Tractor Supply (TSCO) 28 Jan 222021 Q4 Earnings call transcript

Good morning and welcome everyone to Tractor Supply’s Fourth Quarter 2021 Enhanced Earnings Event. The video we just shared, I hope, has you in a Tractor Supply state of mind. Thank you for taking the time to join us today. We look forward to the time we can host this event in person.

We have a packed agenda today.

in excited since you October our where are is where updates XXXX team we been beyond. we’ve last headed executive to many bring of and Our and XXXX event in do our and Lawton, we with our CEO lead our Kurt off To meeting that, Hal CFO. Barton, will and highlights the review quarter fourth will They financial and our operational for XXXX. our Kurt will outlook. also provide XXXX more financial details on Out will an update Here Life strategy. provide multiyear Hal Then our of mindset. It our be day-to-day continues our in and to star north operations

of and After continue Korzekwa, point, Christi President this at to us Commerce new join and retailer our are have will share Supply important our continue John we we about discuss around introducing break, capabilities quick Chief EVP Vice approach and customers’ we that Strategy well our enhance customer to share Officer, Ordus, to Senior Technology, the XX:XX EVP Rob a Our customers and will deliver Tractor Then is service. Stores Marketing, legendary learned a will our experience. Chief break we as have new as insights gained. customer At digital Officer, relationship to Central. the our how we will our as and elevate core have Digital illustrate Mills,

Tractor layout Project Fusion, with followed XX months, our our store in Lot you’ve the remodels. you Supply If last about along over changes heard us exciting speak Side with

next, to our our lead the allow our strong progress Estep, Officer, other will to on customers. execution return. Supply outlook, will as with made to Chief of efforts and plan provide EVP a He of continue a will deliver Then the Supply our evolve well the dependable to we market. speak capital and it Yankee, for strategic Seth and of Tractor that together allocation Merchandising give as our as EVP of the inside bring to of continue long-term features quick how Chain, sustainable stores Kurt Our priorities. layout revitalizing will and Colin insights total tour and our all differentiate Up our these our we supplier growth have investments supply chain shareholder couple

which up before quick a wrap going Q&A the into extensive will take presentations, our session executive after Hal we an will Finally, break team. with

operations differ are an uncertainties considered cases, statements goal that make at regarding Our actual In road, involve and down is Please the business beyond the too you the maybe our cause results that But control. risks statement. Harbor our statements financial materially. forward-looking. like of ask to of get of to allow before for least we performance we note Q&A. hour our take risks these some presentations and many uncertainties I’d today Such note number Safe discussions, to to a could and far and

part business non-GAAP materially the issued release filings performance, reconciliation from the today from company’s statements Although expectations the actual such it time. the of on are webcast in its reasonable, included a that Because Important provided call. website only accurate be be undertakes of this results note can Investors the later could may for forward-looking a It the of select at and of IR the webcast. forward-looking those give actual will have no any any to its operative company differ recorded. in our event of which or to materially link. discussed at to of at measures to the this Exchange describe the contained GAAP that be risk the believes cause as remain update obligation Please and Events we expectations results assurance statements directly Presentations under being of to expectations. or will the statements in with end statements press included comparable these forward-looking Tractor use any we presentation are and available information this is reflected will expectations that will as measures and on most appendix Commission. Supply replay its differ The this assume is not correct no in are section today’s measures, the of prove information in reflected in ir.tractorsupply.com factors date Securities our discussed. website should posted our

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[Video take look. Let’s a Presentation]

Good morning, today. everyone. Thank us you for joining

in here are cold Nashville. We

that are in you Life back our we to first XXXX. you Out greater update excited strategy Here with shared October on in We detail

As the we our see us. started. are of we At we are that ahead Supply, growth highlighted, business journey Year in build on momentum on Review just early to tremendous Tractor and capture very the opportunities video our getting our

Today, early has XXXX, that through business back stronger. operated stronger set As been ensuring the business we on than of early never emerge sights would before. our days our pandemic we in the our

executing and our We demonstrate have a our significant high momentum, results that level Here Out our at is team multiyear is working. strategy Life

We from are a of operating position strength.

ever we evolving, remains our strategic They members. most and we strategic our make with team constant with asset year team news and outlook us are for and for our relationship our our results is what exciting our through company. that fiscal customers we a Kurt before stand will an progress XXXX and a have and provides they you today. important nurture review and Retail want as I share update priorities. We you our lot who take in XXXX quarter fourth of on to the

of purpose-driven community members in other. a our our sense create team and company, each a with stores As

XX,XXX about Out Our team passionate members Life Here. are

supply with the Tractor and our values pandemic, diligently and increased environment. dependable to DCs, navigated that is through grit our support worked and chain This have they overcome to team our ensure together Over the on. They volume online, team new sales has challenging the last the customers the our disruptions. lifestyle, stores supplier into new months operating lived customers the members have XX welcome to of Supply determination mission the to that come and count onboarded

presentation, for as the benefiting our record We capabilities My their And much done we continue record year dedication thanks and work out the many are throughout our customers structurally from market we performance to more. and Thanks XXXX. trends each team. and a so our to business will our successfully comped communities other, call as to have hard to we XXXX today’s IT sound. share goes was home. enhanced the we that in be

customer of of XXXX. in celebrated December We of our opening in committed Farm The our Home. acquisition, an And the our recap strength We have a of remain X,XXXth in store our few the state the to gains announced update to let’s in is & we market continues acquisition Orscheln home be which milestones reviewed to Tennessee. the hope So, right here categories. share across soon. we supporting the by and base FTC our

program Neighbor’s tier growing as Our rewards membership affinity we to is an Club with program. transition program up year-over-year from a XX%

value especially retention and robust have engagement, We with tier our highest members. rates

XX marketing, in increase Supply brand are unaided to name. of points awareness. targeted We are in Through a Tractor household a we seeing our investments making our committed remarkable

supply new goals years. of also new X from as further and the ESG across our of remarkable And dealt the challenges emissions are supply the And as new chain equity well-documented we a diversity carbon chain operations X reduce the announced September, has goals. in distribution global the job well We through as next centers an done in robust our our investing we first to inclusion over level with announced unprecedented team managing inflation.

some our performance. have fourth it We tremendous broad-based. And specific on color is quarter and let me strength now, provide

week and categories. comparable store offset. cost pressures our it price merchants sales strength We And to be cannot XX.X% on basis are a was our customer industry in we basis. and some the several of through Inflation, over the sales a XX% we quarters are across navigating both pass as all taking online and in cost challenging to we the ongoing are outpacing environment and growth regions had price. and that to they market and store our this Continuing we store. believe to that contributed we grew now. the continuing points all Where the comparable share necessary, low robust navigated gain positive with supply chain. pressures and are XXX well broad-based significantly supply extremely for Our represents most currently teams have a across X-year focused everyday disruptive advocate trend, chain this stack on being Every increases

products, key they These to comps As product we and C.U.E. very said, unit to as our customers’ needs-based, right And well. and they demand-driven and dog well often categories to perform we categories, perform everyday. among Supply. on edible health usable chain we are categories continue discussed were some behaviors, are in we average. feed, closely and above pet Tractor I as trends Consumable, the trips of equine livestock our committed purchasing area, being food, priced strongest the treats that drive monitor are with dry continue focused to

big fourth While year last for this again quarter we in had strength of comping ticket we quarter. exceptional growth our double-digit the were categories,

quarter years. warmest strong December the XX quarter, as at on That And below has we performance. cold. the a was all October reminder, was the as weather we comp in normalized Looking exited as know, quite November said, off cadence started modestly plus the January and for December and record

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performance to customers. continue our from highest stellar spending see We

to importance making investments higher Club fourth digital XX% standards, our Our channels X retention our in the in customers in members. through the it’s are came than from remain area. even and we Supply or Tractor reinforcing Neighbor’s rates our the of this historical quarter, of new higher X

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Before we highlights Here on Kurt? more go share get of Out Kurt fourth quarter financial to some Life of our strategy, key our and the outlook. around update XXXX details our through the will

