Robbie Ohmes

Robbie Ohmes sought clarification on how the company's reported gain of new customers across all income cohorts aligns with negative overall traffic, questioning if certain cohorts are reducing frequency or dropping out, thereby offsetting new customer acquisition.

Answer

CEO Mike Creedon explained that the dynamic is primarily a question of frequency; while new customers are being acquired, their initial trip frequency is lower. He believes that improved store operations and a compelling assortment will encourage these new customers to increase their visit frequency over time.

Robbie Ohmes asked for clarification on how Dollar Tree's reported gain of three million new customers across income cohorts reconciles with negative traffic, questioning if existing cohorts are dropping out or visiting less frequently.

Answer

CEO Mike Creedon explained that it's primarily a question of frequency. While new customers are being attracted, their trip frequency needs to increase. He noted that the core customer base maintains strong purchase frequency and comp dollars, and that better-run stores and a relevant assortment are key to increasing repeat visits from newer customers.

Robbie Ohmes asked about the strong performance of the DICK'S business in Q3, including the 5.7% comp growth and raised guidance, inquiring how this momentum is being driven and the company's confidence heading into the holiday season. He also followed up on the anticipated impact of Foot Locker's inventory cleanup on DICK'S Sporting Goods and the number and timing of planned store closures for Foot Locker.

Answer

Lauren Hobart, President and CEO, attributed DICK'S strong performance to working long-term strategies, a differentiated product assortment, an engaging athlete experience, and broad-based growth across key categories. She expressed confidence for Q4, citing the product assortment and consumer focus on sport. Ed Stack, Executive Chairman, stated that store closing details for Foot Locker are still being addressed and will be provided after Q4. Navdeep Gupta, CFO, added that Foot Locker's Q4 gross margins are expected to decline by 1,000-1,500 basis points due to aggressive clearing of unproductive inventory to prepare for an exciting 2026 assortment.

Robbie Ohmes inquired about the strong performance of the DICK'S business in Q3, including comp sales and raised guidance, and the confidence for the holiday season. He also asked about the impact of Foot Locker's inventory cleanup on DICK'S Sporting Goods and the plans for Foot Locker store closures.

Answer

Lauren Hobart, President and CEO, highlighted the 5.7% comp growth, strong two-year stack, and the success of long-term strategies, differentiated product assortment, and engaging athlete experience, expressing confidence for Q4. Ed Stack, Executive Chairman, stated that store closing plans for Foot Locker are still being addressed, with more guidance expected after Q4. Navdeep Gupta, CFO, added that Foot Locker's Q4 gross margins are expected to be down 1,000-1,500 basis points due to aggressive inventory cleanup.

Robby Ohmes asked why merchandise category mix is expected to remain a headwind to gross margin in Q4, despite positive commentary on early holiday spending and strong performance in apparel and home, seeking the 'secret sauce' to overcome this.

Answer

President and CEO, Walmart U.S., John Furner, explained that the headwind reflects the continued strength of the health and wellness and pharmacy businesses. He expressed encouragement for the fashion business, which grew over 5% in the quarter, and the shift of e-commerce from loss to profitability. EVP and CFO John David Rainey added that the merchandise category mix pressure largely reflects the macro environment, with consumers prioritizing necessities over discretionary items, but noted Walmart's efforts to improve assortment and strong apparel unit growth.

Robby Ohmes asked why merchandise category mix is still expected to be a headwind to Gross Margin in Q4, despite positive commentary on early holiday spending and strong performance in Apparel and Home, and what factors would be needed to reverse this trend.

Answer

John Furner (President and CEO, Walmart U.S.) attributed the headwind to the continued strength of the health and wellness and pharmacy businesses. He expressed encouragement from the fashion business, which grew over 5% in the quarter, and the shift of e-commerce from loss to profitability. John David Rainey (EVP and CFO) linked the merchandise category mix pressure to the broader macro environment, where consumers prioritize necessities over discretionary items, but noted Walmart's improved assortment, with marketplace categories like Automotive, Toys, Electronics, and Apparel growing over 40% year-on-year.

Robbie Ohmes asked about Lowe's Q4 seasonal planning, including any changes in the timing of promotions or earlier holiday promos, especially given potential tariff price increases. He also followed up on the strength in flooring, particularly soft surfaces, asking if it indicates a trade-down, how Lowe's is performing relative to the industry, and if there's a change in Lowe's good, better, best positioning.

Answer

Bill Boltz (EVP of Merchandising) confirmed that the promotional cadence for Q4 remains consistent with prior years, including pre-Black Friday, Black Friday, and Cyber Monday events. For flooring, he highlighted the strength of STAINMASTER (including the new leak defense feature as a trade-up), the recent Dow Tile acquisition, and strong value offerings across various flooring types. Marvin Ellison (Chairman and CEO) added that investments in the services business, particularly central selling, and improved product/service levels are contributing to the positive performance in flooring.

