Ladies and gentlemen, thank you for standing by. Welcome to the TJX Companies Q1 Fiscal 2025 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, 22 May, 2024. I would like to turn the conference call over to Mr. Ernie Herrman, Chief Executive Officer and President of TJX Companies, Inc. Please go ahead, sir. Thanks, Courtney. Before we begin, Deb has some opening comments. Thank you, Ernie, and good morning. Today's call is being recorded and includes forward-looking statements about our results and plans. These statements are subject to risks and uncertainties that could cause the actual results to vary materially from these statements, including, among others, the factors identified in our filings with the SEC. Please review our press release for a cautionary statement regarding forward-looking statements, as well as the full safe harbor statements included in the Investors section of our website, tjx.com. We have also detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and in the Investors section of tjx.com, along with reconciliations to non-GAAP measures we discuss. Thank you, and now I'll turn it back over to Ernie. Good morning. Joining me and Deb on the call is John. I wanna start by thanking all of our global associates for their ongoing commitment to TJX and for delivering great value to our customers. I especially wanna recognize the hard work of our store, distribution, and fulfillment center associates across the company. Now to our business update and Q1 results. I am very pleased with our Q1 performance. Overall, comp store sales were up 3%, which was at the high end of our plan. Again, this quarter, the comp increase was entirely driven by customer transactions. We see this as an excellent indicator of the strength of our business. As to Q1 profitability, both pre-tax profit margin and earnings per share came in well above our plans, which was terrific to see. John will talk to the drivers of this profit outperformance in a moment. Our Q1 results are a testament to the sharp execution of our teams, who focused on offering our shoppers excellent value on every item, every day. Our results also highlight the benefits of our flexible business model. Throughout the quarter, we flexed our store assortments and leaned into categories that many consumers were looking for. Further, we remained disciplined in managing our buying, inventory, and expenses and remained focused on driving profitability. Looking ahead, our value leadership in retail gives us great confidence in TJX. The Q2 is off to a good start, and we are excited about the opportunities we see for our business. We are very happy with our inventory levels and are in great position to capitalize on the outstanding buying opportunities that we see in the marketplace. We plan to flow fresh assortments to our stores and online this spring and summer and throughout the year. Longer term, we remain convinced that we are well positioned to grow our global footprint, gain market share in our geographies around the world, and increase the profitability of TJX. Before I continue, I'll turn the call over to John to cover our Q1 results in more detail. Thanks, Ernie. I also want to add my gratitude to all of our global associates for their continued hard work. Now I'll share some additional details on the Q1 versus last year. As Ernie mentioned, our consolidated comp was at the high end of our plan and entirely driven by customer transactions. Comps in both our apparel and home categories increased, with home outperforming apparel. Pre-tax profit margin was 11.1%, was up 80 basis points. This was 50 basis points above our plan, primarily due to a larger-than-expected benefit from lower freight costs, a reserve release, and higher net interest income. Gross margin was up 110 basis points. This was driven by a benefit from lower freight costs and favorable mark-on, partially offset by the timing of capitalized inventory costs and supply chain investments. SG&A increased 20 basis points due to incremental store wage and payroll costs, partially offset by the reserve release. Net interest income benefited pre-tax profit margin by 10 basis points. Lastly, we were very pleased that diluted earnings per share were up 22%. This was well above our plan due to our pre-tax profitability outperformance and a lower-than-expected tax rate that benefited Q1 diluted earnings per share by $0.03. Now to our Q1 divisional performance. Across all our divisions, our comp increases were entirely driven by customer transactions, which, again, is such a great indicator of the strength of our value proposition. At Marmaxx, comp store sales increased 2%, and segment profit margin was 14.2%, up 20 basis points.... Despite some periods of unfavorable weather, both Marmaxx apparel and home categories saw positive comp store sales, with home outperforming apparel. Further, we were very pleased to see comp sales increases at stores in demographic areas with average household incomes above and below $100,000. At our U.S. e-commerce sites and at Sierra, which we report as part of this division, we were happy with their strong sales performance. HomeGoods comp store sales increased 4%, and segment profit margin grew significantly to 9.5%. This was a 220 basis point improvement versus last year. HomeGoods and HomeSense offer customers a differentiated shopping experience for home fashions. Our buyers source products from around the world to bring customers eclectic selections and affordable ways to upgrade their home decor. Moving to our international divisions. At TJX Canada, comp store sales were up 4%, and segment profit margin on a constant currency basis was 12.4%, up 110 basis points. At TJX International, comp store sales increased 2% and were up in both Europe and Australia. Segment profit margin on a constant currency basis improved significantly to 3.9%, up 120 basis points. We believe we are performing better than most other major retailers in Canada and Europe. We are confident we will continue to be a leading shopping destination for value-seeking customers in Canada, Europe, and Australia. Moving to inventory. Balance sheet