Grocery Outlet Holding (GO) 5 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Grocery Outlet Fiscal Third Quarter 2024 Earnings Results Conference. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Christine Chen, VP of Investor Relations. Thank you.

You may begin.

to third call ending quarter XXXX. welcome results discuss September and the for for afternoon, Grocery to Outlet's financial XX, Good the period

from SVP Executive Officer; Eric Lindsay Gray, will Board Speaking Financial Interim and today's Officer Chief of and and Chief Chairman Accounting. the be and President Interim on management of Lindberg, call

will reports conference statements. various prepared be subject forward-looking be factors cause and questions. Please for statements or found remarks these the open materially call could live, that playback telephone from in these expectations on risks uncertainties Following via webcast this the that available Eric of call this results on will a A release These to being to and recording Lindsay, we is as of actual note the as differ forward-looking on business Investor or within Relations can statements. company's company's from SEC, federal that Relations the of well section afternoon's statements securities or company's press financial are operating, may forward-looking performance or meaning of or this address website. Participants call laws. future All the may make company's found of the and website the Investor on description filed strategies the all section the with sec.gov. which be periodic the statements

Eric. over And to now it will I turn

you and everyone, thank joining for us. afternoon, Good

our I'm to President me critical all played for President want transitional contributions independent RJ working and we process the the with and my back. can the I excited really retained to just search Interim Board from first Before permanent we operators priorities, details as serving moment. time, that that I'll let XX has the our returned that call. plan-made CEO. in our the to week step and we his team in the The is have get future. in company's into of week, evolving a Board CEO. on again. scaling years. announced the and set Grocery helping over in RJ business, a begin more to Directors. positions thank and to President Sheedy I'm down be I acknowledge be RJ and foundation last and say I for the quarter, of role, full executive global has role significant then, hiring of Outlet progress the reporting the third Until Last our review this Outlet fully CEO firm are share agreed the of from This results to Grocery which a engaged closely honestly leading during business we'll on a

operators and has through stores. almost differentiated delivers model grocery experience operated unbeatable value, and best-in-class XX customer our but independently a Grocery and have As underlying are changing our change, week, our today, and not I told leadership last shopping our you to years. neighborhood opportunistic buying made we treasure to unique or strategy service commitment amazing us hunt reiterate I'll team we what Outlet for a

near my like guidance. value we'll across where perspectives execution are strong have areas: our refocusing years doubling focused on many highlights, and value that environment. and resonates execute, on be demographics, and We differentiated proposition. I'd we proven down share term today, we QX over to about on transition This the our when that is our on geographies where any macroeconomic almost implications X proposition in

we Let me start are today. with where

ability These and our supply orders write tools transitioned we inventory impact inventory of to to made operators' significant, chain stores. and data in to August to and been issues the product XXXX, our purchase and order last on team's guide their a The commission operator of support. slow buyers' including our systems and has hurt experienced we ability to see have In bring on SAP their and functionality. business accurately from planning progress legacy real-time visibility, poor significant substantial speeds efficiently, our inventory issues, First, ending into systems. year, including the system loss manage ability over

effectively. into While system and to that new remains refine to improve is executing critical work functional, work manage the fully to operators increase is to the This operating tools dynamic use business. speed data to our the visibility we additional and business our

that systems once, you reflection, on initiatives and do our too business further execution the our calls. at everyday of we have probably organization covered much execution. impacting a great we of challenging. transition list The Next, previous strained our core with on execution. have disruptions resources, more upon tried we've from growth making Furthermore, But to

We are have, stop rollout exciting the as these to pursuing we measured we of to going prioritize initiatives any execution. And need we pace but in the of on finally, value. be our

the combination took year on a earlier coincided mark to As that this pricing pricing up. competitive reestablish in margins picked call missed we that actions of discussed value due healthy on with the we to QX,

have value deliver customers a to through we series measured years, For our of metrics.

percentage First, approximately deliver We customers we their on XX% basket. savings XX% and versus versus grocers target discounters. savings the savings approximately conventional total

conventional on generate and sales discounters Second, measure more the than treasure milk we with parity items target for savings And family friends our members from we list price we items, eggs. their in XX% that with of and a retailers. the tell represents versus the stores example, commodity hunt third, about. of extreme our share captures our experience deep and customers key deals -- This the store value

metrics, As customers. value about are the have QX, We do delivering sitting and we basis basket pricing some restoring our work to are value improved. overall XX% to consistent on commodity progress on and we right items value now, savings made our where our level at through still but on extreme relative a feeling confident strong these look has

in just to to we path this We the are area. on right want better Our strong, where be. is value execute to and we need

third bit share about a quarter results. me Let

top are we with growth. line weaker sales mentioned execution of our strong we X.X comp the store given disappointed double-digit delivered issues I above, While

healthy X.X% Our comp ahead stack was X-year long-term our algorithm. of a

transaction XX.X% comp execution X-year end. stores, opened in up despite continues new our our challenges, count count to resonate. Our X QX model on net store a basis, locations quarter increasing We showing that to and was at XXX X%

new back Our on is algorithm growth store track.

