Good morning and welcome to the Cracker Barrel Fiscal Year 2020 First Quarter Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Adam Hanan, Manager of Investor Relations. Please go ahead.

Thanks, operator. Good morning and welcome to Cracker Barrel's first quarter fiscal 2020 conference call and webcast. This morning, we issued a press release announcing our first quarter results and our outlook for the 2020 fiscal year. On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran; Senior Vice President and CFO, Jill Golder; and Vice President and Principal Accounting Officer, Jeff Wilson. Sandy will begin with a review of the business, and Jill will review the financials and outlook. We will then open up the call for questions for Sandy, Jill and Jeff. On this call, statements may be made by management of their beliefs and expectations regarding the company's future operating results or expected future events. These are known as forward-looking statements, which involve risks and uncertainties that in many cases are beyond management's control and may cause actual results to differ materially from expectations. We caution our listeners and readers in considering forward-looking statements and information many of the factors that could affect results are summarized in the cautionary description of risks and uncertainties found at the end of the press release and are described in detail in our reports that we file with or furnish to the SEC. Finally, the information shared on this call is valid as of today's date, and the company undertakes no obligation to update it, except as may be required under applicable law. I'll now turn the call over to Cracker Barrel's President and CEO, Sandy Cochran. Sandy?

Good morning, and thank you, Adam. This morning, we announced positive comparable store restaurant sales, and we delivered GAAP earnings per share of $1.79. While we faced headwinds from the softening trend in industries traffic, comparable sales that continued throughout our first quarter, I was pleased that we again solidly outperformed the industry and that we grew operating income by 3%. Jill will review the financial results for the quarter as well as our updated full year expectations. But before she does I want to speak to some of the highlights from the quarter and provide an update on our plans for the remainder of the fiscal year. First quarter menu promotion featured our homestyle chicken. As a reminder, this popular offering was previously only available on Sundays, but we made it available every day as part of our Signature Fried Chicken platform. The menu promotion also featured our new Homestyle Chicken BLT sandwich and it was supported by six weeks of national TV media, with the ad continuing our strategy of more explicitly highlighting our food and value. While traffic in the quarter was softer than expected, I was still pleased with the performance of the menu and marketing promotion. Moving to off-premise, we again saw solid growth in this business and it was a meaningful contributor to top line results for the quarter. During the quarter, we expanded our third-party delivery coverage and this service is now available in nearly 600 stores. We also expanded our fleet of catering vans, bringing our total to 235 and we hired several catering sales managers as we continue to grow our catering business. Turning to retail, our sales in the first quarter were below our expectations and our apparel merchandise was particularly challenged. We continue to rework our women's apparel category…

Good morning, everyone and thank you, Sandy. I would like to begin by discussing our financial performance for the first quarter of fiscal 2020, and then, our outlook for the 2020 fiscal year. But before we begin, I would like to note that we adopted the new accounting standard for leases at the start of the fiscal year. While this does not have an impact on our income statement or cash flows, it did have a meaningful impact to our balance sheet as our total assets increased approximately $578.3 million with $473.5 million of the increase attributable to the addition of operating leases to the balance sheet. More information on these changes will be provided in the 10-Q that will be filed shortly. In this morning's release, we reported first quarter net income of $43.2 million and GAAP earnings per diluted share of a $1.79 compared to prior year earnings per diluted share of $1.96. Our reported earnings per diluted share included unfavorable impact for the quarter of $0.11 related to transactional and integration expenses associated with the acquisition of Maple Street Biscuit Company and a $0.25 loss from the company's equity-method investment in its unconsolidated subsidiaries, Punch Bowl Social. For the quarter, we reported total revenue of $749 million, an increase of 2.1% when compared to prior year revenue of $733.5 million. Our restaurant revenue increased 2.7% to $607.1 million and our retail revenue decreased 0.4% to $142 million. Our total revenue increase was primarily driven by positive comparable restaurant sales and the net opening of four new Cracker Barrel locations. Cracker Barrel comparable store restaurant sales in the quarter increased 2.1% as average check, increased 3.6% and traffic decreased 1.5%. The increase in average check reflected menu price increases of approximately 2.3% and a favorable menu mix of…

We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Jake Bartlett of SunTrust. Please proceed.