inventory was down 3% versus the Q1 of last year. Inventory on a per store basis was down 5% and driven by the lower inventory at our distribution centers. Importantly, in-store inventory was in line with last year's levels. We feel great about our inventory levels and are in a great position to take advantage of the outstanding availability we are seeing in the marketplace. As to our capital allocation, we were very pleased to start another year generating strong cash flow, reinvesting in the growth of our business, and returning cash to shareholders through our buyback and dividend programs. Now I'll return it back to Ernie. Thanks, John. I'd like to highlight the reasons we have great confidence in the near and long-term growth opportunities for TJX. We have a long track record of success through many kinds of retail and macro environments, and our value proposition has always served us well. Our off-price business model is extremely flexible and resilient, and I believe we are set up for a long runway of exciting growth in our geographies around the world. First is our wide customer demographic reach. We want to sell everyone. With our flexibility and opportunistic buying, we offer expansive assortments of good, better, and best merchandise for shoppers across a broad range of income and age groups. We continue to attract new Gen Z and Millennial shoppers to our stores, which we believe bodes well for our future growth. It's really great when we see multiple generations shopping our stores together. Second, we are convinced that significant market share opportunities remain across the U.S., Canada, Europe, and Australia. Over the long term, we see potential to further expand our store footprint by at least another 1,300+ stores with our current retail banners in our existing countries alone. Third, with our more than 1,300 global buyers sourcing from a universe of more than 21,000 vendors and from over 100 countries, we are confident that there will be plenty of quality branded merchandise available to us to support our growth plans. Throughout our history, availability of inventory has never been an issue. In fact, in recent years, we have seen availability become even better as vendors look for additional ways to grow their businesses. We've opened thousands of new vendors, which keeps our store assortment fresh and fuels the differentiated treasure hunt shopping experience for our customers. 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. Lastly, and most importantly, are the talented associates who do an exceptional job executing on our initiatives. I truly believe the level of off-price knowledge and expertise within our organization is unmatched. We have a highly differentiated global business, and we have developed the specialized talent and teams to support it. We have many leaders across TJX with decades of off-price experience. Additionally, we focus 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 very deep bench gives us the ability to rotate talent between divisions and geographies and to deploy teams where needed. All of this strengthens our company as we pursue our goals for growth and is a tremendous advantage for TJX.... I am also very proud of our culture, which I believe is another key differentiator and major component of our success. For our corporate responsibility update, I'll share more about our culture, which includes supporting our associates and making TJX a terrific place to work. Our associates bring our business to life, and we strive to foster a workplace where they feel welcome, valued, and engaged. A key priority is helping our associates grow and develop at TJX, which we support both through formal and informal training. Our Associate Resource Groups, or ARGs, and our Inclusion and Diversity Committees, have played an important role in creating an inclusive workplace. Within the last year, both the number of ARGs and the number of associates participating in them have continued to grow. As always, you can read more about our corporate responsibility work on tjx.com. Summing up, we are very pleased with the overall performance of TJX in the Q1 and that the Q2 is off to a good start. We feel great about our positioning in today's consumer environment, and we'll continue to emphasize our value proposition to consumers through our marketing initiatives. Longer term, I am confident that the characteristics of our business set us up extremely well to capitalize on the market share opportunities that we see out there. Lastly, I want to reiterate that we will not be complacent and are committed to looking at ways to further increase the profitability of TJX over the long term. Now, I'll turn the call back to John to cover our full year and Q2 guidance, and then we'll open it up for questions. Thanks again, Ernie. I'll start with our full year fiscal 2025 guidance. We're now planning consolidated sales to be in the range of $55.5 billion-$55.9 billion. This is about $200 million lower than our previous guidance due to the impact of foreign exchange. We continue to expect overall comp store sales to increase 2%-3%. We're increasing our pre-tax profit margin guidance to a range of 11%-11.1%. This would be up 10-20 basis points versus last year's adjusted 10.9%. We continue to expect gross margin to be in the range of 30%-30.1%, a 10-20 basis point increase versus last year's adjusted to 29.9%. We expect this increase to be driven by a higher merchandise margin, which includes a small benefit from freight, partially offset by our supply chain investments. We continue to plan shrink to be flat versus last year. We continue to expect SG&A to be approximately 19.3%, flat to last year's adjusted SG&A. We're planning incremental store wage and payroll costs to be offset by lower incentive compensation costs and a benefit from items that negatively impacted us last year. We're now assuming net interest income of about $156 million, which will have a neutral impact on our year-over-year pre-tax profit margin. Our full year guidance assumes a tax rate of 25.4% and a weighted average share count of approximately 1.14 billion shares. As a