My QX and will moment. This Our profit plan, just Lindsay was and gross experience is tenets to starts execute, we in of on we adjusted model. value a a one, Canbebe. when results margin near-term EBITDA. at great a beat refocus it this all value. are through a some Number to flowed unique on the shopping core this those with priorities share more deliver of industry-leading on business, through

create Number from buying best metrics is is have IOs the very value communities. to their past just time Deal As The challenging serving well Consumers prioritize mentioned, deliver last flow positioned environment. consistently we easy, inefficiencies The environment shop and still the have shown growth must year healthy. that year, partner operator is operators, doing to foot we incredible. capture and in steps stores. systems two, in an Being we our every continue them resolve an our hunt the have treasure disruptions across independent or and supporting industry. very believe remains our value, the exciting away strong, we incredibly closeout made one customer key independent this the pulled to they are of for not operators. what and in love, this the are

reconnecting and their the execute that efficiently business the weeks. We tools systems amaze internal teams model. the at they that enable at the with critical of to its to in need need We are work. functionality coming a potential. these to tools I forward three, completing to and tools execute community this focusing to our on our person support Number piece giving operate that full our operator customers. our look transition Full operators the and is of over efficiency speed really business

simplifying weekend, business. with I'll lastly, internal best basics at that us efficiency are enable I've getting we're teams forced plans the we've service functionality over X for of improving working arms take on and to executing year XX-plus In this day. is our weeks strategic about past are set If do implement detailed teams learned step years still a value coming leadership the relevant they right our One I'm been our automation to hyper the increasing need, the reducing to to priorities. that my getting around and critical simply on basics. systems small we to addition time the the on enable to all operating back the to At the business. focused priorities in long will working to of with taking here teams priorities workarounds process unbeatable focus the every and operators the our tools to the of core my the in a execution we too team that And take thing on business set and our to is focused be customer I'll great that of at be assortment Outlet core, on delivering is Grocery a improving successful. ensure when

the the on execute call. more basics. next I to to have forward you with look We sharing

fundamentals year. guidance are QX So of focus insight having for At some our provide our into performance state, the of covered solid. core, me balance current our let the areas, and the business near-term our resetting the

We a strong and proposition have are value growing in line we top runway a the for have long we market, double the in digits, sales growth.

career given company. harder guidance. this, QX track In we business challenges a hard appropriate than usual, this took forecast missing where our execution than landed light making are and recent is XX-year our the at in look harder with recent described of of feel and record any we forecast time Our forecasting we my to

longer value We While we recognize on expected to not relative we due to do be we on our has are where in inefficiencies discussed systems to to QX, Restoring strong proposition not back the environment. value want value. need getting to proposition, we as the a progress our competitive in fully than environment competitive that impediment taken where see made we fundamental the be.

some impacted will in strong did in of history and have the navigating not continue and anticipate we that continue There We to that earlier are and competitive balance our through flow value will QX changing expenses fourth higher quarter. year environments, we with EBITDA adjusted to buying the opportunistic model. a margin

adding internal functional, is While costs, higher and external resulting investing system resources, largely temporary. be should enhancements in still which are the in new we fully and extra

estimate my in this on million midpoint. the seat, out about We've this from our where at anticipated to The an recognize pass addition, full number $XX financial lot. too approximately is is a net We and estimate. I'd consistent this to SG&A with prudent result QX Lindsay In was a downward significant reflects to think stared our came EBITDA reduction more adjusted return low, updated guidance a bit QX year Thanks. a revision. share to levels. like over But recent the a results. more call given QX now our the as we

was on billion challenging X% afternoon, in $X.XX to X.X% a average offset represents to Welcome summer comp a of in growth were the quarter in store but X-year months our decline to sales back, sales, a increase during Comps store X.X%. growth by XX.X% Eric, basket. good X.X% basis. the transaction X.X% during Comp third accelerated September which everyone. Net partially and and increased sales due comparable new

expectations million, basis X.X% other sequential expense after Our points increased and $X.X compared enable to United margin of acquisition Net of to earlier XX quarter increased from by profit support XXXX. to expense second growth share cash a driven to Gross XX.X% XX average to Grocery and the million. year. third $XXX.X the interest basis this our business point debt the continued improvement was the quarter. SG&A X.X% Outlet third quarter million repurchases principal outlays higher of to of $XXX.X rate ahead of gross the XX.X% increased

