Good morning, everyone, and welcome to Lowe's Companies Second Quarter 2020 Earnings Conference Call. My name is Michelle, and I will be your operator for today's call. As a reminder, this conference is being recorded. I will now turn the call over to Kate Pearlman, Vice President of Investor Relations. Thank you. You may begin.

Thank you, and good morning, everyone. Here with me today are: Marvin Ellison, our President and Chief Executive Officer; Bill Boltz, our Executive Vice President, Merchandising; Joe McFarland, our Executive Vice President, Stores; and Dave Denton, our Executive Vice President and Chief Financial Officer. I would like to remind you that our notice regarding forward-looking statements is included in our press release this morning, which can be found on Lowe's Investor Relations website. During this call, we will be making comments that are forward-looking, including our expectations for fiscal 2020. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the Risk Factors, MD&A and other sections of our annual report on Form 10-K and our other SEC filings. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found in this morning's press release and on our Investor Relations website. With that, I'll turn the call over to Marvin.

Good morning, everyone. I'd like to start out by thanking our associates for their tremendous actions to support our customers and communities across both the U.S. and Canada. We are grateful for their hard work and ongoing commitment to safety. Without question, this has been the most challenging personal and business environment that any of us have operated in. Throughout all the uncertainty that we faced in the second quarter, we never lost focus that our #1 priority as a company is protecting the health and well-being of our associates and customers through a safe store environment and shopping experience. In the second quarter, we continued to prioritize the financial support of our associates and community while providing the customers with the products and services they need to manage and care for their homes. We were pleased and humbled that we were the first choice for many customers who needed home improvement items for their businesses and homes during this unprecedented time. And I would like to thank those customers who trusted us and for rediscovering Lowe's. More specifically, during the second quarter, we invested an incremental $460 million in support for our frontline associates, communities and store safety. Through the first half of 2020, the company has invested $560 million in incremental financial support for our associates. In recognizing that helping people make their homes better extends into our neighborhoods, communities and country, we've committed $55 million in grants to support minority-owned and rural small businesses. In total, during the COVID-19 pandemic, we've committed $100 million of assistance to those in our community who need it most. Our financial results this quarter demonstrate that we've experienced unprecedented demand in many of our business categories due to customers spending more time at home during the COVID-19 pandemic. However, these results…

Thanks, Marvin, and good morning, everyone. Over the past 18 months, we've been steadily improving our store operating efficiency and customer service. And we remained laser-focused on supporting a safe store environment through a data-driven approach based on an analysis of store traffic trends across our portfolio. As I previously indicated, we implemented numerous safety standards in the first quarter in support of social distancing and enhanced sanitizing and cleaning. We executed these standards in a consistent, uniform manner across our stores in the U.S. and Canada to protect the health and safety of our team members and the communities we serve. These standards included removing product to free up space for our customer, adding signage and floor markings and adding social distancing ambassadors and leveraging technology to monitor store traffic, which help store managers limit customers based on the footprint, in line with the regulatory requirements. In the second quarter, we added further safety measures by requiring all frontline associates to wear masks beginning in early May and by adopting a nationwide standard for all customers to wear masks in mid-July. In support of this standard, we are providing free masks for customers who need them. And our customers' appreciation for these efforts was evident in a significant increase in our brand reputation and engagement scores as we shifted our marketing away from promotional messaging and instead focused on our commitment to our communities. I'm also pleased that we delivered strong customer service for both Pro and DIY customers in the second quarter while maintaining rigorous safety requirements and driving 35% U.S. sales comps. This is a testament to the outstanding work of our frontline associates and our commitment to our customers and communities. The health and safety of our associates and customers has always been and will remain…

