“And then as you scale, as we say, growth drives scale, that drives a lot of productivity through our supply chain, which sits in the gross margin line as well.”

In context

“uestion hits on a lot of the variables we're watching. Jim, you want to talk about margin? James Lee: Sure. Yes, there's probably 2 dynamics. I'll take 2026 and the long term. So 2026, yes, you should expect gross margin expansion because we're lapping -- the costs that we're lapping last year primarily sit in gross margin because those were tariff-related costs and the inventory adjustment costs, markdowns and clearance, as -- whereas the investments we're making, a lot of that sits in SG&A, when you think about stores, technology and marketing. So there's a bit of a dynamic that's happening in 2026. On an ongoing basis, I think you hit on the right points, which is including merchandising, mix management and expansion, we should have positive tailwinds from things like Roundel for sure. And then as you scale, as we say, growth drives scale, that drives a lot of productivity through our supply chain, which sits in the gross margin line as well. John Hulbert: Let's go to Joe Feldman in the front row here. Joseph Feldman: Joe Feldman, Telsey Advisory Group. I wanted to ask, you guys talked so much about merchandising and everything. What -- on the supply chain side, how are we thinking about that in terms of investment for the future? Presumably, some of the labor in the stores is going to be helping on the supply chain. But have you thought about centralization? And you didn't mention the word marketplace today. That was a big topic last year. So maybe that whole topic. Michael Fiddelke: We can maybe come back to marketplace separately, but supply chain plays a critical role in all the elements of the strategy that you just heard us talk about. Like, all of that great new product has to find its way to the right store at the righ”