and basis share. million million Adjusted of points increased third to quarter. of improvement costs second to the ahead quarter third by was $X.XX tax effective integration tax or primarily rate and related sales, net our basis Our options, effective adjusted diluted excess $XX.X sequential fully per XX XX.X%. tax the X.X% pretax driven the quarter our the of fully by and $X.XX quarter from income net net $XX.X to $XX.X margin or Adjusted EBITDA the income million per GAAP quarter, lower acquisition XX the exercise in income. GAAP XXXX acquisition and benefits book of share. expectations a XX.X%, an of UGO nondeductible the for was diluted was stock was X% the for lower The EBITDA the during for rate quarter of related increase over point

at sheet. of of X.Xx. $XXX.X $XXX.X balance We of the cash. of million third to Total million quarter the the million. with quarter leverage at net $XX.X with Turning the was Inventory totaled end the quarter ended debt our end about

totaling quarter, shares $XX.XX of the During we million an stock, average additional third at we quarter $XX $XX Subsequent million X.X of repurchased $XX.XX. at about price common repurchased to price of million million an an totaling of shares average stock end, per share. X.X

earlier the During previous repurchase our quarter, not have does share repurchases. new The to a into is to remained up the expiration went approved million which that guidance. an immediately repurchase program for our updated million. fourth under This Board share date. new spoke our $XXX for thinking and repurchase share program affected authorization replaces $X.X program Eric available

the Now you let through run numbers. me

For approximately store we year, comp now growth X.X%. full the expect of sales

store sales the quarter fourth X.X%. growth approximately comp to expect in be We

This to XX.X% total, of net our Grocery in stores XX net difficult were trends previous sales new the work In total now now expect sharpen expect up reflects year, similar October slightly While XX. our proposition. acquired United remaining range this of organic openings. margin approximately to of We and the expect XX to of Outlet store net guidance our our from to gross billion. We now XXXX. a and fiscal months add XXXX of XXXX fiscal XX includes September, value more XX comparisons continuing $X.XX for above we stores new

margin investments fourth the and We assortment approximately and quarter proposition to sales. expect to of our reflecting QX QX in typical increasing and XX.X% our seasonality value for drive gross opportunistic

the $XXX $XX million of of quarter be For EBITDA which now full year, the $XXX in to million. to range million, implies $XX EBITDA million we adjusted adjusted expect fourth to

well EBITDA higher adjusted lower than for impact SG&A and as anticipated. gross forecast comps as lowered the previously Our of reflects margins

in basis, now expect For now is we the compensation approximately our accelerated mid-XXs during the expense Net systems anticipated a expect continue on approximately year, interest well as to million. We in $XX as to $XX percentage to investments growth store year. D&A grow new reflecting share-based million. be the of

to fully tax of about of We average down share outstanding We lower share a continue the rate $XXX.X primarily from expect repurchases. to $XXX.X normalized XX%. due approximately count year now shares million, diluted for from expect million

to now approximately net expect of to continue EPS adjusted We diluted per fully CapEx, allowances expect $X.XX of tenant full year $XXX million. share. $X.XX of We

comments let me Finally, make XXXX. a few about

our comparable algorithm margin X%, number are long-term and targets, year to year XX.X% gross this a growth done of X%; our Broadly will progresses. earnings typically We lay to of store and full as X% quarter EBITDA call have fourth approximately the XXXX out our framed point, we years past. sales around fiscal return and formalized of be year this speaking, reminder, should which, guidance approximately of margin believe full to a the in on adjusted growth at as as we building

higher and you as of for XXXX, increased store organic higher fiscal and investments, result, year-end We we in earnings in amortization. regarding supply updating to our chain forward XXXX capital back and a will it to call new on openings depreciation pass to February. And number closing. have I'll Eric more now due expenditures For look detail a

realize our potential. with our close I'm Let business me long-term our to fundamentals in and very ability confident this. growth

history serve now while Operator? passionate unique of some of get open growth time communities. We'd like are for consistent with independent and small to growth. the basics, specialty prioritized questions. We execution discount call operators a on enabling their to back the a up to need a our retailer your focus initiatives to long We set

first The Deutsche is Bank. Katai [Operator from Instructions] Krisztina from question

I to Eric. start sales. with back, wanted Welcome

was but down the need You take Eric, outlook comp considering about But talked was of like September execute commentary. in your better. that some line, the solid, took largely you conservatism to October your XQ is you

fully us? are from we for pressure point? on what And seeing how issues think are realistic priorities this get So the still system to at first line new execution to be of a about behind some your that integration time control should you

of Krisztina. It's heck question. a a

Let me first then that, take jump part in. and of can Lindsey the

doubling down for the there needs to us on I value, need them. So when be customer said we most,

So done. of quite not a we we're made but ton progress,

pull to is on make WOW! So the continue sure particularly going price, there. with to we're lever to the opportunistic