Thanks for taking the question. Sandy, I want to ask about the -- of the lowered same-store sales outlook for 2020 on the restaurant side. And I'm wondering what is driving that, whether it's the industry outlook that you talked about kind of being less and -- less strong than you expected or whether it's some of your initiatives like maybe the follow through from the Fried Chicken launch, how the Homestyle Chicken ran -- how it performed in the first quarter, anything you're seeing early on in the Thanksgiving selling season?

All right. Great. Thanks Jake. I'm actually going to let Jill take that question.

So good morning, Jake. Yes. We did update our comp guidance to 2% from our prior guidance of 2% to 3%. This was primarily driven by the year-to-date industry performance. We continue to be pleased with our off-premise performance and anticipate continued growth in that business. As we said in our prepared remarks, we believe we can still achieve our targeted off-premise performance at 10% of sales at the end of this year. The Signature Fried Chicken platform has been performing well to our expectations and that includes the performance of our Southern Fried Chicken, the Homestyle Chicken, as well as the new Homestyle Chicken BLT. But I do want to point out as we look at the guidance, it does assume that the industry improves from its current trend in the back half.

Got it. And if we could maybe switch to the second quarter and the initiatives that you have and the promotions that you're running, do you expect any difference year-over-year in terms of marketing rates for instance for the Fried Turkey promotion and I believe you're increasing your Heat n' Serve prices pretty, pretty sharply this year again as you did last year. I'm just trying to gauge your confidence that that's not going to have some push back in terms of demand?

Well, we did anticipate the impact on demand as we made the decision about pricing, which was made last spring. So the impact if any on the demand is built into our guidance. In terms of the media, I would say that we do have some additional media this year. One of the things that happened to us last year, we actually I think began to be concerned, we were going to run out of Turkey. And so this year, we were able to change our Turkey inventory, which gave us more confidence. So I think there is some additional media being driven after Thanksgiving with the Turkey message on it. But we continue to be excited about the Heat n' Serve, as well as our celebration meals. And of course, tomorrow, we -- our first Annual Macy's Thanksgiving Day Parade debut is tomorrow with our float and our tiny store, which is in New York, excuse me, Thursday and our tiny store, which was in New York this morning.

Great. And then just last question on the margins, your restaurant level margins included the impact of the transaction and integration costs. I'm wondering I believe the -- you used to have a conference every other year bi-annual conference was that in the first quarter here typically, spending 30 basis points or 40 basis points or is that been pushed into another quarter?

So Jake, there is couple of things there. So yes, the transaction costs from Maple Street of $0.11 within the margins for Cracker Barrel. About 48% of that or so was in G&A, the remaining was in other operating expenses. And yes, we did have our conference this fiscal year and that is in the second quarter. It wasn't -- the biggest impact in there -- I'm sorry, in the first quarter, it wasn't the biggest impact though in there. Yes. We did have some other operating expenses, around our investment in capital as well as the increase of the two weeks in advertising that we had in the first quarter.

Great. Thank you very much.

The next question comes from Alton Stump of Longbow Research. Please proceed.

Good morning Sandra and team. I just want to ask you kind of as you look at the overall competitive environment kind of what you're seeing out there? Is it getting more aggressive in the casual space as you look forward in your view is that going to continue or do you think we'll see things get a bit more rational over the course of fiscal year 2020?

Well, we certainly believe that it has been more competitive. I think as the industry softened in recent months, and it would appear the consumer shifted some of their discretionary spending away from casual diner, the reaction -- that elevated the competitive pressure. And I think the reaction was a higher level of promotional activity, which we were certainly noticing in the first quarter, to what degree that will continue, I'm -- I don't think, I can comment on that, Alton, as Jill mentioned, we are assuming an improvement in the underlying industry trend in the second half of the year.

Got it. Thanks, Sandy. And then kind of small question, which I guess is for Jill. Just you bought back shares of course in the quarter for the first time in a couple of years, but obviously have also done some acquisitions here recently, kind of, how do you view share buybacks as a tool going forward next 18 months to 24 months?