Hal about and appreciate hear bright to Thanks, everyone. today attention us. and our progress We hello substantial joining future. and your very you really for Thank time more our

Hal impressive good results customer our gross will trends, I a margin and line As covered bit our about top with performance. pickup

fourth inflationary product Our of we in pressures This expectation was gross both decrease expected year. costs. points rate margin in versus line XX.X%, generally transportation continue basis with was XX our last quarter to and a as

Hal approach and been elevated ticket I are for the a our our environment. the price management shared retail wages. across documented, managing benefit inflation. Tractor remains team environment through The imports and they points of well very significant current portion XXX has the labor you fourth included Supply with program. domestic offset comparable through cost effectively great growth the environment. basis the commend to freight, The commodities quarter our current doing job of in approximately team As

XXX inflation the benefited XXXX, points. have approximately navigate Across environment fiscal by including issues, and macro we to network, For been basis supply comp nimble chain the unprecedented pressures. sales inflationary

strong continued continue product due depth commitment low frequency pricing to for our and categories. promotions. This to and of is our see to we the favorability demand strategy in our Additionally, a everyday

the net store and ratio, amortization, and in depreciation fixed primarily store costs comparable with XX This higher Turning COVID-XX to Here decreased was ensure sales, by sales occupancy a our leverage adjusted to customer incremental fourth other investments versus Out in providing from strategic are was points and compensation. leverage offset rates, great response incentive our along partially SG&A by pandemic Life good hours year to SG&A, lower XX.X%. of costs in expense basis to improvement initiatives. service last wage This labor including percent and attributable as our we quarter increase improved a

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earnings our an of X the XXXX stimulus of select margin We a margin are transportation X.X assumes partially points guidance. and also drivers benefit. about SG&A Key pressures growth but our inflation planning continue, an This week $X.XX slightly points. included lapping Home diluted per in management growth, for benefit continued remain last promotions. by pace keep to Orscheln Please XXrd big acquisition from of offset year’s and ticket by about the prior categories believe price share. gross strength inflation decline approximately We for the for flattish percentage year. & that in percentage positive will mind ticket include not will assumptions Farm limited of in lesser is and other and average ticket net adds is sales fiscal prospective at gross which The offset from and

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Colin. you, Thank

and robust returns. deliver Barton, Treasurer, Hal closing for Financial to strategy Officer Supply’s us Before us EVP, Tractor share his rejoins shareholder to Chief thoughts, joins Kurt

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billion All over to credit free rating. very is us healthy cash oriented, flow high all cumulative of billion we a cash commitment includes shareholders underpinned cash of of $X which compelling position expect in that $X that the future operating puts investment-grade The X an we of years, flow a and generate attractive this Power flow a of This can by to next balance our initiatives the generation, flow, free cash fully simultaneously. significant return of return cash and strength a growth means enables durability fund capital our our delivery flow of and amount and AND. to sheet

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disciplined or that to trajectory. plan our Moving to to a X subject capital note Supply’s highlights next per our and over future of earnings per allocation to is than This greater future dividend rate increase Tractor to is strong dividends growth and that Directors we commitment Board dividend our years. It grow in forward, discretion the share approval. equal are important at confidence share and quarterly our

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to expect X% success sales on you structural the base markets to based in X% and the comps, to heard our of our Life years next the build evidence shifts X% from We total average revenue the solid over strategy Here and from stronger of today. deliver the on X% as X Out our team

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TSR, see upside accelerating and double-digit this further tuck-in by achieved initiatives Beyond we can potential be strategic on acquisitions. executing that

and success our customers thoughts. final outlook you of strong XX and a Tractor our enhanced company. some Supply’s growing double-digit work feel deep all have cannot my more earnings about statements our look potential, company in I growth with makes over that combined our you event, the hope Supply, is whether Hal. what I leave I will my to Tractor like time and our I the Tractor talked our AND it today and team, With turn last in all it at years potential, the outlook, strong sustainable the at which proud reflective dedicated that, have customers. been is. TSR The through margin I Supply of and of Building with finance operating of tireless way. is with would and same I I the at with up, wrap recall of back to The future excited I the of the you performance As And loyalty Power on

Thanks, us. last couple Kurt. We appreciate audience of everyone in with the the spending hours

our additional an history quarterly As of One, by structural as capital capabilities approval Board’s I increase locations. the to Out committed quick that Here financial had of our home estimate operating combination XX.X%. of our to record the our are found vibrancy trade share long-term X,XXX discussed. deep we we for dividends with to be strategy we of authorization Supply Five, to to our and total capital revitalization, continue of opportunity to the includes see a our our We Two, strategy opportunity the summary in maintaining attractive update large, track we loyalty investing we such the $XXX our our with you Tractor we repurchases. digital many are disciplined the Q&A, a widen news compelling growing our a addressable create operate invest we Supply XX% and margin an an to a we and and competition. remain and today. and moat store in fragmented hope in through areas, we Four, and updates financial share for and total outlook to additional to has repurchase billion. to rural return Life of market and the flexibility our bringing growing now self-reliance, like stores, incremental shared to steady XXX Today, with Kind macro we $X allocation now a billion. transition that value to ownership announced XX.X% dividend success. shareholders pet we capitalizing you Three, Tractor provided shareholders. raising market the to benefits

We record a off years. coming are X

opportunities and tomorrow compelling Supply. Thank for team is have We future for continued to the The Tractor you. growth bright execute.

Now the before we’ll X-minute to you we [Video take go minute. See break Q&A a in a segment. Presentation]

Welcome back to the Q&A session of event. Tractor Supply’s enhanced earnings

they today’s housekeeping We to and per all follow-up presenters take have your necessary. assembled are with question couple notes to Please first. call a clarifying of ready of limit only A one questions. your if

plenty and time are very – so of ask any plenty in if have show back the session, queue in proactive you for to questions We welcome time get trying been to allow Q&A to additional this allows.

Supply Strategy Seth tuning just a Korzekwa, Barton; Marketing; Colin team, Technology, Commerce CEO, Officer. John Chief President Estep, Christi Officer; of SVP and Hal our of Chief Rob anyone Digital Lawton; Ordus, and For Merchandising and quick in, CFO, Yankee, Chief Officer; Chain Stores introduction Chief Mills, Officer; Kurt

already standing We have of folks a by. line

So, let’s question. first take our

from Sachs. first from McShane Kate Goldman morning, the question Our of comes line Kate. Good

everyone. good Hi, morning. Nice to see

centered is the around question operating opportunity. margin Our

this just operating was labor So you, the gave October spoke is you outlook X.X% outlook over of that about I and years. staying margin since thinking difference is time a the higher, the the in the what X% even same? expansion what year? biggest We each it in fairly when transportation And the top I range? X Is am wondered last guess is us with versus for Kurt. while is line it this cadence to the question we next

really On the with in regards last when as about XX back of performance lot our And a really to in earnings and to long-term the the confidence targets, hey, in the are the enhanced is morning the performance look Kate to the pleased one, the structural, have shown was factors ago. XX of one we event you months that more good operating the structural business. regards our it extremely of months of And for transitory company, nature thank and it Yes, business. visibility you margin, is key think you questions.

that gross structural it we your In of So, and and the margin that that that the cadence the confidence how break first us what I’ll the is belief and SG&A have what you seen some the to gives in about the factors? leverage. are question line really nature got over top the between of from down time. on SG&A have regards

managing certainly, right are So times, we that in we now gross unprecedented with margin, recognize inflationary really well.

