Good afternoon, and welcome to the Ross Stores first quarter 2022 earnings release conference call. The call will begin with prepared comments by management, followed by a question-and-answer session. At this time, all participants are in a listen-only mode. To ask a question during the Q&A session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. Please be advised that today's call is being recorded. Before we get started, on behalf of Ross Stores, I would like to note that the comment 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 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 the company's fiscal 2021 Form 10-K and fiscal 2022 Form 8-Ks on file with the SEC. Now, I would like to turn the call over to Barbara Rentler, Chief Executive Officer. Please go ahead, ma'am. Good afternoon. Joining me on our call today are Michael Hartshorn, Group President and Chief Operating Officer, Adam Orvos, Executive Vice President and Chief Financial Officer, and Connie Kao, Group Vice President, Investor Relations. We'll begin our call today with a review of our first quarter 2022 performance, followed by our outlook for the second quarter and fiscal year. Afterwards, we'll be happy to respond to any questions you may have. As noted in today's press release, we are disappointed with our lower than expected first quarter results. We knew 2022 would be a difficult year to predict, especially the first half, when we were facing last year's record levels of government stimulus and significant customer pent-up demand as COVID restrictions eased. The external environment has also proven extremely challenging as the Russia-Ukraine conflict has exacerbated inflationary pressures on the consumer not seen 40 years. As a result of these factors, our first quarter results underperformed our expectations. Total sales for the first quarter were $4.3 billion, with comparable store sales down 7% on top of a robust 13% gain in the first quarter of 2021 that were versus 2019. Earnings per share for the 13 weeks ended April 30th, 2022 were $0.97 on net income of $338 million. The quarter includes an approximate benefit of $0.06 per share from the favorable timing of expenses that are expected to reverse in subsequent quarters. These results compare to $1.34 per share on net earnings of $476 million for the 13 weeks ended May 1, 2021. Men's was the strongest merchandise area during the quarter, while Florida was the top performing region. Dd's DISCOUNTS performance in the first quarter trailed that of Ross as the significant benefit of last year's stimulus and escalating inflationary pressures had a larger impact on lower income households. At quarter end, total consolidated inventories were up 57% versus the same period in 2021, mainly from higher packaway inventories. Packaway merchandise represented 43% of total inventories versus 34% last year, when we used a substantial amount of packaway to meet robust consumer demand. Additionally, supply chain congestion eased somewhat during the first quarter, resulting in the early receipt of merchandise that we stored in packaway and will flow to stores later in the year. Average store inventories during the quarter were up, though we still operated with significantly less inventory in stores than we did pre-pandemic. Turning to store growth, our 2022 expansion program is on schedule with the addition of 22 new Ross and eight dd's DISCOUNTS locations in the first quarter. We remain on track to open a total of approximately 100 locations this year, comprised of about 75 Ross and 25 dd's DISCOUNTS. As usual, these numbers do not reflect our plans to close or relocate about 10 stores. Now Adam will provide further details on our first quarter results and additional color on our outlook for the remainder of fiscal 2022. Thank you, Barbara. As previously mentioned, our comparable store sales were down 7% for the quarter as average basket growth was more than offset by the decline in transactions versus the prior year. First quarter operating margin of 10.8% was down from 14.2% in 2021, mainly due to the deleveraging effect of the same store sales decline along with ongoing cost pressures from higher freight and wages that began to escalate in the second half of 2021. As Barbara commented earlier, the quarter benefited from the favorable timing of expenses, most of which were in gross margin. Cost of goods sold in the first quarter increased by 295 basis points due to a combination of factors. Merchandise margin declined 170 basis points primarily due to higher ocean freight costs. Domestic freight rose 80 basis points, while occupancy delevered 40 basis points on the same store sales decline. Distribution costs increased 25 basis points, mainly due to wage actions taken last year. These unfavorable items were partially offset by buying expenses that improved by 20 basis points. SG&A for the period rose 50 basis points due to higher wages and the deleveraging effect of lower comparable sales. During the first quarter, we repurchased 2.5 million shares of common stock for an aggregate cost of $240 million. We remain on track to buy back a total of $950 million in stock for the year. Now let's discuss our outlook for the remainder of 2022. As Barbara noted in today's