We their all little this about bit it's us, are business with things transition because going to to not mirror. I Frankly, the to can want we the they relationship IOs to things run support can't We efficiently. the and more want doing great intact. do sure is year. just make hear that of I work so that to need next in don't all with them our about the put tools the the systems a want I talk for rearview system. provide

at on making have we're matter the I'd narrow that And that on really list. list a say win know So when things that we that's list sure all focused we we down. then closely most. that looking I short on priorities our and the of the

that's make so coming do sure list that we're on. weeks what over the to going is And right to

And bit. can is up thing I Krisztina, this a follow one

basis. about in so a so feel guide, slight trends but to we reflect So on September, saw September slowdown yes, October and trends they our did good QX similar were we October. a the X-year

Also, time, fourth the we the difficult at So facing same comparisons quarter. we're through as progress

prudent we quarter, the our and fourth with back a in in So really took a for be the revised was and cautious we that accordingly. we more to just said, step all outlook guidance it bit our felt year full

coupled competition, went and that's working still that the for with want everything as our whatnot, into get guide we price comp. the value expect QX we prop to And where we're So it. holidays

of Robbie question is next from from Ohmes The America. Bank

hoping clarify, the systems, get the related RJ's is next year Or replace of just half again. could CEO is, I you systems them disruption looking color to And behind was right now? to question talk also what more is to My first still there type it of we that, to departure and maybe that? you? nice Eric, you're related to on where risk to just the to Is with?

you to Yes. good talk Robbie, to again.

CEO first the me start let transition. So with

last this the year been all You been It's operational really difficult. from know challenge year systems transition. an has

relationship We say We we felt as that's years, can that patient. tell many patient. the our working want, challenging. I'd be you like like have And do. that many, our RJ been or the all were been the we executed was to like with like we have super right internally we've not might well. way But for were thing expectations all of because history. enjoyed that feeling I same to our feeling performance, about you that

forward. finally sat where down, got last point after conversation, meeting a the we to we an had had a we board we to frank move agreement and So

want learn to nothing of shooter really new knows make no I'm everyone was out, function sure any you a The and bit There's guys things we of finding I inconvenient question a today? didn't disagreement. digging still of how just up bit said. about more. little drop. to sort where a This yes, are I've There's So played I'll that what it, later. on into of no repeat timing other that little systems, still major getting have will of speed. kind we

I'd system say enhancements. has just expect. just I'll still say functional. things. is not taken their to resources. for would Let translates time. back. I address couple sort tactical timing. live making your We're guide new that still that a to things we're and which examples say to tap their our a our is it's is anticipated. we words your thing system able of or working Those of be that We're of bigger store of a looking you working I real-time But give to that stabilization quite It's the of fully look guide what may that's opportunistic Internally, been operators and arrival to merchant me on me at an working full the be on -- that the off lot The model. we nirvana like as want efficiency, a biggest having kind progress. than order and speed say I'm But originally more able sound of very able inventory, more you been order to would being a it's pick in undertaking that into system the for

back. And yet, so that had we that and have tool. It's not not back we get

think we we've it's tool system home towards It's us and doing be but will needed I to of not finished. do for The is working. rounded completely. what working, the sort

forward getting mirror. rearview sort of So really the to again, it, I look as said, in

Bonadio from next is Fargo. Wells Anthony The question from

bit sizable the issues So guidance margin, and seen again. to uncertainty thinking even we've a in That began. dig step now your the recently Taking rework just little wanted obviously systems swing on was EBITDA a some since and exacerbated with more you margins. more about back pandemic as some pretty now

the referring specifically just we talk to a So less. time guess, maybe to think I about over should you for you're a margin Can appropriate items you mentioned about strategic some level, a what talk follow-up, priorities just And frame? then back about focus longer on business you from as there? at pulling the just high can profile how

can margin. is I the take Lindsay. Yes. of Anthony, this first our part

you algorithm we place been a have long-term talking be a margin love back that and XX.X%. And believe reinvesting for the to that all with We great us continues since started the for dollars our has we still that's business, So in we be. priority. to

our on and variety down. based is it's wanted Definitely our matters. that's and I still that quarters just few long-term rocky admit, been GO that at we things it -- up emphasize of with why here fluctuate definitely assortment want to to wanted Margins to. call everyone orient what in to the a going because have. as algo we That's well So we

time. year, at last we Just a really great reminder, high that was saw margin. assortment

great delivering as to value customer. well are a We

So it changes just quarter-to-quarter. really

orient you is that, XXXX into. want Eric. of it term, I'll then over you XX.X% to long can So where And is to what and hand we think for just

day Yes, on not adding we're me to to list Anthony. Yes. much, doing back or we're or do being in and too weeks. higher not to list. It's time that doing we're the ready list clear We'll short off taking it work you quite the a to X, coming the putting trying tell really all that what be the while.

question next John Partners. from The is Guggenheim Heinbockel from

Two for I quick I being particularly about talking EBITDA into then this because a And model. CEO know not And are to next right? looking for macro reinvest a mean, assume culture secondly, I because value. characteristic-wise a you with do what you that got price in a things. One, a Eric, and the permanently. you're margin job X% you you and are back very business year want candidate think in comp, you single-digit new you've conservative that low unique are