through expect next normalization. timeframe and general but the supply scale expect normalize back chain on that those and inflation, I that might inflation nature We longer years modest typical we that more of to maybe believe in retail in as over in few more and mentioned, environment, able few transportation disruptions, a the But the to guidance, bit and end Transportation it. believe a price we our management. years XXXX our our can persist be and inflationary through to we take of easing a that little it manage we some actually

we in in right hitting investments SG&A our are long-term, understand We that, pressure the the thing the along now it’s investments it put In SG&A side, investments. addition with of on right and some for wages. we at that peak the investment on look the to those

able but easing efficiency that in programs our even Seth, long-term, our think to are have gross mention So, the we’ve investment, that of our to do heard grow and transforming from beginning of margin drive with margin scale our the a us be proud operating that the those next while efficiencies. X really maintaining grow along take where during our the believe top line. margin, can the that many us allows the you from got. profit time even invest on we pressure leverage stores to this operating really you key investments for potentially of drivers And I’ll years. stronger next the traction in about on improvement, when of operating inflation, ability We when pressures and to have couple years you about

algorithm above easing we the in with of be So it having but back little is that. of it the phenomenal XX% margin end And growth. the and will that bit excitement maybe it, again, more a of like operating that into an upside perhaps

from All right I question next and Baird. your guess, Benedict you. come Nice our Peter. Peter Thank Good with morning. you think to time will see afternoon.

going tougher here supply issues type of do some talk Mary yes, the one about with just you you years? I over complete to years, think you categories and And Side rollouts of Garden view then Congratulations. event wanted ask here you Lot, ‘XX. more the Fusion incremental how are and how the cost out all. bit over nice share I and done something after chain around maybe see Maybe to Side the to today. updated a you there about there. Maybe Hi, see Side guys you Lawn Thank to few Winn, and an some just get what really that can you maybe get TAM, guidance little what next Great is the you. Lot guess gave cadence next time the there. with on the within few on Lot, can on those your

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are On the very continue be Fusion with the – of to Side Lot. pleased returns returns, and we both very

call, on stores stores kind cycle, kind XX-month then kind our high get once are maturity shared kind of of our we As at of single-digit comp in earnings running are that that cycle. the of mid-single-digit the And they right last Fusion-only combo comp.

XXX our that spring that got mark excited in Side that around time very combos will Lot XX-month We’re we’ve hit. hitting the stores about be right

So some and it’s those sales stores. going drive great us drive to for fresh be with share to a opportunity some

kind And $XX think presentation one the to billion gardening, category dominantly for is of goods. talked our adding TAM. and about it’s opportunity. and my is And TAM, a that great about live fresh us, we On lawn a we in

least we first as about that we the they in stores. Our number we as talked about of customers results I seeing about, them serve talked category that being we’re participate in. one it qualitatively, And cohort the talked in great

investments. if And our to a little really much then that kind can million to $XXX a depending the you again, nuances anywhere nuance couple The the chain and That of $X $XXX cost, store. is just depending our strong the that into capital About you upon $X.X million with $XXX capital our we is over Fusion, combo XXX we But all is cases. on other with there it excited pleased garden of year, return hitting business spring the Lot divide on store age the really from sense. take this of each stores store leaves But as million so toughly, the get think we’re investment hard kind for Side to store. of about the supply said, about individual technology. business Side the range stores left took the of million Lot those and a of XXX I getting season. is that On each from get store setup store because return around way of to open it’s million, million really when we’re hundred And having the about that hit roughly. involves it’s

super That’s much, helpful. guys. Thanks so

Wells And Fadem our next with question comes Fargo. Zach. Zach from Hey,

the for great the taking for all thanks today. data Hey, question. And thanks

comp So like to up are XXXX. Fusion stores you through basis looks Lot about question, following lift on last X, the seeing per XXX lift which with that alone Side XXX in year combo single-digit year noted and high point a

first like double-digit performed all, the it So early of lift. a closer XXXX sounds to cohorts

average. beyond So continue curious whether confirm the company line they that. could outcomp then fleet more broader you to any And will on in wanted I have in with if X what fall and to those or the stores just thoughts year and back

thanks and today. us your I appreciate and I’d things. say Zach, two Hey. question, joining for

for kind XX-month think clarify, the First right combo around we’re high of kind single-digit what now, I off, to stores. the mark the is on of record

that’s comp, As I impact on it right. around that’s relates the think to – roughly

last You yet that and over lift business better the enhanced Fusion in can X% right, Kurt in and X%, XXX long-term XX% should well comp And math, And thing is comp guidance. from and growth. the X% and our the of of That’s other mid-single-digit in having even be. in confident that was about making call impact the the those And because the said, in base baked do XX% we’re the and the And really have we stores really areas we’re Lot of revenue, top we to revenue business. and drive store we’re about investments it, of to and sales here date. X% XXXX, in still spring And contribution as X last over XX% time did in on X% growth XX%, Side it take, we’re that to October kind annually. revenues our going roughly season, a as they on it’s larger earnings the we Side do investor us guidance. said, revenue to call confidence getting we’re holding that that are certainly bigger growth an that excited And that’s what XX% on that we’re the on of growth very Lot our years. it after there go can are again, read gives

Thanks Really today. so much. time appreciate the

Zach. Thanks,

with next Piper Keith question Hi, our comes from Sandler. Peter. Peter And

Hi, dig discussion. into some see Good presentation you gross terrific the thanks, everyone. today. I to and to of margin wanted a

what goes we could that product the growth the also about in gross driver. I the mix seen margin was think hindered mix be I the would expansion. a as thinking That C.U.E. business, mentioned of product historically with forward drivers, center positive counter kind in by with to garden think

categories pricing about drive promotions, could promotions you a then think in positive promotions, you too? those, could and been lot that So thinking some delivering lower you about what how and there on margin because other hasn’t last the positive drivers might can thinking shift? on X mix maybe years? bit unpack there margin, unpack And about you little expansion on you’re skepticism how be of maybe product just furthermore, So gross the do that feel to

is now pressure balance Peter, is manage you performing. What would when question. margin today historically, talked gross potentially we’ve bit where see company. the the we of Hey, put C.U.E. could we would look And on were fleet a if we the thanks, really Great to forward, say I little Good as when I of four that about you the at this Seth. today. look is walls say outpacing

there. while is our seeing at really right? for year, and today, continuing that could premium C.U.E., we’re have people, So We’re we’re go even that our contribute do apparel the outside all us we’re area particularly, walls pushing us to segment we today. is toy our truck for forecast number at anticipating we’re the outpacing, and premiumize we But I look and to seeing segment. store, that C.U.E. really this well doing estimate look and that we sales also continue four call four to sales well into the out of around upcoming it, that, walls of

coupled we’re outperform, product So those more have there. the with confident drive feel along manage to while store, continuing that technology be drive to to We able is those able sophisticated the to coming margin be in C.U.E. to past. continue to and ability business, the of that that than today, footsteps, to the of gross the that our targets the have which have the deliver balance the C.U.E., continue are pricing is out we at much in look looking we with we pressures mix in

luck. Okay, guys. thanks so Good much,

our And at Guggenheim. comes Forbes Steve from next question

everybody. afternoon, Good

Hi, Steve.

I digital on growth. to e-commerce focus and wanted

the by next mid of CAGR a a, So you mentioned think, couple Hal which or about penetration XXXX, in Rob, years. I ‘XX XX% is

profitability your increased average So transactions can all evolved? that’s engages of how of customer on numbers how this seeing within you’re And channel? this average the channel initiatives behind customer has you with this comment that channel, whether The the cohorts?

over for Rob Thanks appreciate it Steve. to address to Absolutely, Yes. your pass that. it. I And I’ll question.

you question. you, and see to for Great the Steve. morning, Good thank

well from they first perspective. have of and with with as that are So regards you the is to heard Club. power very data And presentation, Neighbor’s as the focus digital leveraging definitely my around in the customer key mobility through as the a interaction, we engaging the customer

We have tremendous growth. seen

to confident We friction remove telling that contributions we’re their customer, convenience. personalized the really for are Supply. and really services From do experience any profitable. that rate. to need just how simply, a really extremely that they driving penetration we’re of with holding perspective, the And Tractor ability and We product, with back what deliver drive in you

have business. We online a profitable

continue, of work great done at a been can’t store and store? and growth the improve work as through through the hub, as primary buy either online We driven to look course, product the as do capability our him. to day we tremendous pickup the Same the the that’s look business will well from We being as see profitability, curbside ways as this of from profitability, well delivery, has analytics as store all the assortment fulfill well mix leveraging being pickup, at understanding our which as opportunity. delivering that’s how

back some shared it I piece, is first. mobile on. we’re we’re focusing to going putting capabilities around core how Lastly, that And the mobile

Neighbor’s the leveraging as customer and ensure to power Club using connected all knowing that the When the times. analytics the we’re are at researching We’re always items you that that are drive customer of fulfilling with connected that that that and so they the team that back expert, store through and ordering how order process, you being way store, the and hub back do connection all actually customer when to member. so to the you’re

So we’re knowledge, providing that that customer trust our the and trusted. authority that

And so I guess that. I’ll leave you with

both and the strategy ready. data to road listen We continue to to we forward, the we’re well but engaging we’re clear how as the strong customer. a we’re as have We a move profitability, will we’re We to map, and customer. the on leverage focus

Thank you.