No. That's a great question, Alton. As you know, we now have more flexibility for repurchasing shares. So that's another way that as the Board looks at capital allocation, we're able to provide value back to our shareholders. So I think what I'd say is our overall philosophy of our capital allocation hasn't really changed. We continue to focus on investing in the business to drive sales and earnings and long-term value creation. Secondly, we remain committed to our regular quarterly dividend. And then we also -- this year, we declared a $3 last fiscal year -- we declared a $3 special in June. And then as you pointed out in the first quarter of this fiscal year, we repurchased about 14.2 million in shares. And then we have other investments in future growth driving initiatives like our investment in Maple Streets and Punch Bowl. So I think the Board will continue to look at all of our options in front of us, in terms of how we drive long-term value creation. But then share repurchase has now become part of that mix.

Got it. Thank you both.

Our next question comes from Gregory Francfort of Bank of America. Please proceed.

Maybe just the first one, in terms of Punch Bowl Social, Jill, I think you gave a breakdown of kind of what's the main components of that. But can you maybe talk about what was the delta from the old $0.50 to the current $0.80, is that greater pre-opening that you've had, or is it just what was the driver of that $0.30? Thanks.

Great. Thanks, Greg. So as a reminder to everyone, we have a non-controlling stake in Punch Bowl Social and we continue to believe it's a highly differentiated brand with significant growth potential. So remember when we gave our original guidance of $0.50 loss that included the fact that PBS, Punch Bowl Social has store level -- positive store level EBITDA, but it's offset by the pre-opening expense that you mentioned, and a G&A infrastructure that supports the future growth. So then, the change was largely due to unit closure expenses that we closed the Fort Worth site, which we believed was a selection site issue and the Cracker Barrel team is partnering with the Punch Bowl team to leverage our expertise to help us improve our site selection process. And then in addition, we did lower a little bit for our current thinking on updated business performance. Again as a reminder, it's a new brand, many of the stores haven't even been open three years. So we're getting a fair amount of learning, specifically around sales trends, but there is a number of sales drivers in this brand, that we are entering new markets. So we're learning about how sales growth in new markets, how we ramp up in group and event dining, as well as the seasonality of the business. So these numbers may move around a little bit but we will provide as much information as we can.

Thank you very much. And maybe just two others, one for Jill and one for Sandy. Jill, just on the retail margins, I know you guys are talking about being flat for the year, but you guys are seeing, I guess a lot of cost you are able take out, the margins have been very good. Can you maybe talk about what's been the biggest tailwind or the biggest drivers of that performance year-over-year and why that would be temporary versus ongoing? And then I had one last one for Sandy.

Well, I think on the retail margins, I'll actually start on that, I think the team has done a really good job of trying to protect margin rate and dollars in an environment, where we needed to address sort of variety of issues, but probably the biggest one for us this particular quarter was the tariffs. We've done that through designing the assortment, through evaluating alternative suppliers, working with our vendors to share the cost. In some cases, changing our pricing. So our buyers work really hard to continue to deliver unique fun nostalgic, great value items to our guests and to provide the appropriate level of profitability for our shareholders.

Got it. Thank you. And then maybe just my last one is, -- and you talked about a little bit in your prepared remarks, Sandy, but just can you maybe address what are some of the big differences between Maple Street and Holler & Dash? And then, what are the things that they're doing right that maybe Holler & Dash wasn't doing right and why this is kind of a better brand to bet on longer term? And then, that's it. Thank you.

So there is a lot of similarity, they are biscuit entrees, a menu that features comfort food. They are both fast casual open breakfast and lunch, both sort of focused on urban, suburban locations, targeting millennials and Gen Zs. I think our experience with Holler & Dash reinforced our belief that the segment was attractive. They have had -- Maple Street's been around longer, their brand is we believe has a strong proven business model, attractive unit economics, high growth potential. So given their number of units and success and where we currently were in the Holler & Dash pass, we felt that the conversion of Holler & Dash's into Maple Street would accelerate our penetration in the category.

Great. Thank you very much.

Today's next question comes from Jeff Farmer of Gordon Haskett. Please proceed.

Thanks. Just a couple more on Punch Bowl. So when do you expect to see the concepts become neutral to EPS?

So this is, Jill. I think what I would say about that is, as we said, we expect the investment in Punch Bowl this year based on equity method of accounting to be an approximate loss of $0.80. We're not providing guidance beyond fiscal '20. We will certainly talk more about it on our Analyst Day in late June. But as we said, right now, given how we're learning about the brand, the team continues to refine their forecast for next year. So we look forward to sharing more in June.