Yes.

to take prepared a part search I'm clear me with you. hurry. are takes. for of first good a and long a Let in the I'm I've that. going been as we place. is This unique it to not pretty to Yes, John, say here as catch up

good time. CEO some helped others. some over a You've did President has in Sprouts, got Gap work and out and other a long, it Athleta for really known very been placements. She at firm. She We've and successful and with long she search

we're that caliber the in confident very feel with. we working So

model, looking track retail I'm who's our a someone public company of new certainly very retail. what some about If stop. my scaled and important I not It's of model. unique. and Our goal conventional we're is very proven that's then is things someone for obviously, front for which differentiated. record, doing experience, fresh is to down had us, is some everyone. leader, to some land this full -- excited list what It's go This really It's retail, in not terrific

differently. that to it, So of sort culture So share lot find of vision." that it or bit is are need that I see the at X and we looking "I for. and those top you a little mentioned. it someone of do that lot that and is we things a get about A looks But X we're that qualities says, around

This is Lindsay.

you So question a little I'll just with on guidance. your about chat

X% to percentage what targeting, target. continue And so is the we're so what X% yes, comp we to and

think was, what X%. your question I adjusted margins EBITDA just was of the

So landed where levels, if at average is or the the on so. historical X% our X we've years approximate last look you really over

the possible. down to towards systems if think year. XXXX, place functional working we're us you will, to we continue that tool get the want But and for, course, longer we It's get Of one-off. of building as to doing like shoot X% the feel a a well of it for really that, fully still want bit. [indiscernible] and what as cost algorithm that throughout be for some everything we and little stabilize, said, you is as right, through, of we definitely in what just and taking work enhancements lot to a But that's to Eric long-term quarter-to-quarter and as have about a mentioned, shoot to we good though, kind but

from from Mark next Carden UBS. [Operator is The Instructions] question

Welcome back, Eric.

of is with impacted your timing your how are then it recent for And it these you the differently to challenges? expectations? thinking some So on the UTL relative acquisition, by How moving changes, been has any execution stores much over about leadership independent going to operators?

Mark, Yes, schedule. pretty have not going nice is right a aggressive new. very We hear going -- did we thought. Yes. GO it's as to your It's voice. transition

them the see plan we later, convert get of is the In to fact, did those stores And to actually into we opportunity until fold reporting. XXXX. after Initially, biggest not much

make we do. have items, few items they that and sure quite is the Second we products less scanning a that don't to to have have. their They that have, can they stores

opportunities sales some the of have. to see products we some immediate we them So infuse with

a or stores. tried X of have few refreshes X their We

things from coming learned store data in reback on with we've that sell a initials. some good the of those product So merchandising better from very inside standpoint, the helps

We later, want over. year, we'll conversion over before. will X, can then in of IO to we X, those some brand that a and done to sure hit next make come then hurry and And conversion that first, that initiatives GO other of some call So it. to not we to them ultimately, do transition it, do X, XX stores. We've

The next from Jefferies. question from Corey is Tarlowe

But think How was about think rate whether acquisition any curious, then that growth. value the And thinking the there's is could about via to targeted you're change on any wondering make, I forward, the the versus in magnitude what making right what's and past it's investments the that growth? the do in about XX% now unit previously in way there? investments if business? for there made you organic the impact of and Eric, to that context unit or just I the I in put past. into be. And proposition, you're believe the growth you the complexion you've going to continue just of planning

let every what me slightly not would recall second value get my we X, the Corey, are had I'd prop while, first. once and take X can recount we're say Yes. we've question off I in they getting back. from estimation, than say are any do a I investments. times, the we different and making X, to

the XX% and walk we again, told just So through me basket. those and you the XX% let measure how measurements we

to of over basket discount great, need a excitement excitement order Our check. yes, say, XXX a but savings drivers, are one not at quite not So They looks will on over check, that guide check, last there's discount These right? is check frequently driver. operators working we're XX% that's savings the versus the priced items. the bought enough commodities. The conventional take be parity

don't is on inflect have yet. I we that So would margin we extreme, done know that the work we not need to to haven't into we put that say that. but

have we invest if and there we it there, want and that sure we to we've need make to sure when know we keep. get we to we're make plenty got to So

second perspective, say of I the the into wouldn't geography, XX% from would new in we So at I a we been into and unit culture say very on Yes, is the it's of growth. for bunch someone store jump say look traditionally, good acquisition ideas that I have our fits where might risk. that opportunistic question. kind would find that. a future. the not is whole a

the stores. have We

all havoc has stores. ago last deal COVID, of and XXXX us. capacity a done lot team have the setting do an with We X, makers year post or to delays, the have supply up really in the created well. amazing The it behind Think back so, done X the years construction that's job chain,