Ciccarelli at to you. question our Hey, will Nice next come Thanks, from see Steve. Scot. And Scot Truist.

good Thanks Mary as lot, Winn, a see you to well.

institute at So the your new years? is of a the source get think effect? over the kind X Or heads my you growth has do the significant – because question customers. centers. Tractor away kind when cohort for of acquired my cohort been we patterns, the this have But ‘XX, new new around from Supply kind of last that to a to few question look same and is, customer people is customer it changes urban of the all cause can able been some of XXXX customers has moved And years. I new with I guess last Obviously, from our

And appreciate our I joining Thanks to it customers over Yes, insights much Christi talk customer toss and today. hey, new question for the you event. the seeing. I’ll to us for the so about for Scott.

Scott, thanks for Hi, new looking the I’m talking to question. customers. you to about forward our

I even in we’ve pre-pandemic larger number really in a mean, very We not had You’re new customers, didn’t the record similar, XXXX if growth but wane XXXX. during during pandemic that right. XXXX. saw of a

So from to do us, those has and is XXXX. structural happening rural that ex-urban customers and from are XX% And our a – us to we’re that, urban are sales customers. in lot in that suburban, what coming relative in back changes coming areas. more with We those see to even of are coming these the to moving rural new to revitalization that are with pandemic finding millennials

of feel So about need pet continue. it customer, the positive incredibly lot are new structural Tractor of buying we at into there. are neighborhoods. growth our record Supply They are nature They that they space. of garden, are our homes adoptions and given will starting to A starting the flocks, They business, areas, our moving trade highs.

new that our that lot those momentum power trade an so still that lot and XX just be customers our should optimistic at we shopping us excited incredibly end of talk can customers far areas, just about is behind identified still within So, that are and of certainly, million from a to runway we just it.

have just which so live and expanded just is migration and of So to if kind areas I it? towards you clarify, guys is goods, might, customer garden this the isn’t what’s driven your this because regions,

the work into mix, a individuals maturing have lot our certainly say trends we say combination moving of because customers a the and home. it’s our because our that it’s of I would we from merchandising trade would areas. I is fact I things. It’s would the have it it’s lifestyle. I of many say because into of the say would

be that have or XX there our that that trade next be in attracting attributing million customers we years a should to we is runway factors So going many come. to are certainly – us of glad with growth, over are areas that to shopping the lot the the

you very much. Thank

Thank you.

Our Simeon. Simeon Nice Morgan see with Gutman you. Hi, to from next comes question Stanley.

How question operating a Kate you to are wanted follow-up you at Kurt, to doing? I look go funny asked margin. on that the camera. I about

at your If your were XX% and up just you about XX%. over SG&A XXXX, store per store sales per look XXXX your up business were in versus

across follow. you all you spent of that’s all your the get So into growth, of about and the tightest companies spreads we

your your past So you it like seem if to your going comps down, going continues EBIT way compound Unless continues would and SG&A the is pressure your your to margin new gross grow for a investment upward X% comes numbers lot to on is of and X% at there today. cycle business peak. margin guided forward,

So that with logic? wrong what’s

you thank yes, the Simeon, question. for

managing it’s And one. this a team great think on is margin I overall. focused basically operating our

the X Here’s regards that to of couple things years. X over a to in next the

pointed doing the of our look You that making investments look a at operating position When strength on the future. out we’re for invest we business. what we at margin, we’re from and to the

help We’re making chain will And making we’re in supply SG&A, the that investments those in help key investments and chain. share the and margin. supply drive market gross investments drive the will in our the sales

We’re team. making support activity field investments

investments in making IT We’re our technology.

in getting there price that for customer gross in right going and the enhance in put really competitive to that investments, financial to able line uncertainties years. and algorithm margin I’ve good on be a top long-term and we’re operating the driving we balanced. it’s focused some making on SG&A, my that on presentation, be going being margin, to that share and a to slide the and yes, the we’re maintaining recognize inflation. today, keeping unprecedented is mentioned focus some that good our I our ability market even the puts differ So but between pressure the to But

like to most We’re seeing our sure in stores, in retail. and the all our of doing business positioned inflation with those wage invest technology expenses again of having make by we’re in just along still COVID that things

prudent some expectations some is our the costs those careful. financial us factors into And in that like pretty we thing want to we positive long-term, opportunity there and for give does doing approach those be in We be being that years. while right operating the these making feel throughout of prudent that margin. the sure and that business X in the continue of real All opportunity. to turn we’re want we’re play the have steady to and We algorithm, for

Thank you, everyone.

Simeon. Thanks,

Simeon. Thanks,

Hey, Our next from Michael. Michael of UBS. question comes Lasser

Good Thanks my morning. question. taking for

to XXX get for an Your inflation going basis you’re points guidance assumes contribution. year this that of

You also mentioned you up. expect to traffic be

So let’s your you comp the range. to assume going up that’s basis of end high be XX

clarifying, after follow-up, year? that your potential have the into factored your deflation to for enhanced fiscal You support Presumably, tax this in How child of this payments also prospect from unemployment mentioned ticket as and what’s under amount expect customer chain for a categories? extraordinary last and you big stimulus, an year. you be your through some saw guidance get a disruption, supply that also And pressure core quick we government year.

is about. of ticket of kind for points then range comp in formula. of Yes. deflation, that big because couple this on growth, committed kind a provided to over the we unit – on X% share out opportunity our do big of inflation about committed We there surge year that’s talked netting years that. and guidance of will we’re the our growth ticket, And And year. really to we made of – the that past we transaction comp gained likely back I to the of there, there of up, a X% kind drive math range to balance is kind question. points. four there comp transactions. is feel last on there. tanks continue up couple you think about ticket a due transactions a and the to points to to of And year’s a think Michael, that the kind I get the math that in comp always And give very of so substantial And then we’re is of in reflect mean stimulus of is to of Hey, kind good I think

seen the freight, cost of in for really terms of at, I we’ve majority goods, of the wages, is, Dominantly structural it’s the a the unlikely for I whether that think variety we’re foreseeable many reasons. the future imports. that’s that new of inflation think, of levels

really it’s wages, manufacturers’ I of and drove XX, lot to think wages. cycle going to the other I’d structural don’t a increases goods I a in mean, seeing past see we’re months on I we’re on they inflation, of the goods kind of of cost been see kind of to that of don’t And it’s but due so. due core And here, going raw costs. the to significant materials to our board. those at our I or deflation cost is holding the that a know due it. other we’re next know XX of inflation, say really certainly commodities thing steel, across goods continue see cost will

structural before. more in tools I had nature. engines our thing pricing So I our pricing and it’s is competitive lot think that sophistication we leave more we around would The final

just we’ve shown regardless a I And and continue through inflationary deliberate be environment whether we’re agile, deliver the gain in in flexible, to to ability we that. the navigate that’s environment of share deflationary our priced sophisticated results, stay the our lot a it’s can so commitment, market, way performance, But evolves, and an more or how think environment.

and good luck. you Thank

Thanks, Michael.