Okay. And then of the Punch Bowl units that are in the comparable store base, is there a same-store sales number that you guys have shared or are willing to share?

No. We're not providing that level of detail around our investment and the performance of the Punch Bowl brand because it's a non-controlling interest that we're just providing the below the line method based on the equity method of accounting.

Okay. And just a couple of quick additional ones. So just following up on the Heat n' Serve questions, that was you guys didn't provide a ton of detail, but it was pretty clear that was a big same-store sales driver last year in the fiscal second quarter. So with the growing popularity of that offering, I have to assume, it gets more popular over years, you will get familiar with it, and the double-digit price increase that was already mentioned, how impactful could that be to your fiscal second quarter same-store sales number this year?

Well, it's certainly going to be an important component of the Thanksgiving week. It's an offer we're very excited about it. Our guests are excited about it. We did have the price increase and some demand -- an increase in demand expectations built into our guidance. But it is only an offer that's available for one week before Thanksgiving. And then we do offer a Christmas Heat n' Serve before Christmas. So it is just one component of the overall mix for the second quarter. I'll say off-premise in general though is an important part of our second quarter sales expectations. And so in addition to the Heat n' Serve, we're looking forward to growth in our celebration meals, as well as individual to go grow through both third-party delivery and just people coming into the restaurant and to pick up their meal.

That's helpful. Just one last one. So, you delivered strong labor cost control, I think for the second consecutive quarter. Just curious sort of looking under the hood a little bit, what's driving that labor cost favorability and how sustainable is that as we move through the balance of the fiscal year?

This is Jill. What I would say is the teams have done a really nice job managing through labor. Our operations team is focused on kind of the back to the basics on how we forecast our sales and then appropriately schedule. So we were pleased with our overall labor performance, We will say, the wage inflation of 3.2% was a modest headwind for us. We expect for the year wage inflation to be 4%. So that will become more of a headwind as we look forward. And then also within the labor line, we did see some favorability across a couple of other lines that help to offset our wage inflation, primarily in pre-opening labor and a little bit in store bonuses.

Great. Thank you.

The next question comes from Stephen Anderson of Maxim Group. Please proceed.

Hey, that's Stephen Anderson. Just I wanted to talk about the quarter specifically, I want to get into the impact from Hurricane Dorian. Although, there was not really directed to United States -- there was that weekend in September where there were a lot of evacuations, may have been some store closures. I wanted to see if you are able to get any color on the impact on overall sales? Thank you.

Great. No. Thanks, Steve. Hurricane Dorian, even though the actual impact wasn't as much as it was forecasted to be, it was disruptive to our business and certainly had impact on our traffic, especially as people were concerned that it was going to hit, Florida. So what we don't know is how much it impacted people's travel plans. And as you'll recall, it was near an important holiday weekend for us when it hit. So we definitely think that it had an impact. As a reminder, in the first quarter of the prior year, we had two hurricanes. So our best estimate is they relatively offset each other, but it was a little more difficult to analyze.

All right. Thank you. And I want to also take a look at the commodities, you said that by looking at last quarter, the commodity is up 0.2%, but you're still keeping the full year forecast. And I want to see, if you see any pressure points across your commodity complex?

Great. So yes, in the commodities basket, in the first quarter, we benefited from ramping on higher egg prices in the prior year. So that's the primary component that brought our commodities flat to the prior year. We have a little bit of that ramp in the second quarter. So we do expect to see commodities step up in the second quarter. And then it'll be slightly above 3% in the back half. The main drivers haven't changed from what we talked about in our previous calls. It's really beef, pork and dairy that are the largest drivers of our commodity inflation. And as we mentioned, we've got approximately 45% of our commodity pricing is locked.

All right. Thank you.

Our next question comes from Bob Derrington of Telsey Advisory. Please proceed.

Yes. Thank you. Sandy, as it relates to Punch Bowl Social, I think on the last conference call, you talked about the business and you were fairly excited about ultimately the experiential contribution that it could bring along with Cracker Barrel. And at the time, you are talking about the smaller prototype that opened in Fort Worth, which ultimately has been closed. So, what -- I'm just curious, what was it that has changed within the perception of that store location from the initial enthusiasm about that smaller prototype?

