Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies First Quarter Fiscal 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press star one. As a reminder, this conference call is being recorded as of today, May 17th, 2023. I would now like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of The TJX Companies Incorporated. Please go ahead, sir. Thank you, Ivy. Before we begin, Deb has some opening comments. Thank you, Ernie Herrman, good morning. The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the company's SEC filings, including, without limitation, the Form 10-K filed March 29th, 2023. These comments and the Q&A that follows are copyrighted today by the TJX Companies Inc. Any recording, retransmission, reproduction, or other use of the same, for profit or otherwise, without prior consent of TJX, is prohibited and a violation of United States copyright and other laws. While we have approved the publishing of a transcript of this call by a third party, we take no responsibility for inaccuracies that may appear in that transcript. We have detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release in the investor section of our website, tjx.com. Reconciliations of other non-GAAP measures we discuss today to GAAP measures are also posted on our website, tjx.com, in the Investor section. Thank you. Now I'll turn it back over to Ernie. Good morning. Joining me and Deb on the call is John Klinger. I'd like to begin today by recognizing our global associates for their continued hard work and dedication. It is our associates who bring our business to life every day for our customers, and I wanna thank them for their strong commitment to our business, especially our store, distribution, and fulfillment center associates. To our first quarter results. I am very pleased with our strong sales and our well above plan profitability. Our 3% overall comp sales growth was at the high end of our plan and driven by an increase in customer traffic. I am particularly pleased with the performance at Marmaxx, which delivered mid-single-digit increases in both comp store sales and customer traffic. We saw comp sales and traffic increases at both of our international divisions. I also wanna highlight the continued strength of our apparel and accessories businesses across the company. In terms of profitability, both pre-tax profit margin and earnings per share increased versus last year and well exceeded our expectations. Importantly, merchandise margin was very healthy. With our strong profitability performance in the first quarter, we are raising both our full-year pre-tax profit margin and earnings per share guidance. John will talk to this in a moment. Our first quarter results are a testament to the strength and resiliency of our flexible off-price business model. I am very pleased with the excellent execution of our teams across the company, whose collective efforts brought our shoppers great values and a compelling treasure hunt shopping experience every day. Our buyers took advantage of amazing deals in the marketplace. The organization flowed product to the right stores at the right time and did a great job of merchandising the product, delivering on customer satisfaction and marketing. We're happy with our good start to the second quarter and are in a great position to take advantage of the phenomenal buying environment and ship fresh selections to our stores and online. Going forward, we are excited about the opportunities we see to gain market share in the U.S. and internationally and continue to improve the profitability of TJX. Before I continue, I'll turn the call over to John to cover our first quarter financial results in more detail. Thanks, Ernie. Good morning, everyone. I also want to add my gratitude to all of our global associates for their continued hard work. I'll start with some additional details on the first quarter. As Ernie mentioned, our overall comp store sales increased 3% at the high end of our plan. This comp sales increase was driven by customer traffic with average ticket up for the quarter. Again, our overall apparel business, including accessories, continued its momentum with comp growth up mid-single digits. Overall, home sales were down as we continue to cycle the outsized sales we saw during the pandemic. TJX net sales grew to $11.8 billion, a 3% increase versus the first quarter of fiscal 2023. On a constant currency basis, first quarter sales were up 5%. First quarter consolidated pre-tax profit margin of 10.3% was up 90 basis points versus last year's adjusted 9.4% and well above our plan. Gross margin was up 100 basis points and driven by an increase in merchandise margin. The benefit from lower freight costs was significantly more than we expected. Once again, mark-on was strong due to better buying. Unfavorable hedges, our year-over-year shrink accrual, and supply chain investments were headwinds to the gross margin in the first quarter. As a reminder, we are planning to shrink flat in fiscal 2024 versus fiscal 2023. Our plans this year assume an expected headwind in the first, second, and third quarters and an expected benefit in the fourth quarter. SG&A increased 60 basis points. Less than half of this increase was due to incremental store wage costs. Net interest income benefited pre-tax profit margin by 50 basis points. I wanna note that our above plan pre-tax profit margin performance was primarily driven by an unanticipated benefit from a freight accrual adjustment, better than expected freight rates and our freight initiatives, as well as the timing of some expenses. Lastly, we are very pleased that earnings per share of $0.76 were up 12% versus last year's adjusted $0.68 and also well above our expectations. Moving to our first quarter divisional performance. At Marmaxx, first quarter comp store sales increased a very strong 5% over a 3% increase last year. We are very pleased to see a mid-single-digit increase in Marmaxx's customer traffic. Once again, Marmaxx's apparel business, including accessories, had a high single-digit comp increase. Marmaxx's first quarter