you? are come to JPMorgan. Our Horvers how at is from next going question Hey, Chris Chris,

for Thanks. Good thank afternoon, presentation. the you

a So a bit of follow-up to question Michael.

some and you perspective? side, ruralization? your inflation, simply rate expectation margin housing, from similarly, as taken perspective dollar into account not you to So versus from continued then product macro in a think the any headwinds elasticity about rates to have that on Is a the effect think as you saw inflation. sensitivity potential gross And and about rate gross your you wealth that cost profit of for gross higher business you margin managing considering

you Yes. good with pricing. I’d Hey, off, and And Chris on to today. say, first speak

then tune price to, single every needed passed And I Also sure I think mean, have efficiency. done price. advocate have and we in the making found in customer navigating of inflation to day. right being cost a of price inflation and staying fantastic job to X.X% inflation X% has team factors on QX. the we the and that finding and many price price productivity we’re where QX and through environment, it necessary the offsets for the

X% kind the of price single-digit half reflects I talked cycle back settle second guidance single the low through half. as that a about the XXXX inflation digits and think we to first for starting inflation our into in higher

to But is that navigate is navigate, takes, Chris, the inflation more to all I question? of we at there risk and And as think remind the the to the upside through our you continue there than look second me, downside. go on team If part puts assumption forward. will the the

for consumer stock that’s sort think of seen time of some in benefit. clearly, increases, about that So rural you’ve price Surely, your effect you the you’ve spend market impact the a more to had rates, house people had homes. and wealth consumer as strong as ruralization – sort low

the rates engine? from moving headwinds have and So up into decelerating housing and account you any potential wealth taken

million available There well say, they the Christi our of customer, the ways is really market health home think, million. an monitor X.X right? million whether number home It’s qualitative. is Yes. right and a certainly I’d something team we $X the are sales, it’s have and the closely. watch strong, that existing last now, than on above of new million, basis. annualized less I that month, homes X.X market built now X on being XXX,XXX around, homes right quantitative

really I think that’s in of going in likely home continue the next even couple minimum, of to even within at interest of spite reason, years spite prices. for a rates – and

projects. a $X our over When just savings. and pent-up big now I people think general, trillion it’s on. still And continue to a You got buy homes. us. that’s I creates And It’s starter, consumer business. or it in around generation has of transact good homes, for wanting we going purchase that project to think homes see millennial The that’s in

year so think they to if X, think really the environment the the last in this questions. country. forecasted as bit. this tap look XXXX. much, or a runway into a is growth certainly to the kind I your on we’re consumer for the being at that is for savings I Thanks there started balance market so across GDP of that speak, those out better there. pent-up they customers of to And little very Chris as favorable But drive I data, And I down, the head navigated have you think we month rural have think a average into than draw

is Thanks, And with are next Scott, today? you, Hey, up how RX. Scott Chris. Mushkin

Hi, and This having Mary Thanks thanks Winn. me for for How you on conducting. doing? is great. are guys

It to like it kind category, over wanted me of said a kind I things, are only you guys Garden changes. lifestyle you where a as and you bigger could superstore. there the Lawn of more side but is attack clearly, growth It several seems is an if become there the years. these get begun look available lot is seems revenue think I your next revenue mean, adjacent online. categories into just like right, you I to actually make you more into guys other of lot and of So algorithm. And to transition some the

to to making store that. you about also the wanted ask I ask wanted experiential. I about So more

on like check but the another have can services, and that you We based additional speed opportunity lot way. revenue this, to is attack do in layer more the then services obviously it’s there seems you all it actually company And a and here. have that, finally enormous again, do growth stuff guys like in significantly to so a could and And for come higher?

bit first? of clinics that the Hey, maybe and things, two Scott, little assortment and And pet that talk watches, want it’s thanks going X-H and question. hit in with the recap FFA type break And experiences so video of little you can the evolving But a stores, of chip the to our he and we many much maybe of to other that. I do. parts the think assortment that bit days, up the can Seth, talk in into some Seth, John we’re shared about then the of whether much stuff we’re you a and how expansion kind about

perspective, see great expansion addressable the Scott, the from you. our to and core market. to that’s opportunity. our us know are buying we’re outlined excites are incredibly absolutely. merchandising that know that Hey, both because shopper as you’re where and I’m really, total we our excited of have question. market lifestyle. a them share about our finding we’re Yes, for exactly I And talking what about and how earlier business we They across these Supply considerable Thanks this really as Tractor we new finding opportunities we seeing introducing shoppers have what

but continuing after that the our merchants talk on looking the Our on. differentiation, are going looking experiences garden go exclusivity, at driving with box, the front box. centers, John and partnerships, inside that to what attack outside we’re in with could store will both also Obviously, aprons

looking it brands, and like to in attack. Ariat And so into we’re those apparel like as at own whether we’re things in Again, Carhartt, well like the things this and that as talk really trends we’re Ridgecut our the that you seeing I about mean, looking be expanding women’s, exclusive year. are

Pro. And is like for Chick for Supply things like etcetera. in And where be we’re this market, talk we’re partnership playing in market, believe them. about marketplace goods. these OPE constant, the on we as with created you well after, continue we’re That’s to. We up considered to we have the introduction rural science like in. week, seeing what shoppers these we’ve big really Greenworks think really growth mentioned consumer. one talked today, play to approaching whether and constant the doubling going just as we that would shoppers a category about the waiting went Days, past one or well product future. spring. with I’m store. that’s diet, continue the go things the that going to Greenworks new per been like And brands Tractor demands but And and and that not brands our partnership coming share we’ve of around and got As we’re down But but the trending pet, would we know newness be go market and really like it have But the opportunities, can like are that I you have Victor that been also live towards announced excited electrification and shoppers team new that as that really about specialty of Proplan, after in if area in like the we’re with like of to We going that – after, we’ve after on really this that battery stand

within day the and talk there. all in So with can absolutely and with and store expansion but also the I Rob agree long just team store, not that product online our about product

experiences. it So over John, I’ll about turn to talk

Good you, Scott. Hey, see again. Yes. to

Hey, John. Good to see you.

So a it different in I’m couple going to break down parts.

So one is we hire our customers.

members team have inside everything we our our love stores. So that of talking about

conversation with in customers goes days, the They chicks. is the have side a in come when there. that chick we forth know work chick and our up that where brought and here, between member. good that store, event back you an team it’s there They captains So of customer chicks

The theater the Greenworks, is love we side do of our stuff store. the other we things for like of inside

an weed So outside, the a doing different the whipper equipment to we’re Greenworks team buy, we test year, try our using different this and weekend some we’re before and be you members power all using going and going blowers are like to materials. things the driving have events be and using our where and even

thing is able love to to involvement. community The be the other we have

it them, donations things in we like chicken FFA. do where We hot We’ve So bring outside. do different talk can our like for front. swaps other, each in, things out but come do to they and customers things dogs we X-H, have

up kind part So break look parts, into different of communities. we many be but we of individual those to

question. in into full of in Yes. services assortment, just Thanks corner wrap right? power were so every are we expansion a the as A of And shared, the kind mentioning, for up store shared into here, modern, more much, of you of Seth pushing Scott, literally really into legitimate commitment doing offering, over deepening trucks. pet expansion like live own tools a pet chorale, with animal bringing now feed, delivery tool our stores fledge into of John XXX kind our goods, expanding wash. has pet around contemporary

mid-single-digit that those our just to the more those and sweating so getting store, envelope, speak, pushing delivering of out stores we’re just productivity all so of every the things around assets on inch many So more, comps.

share is rates. above do and above we to an year above single goal grow we’ve exciting plan think GDP, every retail to gain got grow And market growth to to to grow that. Our

guys. Thanks,

Thanks, Scott.

much, is so TAG. Please Joe. Joe question. next Feldman your Scott. Hi, with ahead with Thanks go Up

the I have opportunities all do question. front the in guys. Hi, for Thanks you just you about wanted you. of that everything ask, taking to given said