So we're disappointed that Fort Worth wasn't successful. In this particular case, we believe it was a site selection issue more than a small box issue and we're partnering with the team at Punch Bowl to understand better all of the situation and to improve that process. But as Jill said, it's a young brand, there's going to be learnings. We will continue to learn, continue to update the guidance but we continue to believe that PBS has significant growth potential. And I think it's positioned to become a leader in the segment.

Are you -- I guess based on that experience thinking that you may provide a little bit more participation in some of the key decision-making processes within Punch Bowl?

Well, I don't know, if it will be more than we had originally planned. The team out in Denver had -- we'd always anticipated in areas like real estate, purchasing and things like that, that we would be able to add expertise and that's one of the reasons we made the investment. So I think that we've, but we certainly again quickly on the real estate issue just to ensure that we understood what the learnings were in all the sites including Fort Worth.

Got you. Okay. And to shift gears back to the Old Country Store, you also talked on the last conference call about the new menu that you've introduced there. And I think this menu now offers both essentially both breakfast and all day dining, is there something about the contribution from the impact of that menu that has affected the sales guidance or just if you could help us with your initial impression of how that's being received at store level?

Yes. The dinner menu initiative is currently only in 70 stores and it doesn't -- I'm not sure what you said break all day dining all -- what you might be referring to is that the dinner menu now has a small category, where we call out on the dinner menu that breakfast is available all day. And we actually offer on the dinner menu, our most popular breakfast items. And we highlight that you -- the full breakfast menu is available if you ask the server. So that largely made it just easier for our guests that wanted to order breakfast, as well as easier for our servers who now don't have to put two menus down for the lunch-dinner time and only one unless asked. We continue to be encouraged by the learnings we have in the dinner test, but we are continuing to test and learn. The first changes from the initiative will probably launch or we are expecting to launch sometime next spring chain wide. So as we learn, we've been making modifications. I think we've got one going in next week to the test stores, we will have another round then after the holiday. And we'll modify the dinner menu, but no, I don't -- the learnings from the dinner menu didn't impact. I'll turn actually over Jill, on how that might have impacted the sales forecast.

Yes, So, yes, Bob, this is Jill. On the sales forecast really the big change has been the industry expectations. You might remember from when we originally gave guidance, we expected the industry to perform overall as it had performed in the prior fiscal year, which was better than our recent current trends. On the new food introductions specifically under this Signature Fried Chicken platform, we've been very pleased that certainly driving the mix favorability that you've seen and they've been featured in our advertising and we've been pleased with that performance as well, specifically around the Southern Fried Chicken, the Homestyle Chicken and the Homestyle Chicken BLT that were featured.

Okay. That's helpful. What I was curious about is whether adding the breakfast to the all day, that dinner menu Sandy has hurt the check average as consumers shopped maybe at more lower-priced possibly the breakfast items as opposed to the regular dinner features?

We are not currently seeing that.

Okay. All right. That's good. And then last question if I could. On the depreciation, with the first quarter it was up about 15% year-over-year, yet the midpoint of the guidance, Jill, I think only targets D&A up about 5%. So should we anticipate that the essentially $28.7 million in the first quarter is expected to be a reasonable run rate for the other quarters, that's kind of what your, guidance implies?

Yes, just a second Bob, we're taking a look, but I think we feel comfortable with our guidance. Some of that is where the Maple Street integration costs kind of fell, but overall we feel pretty comfortable with our guidance. We've stepped down a little bit on our capital spending, so you're going to see some of that will start to roll off towards the back half.

Yes. And we did -- Bob, this is Jeff. We did have some accelerated depreciation associated with the acquisition of Maple Street, that is affecting our depreciation number in the first quarter as well.

Okay. All right. That's helpful. Thank you. Appreciate it.

The next question comes from Brett Levy of MKM Partners. Please proceed.

Great. Thank you. Good morning. Couple of clarifications and then just some bigger picture. You've talked about the continued growth on Punch Bowl Social, and now you had a closure. Should we still assume that the roughly 100 unit target you had in place still exists and how should we think about the makeup of willingness to revisit the smaller prototypes?

I think for now, you should assume that the guidance for that 100 store expectation still exists and we'll update you more at the Analyst Day in the summer.

Got you. You talked about continued growth of to go in off-premise care to quantify what it was the growth this quarter?

Yes. We are verifying, I think we said it was up over 150 basis points. We'll verify that, but it was a significant contributor in the first quarter, 180 basis points.

