AZO - NYSE

Before we begin, please note that today's call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance. Please refer to this morning's press release and the company's most recent annual report on Form 10-K and other filings with the Securities and Exchange Commission for a discussion of important risks and uncertainties that could cause actual results to differ materially from expectations. Forward-looking statements speak only as of the date made and the company undertakes no obligation to update such statements. Today's call will also include certain non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures can be found in our press release.

Good day, everyone, and welcome to Auto

Thank you. Good morning, and thank you for joining us today for Auto

Thanks, Phil, and good morning, everyone. Before I unpack our results, I want to remind you that each year, our fiscal year ends on the last Saturday in August. Based on the way the calendar fell this year, we had an extra week in our fiscal year and the fourth quarter is based on 17 weeks versus 16 weeks. For comparison, our same-store sales comps are based on a 16-week basis, while our total sales, EBIT, and EPS results will be discussed on a 17-week basis. As Phil has previously discussed, we reported 9% total company sales growth. On a 16-week basis, total company sales were up 2.6%. Our domestic same-store sales grew 0.2% and our international comp was up 9.9% on a constant-currency basis. Total company EBIT grew 6.1% and our EPS grew 11%. I also want to point out that we had a headwind from foreign exchange rates in this quarter. We had a 500-basis-points drag on international sales that resulted in a $32 million headwind to sales, an $8 million headwind to EBIT, and $0.32 a share drag on EPS versus the prior year. We continue to deliver solid results despite the economic backdrop, and the efforts of our Auto

Thank you, Jamere. We're proud of our Auto

Certainly. Everyone at this time, we'll be conducting a question-and-answer session. [Operator Instructions] Your first question is coming from Simeon Gutman from Morgan Stanley. Your line is live.

Good morning. Hey, Phil, you mentioned accelerating commercial sales growth. You made a hire recently, and we talked about hubs on the call, and I think you're tweaking inventory. Can you talk about timing? What should investors expect? What you expect out of the organization? When we could see commercial sales move to that next level?

Yeah, it's a great question. Thanks, Simeon. I think we will sequentially improve from here. Again, I'd -- like we've talked about on the last couple of calls, I think it's a progressive improvement. I don't think it's going to be a snapback. If you look at the environment out there, the consumer is still pressured and we think that's showing up on both DIY and the commercial side of the business, but we like our strategies that we have in place as far as exactly what you said, incrementally improving the store side assortments at the satellite stores, opening up these hubs and mega-hubs, and adding inventory closer to the customers. And then, we're also working on ways to streamline customer service, specifically improving speed to customer on those harder-to-find parts. So, we like our strategy, and we think we'll continue to build from here.

And then, a quick follow-up on gross margin. What's left, and how high it can go? Because I think discretionary being down would have hurt you, commercial being up would probably hurt you. So, how do you -- I guess, where is the drive? Where is the strength coming from? And how much can it continue?

Yeah, I think, we got a couple of things working in our favor. One, our merchants are doing a fantastic job driving merchandising margin improvements and negotiating with our supply base, and that team has done a tremendous job for us. So, I think, as we move forward, we'll continue to drive merch margin improvements. We have a little bit of a drag early on because we're adding a couple of DCs associated with the supply chain efforts that we have, but net-net, we think that the merchandising margin improvements will continue to power us moving forward. The one area that we're watching very closely is what's happening in the industry from a pricing standpoint, as Phil alluded to and I alluded to as well, that we're not seeing the average ticket growth. That's largely a function of what we're seeing on the inflation side. As we get some additional inflation that starts to make its way into the industry, we're looking forward to having an opportunity to push retails a little bit harder. So, a very disciplined approach, very strong merchandising margins, and we're looking forward to a pretty good outlook for FY '25.

Thank you. Good luck.

Thank you.

Thank you. Your next question is coming from Bret Jordan from Jefferies. Your line is live.

Hey, good morning, guys.

Good morning, Bret.

Could you talk about what, if any, are the hurdles to reaccelerating the hub growth now that the three major players are all using a hub strategy? Is it a real estate access issue, or is it just sort of timing of your internal development team?