And You’ve share times. tuck-in it acquire product thinking that. wondering just competitors? Is infrastructure better? business a the acquisitions you I’m even some few that there. lines you’re new just getting to wanted or to more just run or for thoughts small on to into mentioned categories what Is I

capital tuck-in to acquisitions and then about share that? after our talk Yes, Kurt, you do strategy allocation want

Yes, definitely.

priority Just opportunity, there. – of new with more allocation. a rent to making and The number mentioned, significant and productivity reiterating sweat have already I assets our capital the stores still the one to our the is that in as the decade growth of investing runway stores. put Certainly, investments the occupancy in those we’re stores, nearly start and we I’ll see in

and So to repurchases, of the Joe, share increase market both growth a feel step-up got the opportunity, to to we’ve tremendous Board’s and we to XX% market dividends. flow the total grab point, your so operating in approval announce able first, with addressable will the thrilled there. with much share growth return in business in and the be dividend and after of of the course, Then grab consistent that, cash the opportunity

is much core. an far strategy highly sometimes in Tractor As grab acquisitive. is opportunities, there is are the not where estate tuck-in exit our are We Supply We’ve are it where in say, real But open we been we where to there our hey, acquisitions not or in. industry, If opportunity the there opportunity. as to and opportunity feel there we’re that that that in niche there mean complement. area then, not opportunities. I we’re so is to look at

at look opportunities. more and that certainly what really on is initiatives radar you build, be us our of on front a things a it’s strategy Life part there Here got excited there versus there of is the that acquisition, if builds capability But opportunity. so will that in of And right strategic may and one complementary from opportunistic buy to Out we’ve of hear about as us, we that if

you. Thank

Thanks, Joe.

Our question Hi, Brian comes at you? next Oppenheimer. Brian, are Nagel from how

you presentation, thank doing? Great are morning. Good How you. Good.

share a rebasing So is of some to about big sales. the all just themes Supply, more changes the that But I to mean the actually I think a of taken more a you’ve But have for and on this today’s But gains. portion my as that seeing clearly, you’re that is – Or set been is clearly market you maybe prior is now meet are – color back happening? share? market Supply. permanent I maybe follow-up Tractor see now? you guess comments market bit dynamic, at the – opportunity to sort sustainability the share look years. And there academic I it’s say about these what there through question one wins I with the seeing some for where competitive we share – in There other your you population more higher on know of starting is this that mean seeded always fight a is you to more time, starting side, gains? competitors questions. Are of lend to the that market living there in share as there are Tractor is in people and lifestyle – – some large same of talked

for Hey, question. three into thanks the Brian, I’ll break it buckets.

and in about market First years, And think implied X all at aggregate the trends you does we’ve to that the over last that few over in grew years. your talked off, our say outlined question. about we I XX% those

our got Club, stores of substantial for our handheld our our team in headsets highlight in in team I’ll things Honeywell store We’ve digital structural the two train the we devices. in inside technology we second our members investment. use base our business, supply and our Neighbor’s members, chain, are around The Theatro and our really way advantages like our

rate we It in things the gained context are marketing, those digital. that up the over staffed, heavily perhaps others was expense the stores grown the the mentioned invested and kept historically we a in invested had we others the in We a about them the inventory back back that had shopping paid to change those pick in a out grew slip our buy X the once in come didn’t. Neighbor’s talk few reason into reason them invested XX% We We we our to And X quite put really as to is growth service in we it’s double that stores. into in we think We them. for years. chain lot years. not some we there. others them over business, earlier we people And been partnerships is the had our sales we the – talked program we that online, our there a allow product flow last because last our have – to really unless market are of that as their bringing when we and we – wages, and years I back And because it’s people margins way customers had let in invested down. so stores. store infrequent had up supply the over things able appropriate of And as over sales, operating behaviors, couldn’t. much Club And

The Out all all the year, – Side the Here that the the about on we made. on Lot Life Fusion doubled made stores. third single only strategy, talked in and was digits thing we’ve the XXX is Last we incremental stores, mid-single garden investments Fusion, center investments digits combo XXX incremental high structural stores, on stores. all technology our the And

the it kind driving that more to sales of we’re those three in us in market, operating on in plus a the of and comps, having those higher that with kind drive of I years initial the those investing customers excited about into of the trends impact those But our to So and gain with of to are buckets, overall midst momentum see share. break base. top X and last the even business structural future, holding to our it’s then committed on we excellence continuing starting to being

Hal. really Thanks, helpful. That’s Congrats.

Thanks, Brian.

Thanks, Brian.

Short you are Hi, How Karen with Next today? question comes from Barclays. Karen.

much couple questions. Hi. a of Yes, very everyone. Thanks

on the we should up of unit I growing guess you in about question potential, depending at Just that rate if would your on the million then relationship? detail, versus top algorithm, scenarios, growth line customers, was think little Because about on incremental your And potential think more could XX given how actually and that your higher? a just unit within had wondering is algorithm. sales you is that bit your context when your the the following analysis that, potential have I the thought unit actually on I I second talk increased about growth

Yes.

So, take back will then Kurt operating leverage. about question unit to I the potential it to turn talk margin

at what the map stores team is. where value the the our ZIP then that we sophisticated stores. void void historically, of put up if We led has in stores kind the unit And look them have analysis map. take of we bounce code. know are, know John to we is potential, are financial On competitive ZIP a store and kind are. we those where have there? know of We what create spaces been that country, say, potential spaces code by that very demand our X,XXX those and and it model And does against us We

Now not now. some growth that with it new also but attractive spaces, financially previously attractive, more void financially in were our the some spaces creates that market, one, void makes

stores over outperformed last As X I business new mentioned, years our the case. significantly their have

in profitable are stores year. the new first Our

operating that, is we combination to of feel And factors leverage. the number. on up in to hopefully, but X,XXX years, very And our of confident we in And Kurt very there couple of target more X,XXX. those new feel talk so can that And good led a take from that store number. about our top us margin about

Yes. to good you. see Hey Karen,

clarification on the me Let it EBIT. up broke on ask question because for a you

question I margin EBIT that. but know just it and an sales growth, So, was maybe also referencing clarify

grows that line right? growth I you rainwear what with sales Well, don’t guidance, range thinking growth a slightly sales the percent but we a in where rate. site it decent historically, at about your or to within greater relative growth grows to to growth, know was done think the have the it no, So, EBIT

how the So, you that of the algorithm? about within think just wondering context

and I the reference about supply our the mean an in if margin to is and important regarding there Yes, will – we the question now technology – is lot in I outlook, an key just investments, a that standpoint, see and make our the great. stores the From of right operating long-term think again, EBIT will chain. that opportunity be in investment we

investment And the the so SG&A, we sales. leverage are the in through our as on from those and leverage see investments also the great we efficiencies, operating make pressures growth

and operating – years, the inflation X we and see And so offset we definite years next can investments the we have efficiencies. pressure X with over to from with leverage the that

got gross those able see to margin. also margin time the from side, grow investments over that gross On opportunity have we the we our

there and good some some work our see doing is be Seth margin grow in with and the there. to that of Colin So, opportunity that here a and with really able faster rate scale opportunity are gross that to at

is algorithm, investments X-year assumption also operating grow. is to period the as margin growth SG&A in to an giving there over in growing gross these margin the from the from but our investments our our out opportunity margin assumption that side. And balance be top likely gross in more our So, our line, side we efficiencies, the are that the

Okay. Thank very much. you

way growth I for is a of which XX%, and then couple got buying you you And X%. EPS of in simple X% then like me you say would us the Karen, at through percent only a share of were growth, thing And revenue to the to have got Kurt took kind X% really of is back.

