Thank you for standing by. And welcome to National Vision's Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to your host, Mr. David Mann, Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Welcome to National Vision's fourth quarter 2021 earnings call. Joining me on the call today are Reade Fahs, Chief Executive Officer; and Patrick Moore, Chief Financial Officer. Our earnings release issued this morning and the presentation, which will be referenced during the call, are both available on the Investor section of our Web site, nationalvision.com, and a replay of the audio webcast will be archived on the Investors page after the call. Before we begin, let me remind you that our earnings materials in today's presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to the factors identified in the release and in our filings with the Securities and Exchange Commission. The release and today's presentation also includes certain non-GAAP measures. Reconciliation of these measures are included in our release and the supplemental presentation. We also would like to draw your attention to slide two, in today's presentation, for additional information about forward-looking statements and non-GAAP measures. As a reminder, National Vision expects to provide certain supplemental materials or presentations for investor reference on the Investors section of our Web site. Now, let me turn the call over to Reade.

Thank you, David, and good morning, everyone. I'd like to thank you all for joining us today. I hope you are all staying safe and healthy. Like to begin by sharing my heartfelt appreciation to the entire National Vision team for their continue resilience, hard work, and their commitment to patient care and customer service during these ever-changing times. I've said it repeatedly over the past two years, and I'll say it again, I am just so impressed with this team. Turning to slide four, net revenue in 2021 exceeded $2 billion for the first year ever, with record adjusted EPS of $1.48. We are confident that we continue to outperform the industry in 2021, and believe that this should continue. We increased our whitespace target for America's Best by 300 stores in 2021, and see a long runway for expansion for both our growth brands. We invested in and progressed key strategic initiatives, including the improvement of Eyeglass World's ROIC, and the ongoing digitization of America's Best stores with remote medicine and electronic health records, which we expect to continue driving growth in 2022 and beyond. We generated record operating cash flow, paid down $167 million in debt, and returned nearly $70 million to stockholders through share repurchases. We released our first Corporate Responsibility report, and Greenhouse Gas inventory. Our corporate responsibility efforts have been well-received by investors and other stakeholders, and have been reflected in improved ESG rations. All in all, 2021 was a record-setting year on a variety of dimensions. Turning to slide five, and a summary of Q4 results, as noted in today's press release, our results are being compared to the fourth quarter of fiscal 2019, just as we did in our Q2 and Q3 releases. Due to the significant recovery following the reopening of…

Thanks, Reade, and good morning, everyone. We're pleased with our fourth quarter results as the business performed ahead of our expectations. Our performance was driven by continued positive traffic trends, and excellent store-level execution. In addition, we continue to reinvest in the business to maximize our opportunity to grow share while reducing our debt further and returning capital to shareholders. As a reminder, the comparability of our reported results was affected by the impact of temporary store closures in 2020. Thus, consistent with our second and third quarter earnings releases, we have shared results versus both 2020 and 2019. As we noted, our comments today are being primarily made to 2019 which we believe is a more helpful comparison. Now, let's turn to slide 10. Net revenue increased nearly 19% over 2019, the timing of unearned revenue versus 2019 benefited revenue growth by 1.1% which was better than expected due to the Omicron impact on sales during the final week of 2021. During the quarter, we opened 14 new America's Best stores and two Eyeglass World stores for a 6.1% increase in store count. For our America's Best and Eyeglass World both brands combined, unit growth increased 8.2% over the last year. Adjusted comparable store sales growth was up 11.5% over 2019 and up 1.2% over 2020 compared to a 10.6% increase in the fourth quarter of 2020. Q4 same store sales growth over 2019 was driven by growth in both average ticket and customer transactions. Compared to 2020, comps were also driven by an increase in customer transactions as well as a slight increase in average ticket. Turning to slide 11, as a percentage of net revenue cost applicable to revenue decreased 110 basis points versus 2019 or about 240 basis points ahead of our expectations. This decrease was…