press release, given our first quarter results and today's increasingly uncertain macroeconomic and geopolitical environment, we believe it is prudent to adopt a more conservative outlook for the balance of the year. We are now forecasting comparable sales for the 13 weeks ending July 30, 2022 to decrease 4%-6% on top of a very strong 15% gain in the prior year period. Second quarter earnings per share are projected to be $0.99-$1.07 versus $1.39 last year. Our guidance assumptions for the second quarter of 2022 include the following. Total sales are forecast to decline 1%-4% versus the prior year. We plan to open 29 locations in the second quarter, including 21 Ross and eight dd's DISCOUNTS locations. Operating margin for the second quarter is planned to be in the 10.4%-10.8% range, down from 2021 due to deleverage on lower same-store sales and ongoing expense headwinds that are expected to continue through the first half of 2022. Net interest expense is expected to be approximately $15 million. The tax rate is projected to be about 25%, and diluted shares outstanding are expected to be approximately 348 million. For the full year, we are now planning comparable store sales to decline 2%-4% and earnings per share in the range of $4.34-$4.58. As Barbara mentioned, this reflects our continued expectation for sales and profitability to improve as we move through the balance of the year. Now I will turn the call back to Barbara Rentler for closing comments. Thank you, Adam. Looking ahead, while the landscape in early 2022 has been tougher than expected and the year may prove to be more difficult than initially anticipated, we remain confident in our ability to successfully navigate through this period. We have shown in the past that our value focused business model has served us well in both healthy and more uncertain external climates and believe the current challenging conditions will be no different. Despite the slower than expected start to 2022, we operate in an attractive sector of retailing. Our mission continues to be delivering the best bargains possible to leverage our favorable market position. As demonstrated by our long successful track record, we believe our steadfast focus on the execution of this core strategy will be the key driver of our success. At this point, we'd like to open up the call and respond to any questions you may have. Sure, ma'am. As a reminder, if you have a question at this time, please press star one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, press the pound key. We kindly request that you limit your question to one only. Thank you. Once again, that's star one to ask a question. Your first question comes from the line of Kimberly Greenberger with Morgan Stanley. Please go ahead. Great. Thank you so much. Barbara, I wanted to ask about product and merchandise execution. Could you just comment on how you feel the team is executing and merchandising, and how did merchandise margin perform here in the quarter if you exclude, let's say, inbound freight and domestic transportation costs? Are there any pockets of inventory where you wish you had a little bit more? And how in aggregate are you feeling about your overall inventory position? Thank you. Barbara, this is Adam. I can jump in on the merchandise margin question and then throw it back to you. Kimberly, merchandise margin, as stated in the comments, dropped 170 basis points versus last year, but we would have been flat versus last year's significant gain without the impact of ocean freight. Barbara, I'll throw it back to you. In terms of, let's start with the pockets of inventory and aggregate. At this stage, Kimberly, in the market, there's a lot of availability, and it's very broad based. Whether it's in home or whether it's in apparel, there's a lot of supply out there. I wouldn't really say that there are problems in any pockets of inventory that we have. In terms of execution and product and merchandise, here's what I would say. I would say that, you know, we didn't execute at the level that we're capable of. You know, we're digging into the business now, and we feel that we can improve the assortments and we can improve our execution. At this point, you know, it's really about us taking different actions in some of our assortments overall, I would say. Thank you. Thank you. Your next question comes from the line of Mark Altschwager with Baird. Please go ahead. Thank you. Good afternoon. You know, obviously a very tough environment out there, especially for lower income consumers. You know, we've heard from other retailers that the initial shock of inflation following Russia and Ukraine led to a pause. Curious if you've seen any notable change in trend, you know, a positive change in trend as you move through April and into May. Then, you know, bigger picture, you know, Ross has navigated weaker economic environments in the past, you know, benefited from the trade down to value. Just, you know, how do you view the potential for that as the year unfolds? Thank you. Mark, it's Michael Hartshorn. On our trend during the quarter, ours was following a fairly strong start to the period, the start to the quarter for us, sales underperformed over the balance of the quarter. I think most importantly