Thanks, Joe, and good morning, everyone. As Marvin mentioned, we posted U.S. home improvement comparable sales growth of 35.1% in the second quarter, driven by broad-based outperformance across DIY and Pro customers as well as indoor and outdoor product categories. We delivered indoor comps of 30%, driven by strength in indoor categories, such as decor and lighting. We delivered strong growth across all merchandising departments. In fact, all 15 merchandising departments generated positive comps exceeding 20%. As customers continue to spend more time at home this quarter, we saw an acceleration in both indoor and outdoor project activity, including core repair and maintenance, along with projects to repurpose home space for work and study as well as discretionary indoor and outdoor projects to increase customers' enjoyment of their homes. We also continued to see robust COVID-related demand for essential cleaning products along with other home necessities such as appliances. During the quarter, we posted comps over 30% in core project categories, such as lumber, tools and paint, driven largely by extensive indoor and outdoor project activity from both the DIY and Pro customer. Importantly, we saw significant improvement in installation-heavy categories, such as flooring, millwork and kitchen and bath. In paint, we continued to drive strong sales of both interior and exterior paint and stains as well as applicators as our brand offering and service model positioned us to serve increased project demand with our paint products being key components of many home improvement projects. Lumber benefited from strong unit demand from both Pro and DIY customers as well as our investments in job lot quantities. And in tools, we saw strength across all segments of power tools, along with growth in tool storage and mechanics tools, driven by the CRAFTSMAN brand as customers took to doing projects at home.…

Thank you, Bill, and good morning, everyone. I'll begin this morning with a few comments on the company's liquidity position and our capital allocation priorities. Last quarter, we decided to raise some incremental capital in light of the disruption in the global credit markets. After issuing $4 billion in senior notes and increasing the capacity of our revolving credit facilities by nearly $800 million, we now have $11.6 billion of cash and cash equivalents on the balance sheet. Additionally, we have $3 billion in undrawn capacity on our revolving credit facilities. So in total, we have an immediate access to $14.6 billion in funds, and we remain confident that we have ample liquidity to navigate any unforeseen circumstances. At the end of our Q2, our adjusted debt-to-EBITDA ratio stands at 2.4x. During the quarter, the company generated $11 billion in free cash flow, driven by exceptionally strong operating performance. In the long term, we remain committed to delivering robust shareholder returns through our disciplined capital allocation program, consisting of 3 main pillars: first is strategically investing in our business to drive outsized returns; second is supporting our 35% dividend payout target; and finally, returning capital to our shareholders through value-enhancing share repurchases. However, as you know, we have currently suspended share repurchases in light of the unprecedented environment created by the pandemic. We continue to support our dividend program, and we returned $416 million to our shareholders by paying a dividend of $0.55 per share in the quarter. And importantly, we are investing in growth initiatives to build on the momentum that we are seeing across our business. In Q2, capital expenditures totaled $382 million. We continue to prioritize investments in our omnichannel capabilities as our customers are shopping more online. Now turning to the income statement. In Q2, we…

[Operator Instructions] Our first question comes from the line of Chris Horvers with JPMorgan. Our next question comes from the line of Simeon Gutman with Morgan Stanley.

Nice quarter. I'm going to apologize, this will sound like the broken record question. I wanted to ask about the 12% EBIT margin target, realize an actual goal in terms of timing was never given, but that this environment probably speeds it up. Can you talk about 12%? I think some of the math to get there in the near term or medium term would imply that sales continued to grow at a nice rate but expenses actually get deleted or your productivity gets a lot better. So can you talk about the reality or the realistic nature of doing that in the next, call it, 12 to 18 months?

Chris, this is Dave. I think you're right. Obviously, we are very focused on delivering upon that 12% operating margin target. And keep in mind, that's just a step function. That's not the end. We think we can do better than that over time. It's clear at this point in time, we're trending a bit ahead of that, given just how our business is performing. But having said that, we still have a lot of investments that we're making to be sure that we can consistently deliver that 12% day in and day out. I think you heard us talk about this morning that we're investing in assortment and merchandise in the store environment. We're making really important strategic investments in our online capabilities and technology platform as well as in our supply chain. And we continue to focus in those areas to make sure that we can consistently deliver both really strong top line performance, manage gross margin at a reasonable rate, leverage SG&A in a meaningful way, so we can deliver that off-base target over time.

And Dave, is there any different thought with regard to gross margin? I know that, right, it's benefiting in the near term from lack of promotions. And you're expecting that level of promotion to continue or to rise to be a little bit less of a benefit going forward. But is there some level -- or is the calculus of getting to the 12% any different, where gross margin ends up being a little bit better in that -- than you thought initially?

