Carol M. Meyrowitz - Chief Executive Officer and Director Sherry Lang - Senior Vice President of Global Communications Scott Goldenberg - Chief Financial Officer, Executive Vice President and Principal Accounting Officer Ernie L. Herrman - President

Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division Jennifer M. Davis - Lazard Capital Markets LLC, Research Division Jeffrey S. Stein - Northcoast Research Roxanne Meyer - UBS Investment Bank, Research Division Kimberly C. Greenberger - Morgan Stanley, Research Division Omar Saad - ISI Group Inc., Research Division Mark K. Montagna - Avondale Partners, LLC, Research Division Rick B. Patel - BofA Merrill Lynch, Research Division Paul Lejuez - Nomura Securities Co. Ltd., Research Division Brian J. Tunick - JP Morgan Chase & Co, Research Division Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division Patrick McKeever - MKM Partners LLC, Research Division Howard Tubin - RBC Capital Markets, LLC, Research Division Marni Shapiro - The Retail Tracker David J. Glick - The Buckingham Research Group Incorporated Jaime M. Katz - Morningstar Inc., Research Division

Ladies and gentlemen, thank you for standing by. Welcome to The TJX Companies Second Quarter Fiscal 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded, Tuesday, August 14, 2012. I would like to turn the conference call over to Ms. Carol Meyrowitz, Chief Executive Officer of The TJX Companies, Inc. Please go ahead, ma'am.

Thank you, and good morning, everyone. Before we begin, Sherry has a few comments.

Good morning. The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the company's SEC filings including, without limitation, the Form 10-K filed March 27, 2012. Further, these comments and the Q&A that follows are copyrighted today by The TJX Companies. Any recording, retransmission, reproduction or other use of the same for profit or otherwise without prior consent of TJX is prohibited and a violation of United States copyright and other laws. Additionally, while we have approved the publishing of a transcript of this call by a third party, we take no responsibility for inaccuracies that may appear in that transcript. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Also, we have detailed the impact of foreign exchange on our consolidated results and our international divisions in today's press release and the Investor Information section of our website, www.tjx.com. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release or otherwise posted on our website, www.tjx.com, in the Investor Information section. Thank you. And now I'll turn it over to Carol.

Thanks, Sherry. So joining me and Sherry on the call are Ernie Herrman and Scott Goldenberg. I'm happy to say that once again, I'm extremely pleased with our quarterly top and bottom line results. Our 24% increase in second quarter earnings per share significantly exceeded our original expectation. This marks the seventh consecutive year that our adjusted second quarter earnings per share have grown by 20% or higher. Consolidated comp increased 7%, also well above our plan, and on top of a 4% increase last year. It is great to see our momentum continue and be so broad based. All of our businesses in the U.S., Canada and Europe are on track and delivering excellent results. To underscore that statement, let me give you a quick recap. At Marmaxx, segment profit margin was up 150 basis points. At HomeGoods, it was up 280 basis points. Excluding the impact of foreign currency, TJX Canada's adjusted segment profit was up 80 basis points, and TJX Europe was up 240 basis points. Customer traffic was up significantly over increases last year, which we believe speaks to the strength of our brand, fashion and values. These strong results year after year in good and bad economies demonstrates sustainability of our sales and profit growth. I'll keep my comments brief today and take a somewhat different approach. We believe the numbers speak for themselves, so rather than reviewing divisional results, I will leave more time for Q&A. I'll share with you a few points that may be less visible externally, but internally give us great confidence in our belief that there's still substantial near and long-term growth in front of us. We remain as convinced as ever that TJX will grow to be a $40 billion company and beyond. But before I continue, I'll turn the call over to Scott to recap our second quarter consolidated results.