segment profit margin was 14%, up 80 basis points versus last year. We are extremely pleased with the momentum of our largest division as sales and traffic were consistent across each of Marmaxx's regions. We continue to see an excellent opportunity for Marmaxx to capture additional market share across the U.S. HomeGoods first quarter comp store sales decreased 7% as it continues to cycle the outsized sales we saw during the pandemic, specifically fiscal 2022's first quarter 40% comp sales increase. HomeGoods' first quarter segment profit margin was 7.3%, up 130 basis points. We expect HomeGoods year-over-year comp sales to improve for the remainder of fiscal 2024. We continue to see a terrific opportunity to capture additional share of the U.S. home market. In the first quarter, we opened our 900th HomeGoods store and continue to see excellent opportunities to grow both our HomeGoods and Homesense banners. At TJX Canada, comp store sales were up 1% and driven by customer traffic. Segment profit margin on a constant currency basis was 11.2%. As the only major brick-and-mortar off-price retailer in Canada, we benefit from excellent customer awareness of our brands. We are confident that we are set up extremely well to continue our growth plans and attract even more shoppers to our banners. At TJX International, comp store sales increased 4% and customer traffic was also up. It was great to see strong sales in our European business, especially in a challenging macroeconomic environment. In Australia, comp store sales were outstanding and continue to grow, and we continue to grow our footprint in that country. Segment profit margin for TJX International on a constant currency basis was 2.7%. Going forward, we continue to see a path to improve profitability for this division as we plan to grow our footprint in our existing countries and leverage our infrastructure. As to e-commerce, overall, it remains a very small percentage of our business. We continue to add new brands and categories to our sites so that shoppers can see something new every time they visit. Moving to inventory. Balance sheet inventory was down 8% versus first quarter of fiscal 2023. Importantly, this year-over-year decline is primarily due to the elevated levels we saw last year from a larger in-transit balance as a result of supply chain delays. We feel great about our balance sheet and store inventory levels. We are confident that we are strongly positioned to take advantage of the outstanding buying environment and flow fresh assortments to our stores and online this summer. I'll finish with our liquidity and shareholder distributions. For the first quarter, we generated $745 million in operating cash flow and ended the quarter with $5 billion in cash. After the quarter ended, we paid down $500 million of maturing debt. In the first quarter, we returned $841 million to shareholders through our buyback and dividend programs. Now I'll turn it back to Ernie. Thanks, John. Today, I'd like to highlight our confidence in our growth plans and why we are convinced that we are in a great position to capture additional market share in the U.S. and internationally. First, we are confident that the appeal of our value proposition will continue to resonate with consumers. Over the past 46+ years, our continued focus on value has served us extremely well through many kinds of economic environments, including periods of inflation and through recessionary times. In an ever-evolving retail landscape, we believe our commitment to offer great value every day will continue to attract shoppers to each of our retail banners. Second, we see our differentiated treasure hunt shopping experience as a tremendous advantage. Our stores receive multiple deliveries each week of fresh branded merchandise to surprise and excite our customers. With our rapidly changing assortment, shoppers are inspired to visit us frequently to see what's new. Third, we see ourselves as leaders in flexibility. The flexibility of our buying allows us to seek out the best opportunities and hottest trends in the marketplace. Our store formats and fixtures allow us to flex our floor space to support our opportunistic buying. Further, our systems and the flexibility of our supply chain allow us to merchandise stores individually with a curated mix of good, better, and best brands with a wide span of price points. All of this allows us to attract consumers across wide income and age demographics in each of the countries that we operate in. Our broad demographic reach across income levels can open up even more opportunities for us in the product marketplace. Further, we continue to attract an outsized number of younger customers to our stores, including many Gen Z and millennial shoppers, which we believe bodes well for the future. We believe our ability to flex our product offerings across a vast array of categories and brands helps us attract a wider shopping audience than many other retailers. Next, we see the potential to grow our global store base by more than 1,400 additional stores over the long term with just our current banners in our current countries. Giving us confidence are the opportunities we see for real estate and our disciplined approach to selecting locations. Next, I can't emphasize this enough, we are extremely confident that there will be more than enough inventory available in the marketplace to support our growth plans. Over the last year, our more than 1,200 global buyers have sourced merchandise from a universe of approximately 21,000 vendors, including many new ones. Overall availability of quality branded merchandise has never been an issue for us throughout our history, as vendors and brands continue to produce goods from multiple channels, including in-store, online, and direct-to-consumer. In fact, many vendors want to work with TJX due to our size, scale, and buying power. As a growing global retailer with nearly 5,000 stores, we offer vendors a very attractive way to grow their business and clear their excess inventory quickly and discreetly. Lastly, I truly believe