Good afternoon, and welcome to the Ross Stores First Quarter 2015 Earnings Release Conference Call. [Operator Instructions].

Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts and other matters that are based on the company's current forecast of aspects of its future business.

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations. Risk factors are included in today's press release and the company's fiscal 2014 Form 10-K and fiscal 2015 Form 8-Ks on file with the SEC..

Now I'd like to turn the call over to Barbara Rentler, Chief Executive Officer. .

Good afternoon.

Joining me on our call today are Michael Balmuth, Executive Chairman; Michael O'Sullivan, President and Chief Operating Officer; Gary Cribb, Executive Vice President, Stores and Loss Prevention; John Call, Executive Vice President, Finance and Legal; Michael Hartshorn, Group Senior Vice President and Chief Financial Officer; and Connie Wong, Senior Director of Investor Relations..

We'll begin our call today with a review of our first quarter 2015 performance followed by our outlook for the second quarter and fiscal year. Afterwards, we'll be happy to respond to any questions you may have..

As noted in today's press release, we are pleased with our better-than-expected first quarter sales and earnings. Our results continue to benefit from value-focused customers responding favorably to our fresh and exciting assortments of name brand bargains..

Earnings per share for the first quarter were $1.37, up from $1.15 in the prior year. Net earnings for the quarter grew to $282 million compared to $244 million for the same period last year.

These earnings results include a benefit of about $0.04 per share mainly from the favorable timing of packaway-related costs that are expected to reverse in subsequent quarters. Adjusting for this expense timing, first quarter 2015 earnings per share rose 16% over the prior year period.

Sales rose 10% for the quarter to $2,938,000,000 with comparable store sales up 5% over the prior year..

Like Ross, dd's DISCOUNTS also posted better-than-expected gains in sales and profits for the quarter as customers continued to respond positively to their value offering..

The strength in merchandise and geographic sales trends for Ross during the first quarter were relatively broad based. Juniors continues to be the best-performing category during the quarter, while the Midwest was the strongest region..

Our first quarter operating margin grew to 15.7%, up from 14.6% last year. As we ended the first quarter, total consolidated inventories were up 20% over the prior year, while packaway levels were about 45% of total inventory. Average in-store inventories at the end of the first quarter were down slightly versus last year.

The growth in total inventory reflects our ability to take advantage of increased closeout availability, a portion of which is from the ongoing West Coast port disruption. In addition, we increased inbound in-transit inventory to mitigate longer lead times from this situation..

Let's turn now to our expansion program. Store growth remains on track with 32 new Ross and 5 dd's DISCOUNTS opening in the first quarter. For fiscal 2015, we continue to plan for about 70 new Ross and 20 dd's DISCOUNTS locations. As usual, these numbers do not reflect our plans to close or relocate about 10 older stores..

Now Michael Hartshorn will provide further color on our first quarter results and details on our second quarter guidance. .

Thank you, Barbara. Let's start with our first quarter results. Our 5% comparable store sales gain was driven by a combination of higher transactions and an increase in the size of the average basket. As Barbara noted, first quarter operating margins grew to 15.7%, up from 14.6% last year.

Cost of goods sold improved by 80 basis points driven primarily by a 60-basis-point improvement in merchandise gross margin and a 5 basis points of leverage on occupancy. In addition, distribution center costs were lower by 25 basis points due to the previously mentioned favorable timing of packaway-related costs.

These improvements were partially offset by a 10-basis-point increase in freight costs..

Selling, general and administrative expenses improved by about 25 basis points during the period mainly from leverage on the 5% same-store sales increase..

During the first quarter, we repurchased 1.7 million shares of common stock for a total purchase price of $176 million. As planned, we expect to buy back a total of $700 million in stock for the year under this new 2-year $1.4 billion stock repurchase program approved by our Board of Directors in February 2015..

Let's turn now to our second quarter and updated full year guidance. For the 13 weeks ending August 1, 2015, same-store sales are forecast to increase 2% to 3% with earnings per share projected to be in the range of $1.19 to $1.24, up from $1.14 in the prior year period.