there was us anniversarying the government stimulus and customer pent-up demand last year. We also didn't see a pickup during Easter that we had planned into the business, and we wouldn't comment on inter-quarter trends at this point. On the trade-down customer, it's hard to say. Obviously with higher fuel and food prices, discretionary spending for the lower-end customer is being squeezed. We saw customers at both chains pull back on spending in the first quarter. In terms of trade down, you know, the best proxy we would have, although every recession is different, would be 2008, when the fall of 2008 was very difficult, and we started to see some improvement in the first half of 2009. Thank you. Thank you. Your next question comes from the line of Lorraine Hutchinson with Bank of America. Please go ahead. Thanks. Good afternoon. I wanted to follow up on your comment, Barbara, that sales and profitability within your guidance will improve as the year progresses. Can you just provide us with just some context on what gets you comfortable, especially on the top line, that things will improve as the year goes on? Lorraine, on the top line, you know, the guidance assumes a fairly steady pace. In the fourth quarter, we know, for instance, we have opportunity because we were up against Omicron, and we had supply chain congestion that we know we lost business in the fourth quarter last year. In terms of profitability, as we said when we started the year, we did make wage increases in the back half of 2021, and we also started to see the freight increases. The guidance assumes that we lap those increases from last year. Overall, what you see in our changed guidance is really just sales. We haven't changed our expense assumptions. When we came into the year, we thought we had a good grasp on freight, ocean freight wages and the only thing that's slightly changed there is fuel, but we've been able to offset those in other costs in the business. The updated guidance really is a sales flow through. Lorraine, in terms of the assortment, what happened last year is as merchandise slid, as I'm sure it did for all retailers, different product categories created real gaps in the assortment. As you get into fall and the inventories catch up with where those gaps were, gives you the confidence in certain businesses that the performance should be better. Thank you. Thank you. Your next question comes from the line of Matthew Boss with JPMorgan. Please go ahead. Great, thanks. So Barbara, on the magnitude of the comp slowdown as the quarter progressed, I guess, were there any notable changes by category or specific geographical call-outs as you dissect the first quarter? Then just looking back, if we take a maybe a broader picture, thought process, are there any time frames that you'd compare the magnitude of this sharp slowdown? How many quarters or how long did it take for your model to respond? Just kinda thinking about the duration in the past and then the subsequent improvement that you're baking in as the year progresses. In terms of a slowdown, Michael, from one quarter to another, I can't really think of a period of time where we baked in that other than in 2016 where we had difficulty in the ladies business, where we had to. Yeah, Matthew. Slow down. Yeah, I mean, Matthew, we knew there was gonna be a slowdown, at least on a comp level with all the government stimulus that came out last year. We had to actually plan that in the business and also with the customer pent-up demand as COVID restrictions eased. Even in our initial guidance, you know, the low end of the range was -4%, so we missed that by about 3 points. In terms of where in the business it slowed down, it was pretty broad-based. You know, we did see pockets of opportunity. You know, if you look at our larger markets, Texas and Florida outperformed. We had expected, as the border opened up, that we'd see improvement there. We, in fact, did. In Florida, as tourism and travel started to increase, we had planned increases there, and we saw improvement. In terms of the assortments, apparel outperformed home. We were up against very large comps in home in Q1, and so that's really where we saw a large difference in performance. Thank you. Your next question comes from the line of Michael Binetti with Credit Suisse. Please go ahead. Hey, guys. Thanks for taking our questions here. I guess as we look at the quarter on paper, it looks pretty far from where we were on the narrative in early April. I think there's been a pretty consistent narrative that you felt good on inventory, and I think you felt like you came into spring with the right mix of goods for the categories. The consumer is clearly drawing a line. You know, between wanting, you know, back-to-office apparel, dresses for women, those kinds of things. It does sound like demand was the issue. I think you know you did however talk about in the initial guidance an acceleration through the year, and I think at the time, one of the inputs was that by 2Q last year had. You know, when stimulus kind of cleaned out some of the inventory, you were in chase mode on some real meat and potatoes items that were just stocked out, and I think that fueled a lot of your optimism baked in to the acceleration