that the depth of our off-price knowledge and expertise within TJX is unmatched. We have a highly differentiated global business and have developed the specialized talent and teams to support it. We have many leaders with decades of off-price experience and remain focused on developing newer associates and the next generation of leaders within our organization. We take great pride in our TJX University and other training programs. Our deep bench allows us to deploy teams where needed and rotate talent between divisions and geographies, all of which strengthens our company as we continue to pursue our goals for growth. As I look at the retail industry today, I believe our best-in-class organization is a major advantage. Moving to profitability, again, we are extremely pleased with our well above plan first quarter performance and have increased our pre-tax profit margin expectations for fiscal 2024. We are confident about our ability to achieve our 10.6% pre-tax profit margin target by fiscal 2025 and will continue to strive to exceed it over the long term. Turning to corporate responsibility, we continue to focus our global corporate responsibility reporting under four key pillars: workplace, communities, environmental sustainability, and responsible business. We recently updated our corporate website, tjx.com, with our 2022 efforts across several of these areas. We encourage you to look more on our website, and we expect to release our updated global corporate responsibility report later this year. I'm also proud to share that TJX was recently named to Newsweek's list of America's Greatest Workplaces for Diversity for 2023, as well as Forbes magazine's list of America's Best Employers for Diversity. As always, I'm grateful to our teams around the globe for the work they do to support our global corporate responsibility efforts. Summing up, our strong first quarter results highlight the continued appeal of our branded merchandise, terrific values, and the excellent execution across the organization. I want to again recognize and thank all of our global associates whose collective efforts drove our strong performance. We feel great about our plans for the remainder of the year. While our business is not immune to macro factors, I am convinced that the characteristics and flexibility of our off-price business model and the depth of our organization's expertise will remain important advantages. Looking ahead, I am convinced that we have a long runway for growth and are set up well to capitalize on the opportunities we see to drive sales and traffic, improve profitability, and capture market share going forward. Now, I'll turn the call back to John to cover our full year and second quarter guidance, and then we'll open it up for questions. Thanks again, Ernie. Before I start, I wanna remind you that fiscal 2024 calendar includes a 53rd week. As we stated in our press release this morning, we will be offering eligible former TJX associates who have not yet commenced their pension benefit, an opportunity to receive a lump sum payout of their vested pension benefit. We anticipate that the impact of this pension payout offer, primarily a non-cash settlement charge, could negatively impact fiscal 2024 EPS by approximately $0.01-$0.02, but could be higher or lower, depending on participation rates and other factors. To be clear, all of the guidance we are providing today does not include the potential impact of this pension payout offer. We expect to exclude the impact of this potential settlement charge from our adjusted pre-tax profit margin in EPS results in the third quarter. To our full year guidance. We continue to expect an overall comp store sales increase of 2%-3%. As a reminder, our comp guidance will exclude expected sales from the 53rd week. For the full year, we expect consolidated sales to be in the range of $52.7 billion-$53.2 billion, a 6%-7% increase over the prior year. This guidance assumes approximately $800 million of additional revenue expected from the 53rd week. As Ernie said, we are increasing our full year profitability guidance. We're now planning full-year pre-tax profit margin to be in the range of 10.3%-10.5%. Excluding an expected benefit of approximately 10 basis points from the 53rd week, we now expect adjusted pre-tax profit margin to be in the range of 10.2%-10.4%. On a 52-week basis, this would represent an increase of 50-70 basis points versus fiscal 2023's adjusted pre-tax profit margin of 9.7%. Our full-year pre-tax profit margin guidance assumes that we will now see a benefit of more than 100 basis points from lower freight expenses. Our current freight assumption includes a pull forward of some of the benefit we had previously expected in FY 2025. This includes favorable freight rates and benefits from some of our freight initiatives. These, along with the freight accrual favorability in the first quarter that I mentioned earlier, is driving the increase in our full-year freight benefit assumption. Our full-year pre-tax profit margin guidance also assumes that we will see a continued benefit from better buying and that we will continue to have headwinds from incremental store and distribution center wages and supply chain investments. This pre-tax profit margin guidance continues to assume that shrink will remain similar to last year. In the first quarter, we took actions to secure more of our store merchandise through tagging, tethering, and casing. We also increased our loss prevention presence more broadly across our banners. We are laser-focused on our shrink initiatives and continue to look for additional ways to mitigate the impact. As a reminder, we won't know the full effect of these actions until we do a full annual inventory count at the end of the year. For modeling purposes, we're currently assuming a full year tax rate of 26%, net interest income of about $135 million, and a weighted average share count of approximately 1.16 billion. As a result of these assumptions, we're increasing our full year earnings per share guidance to a range of $3.49-$3.58. Excluding an expected