I don't know that there's anything materially that's changed there. Clearly, 2019, we had a bit of a step down in gross margin. Our objective in 2020 and beyond was to get our margin rate back. Keep in mind that we are making investments in supply chain that will disproportionately dampen gross margin rate but will allow us to lever SG&A more productively over time. So you have some natural kind of geography shift within the P&L, Simeon.

Our next question comes from the line of Michael Lasser with UBS.

Marvin, do you think there's been any structural shift, meaning that this growth you're experiencing now won't just be a one-shot deal that will be given back next year when people go back to traveling and eating out? Said another way, under what conditions do you think you can comp positive next year when you lap all of this?

Mike, I think it's a fair question. Next year is difficult for all the obvious macro reasons. But we feel good about our business trends. And look, I don't want to minimize the impact of what we describe as retail fundamentals. We talked about getting foundational things in place here at Lowe's for the last 18 months. And they're paying dividends. Getting dot-com on the cloud, hiring an experienced team of home improvement and retail experts in key functional areas, new price management system, field merchants, focus on Pro, I mean, all of these things matter. And when we think about market share and we think about the sustainability of it, our data is pretty consistent that when customers shop us in store or online, they have a good experience. They come back. When customers shop us in our stores, especially in this environment and they feel safe, they come back. We've done an analysis that suggests that our COVID-19 safety protocols in our stores are amongst the strongest in the industry. And Forbes ranked Lowe's #6 on their list relative to that. And our research tells us that when customers show up in our environment, specifically during this COVID-19 crisis and they feel safe and they feel well taken care of, they come back. And when you look at our first half results, it demonstrates that customers are coming back over and over again. And so we believe that of all the things within our control, if we can execute these at a continual high level, then the rest will take care of itself.

Okay. Then my follow-up question is of the mid-20s percent Pro comp that you experienced, what portion of that came from new pros that Lowe's hasn't been regularly interacting with? And where did you grab these from? And maybe somewhat unrelated, Dave, you mentioned that promotions are going to pick up in the back half of the year. Why would that be the case if the environment stays the same?

Yes. So Michael, let me take the first part of the Pro question, then I'll hand it to Joe and he can give you a little bit more context. We feel really good about our Pro business. And we stated in the prepared comments that DIY outperformed Pro from a comp perspective. But we expected that in this environment. But we also know that we had increased performance in our urban areas. And we think that, that was driven by our improved performance in Pro as well as our omnichannel and online performance, which you have to have in those urban markets. So I'll let Joe just briefly cover a little bit about the Pro segmentation that we have.

Yes. Thanks, Marvin. Thanks for the question, Mike. Our strong Pro demand with comps in the mid-20s continues. And it's really around our -- the investments that we've been making in both the product and the service offerings. So it's things like our job lot quantities, our dedicated supervisors, our Pro parking, our loaders, et cetera, et cetera. And as we now move to the more strategic phase of our Pro growth initiatives, what we're really excited about the progress we're making, things like our Pro loyalty platform that's integrated with CRM, keeping Pros working through the partnerships that I've announced at HomeAdvisor and JobSIGHT, really excited about our announcement of the tool rental. And so as these Pro customers continue coming back, seeing new product additions like Simpson Strong-Tie, and so we feel very good about the future of our Pro business.

And Michael, as it relates to pros, I'll ask Bill to comment here a bit as well. But clearly, as we cycle in the back half of the year, we do think promotions will tick up just a little bit. I don't think it will be a material change. But I think it is important that we communicate really the value that we're offering to both consumers and the pros, the breadth of offering that we have at Lowe's. And I think because of that, you'll see just a slight tick-up, but I don't think a material change from a commercial cadence perspective. I'll ask Bill to...

Yes. Just to -- Michael, just to add on what Dave was saying, I think we've clearly got to realize that gift centers and the holiday trim and tree programs were all committed for and bought prior to COVID happening. And so those were well in motion and on the way. And those are things that we have to work our way through based on how the consumer responds to those programs. But I think it's also important to clarify that during the quarter and during the first half of this year, we were dramatically less promotional all around building around our pricing and promo strategy that we've been working to put in place over the last 20 months, which has been a focus on everyday values and being priced right every day for our customer. And so really pleased with the traction that we're making with the teams. And I think as we look at the back half, it's not like we're going to go from one side of the road to the other and just get back into the promotional game.

Our next question comes from the line of Chuck Grom with Gordon Haskett.