Adjusting for our recently announced 2-for-1 stock split that becomes effective June 11, 2015, second quarter 2015 EPS is forecast to be $0.59 to $0.62, up from $0.57 in the prior year period..

total sales are projected to grow 6% to 7% on a comparable store sales increase of 2% to 3%. We are planning to add 18 new Ross and 8 dd's DISCOUNTS locations during the period. Operating margin is projected to be 13.6% to 13.8% versus 14.3% in the prior year.

As a reminder, the second quarter of last year included a onetime benefit of approximately 20 basis points from the favorable resolution of an outstanding legal matter.

We are forecasting a slight increase in merchandise margins for this year's second quarter that is expected to be more than offset by higher costs from recent infrastructure investments, including the opening of a new distribution center in California during the quarter. In addition, we expect some deleveraging on expenses from higher wage costs.

Net interest expense is estimated to be $2 million. Our tax rate is planned at 37% to 38%, and we expect average diluted shares outstanding before the effect of our recently announced 2-for-1 stock split to be about 205 million or 410 million post split..

Moving to our outlook for the full year. As mentioned in today's press release, based on our first quarter results and second quarter guidance, we now project earnings per share for fiscal 2015 to be in the range of $4.72 to $4.87 compared to our initial guidance of $4.60 to $4.80.

On a split-adjusted basis, earnings per share are forecasted to be $2.36 to $2.44, up 7% to 10% from $2.21 in fiscal 2014. Lastly, we will be making competitive wage adjustments beginning in the second quarter that are included in both our second quarter and updated annual earnings guidance..

Now I'll turn the call back to Barbara for closing comments. .

Thank you, Michael. As mentioned earlier, we are pleased with our solid start to the year. For the balance of 2015 and beyond, we remain confident in our ability to successfully execute the strategies that have enabled us to deliver solid financial results over the past several years..

Our top priority remains providing the most compelling values possible to our customers. The best way to accomplish this is by continuing to make strategic investments in our buying organization.

We believe this unwavering focus combined with our ability to tightly control both in-store inventories and expenses will enable us to show respectable sales and earnings growth over both the near and the long term..

At this point, we would like to open up the call and respond to any questions you may have. .

[Operator Instructions] Your first question is from Ike Boruchow with Sterne Agee. .

I guess, Michael, maybe for you. To talk about the merchandise margin line, I mean, just, you guys are putting up some very impressive numbers there.

Is that more a function of less markdown and less clearance in the store? Is it more a function of just the merchants getting -- being -- getting better buys? Just can you add some more color there for us?.

Ike, the margin improvement was really a combination of both. We did operate the business with lower inventories during the quarter, so that helped us have more full-price selling. In addition, we had some pretty good buys during the quarter. .

Your next question is from Matthew Boss with JPMorgan. .

So understanding there's a lot of noise in the retail landscape today.

Can you guys just kind of elaborate on some of the drivers between the more recent 4% to 6% comps that you're seeing today versus your multi-year 3% to 3.5% base case run rate?.

Sure. Matthew, it's Michael O'Sullivan. I'll answer that. Yes, we've been very pleased with our performance over the last few quarters, but there are a few reasons to be a little bit conservative as we look forward. Firstly, we think the macroeconomic and retail outlook remains pretty uncertain.

You see that, and you get a sense of that in the recent results that have been announced by other retailers. Actually, that feeds into a second concern, which is those results themselves may cause the environment to become more promotional over the next few months.

And then the third reason for conservatism is that we're up against our own tough multi-year comparisons. Now those of you who'd followed us for some time will know that this is straight from our playbook. In an uncertain environment, it makes sense for us to manage the business conservatively.

If the markets promote -- sorry, weak or promotional, we can protect earnings, and if sales trend is there, we can chase the business. .

The next question is from Randy Konik with Jefferies. .

I guess, Barbara, can you talk a little bit about the different long-term investments you want to make in the buying organization, what areas you think you need more kind of bulk in, what have you and why? And then as it relates to just dd's, kind of what do you -- so how should we just be thinking about the long-term economic model from here versus how you're thinking about the different profit -- obviously, the great profit margins you're able to put up in the Ross Stores? I'm just curious how we should be thinking differently or the same about dd's' economic model long term from here.

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Randy, do me a favor. Just repeat on the first part where you said the long-term investment more. I missed the word you said. .

Oh, I'm sorry. Just in the buying organization, just like what areas -- you talked about kind of adding to it. What areas do you really want to focus on and why? And then just the second question was more around the long-term economic model around dd's' concept. .