benefit of approximately $0.10 from the 53rd week, we expect adjusted earnings per share to be in the range of $3.39-$3.48. On a 52-week basis, this would represent an increase of 9%-12% versus fiscal 2023's adjusted earnings per share of $3.11. Moving to the second quarter, we are planning overall comp store sales growth to be up 2%-3%. We expect second quarter consolidated sales to be in the range of $12.3 billion-$12.4 billion, a 4%-5% increase over the prior year. We are planning second quarter pre-tax profit margin to be in the range of 9.3%-9.5%. This guidance assumes a significant benefit from lower freight costs as well as a benefit from better buying. It also includes ongoing headwinds from incremental wage costs and supply chain investments. When looking at our second quarter pre-tax profit margin guidance sequentially versus the first quarter, I wanna remind you that our first quarter pre-tax profit margin benefited from a favorable freight accrual adjustment that won't repeat in the second quarter. In the second quarter, we are expecting a reversal of most of the first quarter timing of expense benefit as well as a bigger impact from wage costs and supply chain investments. For modeling purposes, we are currently assuming a second quarter tax rate of 26.2%, net interest income of about $37 million, and a weighted average share count of approximately 1.16 billion. We expect second quarter earnings per share to be in the range of $0.72-$0.75, up 4%-9% versus last year. On a 52-week basis, our implied guidance for the second half of the year assumes that pre-tax profit margin will be in the range of 10.6%-10.8%. Our outlook also implies that overall comp store sales growth will be up 2%-3%, and on a 52-week basis, earnings per share will be in the range of $1.91-$1.97 for the second half of the year. In closing, I wanna emphasize that we are in a great position, both operationally and financially, to take advantage of the opportunities we see to grow our business. We plan to continue making important investments in our business while simultaneously returning significant cash to our shareholders. Now, we are happy to take your questions. As we do every quarter, we ask that you please limit your questions to one per person so we can keep the call on schedule and answer as many questions as we can. Thanks. Now we'll open it up for questions. Thank you. As a reminder, if you would like to ask a question, please press star one. If you need to withdraw your question, you may do so at any time by pressing star two. Our first question comes from Lorraine Hutchinson. Please go ahead. Thank you. Good morning. I was hoping you could walk through some of the specific pressures that you're seeing on SG&A this year? Any quantification would be helpful because the growth rate's a little bit higher than normal. If you could perhaps comment on which of these expenses will continue into next year versus, you know, some more one-time type of investment? Thank you. Thanks, Lorraine. We're not giving guidance, but I will walk you through some of the components. As I said in my prepared comments, you know, we continue to have incremental store wage, but for the full year, we expect this incremental wage pressure to be less than half of our anticipated SG&A increase. The rest of the cost is in a number of smaller headwinds, such as, you know, general cost inflation, return to normal costs that include such things as increased travel and investments in loss prevention. Thank you. Thank you. Next, we'll Thanks. Next, we'll go to the line of Matthew Boss. Please go ahead. Great. Thanks, and congrats on a really nice quarter. Thank you. Thank you. Ernie, could you speak to traffic that you saw as the quarter progressed and trends that you've seen so far to start the second quarter? Can you just elaborate larger picture on new customer acquisition? You cited it. What stood out was notably the broadening of the income demographic reach that you cited. Sounds like a younger customer, a new customer. Maybe just traffic, and then, just elaborate on new customer acquisition that you're seeing. Yeah, traffic. Matt, great questions. Traffic has been, you know, healthy overall. It's pretty consistent. You know, one of the things we're looking at, and this is a good opportunity for me to give you a heads up, is, you know, our ticket has started to moderate a little bit. You know, we're doing this business off of our traffic, which we said in the release. It's not being driven as much by ticket when we had our average ticket being up. It's also encouraging when we look at the way our HomeGoods business is starting to rebound a little bit. We're seeing relative to the trend we had before, where traffic was down quite a bit. We're seeing the traffic kind of pick up there more recently as well. These are healthy signs. We're very, you know, bullish on these signs. We do not manage average ticket, by the way. Obviously, we've talked about that, Matt. I know we've talked in the past where we bottom up that in the company and that we wanna just drive it off of the exciting values that are in the store and the traffic for what you were talking about. New customers, I think that was kind of part B of your question, new customer. Are you talking to, like, new customer acquisition that we're getting in this environment? Is that where you're getting at, or? Yeah, exactly. If you could just elaborate on new customer acquisition, who you're seeing as new. I think you cited a younger customer and a broader- Yeah. I think you were talking about the demos, how I had talked about the different good, better, best and income levels, right? Yeah. We're getting a good amount of younger customers. Our percent of our new customers are on the younger age group. That's been going on for a while now. We really don't wanna be pigeonholed into any group of income demographics or how's this fashion looks, whether conservative, traditional. We want customers from all demographics, income, and even fashion looks. The one thing that's a constant denominator, which all our