Phil always smiles when we get this question, because I own store development inside of our organization. We feel very good about what we've done, essentially what we've done over the last year or so is rebuilding our pipeline and our capabilities. Obviously, and we've talked about it here on the call, we struggled a little bit as we got through the pandemic. Everything was generally delayed during that timeframe, but the reality is that there were things that we needed to improve from an operational standpoint to really improve that pipeline. We're pretty excited about where we are on hubs and mega-hubs. We still have our plan to open 200-plus mega-hubs versus our original estimate of 110. We'll build 20-plus in FY '25 and I'm really excited about the fact that we have about 70 mega-hubs in the pipeline today, most of which are under construction. So, I feel good about the team, what we've executed on, et cetera. These are big 30,000-square-foot boxes and tough to find locations, but we've reorganized our team and doubled down on our efforts to get those boxes into the marketplace. I'm excited about what they'll contribute to our future growth prospects.

Okay. Then a follow-up on the commercial business. I mean, can you talk about the cadence through the quarter and then any dispersion between national account business versus the up-and-down the street business?

Yeah. If you talk about the cadence -- the quarter, like I said, both regionally and the cadence across the quarter were all pretty similar. If you -- the very beginning of the quarter was a little bit lighter. June was great. Some of it due to the hot weather came a little bit earlier this year. And then, when you got into July and August, it was pretty similar to last year from a weather perspective. So, you didn't see meaningful change in July and August from a comp perspective. Where it was hot, we saw all the categories take off like you would expect. So, we had a good summer. It wasn't demonstrably different than last year though. And so, that's kind of how we think about that from a quarter perspective. Sorry, what was the second part of the question?

And, I guess, national account versus the up-and-down the street business, are you seeing any change in the independent, the WD competitive landscape out there around the net -- around the up-and-down the street?

Yeah. So, on national accounts, that's a great question. We kind of think of our -- the up-and-down the street customer. We think about national accounts and then we have what we call some verticals. And I'll explain kind of how we saw performance across those segments. The up-and-down the street customer has been very resilient, been one of the best-growing segments for us. The national accounts have improved quarter-over-quarter, and part of that improvement has come from a lot of those national accounts are heavily tied towards tires and tires are not as bad as they used to be. The trends have improved. We're seeing more tire replacements, even though those customers generally, I think, are seeing down customer traffic, but tires are not the big drag that they have historically been. The one segment that has not performed very good for us and, as I say, I think it's going to make sense, it's anything related to new cars, used cars, or [buyer payer] (ph) lots. As cars change hands, there's generally an uptick in maintenance. To a used car, they may refurb and put on -- put tires on, put on new brakes, suspension items, change all the filters, do some maintenance, et cetera. And as that new customer picks up the new car, they may continue to personalize it. So, that segment of the business, which we're highly penetrated in, has not performed as well. We think as the environment and the economy improves a little bit and we see more used cars change hands and new cars being sold that will help those two segments of the business.

Great. Thank you.

Thank you. Your next question is coming from Chris Horvers from JPMorgan. Your line is live.

Thanks, and good morning. Can you talk about where you think the DIY -- domestic DIY and domestic commercial markets are growing? You mentioned share gains in DIY, but you comped down [1] (ph). So, any thoughts on where you think those markets are -- grew during the quarter, and how we think about the improvement in the backdrop over FY '25?

Great question. Thank you. So, on DIY, as we said, the biggest pressure point has really been in the discretionary part categories of the business. So, think of that accessories, truck towing performance, things of that nature. That business has been pretty tough for us for at least a year. And when you look at the share gains, that sort of area is where we've seen the most challenging performance. In our maintenance categories and our failure categories on the DIY side of the business, they have been pretty resilient, but it's those headwinds from the discretionary categories that have been tough. And we frankly don't know that that's going to change too much until that our pressured consumer starts to get some economic relief and, frankly, when their confidence starts to improve a bit. On the commercial side, we believe we're still one of the fastest-growing in the industry, a little bit of a tougher comp scenario, but we believe we're growing share and we like our strategies of deploying inventory through the hub and the mega-hub assortments. And we have several strategies that are focused on improving customer service in commercial, and we're seeing really good results from those.

