Root (NASDAQ:ROOT) reported its Q3 results on Friday, with EPS of ($4.54) coming in better than the Street estimate of ($6.33). Revenue was $69.8 million (down 8.5% year-over-year), missing the Street estimate of $78.4 million.

Analysts at RBC Capital said they continue to expect the impact of the uncertain macro backdrop to impact the company’s results over the near-to-medium-term.

Management noted they expect cost increases and softer sales trends to drive a higher year-end inventory balance. The analysts do not expect much promotional activity through early 2023 to reduce the excess inventory, as a large part of it consists of "core products" that can be sold in future periods.