Question · Q3 2026
Angus Kelleher, on behalf of Adrienne Yih, asked about the percentage of product price increases implemented in Fall 2025 and the expected price increases for Spring 2026. He also inquired about where elasticity thresholds are being observed by category, given that average unit retail (AUR) is running mid- to high-single digits while transactions are down 4%.
Answer
CEO Steve Lawrence reiterated that AURs were up mid-single digits in Q2 and mid- to high-single digits in Q3, a result of price increases, promotional rationalization, and better clearance management. He expects AURs to be up high single to low double digits in Q4 and to hold at that level through Q1 and Q2 of next year. He noted that units per transaction (UPTs) were down mid-single digits, almost a one-to-one offset with AURs. Elasticity varies by category, with some front-end items being inelastic and others highly elastic. CFO Carl Ford added that the company aimed to make necessary price changes now to avoid perpetual disruption in stores and distribution centers, resetting the floor and inventory for greater efficiency next year, assuming no significant changes to the tariff structure.
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