Thank you, Patrick. Turning to slide 16 and our moment of mission, being responsible individuals and corporate citizens has been a core part of the National Vision ethos for decades. Over the past year, we've made several leaps forward in our ESG journey, including several firsts, such as completing our first greenhouse gas emissions inventory, and publishing our first corporate responsibility report. These efforts to improve our transparency and disclosure and lower our perceived governance risk are reflected by recent improvements in National Vision's ESG scores and ratings, thus reinforcing that our ESG journey is aligning to the needs of our stakeholders. Our ESG framework is also helping us maximize the impact of our philanthropic activities. Last year, National Vision made philanthropic commitments that we expect will help a million people around the world to see better and consequently live better. This includes collaborative partnerships with such groups as Americares and RestoringVision, as well as our own programs like NBI Cares, and Eyeglass World's Made Locally, Given Globally program. More information about our philanthropic and corporate responsibility efforts is available in the corporate responsibility section of the National Vision Web site. In summary, the key takeaway from today's call is this. As we entered the third year of the pandemic, we've grown our business and market share advanced key initiatives and further strengthened our foundation for sustainable growth. We feel good about what we can control and the smart investments we're making to drive our business. Eyeglass World is at an inflection point of growth. We're excited about our optometrist recruitment, retention and remote medicines initiatives. Our average ticket has stabilized and we've taken some pricing actions, and our financial position and cash flows are strong and remain a competitive advantage. For these reasons, we're confident about our prospects for this year and beyond. With that, I'd like to turn the call back to the operator to start the question-and-answer portion of the call.

Thank you. [Operator Instructions] Our first question comes from the line of Paul Lejuez with Citi. Your line is open.

Hey, thanks, guys. Couple of questions, can you maybe talk about the impact that you saw in December that last week, not sure if you quantified how much that impacted your fourth quarter results due to Omicron? And then also on the pricing actions, when exactly did those kick in, in the fourth quarter? How broad were they? And are you planning any other pricing actions beyond that this year? And then higher level, Patrick, can you maybe talk about accelerated store openings, so, I'm curious if you could give us an updated view on what the new store model might look like in a post-pandemic world in terms of payback, ROI, any change in the cost side in terms of the initial investment, if you could just give us an update there? Thanks.

Sure, Paul, good morning. I'll take the first and the third, and Reade will in on pricing. In terms of the last week of the year, we were really seeing the beginning of what we ended up sealing in significant ways in January, and improved the bulk of February, with Omicron, and Omicron both started affecting our store staffing for associates and doctors, starting affecting customers coming for their appointment. And so, we did see some sales impacts out of that that weakened in the last week or two. Again, I wouldn't call it severe, but we did see some weakening, did a little less than we expected to. But then the big impact was kind of the impact on our revenue, where we had guided for that to be fairly negative and it was like $4 million to $5 million better. So, that also kind of offset some of the sales [mix] [Ph] that we would have felt in December. Now, that $4 million to $5 million of less negative unearned, in 2021, found its way into 2022, which is part of our guide as well.

I think your second question was the pricing action.

Yes.

That was sort of late October, early November is what you should assume then.

And anything in the future, Reade, coming off this year, above and beyond that?

And the other pricing actions, is that what you're saying?

Yes, sir.

Yes, we don't rule that out. It's always a lever we have if we choose to or not. Announcing anything, [in fact] [Ph] we generally won't be announcing or sharing any of that till sort of little while afterwards, as we're doing now. Just for competitive reasons, we don't need to broadcast that. But it's -- there are options, and we're always looking at that, and looking at the difference between us and competitors. We'd like our customers to know they're saving money by coming with us, but it's certainly a lever we have pulled several times over the past several years.

Got it.

And in terms of new store models and paybacks, really not a lot has changed there. We still see target [indiscernible] revenues in the 1.4 to 1.6 range, cost to opening, $400,000 to $500,000 range, and so kind of the same breakeven timeframe, the frame of the same paybacks. We'll say, Paul, we are -- we continue to test some slightly different concepts, where we will maybe shrink the store a bit or we're putting in different configurations for our America's Best brand and our EGW brand. But all in all, for the foreseeable future, until we were to say something different there, you should expect a pretty similar store opening cadence and economics, which is a big part of the consistency of the business, yes.

Yes. And so, I'm just going to chime in and add in, as you've been hearing us say, we're excited about Eyeglass World. We think the last few years have been a real inflection point for it. And we have opened sort of two new configuration models that we're pretty darn pleased with. So, that's out there also, and we've done that pretty recently.

Thanks, guys. Good luck.

Thanks, Paul.

Thank you, Paul.

Thank you. Our next question comes from the line of Zack Fadem with Wells Fargo. Your line is open.