result of all these assumptions, we now expect full year diluted earnings per share to be in the range of $4.03-$4.09. We would represent this, this would represent an increase of 7%-9% versus last year's adjusted diluted earnings per share of $3.76. Moving to our Q2 guidance, we're expecting overall comp store sales to be up 2%-3%, consolidated sales to be in the range of $13.2 billion-$13.3 billion, pre-tax profit margin to be in the range of 10.4%-10.5%, flat to up 10 basis points versus last year. Gross margin to be approximately 29.8%. This would be a decrease of 40 basis points versus last year. This is primarily due to the lapping of a significant freight accrual benefit last year in supply chain investments, partially offset by an increase in merchandise margin. SG&A to be approximately 19.6%, a decrease of 50 basis points versus last year. This is primarily due to a benefit from lapping higher incentive accruals and a reserve related to the write-off of a German COVID program receivable last year, partially offset by incremental store wage and payroll costs. Our Q2 guidance also assumes net interest income of about $42 million, a tax rate of 26.3%, and a weighted average share count of approximately 1.14 billion shares. Based on these assumptions, we're expecting Q2 diluted earnings per share to be in the range of $0.88-$0.90, up 4%-6% versus last year's $0.85. Lastly, our implied guidance for the H2 of the year assumes that overall comp store sales will be up 2%-3%, pre-tax profit margin will be in the range of 11.3%-11.5%, and earnings per share will be in the range of $2.22-$2.26. ...In closing, I wanna emphasize that we are in an excellent financial position to continue to invest in the growth of our company, while simultaneously returning significant cash to our shareholders. Now, we are happy to take your questions. As a reminder, please limit your questions to one per person, so we can answer as many questions as we can. Thanks, and now we'll open it up to questions. Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one, unmute your phone, and record your name clearly. If you need to withdraw your question, press star two. Again, to ask a question, please press star one. Our first question comes from Matthew Boss, from JPMorgan. Great, thanks, and congrats on another nice quarter. Thanks, Matt. Thank you, Matt. So, Ernie, could you elaborate on drivers of the market share gains across both apparel and home that you cited, and just your confidence in the multiyear runway for continued gains? Maybe near term, have you seen any change in business momentum here in May? And then, John, just speaking of runway, how best to think about merchandise margins multiyear, just given the structural changes on the buying front that you've discussed? So, Matt, let me start. Well, obviously, we don't give category-specific information on which categories we're driving the comps. But, you know, one thing I can tell you, it was pretty balanced across the board. It wasn't one - any one area that was driving our total any more than we planned on it. We did feel a little bit of a weather pattern hit that, you know, during the quarter, and it was kind of an on-and-off thing, which you probably read about and heard about from other retailers talking about it. So in our case, you know, those type of patterns can impact us in areas just like it does anyone else in terms of foot traffic. Tends to impact our apparel areas, but our apparel ended up healthy for the quarter. So, whether it was, you know, home, apparel, accessories, everything kind of was in line with the way we thought it would've been for the quarter. The confidence in the, I think your second part of the question was about the, and again, I can't give you specifics on the categories. The second part of the question, you know, I guess, is about what gives us confidence in the future, right? On how we're gonna continue to drive this. Am I getting that right, Matt, on the second- Yeah. Yeah. Yeah. continued drivers and market share gains, and just- Yep ... business momentum. Have you seen, have you seen any change? Yep. Yeah, no, the momentum is really consistent where it's been the last few months. And the, I think what gives us a lot of confidence is we are the only retailer right now, that I see, that is able to take brands, and fashion, and quality, and put all of that together in this treasure hunt format. Remember, I'm talking about having good, better, best. Good, better, best, a range of all income and age groups, whereas all the other retailers, and I know, Matt, we've talked about this before, I, I really don't know of any other retailer, brick-and-mortar oriented, that is creating a treasure hunt of this excitement level and entertainment level, because they're trading so broadly as we are. And so that is extremely differentiated in this environment, fortunately for us. We're able to take advantage of the excess inventories across the e-com businesses as those flex. And some of those, as you know, some of the vertical players as well as the full-line players, they've had spill off of goods. That has been a supply of extra inventory for us. As always, we see availability to continue to propel us because we are now becoming more and more important to our vendors, which has... You know, we were important, in the middle of COVID, pre-COVID. Now, we're at a different level, I believe, of importance to our vendors. And, the neat thing with that is, the vendors have figured out ways to work with us, even more consistently than in the past. So, your question, by the way, as you can imagine, as I'm going on here, it just it really encompasses all the reasons why we're so bullish. I mean, we have the value leadership positioning right now. And another thing that's happened is we've become a cooler place to shop. So the other thing giving us confidence is we are now more gift-giving oriented all year long. So now we're starting to get a greater consumer traffic for coming to us for gift giving, whether it's at holiday, and we've delivered strong Q4s, but even in the other time periods, Mother's Day, Father's Day, Valentine's