Well, I would say from a merchandise perspective, it's very broad based. Our total business is very broad based. We've been pleased with some of the progress and things that we've made in some of our core businesses like Home. Our Junior business continues to be good.

But overall, our total business is pretty broad based, and that is kind of how we're approaching it for the future. At this point in time, I would say, if I had to select one particular area, I would say it would be the continued investment in our Home business. As it pertains to dd's on the longer-term basis, Michael, economically. .

Sure. So as it was mentioned in the earlier remarks, Randy, dd's posted better-than-expected gains in sales and profits for the quarter.

That's been a common theme, actually, over the last couple of years, dd's achieving good sales and profit improvements, driven by, frankly, pretty similar actions to those that we've taken at Ross, particularly tight control of inventories and expenses. At this point, dd's has very similar four-walled economics to Ross.

So we -- as we look out over the longer term, we're very confident with the dd's business model. We've opened -- well, we opened just over 20 stores, dd's stores in 2014. We're going to open a similar number of new dd's stores this year, and as we described before, we expect dd's can be a chain of about 500 stores. .

The next question is from Daniel Hofkin with William Blair & Company. .

Just wanted to understand a little bit. So you said roughly a $0.04 benefit from the packaway timing. Can you just explain a little bit how that works and also the math on getting from that to the 25 basis points in gross margin? Was there something else within SG&A that wasn't specifically quantified? Just a little color on that would be helpful. .

Sure, Dan. It's Michael. So for packaway, we capitalize cost to procure store and process packaway merchandising, and that includes fixed cost. So we capitalize until those items are sold. When sold, we charge those to expenses or cost of goods sold. So in a period of rising packaway levels, the higher capitalization means there's a benefit to earnings.

This year, packaway levels increased during the first quarter versus last year when they declined. In terms of impact, that $0.04 is worth about 45 basis points of favorability to the quarter. .

And Daniel, this is John. You mentioned -- you referred to G&A, but our DC costs are in our gross margin line. .

Okay, maybe I didn't -- okay, so the 25-basis-point favor, I thought you said 25-basis-point favorability on the DC.

Did that include the 45 within that, so to speak?.

It does. And what it means is the distribution center cost without the packaway would have delevered, and that's given the opening of the new DC in the middle of last year. .

Okay.

Is that basically the unit cap? Is that kind of another -- is that the same thing when people talk about unit cap method?.

Yes, that's a good way to look at it. Unit cap's really for tax purposes, but it's the same concept. .

Okay. And then I -- just one follow-up if I could.

So did you feel like -- or is there anything where you saw, over the course of the quarter, a change in trend to the upside? Or anything where you could point to benefits from on the sales side or the cost of goods sold side from the port issues so far?.

In terms of trends for the quarter, Dan, comp trends were steady throughout. After adjusting for the impact of the Easter shift, which fell 2 weeks earlier this year, there was not a meaningful disparity in trends either from a margin or a sales standpoint. .

The next question is from Stephen Grambling with Goldman Sachs. .

Could you give us a little bit of a better sense of the wage increase and how this potentially changes the SG&A leverage point, maybe not only this year, but perhaps over the next 18 months?.

Yes. Stephen, on the first part of it, what are we planning to do on wages? We've mentioned in the call -- on the call in February that we expected to see more wage rate pressure this year and that we'd be making adjustments to keep wage rates competitive.

One of the adjustments we will be making in the second quarter is to raise our minimum entry-level hourly rate to $9, and that adjustment, together with any offset, is built into the earnings guidance. .

And then in terms of... .

And then your second question on [indiscernible] ... .

Yes, just in terms of the leverage point, does this change that leverage point longer term?.

I would say now, Stephen, as we look through fiscal 2015, we're working to offset those costs, so the leverage point would the same. And going forward, it's a little of an open book as to what [indiscernible] are going to do with their wage rates at this point. .

Okay. And then may be taking a step back, certainly, there's been a lot of new competition and testing from some of the peers. How do you think about the primary competitive advantage of the Ross model? And maybe if you rank kind of scale buying supply chain for us. .

So we operate in a very competitive and fragmented market. We're always expecting that there's going to be competitors or new entrants that are trying to capture share, and frankly, we wish them the best of luck. But we know that with our off-price model, when it's executed well, we can compete very effectively against all comers.

