That is what is in our long-range model. But yes, hypothetically, you are correct in your question, even with low single-digit comp growth, our business has significant earnings power, driven by new store growth an operating margin expansion that’s unrelated to comp growth that we’ve talked about. But I just want to underscore one last point here. We believe and we expect that we’re going to drive significant comp sales growth over the next several years. So even though it may be true that we can drive earnings growth with a low single-digit comp, we would not be happy with that performance as that would not be full potential.
Lorraine Hutchinson : And then I wanted to ask a follow-up question to Michael. I’m curious what you’re seeing in terms of customer trends. Are you seeing any improvement or deterioration in the low-income consumer? And also any increase in terms of trade down consumers in your stores?
Michael O’Sullivan: Lorraine. As you know, in 2022, this shopper really struggled with the combination of lower benefits and higher inflation. I would say as the cost of living went up last year, money that those shoppers might have spent at Burlington had to be used instead to pay for higher grocery bills or higher rent or higher gas prices. Now turning to this year, inflation is obviously lower this year. So I would say the situation has improved. The cost of living hasn’t gone down, but at least it stopped going up or at least stop going up by as much. And I think we may be seeing some early evidence that the low-income customer is actually starting to recover at least starting to recover from the shock of last year. One point I would make about this customer is that they go shopping when they have a true need.
We think that’s why our business did so well going back to school. Every year, kids get bigger and they go back to school, there’s a true need. You have to buy them close and supplies. So this low income customer comes out to shop curing back to school and it felt like this year, they had a little more money to spend, certainly versus last year. And I think that’s consistent with the point that they may be feeling a little less economic pressure than they were in 2022. Add to that, I do think our teams do a very nice job delivering great value on opening price points going back to school, not just by opening price points, I mean, merchandise that isn’t just cheap, but it has great fashion and quality all at a great value. Let me move on and talk about the trade-down customer because I think — and obviously, the trade down customer tends to be a little higher income, moderate to hire income and then more of a wanted deal rather than a net deal shopper.
I would say that customer has definitely contributed to our 5% comp growth year-to-date. We really leaned into that shopping. We’ve increased the proportion of better and more recognizable brands in the assortment. And we’ve adjusted our mix of good, better and best. And this has worked well for us this year. There are also — there are specific categories that I would say we’re doing particularly well at with the shopper. Our accessories business, parts of our home business, parts of our ladies apparel business. We’ve chased and fueled some really nice trends in those categories by delivering a higher mix of recognizable brands and elevated assortments. Our expectation coming into this year was that the economy would slow down, and that would cause shoppers to become more value conscious, and therefore, we’ve seen more trade down traffic in our stores.
And that has happened, perhaps not to the extent we would have liked, but it has happened. As we look forward to 2024, we think it’s possible that we’ll see more of that trade down — if that happens, I think we’re in very good shape to take advantage of it. The off-price supply environment continues to be very good, and we have strong and growing access to brands at great values. Thank you.
Operator: Your next question comes from the line of John Kernan from Cowen.
John Kernan : Excellent. Michael, Kristin and David, thanks for the detail. Michael, it sounds like you’re happier with the level of execution you achieved this year versus last year? Are there additional opportunities particularly as you look at the margin improvement opportunities.
Michael O’Sullivan: Well, thank you for your question. Let me start my answer by contrasting this year with last year. In 2022, the external environment was very difficult. Business would have been tough, no matter what. But we compounded that tough environment by making some mistakes of our own. And I would say we definitely learned from those mistakes. This year, in 2023, the external environment has gotten a lot better, and our own execution has significantly improved. That said, there’s still plenty of room for improvement. I would say one of the core strengths of Burlington is that we’re fairly humble and self-critical. And our teams are very focused on learning and improving our own execution of the off-price model. So let me talk about opportunities, and I’ll start with merchandising.