Great results. Marvin, I just wanted you guys could just speak to the opportunity on the digital front now that you've completed the migration to the cloud, I guess, just to size up the opportunity for you guys in the back half and even into next year.

Well, we think it's significant. I mean we've talked from the very beginning about the importance of modernizing our online business. And I just can't help but reiterate that just a year ago, we were on a decade-old platform. And we were slowing our growth because we were disappointing customers. So the ability for Seemantini and her team to get this replatforming effort done in the second quarter is monumental for us because it gives us so much agility and flexibility to build on that platform. We're not going to put any numbers to that, Chuck, because I think in this environment, it's really difficult. But what we do know is that it will be impossible for us to deliver 135% comp as we did in the second quarter without that replatforming effort. Because our instability was such that back in Black Friday of 2018, the volume we had crashed the whole system. And we've had volume that exceeded that for probably 90 straight days. So that tells you where we were and where we are. I'll let Bill talk a little bit about some of the specific things coming online that we think will continue to build that business and open up to a whole new set of customers that will continue to rediscover Lowe's.

Yes. I think it's important to note that during the quarter, all 15 departments grew at or above double-digit rates for dot-com. All -- and the migration to the cloud, obviously, allowed for speed, allowed for us to be nimble. But we've got improved checkout and navigation continuing to happen as we go through the back half. We've continued to work on separating freight from costs. And if you remember our comments on this before, this will help make sure that competitive pricing shows up online the way it needs to show up online, continue to enhance our curbside pickup, working with Joe's team in store, continuing to improve our buy online, pick up in store process to make that store picking faster. And in my prepared remarks, I talked about the store picking app, that's all around designing for the associate to be able to handle the customer with speed. So we've got a lot of efforts going in addition to adding SKUs and improving the content that we put out there on dot-com on a daily and weekly basis.

So Chuck, we're not trying to avoid answering the specifics of the question. It's just really tough to forecast. We just know that we have a much better platform that we can take that demand and manage it as it comes our way.

That's helpful. And then just taking a step back, the long-term sales per square foot target, I believe, is around $370. You're going to hit that number pretty easily this year. So I just to kind of build off of Simeon's question about margins but thinking about it from a sales productivity perspective, you're still about roughly $100 below your biggest peer. I'm just wondering if you guys just size up the opportunity of how much more productive your stores can be, that would kind of lend support that you guys actually should be able to comp to strong results in the next couple of years.

Yes. Chuck, Dave here. Obviously, we have a tremendous amount of opportunity here. Part of what we're doing is investing in our infrastructure such that our base can become a lot more productive day in and day out. And you heard Joe speak about all the investments we're making from a technology perspective within the store environment such that we can really leverage the hours that we have in our stores to put more of those hours to work facing customers and actually driving increased sales and productivity as we move volume through the box. So I think there's a big opportunity. You'll see us continue to talk about it and push on it. And actually, even leveraging the omnichannel environment will also help that. Because if we engage consumers both in the store and online, it really helps us leverage those fixed costs across our platform.

So Chuck, this is Marvin. And I'll just add this last point. So if you think about where the opportunity exists for us to increase sales per square foot, first, it starts with what Dave talked about and Bill discussed in his prepared comments regarding the work we're going to do in the second half to get our adjacencies corrected and to go in and drive more bay productivity based on how we are merchandising the floor and also creating a more intuitive shopping experience. This sounds very basic. But we all were surprised with the poor adjacency structure in our stores and how most stores don't even have planograms in the system. And so it's almost impossible to merchandise and to have a good replenishment strategy. So that's number one. Number two, you have 3 things that are going to drive productivity in existing stores: an increased penetration in Pro, an improved e-commerce and omnichannel infrastructure and a better install business. And we have negative comp in installed business last year. We've discussed dot-com to a high degree of detail and we've also talked a lot about Pro. And so all of these investments are part of our strategy to hit those targets that you talked about. And we think we're well on our way to making some progress.

Our next question comes from the line of Scot Ciccarelli with RBC Capital Markets.

Scot Ciccarelli. I think one of your bigger productivity unlocks was shifting some of the big -- large inventory categories, like appliances, out of the stores and back into the fulfillment network. Can you update us where you are on that front? And related to that, are there any large productivity initiatives that you've maybe had to delay because of the unexpected sales surge?