So there's no single competitor or new entrant that we're worried about. As long as we offer great branded merchandise at attractive discounts, we're going to do just fine. .

Stephen, I would also add that we're well positioned. We have buying team, a buying organization of 700 merchants, so this is our core business. And we've made a strategic investment over the years to build that team to be able to compete in all types of environments. .

The next question is from Lorraine Hutchinson with Bank of America. .

I wanted to follow up on the inventory increase in your packaway. Is most of that product -- will be flowing through the stores over the next couple of quarters? Or will we wait to see it coming through next spring? And I guess, just specifically, how that relates to the $0.04 of cost coming through the COGS line. .

Lorraine, on packaway, obviously, it varies by merchandise category. It's hard to predict what availability will look like over the remainder of the year. We view packaway as a top line driver as it represents some of the best values for the customer.

Our guidance assumes that the additional packaway we had in the first quarter would flow through the store through the balance of the year, and that's also reflective of our guidance on the packaway credit. .

The next question is from Oliver Chen with Cowen and Company. .

As we look forward to the comp going forward, do you feel like it will also be split by our transaction and size of the basket? And also, related to the inventory build, can you contextualize for us, was this in line with kind of your expectations? Or did you witness more bargains than you expected with the dislocation? I'm just curious about the context of the rising inventories and how that happened strategically and competitively relative to your actions.

.

On the inventory, as we mentioned in the remarks, there were really 2 factors that drove the inventory increase. The first is higher packaway inventory as we were able to take advantage of the increased closeout availability. A portion of that was related to the port disruption.

That piece was harder to predict, and we take advantage of what the market gives us. And in terms of the other piece, which is the inbound in-transit levels, that was our efforts to mitigate the longer port lead times, and we planned to do that as we will continue to watch the port.

There's still longer lead times, and we'll continue to mitigate that with higher in-transit levels. And higher in-transit levels, thus, means we're putting stuff, imports on the water earlier or trying to ship around the West Coast port. .

The other sort of key inventory metric to look at is average in-store inventory, and as Barbara mentioned in her remarks, that was down slightly versus last year. And what that tells you is that our in-store inventory is pretty fresh and in pretty good shape.

With a 5% comp, we were able to achieve higher turns, which is 1 of the contributors to the higher margin. .

Oliver, on your other question on the components of sales, we have no reasons to believe that, that trend would change. .

I just want to add... .

Okay. Just a final question -- sorry, go ahead. .

No, I just wanted to add on the packaway. Part of what drives that number is really the great deals that we've gotten in the marketplace. Between the port dislocation and mixed sales results in Q1, there was a lot of availability, so we feel very good about the packaway that we have.

It's a branded product at really great values that our customers expect, so we feel like it's a very good thing for us. .

Got it. And just a final question. You've had such stellar execution throughout the year and last year and holiday and back to school.

So do you have any initial thoughts on your inventory flow versus last year and Gifting initiatives versus last year as you anniversary your own outstanding performance?.

From the Gifting perspective, we were very happy with what happened in Gifting last year, but we feel like we haven't maximized that business yet. So that is one of the things in the fourth quarter that we will be focused on. Last year, we expanded in some new -- into some new classifications.

We tested some new classifications, so we feel that we have a lot of room to grow in the fourth quarter. We recognize that we're up against some very big numbers. In terms of inventory flow, you mean just literally how the goods will [indiscernible]? Just trying to make sure I understand the question. .

Yes. And that was very helpful with categories. And you also mentioned Home in your earlier remarks. Is that something that is an opportunity for you? I guess, I'm asking as you post game holiday from last year, if you feel there were any elements that we should think about that's lower-hanging fruit as you approach it this year. .

Well, I don't know if I think there's anything that's low-hanging fruit, but what I would say is that we don't feel like we've maximized -- we obviously don't feel like we've maximized those businesses.

Our Home business has been getting progressively better over the last few quarters, and for competitive reasons, we wouldn't talk too more about -- too much more about it.

But I would say is, again, we tested a lot of classifications, and we do that every year in an effort to increase the treasure hunt, drive sales, give the customer better experience. And so we feel that we can anniversary those numbers. .

The next question is from Mike Baker with Deutsche Bank. .

