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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good afternoon, and welcome to the Ross Stores Fourth Quarter and Fiscal Year 2018 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 forecasts of aspects of its future business.
These forward-looking statements are subject to risk 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 the company's fiscal 2017 Form 10-K and fiscal 2018 Form 10-Qs and 8-Ks on file with the SEC.
Now, I'd like to turn the call over to Barbara Rentler, Chief Executive Officer.
Good afternoon. Joining me on our call today are Michael O'Sullivan, President and Chief Operating Officer; Gary Cribb, Group Executive Vice President, Stores and Loss Prevention; John Call, Executive Vice President, Finance and Legal; Michael Hartshorn, Executive Vice President and Chief Financial Officer; and Connie Kao, VP Investor Relations.
We'll begin our call today with a review of our fourth quarter and 2018, followed by our outlook for 2019. Afterwards, we'll be happy to respond to any questions you may have.
Let me preference our discussion of today’s financial results by noting that our 2018 fourth quarter and fiscal year were 13 and 52 week periods respectively, while our 2017 fourth quarter and fiscal year were 14 and 53 week period. The 53rd week added approximately $219 million in sales and $0.10 in earnings per share to 2017 fourth quarter and fiscal year. Further, the extra week added about 70 and 20 basis points respectively to operating margin in last year’s fourth quarter and full year.
Now let's turn to today's result. As noted in today's press release, sales and earnings for both the fourth quarter and fiscal year outperformed our expectation. As we also mentioned, we achieved these results despite our own challenging multi-year comparisons and weakness in our Ladies apparel business during the holiday season.
Earnings per share for the 13 weeks ended February 2, 2019 were $1.20 versus $1.19 in the 14 weeks ended February 3, 2018. Net earnings for the 2018 fourth quarter were $442 million versus $451 million in the prior year.
For the 52 weeks ended February 2, 2019 earnings per share grew to $4.26 compared to $3.55 in the 53 weeks ended February 3, 2018. Fiscal 2018 net earnings were $1.6 billion up from $1.0 billion in fiscal 2017.
Now let's turn to our recent sales results. For the 13 weeks ended February 2, 2019 total sales were $4.1 billion. Comparable store sales for the period rose 4% over a strong 5% gain in last year's fourth quarter.
For the 52 weeks ended February 2, 2019 sales increased 6% to $15 billion with comparable store sales up 4% on top of 4% gain in each of the three prior years. For the fourth quarter, Men’s was the best performing area and as I said, Ladies underperform. Geographically the Southeast and Midwest were the strongest regions.
dd’s DISCOUNTS customers continued to respond positively to its merchandise assortment, leading to another quarter and year of solid gains in both sales and operating profits. As we ended 2018, total consolidated inventories were up 7% over the prior year with Packaway levels at 46% of the total compared to 49% last year. Average in-store inventories were down slightly versus last year.
As noted in today's release, our Board authorized a new program to repurchase $2.55 billion of common stock over the next two fiscal years. Our recent stock prices, this new repurchase program represents about 8% of the company's total market share and a 31% increase over the prior two year, 1.95 billion authorizations that was completed in January 2019. The board also approved an increase in the quarterly cash dividends to $0.255 per share, up 13% over the prior year.
The increases to our shareholder payouts for 2019 reflect the current strength of our balance sheet and our ongoing ability to generate significant amounts of cash after funding growth and other capital needs of the business. We have repurchased stock as planned every year since 1993 and raised our cash dividend annually since its inception in 1994. This consistent record also reflects our continuing commitment to enhance shareholder value and return.
Now Michael Hartshorn will provide future color on our 2018 results and details on our 2019 full year and first quarter guidance.
Thank you, Barbara. As Barbara mentioned earlier, earnings per share for the fourth quarter and fiscal 2018 year were $1.20 and $4.26 respectively. These results compare to fourth quarter 2017 earnings per share of $1.19 and $3.55 for the year.
Our earnings per share results for both the 2018 fourth quarter and fiscal year reflect a onetime non-cash gain of $0.07 related to the favorable resolutions of a tax matter, as well as a $0.19 benefit from tax reform legislation in the fourth quarter and $0.70 for the year.
