week sometimes hearing And we've I've of that holidays. really the if that --

Barbara Rentler

was I it So earlier you're saying on itself morning. years the depends sold than X is think this ago had event much Halloween today? what

then top the think I early -- as things all people, of go it's And way and buy can some end. sell line at and quite that certain through. But not the moves. move it's it certain selling... quite that -- whether a good has That do floor, is, it and can that year-to-year. to I'm the lot assortment not on the also put with you how frankly, holidays

Operator

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

John Kernan

Congrats a great quarter. on

So How you think Adam, in of been the potential business long-term I'm perspective? the comp and Obviously, on about for of flow-through you high inflation from there's bottom some the as now margin ceiling of in wage been long-term business? about been the do XX% wondering X% supply a the You've just structure a when what's margin inflation. as the this tremendous QX the margin line. lot think operating in past. and the there's business, X% comp the QX to long-term chain

Adam Orvos

keep changed, that say basis additional do XX get points Yes. I'd primary margin long still really right? The right? to outsized of the That's of term, an point on us really -- need driver, be XX think John, We long to where comp going gains. nothing's term we we gives delivering hasn't to sales expansion, to comp and changed.

of coupled inflationary other moving do So fuel et somewhat like those out? a play part the biggest long with a And of they variable does the how if cetera, wages? some in guess, And continue What probably the things long-term I the term, then stay there's is look rates biggest pieces to stabilized standpoint. -- are environment? from is probably

John Kernan

makes That sense.

years. a several quick been of There's a amount last in Just the follow-up. fair immigration

Have lot of that states. a those stores lot seeking value got of benefited in you and those seen border a customer You've states? a some of in from population growth

Michael Hartshorn

growth relates gone being Texas the over drivers and forth and border as to stores, of back I mean, strong, it California have as Specifically years. strong

underperformed. well You across instance, that saw border of California cross-border do years. been Certainly, volume over kind broad with point regions. we of highest stores. specifically, few to Texas quarter, and of like we very our the don't outperformed, think past swaths the some for the best that traffic in It's But immigration could I on

Operator

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

Aneesha Sherman

the quarter. on good Congrats

having Barbara, underperformed last quarter, apparel while. you a So talked about for

it's line chain. Now with in

progress you get the you and are or follow-up, as even As with quick QX go are the the Michael, on of happy the have see back season QX through half you Or comp. a do year? then QX, assortment? Adam you you into now on continued incentive where brand's And I in between

plan the to beat gradually still performance half? in back on the current see incentive now Based X expect You've raised benefit moderating Or far? so benefit half, do your back for that do see you the you quarters. for accruals based guidance on

Barbara Rentler

apparel In apparel's in and underperformance in chain chain. is apparel terms now with line of still chain, line the being the below however, is average. the with Ladies,

as areas, see in apparel goes the on. progress the more all in year expecting So to we're

the we're upon things customer the the upon So building is that learnings, building for. voting

children's total, understand long as really for going as it. that's or be so it But was as But think X grand I it know, to in so ladies . the months And line. in you next takes truly us to underperformed outperformed

Adam Orvos

incentive incentive see the on we that still some would the guidance we're providing, expect Aneesha, to And benefits. piece, with

our exceeded XXXX, going we So we're significantly financial year plans. up again, end where it's

While we up tracking, outsized a about good really year. we're feel we're against how

Operator

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

Corey Tarlowe

vendors adding to you Is response to prior or And might of of amount incremental that? people into what Barbara, I the there way any context history? that put think the there's new in to you're a expanding number you versus to if historical vendors look expense you buying like you're that have. bring on had question mentioned any that accommodate

Barbara Rentler

or mean business vendors, -- And I out of I business, it I give when frankly, more in you comes number. quite really go adding some people a go some vendors. can't vendors specific to

to me that for hard for really it's quantify So you.

Corey Tarlowe

shoes brown way in perhaps? could Okay. any the athletic talk or relates Understood. to is you you saw as it there category, then about lifestyle just And versus what within shoes,

Barbara Rentler

Sure.

of chain was shoes the large all, very, underperformed against up but comp. very First a

been early made did the on a little the little they our it some season. the run-up women's, more better We upon active overall sandal been we're than mixed in But early. not some as we because going And the It's year, this see ] a And ladies or depending Athletic boots perform mixed strategic brown kids. did a into transition athletic good. I others. overall, heels. timing. a shoes did as and brands little meet in on active, shift see have we year flat has think was block we're bit into take last been [ did way good we pretty bit has more certainly and fall see thing we off. slowed sandals, But in

Operator

question the of And UBS. Jay next line from comes the Sole with

Jay Sole

My question is international. about

about what Some of Ross or announced have have with markets? they you I maybe in expanding that? markets. are thoughts competitors deals retailers off-price your your talked explored mean international deals into international Have about doing

Michael Hartshorn

XXX But I us, question. our store on the years. we're of next the and we we Ross, We -- grow number of growing U.S., Plenty focus profitably deals. room comment have that can over stores. dd's. X,XXX base Good is grow to X,XXX in think wouldn't the on for

our that's energy we're So our where and focus. putting

Operator

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

Laura Champine

will Meaning, EPS efficiencies see a positive longer-term lapping half is some and should in margins back the out? benefit half the it then and benefit of examples additional Or flattens of then You your in that called the this of we benefiting guide and into gave is long the first tail How those. year? part just earnings program out next there?

Michael Hartshorn

couple in ways. different that answer a of I'd

-- -- there's not all First, they number a and are initiatives have timing. different of they're these

next into in Some will will go the some year, help us year. next

will generation of efficiencies Some this But next year work out as next then run we that we'll well. on have for year. the

said, we comp, to continue EBIT long X% we term, at can we gradually hasn't margin changed. think grow As and a to that X%

Operator

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

Barbara Rentler

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

Operator

does and And ladies conclude teleconference. gentlemen, that today's

You this may a time. great Have disconnect day. your lines at

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.