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

Page 6 of 11

Barbara Rentler: Okay. No problem. So the packaway is 40% are all deals that we feel very, very good about. And you have to remember that in the beginning of last year, and you’ll see this as we go along, we had all those late goods that were home goods that we took into our DCs, which would have increased part of our packaway. The 40% that we have in there right now, we feel very good about. And buying packway is an art, you can buy a lot of packway time you want, right? But the packaway you put in there, you have to feel it’s great product at great values. And right now with the buying environment being very favorable, with really quite frankly, broad access to some really key brands, you’re going to be very judicious about what you put in packaway and how you time that and what that looks like. So I’d say we feel good about the position we’re in today. We have a tremendous amount of liquidity and we really feel like we’re in a good place.

Adrienne Yih: Very helpful…

Michael Hartshorn: Adrienne, on shrink. So our strength, we don’t disclose what it is externally, but it is a place where we constantly invest, whether its security tags or no equipment in the stores. If you’ve been in our stores, you see we have people in front of the store and our shrink was slightly higher this year as we closed out the year.

Barbara Rentler: Yeah, go ahead.

Adam Orvos: Well, I was just going to jump in on the 53rd week. So a little bit higher than what you said. You can think about it as an additional week, somewhat pro rata, but then downward calibrated a little bit that it’s, call it, in January, February, week and lighter than an average week.

Adrienne Yih: Perfect. Thank you very much and best of luck.

Barbara Rentler: Thank you.

Adam Orvos: Thank you.

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

Chuck Grom: Hey, thanks very much. Curious if stores in higher demographic markets performed better in stores and lower income demographic markets. And a second follow-up, there’s a lot of talk about Snapcuts next month and lower tax refunds this year versus last. Curious how much of a potential headwind that could be for you guys over the next couple of months?

Michael Hartshorn: Yeah, we’ll have to see. On the tax refunds, they just started to come out last week, and that does have an impact, especially for our dd’s business, but we’ll have to see how that plays out. We certainly – where we’re coming into it, the tax refunds could be lower. So we’ll have to see how it plays out. But certainly, that is a customer that can be impacted by both the tax refunds and the snap benefits. On your other question, I think you asked a question around demographics. And I think I answered this earlier with Paul, we have not seen a material shift in spending across different income demographics.

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

Page 6 of 11