In the quarter, gross margin contracted 50 basis points (bps) due to increased freight and distribution costs, higher sales of low-margin consumable merchandise primarily in the Family Dollar segment, and increased shrink. Further, operating margin declined 80 bps due to soft gross margin and higher SG&A costs. Dollar Tree expects incremental pressure on merchandise margin due to lower-margin consumables growing faster than planned, payroll costs in distribution centers, and increased run rates for repairs and maintenance, utilities and depreciation to affect fiscal fourth-quarter performance.