through the year. It seems like the demand line has changed quite a bit here and that just having inventory may not be sufficient at this point. You know, how do you true that up, bring that forward and say, "Look, we were missing some categories a year ago in 2Q," versus, you know, the expectation for sales to continue to be very, very slow here in the second quarter? Michael, I would just say overall, I mean, it serves us well to be given our underperformance in Q1 to be cautious with the rest of the year. That's why you saw us bring down the guidance, and that's true from, you know, buying inventory to running the company with lower expenses. We'll see how it plays out. I mean, it's very uncertain out there. The inflationary environment was much more than we expected when we entered the year. We're gonna put ourselves in a position to chase business and to chase trends, and we think that will allow us to maximize our potential in this environment. As we dig into the opportunities of the businesses that we did miss and that we didn't have last year, that would be part of what we're looking at to improve the business. Making the shifts in your, you know, example into more dress versus casual and, you know, making the appropriate moves. We're digging into that piece now. Okay. Excellent. If I could follow that. Is it safe to say the AUR strategy you might have rolled it back a little bit given some of the commentary we've heard across the space at this point? It sounds like a sharper focus on value versus what you were thinking from the consumer. Sure. The AUR strategy, you know, we strategically increased prices, so we didn't do it just straight across the board. What we really did was, you know, make sure that there was the appropriate price separation from traditional retailers. We monitor that very, very closely. You know, the merchants can see on the turn line every single week whether something is working or not. That piece will continue to do, you know, in both companies really with a high focus on value, right? That a slightly higher AUR might be a very strong value based on what's going on in the rest of the world. I think the value equation, to your point, is really, you know, what our customer looks for and comes to expect from us. We are highly focused on the value equation. That doesn't mean that potentially an AUR could be higher. It's. They're not mutually exclusive. It could be, you know, both ways. You really have to know where and what. Thank you. Thank you. Your next question comes from the line of Charles Grom with Gordon Haskett. Please go ahead. Hey, thanks very much. Good afternoon. It seems like the buying environment is about to turn from just okay to potentially extremely good given where retail inventory levels are gonna exit the first quarter, particularly in home. So I'm curious how quickly the merchant and buying teams can pivot and take advantage of this. Have you baked any of that into the guide for 2Q and beyond? The merchants can take advantage of the closeout opportunities as they become available. There are closeouts in home and that's, you know, that's more unusual than it is in apparel. Supply lines right now are very broad-based because of all the things that you know, goods coming in early, people bringing in fall early. It's kind of all collided at the same time into the marketplace. The merchants can take advantage of that as quickly as possible if it's the right merchandise and right product. There's nothing in their way to keep them from doing that. On your question on the guidance, we have not built any upside on that into our guidance. Thank you. Thank you. Your next question comes from the line of Irwin Boruchow with Wells Fargo. Please go ahead. Hey guys, thanks. Just two quick ones. Just on the merchandise margin in the quarter, so 170 was fully ocean freight. Can you, based on the contracts or the visibility you have, what should that headwind kinda look like, you know, big picture or as specific as you guys can get as we move into Q2 and beyond? To Michael's question on AUR, can you kind of help us with the inventory? I mean, it looks heavy, but it's hard to kind of, you know, read between the lines sometimes. Are you guys comfortable with your inventory position? Do you see a need to clear more product in Q2? Just kind of trying to understand where exactly your comfort is on the inventory you guys have right now. Yeah, let me- Sure. I'll start with your last question first on inventory there. Overall, the growth in inventories was really packaway. We ended with 43% of the total inventories versus 34% last year. If you can remember from last year, we used a substantial amount of that packaway to backstop the demand we saw at the end of the first quarter when the stimulus came out. The 34% was lower than our historical levels. The second piece relates to supply chain congestion. When we came into the year, we planned longer lead times based on what we saw in the fourth quarter. What that meant for us for businesses where we directly import mainly in home, what happened in Q1 is the supply chain eased somewhat and we received early second quarter goods in home, and we stored them in packaway and we'll flow them later in the year. As far