And I would say, just to build on that, I mean, if you think about the growth rates, we actually believe that the DIY market has been down kind of low-single-digits because of those dynamics that Phil talked about, but also the fact that we're not seeing the same level of retail inflation. Tickets are still growing slower than the historical levels and that's put some pressure on it. So, a combination of the consumer sentiment, the fact that we are not seeing retail inflation are sort of driving that business down a little bit. But what we're excited about is the fact that we continue to execute, as Phil mentioned, I mean, we're providing great service to the customer. And as that portion of the industry reaccelerates, we'll be in great shape. And on the commercial side, I mean, as near as we can tell, I mean, commercial has been flat to declining for -- or slightly declining for a few quarters here. And if we look at what we saw this quarter, it was probably in a similar sort of zip code. So, we're excited about the fact that we've accelerated our commercial sales growth. And as we move forward, the execution on our initiatives that Phil talked about, the fact that we'll get more hubs and mega-hubs in our marketplace, all bode well for us as we move forward.

Got it. And then, a couple of quick margin follow-ups. First on the gross margin. It looks like that 53rd week, the gross margin was maybe 80 basis points lower. So, is there something to read into that? You talked about being positive on gross margin over the year, but some DC pressures. So, is that just accounting nuance or something that we should think about in terms of cadence? And then secondly, on the potential FX headwind, the international implied operating margin for the year is materially higher than the quarter, so what you experience in the fourth quarter. So, is that the 53rd week impact, or is there something going on there?

Yeah, so the 53rd week is always a little bit noisy for us, just in general in terms of how allocations happen, et cetera. So, I wouldn't read much into how you think about it. I mean, overall for the total company, we had about $365 million of sales and about $87 million of EBIT associated with that extra week when you look at it on a like-for-like basis. And I wouldn't -- the margin impacts and SG&A impacts and all those things can get a little bit skewed just based on how you do allocations in the quarter. What I'll say about international and the international margins as we think about it going forward, it's a very strong business for us. Our business in Mexico has basically doubled over the last three fiscal years or so. So, given that significant revenue and EBIT impact of our international footprint, swings in FX rates are going to impact us, et cetera. The teams are doing a great job of executing and we wanted to be really transparent on what we see in terms of FX moving forward and what the margin impact is going to be going forward.

Got it. Thank you.

Thank you.

Thank you. Your next question is coming from Steven Forbes from Guggenheim Securities. Your line is live.

Good morning, Phil, Jamere.

Good morning, Steven.

Maybe just a follow-up to start on the commercial business. Maybe if we just focus on sort of weekly sales per commercial program. If we adjust for the extra week contribution, it looks like your sales were sort of down mid-single-digits year-over-year. Any way to help contextualize sort of what's driving that and/or, right, any sort of initial thoughts on how your initiatives on speed of delivery, right, customer service you may help inflect that, right, as we look out over the coming quarters here and potentially get it back to growing?

Yeah. Well, again, if you compare the 16-weeks to 16-weeks, we were up 4.5% versus last year. So -- and it sequentially from the last three quarters, that's three quarters in a row of growing trend on our commercial sales. If you look at what we're focused on with the -- obviously, improving our assortments is something we do all the time. I think our merchants have done a fantastic job of improving the store-level assortments and also improving the store -- the hub and mega-hub assortments within any given market that may have one of those types of boxes. What we're focused on is utilizing deployed inventory in a given market, either in a hub or a satellite, and getting that inventory quicker to the customer at the shop level. So, we think of it in terms of time, speed to shop, how quickly can we get that inventory from wherever it may be to the shop, the fastest way to improve customer service. And as you back up to a hub or a mega-hub, the assortments get deeper, and how do we get that product to those customers faster. We've deployed quite a bit of technology over the last couple of years. We continue to leverage that technology and learn how to improve the customer service at the -- for the Auto

I appreciate the color. And then, just a quick follow-up for Jamere. I appreciate the quantification of FX, assuming all things constant, the release, obviously, quantified the EBIT contribution of the extra week. You also called out LIFO. If we add these up, right, we have sort of a mid-single-digit headwind to EBIT growth next year. Is that the right way to frame up sort of the non-controllable headwinds to EBIT growth, or anything else you want to add as we think about sort of cleansing the models here?