In addition to the $0.10 earnings per share benefit from last year's 53 week, our 2017 fourth quarter and fiscal year EPS results also included a $0.21 benefit from the adoption of Tax Reform Legislations, consisting of a one-time $0.14 gain due to a revaluation of deferred taxes and $0.7 from a lower tax rate.
Now I’ll discuss further details on our fourth quarter results. Our 4% comparable store sales gain in the quarter was driven by a combination of higher traffic and an increase in the size of the average basket. So better than expected operating margin of 13.2% for the period was down from last year.
The 135 basis point decline was primarily due to the approximate 70 basis point benefit in the 2017 fourth quarter from the 53rd week and as expected, higher freight and wage costs. For the full year operating margin declined 85 basis points to 13.6%, due in part to last year's 20 basis point benefit from the 53rd week.
Cost of goods sold for the year increased 55 basis points, consisting of 40 basis points of higher freight costs, a 15 basis point increase in distribution expenses and a 10 and 5 basis point rise in buying and occupancy cost respectively. These expense pressures were partially offset by a 15 basis point increase in merchandise gross margin.
SG&A for the year rose 30 basis points driven by higher wages. During the quarter we repurchased $3.1 million shares of common stock for a total purchase price to $268 million. For the full year we repurchased $12.5 million shares for an aggregate price of $1.075 billion.
Now let’s discuss our outlook for 2019. For the 52 weeks ending February 1, 2020 we are forecasting earnings per share to be $4.30 to $4.50, up from $4.26 for fiscal 2018. Our guidance reflects the adoption of the new lease accounting standard, which is not expected to have a significant impact to our earnings results.
The operating statement assumptions for fiscal 2019 include the following: Total sales are projected to grow 5% to 6% for the 52 weeks ending February 1, 2020 compared to the 52 weeks ended February 2, 2019.
Comparable store sales are expected to increase 1% to 2% on top of multiple years of strong gains. We plan to add about 100 new stores this year consisting of approximately 75 Ross and dd’s DISCOUNTS locations. As usual these numbers do not reflect our plans to close or relocate about 10 older stores.
We projected operating margin for 2019 will be in the range of $13.2% to 13.4%, compared to 13.6% in 2018. The forecasted decline reflects our plans for relatively flat gross margins and some deleveraging of expenses if same store sales increased 1% to 2%.
Net interest income is estimated to be $17.6 million. Our tax rate is projected to be approximately 24%. We expect average diluted shares outstanding to be about $362 million, capital expenditures in 2019 are projected to be approximately $600 million, which includes the initial investment for our net distribution center. And depreciation and amortization expense inclusive of stock based amortization is forecast to be about $450 million.
Let's move now to our first quarter guidance. Given the recent under performance in Ladies apparels, a business that becomes more important in the first quarter, we are forecasting comparable store sales to be flat to up 2%, earnings per share are projected to be $1.5 to $1.11 versus $1.11 for the first quarter ended May 5, 2018.
Other assumptions that support our first quarter guidance include the following: Total sales are planned to increase 3% to 6%. We expect to open 22 new Ross and six dd’s DISCOUNTS locations during the quarter.
First quarter operating margin is projected to be 13.4% to 13.8% versus last year's 15.1%. This forecasted declined includes expectations for a negative impact on the timing of Packaway related expenses that benefited last year's first quarter and ongoing headwinds from higher freight and wage costs in the first half of 2019.
Net interest income for the quarter is estimated to be about $4.9 million, our tax rate is expected to be approximately 23% and finally weighted average diluted shares outstanding are projected to be around $367 million.
Now I'll turn the call back to Barbara for closing comments.
Thank you, Michael. Again we delivered better than expected sales and earnings gains for both the fourth quarter and fiscal year. Looking ahead, while we hope to do better, we continue to take prudent approach to forecasting our business for 2019.
Although we remain favorably positioned as an off-price retailer, we are facing our own difficult multi year comparisons, a very competitive retail landscape and an uncertain macro-economic and political environment.
Longer term though we remain confident in our ability to achieve on going profitable market share gains by consistently offering customers outstanding value throughout our store. As long as we remain focused on the careful execution of our proven off-price strategies, we believe we can continue to deliver solid growth in both sales and earnings.
