Ross Stores, Inc. (NASDAQ:ROST) Q4 2022 Earnings Call Transcript

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Aneesha Sherman: Thank you. So the comp guidance for the full year implies a 4-year stack of 10 a CAGR of just over 2, which is quite a bit lower than your historical pre-COVID performance. Are you still – do you still believe in the medium term, algo being kind of a little bit higher than that around the 3% comp algo? Or is there something structural about the comps that you think will decelerate even beyond this year? And then, Michael, you talked about the sensitivity of margins to comp, but with higher wages now embedded into your cost structure, has that sensitivity changed? Or is it still a similar sensitivity as what you’ve talked about in the past?

Michael Hartshorn: Hi, Aneesha. On the guidance, it’s hard to comment on structural in this environment. As we guide the year, it’s really a function of us wanting to be very conservative in a blasting inflationary environment and a macro economy that we’ll see how that plays out later in the year. So I don’t think there’s anything to read into that at this point. Obviously, we hope to beat the guidance. We think it’s a good way to run our business in an uncertain environment. In terms of the long-term algorithm, it certainly doesn’t change as I said earlier, that a beat to comp is 10 to 15 basis points upside. And then longer term, we think if we can grow the 3% to 4% comp as we did historically prior to COVID that we’ll be able to leverage the P&L.

Aneesha Sherman: Okay. That’s helpful. Thank you.

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

Corey Tarlowe: Hi. Good afternoon and thanks for taking the question. You mentioned that shoes had done pretty well a few times. Is there any way to parse out maybe whether it was informal or casual, what did better? And then, I know availability is quite robust, but across your good, better, best strategy, is there any particular segment within those three that’s maybe you’re seeing a little bit better availability. And then just lastly, on CapEx. Historically, you’re usually around, I think, like $500 million or so in CapEx. And now I think in this year, you’re expecting to do $800 million and in this coming year as well, another $800 million. So could you just parse out maybe what the incremental spend is really going to be? I know you talked a little bit about automation, but just curious what else there is in there? Thank you.

Barbara Rentler: So let me start with shoes. So the shoe business is pretty broad based. I would say that athletic performed slightly better than Bram shoes, but the shoe business, again, tissue industry had issues delivering. You remember that in 2021 with the whole carrier issue. So it is pretty broad-based and meeting customers’ demands that they want not just athletic, but other brands choose to wear. That’s the first thing. In terms of a good, better, best, the availability is pretty broad-based in all three buckets. So I think that’s a little unusual, but that’s kind of going on out there at this moment.

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