as in-store inventories, we operated up from last year, but remember, again, they were lower than we had anticipated with the frenzied demand, but well below 2,000 pre-pandemic levels. I would say overall, we're happy with our overall inventory levels. Yeah. Touching on the ocean freight question, they will remain elevated throughout the balance of 2022, but as we anniversary that spike that we had in the second half last year, they remain elevated but improved through the balance of the year. On the domestic freight side, as Michael commented, you know, fuel costs are higher than our expectations at the beginning of the year, but we've offset that in the guidance that we've provided to you. By the second half, we don't see any pressure on domestic freight. In terms of packaway. Thanks so much. We're very comfortable with the content of packaway also. Great. Thank you very much. Thank you. Your next question comes from the line of Simeon Siegel with BMO Capital Markets. Please go ahead. Thanks. A few quick ones, if possible. Do you know inventory growth in units versus dollars? Then what% of the freight costs generally are ocean versus domestic? We wouldn't give you the unit growth. That's not something we disclose. Okay. Freight costs, just ocean versus domestic in general? Can you repeat the question? When you think about your total freight costs, just roughly, what is the ocean versus domestic breakdown? What percentage of your freight costs tend to be ocean versus domestic? We don't. Yeah. We don't disclose that externally. Okay. All right. I'll try one last one then. I think you talked about deleverage. What do you expect the rest of unit dollar growth to look like for the year built into that or embedded in the comments you gave? Could you repeat that question? Yeah, sure. Embedded in the full year guide, just how are you thinking about unit dollar growth? I don't know. Yeah. Why don't we call you after the call and get specific modeling questions for you? Sounds good. Thanks, guys. Sure. Thank you. Your next question comes from the line of Adrienne Yih with Barclays. Please go ahead. Yes, good afternoon. Barbara, I wanted to sort of dig into the comment on kind of redirecting or reallocating some of the penetration. What is or was home penetration during the quarter, maybe versus ladies apparel? Because I'm assuming that apparel piece was the stronger piece of it. Secondly, how were store traffic trends over the pacing and over the quarter? If you can help us with those two, that'd be great. Thanks. In terms of overall home apparel, I think Barbara mentioned earlier that apparel outperformed home, although home was up against very strong comps last year. Adrienne, we also talked a little bit about the trend and that was similar for traffic in that, you know, we had a strong start to the year, so year-over-year growth. Then that dropped in later in the quarter as we started to anniversary the stimulus and also customer pent-up demand. Okay. Go ahead. The home penetration is around 25% of the company. Okay. Similar to pre-pandemic, in that range? Mm-hmm. Okay. I guess on packaway, so there's a portion of the packaway. The number I think, if I got it correctly, was 43% at the end of this quarter. Some of that is obviously the early receipts in home goods. Were you able to take advantage of any of the unfavorable kind of transition to spring? I know you don't have a large exposure to the Northeast, but picking up some of those goods off of Northeast retailers. We've seen this happen in the past for you, where that short stay really does work to your benefit as you redeploy it in Q2. Is that an opportunity? That doesn't just come from Northeast retailers. I think there's a lot of spring goods that came into the country. Spring last fall plus early spring kind of all collided and came into the country pretty much at the same time. Part of it, I'm sure, comes from Northeast retailers, and part of it just comes in from the supply that came into the country as the congestion eased all at the same time. Mm-hmm. We've been able to buy appropriately the things we want, in spring products. Yes, there will be spring products that we can use from Q1 into Q2. Okay. Thank you very much, and best of luck. Thank you. Your next question comes from the line of Marni Shapiro with Retail Tracker. Please go ahead. Hey, everybody. One clarification. I think someone on the call mentioned you did not see the lift around Easter that you normally do, and I was curious if that was related to traffic or assortment. I'm just trying to think it through to other holidays that are coming up and the more traditional cadence of retail business getting back to where it was. Then if you could just talk a little bit about any excess inventory you have going into the second quarter. Will it be liquidated in the second quarter, or is it current enough that it doesn't have to be marked down? And is this contemplated in the operating margin guidance? Marni, on the inventory, we actually ended with store inventory where we wanted them. Okay. There isn't any liquidation past the first quarter. Then on Easter, I commented earlier on Easter, and that was versus our expectations. Typically, when there's a later Easter, you have