Yeah, there's really two pieces. One is, we had about $40 million of LIFO credits that roll through the P&L this year, that become headwinds next year. Now depending on what happens from an inflation standpoint, we've got about $19 million of credits still to come before we go back to an unrecorded balance. So, you could offset maybe half of that $40 million benefit that you had this year on the LIFO side. So that should help you from a modeling standpoint. And then, from an FX standpoint, we try to be transparent about where the spot rates are. We're certainly not making a prediction on where FX is going to land. There are lots of things that will impact that, certainly, things that happened in the U.S. economy, things that happened in the international economies, and some of the political dynamics. So, what we wanted to do is just be really transparent about where the spot rates currently are and what the impact could potentially be on our P&L. We'll update you as we move through the year. It's been pretty volatile. You've seen a pretty significant spike probably to the tune of 20% or 25% in a very short period of time. And again, as I said, given the size of international and our P&L and the profitability of that business, it does have an impact. So, we'll be transparent and share with you exactly what we see as it rolls its way through the P&L.

Thank you.

Thank you. Your next question is coming from Robbie Ohmes from Bank of America. Your line is live.

Hey, good morning. Thanks for taking my question. I was hoping, could you guys talk a little bit more about seeing inflation return and what the drivers to that normally are or what they could be. And maybe as part of that, remind us how historically tariffs and port strikes and things like that impact inflation for you guys?

Yeah. So, let me kind of back up, and we've talked about this a couple of different times, the historical growth rates versus what we're seeing today in ticket average. It's been fairly muted over the last year or so at around this 1% retail inflation and ticket average inflation that's been muted, both -- on both sides of the business, similar numbers that are down from historical rates. Over the long-term and I'm talking literally close, somewhere between 20 and 30 years, the industry has generally seen somewhere between 3% and 5% inflation in average ticket and around 1% to 3% decline in transactions, typically driven by inflation of parts as well as technology, enhancements in quality of the product. We believe that sometime in the near-time horizon, we would revert back to a historical growth rate on both of those metrics. What we typically see what drives inflation is mix of business -- drives ticket average is mix of business converting to higher technology parts, which generally speaking are more expensive and inflation caused by product cost. Over the last year, there hasn't been much product costs come into the system. And we all believe that that's because of -- if you look back through the pandemic years when we had the supply chain constraints, we had massive inflation in cost and we took those retails and pushed them to the consumer and we ended up with this hyperinflation. We're now lapping a lot of that and that trend starts to slow down kind of now going through the end of the year, and we would expect that inflation would come back in sometime in '25 and get back to normal. As far as tariffs, your question there that -- those sorts of things have ebbed and flowed over the years. If we get tariffs, we will pass those tariff costs back to the consumer and we'll pass them through. As they turn through, we'll generally raise prices ahead of -- we know what the tariffs will be. We generally raise prices ahead of that. You get some gross margin improvement as the cost of goods turn in and then it flattens out. So, that's historically what we've done. I see no reason this industry has been very consistent on pricing and rational and we believe that all those same metrics are still in place.

Thanks. And just a quick follow-up since you brought up the last 20 to 30 years. When over the last 20 to 30 years has the consumer been like this? You guys are talking about on the DIY side a challenged consumer. What happened last time the consumer was like this?

Gosh, I don't know -- well, that's a great question. The consumer is under much different pressure. The bottom-end consumer has been pressured for the last 20 months or so or maybe more, but it's ebbed and flowed over recessions, et cetera. Have we seen the type of inflation that we saw over the last three years? No, not -- certainly not in my lifetime. But generally speaking, in tougher economic times, people will generally defer maintenance and discretionary items early in the cycle. And then, as we get further through the cycle, they start to repair their cars because they realize a little investment today, maintaining their vehicle defers a major repair into the future. So, we think it's going to ebb and flow over time, but we feel like our execution, our improvement in execution and our strategies are the right strategies for us and we'll work over the long-term.

Just a little more on the consumer. I mean, a couple of things really stand out to us. One is, if you look at the economy just in general, I've said this for a while that you've had this sort of this two-speed world where the middle- and upper-income consumers have strong balance sheets and are continuing to spend as normal, and the lower-end is feeling the pinch, particularly in the discretionary categories. The beauty of our business is that the lion's share of our business is relatively inelastic, it's break-fix, it's essential maintenance. Consumers need their vehicles for mobility. So, we tend to power our way through those. What encourages us about the consumer is that even in this environment, you've got unemployment at 4.2%, you've got wage growth at 4%, so wage growth is finally keeping up or outpacing inflation. So, we feel pretty good that as consumer sentiment improves, moving forward, that you'll see some return of normalcy in terms of spending and our business will benefit from that. But the good news again is the lion's share of our business, that break-fix, essential maintenance, is pretty resilient really through all cycles.