Before we begin the question-and-answer session, I'd like to thank John Call for his leadership and the numerous contributions he's made over more than two decades at Ross, including previously serving as CFO for 16 years. John begins his planned transition to an advisory role at the end of this month.
At this point we’d like to open up the call and respond to any questions you may have.
[Operator Instructions]. Your first question comes from Matthew Boss from JP Morgan.
Thanks and congrats on the nice quarter. So I guess maybe my question is just on Ladies apparel, maybe on the weakness. Could you just elaborate on the drivers, maybe how best to think about the time frame to work through any excess inventory and larger picture; you know what drove it and the time frame to correct it?
Okay, first of all the ladies apparel business got of course because we didn't have the right balance of our assortments in certain categories within the total apparel business. So as a result we left some money on the table in seasonal areas of the business.
In terms of you know excess inventories or residual inventory left in stores, we don’t have any excess issues that we need to deal with or go through. In terms of correcting the merchandise misuse that I would say is, you know obviously we’ll of course correct it as quickly as possible, but we expect gradual improvement as we rebound the assortment throughout the year.
Great, and then just a follow-up on the expense front, I guess what's the best way to think about the threshold needed from a calm perspective to leverage SG&A this year and is there any difference in the front versus the back half of the year?
Sure Matthew. On expenses, SG&A this year, the leverage point is about 3%, which is in line with our historical averages pre-2018. We would expect more deleverage in the front half. As a reminder, we increased our national minimum wage in the second quarter of last year, so we have to round that in the first and a little bit of the second quarter. In addition, in overall operating margins freight costs escalated as we moved through the year last year. So those will be more of a drag in the first half versus the second half.
That's great color. Best of luck!
Your next question comes from Lorraine Hutchinson from Bank for America.
Thank you, good afternoon. Could you quantify the freight freed headwinds that you are seeing and then also maybe comment on some of the contracts that are coming this year? Are you seeing some relief in the rates versus this time last year?
Sure Lorraine. In terms of the impact of freight: So as we expected, first on the fourth quarter. So the fourth quarter, there was 135 basis point drag, 70 basis points of the decline was due to the 53rd week, the remaining 65 basis points was a combination of higher freight and wage costs. For the fiscal year, freight we had a 40 basis point drag for the full year.
As we move into 2018, the drag was obviously higher in the third and fourth quarter, so we’d expect continued drag in the first and second quarter and then be somewhat neutral later in the year. Our contracts, if you compare against the spot rates, actually in many cases they are lower than the spot rate. So as we go through contract renewal this year, we would expect rates to somewhat normalize.
Thank you.
Your next question comes from Simeon Siegel from Nomura Instinet.
Hey guys, Steven [Inaudible] on for Simeon and thanks for taking our questions. I had a question on the flat gross margin implications. You guys touched on freight. But maybe how should we think about distribution costs, occupancy and may be how our merchant margins will shake out for the year?
Sure, in my commentary the gross margin was intended to be merchant margins. So we expect merchant margin to be relatively flat for the year and we didn't provide additional guidance on these three costs. Like the rest of the business, we would expect some wage headwinds in DCs in the first half of the year more than the second half.
Alright, thanks guys appreciate it.
Your next question comes from Paul Trussell from Deutsche Bank.
Good afternoon. Just a follow up on Ladies apparel; is the thought process that [Audio Gap] comp in fourth quarter, you know negatively by about a point and is that the thought process as well for the first quarter.
Paul you cut out, some cut out. Could you just repeat the question?
Yes, I just wanted to follow-up on Ladies apparel. Just to maybe get a better assessment around what you thought the impact to the comp was in the fourth quarter and then I know that that is a little bit bigger business in 1Q. Just how you are thinking about that, and any other puts and takes you can provide around your first quarter guidance.
In terms of being more specific, on Ladies apparel for the first quarter guidance, for competitive reasons I wouldn’t be more specific, other than to say that it's built into our guidance, the way it is performing.
Understood, and what is the impact of the Packaway in the first quarter and should we think that that – is that going to continue at all into the second quarter?
Sure Paul. In Q1 we are lapping the Packaway related timing as Packaway levels rose during the quarter last year. It was worth about 45 basis points last year. Packaway levels are tough to predict, so our guidance at this point assumes that the benefit doesn't reoccur and we wouldn't talk about the impact beyond the first quarter. We’ll give you an update in our May conference call and first quarter results.