I just wanted to ask, if I could, about the promotional environment. You talked about -- I think you were referring to potentially being more promotional.

But is that in reference to anything you're seeing? And if I can just say one thing, where monitoring is -- department store inventories, which are up about 4% year-over-year, higher than they have been over the last couple of quarters.

So is that giving you guys any pause to think that the promotional environment might be a little bit more intense over the coming quarters?.

Yes, we do believe the promotional environment in Q2 will be much more aggressive than it was in Q1 based off the mixed sales results. .

Right, okay, and so that's presumably in your guidance for the second quarter.

Is that something that is also contemplated in the guidance for the full year?.

It is, Mike. .

The next question is from Laura Champine with Cantor Fitzgerald. .

My question is really if you can update us on new store economics.

On the new stores you're building this year for Ross and dd, how much do those cost? What do you think you'll see in first year sales? And what are the cash-on-cash returns from those new stores?.

Sure. In terms of the earnings [indiscernible], Laura, it hasn't changed that -- quite that much. Our CapEx is probably, given the mix of whether we take on a property we have to improve or whether you get a store that's already built out, on average, it's about $1.5 million. Working capital is another about $200,000.

So if you take those economics, we get in our new stores lower volumes than our existing base, as one would assume. And as we roll out dd's a little more aggressively and enter the markets, the average volumes are probably in the 60s. You do that math. You get in-store returns in the mid-teens. You get a cash-on-cash return of right around 2 years. .

The next question is from Bob Drbul with Nomura. .

This is Karyn O'Brien filling in for Bob. I was just curious. Have you guys seen any material effects or underperformance in the regions more sensitive to the oil industry? You mentioned last quarter that you hadn't, but just curious if that -- if you'd seen any changes there. .

I would -- this is Michael. I'll answer that in terms of regional performance. As we mentioned on the call, the Midwest was the top-performing region, and that's been the case for the last year.

In terms of our larger markets, which includes Texas, Texas and Florida were slightly above the chain, and California, our largest market, was in line with the chain. .

The next question is from Jeff Stein with Northcoast Research. .

Yes. Just a follow-up on that prior question.

Within Texas, and I can't remember if you have any dd's locations in Texas, do the dd's -- and if you do, have those locations performed any differently than the Ross locations within Texas?.

No, they haven't. No, they haven't, Jeff. .

Okay. And I can't recall. I don't think you mentioned.

Did Home underperform, perform in line or outperform apparel during the quarter?.

Home was slightly ahead of the chain, average. .

Slightly ahead. Okay, great. .

The next question is from Patrick McKeever with MKM Partners. .

Question on the website and what you're doing with social media. Looks like there's been a recent redesign of the website. I could be wrong but looks different to me. So is that the case? And then with marketing, maybe you could talk through what you're doing with social media, Facebook and Pinterest, those kinds of things.

And do you feel like what you're doing is having much of an impact on the business, particularly the Juniors business, which continues to be very strong?.

Sure. So Patrick, we -- a few years ago, we started experimenting with social media, and now we actually -- we do allocate a portion of our marketing budget to those kind of media. And we've been pretty happy with the results, and you can expect to see more of that over time.

What we like about social media is that the best marketing for us has always been word-of-mouth marketing. The customer finds a great bargain at Ross and then tells all her friends about it. And social media provides a way to sort of simulate that but to do it more extensively. So yes, so social media is certainly something we plan to do more of. .

And the website, is that a redesign?.

Yes. We recently redesigned the website, and we do that periodically every couple of years. .

Okay. And then just -- I know we're talking 1 or 2 stores, but with some of the announcements that have come out of some of the department stores, including Macy's and I guess, today, there's talk about Kohl's opening a sort of a maybe not off-price concept but some kind of a concept, smaller store with deeply discounted product.

So the question is, is that a -- as you think about that becoming perhaps a bigger part of retailing, some of the bigger players getting into off price or opportunistic buying and merchandising, is that a concern?.

I think that we're happy that people want to grow the off-price category. If they want to grow each share of the off-price segment, probably at the expense of other retail formats, that would be fine.

But we actually have -- we think we have quite a strong skill set and set of capabilities that put us in a pretty strong position, and we've always operated in a very competitive environment.