Day. Whereas a handful, yeah, I don't know, 10 years ago, maybe we weren't the place on X% of gifts that people were comfortable with giving. So sorry for the long-winded answer. I could keep going, but I think that's enough to give you the confidence of why I think we're gonna continue on a healthy trajectory here. Yeah. John, did I leave anything for you? No, I think, I think you did great, Matt. No, but I think you had- Well, did you? What was the question for me, Matt? I think Ernie might have answered it. Runway multiyear with, with merchandise margins, just given the structural changes that you've made on the buying front. Oh, that's back to me, probably. Yeah, that's right. I just want you to know, Matt, John's looking back at me. So the... Wow, oh, say, we just started to touch on that. So our buy- as you can see from the healthy merchandise margin we just delivered, and we believe there's still a... opportunity in our pricing as we go forward, to continue to, selectively, raise our prices, as well as what's happened is buy better. It's kind of a 50/50 right now. We're winning on both fronts in terms of buying better and retailing goods. And I have to tell you, one team, our marketing teams measure our perception of value with the consumers regularly. And what they would tell you is that our surveys tell us our customer perception on our values that we offer continues to show us as being stronger than the competition, really, overall, through the business. So we're always monitoring that in addition to looking at the true numbers. But our customers perceive our values as extremely strong relative to competition, which I believe gives us, in merchandise margin, to your question, the ability to continue to leverage our pricing and our buying power, always keeping a pulse on that, which our buyers are excellent at monitoring where our retails are versus the competition. Hopefully, that answers that. Great color. Best of luck. Thank you. Thank you. Our next question comes from Lorraine Hutchinson from Bank of America. Thank you. Good morning. My question is around new customer acquisition. Are you still attracting a younger customer to all of the banners? And are you seeing any increased sign of trade down from a higher income demographic? Yeah, Lorraine, so we, we do continue to attract more new customers that are skewing to a younger age as well, as we've seen for the last number of quarters. And, what was your-- I'm sorry, what was the second part of your question? The signs of trade down. Oh, the trade down. Trade down. So again, it's hard for us to see specific customer data because, you know, our credit card isn't as penetrated as other retailers. But what we are seeing when we look at our sales by stores that are in different demographics, you know, like we said on the call, we're seeing above and below $100,000. They were both positive. Now, this quarter, it skewed a little bit more towards the lower income customer. But, you know, again, it was strong on both sides of that point, that $100,000. Thank you. Lorraine, I would just also jump in on one of the things that we believe is healthy for us, again, as we talked about in the beginning of the way we trade to good, better, best. On the age demos, where we have been appealing to more younger customers, what's been great is we also track the age group and the income groups, like John is saying, and we are pretty balanced. So also, we have desired to not as much as appeal to younger customers. We don't wanna swing a pendulum on any age group because we want the customer to vote, and we try to drive across as many income and age demographics. At the same time, planting the seeds, as you know, our emphasis has been younger customers. So want you to know that we're always keeping a pulse, though, on as best we can on measuring having a balance, I guess you would call it, across age and income. Thank you. Thank you. Our next question comes from Brooke Roach from Goldman Sachs. Good morning, and thank you for taking our question. Can you speak to your outlook for further market share capture and momentum in the home goods segment and the home segment in aggregate? As you begin to cycle the step up in sales and profit trends from last year, do you think that you can continue the momentum? Where do you see the biggest opportunity for further gains in comp and margin improvement? Yeah, I'll start with this, this question, Brooke. Yeah, so when you look at our comps going forward, let's say on a two-year stack basis, you know, we do have a large Q4. But the one thing that to note is that, you know, when we came out of COVID, you know, first of all, you know, if you look at the history, it's been somewhat choppy as we've guided towards more of a normalization. But when you look at our comps on a stack versus our last base year, which is FY 2020 pre-COVID, you'll see that they are very consistent quarter- to- quarter. The other thing is, you know, we're seeing our sales growth through transaction growth, which is very healthy, you know, it's a healthy way to grow your top line. So that, again, gives us confidence that, you know, we're still appealing to a lot of customers, still picking up a lot of customers that are new to us. So that gives us the confidence to, again, be confident about the 2-3 comp we have going forward for the remainder of the year. Yeah, and I think, Brooke, the industry, as you know, has had a lot of upheaval and inconsistent results. And whether interest rates and big picture with, you know, housing slowdown, et cetera, reiterating what John said, I think there's this continued market share opportunity, though. And when you look at the we look at where our volume was pre-COVID- Right ... to now, that way, you get rid of all the ups and downs and all the noise that happened in that time period. And we have averaged very healthy comps, which I think bodes well for the future. Obviously, the industry, you can see it out there, the furniture business and the industry, that has been rather soft across the board everywhere. But what we're happy, the reason we don't take a hit as hard as others, is