It grew as a percentage of the mix?

Yes. They contributed that, the same restaurant sales growth.

So that's the contribution to comps. Okay.

There you go.

With respect to November, I know you haven't given a guidance -- cadence, but could you care to -- do you care to share any color in terms of how you exited F 1Q and started off on 2Q?

No, I guess, I would not -- I don't have any additional color to add to what we've already disclosed.

Got you. And then I guess a strategic question. You've talked about upgrading the POS systems. How many units do you have it in now? And theoretically, why did you decide to spend $14 million on buybacks as opposed to use that free cash that you have in play to maybe accelerate the integration now that you've already gotten past the equipment integration from last year? Thank you.

Yes. That's a fair question. So as we've looked at the POS rollout, so first of all, we're currently in 130 stores. We expect to add an additional 40 in fiscal '20. We're still really pleased with the new POS. It's an easier system to use for the team members. The technology we believe enhances the employee experience. And then, we think it will be a foundation for some future cost savings, but I guess what I would say is, it's not that easy to flip the switch in terms of rollout. So we will talk about at Analyst Day more about what our rollout plan to look like, but it wasn't capital risk constraints that Campfire from increasing the rollout, it's more a logistics. Is that helpful?

That is. Thank you very much.

Our next question comes from Jon Tower of Wells Fargo. Please proceed.

Great. Thanks. Just a quick clarification, first, if I may. The $0.80 EPS headwind that you had mentioned related to Punch Bowl Social that does not include the interest income from the loan. Is that correct?

That is correct. So the $0.80 represents our investment using the equity method accounting. So the other two areas on the financial statement where you will see an impact from Punch Bowl Social, one is on the interest income, which benefits from our loan to Punch Bowl. The other is in the tax rate, which benefits from the loss.

Okay. And the tax rate doesn't include, this is just a straight up one line, it's an headwind type of loss, okay.

Yes.

Great. Perfect. And then could you quantify what the size of the loan is to Punch Bowl right now?

So what we had said -- so what we have said is, we were going to loan up to $50 million in the near term to date we've loan $30 million, about $15 million of that was the last fiscal year, $16 million to-date so far, and our guidance contemplates that will loan, the remaining $20 million, the rest of this in this fiscal year.

Great. Thank you for that. And then just going back to the Signature Fried Chicken platform. Can you give us a little bit more in terms of what you're seeing around customer usage of this perhaps just simply percentage of mix of sales today or more importantly what you're seeing around frequency of use of this platform. Are you actually seeing customers come in more frequently to use this then what you've seen in other platforms in the past?

Well, what I can say is that it's in line with our expectations that we're pleased with the mix. Let me back up so when we put our Signature Fried Chicken platform and we started with the offer of Southern Fried Chicken and that was the bone-in offer four pieces of bone-in fried chicken. And then we rolled our Homestyle Chicken, which is a boneless offering that used to be available only on Sunday. So we rolled that out as an everyday offer in the summer. And we added to that our Fried Chicken BLT, which we are pleased with that performance. Then in the holiday season, we are offering the fried chicken -- excuse me the Fried Turkey offer as our holiday offer and we're pleased with the performance of that. We'll next be adding hand batter breaded tenders that will probably be next fall at the earliest. So the investment in the platform was always intended to be a multi-year initiative and we continue to be pleased with the results.

Okay. Thank you. And then, yes, anything else on outside of the Signature Chicken platform for the balance of the year either on the new product side that we should be thinking about or importantly also around advertising, is there any significant changes in the advertising spend planned for the balance of 2020 and obviously 2019, you had a amount of spend in that fourth quarter tied this launch. How should we think about advertising for the balance of '20?

Yes. I know, it's a good question, Jon. So the advertising as we talked about and we've added some advertising in the first half more in the second quarter was that kind of came out of the fourth quarter. So it will be close to parity within the third quarter, expected to be lower in the fourth quarter. And then we haven't talked about what our advertising will feature yet kind of beyond what we're on air with right now.

Okay. Thank you.

Thank you.

This concludes the question-and-answer session. At this time, I would like to turn the conference back over to Sandy Cochran for any closing remarks.

Well, thank you for joining us today. I'm encouraged by the start to the year and remain confident in our plans to drive continued performance. We appreciate your interest and support and wish you all a safe and happy holiday season.