merchants go after, is quality. We consistently talk about the quality level of the goods that our buyers buy and what we put on the floor, that we never give up on that. What does fluctuate is the fashion and the income, good, better, best, which I think has been a competitive advantage to us in gaining new, younger customers, yes. Also customers across the board. When you look at the competition around us, and I'm not talking just off price, many of them don't trade broadly like us, so they're very narrow in the scope of what they go for, either in the looks of the goods or in the price bracket that they're in. They, you know, they either go after a lower, better, demographic slash price point range, or they're more fashion driven or more true. They're never all of it. Our strategy, and we believe, by the way, that this is linked with us driving more traffic, is to have good, better, best to capture more of the potential customers that are out there. Then I would throw in one other thing you didn't ask about it, but our marketing teams, as you know, specifically and consciously do that in our marketing approach, where of course we have upped our digital media to a much greater degree over the last handful of years, which gets across many demographics, but they are actually going for different looks of customers. The placement of the working media that we do is meant to go after different customers as well. Whereas some other retailers purposely place their working media in segments that are going after a certain customer base, we are very strategic and conscious, and purposeful about where we go with our media spend. Great question. Sorry, I've given you a lot of information there, but you were getting to some of the meat of why we have a lot of confidence in our top line going forward. It's a great color. Best of luck. Thank you, Matt. Next, we'll go to the line of Paul Lejuez. Please go ahead. Hey, thanks, guys. Just to follow up on that last bit, Ernie, can you talk about the performance of your higher income demographic stores versus your lower income demographic stores? I'm curious if you would say that you are seeing a trade down customer at this point. Just anything you could add on regional performance, any differences there? Thanks. Sure. Yeah, yeah. Paul, you know, what we're seeing in the first quarter is what we were seeing similar to the first quarter of last year. Through the first three quarters of last year, as we said, you know, we were seeing stores in higher demographic areas being more of the driver of our comp. As we, and that's what we're seeing in the first quarter as well. As far as, you know, by geography, you know, Marmaxx by geography was pretty consistent. It was really nice to see, you know, the consistency that we're seeing in the business. Any detail you can give by state, like from your larger states in terms of outperformers, underperformers? By geography, it was pretty consistent. Again, it's hard for us to read into trade down and what we're seeing. There's just so many moving things that are going on right now that it's just tough to read. Like I said, you know, we are seeing, you know, that the higher demographic stores in higher demographic areas, performing, you know, being more of the driver of our comp in Marmaxx. Got it. Thanks, guys. Good luck. Thank you, Paul. Next, we'll go to the line of Alex Straton. Please go ahead. Great. Thanks so much for taking the question. Congrats on the quarter. I wanted to zoom in on Marmaxx here. It looks like the margin outpaced expectations. Also looks like it was one of the highest you guys have delivered there for a first quarter in a number of years. I'm just wondering, is that a function of some of the price increase strategy flowing through, or what would you attribute that result to? Thanks. Well, I'll start off and John will jump in as well. I think it's multipronged. You know, we've had, yes, pricing strategy, you know, sales being healthy, you know, mark-markdowns certainly are part of that margin. John, do you wanna jump in? Obviously lower freight costs. Lower freight favorability. Big driver. Freight cost favorability. That's. Yeah, that's kind of it. Honestly, you know, you know, we'll reiterate, we feel good about the expected level of freight expense recapture and the continued opportunity we have in better buying. Yeah. Alex, I'll throw something else in on Marmaxx is, as you could see by the, you know, the strong performance, you know, on sales, we show it as a 5%. It was a very strong 5%. We really like the positioning on open to buy. You know, they're the big ships. We like the open to buy that we have there and the liquidity because the markets, as we talked about, have been, they're just really flooded with a lot of inventory across many brands. That combined with the fact of the good, better, best advantage that we have and our teams are, you know, we have so much long-tenured merchants in that world and planning and allocation teams that we're really able to leverage the market, I think, better than a lot of other retailers to achieve some of these merchandise margins that are driving their profit performance. Again, a lot of the other retailers can't bob and weave as much because they're not as broad as we are. It gives us more retailing play, I think, in surgically addressing the retails as we do. Thank you. Next, we'll go to the line of Brooke Roach. Please go ahead. Good morning, and thank you for taking our question. I was wondering if you could provide a bit more color on the drivers of the freight outperformance and what you're seeing between ocean and domestic freight as you enter the new contract year. How much of this better freight outlook for the fiscal year is a pull forward from fiscal 2025? How does this impact your view on the recapture ability of the approximately 300 basis points of freight pressure versus pre-COVID levels? Thank you. Yeah. We're not gonna get into the detail of the pull forward other than to say that, you know, we did have, you know, some operational initiatives that gave us some