So think working we XXXX. signed mentioned are XXXX. so that XX-stores-or on for ready I We're actually

wouldn't So acquisition. an no concerns acquisition, another wouldn't that say for going I issues to do we or there. we're I go And look but wouldn't say

Oliver next The Chen TD is from from Cowen. question

Lindsay. and Eric

operators. What Also, of opportunities priorities key independent with terms are As the of the interrelated, you challenges relationships challenges some and medium any Eric? ahead, term versus the you how in think thinking context would bigger the great and issues you them, rank that see? nearer of in about you terms -- on have term

Just thoughts take what foster to wondering will your on well. it continue those as to

we let's list go thanks in really and Oliver, for it's value, mind, questions. to get and my here easy bit A flywheel the first deep like back. Look, make that that of a on say the rolling once say, sure minds we start keep I'd is momentum on rolling. my you enough everyone and I'd on

paying I early think frankly, some QX margin damage, we're value, through we and for for and did that right of now. versus pricing pricing the ourselves price QX

There's and getting there's about momentum. we're lot lot it of back, We a feeling and are of good it. a energy,

that. be of for got are and Thanksgiving offerings really best product we've one the think we opportunistic meal, for but I an challenging, up well in world can offering our sometimes set

I And say, very They the of inefficiencies, quick going it, going try and we're Relative X we're X sometimes other it to as start the lay people. annual give been room feel mood And had biggest. as X read things the We all. things of bit or at not good us to They to a heard group successful, has Dallas a blind. initiatives. focus in not Things September. online, some that. and guys So to has of coming we're -- to frustration. X look, positive. a make efforts this lot would We IOs, been mistakes, year. graceful our little are days and fast out being in activities of I It working, tough about one with our these back flying then operators meeting have tough, on in or redundant stores, a or and for were days

supportive. they're so And

we timing communicate with truth the share what as them is and we As the and as them and is long what as what with long tell the which them is, fix doing. we're

And Saturday, and the So then We'll out see Thanksgiving see We'll do trip it I'll some Thursday, [indiscernible] around will and so. take we'll XX time. leave I operators. a more Thursday. or to Friday, We'll see Saturday. operators again another XX go Thursday, Friday, east about next

have listening. So we And their know doing. questions relationship. what forgiving. to we're bunch by be the issues. like this care. They They that are But lucky that of working operators or that back, super eighth to and they they with And hard them kind my seventh and need to a we're with can address need of we're out timing patient they're know and that know you I'll sharing of probably taking we're day to need tell

important super incredibly that we So us, take to seriously. and

Feldman next question Advisory is Telsey from Joe Group. The from

share that like to wanted it, are to things when a if maybe the X missed initially. -- you or that I I delayed, the you've you a you'd project execution, could are about you And on think just some color if I and like Eric, execute of what ask apologize that any talked little better? where could but you, get

project Look, here do, Yes. the manage just call that about new an app all acquisition talk always and run some all tools, to not that's let we're we an SAP, make private things workforce marketing the launch wrestled trying the label, time. me

has bit ever than tools the want. and a been you, business for we little not Just of would this challenges more when thought are ever difficult working

lay that again, now do delays, whole store, on, they're bit the goes. going we to example they're be them need up a product. a but they're fine. the reinvestment don't stays, fine. right all go mentioned of because UGO, of what going I to any with I've be going to bunch get early little we're list, running, of operating. initiatives back in some what say And wouldn't to decide off So team and of my the of work We on We They're do are the things the what UGO

question Sachs. next Goldman Leah from The Jordan is from

your understand So fully visibility it, it where system want I but you the to last back isn't has year. improved over

any XQ curious aren't disruption getting just last guide suggests from your year. I'm lapping we why that initial lift gross margin So really

you the And I'm guess from Is curious competitors Just pressures? getting benefit went. all it as some closeout curious also why I all away where that aren't competitive well? going

Lee, this I can Lindsay. is speak that. to

so just of as So pieces, couple margin just yes, address a well. comp and

issues a is facing we some the teams the the system though longer And What taking still it way great you're visibility, lot back mentioned, lot Eric in tasks progress is inefficient. operators to do frankly, operating, made talked in of data and they functional we've with of earlier very and just the it's as and as we're we the the before. that it's a some system, right, brought a well while about, year. So did

really improve. we about these think how we've to you as and to so And trying by love be, hampered that been are, we're tools how we nimble

