Cost ChallengesPotentially indicating higher than expected costs from digital fulfillment, higher promotional levels, pressure from higher wages and/or some spillover into 4Q24 of the increased warehouse and logistics expenses from delayed inventory receipts in Asian ports during 3Q24.
Earnings PressureInvestors are likely somewhat disappointed by the lack of EPS upside from stronger comp growth, suggestive that costs remain heightened and/or that promotional activity increased in the period to drive traffic/comp.
Gross Margin PressureLingering Gross Margin pressures are expected from digital penetration growth, strong consumer engagement with promotions, and elevated inventory levels.