We never take the customer for granted, and we know that if we can execute well on our off-price model and deliver great bargains for the customer, we'll do well no matter who the competition is. .

The next question is from Kimberly Greenberger with Morgan Stanley. .

I'm wondering if you could help us with order of magnitude either on the transaction increase, driving your comp or a average dollar sale that it's sort of equally split or was one a bigger driver of the quarterly comp. .

Kimberly, the -- as we mentioned, the 5% comp was transactions, which is our proxy for traffic, and also an increase in the basket. Between those 2, it was fairly equal. The basket increase was mostly driven by units per transaction, but AUR was up just slightly. .

Okay, excellent. And then I'm wondering if you can talk about the sort of cadence of wage increases that you're looking to make. Michael, you obviously talked about the move to $9 here in the second quarter.

Are you contemplating a move in 2016 to $10? Or how are you sort of thinking about the wage environment?.

first of all, we're pretty confident that, over time, we'll be able to find efficiencies in our business to offset some of those cost increases; and secondly, there is a silver lining here in that the customer has more money in their pocket because of higher wage rates and that could well help our top line as well. .

Terrific. My last question is just on the $0.04 benefit here in Q1. It sounded like you're expecting the packaway to be sold throughout the next 3 quarters of the year.

Does that mean that the $0.04 benefit here in Q1 just sort of gradually gets rents through the cost of goods sold line in Q2, 3 and 4? Is that how we should think about it?.

Kimberly, yes. At this point, packaway for us is really hard to predict, and it's based on what's available in the market. But our guidance assumes that it flows throughout the remainder of the year. .

The next question is from Anne-Charlotte Windal with Bernstein. .

Was wondering if you could elaborate a little bit on the traffic trends you're seeing and what type of order of magnitude are you seeing in terms of increase in traffic.

And then if you could also elaborate a little bit on any type of traffic-driving initiative that you are either implementing right now or like looking forward to implementing during the balance of the year, so from a marketing standpoint. .

As we mentioned on traffic, what we said was about 1/2 of the 5% comp was -- was traffic. .

In terms of our initiatives to drive traffic, I think I would say our approach is the same as it ever was. You've heard us say this before. The most effective way for us to drive traffic is to have great bargains in the store. That means the customer will show up, and through word of mouth, more customers will show up.

So there's nothing new that we're going to be doing that's different to drive traffic. It's more of the same focus on value. .

[Operator Instructions] The next question is from Marni Shapiro with Retail Tracker. .

I'm sorry if I missed this. I have been hopping on a few calls. But you've a great temporary leader in place at dd's, and I was curious what kind of changes or things are happening there, let's say, you're implementing that you've seen any traction with.

And also along the lines of dd's, are you seeing traffic to that website? And is it getting any kind of consistency?.

Sure. So on dd's, first of all, we certainly are making some improvements and changes at dd's, but that's a business that we're pretty happy with how dd's has been performing over the past several quarters. So we're very confident in the long-term future of that business.

So I don't think there's anything I would call out at this point in terms of changes that we're making. In terms of the website, the website, really, is informational. We are -- as you know, we don't have any commerce business. We do track traffic to our website, and over time, we've seen a growth in that traffic.

But it is, I want to be clear, is an informational website rather than a e-commerce website. .

Great.

Are you seeing increased traffic? Is the brand building more awareness at all?.

On, what, dd's, specifically?.

Yes, dd's. .

So yes, dd's growth of traffic both to the website and Facebook page and other areas of social media, we've seen quite significant growth in traffic targeting dd's across those different media. .

Fantastic. And then just one follow-up also on dd's. As you go to the market for dd's merchandise, are you able to leverage the Ross power? Are you going in there and saying, look, this is Ross' little sister and potentially bigger sister, who knows, but this is Ross' little sister.

And is that helping you to gain access to brands that maybe you might not have had access to?.

I would say a little. On occasion where we think it's appropriate for the 2 teams to travel together, they'll travel together. But overall, really, dd's, at this point, is 150-some-odd stores. We have a pretty big pencil, and they go out, and they shop different resources, different vendors, and they do it on their own. But there is some slight overlap.

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There are no further questions. I will turn the call back over to Barbara Rentler. .

Thank you for joining us today and for your interest in Ross Stores. Have a great day. .

This concludes today's conference call. You may now disconnect..