So do that. to we're continuing

leads of you that giving flavor So into comp. kind

-- of And so on comp. reasons there's couple we a

difficult make QX laying just with saw well. as gross some as out, conservative. we conservative. proves we well. achievable. we're though guide And for trends, facing We comparisons the thing hope that margin, prudent there It that even want comp is really to reasons we've So be our But the be recent really all to we sure out feel laid same then given we we were is wanted to

toe into with get of the out have that in trying QX, value. in margin with bit QX there's margin. that earlier our was and but inefficiencies, And still some plays a some just lost drag material we coming on So stubbed year bit feeling the system some just of to bit nothing QX, dollars, everywhere we really just of drag like little kind a that a in a a or are

year. is I like QX that of through we've you say to our And through from the this seeing early have walked But material would still saw so just we're we days through what of improvement. back some customers we for in impacts the and with margin anything QX year work adverse last not all some value

back to think than all better not? did in year, getting your or So we fully a back much it last but I not back. position that we're get question, we're

conservative, out said, our really all really about and like into thinking conservatism again, hope now. but right where I guidance. laying at that also And then we're So that's layering is it's we where we're

question. Leah, second I'll your jump the part of on

we're year. stores, announcements our getting sort from that's are now, through and increase penetration of big we're And the margin. of We been definitely and good is from this year flowing pretty I'd benefit really buying a last of through the buying XX the what right say both picking what strong to shipping since up. in

you, out I taking really are the sure of we deals we value we've a of store. sure value, in few to all, would people and notice different need good that's in that in those discussed So make with measure that column. the best lots just We say, the need ways, to make

So that's where it on. heads down

question from The next D.A. Davidson. is from Michael Instructions] Baker [Operator

the Okay. My if environment, on X question will buying I be could.

XX.X%. I XXXX, margins about peak the peaked which think to relative in at So

when is again. XX.X%, chain back? always there's as of products, get is that, because it targeting to COVID post -- more say to Now fair it's plan. run that supply going but to get Is which you're was supply is just you're disruption. so that that good never just it and your That was reinvesting just buying it all disruption strong. repeat out it much that was you chain so probably closeouts, unlikely it of environment there's as COVID, it's long-term Or I post

you let margin. Yes, walk little on bit back Michael, little and a bit about a buying me just history talk

a of XX narrow years it, XX, operated So very within call through, attention here, band. paying we've

taken how for been years. believe average on call we've the from it, say, the while X% while introduction of And a intrusion last sort And or I'd changes narrow can't that's delivered comp positive of Some acceleration business. MTO or like XX XX or That's meat in XX%. of new market and changes comps categories. of of, the lots Those things massive lots are delivered competitors. low-margin we've produce of product more introduced XX% fresh to

very, of for get model, it very around different. those or your it, can't who this appreciate you heads So it's quite

this the assortment. our that that's ability half to We price week have something week, next sell of we'll and

really attention can we pay watch and closely. So

I comfortable And to which call maybe that say anything think and more in, very, you so be have I to again. would Right the we'll When band healthy. is unless and we've very choose would these coming are it XX that being got and that margins never going XX, to and we the happened of we sure see the see doing roll this is XX that's sort margins in And contrary, between with gotten customers. never of say band. right better invest more what should now, to opportunistic those, product that's market. you XX.X we're now make

a bit So long it time. that's of works, how a for it has little how worked and

Stanley. Morgan The Gutman is question next from Simeon from

ask wanted horse, systems is this creating that the proposition. about Eric, value definitely I again beating to a weaker issues

were So could on shelves. relative sits where selling I on value, the affected were goods the that at IOs know prices. buy, had think, have prices and have would The and certain not what I get sell certain you visibility you may

know logic, weren't that. you caught. of led that issues things there being not How certain us if value systems frankly, to So talk can through And safeguards think Like in to place time? that? these then the a about being how that just you for not period

you I'm call were looking a are. back at that, quarterbacks. it. price So ourselves. We down, however We we people that. value took were The margin thought and did for easy really pretty did the had No, for was not prices price reasons scarring well Upon we We armchair where Yes. okay? margin. control. pretty And prices that. quarter. take there good We reflection -- We same to to we did time, taking our this first are up, within it, is, we it's to for right, why ownership at consistently. got going

market us right time. call to the but adjustments try and be to that up have them ask We allow about and operators on They a ask micro things items. they us need price don't operators. on and to it, be the few ability price the You're We to down, they price. of right XX%

set broader keep We lens the competitiveness mind, of to price better you see profit margins. to right. a we And to gross share in ability and the got have much

sometimes we So operators are focused are. a like margin fault to on

it. that's probably I Thanks really Aiken-Phillips of lack explanation. So Research. improper. SPEAKERXX The of cause bit systems Did Melius in from the on to occurred next question is proper easy a And think, Jacob it. the that with caused was the It's systems that again now, our question. visibility the then for reaction, weigh from

the inventory. So that being like you part it was you then part said system took the visibility I'm pressures of is pricing. wondering And competitive of some transition to have or it was not able when like

means you what for would a Because don't So growth last bps be like expected XXX you from better then have planning that giving contextualize to don't and know, help reduce XXXX? to over all. I can that year. unit comping in I in us lapping you at like seem XQ separately, XQ And

