Question · Q2 2026
Kelly Wess requested more granular color on the back-half comp assumptions, specifically the expected performance in Q3 versus Q4, and sought additional detail on the quarterly flow of SG&A guidance, noting that Q3 is anticipated to be a peak for new store openings. She also followed up on SG&A deleverage, asking about the flexibility to achieve the 100 basis points target in the back half, given its dependence on top-line performance, and requested insights into potential SG&A dollar growth.
Answer
CEO Steve Lawrence explained that while quarterly guidance isn't provided, SG&A deleverage is expected to moderate from Q1's 290 basis points and Q2's 150 basis points, targeting around 100 basis points for the full year. He anticipated business inflection in late September/early October as the company laps softer comps from the previous year, continuing through early November, with optimism for holiday shopping. Mr. Lawrence indicated flexibility in managing variable SG&A items, noting that incentive compensation would be impacted at the low end of the guidance range.