Thank you. Best of luck!
Your next question comes from Ike Boruchow from Wells Fargo.
Hi, good afternoon everyone. So I'm sorry to jump on the Ladies apparel train, but I guess Barbara or Michael, I think the last time you had an issue in the category, I think it was early 2016. I know you guys can't – don't want to be too specific, but I'm just kind of curious to similarities that are happening today versus back then and then again when I look back then, it didn't take you long to kind of course correct. I think you were back in a 4% comp range, three months later. Is there anything different this time around? I guess I’m just trying to compare today and what happened several years ago?
Sure, what I would tell you is that the issues really aren't related. What went on in 2016 was really, yeah wrong product, coloration and seasonality. What we are talking about here is that our assortments were not balanced in certain categories, and so I think these from a merchant perspective they are two completely unrelated issues.
In terms of correcting the issue, obviously we’re trying to correct it as quickly as possible, but we are going to expect gradual improvements as the months go on.
Thanks.
Your next question comes from Kimberly Greenberger from Morgan Stanley. Kimberly Greenberger, your line is open.
Sorry, sorry I was on mute. Let me make sure I congratulate John Call on a very long and distinguished career and I wish him well in retirement.
Barbara, I wanted to just ask quickly on the merchandising issue in women's. It sounds like a balance issue. Is it the case also that there was – that the merchants bought the wrong goods. I'm just trying to figure out if there's LIBOR inventory here heading into Q1 or is it simply the case that you thought you could have done more business in Ladies in the fourth quarter and maybe potentially the first quarter, if you had for example either more winter seasonal goods or just a better balance to the assortment.
And then separately, you mentioned the Midwest and Southeast as the best performing regions. I was wondering if you are seeing any sort of a benefit in your stores from competitor store closings and if you've noticed for example Bon-Ton’s presence in the Midwest. Is there any sort of benefit that you are seeing in those stores that are co-located. Thank you.
Kimberly, I’ll start with the regional performance. You know as we mentioned, the Southeast and Midwest where the strong. The Midwest has been the strongest for some time now, since we entered the market in 2011. So no change – I would say no significant change in trend over the year.
Yeah, your second question was on Ladies?
On Ladies to – trying to put this in a natural – the imbalance to the assortment is in certain categories and then your question Kimberley is the game within the game of – the assortment within the assortment. You know that verifies by different business. What we did feel is that we did leave seasonal opportunity on the table because of our imbalance, which would have driven more Q4 business had we been in better shape in those business.
As you move into Q1, you start obviously transitioning into different products. However that does take time to change up that assortment, that’s not going to be a you know one month, two month switch, so it will gradually take time.
The other thing is in terms, to get the balances from the way we want it to be, the other thing in terms of you know having any liable inventor issues or bad Packaway or anything along those lines, we don't have that, we absolutely cleaned that up and so we need to take the time to ship the assortment to get it back to where we need it to be.
Great, thank you so much.
Your name comes from John Morris from D.A. Davidson.
Thanks, my congratulations on a great year as well. Weather impact, you know I realized we did talk about the regional strength. I'm just wondering if you stepped back and looked at it with that filter of whether or not weather had a particular impact on you, either in Q4 or in as much as you talk about seasonal areas with women's. And then I got one quick follow up.
Sure. Weather was relatively neutral for us year-over-year. You know I meant – I know we mentioned the Southeast and Midwest, but the strength was fairly broad-based. Some of our major markets, Texas, California were in line with the chain. Florida also a large market for us was slightly below the chain in average. It was up again 2017 when it was our strongest performing year.
And I don’t think the weather.
Yeah, well that’s right.
I don't think the weather impact is what hurt our business.
Got you. And then my follow up really is about the DC, you know the timing and maybe highlight some of the potential benefits you'll be getting from that in terms of the impact. I mean is that you know typical in terms of your speed and your ability to distribute, talk a little bit more about the new DC.
Sure. The new DC is sickly the capacity place for us as we grow the business. That said there are large distribution centers that is as a large as the 1.7 million square feet. It will take us a couple of years to get it in place. That said, we do plan to put automation investments that we think can help our productivity.