benefit earlier than expected. Basically, where we're seeing the freight favorability versus last year is primarily in ocean rates. The ocean rates have come down significantly. The freight initiatives that we've implemented, such as, you know, more intermodal, more premier carriers on our routes, and we're seeing less port congestion as well. At the beginning of the year when we did our plans, we put something in our plans, on the, as I said in the, in the fourth quarter, the domestic contracts. Honestly, the majority is coming from the ocean. The domestic, the costs are a little stickier. You know, the wage rates that have been implemented, you know, particularly in on rail and truck, you know, they, those aren't gonna come back out. You know, we don't anticipate at this time, huge domestic freight favorability. Again, you know, the initiatives that we're putting in place to mitigate our freight expenses, we're very happy with. You know, as far as the recapture, we don't expect to recapture the full 300 basis points of incremental freight that we saw over the last three years. Thank you very much. We'll go to the line of Laura Champine. Please go ahead. Thanks for taking my question. I wanted to get a little bit of clarity on the expense shift, given that Q1 margins were better, but the Q2 guide is a little bit lighter. Can you help quantify the drivers that are just timing related? As far as, you know, Q2, we did have a favorable timing of costs in the first quarter. The majority of those will reverse out in the second quarter. You know, we are planning 30 basis points improvement over last year. Again, the lower freight we anticipate lower freight benefit in the second quarter because the first quarter we had the accrual reversal that benefited us in the first quarter. Of course, you know, higher wage and supply chain investment costs start in the second quarter. Those are the main reasons for the when you look at Q1 versus Q2. Did you quantify what the Q1 impact was from the freight accrual reversal? No, we did not. Okay, got it. Next, we'll go to the line of Aneesha Sherman. Please go ahead. Thank you. I wanna ask a little bit more about your traffic patterns through the quarter. I know you talked about overall, seeing an increase and not seeing differences by geography. What about through the quarter and your exit rate at the end of the quarter? Did you see it pick up throughout the quarter? Last Q2, you talked about traffic being down and basket being up. It sounds like now you're seeing those trends reverse, where your traffic is up and your basket is coming down a little bit, where ticket is starting to moderate. Is that consistent into Q2 as well? Thank you. Yeah, we haven't given any guidance on Q2 as far as, you know, what we're seeing other than, you know, we've got a good start. We've said that, you know, the sales in Marmaxx, you know, were pretty consistent by month. Does that answer your question? Yeah. Could you give a bit more color on the components of that, the traffic and the basket? Are those all consistent by month as well? No, we're not giving that detail other than to say on the quarter, you know, the transactions drove the comp. Got it. Okay. Thank you. Yeah. I think, Aneesha, maybe, part of this question is related to when before I talked about, I guess I'm giving you a little preview that we could have our ticket coming down a notch from where it's been a point or two, but that's going forward, and that's just a bit of a heads-up for everybody. The ticket could come down, I don't know, a couple points, and that's really more based on a merchandise mix variance within the, within the store. When our mix is certain mixes, we get more growth in a lower ticket area which is happening. Again, that's what I was trying to say before. We don't drive the bus on. We don't determine that. We wanna do whatever drives our top-line sales the most. That's our priority. The pricing throughout the store is a bottom-up pricing strategy where our buyers literally, they make the deals at the right and they assign the right value there. I understand the question because, you know, we were talking about the traffic and then the ticket. The ticket is really just me giving you a heads up that it could come down a couple of points based on what we're seeing in some of our hotter businesses are tending to be our lower ticket, and that mix just could bring our ticket down a little over the next quarter or two. Very helpful color. Thank you. Next, we'll go to the line of Chuck Grom. Please go ahead. Thanks. Great quarter. Just wanted to focus in on HomeGoods a little bit. You talked about a recovery throughout the quarter there. Just wondered if we could dive into that a little bit. Given the pending closing of some of these Bed Bath stores, wondering if you decide to reposition the business to pursue that market share opportunity in greater quantity going forward. Okay. Yeah. The Chuck, yeah, what's happening is we're seeing, you know, an improvement in the business here as we were coming out of Q1 and going into Q2 on a year-over-year comp basis. If you look, we actually commented on seeing continuous improvement there as the year goes on over the next three quarters. Right. We do feel that opportunity based on what we're actually experiencing with our sales more recently. Again, we don't give out exactly what we did by month in the quarter, but I can only say that as we got to the end of the quarter and as we started off this quarter, it was improving, the trend. The Bed Bath & Beyond situation, what's interesting is a lot of articles, many of you have probably seen them, that have come out that are referring directly to us and HomeGoods as being beneficiaries. We believe, we always talk, we never like to name the other retails where it's happening, but we do strongly believe that that creates market share opportunities and market grab for us. I think what you're talking about is, are we doing anything in our stores to capitalize? What we do within our own systems here, and HomeGoods is very diligent on