we're able to flex. This is where our flexible business model comes into place. And whether it's in HomeGoods or in HomeSense, we're able to flex the categories to where the action is more and the demand is more happening. As well as the other thing we've been doing there is going after consumables, things where they're driving repeat traffic, in the HomeGoods. So that's another place we think we'll continue to... And I won't get into those specific categories, but some of the places I think we're gonna continue to gain market share. Great. Thanks so much. Thank you. Our next question comes from Ike Boruchow, from Wells Fargo. Hey, good morning, everyone. I guess I wanted to talk about the HomeGoods business, and I assume you're not gonna give us specifics on the outlook on either comp or margin. But I guess if I'll kind of frame it as a high-level question: how are you thinking about the business as you balance the solid recovery and margin against what seems like it's becoming a little bit more competitive or tougher in the furnishings and furniture space, just as you kind of like look out to the rest of the year? If you want to give specifics on guidance, that's also okay. That's very nice of you, Ike. Thank you. Look, you know, I think we're confident in HomeGoods as we are in our other divisions. You know, Ernie talked about the, you know, the replenishment business that we've increased in our home, but both in home and in Marmaxx and home in HomeGoods, that gives the customer a reason to come to HomeGoods, that's outside of maybe, you know, decor and big-ticket items. And when they're in the store, you know, a lot of times they will find other things, you know, that they can put in their cart. So, you know, giving the customers more reasons to shop all of our stores is a key to, you know, us driving that top line. Yeah, and I think, you know, even given what's going on in the environment, you know, you can see these ups and downs where they don't go picture perfect. But you remember, not long ago, I think it was three quarters ago, we were talking about making incremental improvement, and, you know, we've exceeded it at times, and then we come in now a little bit more kind of in line with where we might have thought we'd been, and we're not exceeding at the moment. But we always have faith that the model is so different than everybody else, and we're fashion and utilitarian driven, and the impulse nature of HomeGoods, I'm just not concerned about where we're gonna be as we move forward over the next nine months. Thanks, guys. Thank you. Our next question comes from Paul Lejuez, from Citigroup. Hey, thanks, guys. Can you talk about the competition for deals and whether you've seen any changes within the good, better, and best opportunities? And maybe where you're seeing better deals than IMUs within that good, better, best. And then second, just curious how you'd characterize the promotional landscape that you're playing in now. Thanks. Sure, Paul. So on the competition for deals, you're talking about kind of at the market vendor level, could be other vendor, other retailers competing with us? Is that- Correct. Yeah, other retailers- Yeah ... looking for the same deals. Yeah, yeah. Ironically, of course, there's competition. The only thing that's happened is, first of all, our buyers that are extremely well trained, and I don't know if I say this enough, our buyer—part of their training is to be easy to deal with and be courteous and respectful, yet be demanding on price to get to the right value, which is what they do. Now, you take that training and where they are with the fact that the market has, as you know, consolidated a bit in terms of all the amount of brick-and-mortar stores, and we have continued to grow our brick-and-mortar stores. So more and more vendors, they have even more reasons to want to sell us versus others because they, their goods in our store now hang with the best. They hang even more assorted than ever before. They're part of a very eclectic mix, even more so than ever before. They're dealing with a buying team that's very straightforward, and a company that has cash and will be paying. So the competition is there, like, competition has always been there. But I would say, like I said earlier in the call, we're more important today to the vendors, and probably the vendor relationships are even better than they've ever been due to that. I'm sure you can always find an exception here or there because we sell thousands, we deal with thousands of vendors. But overall, the relationships are just fantastic. And so our competition, some vendors want to split up goods, and no matter who they are, they're gonna allocate goods to certain retailers. Most, I would say, want to deal with us because they—it's the best thing for them to know where their goods are going, and they're getting spread out dramatically. The promotional environment that you're asking about, I would say is, to me, very similar to what—I don't see any noticeable difference. The only thing is you've probably read—there's more words in the media, more describing of pricing being adjusted more than necessarily promotions. And we've taken a look at that, and most of those situations, and the retailers talking about, it tends to not be in the categories that we're dealing with, where our emphasis in, is in. So, I think that's a form of it, and many retailers have been soft on traffic and transactions, I think we're gonna see more, my prediction would be, we're gonna see more of that talk about lowering prices on certain commodity items for them to try to get customers back. Fortunately, for us, it tends to not be with the vendors or the categories that we actually do business in. Just to add on to what Ernie was saying, you know, in promotional environments, the fact that we buy so close to need, our buyers oftentimes are able to react to those promotional times and price the goods competitively. Thank you. It's helpful. Good luck. Thank you. Our next question comes from Michael Binetti from Evercore. Hey, guys, congrats on next quarter. Thanks for taking our questions here. I have