less weather. Yeah. We missed our own expectations there in our plans. Well, I'm just curious, because overall traffic was lower, or was it the assortments? Do you think it was more specific to just traffic in general and the late Easter or the assortments that you had in place for Easter? The East, what you would define. I think. Go ahead. Mm-hmm. What you would define as the Easter assortments, Marni? Mm-hmm dresses, dress shoes. Yep Children, children's dresses. Yeah. Those just were fine. That was fine. You had the lift for that, but the overall traffic lift as people kind of have a little bit of time off or holidays coming up, that you didn't see. I would say overall, the traffic is probably a large function of the consumer being squeezed with inflation. Right. Okay. Fantastic. Thank you, guys. Best of luck with the summer season. Thank you. Thank you. Your next question comes from the line of Aneesha Sherman with Bernstein. Please go ahead. Hi. Thanks for taking my question. I have two, please. I'm trying to square the model of your FY guide versus the Q2 guide implies that you're modeling about flat comps in the second half of the year. I'm trying to square that with your view of your lapping assortment gaps last year, so you should be able to pick up more at the in the back half of the year. How does that square with the view of flat comps? My next question is around packaway. You picked up a lot of packaway in Q4. When does that start to flow through? Is that fall/winter assortment that we should start to see that margin benefit from that flowing through in the second half? Thank you. On the back half, that it does include our easiest compare in the fourth quarter. Okay. You know, fourth quarter would be the stronger comp. On packaway, on average, we hold it for about four months. That's the way you should think about the timing and when we typically flow goods. Just to follow up on the packaway. The packaway that you're picking up in Q4, most of that will have already flowed through. Is that right? It depends. It depends on the product. The packaway that we picked up in Q4, you're thinking it's like outerwear? Yeah. If it was outerwear. Seasonal, yeah. Seasonal, that packaway would obviously ship from the vendor when it would be, you know, at the end of December, let's say, and would release in the fall season. There are other classifications of product like denim, like fleece, like knits, or parts of home that are seasonless, that can flow all along. That can flow in Q1, can flow in Q2. A lot of packaway products are seasonless. Got it. Thank you. Thank you. It depends on the product itself. Thank you. Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Please go ahead. Good afternoon, everyone. Last quarter, we had talked about taking price. Where are we in that journey given the slowdown? Is that being adjusted at all? What are you seeing, and how does it differ for dd's versus the Ross brand? Sure. As we've talked about before, we started to increase some of our AURs, keeping in mind, you know, that it has to be the appropriate value separation from traditional retailers and in both companies. We're strategically doing it. It's not just straight across the board and obviously examining that very closely. Does it make sense or not? You can do that simply by how quickly the goods turn and the markdown rate. The merchants are managing that every week. While they're going through their selling, and then we're reviewing it obviously at a higher level to make sure that that hasn't been an issue. In both companies, and particularly in dd's where the customer is very price sensitive, you know, we really look at that at a pretty low level. Got it. Just the health of your consumer, what are you seeing there, and how do you define the household incomes of dd's and Ross customers? Sure. On the first of all, our overall customer is very broad age-wise, ethnicity, and income-wise. On average, the Ross customer makes between $60,000-$65,000 household income, and the dd's customer is south of that in the, you know, $40,000-$45,000 range. But I would say the health of our customer, they're being squeezed due to food and fuel prices, with inflation there means they have less to spend on discretionary items. Just lastly, as you think about the real estate portfolio, but then keep it maintaining the same level in new store openings, is there anything that would make you adjust your rate of new store openings? Or given that's a glide path for the future, no adjustment in the strong balance sheet that you have, how do you think of that real estate portfolio? Yeah. At this point, Dana, we wouldn't change our glide path. We're planning to open 100 this year, and we'll execute to that. Then we'll revisit our long-term plans. We think there's market share available. We think there's market share opportunities. We think value will become increasingly important for the customer, as it has over the last number of years. We think we have a great opportunity ahead of us. We would continue with our store opening plans. Thank you. Once again, if you would like to ask a question, please press star one on your telephone keypad and wait for your name to be announced. We kindly request that you please limit