“Domestic, at least for us, we expect domestic costs to be relatively neutral in the back half because we started seeing them rising in the back half of last year.”

In context

“rom the line of Laura Champine with Loop Capital. Laura Champine: I've got a couple. So when do you think that logistics costs will start to ease? And then secondly, you mentioned more clearance activity in Q3. When do you think that inventories come more in line with sales trends, assuming that's a goal given the packaway opportunities you see? Michael Hartshorn: Laura, it's Mike. On logistics cost, we're already seeing them. They already seemed to have peaked and have started to come down. I think it's different between domestic and ocean freight. I think ocean freight, there are a lot of long-term contracts that it may take some time to come down. But certainly, the current noncontract market is below the contract rate. So we're starting to see some movement even on contract rates. Domestic, at least for us, we expect domestic costs to be relatively neutral in the back half because we started seeing them rising in the back half of last year. But I suspect over time, both of them will come down and maybe not to the levels that we saw pre-pandemic though. Barbara Rentler: And then in terms of the inventory level coming down, we see that moving as it goes throughout the fall. But with that, we have liquidity, and we're comfortable with our liquidity. And so we have -- open to buy to take advantage of opportunities. So it's kind of 2 things going on at the same time. Operator: Our next question comes from the line of Aneesha Sherman with Bernstein. Aneesha Sherman: So if I heard it right, the in-store inventory levels at the moment are about in line with what you saw pre-pandemic. So just trying to understand the rationale for the higher markdowns you're doing now as well as into the second half. Is it about your product mix a”