Great, thanks. Good luck for spring.
Your next question comes from Daniel Hofkin from William Blair.
Hi, good afternoon. Just wondering if you could fill out a little bit more of some of the category detail. I think you just give some additional regional detail aside from men's and ladies apparel, maybe something like Home or other categories if there's any additional color there that you can share?
Basically Home performed in line with the chain average, and that’s on top of solid growth over the last several years and after that most of the other businesses performed inline were the same.
Okay and then if I could just – I apologize, one – I believe this is one of a lot of questions about the ladies apparel. What do you expect this fix in terms of time, you know the amount of time required to be shorter than early 2016 for the earlier question or similar later?
Versus 2016, I think these are two different types of issues. My expectation is that there will be gradual improvement. I'm not putting a specific time frame to it.
Okay. Thanks very much. Best of luck!
Your next question comes from Marni Shapiro from Retail Tracker.
Hey everybody, congratulations. And John congratulations, enjoy your retirement. You were the only Mike or Michael who lasted this long. For a while it was all Mike, Mike, Michael, Michael and then John.
[Inaudible]
Exactly, we always remember you. So if I can actually move away from women’s for just a moment and ask just a quick break down. You said average basket was up. I was curious if that was driven by AUR or UPT and then I guess Barbara, can you talk a little bit about any opportunity you see out there with Payless going away, which has a nice shoes business and it’s a family business, which your stores are family driven. And also Kids-R-Us, I don’t know how often your stores cross with them, but did you see any benefit where those stores are gone again. I view them as a family business and I view your stores as family stores as well.
Sure. As it pertains to Payless going away, you know obviously that would – you would think it would present the market share opportunity, because it is a family business and had a large amount of stores. So it remains to be seen how much shopping between the customers, but we would think that would be just a market share plan. In terms of Kids of Ross, when that went out, Michael do we have – do we think we saw any impact on any of that from the Kids-R-Us stores.
I think your question Marni – this is Michael O'Sullivan, another Mike. So I think your question was broader in terms of you know as other retails go out or close down stores, as Barbara mentioned it can only help. That sales volume has to go somewhere and you’d expect that the remaining retailers in those areas would pick-up some of that volume.
You know in any given year, we think we benefited from that over the last two years as retailors have closed stores or gone out of business altogether. But I wouldn't say it’s been material to our results over that period. And as we look forward, same thing. You know we should continue to benefit, if we do our jobs right, but I don't think it will be material to the overall business.
Marni and on the components of sales, so the forward comp was driven by as we said in the comments, higher traffic and increase in the size of the average basket. The basket was driven entirely by UPT as AUR was flat for the quarter growth.
Excellent!. Best of luck this spring guys.
Your next question comes from Paul Lejuez from Citi.
Hey thanks. John, congrats and best of luck sir! So question, maybe a little bit more color on dds operating margin versus Ross coming out of 2018. Any more data you can give to us in terms of the size of that business and the margin.
Also curious if the issues that you saw in the ladies business, you also saw that on the dd’s side as well. And Barbara just high level on Ladies, is it that your buyers weren’t buying the right stuff or was the right stuff not available. Thanks.
Yes, so Paul on dd’s as Barbara said in her opening remarks, dd’s customers responded very well to our merchandise assortments in Q4 and the business posted solid gains in both sales and operating profit. As you know we don’t disclose a lot of detail on dd’s and you know a couple of reasons for that. One is, its really only around about 10% of our business, so you know 90% of our business is Ross.
And then the other point I would make is in general many of the same trends that we talk about in these calls apply to Ross and to dd, so we tend not to give a lot of detail or lot of additional detail on dd’s.
And as it pertains to ladies, it wasn’t an availability issue. I would say that we brought in some Ross products, and I would say that the weighting of the categories of the business that we had weren’t balanced the way we’d like them to be balanced. So the merchandise is good.
Yeah, good luck.
Your next question comes from Michael Binetti from Credit Suisse.
Hey guys, thanks for our questions here. Michael regarding the comment that merchant margins are about 15 basis points last year I think you said, would you mind helping us quick down into that a little bit to know what the tailwinds were there. Was it IMU lower markdown levels, anything with a mix. And then want rolls-off in the guidance for merchant margins to be about flat this year?
