Operator: And the next question comes from the line of Marni Shapiro with Retail Tracker.
Marni Shapiro: Congratulations. And if I forget, best of luck for the holiday season. But I’m curious, just on dd’s, if we can dig in a little bit there. Are you — with people looking to trade down with their wallets a little tighter, are you finding that you are attracting more new customers into that brand and the traffic trends that drove the comp in the quarter, whether this — was that also true for dd’s? And then I recall dd’s tends to have more — a little bit more family focused, you tended to have a little bit more kids and toy focus even. I’m curious how you feel about the lead-up to holiday with the assortments and values there? And is that still the case in dd’s actually?
Michael Hartshorn: Marni, on traffic. So traffic like Ross, the comp for dd’s was entirely driven by traffic.
Barbara Rentler: And then in terms of assortment, yes, it is a family-focused box and the dd’s customer does have more children. So businesses like toys in the fourth quarter becomes very important for the toys [ph].
Marni Shapiro: Also holiday dresses do you do that business as well in dd’s?
Barbara Rentler: We do all those businesses. All the traditional businesses you would expect, you would expect holiday dresses, you would expect toys, you expect anything, also family photo shoots and then toys or other little things that they give to kids but…
Marni Shapiro: And can I just ask a follow-up on that? Are you seeing at dd’s that the customer is now coming to dd’s for these big holiday events like for Halloween, for Christmas? Does that customer come to dd’s more regularly? Is it part of their regular trip of stores to go to?
Barbara Rentler: I think it’s part of the regular stores to go to. And do they like seasonal products, Halloween harvest, Christmas. Obviously, Christmas is very big. Yes. dd’s, I don’t think they’ll get up in the morning and say, I need to go buy some Halloweens. I think there is always [indiscernible] they’re going to stores, they are seeing things that they like and I think it’s simple purchases probably for everyone.
Operator: The next question comes from the line of Dana Telsey with the Telsey Advisory Group.
Dana Telsey: Congratulations on the nice results. Can you give some color on the regional performance and what you saw California, maybe Texas and any of the other areas? And then also on categories, I think last time — on last quarter’s call, you mentioned that apparel trailed but improved sequentially. What did you see this quarter?
Michael Hartshorn: Regionally, Dana, our largest markets, California was above the chain average. Texas and Florida were in line. And as we mentioned on the call, it was very broad-based across the country.
Barbara Rentler: And then in terms of apparel, it’s slightly trailed the chain average and the comps were relatively similar between Q2 and Q3 but they did exceed plan.
Operator: And the next question comes from the line of Aneesha Sherman with Bernstein.
Aneesha Sherman: So Barbara, as retailers and brands have been talking about clearing excess stock. Are you seeing any change in your inventory mix and your percent of closeout? Like through the year, are you seeing more importing and more upfront buying? And I have a quick follow-up for Adam. You mentioned labor costs and wages stabilizing. Can you talk about some of the new labor cost saving models you’ve been piloting like self-checkout and any updates you can share on the rollout of those?
Michael Hartshorn: On the self-checkout, we’re in a very small number of stores. And as you can imagine, we’re going very slowly to make sure we get it right. We’re in about 100 stores right now and we’re going to continue to pilot the operating model that we have there and we’re very cognizant of the shrink environment, so we’re going to go slow.
Barbara Rentler: And then in terms of upfront versus closeouts, as the year progressed, I mean it’s pretty similar. It can peak up and down a little bit in the fourth quarter. You have more home business, some of that’s more DI, so that gets bigger versus the rest of the year. But I would say it’s similar. I think closeouts have come across all year pretty much in most businesses. And so I think — yes, I don’t see a bigger shift. It could have gone up or down 2 or 3 points but nothing major.
Adam Orvos: And Aneesha, just building on those comments, within our CapEx, we’re definitely investing in technology, more automation in our distribution centers. We’re spending money in our stores just to automate. A lot of our noncustomer-facing tasks in more efficient ways to take markdowns and check inventory and also just investing in more analytics in the business.
Operator: And the next question comes from the line of Corey Tarlowe with Jefferies.
Corey Tarlowe: Great. I was wondering if you could talk a little bit about what you saw in footwear? I’m not sure if you did highlight it or if I missed it but it would be great to get color there.
Barbara Rentler: Sure. Shoes, again, was one of our best-performing businesses. And that was pretty — that was broad-based across all the shoes.
Corey Tarlowe: Got it. And then just as it relates to higher buying costs, I believe you highlighted. Could you discuss what drove that?
Adam Orvos: The higher buying was all incentive cost related.
Operator: And the next question comes from the line of Laura Champine with Loop Capital Markets.
Laura Champine: It’s really about California wage rates, not just with the minimum wage increase but also the fast-food wage increase slated for the new year. How much of that — how much of a material impact do you think that might have on your expense lines for next year?
