Q2 20 Results for Off-price retail.

1. TJX Marmax ROST BURL KSS
Q2 Sales Ch -32% -40% -33% -39% -23%
Q2 Re-Open Comp -3% -6% -12% -14% -25%
Q3 Sales Comp Consenus -13% -13% -13% -14% -12%
YTD CY2020 EBITDA Est. Ch -13% -14% -8% -24%
YTD Inventory Ch -23% -39% -22% -24%
YTD CFO Ch
1H'19 $899 $1,083 $229 $2,107
1H'20 $176 $172 -$473 $1,657
Delta -$723 -$911 -$702 -$450
YTD Net Debt Ch $554 -$594 $485 -$115
YTD Debt Raised $3,959 $1,849 $1,160 $1,594
Debt Raised / Starting Assets 16% 20% 21% 11%
Off-Price during Q2 1. The table below shows that the off-price retailers experienced similar sales declines. KSS is shown as a
benchmark and it benefited from online sales which is absent from off-price. Marmax had a stronger re-
opening comp due to favorable geographic, income-cohort, and category mix, and likely more leverage
over vendors to get the brands that counted. All lost sales in June / July due to insufficient inventory.
2. Inventory, all companies spoke to having DC labor shortage issues and difficulty in getting orders filed
from the vendors. Moreover, certain hot categories were scare. ROST faltered the worst in this area as
evidenced in their YTD decline and the further evidence is that they burnt deep into pack-away inventory.
3. Cash, KSS did the best in generating cash YTD; whereas, ROST and BURL were less effective. A/P
significantly declined at both, no doubt an effort to incent vendors to deliver the goods.
4. What's the future of retail, click HERE.
All rights reserved, Inflection Capital Management, LLC

2. 25%*** 75%
Retailer** Market Captured Captured
NAICS Retail Sales* - 2019 Off-Price*** Supply Share by by
Code $millions Category Addressible Destruction Disrupted Digital Stores
442 Furniture and home furnishingsstores $117,815 $29,454 15% $4,418 $1,105 $3,314
448 Clothingand clothingaccess.stores $266,903 $106,761 20% $21,352 $5,338 $16,014
4521 Department stores $135,026 $54,010 20% $10,802 $2,701 $8,102
Totals $190,225 $36,572 $9,143 $27,429
ROST (2019) $16,039
Share 8%
Eliminated $36,572
Remainder of SurvingStore Sales $137,614 (Total - ROST - Eliminated)
Share 72%
ROST + Remainder Share 81%
ROST Adj Share (post COVID) 10% (simply 8% / 81%)
Share Post COVID 10%
Addressibly Market (stores) $181,082 ($190,225 - $9,143)
ROST $of Share post-COVID $18,902
Notes:
* Census Bureau MRTSreport
** Based upon our analysis of announced closings and Census data.
*** Questimates
2
ROST: Sales Outlook
All rights reserved, Inflection Capital Management, LLC
We and other investors own ROST because we expect it to survive to the other side of the COVID-valley and
then thrive. Based upon the merits of ROST's offering to the consumer, the durability of its business model,
and the reliability of management's execution, we expect ROST to at least retain is pro-forma market share
from pre-COVID, which we quantify as 8%. Based upon our analysis of the current retail industry, we forecast
that the retailers the NAICS codes 442, 448, & 4521 will loose 15-20% of their share due to store closures and
unsatisfactory customer service. We questimate that: 1) only a portion of these retailers' sales are
addressable by off-price retailers and that 2) of the share loss, remaining traditional retailers capture 75% of
that lost share, while digital retailers (Amazon, Shopify sellers, ThreadUP, Revolve, and other digital natives)
capture 25%.

3. All rights reserved, Inflection Capital Management, LLC
Ross Stores
$5m per penny 2018 2019 2020E 1Q 2Q 3Q 4Q 2021E 2022E
Comps 4% 4% -10% 125% 71% 36% 29% 62% 6%
Guide 1-2%
Net Sales $14,983 $16,039 $11,955 $4,196 $4,671 $4,679 $5,355 $18,902 $20,785
Cost of sales $10,726 $11,536 $3,063 $3,410 $3,416 $3,909 $13,798 $15,142
Gross profit $4,258 $4,503 $1,133 $1,261 $1,263 $1,446 $5,104 $5,643
SG & A expense $2,217 $2,357 $586 $622 $635 $632 $2,474 $2,663
Operating profit $2,041 $2,146 $547 $640 $629 $814 $2,629 $2,981
53-week
Interest expense ($9) ($18) $20 $15 $15 $15 $65 $8
Pretax income $2,050 $2,164 $527 $625 $614 $799 $2,564 $2,973
Total Tax $463 $503 $129 $153 $150 $196 $628 $728
Tax rate 23% 23% 25% 25% 25% 25% 25% 25%
Net Income $1,587 $1,661 $398 $472 $463 $603 $1,936 $2,244
Earnings per share $4.26 $4.60 $1.12 $1.33 $1.31 $1.71 $5.47 $6.49
Operating margin 13.6% 13.4% 13.0% 13.7% 13.4% 15.2% 13.9% 14.3%