Really helpful. Thank you.

Thank you. Your next question is coming from Michael Lasser from UBS. Your line is live.

Good morning. Thank you so much for taking my question. So, the market has grown accustomed to Auto

Yeah, thanks for your question, Michael. First thing I'll say is that the long-term algo is unchanged. I mean, this is a business that we believe as we look forward will be a consistent, steady grower. It has an opportunity to expand margins that will have a ton of free cash flow at the bottom of the waterfall and we'll buy back shares and do shareholder-friendly things associated with it. In the near term, the things that you've alluded to, things like LIFO, a little bit of pressure on -- from an FX standpoint, may impact that on a quarterly basis, but that long-term algo doesn't change. I think what we're encouraged by is that the growth initiatives that we have as the macro environment improves, you'll see the acceleration in the top-line, which is key to that algo working as we move forward. So, all the things we're working on from a growth initiative standpoint will really start to show up in the results, but in this environment where particularly the consumers have been pressured, DIY has been a little bit soft, it's a little tough to print that number quarter-over-quarter as we move forward. So, we feel good about where we are, we feel good about the fundamentals of the business, the fundamentals of the industry, the fundamentals of our execution, but on a quarterly basis, it's difficult to print the algo as it has been. So, long-term, no change. Short-term, you'll certainly see some impacts from the top-line and some of these other drivers in the business.

Yeah. Just to reiterate, I mean, there definitely will be pressure on the given quarter, but the Mexico business and the international business is an incredible business and growing. We like the profitability of that market and we like our strategies both on the international markets and our opportunities that we still have here in the U.S. So, we're happy with our strategies. Don't like the FX pressure, but we can't. That's not one we can deal with at the moment.

My follow-up question is, the margin structure of Auto

Yeah. I think two things associated with that. One is we are continuing to run the gross margin play with intensity inside the company. And as I mentioned a little bit earlier, our merchandising teams are doing a fantastic job of finding a way to give us expanding margins even in an environment where we haven't had an opportunity to raise retails as fast, which is a pretty significant achievement for the company. I've also said that in the middle of the P&L that to the extent that the top-lines or the gross margins don't materialize that we have the muscle and we'll make the decisions that are necessary to make sure that we're protecting our operating margins in total and that includes the things that we do on the SG&A line. What we've been able to do over the last couple of years is invest in a very disciplined way in things that are positioning us very, very well for the future in SG&A. So things like IT, payroll to improve service, the payroll that's necessary to support some of these growth initiatives, and those things are all going to pay benefits for us. So, I think the message here is no change to the algo. No outlook that suggests that operating margins are going to be on the decline here. We'll work our way through these. And as we see the top-line return and as we continue to work gross margins and work the middle of the P&L, the operating margin profile of the company is protected.

Thank you very much.

Thanks, Michael.

Thank you. Your next question is coming from Michael Baker from D.A. Davidson. Your line is live.

Okay. Thanks guys. Two quick ones. You've alluded a little bit to pricing, competitive pricing. Can you just tell us, we know one of your competitors has been investing in price. Is that impacting the average ticket at all?

Yeah, I would say that they -- we've heard that they're doing that. And at the end of the day, we monitor our pricing all the time. We haven't seen any radical change. I think, specifically, on the commercial side of the business, the vast majority of the share is with the WDs and that's who we focus on in our pricing strategies, and we haven't seen any material change there. And I would say that, if you ask if that's the pressure point for a lack of average ticket growth, the answer is no. The impetus for average ticket growth and retail inflation is really comes from cost. And as the cost comes in, we'll push that cost to the consumer and that's where you get some of that retail average ticket inflation. So, I would say it's not -- that is not the primary reason for the lack of inflation on ticket average. It goes back to this hyperinflation that we had since the supply chain issues of the pandemic.

Yeah. I mean, you heard me say in the past, particularly during the pandemic where we saw a pretty significant increase in ticket that inflation is a bit of our friend when it comes to retails, and that dynamic is because, as Phil alluded to, this is a very disciplined rational industry in terms of pricing. And so, even when you are looking at changes that you're making dynamically from a pricing standpoint because you're largely in a break-fix business where you don't necessarily stimulate demand from pricing -- downward pressures on pricing, you generally don't see that happening in our industry. And this industry is rational today, it's been rational for decades.