your questions to one only. Thank you. Your next question comes from the line of Laura Champine with Loop Capital. Please go ahead. Thanks for taking my question. I'm wondering if weather had an impact on your comp this quarter. The strength of Florida would seem to point to that, but the comment that the comp decelerated as the quarter progressed sort of fights against that theory. Laura, the weather did not have a material impact on the business in the quarter. How are your more mature markets like some of the California markets holding up relative to the whole? California was relatively in line with the chain. Then as you know, other bigger markets which you mentioned, Texas and Florida outperformed. Great. Thank you. Thank you. Your next question comes from the line of Mauricio Serna with UBS. Please go ahead. Hi. Good afternoon. Thanks for taking my question. I was wondering if you could comment on if there was any post divergence in performance between Ross Stores and the dd's DISCOUNTS. Curious if one of them began slowing down earlier than the other. Then maybe about a question on the second half. If I'm looking into the numbers, it implies roughly second half of the year flat comp sales, but I think it also implies double digit EPS growth. I'm wondering what are the gives and takes there to drive the EPS growth in the second half of the year? Thank you. On dd's did trail Ross, but they were up against stronger gains last year, especially with government stimulus that had an outsized impact on that consumer. Also last year's stimulus at their income levels, they were also more impacted by inflation than the Ross customer. Yeah. The later in the year profitability improvement really on that flattish sales we're gonna get. We're gonna go up against the anniversary of not only the wage side of it, but also domestic and ocean freight costs. We'll anniversary those, you know, significant increases versus last year. That's really providing the lift that you're seeing in the model. Got it. Thank you very much. Thank you. Your next question comes from the line of Corey Tarlowe with Jefferies. Please go ahead. Hi. Good afternoon, and thank you for taking my question. I believe in the prepared remarks, you talked about supply chain congestion easing somewhat. I was wondering if you could provide some incremental details about what you meant by that and what you witnessed in the quarter, and then perhaps maybe what you're expecting going forward. Thanks. Sure. It's best to start from last year. Last year, the lead times degraded as we moved through the year. They got longer. We planned the year based on what we saw in the fourth quarter. What we saw in the first quarter is it did ease somewhat, which meant we received goods early. Expectations for going forward, I think, will be highly dependent on how China comes back from their shutdown. We're watching that very closely. We're gonna be very cautious with our lead times. I think it's gonna be dependent on whether, when they open back up and the timing of when it opens back up, what type of congestion that causes. Understood. Thank you very much. Thank you. Your last question comes from the line of Daniel Hofkin with William Blair. Please go ahead. Good afternoon. You may have addressed this earlier, so I apologize if this has already been asked. When you talked about execution issues, is that strictly a matter of kind of not enough of the better selling products, too much of slower selling product, or are there other issues you would point to? Second would be how would you break down your sales shortfall between execution and the consumer slowing down? Thank you. Daniel, I think what we're saying is we know we can do better. It's in this environment, inflationary environment. I mean, none of us have been in this for 40 years. We know we can offer our customer, you know, better bargains and we'll do that. It's. We wouldn't be able to break out execution versus the impact on inflation on the consumer. In terms of just the nature of the misexecution, was it all related to heaviness or, you know, how much of the better selling product you had or how or being light on it? Or was it also pricing in some cases, as it would be helpful to understand that a little bit better. I think it goes back to what Michael is saying. It's not we had one major mistake or one major business that's really underperforming. Mm-hmm. We don't feel that we executed at the level that we're capable of. That might be something as simple as we should have bought more career versus casual, a shift of penetration of a few points. You know, filling up a delivery of something. It's just not quite as crisp as we normally are. If the real question is, are there any real assortment issues in select businesses? There aren't. We need to execute at a higher level, and we need to at the level that we're capable of doing and that we have been doing. That's really what we need to do as an organization. That concludes our question and answer session for today. I will now turn the call back over to Barbara Rentler for final remarks. Thank you for joining us today and for your interest in Ross Stores. Ladies and gentlemen, this concludes today's conference call. Thank you for participating.