Hey, good morning. So, you've been talking about the elevated average ticket in your business for several quarters now. And in the past few quarters, you've been guiding for some form of normalization that, thus far, has been a little bit better than anticipated. So, first of all, can you talk a bit about the makeup here between price and mix, what you think has driven the average ticket? And then, what of that is expected to moderate? And then for 2022, how much of the 220 basis points of gross margin pressure would you specifically attribute to the ticket reduction?

Let me start, and Patrick, you can chime in on that second point. Actually, we were pretty pleased. What we've been saying is that we've been having an elevated average ticket for quite some time since the reopening of our stores, and that we expected it to moderate, and we expected it to moderate probably above 2019 levels, but we expected it to moderate. And we think it's now stabilized. And we think it's now stabilized at a level above our previous expectations, and certainly above the pre-pandemic levels. It's a combination of three things. There is mix shift, customers are buying more features, blue light is doing quite well, that sort of thing, and the peripheral pricing action. And we're pleased to have seen this despite the fact that there is less stimulus out there than there was before. So, this was an unexpected plus for us to see it stabilizing the way it has.

Hey, it's Patrick. The bulk of that 220 to 240 basis point reduction is ticket related. I mean there is a small amount, call it 30 bps for the remote rollout dilution, but, I mean, and for all practical purposes, all of that ticket stabilization is the gross margin change. And I'll just say, we -- it hurts financially for that ticket to stabilize, but it's really important for our business model, really important to our customers, is a part of the growth model going forward. So, part of this we just have to work through.

Yes, but it's stabilizing, so…

And then for Reade, how do you expect the category to perform as a whole, in 2022? And considering the lower income headwinds from inflation and lapsing stimulus, et cetera, do you expect the value tier to still outperform this year?

Oh yes. Like what we're seeing is a long-term trend in the category, where a shift to value, and that's -- I don't know, it's certainly been going on for a decade, and especially so in the past seven years. And so, the category, there is a definite shift to value going on, and we've been the beneficiary of that for quite some time. I do think that the category is off to a slower start for the reasons we talked about, Omicron and weather, and the weather, I think it was like five or six storms, and they all hit on the worst possible days of the week too, the highest days of the week, so that was -- and so the whole -- that anyone who is sort of out there with a broad geography affected by weather will have that, so I think the category is off to a slower start than any of expected, due to those factors. We don't think, in terms from a competitive environment, it's generally unchanged, but it's generally unchanged in the shift from independent to chains, the shift from malls to non-mall businesses, it's sort of several pieces like that. There have been two or three percent of doors have shut since COVID started, that's 2% to 3% of independent stores have shut, a lot of doctors just threw in the towel and said, "I'm going to retire, this is too much for us." And so, there have been sort of challenged hosts that have been not great places to be in optics, and that's -- again, that all favors us. I can't predict the future of the consumer, but I do think that when inflation is out there, and the like, people seek value, and that's what we're known for. So, in general, I feel that's a continuation of what we've been talking about for since we went public, in 2017.

Thank you. Our next question comes from the line of Michael Lasser with UBS. Your line is open.

Good morning. Thanks a lot for taking my question. How much of the loss sales or disrupted sales that National Vision has experienced year-to-date have you assumed that you will get back over the course of the coming months? Your first-half comp guidance is for a negative mid single-digit number. And then you're expecting a mid-to-high single-digit expectation in the back-half of the year, which would be higher than the long-term average, around 5%.

And Michael, I'll start, and Patrick, you can chime in if you want to. This is the thing about sort of the vagaries of our category. You got to remember, sort of, Q1 is optical Christmas, and January and February are the warm-up, and then March is really the high seasonality period. And we've not really had this sort of dynamic before in the category. We were talking earlier today about that, few years back, there were a lot of storms in March, pent up demand came back in April. April was a lower seasonality time. So, there was plenty of capacity there. But in March, so we have the least excess exam capacity to take up pent up demand. So, it sort of fits whole mess of Omicron and weather couldn't have happened at a tougher time given the category's seasonality overall, but - so sort of we're assuming a more modest recovery than we would if the seasonality was different.

Thank you very much for them. My follow-up question is your growth margin guidance implies that in 2022, it will still be above where it was in 2019. So, can you frame how your gross margin is going to compare this year versus prior to the pandemic as National Vision has experienced tremendous amount of gross margin expansion over the last couple of years. Can you be specific about how much of the price increase will go to cover some of the incremental optometrist wages that you will be paying this year? And to what extend will that be a drag on gross margin this year versus where it was prior to pandemic? Thank you.