of next EPS year kind take this investment, which on kind will to or cycle means leads on and up to X.X of after average. we margin are those X% XX.X%. you of are that basis operating of kind earnings to of And kind slightly kind you annualized going So, that about particularly grow if point we sales which means better year, growing a grow with of an out, X% kind organically, to of

clarification the Chuck is Gordon great there from line Hal. next on Haskett. Up That’s Grom

customers Great today, great Thanks. lot million your everyone. one of was that presentation, called but additional the eye in trade the A area. statistics my Hi. really XX

hoping, margins How I gross the a to to of could timeline for the shoppers. then new Hal you was And for the gross acquiring spoke these the roughly speak XXXX. on year? throughout margins, as about for flattish cadence follow-up Christi I think we believe So, should

for Thanks customers. first acquired through And thinking customers. talking XXXX, about pre-pandemic new or the started question. our about million when I Yes. pandemic Hi we XX customers just our Chuck. the love

We are still comping the pre-pandemic numbers in XXXX.

did We than new in we XXXX have more pre-pandemic. customers

are to after and million those XX year XX% are is us attracting, a of So, million what XX returning we to shop. they

new those much that attracting But we so opportunity are of to retaining work see than the TAM XX Lot, more a trend on opportunity and to XX time. I new the customers. there is more every and with year would with are the and million over lot customers. even a million year, So, us now really customers of right Fusion in to And new attract for new Side million a just line accelerating and we XX us begin

an would just are and I And outstanding the speak, Yes. job. Christi team just doing

business, the points years raising ago points. from going XX XX our awareness think to of X I

awareness stores. through itself in And just whether then that top continue fantastic that at conversion the experience our and store then our and customers. into Now, build of assortment and on think team then I helped really and or as online. continues product kind traffic that have to awareness customer John those it’s grow we think increase, that service, drive store and And in XX-point the holding online has I of to

really is of the that to a held that, think think a As And of The was us we it is XX.X%. the about of kind to operating kind the continuing talked I XX.X%. in would way that we we rate margin have Last kind years, the as similar year was of it gain to of it XX.X%. about SG&A margin way bulk XX.X% last which the before to algorithm, very couple gross roughly flat. year, we did relates we see

investment few we once year year. As this next get particularly over we through the and years, think this next peak about

or doing maintaining then think be little at will to through in XX.X% the I see middle were structural have is what in between us we where range that the in year, not margins on creeping in. the us we some. that will with of gross the And And And not hold back of in I the whether last as could constrained of that’s to SG&A. we higher particularly the fantastic thing will remain importantly, think leverage navigating towards coming And asking clearance. then whether maybe be no this list no is cost team or through, supply and years great And nature and kind chain. that moderate gives then to behaviors some XX.X% kind the creep inflations we we still Seth passing in a to as can job into they the and that the offsetting and are of the look range X-year would all range. continuing it a end get of ways are evolved, promotions then the or little on couple years, really and to market little also after promotions And year to price. no out

future stay So, kind in we trip to little we our into of no as routes. good core EDLP feel kind promotions to and really of maintaining about look

you. Thank Alright.

question Oli, you Evercore Wintermantel Oli from are today. comes Hey ISI. how Thanks Chuck. And our next with

I your I outlook comps. traffic term very the question presentations the or within regarding today. Thanks. on the transactions Thanks for good. much Hi. a am had longer

how do mix next X drives over what If the you you And your that transactions? on within years, inflation normalizes an think about then traffic stores. if think the and traffic the basis, about between

Yes. Hey Oliver, I will take that.

First, beyond by XXXX quick about talking a then I will as and that. reminder, start just

transaction we So, have in are And than targeting and transaction to more ticket. positive comp said is what we plan for and XXXX, ticket positive likely comp lead XXXX.

into it doing driving that driving got new talked be have business thing, the categories. are in we on Beyond really ticket, the to the real our have that legendary service. comps of that and These drivers what momentum about digital the we that got got we initiatives between really focused delivering strategic year store driving a and that They are traffic if clicks XXXX with opportunity and both to of means market which Colin Side to means the and Fusion these different, are be Lot could refer it’s have initiatives about going on you think time in every traffic, And John the the you about, into share, types that is back XXXX, while be really pretty of the the talked balanced. to have some we on things, bit those strategic we is same work of footsteps on which stores long-term see balanced period XXXX because website. the of also

very luck. Good Thanks Okay. much.

much. so Thanks

Our Daniel, you? next how question comes are Hi Stephens. from at Daniel Imbro

about just you are turnover DCs a members any an DC Hi, volume? asked how you store on provide investments about given for talk doing is existing can team store you team efficiency, then the Colin, the efficiencies? the handle can And growth update the good to turnover about And you made? question. more? investments. and being about your the wage seeing How two-parter you handling But for as investments any then we maybe improve to morning. as talked on as in Thanks think infrastructure, are more stores, maybe today info Colin, issues had the in and we Hal as taking throughput think is existing all I the

turnover all-time joining I Yes. to when and relative turnovers our the at year certainly would today better saying, much that our fared about Thanks commitment increases question. appreciate and we the some think I modest to seen of first last than around in because most year, by we this our But Hi foremost, Daniel. companies. start commitment for have and and I were culture things and John lows. mission earlier our all talked values One, to we And and which last our substantial customers. served the other communities then terms hiring retention. investments years, in and couple well the And have benefits wages in secondly, made then benefits of and over of No – the in couple of substantially have in flow business, on through terms more C.U.E. sells our animal we years. animal last and we of are feed over feed up of one than bag the country kind us do. the us

our We are And their as pets, on side, one of – pet skew food retailers pet interestingly, customers larger the well. on top the on on right. particularly

vast a through, through. anyone So, more that’s and we of our dog than of food flow tonnage bags, certainly bags XX-pound XX-pound animal lot of sell food majority and are the

lowest We those to are the in the cost market. serve all

cost We are committed to to lowest being serve. the

couple and for be a that. a presentation him that’s years of be those. and to let to is next Colin’s going on in committed really able to And are elaborate what focus bit on be lot on the stock We of

thanks the question. for Sure. Daniel,

I that. than would investment distribution But a distribution As planning team have just our think it’s really in our It’s tough throughput, with more just And the throughput centers. that I enough. existing centers execute drive Hal far as year. can’t a record level to I say answered thank problem. last hit this to turnover, They we

make upstream working starts sure we team are our replenishment to allocation, with with So, our set with with success. centers for the it vendors, transportation our distribution

chain. is disruptions XXXX given XXXX, team across different supply we in well and at the all have publicized the that the So, phenomenally

culture, our and other leaders of we of at leadership can our at areas, have that’s frontline our we XXXX through developing with an improvement this centers, because they going last and are of walls made kind of bringing we investments we all year of for future. centers, years really the going the Within intense in foreseeable into distribution carry existing work profit distribution our previous because of benefits members four of choose the the reaping our team in work members. enduring know communication us efficiency strength of to treated that systems because the with centers execution Supply And to across mission, our engineered and team platform quality because way throughput they the most in to facilities but our drive to all those and within Tractor up Two, are these distribution importantly, go facilities. to And our common next over that’s standards to labor distribution geographical flexibility the schedule centers.