this, strategically, we'll go in, and we're able to do this with our planning and allocation system, where we can look at which categories in a Bed Bath & Beyond store, obviously, we know what they did for category business, and we can go in and re-rank our HomeGoods stores and inventory at the nearby location where they have just vacated. That's how we don't artificially change proactively without knowing. We don't just go in and say, "Oh, we should do more of this category of business because that's what Bed Bath & Beyond did." We do it by location and by the category of businesses we think they stood for. We say, "Yeah, there's more market share opportunity for us in those categories." We are taking advantage of that situation to your point. Great question. We do it very strategically like that. We don't just broad brush it across the HomeGoods store, so to speak. Great. Thank you. Welcome. Next, we'll go to the line of Dana Telsey. Please go ahead. Good morning, everyone, and congratulations on the nice results. As you think of the international business. Hi. As you think of the international business, where you talked about strong sales in Europe and very good sales in Australia, how does that business compare to the U.S. and what you're seeing anything by category to note? Just lastly, on the shrink side, keeping it flat for the year, how much of a benefit do you expect to see in Q4 versus the first three quarters? Thank you. All right, Dana. I'll start off with the merchandise category thing, and then John and I will get into the shrink after that a little bit. Clearly, what we've been seeing is, you know, Marmaxx has been the most consistent sales performer. Internationally, we are seeing strong. By the way, we get data on market share. We are picking up major market share across the board in actually all three of those geographies. If you mention Europe or Australia or Canada, we are outperforming by my guess, on average, hundreds of basis points. It's not just a little outperformance. There's also helping that a little is the store closure. All those geographies, I don't know as much about Australia, but Canada and Europe have a fair amount of store closures going on. That'll play in. They're not necessarily like a Bed Bath & Beyond, but they have other store closures that'll create ongoing tailwind, I think, for market share grab. Little tough to read on the ups and downs because of those areas having our compares are a little funky as to when they were opening, right, John? Yeah. Opening up, coming out, and then there were some shutdowns. Yeah. When we look at our one or two-year stacks, it gets a little funky when we look at it. Correct. Um- Yeah, the timing of the openings and closings, you know, were not consistent by geography. Yes, to your point, the pure raw numbers aren't, well, aren't as good as Marmaxx. Obviously, HomeGoods is a whole different animal. Europe, yeah, Europe in the first quarter was very close. Yeah. It was a strong quarter for us. Strong quarter. Yeah. By the way, the way they are positioned in terms of liquidity and the branded market availability in both those regions is also gonna bode well, I think, for the balance of the year. shrink. As far as shrink goes, you know, we didn't give guidance on shrink for the full year. You know, just to remind, we are laser focused on our shrink initiatives, which are the increasing tagging, tethering, the uses of hard cases, and increased loss prevention presence. You know, we're continuing to look for, you know, newer ways to protect our merchandise. Then, of course, you know, we are also very focused on, you know, the employee and customer safety in our stores. That along with, you know, the customer satisfaction. Anything we do, we wanna make sure that our customers and employees are protected and that the customers, it's an easy experience for them to shop in the store. Thank you. Dana, I'm gonna just jump back in also. As we're talking about the international and we've been talking about, you know, ticket, et cetera, I wanna make sure everybody's clear that we're still extremely bullish on our ability to do our pricing strategy. The whole ticket discussion, which you know is gonna have a slight moderation, but it has nothing to do with our pricing strategy. That is really just based on a mix of categories within the store that could affect that. Our pricing strategy, where we have been selectively addressing prices and retails on certain items here or there, is continuing in full force. One is not connected with the other, actually. They're two different things. I just wanna make sure that's clear there. By the way, internationally, which you were talking about, they have been having terrific success on the pricing strategy in Canada and in Europe and domestically. We continue it from our e-com business through our Marmaxx to our HomeGoods businesses. Wanted to make sure that was clear. Very helpful. Thank you. Thank you. Next, we'll go to the line of Adrienne Yih. Please go ahead. Great. Thank you very much. Congratulations. Tremendous execution. Ernie Herrman, on the last call, Thank you. You're welcome. Well deserved. You had mentioned that sort of the chase capacity of the model is sort of now fully functional and really allowing the off-price model to shine. Can you just go into kind of some more detail about how much better kind of this year is from an open-to-buy and how that gives you tremendous visibility for the buyers? And then kind of just a follow on to that, we get a lot of questions about availability, which you addressed. As the inventory at frontline cleans up, can you then explain the next phase, right, the longevity of the off-price comparative advantage as AURs at frontline move up, and then the value shines through on off-price? Thanks. Okay. Very good, Adrienne. you're hitting right in the crux of what we do here. The first thing you were talking about is the chase culture, so to speak, of what we have going here versus a year ago, while we are coming as witnessed by some of these inventories, you can see. Part of