Sure. As we look at gross margin, we are modeling it ahead of 2019. Certainly the ticket stabilizing at a higher level than, frankly, we predict is a factor and part of that is attachment to new products. We've also taken pricing action. So, I think those things, Michael, were obviously helping. We still expect to see some low degree of optometrist wage inflation. And also still expect to see lab productivity advances every year. So, we are fairly confident that we can maintain the gross gains that we have experienced. We have long-term contracts with our partners and vendors in terms of most of the things that come through out cost of sales. We are immune to it. But a lot of the cost of sales are under long-term contracts. That gives a little bit more confidence there. Coming back to the first question that you asked Reade, I would just add there too, gosh, it's still a difficult to plan and provide guidance. And as we think about how much of that revenue we will get back, we have taken somewhat of a conservative posture which is probably no shocker to anyone listening. But there is the element of conservatism in the revenues that will pick back up.

Thank you.

Thank you. Our next question comes from the line of Adrienne Yih with Barclays. Your line is open.

Yes, good morning; very well done in an incredibly difficult environment. Reade, I really want to focus on this remote exam, the 100 locations in 2021 and I guess 200 by the end of this year. Are these locations outside of like what type of sort of MSAs are they outside of -- are they for both AB as well as Eyeglass World? And how much more optometrist capacity utilization are you seeing in this initial phase? Any data that you can give us and share with us on those initial phase, and what's giving you that confidence? Thank you.

Yes, great. I can. I appreciate that question in particular. And just so to level set make sure everyone's got the common vision as to what we are talking about here. We are talking about patient in our store in the exam room sitting amidst all the all expenses, exam equipment that is in all of our stores. Doctor not in the store, doctor let's call it practicing from their den. It's a synchronous exam. So, the doctor is on a video screen talking to the customer as if they were there. And the doctor due to his electronic health record has all the data that they would have otherwise. So, the only difference in the experience is the doctor is on a screen versus actually in the room with the person. When you talked about sort of MSAs, the key thing is the doctor has to have a license for that particular state. And so, they don't have to be sitting in that state. But, they do have to have a license for that state. And so, we are looking at this as more of a state-by-state rollout, so that we sort of recruit in and have the doctors -- all the doctors that will need for that particular state. So, it will be a state-by-state of rollout. Again, in the past, we've been talking about the -- that we've been into the pilot phase, and now we're sort of moving into a broader expansion phase, it is all in America's best at the moment. And in short, the benefit is a patient is more likely to be able to get an exam when they want to have it. So, it's customer convenience there and the patients enjoy the exam, they all work. I think, we're all just getting a lot more used to doing things virtually than we ever thought about in the past. So, we're excited by that and it expands exam capacity and it allows us to serve more patients.

Hey, I would also add. Well, we're really, we're excited about the ROIC elements of this, this will be probably a multi-year project, in the same vicinity of scale of our retinal camera project that we did over a few years. And the return economics are great. If you think about a store where you can add a second one doctor to handle customer traffic or even a store that is dark for a day for some reason, having a doctor in that day. And having a second one when you need it is really big, it doesn't take any of those days to begin to kind of pay back that investment. So, we think this will be very ROIC accrued is early on.

And, who knows down the road or right now we're putting it in current stores at the different stores. But if you are down the road, we may have an opportunity to start building stores in places we wouldn't have contemplated before because we didn't think we'd be -- it'd be easy to get a doctor to move there. And this allows us to be agnostic about whether a doctor will eventually live in that area. So, there may be more remote or rural stores in the future. I'm not announcing anything yet. But that's a possibility that this unlocks.

Now, this is very interesting, because I guess my follow-up question to that is the rollout time for it does not seem to be I mean, they're with the equipment, right, the patient is with the equipment. And this is sort of just filling up the appointment book and utilizing kind of the appointment slots much better. So, seems like it has a pretty significant long-term, positive ramification if it starts to accelerate. So, that --

I would just add the way I think about it is it takes the most -- one of the most critical resources in our entire business model and it makes that resource more fungible across geography and time. That just you no longer have to use that set of skills in that one location, and you can flex it.