Scot, I'll take it. This is Marvin. So I'll take the second part first. No, I mean, we hadn't really delayed any large project. Dave mentioned, to the contrary, we've decided to push projects up that drive productivity and also that impact the improvement of our omnichannel strategy because we believe that we're behind. And candidly, we want to come out of this COVID-19 crisis a better company than we were going into it. And we think we're making progress in that area. Relative to supply chain and our transition of products like appliances out, we're in the early stages of that. I reiterated in my prepared comments that we are going to have an aggressive 18-month strategy to roll out, deliver cross-dock and bulk distribution centers and also online fulfillment centers. Our pilots have proven successful in getting appliances and bulk product out of our backrooms into more centralized, local distribution or delivery. And you're going to see us accelerate that in the back half of the year going into next year.

That's really helpful. And can you just give us a quick update on where you are in terms of the customer-facing hours versus tasking?

Yes. Let me hand that to Joe and he can give you some specifics.

Yes. Thanks, Scot. So we've made significant progress. We're ahead of our 60-40 goal. We continue to engineer out tasking in the stores to improve customer service. We are well on our way and ahead of our 60-40 goal.

Yes. And Scot, the last point I'll make, just giving credit to Joe's team and the IT team. Without some of the advancements in technology, like the new labor scheduling system, I mean, we would be in a much different position as a company, trying to serve the needs of the customer and the needs of the associates in this unique environment. But having a system that gives us the ability to manage to the unique needs of both customers and associates, that system was put in place last year, it's created just an enormous benefit to our ability to not only serve customers but to drive productivity. So proud of the progress of Joe and the operations team. And we think we'll hit that target before what we committed to because it's just the right thing to do for our associates but also for our shareholders.

Our next question comes from the line of Steven Forbes with Guggenheim Securities.

And Dave, maybe the first one for you, just given the number of facilities being stood up over the next 18 months. And you sort of mentioned the geography shifts in the prepared remarks. But can you help us better understand the P&L implications? I mean should we expect a net margin headwind, I guess, an incremental one, given the pull-forward here? Or are there enough offsetting factors to neutralize the initiative as you roll it out?

Steven, just keep in mind that what we have done here is consistent with our long-term plan because we were always in the mode of investing in the supply chain that we knew would drive incremental costs and dampen gross margin rate but would alleviate some SG&A pressure in the stores and across our platform. So I think the plan over the long term is consistent with that. Clearly, when you make investments in the short term, you have to stand up the facilities in advance for them being at full productivity level, so there will be some near-term headwinds. And that's somewhat of the commentary you heard me speak about as you thought about the back half of 2020 is really due to that fact.

Yes. I think -- and Steve, this is Marvin. The only point I'll add is, obviously, this is part of our plan. But we also have things we're implementing that will be offset. And I talked about the price management system. And the continued maturation of that system gives Bill and his team a lot more understanding to drive benefits relative to pricing and also having a more balanced promotional strategy. Some of the things that Joe is putting in the stores from a productivity perspective that's helping us to get that balanced payroll, which also drives operating income improvement. So there will be offsets to go along with the investments we're making. This is not really a pull-forward. This is really a reminder of where we are in the process, so it keeps us on track. We're not getting off track, and we're not going to create any downside scenarios that we didn't anticipate.

And then just a quick follow-up. I guess, Dave, again starting with you. As you noted, right, the expectation for, I guess, a moderation, right, in top line growth as we head into the back half of the year. But any context on how that pertains to both the DIY and Pro customers? Is there any sort of, I guess, dichotomy between the 2 channels or 2 customer segments?

Listen, I don't think so. Listen, I think we've seen really strong growth and retention of both new and repeat customers in our channel, both from a Pro perspective and DIY. I think just practically speaking, we're going into kind of the season which demand begins to moderate just from a natural progression perspective. And I think that's just what we're trying to call out as you think about the back half of the year. I think we're really nicely positioned from a merchandising perspective and from a labor perspective that we're going to really do well from a service perspective and have the right product in stores and online to meet the demand for these customers.

Our next question comes from Seth Sigman with Crédit Suisse.