a few. I guess, John, I know you guide on pre-tax margin, but the implied EBIT margin you expect for the year is up about 10-20 basis points. That's, you know, a little better than it was 90 days ago, last at 10. So it's moving up, but you said a few times you need a 4.4% comp to lever the business. You've held the 2%-3% here, but the margins keep getting better. Any reason to think you're having some successes in moving the leverage point down into this comp range if this is the new normal for a while? And then I'm curious, California's had some very big changes fairly recently in the hourly wages over on the restaurant side. I mean, I assume your teams there are thinking about that and how it will radiate out to your hiring and retention and hopefully comps. Any thoughts you have early days on the changes in California? Yes. So I'll start with the 2-3, the fact that we're levering on a 2-3. So, you know, our leverage point continues to be, you know, flat to up 10 basis points on a 3-4 comp with no outsized expenses. What you're seeing in our guidance is that, you know, we had a number of one-time items last year that are benefiting us. So we had incentive accruals, a German reserve accrual that we wrote off. And on a full year basis, there's HomeGoods.com that we shut last year. So when you look at that, you know, that gives us the ability to leverage the business. Now, one of the other things if you look at our, let's say, our Q1 versus our guidance that we had, you know, one of the areas that we did, you know, outperform was in freight. So our freight was. We were more efficient on how we were moving our goods in the Q1, so we benefited there. And then, of course, the mark-on was also favorable in the Q1. So both of those things also support our ability to leverage on a comp that's lower than that 3-4. Oh, and then wage, sorry. Yeah, wage in California, you know, we see wages going up, you know, in different geographies. And one of the things that, you know, we've talked about is that, you know, we're not looking to do across the board wage increase. Rather, you know, in our plans, we have funds available to be able to adjust on a market-by-market basis where we, where we need to. So we, we track very closely our attrition rates, our ability to hire, and where we see the need, we, we have the ability to increase wages pointedly, which we have in as part of our guidance. Okay, thanks for the thoughts, guys. Our next question comes from Adrienne Yih from Barclays. Great. Thank you very much. Ernie, this is a follow-on on something you said earlier. So last year, you had some strategic pricing, very specific to particular categories you were looking at. It sounds- Yes ... like the environment is maybe not, you know, meaningfully more promotional, but we've seen a definite uptick in April and May, and then the Target announcement yesterday about sharpening those price points. So I, I guess my question is: How do you think about, you know, how do you think about your pricing strategy in light of kind of new information and sort of the- Yeah ... dynamic environment? And then for John, my question for you is: Can you continue to run sort of negative low- to mid-single-digit per-store inventory and drive a positive comp? Thank you. All right, Adrienne. So, yeah, on the first one, here, so here's the crux of the most important thing to always remember is, and you mentioned the right word, which is a dynamic environment in terms of the pricing, which is, I think, how you said it, which is—Yep ... spot on for what can happen here. Our buyers comp shop weekly of what the out-the-door retail is on the exact SKUs or the like SKUs that we carry to ensure that we always maintain a gap. ... between our out-the-door retail and any retailer's retail. In fact, I think we've talked about this before, we will not be undersold. So that's the first thing- Yeah to always know, is that is a foundational key point that all our merchants live off of. We will not be undersold by any retailer. Sometimes we could be at the same price if it's, if it's another off-price retailer or another format. Nobody is ever below us knowingly, and then we adjust if that was the case. Then we always look at our gap between the out the door what we're selling for, and this is, this is embedded in the way our merchants are trained and the way they operate all the time. So we would react if there were categories that started to happen in, we would react quickly to those. I still believe from what the categories I know that the retailers are talking about adjusting, it would not be in the categories for the most part that we're in. Right. So I believe we're going to be fine, in terms of, overall, I would say, in all of our families of business. However, if we run into items or specific SKUs, we will adjust. I don't see the problem, which is different than when we talk promotions. Sometimes that's sale promotions at department stores or percentage off on a website, an e-com player. Those are really never a concern because we're always below those out-the-door promotional prices. So even though there might be more of that activity, it doesn't take away from our value difference. And at the same time, we measure, just so you know, we measure statistically our turns by area to make sure we are spinning. Yeah ... in the stores appropriately, which would be a sign of, if we weren't, the value equation, as well as the survey, which I talked about in the beginning. So again, we take this all extremely seriously, but right now, you know, no signs of impact, but we'll adjust if there ever were. Thank you, Ernie. Sure. That's very helpful. Yeah. So the inventory. So, you know, as we said in our release, on an average per store basis, inventories are down 5%. However, store inventories are in line with last year, and that's the important point to note. You know, when you look at our inventory, as far as our distribution center inventory, in FY 2022, excuse me, FY 2023, our inventory levels were higher than what we wanted, as the logistics networks sped up and the outsized comps from FY—you know, we were coming down from the