“We also expect to see lower domestic freight rates this year, and that's embedded in our guidance.”

In context

“hink about price. I mean, what I'm really trying to get at is beyond this year, do you think there's any structural underlying change to double-digit earnings growth in this model if we can get back to that 3% to 4% comp algorithm? Michael Hartshorn: Let me talk a little bit about the long-term operating model. We certainly, with ocean freights coming down, we'd expect to see a big benefit this year. Longer term, the margin improvements will be highly dependent on sustained strong sales growth, but also, as we mentioned, to a large extent, the persistence and the inflationary costs in the business. We, again, expect to see ocean freight costs preceding this year, but they still remain above pre-pandemic levels and a number of transportation lanes. So that could be a benefit beyond 2023. We also expect to see lower domestic freight rates this year, and that's embedded in our guidance. But we see these pressures easing over a longer horizon and is somewhat dependent on fuel costs. Wage costs have risen, but are growing at a slower pace than they did during the pandemic. We expect from a wage perspective that it will be an ongoing pressure, but we are finding ways to be more efficient in the business that's offsetting some of those costs. So all of those taken together, we believe we can grow our EBIT margins and profitability over time, but it will be very important to drive top line sales growth in that equation. Operator: And the next question comes from the line of Mark Altschwager with Baird. Mark Altschwager: In terms of the competitive backdrop, some of the bigger general merchandise retailers look leaner on inventory, especially apparel and discretionary catego”