“we're anticipating second quarter sales in a wide range centered around a low single-digit decline, consistent with those recent trends.”

In context

“l. For the trailing 12 months through the first quarter of this year, our after-tax ROIC was 11.4% compared with 25.3% a year ago, reflecting both the change in profitability and the increase in working capital we began to see a year ago. As we move further into the year, we expect to see higher profitability than a year ago and continue to benefit from the inventory efficiency reflected in this quarter's cash flow. Based on these expectations, we anticipate a recovery in the ROIC metric this year and expect to continue building back toward our longer-term potential in 2024 and beyond. So now let me turn to our expectations for Q2 and the full year. As I mentioned, on the sales line, we experienced notably softer comp trends as we exited the first quarter and moved into May. As a result, we're anticipating second quarter sales in a wide range centered around a low single-digit decline, consistent with those recent trends. In terms of profitability, we're expecting a range of possibilities as well. On the gross margin line, we believe that many of the same trends that emerged in Q1 will continue in the second quarter, including a meaningful tailwind from freight and transportation costs, and a significant headwind resulting from inventory shrink. Similarly, on the SG&A expense line, we'll continue to face broad-based inflationary pressures and expect to benefit from efficiency efforts and cost discipline across our team. However, if our second quarter comp sales end up declining in the low single digits, which is where they are trending currently, we'll see greater SG&A rate pressure related to cost deleverage than we experienced in Q1. In light of all of these expectations, we believe our Q2 operating m”