Good luck. you. Thank

Daniel. Thanks it. Appreciate

comes Zaccone Steve. at question next Hi Citi. our And Steve from

Great. for XXXX taking a just targets. I then longer Winn. on Hi had today. like Mary presentation my Thanks on question. follow-up question the for term and a the Thanks

targets, could the So, this doesn’t cycling we And seem what nature. to inflation broad-based a than of the It relative perspective year. term maybe you a don’t about a in from give-back like that the you just What’s strength. is some had level to the it’s category us, that in from It have you the met think confidence about I driving longer inflation talked saw the year of XXXX on talk an more here? give-back time like potential you other really XXXX? last factoring about perspective, the you with giveback seems question

would inflation with about you back really Relative outlook this – are then year, into versus as on what Steve, their steel, would and is to that this etcetera. And in continue pressure, whether to is is the Hi of that more labor be to, would our into we Seth. have overseas call if where XXXX what past go cost other to to we it, think broad-based. grains, what are more getting I you say we started is that supplier XXXX beginning side, year, commodity pressures it roll is move entered this year today, to rates, from goods cost continued and right? markets, the I components say here, And of were then we it

the at done measure elasticities team able be sure accordingly. P&L market out sure And though, and we perspective, price And across front same and is what’s our fantastic manage are analyst can the know right our when about at we that so say last time, broad-based we us. the looking I relative our and be drive tools an think to coming in pricing has year, from know where of and is in more about that, walls. the What share, make to to go priced a you job would make we – that the us four utilizing the to sophistication, market,

So, as really went you it look steel. into really year, did started at commodities, last

it we more in where is XXXX. heading and that’s it see Now broad-based

or a the not Christi the line it. back entering about question of that as of an the types talking growth those three on tee, will Supply. in really way is to, almost permanent where of of consistency. the homes, on saw am back powerful XX-month then X on the hobbies question had we we give the reference to to to in shifts of And slides in have things but this question and ticket. things have think it, back each some graph And basket, call, of XX that growth how they temporary those that as of mentioned in time. And broad, last it resilient go period people Best your biggest began growth in was lifestyle, to and have customers, shift back locations, I was consistency. it of we fact about regards we in the talked over reference, was into well earnings take are to the really that product But and brick-and-mortar and from we reference but assuming in new will quarters, Hi, period the much of growth. at give-back XX% referred favor about a back all piece the an you the that fact the when and buying quarters, years step-up back get had was Last growth as what existing answered I look so transaction to categories one months Steven. over that really transitory, And are how with I millennials of comp. an I from example digital only many this that presented, had example, is structural the year. that when existing all our really you ago, me growth I new legitimate there that customers, then, enhanced as time, geographic and XX% transactions the well what diverse the this that’s behavior is Tractor our and what in in of

relationships work our So, are excited difference the that, that we Supply. benefiting solidified what It’s enduring the ago it presenting between really months customer what through are that future. Tractor and we that outlook these was for really about really XX are versus today, as

Very helpful guys. Thanks very much.

Appreciate Steven. Thanks it.

from Suzuki of comes question next Liz. our with America. And Hi Liz Bank

so this that Thanks alternative question are question number? a those had in just the X,XXX Side correct I be as will view that there of all And that long-term much base. to related will store what a layout Karen’s X,XXX might you about Fusion Petsense, opportunity have that follow-up Hey. event. for it the considered assume hosting stores majority to Lot, that Is about or vast and essentially the have store for store and any formats base? ultimately

that’s Fusion All being with are Yes, layouts. Liz. Hi correct. new built the Yes. stores

in that be will was case So and XXXX the forward. the case and – moving

our the tells it’s relates garden gave store-by-store What stores had driving job it I store a an that the number would whether lead with growth, on a Rubin and built is say it As the joined to as talk center, existing and last this of that They And haven’t the the XXXX, incremental majority vast Petsense, business, in to year, today, built. opportunity year a a garden excellent year new garden stores or of not depends but strong the guidance had kind center, market business really to the this relates to Matthew that’s on have center, of of us. basis, assessment to through the excellent very new what our will is an us the profit well. then doing growth on some we we done business. about base time store business the presentation. of is about chance sales

sell We several integration Petsense. health elements like inside have branded now made that customer facing of for food are we of

the process and also some year on integration We are of in of the in integration branding. on in doing some Neighbor’s terms Club things later

base. now inventory right individual also the stores are of platform, store We implemented And now, software whereas are of kind Petsense. of on we inside a the are kind centralized via also working taking that our done

driving it. The of lot going make team Supply great And is job a leverage of Petsense breadth to Tractor the on a to work so doing is better.

built We that a for have Petsense we about that year, stores number new excited and will future are this got the business. of be of

Thank Great. so much. you

got time questions. two for have We more

a hearing of we will go And with So, Bobby. you. bit we next trouble are up little Bobby up more Bobby, having two to Hi Griffin James. is questions. Raymond

Mary Winn. you, Thank Yes.

grows, those guess about to I the embedded Is is think way – market that. about the rate to it growth the long-term right targets. Sorry Is what the want in targets? quickly is rate I growth picks the say, the just in X the up grow comps, to unpack and Tractor growth of share line from share market that is going in to and market gains come comps X or point growth? then the new market a store with market

long-term And GDP, a is to kind it it’s the the think great about latter, country X%. X% we that of Yes, of question. I think kind

to above comp Our market of grows our up guidance maybe X%. and maybe point kind to X% typically X.X% that, with X.X-ish of X.X%, X% ease

we certainly that. to allows take share markets building that And the new in on share of then are are incremental of already just us the stores taking in. top We

of share digital. store bit new through productivity. it’s build-outs taking a but as also it’s on both our blend growing the mentioned, certainly of scenarios of then sales top existing it So, two gaining a our well stores, you that, with as And

Thank you. of luck. Best

will come with question. question John John, your last our from And go Benchmark. Bobby. Thanks please Lawrence ahead with

How the pet year. around clinics. Great. go you you pet mentioned mentioned what in talk customer from seeing that’s pull doing could you veterinarians had think the and wellness And one of add washes of business? little be? you you that are on he And little the the so other what I Just and a into talk this great does big about and categories? the Can how that Can those Does the over with for bit bit you this shop? when much availability congrats a you today, business business. Thanks XX. happens environment?

for the questions. Thanks Hi. Yes.

last that our of store. off saying about mentioned We I business our And is food pet C.U.E. overall out-comping pet business. its our even off, dog talked and C.U.E. performance strong. incredibly by is then quarters, would particularly start our dry we handful over outperforming First the

and how let is online. bit talk providing strong, little a we very clinic make services are in-store or certainly a and and John we suite in or we about to around have business And our pet both the So, pet that a pet a then And sure clinic plays want our full a wash stores. that. dynamics I of will mobile out

for question. Yes. Thanks the John

– the washes like uses using pet the as wash. soon So, back. as come customer to continue so our back back They They pet a back. and pet wash, love to come they and

will washers XXX stores over do washes. some a where in week pet We have pet

So, it, pet. they really able likes feed doesn’t the have of to It be though. and dog customer care their a that take it. They enjoy always they like being love to

it’s else. something Sometimes

You do asked after they that. about what

come shopping will the and other a pick while if rest They pet, pet will they clinics So, one the the of out number you let’s these love your get front We thing they in, collar. there. so want Christi we them. it come and first out front the taking the done. that store get will dogs of you the stores, clinics. wellness of you there, they also them our pet go the wash out their the to our of their can’t up in use advertise clinics of they Because customers to lines get is out for something or mobile new have you Customers her for up care some then Out into thing And will sign team then there. buy collar. to and do get stores the getting is up

something the for customers do really convenience it it. they our So, that They we like. fact about love love the it’s them,

stores those add or those How could many over of projects? you time

Yes.

not stores. a real a a is So, space the kind Really, of going only component pet kind core Fusion into now limitation. Fusion set when legit of outline time of wash our it’s a stores there is

weeks, have a vast a over minimum, for the mobile of there twice but wash. it clinics, a had our The that majority it’s stores mobile our vast the having our pet is us. the see more majority time, a stores a week. At stores clinics, in we already then clinics. So, think on what mode I of still of a every testing that bit is And wellness two lot

store, we As are range. in XX Seth kind that talked, store of XX

or some and performance we years. of year over We those, the do the we performance through and excited year more next Fusion, this look benefits but about really are to the will the X as will we add more see

Alright. Thanks. Congratulations and good luck.

you. Thank

Alright. our Well, be final to that’s going question.

those great questions. As some were always,

around joining a time everybody, to Marianne your Tractor off thanks virtually day minute Please Supply. of of Tractor XXXX speaking Denenberg, today An a time behalf community. today. investment this today’s about your who a helped stay you and So forward first Supply more to taking pull for appreciation showcase wanted accept scale sincere thank those of to on the us that look Tractor at be We such appreciate really others multitude Relations to this partnership take to what of join and to on will virtually. thank again and company. special supported quarter please Marianne event also call Investor at out all of safe. in you takes Supply And I April. to gratitude think lot of We we you, us care, my for the to event of you afternoon. a program. I learn makes our And questions to any and to take Take company all