Yes. And then, really quickly, my follow-up question, I guess, Patrick, or maybe Reade, can you remind us what is the percentage of customers that do not have insurance? And the great resignation is largely coming from average hourly rate workers. And I know it's very early, very difficult to tell. But this is kind of a semi-permanent change in the workforce that should be benefiting National Vision. How do you think about that? And how do you tap into those customers? Thank you.

Okay. So, we have historically and always been underdeveloped in the area of vision insurance. For much of the category, it is the majority of the business that they get it is true vision insurance. And for us, it's always been a minority. And we're -- we say what if it was when we last announced that it's roughly in the 30s.

Thirties.

Yes, in the thirties and the first I would take in about a third of our patients and customers have that. This is for two reasons, when we bought America's best, they didn't even take insurance. So, that was we are starting from zero when we bought them. But more importantly, we think will probably always be or at least for the foreseeable future, majority non-insured patients because when it's your money that not masked by networks and things like that, when it's your money, you can seek out real value. And that's how people find out when it's their money. It's like, I'm going to save money by going to Mark Spencer, Eyeglass World or our Walmart store, so and to the extent of the great resignation to the extent that people aren't going to be in jobs where they're offered vision insurance. Yes, it shouldn't help us in that way, we think that consumers, when they're spending their money find us.

Fantastic. Best of luck, and well done.

Thank you. Thanks so much.

Thank you. Our next question comes from the line of Kate McShane with Goldman Sachs. Your line is open.

Hi, good morning. Thank you for taking our question. We just had a couple of questions around SG&A, or the drivers within SG&A. I wondered if you could help us understand how we should think about advertising costs throughout 2022 given some of the investments you made there during 2021 and is there a way to discuss your retention rates for your employees over the last few months versus historically, given the wage investments that you've made and will continue to make this year?

Kate, it's Patrick, I'll give you a little color on advertising as I step back and think about the last few years, we had oddity of 2020, where we reopened our stores, and frankly found that we didn't have to advertise that much to draw customers in because they were lined up. In 2021, we took some of the piece dividends that we were enjoying from high gross margins. And we invested in various forms of advertising testing, I feel like we walked away with that, with a much better sense of advertising effectiveness, where the line was our CRM, and so I feel like we ended the year very optimized. Now, obviously we're going to de-leverage, we're going to have some de-leverages as result of that Omicron and weather impacts that we disclose today. But when we get to the second-half of the year, I expect that we're going to see some leverage for the full-year, our guide assumes just a little slight leverage, and that includes the negative impact from Q1. So, as I look out into the second-half in general, for advertising, and really more broadly margins, I think we're going to see better numbers and better compares.

And, Kate to your question about retention rates, we don't share the specific numbers on that, I will tell you our stores are well staffed now that we're in good shape on that. And a vagary of this category that's different from others that you might look at is a lot of our associates regard themselves as an optical professional, and that they are career optician or their career optical person, there are very nice aspects to working in this field, you're in health care, there's a fashion component, there's a nice sense of fulfillment that you're helping people, there's some beautiful moments when a child sees for the first time. So, there's a lot of fulfillment in that and there's so there's not a ocean, I go work at the restaurant down the street, they're competitive, their labor frame is other optical firms. And we've had such nice success for so long that, that there's a feeling like they're with a winning team, which is always good. And also one of the things that we're real pleased about is sort of our career tracking and I'll just give you a rough sense that around 40% of our store managers started in an entry level role with us, without optical experience and grew from within. And those people are really dedicated to National Vision, and that we've given them great career growth. And they're well aware that that a company that's opening formerly 75 now 80 stores, at least 80 stores a year is a great place to grow a career because a growing company has lots of opportunity. And if you feel like you're learning and growing and respected and getting promotions and you like optical, you tend to stick around. So, I think relative to a lot of companies you might follow it's a little better situation than you might expect, if you didn't understand optics as deeply.

Thank you. Our next question comes from the line of Steph Wissink with Jefferies. Your line is open.

Thank you. Good morning, everyone. Most of our questions have been asked but I wanted to go back and just unpack the operating margin guidance. If you've had this is best for you. But looking at it relative to 2019, it looks like your margins are kind of going back to the '19 level. I understand the gross margins are a bit better, sounds like advertising leverage maybe tell us a little bit about what's happening in the selling expense line and the G&A line? Are you seeing wage inflation that you don't think you can lever? What's happening with respect to the operating margins just as a sequence with respect to the overall growth in the business? Thank you.