Sure, so for the quarter merchandise margin was up slightly on a 52 week basis. For the full year merchandise margin was up 15 basis points and again, that was up against the 25% basis point improvement in 2017. And then so going forward into 2019 we are planning merchandise margins to be flattish.
What drove it this year was a combination of better buying and lower markdowns, anytime we can exceed our sales plan, we can chase the business with closeouts and also leverage markdowns.
And Michael, as you look across the margin outlook for the company and really for the off price space, you had a couple of years of pretty persisting cost pressure from the freight wages. You guys navigated as well as anybody. When you are on these calls you know with us we get a pretty stable outlook from you for the year ahead every year. You know with how much volatility, you always expressed a lot of confidence to be able to navigate those things. But you know as you look out, do you think there has to be something more dramatic for the group to get done, to try and restore to what you think are the right profitability levels, given that we’ve seen just a few years now of wages and freight.
Yeah, I would say for us that 2018 was the exception. You know obviously at the beginning of the year we knew we were getting a benefit from tax reform and we made an important investment in raising our national minimum wage to $11 an hour. So that was the exception.
If we look ahead to 2019, we are guiding a one to two and with that we are guiding 4.30 to 4.50 compared to 4.26 last year and its up one to six. As a reminder, last year that also included a onetime $0.07 benefit from a favorable resolution the tax matter in the fourth quarter. Excluding that one time item we are at EPS growth of one to two and EPS above three to seven, which is in line with how we historically guided the year.
Okay, thank you very much.
Your next question comes from Laura Champine from Loop Capital.
Thanks for taking my question. Barbara on the issues in women's, do you think that some of the missteps were just driven by becoming tougher to execute an off price model at the kind of scale that you have now or is it your belief that this was just purely in an execution mishap that is unlikely to recur.
It’s a misstep. I'd like to tell you that would never occur again, but I don't think I'd be saying that, I don't think anyone could ever say that about any business. I don't think it an off-price tougher to execute model, I don’t think that’s the issue. I think the issues were internal, self-inflected, it’s the assortment that we built out for the customer. I don’t think it has anything to do with the off-price model, the future, you know what could go on.
You know we really just need now to go in and correct that, before – you know obviously ladies is a very large business in or price and everywhere else and so it's important for us to do it. But I don't think it's a model issue. I think we had merchandise miscues that we need to correct and we will go up and correct them during plan ’19.
Got it, thank you.
Our next question comes from Alexandra Walvis from Goldman Sachs.
Hi there, thanks for taking the question. I had a question about the relocation strategy. So it looks like the plan is for relocations and somewhat consistent with the number that you've done in prior years, with not just some you know competitors in the retail space who have been ramping up the number of relocations that bring us more opportunities come up as you see closures across the market. How are you looking at you know opportunities here, and could that be more opportunities to ramp up relocations as those opportunities present themselves?
Sure Alexandra, we open about 100 new stores a year and in any given year that includes a handful of relos. I don’t expect that that number will change significantly over the next couple years. You know we’ll always respond if there are additional opportunities here or there. But I don’t think it will – It's not going to change materially.
Great, thank you.
Our last question comes from Bob Drbul from Guggenheim.
Hi, just following up on Alex’s question. On the new stores, can you talk about new store productivity and performance and as you continue to do like the 100 stores, a year in terms of new real-estate, any changes to the real-estate available or costs that you are seeing versus the past few years, thank you?
In terms of new store productivity its actually been fairly stable over the last five years since we’ve entered the mid-west. So average on a new store is about 60% to 65% of an average comp store in the chain and then in the first few years it ramps faster than the chain average.
And then on your question about availability, I would say going back over the last several years we've been running at a sort of 90 to 100 new store rate and we plant those stores and we look for real-estate several years out. And as we look at that pipeline, no major changes in availability. I think availability has been I think reasonably good over the last several years and we expect that to continue.
Great, thank you very much.
That was our last question. At this time, I will now turn the call back over to Barbara Rentler for closing comments.
Thank you for joining us today and for your interest in Ross Stores. Have a great day!
This concludes today's conference call. You may now disconnect.