Robbie Ohmes asked about Lowe's Q4 seasonal planning, specifically if there are any changes in the timing of promotions related to holiday given potential tariff price increases. He also inquired about the strength in flooring, particularly soft surfaces, asking if it indicates a trade-down, how Lowe's is performing relative to the industry, and if there are changes in positioning or good, better, best offerings.

Answer

Bill Boltz, EVP of Merchandising, stated that the promotional cadence for Q4 remains relatively consistent with prior years, including early pre-Black Friday events, Black Friday, Cyber Monday, and holiday promotions. Regarding flooring, Bill Boltz highlighted the strength of StainMaster, especially the new leak defense offering, which represents a trade-up rather than a trade-down. He emphasized the team's focus on offering value across soft surfaces, luxury vinyl, and hard surface tile. Marvin Ellison, Chairman and CEO, added that investments in the services business, particularly central selling for flooring, have shortened the time to close customers, contributing to the category's green shoots.

Robbie Ohmes asked for insights into gross margin puts and takes for the first half of 2026, given tough comparisons. He also inquired about the narrowness of consumer pressure (e.g., specific demographics) and potential changes in marketing strategy to regain momentum.

Answer

CFO Curtis Valentine deferred specific 2026 margin guidance but reiterated the goal of stable full-year margins, leveraging existing investments. He noted consumer pressure is building everywhere, more pronounced in lower/middle-income and younger demographics. President and COO Nick Konat stated no significant changes to marketing philosophy, focusing on refining the value proposition (innovation, freshness, quality, health) and optimizing channel spend.

Robbie Ohmes asked for insights into the gross margin puts and takes for the first half of 2026, given the tough comparisons. He also inquired about the narrowness of the consumer pressure, specifically if it was concentrated in demographics like 25-35 year olds, and if any marketing changes were needed to regain momentum, separate from the loyalty program.

Answer

Curtis Valentine, Chief Financial Officer, stated it was too early to give specific 2026 gross margin details but aimed for stable full-year margins, leveraging investments made. He noted consumer pressure was building everywhere but was more pronounced in lower/middle-income trade areas and younger demographics. Nick Konat, President and Chief Operating Officer, said Sprouts has a great story to tell and is always refining its value proposition (innovation, freshness, quality, health at fair prices). He indicated no significant marketing changes or pivots, but rather continuous optimization of storytelling and channel spend.

Robbie Ohmes from Bank of America asked for more detail on the 'new arrival guide' for IOs and clarification on the duration of the SG&A benefit from ending commission support.

Answer

President and CEO Jason Potter explained that the new arrival guide, distinct from the recently rolled-out order guide, will allow IOs to see and reserve opportunistic product outside their normal ordering window, aiding forward planning. CFO Chris Miller clarified that Q2 2025 was the final quarter with a year-over-year SG&A benefit from the cessation of elective commission support, meaning future comparisons will be on a like-for-like basis.

On behalf of Robby Ohmes from Bank of America, an analyst inquired about the expected contribution of the B2B segment to this year's comp and the long-term size of the B2B opportunity.

Answer

President and CEO Laura Alber stated that the B2B business continues to show nice momentum as the company builds its pipeline with new and existing customers. She reiterated the company's view that B2B represents a $2 billion opportunity long-term.

On behalf of Robby Ohmes, an analyst asked how much the B2B segment is expected to contribute to comparable sales this year and for an update on the long-term size of the B2B opportunity.

Answer

CEO Laura Alber highlighted the strong momentum and growing pipeline in the B2B business. While not providing a specific comp contribution for the year, she reiterated the company's long-term view that B2B represents a $2 billion opportunity.

Speaking on behalf of Robby Ohmes, Maddy Check asked about the expected contribution of the B2B segment to this year's comp and for an update on the long-term size of the B2B opportunity.

Answer

President and CEO Laura Alber confirmed that the B2B business continues to show nice momentum as the company builds its pipeline with new and existing customers. She reiterated the company's view that B2B represents a $2 billion long-term opportunity.

An analyst on for Robbie Ohmes asked for guidance on Q1 and full-year 2025 gross margin and SG&A, the timing of software implementations, and what preemptive measures have been taken regarding potential tariffs.

Answer

An Arhaus executive stated that Q1 gross margin will see slight deleverage from showroom occupancy, but the full year should be consistent with 2024. SG&A will increase due to expansion and strategic investments. John Reed, CEO, added that the company is well-prepared for tariffs through partner collaboration and a diversified supply chain, including significant US production. The current guidance already reflects the potential impact of known tariffs.

Speaking for Robby Ohmes of Bank of America, an analyst asked for an update on collision claims trends and inquired about the long-term membership pricing strategy for the car wash business amid the current competitive environment.

Answer

CEO Jonathan Fitzpatrick acknowledged that industry-wide collision claims are down mid-single digits but stated Driven is offsetting this by winning DRP accounts. COO Danny Rivera added that the company is very satisfied with its current car wash membership pricing strategy, implemented in January, and sees no immediate need to change it.