Core Viewpoint - The meeting held by the China Light Industry Federation on June 27 aims to enhance the standardization work in the light industry, summarize achievements during the 14th Five-Year Plan, and outline key tasks for the next phase to promote high-quality development in the industry [3][4]. Group 1: Achievements and Developments - The standardization work has significantly contributed to the transformation and upgrading of the light industry, meeting the growing needs of the people for a better life [4]. - The organizational structure has been improved, with 46 national professional standardization technical committees and 92 sub-committees established, involving 6,510 committee members [5]. - A total of 3,143 national standards and 3,748 industry standards are currently in effect, with over 1,100 group standards developed, including 60 recognized as typical cases for application and promotion by the Ministry of Industry and Information Technology [6]. Group 2: Focus Areas for Future Work - The China Light Industry Federation plans to implement five key actions to enhance standardization, including optimizing the organizational structure, improving the standard system, leading with new quality standards, breaking through international standards, and empowering talent development [12][13][14][15][16]. - The goal is to develop over 500 new standards focusing on health, safety, digital intelligence, high-end manufacturing, and green low-carbon initiatives [14]. - The international standard conversion rate is targeted to remain above 85%, with key areas aiming for a conversion rate of 95% [15]. Group 3: Challenges and Recommendations - Despite achievements, challenges remain, such as uneven capability levels, lagging new quality standard supply, and a shortage of professional talent [11][17]. - Recommendations include enhancing the quality and efficiency of standard supply, optimizing internal management, and strengthening technical requirements to ensure safety and quality in the light industry [18].

Financial Data and Key Metrics Changes - Total sales increased by 3% to $5 billion, with comparable store sales remaining flat compared to the previous year [4] - Earnings per share rose to $1.47 from $1.46 last year, while net income decreased to $479 million from $488 million [4] - Operating margin was flat year over year at 12.2% [4][10] Business Line Data and Key Metrics Changes - The dd's discount brand continued strong momentum with solid sales and operating profits [5] - Cosmetics emerged as the strongest merchandise area during the quarter [4] - Average store inventories increased by 4%, aligning with company plans, while total consolidated inventories rose by 8% due to opportunistic buys [5] Market Data and Key Metrics Changes - Geographic trends showed broad-based performance, with the Southeast region performing the best [4] - The company opened 16 new Ross and three dd's discount locations in the first quarter, with plans for approximately 90 new stores this year [6] Company Strategy and Development Direction - The company plans to maintain a substantial pricing umbrella below traditional retailers to deliver value to customers [7] - Strategies are in place to gain market share while minimizing margin impact from tariffs [9] - The company is focused on providing high-quality branded merchandise at great value despite inflationary pressures [7] Management's Comments on Operating Environment and Future Outlook - Management expressed limited visibility into the second half of the fiscal year due to prolonged inflation and fluctuating tariff levels [15] - The company remains cautious and has withdrawn its previously provided annual guidance due to uncertainties in the macroeconomic environment [9] - Management highlighted the importance of a flexible off-price business model to navigate through uncertain times [15] Other Important Information - The company repurchased 2 million shares of common stock for $263 million under a $2.1 billion buyback authorization [11] - For the second quarter, comparable store sales are projected to be flat to up 3%, with earnings per share expected in the range of $1.40 to $1.55 [12] Q&A Session Summary Question: Can you elaborate on the cadence of comps and drivers of improvement? - Management noted broad-based sequential improvement across merchandise categories, with April showing strong performance [18][19] Question: What strategies are in place to mitigate tariffs? - Strategies include negotiating better costs with vendors, passing along some price increases cautiously, and utilizing closeouts and packaway merchandise [19][20] Question: How do you expect the tariff impact to change throughout the year? - The second quarter impact includes costs from orders already in transit when tariffs were announced, and future impacts will depend on macroeconomic conditions [25][26] Question: What is the outlook for inventory availability? - Management expects availability of closeouts but acknowledges potential receipt risks due to production halts in China [32] Question: How is the branded strategy performing? - The branded strategy is on track, with no expected margin headwinds going forward, particularly in the ladies' business [55] Question: What are the expectations for pricing elasticity? - Pricing elasticity will depend on the category and is influenced by broader inflationary pressures across the retail sector [60] Question: How is the cosmetics category performing? - The cosmetics category is performing well due to strong execution and a favorable brand mix [102]