outsized comps in FY 2022. So in FY 2024, we packed away... or FY 2023, we packed away a lot of inventory, that we bled through in FY 2024. So in the Q1, you have that pack-away inventory that was much higher than we would normally want to carry and pack away in the Q1. So when you back out that pack-away difference, our inventories are in line in total on an average per store basis with last year. So it's just really the timing of the pack away from the previous year. Excellent. Thank you very much. Best of luck. Thank you. Thanks. Our next question comes from Jay Sole from UBS. Great. Thank you so much. Ernie, I heard you mention in prepared remarks that you see a lot of store growth potential just in your existing banners in existing countries. I was just wondering if that was sort of a, that maybe there's even potential to grow outside of your existing countries. I'm just wondering if there's anything, any new developments over the last 90 days that, you know, you see in terms of TJX's potential to grow, you know, beyond maybe where, where you are today. So, Jay, first of all, great question. You know, unfortunately, this is one of those things we just don't talk externally about it until we're at a point where we think we could announce. We're always looking, by the way, and I think what you're getting at is other markets, correct? Yeah. Potentially. Yep, and we're always looking, you know, but at this point, we can't really say, which is typically our posture- Yeah - when we're asked this. We're confident in our store plans or store growth plans that we have in our existing markets. You know, we still see ability to grow our store base in the U.S., in Canada, and in Europe, also in the, you know, particularly in on the continent, you know, particularly in Germany. We still see opportunity to grow our store base. Got it. And maybe can you give us an update then on HomeSense and Sierra, how those performed in the quarter? Thank you. We're pleased with how we don't break them out, but we're pleased with how they performed. Yeah. Great. Thank you so much. Welcome. We have one more question. Our next question comes from Aneesha Sherman from Bernstein. Thank you. This question is a follow-up on the comments on international. International has been growing slightly in the mix the last two years, but the margins remain pretty low, it was 4% this quarter. I know a couple of years ago, you had talked about high single digits as being the kind of long-term target for margins. ... Is that still the case, or has that, has that view evolved? And then a quick follow-up, John, on the gross margin comments you made earlier. You talked about freight becoming more efficient, which sounds different from kind of recapturing the headwinds that you've had the last two years. And you also talked about mark-on. So would you say it's fair that you think there's going to be a structural improvement in gross margins beyond the kind of recapture of, of headwinds for the last two years? Is it, is the business actually becoming more efficient? Thank you. Well, I'll start with that question there. Yeah, the freight itself. So, you know, we—you know, when the freight rate was going against us, we dropped 300 basis points, and we—last year, we clawed back 200. And in my comments then, we said that, you know, going forward, it's about so we don't see—we see a stickiness in the freight where, you know, driver salaries, there was a train strike that you know, caused higher wages, higher benefits. So those kind of increases to the cost structure of freight are sticky, and we don't see that those are necessarily gonna go away. For the Q1, we were able to shift, you know, some of our inbound product a little bit more towards the intermodal versus truck, which is more cost effective. So that's kind of what we're looking to do going forward, which is try to be as efficient as possible, you know, both inbound and outbound of how we move the goods. And as far as the international segment, yes, we are still very confident in our ability to approach the 8% that we've said. And we are, you know, that division is working very hard on that as well. Yeah, Aneesha, I think you had pointed out that the Q1 was a four. Yeah. But that's, Yeah, and that was up from- Yeah the last year, so we continued to Right. Traditionally, that Q1, internationally, is always a low quarter. H1, really is. This H1 is low. Yeah. You can see it's incrementally up from a year ago. Yeah. Directionally, we're heading in the right place as we look out for the back half. Got it. Thank you. You're welcome. Our next question comes from Laura Champine, from Loop Capital. Thanks for taking our question. We thought the execution was so strong that you might comp up better than 2% in Marmaxx in this quarter. So I'm wondering if you could comment on what you think the macro backdrop is that you face now, and whether or not you actually do see any pressure on market share from the Chinese discounters like Temu and Shein? Yeah, I'll start with this one. So, you know, in Marmaxx, we did round down to a 2 comp. But when we look at the business itself, the departments that aren't weather dependent performed much better, and the regions that didn't experience as much unfavorable weather also performed better. So you know, that tells us that, you know, where we saw the regions and the departments that were strong, that tells us that, okay, that's leaning more towards weather. Got it. And- We're very confident on our comps for Marmaxx going forward. And the teams there, we do. John's team does a bit of analysis to kind of... right? To look at- Yeah ... control groups as such to figure that out. So yeah, it feels like weather did hit us and, and resulted in us rounding down to the two, right? Yeah. Laura, on the question about some of those online players you were talking about, we feel it's just as similar. They're so commodity driven and so not the brands that we would carry, very much not the good, better, best type of branded mix that we would go after. We see very little issue with them taking market share from us. I could see that their business model