Question · Q3 2026
Adam, on behalf of Ike Boruchow, asked about the strong e-commerce results, specifically if the 22% growth was in line with or better than expectations, and how it might impact future thinking on new stores in new markets, potentially leading to earlier profitability. He also inquired about the cost difference between opening a new store in a new market versus an existing market, given the pivot back to existing markets next year.
Answer
CEO Steve Lawrence stated that the 22% dot-com growth was above plan, attributing it to a combination of team efforts in improving navigation, search, site functionality, personalization, and expanded assortment options. He highlighted the symbiotic relationship between new store openings and a surge in dot-com demand in new markets. Regarding new store strategy, Steve noted a shift to an 80/20 mix for 2026 (legacy/existing vs. new markets), driven by significant population growth in core legacy markets and opportunities in underserved mid-sized markets. CFO Carl Ford clarified that the build-out cost for new stores remains $4-$5 million, all-in. He explained that legacy/existing markets offer higher brand awareness (reducing marketing costs), attractive rents, and better ROIC/payback periods, with very low levels of cannibalization modeled into pro formas.
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