new store think we productivity like in do years? coming about the So how

Jake, first question. I the of the part can take

slight fourth is some in difficult So still look showing a comparison yes, trends the QX at the basis, impact. The slowdown. comp systems September seeing again, quarter through guide, it. definitely had where you year, the And And a progressing last we tough and I positive October. that's tough. again, even get given we're after X-year But if a

to on the cautious fourth speak, comp, whole for our and get and its got the business, the But GM really comps, wanted and those guide. EBITDA then holidays look competitive and that wanted definitely to few rebalance again, think the we right, comp it's a going too more XX.X% well. We strong along everything at on our quarter full our guidance Eric's that's down. -- And on. commenting And of we've mentioned. stands, going on X%, a I a customers. pressures, the this to really just got back just the and guidance, 'XX, with we reading and of about for as are for hitting trying where and we've what little we There's adjusted we at our but right the out now, guided just and very And we not comp its that in value talked lot algorithm so and make long-term comp again, and we all frankly, it's really And that a outlook and were performance all as be to at proposition being with really X year things it the margin is package reiterating formally to ballpark, together, can. prudent So we why sure for prudent. X to is

So for again, folks to 'XX. what X that's really orient we're trying

these We Eric about next As we want systems said, really don't hope be to year. talking we're not.

everyone's so make those head to as really algos And we to 'XX. just oriented we into algorithm want that long-term sure

XX-plus growth. about Jacob, don't any got yes, of stores has open setting I leases a with job the to done Team store nice new I think you signed. problem the next those up. see we've really year, asked ability

I'd So feels number good. that say

from Hamblin from is Jeremy The next question Instructions] Craig-Hallum. [Operator

here Eric, that are ask that welcome back. some of wanted the to I involved you just about systems costs noted.

ongoing rate? that next is you quarter more move is then well as a of some through the cost magnitude as to over 'XX temporary likely run or issues And presumably the consultants. what of what in costs, as on internal some can external But here we noted You these X. quarterly quantify versus portion be that

I don't going -- Maybe, to ongoing It quantify. somewhat we're Jeremy, can not you that. is to quantify we're going in QX. think be Yes. going to Lindsay,

it No. Yes, but cost. Jerry, context a we little that, general, because kind haven't me just systems of around that sounds you quantified give just let

everywhere than systems think goes A of And so maintaining into higher as we previously we levels forecasted. some had about infrastructure. we're lot spending improving SG&A and

went of lot as SAP systems infrastructure, system and all, into first well when ancillary sophisticated place a we other So super put system with live. of we

whatnot, run we what than rate and we the thought. that all GPP than the higher expected need, Just grew cloud, and infrastructure the more the we

resources, totally you're right. Second,

trying period to stabilize transition system we're the enhancements where this during continue resource. you've external So internal got and further got do to resources,

which as we rolling You this we really fantastic, the resources sure but internally. things get is those overlap you're consultants remediate knowledge, some we then overlap made have hires internally you We've correctly. make to have SAP great off. right where you're some And with transitioning and want

a So and again, large resources this definitely temporary. a is as time And part well. transition of

we but so really of And building in Jeremy, as these going And just of XX%. really working mentioned have XXXX. been we where the this year you're -- go to we as EBITDA of we thinking be want through X What can, as because we're as see year the that hard but as only I is around full for we left. continue costs some is to X% expect on transitionary weeks into to we to have 'XX, we

Bill Kirk question next Partners. The more Capital X We is ROTH from have question. time from for

Thank sneaking you for me in.

So industry, or maybe availability in e-commerce keeps radius the assortment even more of whether the increasing, fees. delivery it's broader the wider like options manageable or

of not new they existed guess e-commerce increased. now as is, what competition terms are I to up against the that your availability question options in has have before seeing that have the IOs go of might So

a I would Bill, the at not lot value say end.

a cost, delivery higher price. which a options All come with is those of

I'd our to We in-store the is But more for do is -- now, engagement all and to finding strategy from we're do a we're shade lot bit are things not difficult feedback people part it's online. explore the cast part sort platforms them what prices. e-com, model. delivered. the today. but little that up at to treasure that a part the treasure trip. worth getting we're value, any all and convenient on customers major We time. and reverting order treasure have of say of those hunt. it's that So the continuing still is of major what the for super us, are hunt it's of on of And continuing in we that got and we've a But to a really People strong. that, mean are well look, It's surveys And minor we our hear perpetuating

the I closing to would like concludes for question-and-answer over session. to comments. back This Eric the turn floor Lindberg

to business. really be people back. Yes. the be the operators team I'm on guys. Thank you It's the the bullish good excited with back to and

so all some business. interest appreciate And us having I of lot in a you giving time our and

forward for you. to few thanks and to we'll Look a So the talk in it. today, you time minutes. Thank

This concludes today's teleconference.

disconnect time. this you may Thank lines at your for You your participation.