So at this point, I’m really not that worried about long-term or structural or strategic risks. The second bucket is short-term risk. These are things that can happen in any given year that can impact the trend such as a spike in inflation or a sharp economic slowdown or some other major disruptive event I’m much more wary of those short-term risks than I am of the longer-term structural. Any long-term structural threats. These short-term factors are, by definition, very hard to predict. The implication for us is that we need to be flexible. If we can plan cautiously and if we tightly control liquidity, inventory levels and expenses, then we’ll be in much better shape to react to whatever happens, and that’s really the poor principle behind Burlington 2.0. But as I say, I do worry about those short-term risks.
The third bucket of risks is internal. In other words, our own execution. As I said in the script, we’ve introduced a lot of change in a short period of time. And together with a tough external environment, especially for our core customer over the past 18 months, that’s all impact — it impacted our ability to achieve the level of execution we would have liked. But here’s the thing. The changes that we’ve made are proven strategies. We recognize that it may take time to get the momentum, and it may take time to get the consistent execution that we’d like. But we know that these strategies were. We know that upside is still ahead of us. So anyway, I guess just sort of summing up my answer, long term or structural risks, we need to watch them.
But candidly, I wouldn’t be too concerned. Much more concerned about the term risks. We need to plan sales cautiously, then be ready to react and to chase. And then lastly, internal risks. We’ve made a lot of changes, but their impact, in my view, is only a question of timing. We’re confident that the changes we’ve made, the strategies we’re pursuing are going to drive stronger execution over the next few years.
Ike Boruchow : Got it. And then I have one follow-up for Kristin in regarding the new stores. progress have you made in opening the Bed Bath stores you guys acquired last quarter? And can you remind us how these stores impact net store openings this year in the 100 number for next year?
Kristin Wolfe : Ike, good morning. Thanks for the question. Quickly, as a point of clarification, we were able to acquire 2 additional leases from Bed Bath & Beyond. So the total is now 64 leases through the bankruptcy process. And as a quick reminder, we prioritized these leases based on nonfinancial and financial criteria. So the nonfinancial criteria included strategic factors like the location, the specific market as well as competitive and site particular site-specific aspects, the strip center, the co-tenancy, the demographics. And then on the financial side, we ensure that these new stores met our financial hurdles, taking into account rent levels, including the dark rent will be incurred before we stored open the expected volumes, operating margins, the CapEx and obviously, the expected rate of return.
So we’re pleased that we will open approximately half of these 64 stores we acquired in fiscal ’23 and we’ll open the other half in early 2024. Now because we’re incurring occupancy costs in these locations, we prioritize these stores. We’re pushing to get them open as quickly as possible. And of course, prioritizing these stores meant some of our non-Bed Bath & Beyond store openings flipped into next year. Thus, our overall net new store count for the year is 80 net new stores at the high end of our original plan. Now this group of stores will also enable us to open that 100 net new stores in 2024. And then the last point I want to make is it’s important to call out, there are many other former Bed Bath & Beyond stores that have reverted to the landlord.
And it’s likely we’ll pursue many of these stores with the landlords over the next couple of years and these stores would form an important part of our normal new store pipeline.
Operator: Your next question comes from the line of Lorraine Hutchinson from Bank of America
Lorraine Hutchinson : I wanted to ask a question on the long-range model. You described 3 drivers of earnings growth, new stores, comp growth and margin expansion. If the comp sales growth is lower, like in the low single digits, would the model still generate significant earnings growth?
Kristin Wolfe : I’ll take that question. As you said, our long-range model has 3 drivers of earnings growth. New stores, comp sales growth and margin expansion. Now of course, to maximize shareholder value and to achieve our full potential, we will aggressively go after all 3 of these drivers. We believe that we have significant opportunity in each of them. But I’ll spend just a minute to your question on comp sales growth. We expect over the next several years, off-price retail will continue to take share from other retail formats. This will come as new store growth and as comp sales growth. Now we’ve improved and we’ve invested in our business over the last few years to make the assortments in our stores as compelling as possible to make sure we are offering great value, and we are very confident that these improvements are going to drive significant comp sales growth over the next several years.