what was happening last year is it was a bigger challenge for the merchants to kind of guesstimate our sales trends and the timing of availability that was gonna be in the market. We were finding that the transportation, inbound transportation was moving faster than we thought it would be. All those dynamics were intersecting, which for a period of time, you know, had us chasing a little bit less. Where this year, we are in, I would call it a textbook situation to take advantage of the, quote-unquote, "phenomenal availability" that's out there. I think that's why we feel great about it. I do feel we are in more of the chase mode in actually every division. That combined, it's not tricky to picture why that combined will help our profits, by the way. We mean the other dynamic going on, with in terms of our buyers who are so talented and so experienced, again, we have very little turnover in that group, is we mean more to... I think I've talked about this before. We mean more to vendors today than we did a few years ago, and we mean a lot to them a few years ago. It's just since COVID has gone this way, as you can imagine, the decrease in branded retail out there, whether it's online or at brick and mortar, has created more of a reliance and a partnership on the key brands in the market to want to do more business with us. Add that into the chase, it has allowed us to make sure we have a lot of open-to-buy, we have a vendor community that is loaded with merchandise that also knows we're more important to them today than we've ever been. That's why, excited about where we are currently, excited about the potential future increase in profitability as we move forward and continued top-line market share grab. I hope so. I think that answers that first part. I think are you asking on availability where the vendor community talks about maybe cleaning up their inventories? Yes, exactly. Yeah. I think you've mentioned that. Well, that is... That's actually... That has been said for, you know, years and years and years, decades. You know what happens now is, again, no matter who they are, you know, we're dealing with 21,000 vendors. Even if you look at our top couple thousand vendors, think about that. Yes, one vendor one year could have less. Most of them are public companies that certainly, and rightfully so, need to grow their earnings and show growth. They are almost, no matter what they do, they have to still chase inventory or drive an inventory situation a little to try to get reorders and maximize their business. That's always going to be there. I see no signs of that changing. To your point, I know certain vendors will come out and say they're gonna clean up their inventory, but what typically happens is they're clean for a season or two, and the other vendor in a similar category just happens to have more at that time, and it all dovetails rather nicely. Again, I see zero issue in a constant availability of desirable merchandise. Super helpful. Great to get your insights and best of luck. Thank you. Thank you. Our final question comes from Ike Boruchow. Please go ahead. Hey, guys. Let me add my congrats. Just two modeling questions. I'm sorry if I missed this. Can you give us the freight benefit you got in the first quarter? I know you're saying 100 basis points for the year, 100+ basis points for the year, what was it Q1? Ernie, so you're taking the pre-tax margin up 20 basis points. I think on the last call, you had the gross margins up 140. Should we assume that that now means gross margins up, you know, 160? Is that where that upside comes from? Just kinda curious on the gross margins for the year, what the thought and the plan is. We will answer both. On the gross margin, Ike Boruchow, and John Klinger, I'll let John Klinger jump in here as well. On the gross margin, you're talking about where we guided for the year. Now we're raising it to the operating margins of 10.4%. Yeah, I was trying to understand, is that upside to the gross margin you gave prior? Like what is that new annual plan on gross margin? We, yeah, we didn't give guidance on a full year gross margin. Just to say that, you know, we had a significant benefit from freight. Right. Okay. Does that make sense, Ike? I guess. I thought in the prior call, you guys had said 140 basis points of gross margin for the year. Yeah, we're not giving freight, you know, or gross margin other than to say that, you know, we feel good about the freight benefit that we've gotten and, you know, and the better buying that we're receiving as well. Got it. Okay. Thank you. And then, uh- What was your other question? The other question is like shrink. Tailwind. Was there any shrink in the first quarter? Freight tailwind. Oh, freight? Yep. Yeah, we talked about that. Right. You had a two-part question. One was on the gross margin. I think one was on something else. Yeah, I was just asking, if you could tell us the freight tailwind margin in the first quarter, and then if you could give us a gross margin guide for the year? It sounds like we're not gonna do the second part of it. Is the first part possible? Yeah. I mean, as far as the first quarter goes, I mean, we had a benefit from, you know, unanticipated freight accrual. Then we had, you know, some of our freight initiatives were, you know, we were getting a benefit earlier than we anticipated. Those are the real two items. Okay. Thank you. We are, Ike, though, you know, the one thing that we'd like to leave you with on that, is we're feeling very confident about the, you know, the 10.4% for the year, though, which I think was the original catalyst of why you're asking. We are feeling good about where we're heading on achieving that for the, for the bottom line pre-tax profit margin. Got it. Thank you. Thank you. Okay. That was our last question. I'd like to thank you all for joining us today. We'll be updating you again on our second quarter earnings call in August. Everybody, take care. Thank you. Ladies and gentlemen, that concludes your conference call for today. You may all disconnect. Thank you for participating.