Exactly.

Yeah. Okay. Pretty clear. One follow-up, I guess, maybe in two quick parts. You said you expect first quarter comps to be -- I think you said improving. Why? Is that based on what you're seeing quarter-to-date? And then, you also said accelerating or more store growth. Can you quantify that? How many stores -- you gave us a mega-hub number for next year. How many total stores should we expect in 2025? Thanks.

Yeah. So, Jamere said, I think we're expecting somewhere north of 20 on the mega-hubs. As I said, they'll also be kind of back-end loaded. So, think kind of after Christmas or so will be where the vast majority of those will come in the latter part of the year. So, we like that we will reaccelerate those. We wish that we were going to be earlier in the year. They just, from a timing perspective, are going to come in the back half of the year. As far as the first quarter, what we said was we expect the Q1 to look pretty similar to the last quarter. We don't see a whole lot of -- the consumer is still under the same pressure they were back in over the summertime. The consumer confidence I think is pretty stable at the moment. We wish it would improve, but we don't see a whole lot of catalysts for it to improve. Frankly, maybe until December timeframe after the election, et cetera. So, we expect it to be pretty similar and we think it will improve. We'll get back to a normal growth average ticket growth later in the year. So that's kind of when we see things maybe having a better inflection point. We'd love for winter to get here and have a harsh winter.

And just in terms of...

I thought you said you expect first quarter to modestly improve, so...

Yeah, modestly improve from a [DAP] (ph) perspective. That's correct.

Yeah. Okay. Thank you.

Thank you. And our last question this morning is coming from

Hey, good morning, and thanks for squeezing me in. So, Jamere, you mentioned the car park as a tailwind, but since we're entering a period where new cars from 2018, 2019 are starting to come off warranty and new car sales lagged during the pandemic, just curious why you wouldn't view this as an air pocket or a headwind for the industry. Any thoughts on why that wouldn't be the case?

Yeah. I think simply put, the cars are lasting longer and they're staying on the road. So, even though the SAAR has come down, you're not seeing cars go to the boneyard. So, as a result of that, the car park has continued to tick up. And you can see that from the data that's out there. I mean, the average age of a vehicle on the road has ticked up to 12.6 years and what all the data suggests based on what we know today is that it's likely going to be one or two ticks higher next year. And that's a combination of what consumer behavior is, but it's also the factor of what's happening with technology. The cars just simply last longer and you're seeing them stay in the car park much longer, which means the average household is fractionally going up a little bit more in terms of the number of vehicles that they have.

Yeah, I think it going to kind of your air pocket. I think that did happen to some degree back in the financial crisis 2007, '08, '09, but your car -- your new car SAARs literally dipped below 10 million annually. And we haven't seen anywhere near that type of a decline in SAARs. So, I don't think it's necessarily going to be an issue. Again, we love the fact that cars are now over 12 years on average and the American consumer is driving a lot. Those are a great tailwinds for us. We like that.

Got it. That makes sense. So, maybe fewer newer cars entering the addressable market, but also fewer scraps. So that makes sense. So, just separately, when you look at your SG&A growth on a per-store basis, it was about 1% normalized, a step down from about 3% in Q4. And when you think about managing your business for 2025, could you talk about why this low-single-digit range is the right level for you, particularly in light of the investments that you're making in commercial and also in light of some of the peers stepping up to mid-single-digit to drive share gains?

I mean, what we've said about SG&A is that we'll continue to invest in a disciplined way to support our growth initiatives. And so, to the extent that there are opportunities for us to invest in things like store payroll, the work that we're continuing to do in IT to improve the customer experience and improve our Auto

Appreciate the time.

Thank you. Appreciate the question.

Thank you. That concludes our Q&A session. I will now hand the conference back to Phil Daniele, CEO of Auto

Thank you, everyone, for the questions today. Before we conclude the call, I'd like to take a moment to reiterate, we believe our industry is in a strong position and our business model is solid. We were excited about our growth prospects for the year, but we will take nothing for granted, as we understand our customers have alternatives. We have exciting plans that should help us succeed into the future, but I want to stress that this is a marathon and not a sprint. As we continue to focus on flawless execution and Wow! Customer Service and strive to optimize shareholder value for the future, we are confident Auto