Given the strength over the last few months, we get a lot of questions about pull-forward. I guess as you look at the composition of sales through the second quarter and then obviously early here in the third quarter, are you seeing any change in the types of projects that consumers are working on? Anything that maybe helps give you confidence that demand through this period has been incremental versus pull-forward? How are you guys thinking about that?

We do not see it as pull-forward. I think what we've tried to articulate is that this is a really unique environment, where most of us are forced to spend more time at home than we ever have in our lifetimes. And so those customers are finding projects around the house that have been on the list, they just hadn't got a chance to get to them or candidly they just didn't notice them. So we don't see this as a pull-forward. This is more of an incremental add. In addition to that, as I mentioned, we've been running a negative install business for the past couple of years. And Bill Boltz and his merchandising teams made big investments last year in updating our flooring showrooms in our stores and updating our kitchen showrooms. We believe that those investments in the store has led to us improving our install business this year, along with the restructuring of the field team that Joe took on. So the short answer is we don't see this as pull-forward. We see it as incremental just based on the unique environment that we're in. And we also see it as market share gain. I mean it's difficult for a company our size to grow sales by 35% comp without having some significant market share gain that's happening as well.

Right. Okay. That's helpful. And then just a question on the regional consistency. It's helpful to get that color and it's obviously a very good trend that it's been so consistent throughout this period. I'm just curious, have you seen any change in comps or the composition of categories in markets where COVID cases have started to pick up?

No. We have not. I think actually where COVID has picked up, we've seen very strong demand in those markets. And it's been pretty consistent, so we really have not seen a material change in there.

Our final question comes from the line of Mike Baker with D.A. Davidson.

So I wanted to follow up on DIY versus Pro. And I think some of your comments suggest that DIY was maybe up closer to 40% in the quarter versus Pro up 25%. But has that gap narrowed this quarter? I think at one point, it was said that Pro is up mid-20s and you sort of implied that the whole company is up mid-20s in August. So that would imply that, that gap has narrowed. Is that a correct assumption?

I would say your assumption is correct on the ratio between Pro and DIY, relative to a composition change, not so much. I mean this is a unique environment. And most of 2019, our Pro comps outperformed DIY. The shift occurred, obviously, during this COVID-19 crisis, where customers are spending more time at home. And in some cases, they're still a little apprehensive to allow contractors in their home. So we think those combination of factors is driving the resurgence in DIY. We have to be more penetrated from a DIY perspective as a company. Our Pro business is growing, but DIY has always been a strength, and we think that we're benefiting from the current trends.

Okay, makes sense. One more follow-up on indoor versus outdoor. So you gave us the indoor comp. Could you just share with us the outdoor comp or percent of indoor versus outdoor and then we could back into the outdoor comp? But more importantly, how does that percent change as we go through the back half of the year? How much bigger does indoor get relative to outdoor?

Well, what I would say is we've given plenty competition information. So we're not going to give you any more specifics on ratios because we think we've given enough to provide context and color. But going into the back half of the year, this shifts inside versus outside just due to weather and seasonality. I'll let Bill talk a little bit about what our focus is on the inside and the back half because it's something that we've been working quite a bit on.

Yes. I think to play off of Marvin's comments, as we shift to the fall business, it naturally shifts indoor. But in the southern parts of the country, there's still a lot of outdoor projects that get done as the weather cools. But for the northern markets, the Pro moves inside, the consumer moves inside, flooring, kitchens, bath, those types of projects, all about getting the home ready for the holidays is where the customers focus. And then you have your natural fall businesses, right? So fall businesses continue to play. Those are a little less seasonal than the spring time frame. And they're all really driven based on what Mother Nature brings. So that's really what drives the back half of the year.

Okay. One more which might be helpful for everyone, if I could. You talked a lot about COVID. Where we've seen the COVID spikes, business remained strong. I guess I'd be concerned about the opposite, where COVID is sort of calming down, are we seeing people move away from the home?

We have not actually seen our business in those areas actually improve.

So -- and the last point I'd make, we have 15 geographic regions. All 15 were 30% comp or higher. I mean that's a pretty unprecedented number. And that illustrates the consistency of demand across rural, urban and all types of geographies in the country. And we think that is also consistent with really good execution by the merchandising and stores team to drive the business as well as outstanding work from our store leaders out there every day, doing incredible job for customers and communities.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.