“Based on these lower expected sales, we anticipate downward pressure on profitability with meaningful offsets from lower shrink and cost initiatives.”

In context

“aced pressure from lower-than-expected sales, which resulted in higher-than-expected markdowns. Offsetting these pressures were significant savings from lower inventory shrink and the benefit of cost efficiency and productivity efforts on the SG&A line. We expect many of those Q1 themes to persist in the second quarter with headwinds including continued sales pressure, tariff impacts, and some additional costs to adjust inventory and receipts with continued benefits from lower shrink and productivity gains. In the back half of the year, we will be lapping easier comparisons from 2024 and expect to have inventory and receipt adjustment costs behind us. For the full year, we believe it's prudent to plan for a low single-digit decline in our sales, in line with our first quarter performance. Based on these lower expected sales, we anticipate downward pressure on profitability with meaningful offsets from lower shrink and cost initiatives. Altogether, we've updated our adjusted EPS guidance to an expected range of about $7 to $9 for the full year. This wider range reflects the expected impact of tariffs and heightened uncertainty regarding the economy and consumer spending. In terms of GAAP EPS, our updated range is about a $1 higher, from $8 to $10, due to gains we recognize from the litigation settlements. Importantly, our updated full-year adjusted EPS range includes a number of near-term costs that we don't expect to repeat in future years, including actions in response to tariff announcements and inventory and receipt adjustment costs on softer than expected sales. The expected impact of these headwinds is similar in magnitude to the offsetting GAAP EPS benefit from the litigation settlements. As such, we believe this”