Sure, Steph. Good morning. And if I missed some of that, just we'll come back and make sure we get everything done. I'd say in general, as you think about operating margins again, we've been through some, we've been through some choppy chapters of COVID, where we had high stimulus, high ticket, high pent-up demand, ticket mix advantages, low advertising, extreme leveraging of all fixed costs across the P&L and we're heading to more of a stable place now, where regarding this year, I think margins to be maybe up just 20 or 30 basis points off 2019. But Steph, that's what the huge Q1 impact taken off the top right here at the beginning of the year. So, if you would, if you kind of think about where we would have been without that, it'll give you a little more insight into we're really not headed all the way back there. I still see that there are margin opportunities over time. I think as I look at the second-half, I'm feeling pretty good about the second-half, the comps are going to be good, we're going to lack those wage investments. We'll have remote ramping. I said early, I expect to see advertising leverage. So, all of those things come together for me to think that when we get into the second-half, and we clear effectively the comp roll over of growing over 53% comps from the first-half of last year. And then Omicron weather impact, I think this is going to look better. Certainly our internal plans indicate that. So, that's kind of how I think about margins and then longer-term, yes, the fifth, the sales impact in Q1 is a significant hiccup and we've got to get beyond that. We're assuming modest recovery. But beyond that, I still think that we've got industry trends in our favor. It's great to be the low cost provider for medical necessity, especially in a world where that consumer maybe weaker or may get weaker. We'll get lapped productivity gains, I think we're going to see better leveraging in advertising. You have to kind of watch out for some of the wage investments and track those but I still feel good about margin expansion. We ran it all the way up to nearly 10% at one fine point and we're not there today. But I won't communicate a specific goal but we are sure lot being closer to that.

Great answer. Thank you very much.

Thank you. Our next question comes from the line of Dylan Carden with William Blair. Your line is open.

Yes, thanks a lot. Just some follow-up here on a couple of items, Patrick, you had mentioned that toward the impact of tele-remote kind of show to the margins pretty quickly in there on those comments it sounded like maybe you're kind of expecting some benefit in the back half of this year; just wanted to clarify that. And then sort of where we are on optometrists wage, the wage cycles, there's some catch-up this year, having not seen too much inflation in the last couple of years. And then on the new store targets, is 80 plus now that Eyeglass World is kind of ramping a better target to use go forward? Thanks.

Yes, so thank you on the remote as I think about that, now I don't know that that's going to, we're going to have the dilution evenly spread across the year, we'll certainly as we lacked that next year, if this indeed is a multi-year effort, we'll stop feeling it then. But I don't expect it to get a lot better in the second-half because we're going to do a lot of stores. If we were just going to do like 50 in stock yes, it would get better but this is probably the beginning of a couple few year efforts. So, that's my perspective on remote for second-half. In wages, we are modeling continued levels of kind of wage inflation based on supply and demand and given specific market. I do like what we're doing in terms of enhancing our recruiting and retention efforts, trying to find evermore ways to give our doctors flexibility. And as I said earlier, remote medicine will allow us to make that resource a little more fungible across geography and time. So, I hope over time that will help abate some of the inflation levels. And 80, 80+ is our number for this year. I am not going to commit that we will do that every year. We might do more than that one year. But, I would say right now we've moved kind of beyond the 75 and we are going to try this on and see how it goes. And then we will go from there.

Excellent. Thank you.

Thank you. Ladies and gentlemen, we have time for one more question. Our final question comes from the line of Anthony Chukumba with Loop Capital Markets. Your line is open.

Good morning. Thanks for fitting me in; lot of good information. So, I just have one question, I guess it's just more on the competitive environment. I mean what are you seeing from a competitive perspective, particularly in terms of are your competitors also taking price? And how do your sort of price differentials compare to I guess let's say like 12 months ago? Thank you.

We think our price differentials are holding up well. And we think that consumer gets that. And -- yes, so we are encouraged on that front. And again, the competitive situation is generally unchained. But yes, other groups are taking price as well even in the value space.

That's very helpful. Thank you.

Thank you.

Good, all right.

At this time, I would like to turn the call back to over to Reade for closing remarks.

Thank you, [Tuwanda] [Ph]. And we would like to thank all of you for joining us here today. And thank all of our stakeholders for your continued support. We look forward to speaking with you again when we report for first quarter results. Thank you all very much for your time.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.