could overlap with some other brick-and-mortar guys or some other online guys for sure. But we just don't see that as bumping up with our customer base or end use. Got it. Thank you. Welcome. Our next question comes from Dana Telsey, from Telsey Advisory Group. Hi, good afternoon. As you think about the pace of remodels—hi, I think you mentioned 450 remodels this year on the last call. How are they going? What are you seeing? And any details on any of the banners and how the performance is different? And then also on shrink, are you still looking at shrink being flat this year, or any changes to what you're seeing in shrink? Thank you. Yeah. On the remodels, again, you know, remodels are more about making sure that our stores, you know, maintain, you know, an excellent, you know, fit and finish, and so when we do the remodels, what we see is that stores that are much older are able to compete or I should say, comp as good as, let's say, a store that's 10 years old. And so it's about maintaining the base and making sure that you don't get into a situation where now your sales start to falter, and you have to start to really invest in them and catch up. So for us, it's about maintaining and making sure that when the customer comes in, that it's a pleasant shopping experience, no matter what store they come into.... Now on the remodels, we always try to make sure that we're putting fixtures in that make it easier for the customers to shop. When you look at our remodels, as far as the beauty department, it's better lighting, it's a cleaner look, and all those things, we think do add to the top line. As far as shrink goes, you know, we're still highly focused on shrink. You know, as I said in my comments, we're planning shrink to be flat year-over-year. But we still have a high focus on making sure that we balance protecting the goods with making sure that the customers can shop easily and get and be able to buy the goods, while also maintaining safety in our stores. So one of the things that we've added, we started to do last year, late towards the year, were body cameras on our LP associates. And, you know, when somebody comes in, it's sort of... It's almost like a de-escalation, where, you know, people are less likely to do something when they're being videotaped. So, we definitely feel that that's playing a role. Also, you know, during the end of the year, when we look at our shrink results, we're able to then set our plans for the following year and seeing what worked, what, you know, what didn't. And, so it's about continuing to lean into the strategies that worked last year. But again, you know, we count our inventory at the end of the year, and that's when we would be in a position to, you know, give guidance. Thank you. Our final question of the day comes from Marni Shapiro from Retail Tracker. Hey, guys, love closing out the call. Congratulations on a nice quarter. The stores look great. Can we just talk about your shopper just a little bit? It's been a couple of years now, you've been talking about getting the younger shopper in. They've been coming in. Traffic has been up. I guess, a couple of things: does this younger shopper open credit cards? Is it something that is, that you guys are pushing them to do? And are you finding that they shop across the different brands, and are you marketing to them to shop across the different brands? Because arguably, a shopper that shops both TJX or T.J. Maxx and HomeGoods is going to be a more loyal shopper to the company in total. Can you just talk a little bit about what that younger shopper looks like internally for you guys? Yeah. So Marni, let me start, and John will jump in as well. He's very, Also, we're both kind of involved in all of the, you know, opening credit cards and loyalty. Yep. You're touching on a whole loyalty- Yep, yep. -cross shopping. And by the way, you're spot on. When you do get the customer, that you build loyalty, if they open a TJX Rewards- Yep ... even a younger customer, ideally, we'd like them to open the credit card, and then they cross-shop—Yeah.—more. John, right? Yeah, I mean, it's—but, but again, you know, the credit card, you know, is not as penetrated as it is with a lot of our competitors. So- Yeah ... you know, yeah, so, so, you know, a lot of our read that we get on the customers comes from customer surveys. Mm-hmm. And we do, we do get credit card information that is, you know, available to us, that we partner with organizations that pull that information together. And that's where we're getting the large majority of the comments that we make as far as, you know, being able to, that we're attracting these younger shoppers. So, that has been pretty much a steady increase over the last handful of years, attracting a larger percent of our new customers in the lower age, in the younger age demographic. Yeah, correct. So we are looking at, you know, a large data pool when we're making those comments. That's beyond just our credit card. Are they... do you see the data that they are already cross-shopping the departments? And I guess, what are you guys doing on the marketing side to really push that? Because it feels like a real opportunity as these people come into your brand. It's different for somebody like me, who's old and has been shopping there forever, versus somebody who's new, who came in with mom and maybe is now buying their first house or buying their new apartment. So we try to use our digital marketing is really aimed at trying to go after when we get emails- Yeah ... okay, we are able to drive the other brands with the customer. We have also done things in store as well. Mm-hmm. I think the measuring of it is where I think John and I would say it's. We can't measure a lot of this as well as we would like. Understood. Well, best of luck for the next quarter. Thanks, guys. Thank you, Marni. Yeah, thanks, Marni. All right, in closing, I want to emphasize that we are really in an excellent financial position to continue to invest in the growth of our company, while simultaneously returning significant cash to our shareholders. Now, we will... Thank you for joining us today, and-