Thanks, Carol, and good morning, everyone. Now to recap our second quarter results. Net sales reached $5.9 billion, a 9% increase over last year. Consolidated comparable store sales were up a very strong 7%. I should point out that this was on top of Q2 comp increases of 3% to 4% in each of the last 6 years. Diluted earnings per share were $0.56, a 24% increase over last year's $0.45 per share and well above our original guidance of $0.47 to $0.50. In terms of the underlying growth rate, it's important to note a couple of factors. Foreign currency exchange rates had a neutral impact on EPS compared to a $0.01 benefit last year. In addition, a higher tax rate in this year's second quarter negatively impacted EPS by $0.01. The consolidated pretax margin was 11.5% for the quarter, well above our expectations, and up 130 basis points over last year. Foreign currency had a 10 basis point negative impact on year-over-year comparisons. Again, as Carol mentioned, excluding the impact of FX, pretax margins increased significantly at all divisions. Gross profit margin increased by a very strong 80 basis points over a 70 basis point increase last year, driven primarily by higher merchandise margins, as well as some buying and occupancy leverage. SG&A expense improved 40 basis points to 16.5%, which was very favorable to our plan. We continue to see very high flow-through to the bottom line. SG&A expense, on a dollar basis, was in line with the high end of our expected range despite sales being about $130 million above plan. Further, the incremental investments to support our growth, including talent and infrastructure, which we have discussed on prior calls, negatively impacted SG&A by 20 basis points, which is slightly less than we expected due to the above-plan sales. As to inventories at the end of the second quarter, consolidated inventories on a per-store basis, including the warehouses, were down 12% versus a 16% increase last year. We are extremely happy with our inventory levels. We entered the back half in a very strong position to buy into the terrific opportunities we are currently seeing in the marketplace and continue shipping fresh merchandise selection to our stores. In terms of the share repurchases during the second quarter, we retired 7.1 million shares, buying back $300 million worth of TJX stock. Year-to-date, we have retired 13.6 million shares, buying back $550 million of stock. We continue to anticipate buying back 1.2 billion to 1.3 billion of TJX stock this year. Now let me turn the call back to Carol. I will provide details on our third quarter guidance and recap guidance for the full year at the end of the call.

Thanks, Scott. So moving straight to the first major point. I want to underscore our deep belief that TJX's business model makes us a company with tremendous strength for both defense and offense. While we believe the defensive elements of our model are well-known, I'll spend more time on our offense, which may be less evident. On the defensive side, I'll just say briefly highlights consistency and the flexibility of our model. In good economic times and bad economic times, we have executed well. When we execute well, TJX has thrived. In our 35-year history, we have only had 1 year with a negative comp. In the last 14 quarters, we have had only 1 month with a negative comp. We believe that the flexibility of our business model, which we see as the most flexible in the world, is at the core of our success. We offer customers tremendous variety in a single store with a consistently changing mix of products and merchandise categories at extreme value. We have built a sourcing machine over 35 years with a universe of over 15,000 vendors. This flexibility allows us to respond to the market conditions, weather and current fashion and consumer trends. Further, with our broad U.S. and international reach, we believe our demographic audience is the widest in retail. Now to our strengths in offense, which I believe are not as well understood as the defensive story. It starts with our customers. We are convinced we will continue to attract more U.S. and international customers with our values. Our customer traffic is up mid-teens over the last 3 years and continues to increase. While we have made significant market share gains, enormous opportunities remain. Our customer reach indicates that our U.S. penetration is still well below most U.S. department stores.…

Thanks, Carol. Before I get to guidance, I first want to provide some detail on the impact of FX on TJX Canada's profit margins in the second quarter. On a reported basis, TJX Canada's second quarter segment profit margin was down 50 basis points versus last year. As Carol mentioned, on an adjusted basis excluding the impact of FX, segment margins were up 80 basis points over last year, which is more than we would typically expect on a 5% comp. As a reminder, tables are available on our website which lay out the impact of foreign exchange on our international businesses, as well as our consolidated results. Now to fiscal '13 guidance beginning with the full year. As we noted in our press release today, we are raising our guidance for the full year by $0.01 to reflect our second quarter earnings per share. The new guidance calls for full year earnings per share to be in the range of $2.39 to $2.45, which would represent a 20% to 23% increase over the adjusted $1.99 last year. As a reminder, we had raised our full year EPS guidance when we announced July sales a couple of weeks ago. That raise was driven by our outlook for higher comp sales for the remainder of 2012. Let me recap the key changes versus guidance we provided on the Q1 earnings call in May. We now estimate consolidated comp store sales growth of 4% to 5% for the full year compared to our prior guidance of 2% to 3% growth. Also, we now expect pretax profit margins of 11.6% to 11.8%, which is 90 to 110 basis points higher than last year's adjusted margin of 10.7%, and better than the guidance we provided in May of 11.1% to 11.5%. As a reminder,…

[Operator Instructions] Our first question today is from Richard Jaffe. Richard Ellis Jaffe - Stifel, Nicolaus & Co., Inc., Research Division: Seeing inventory down and turning so quickly, I want to know your thoughts especially with new systems coming onboard for inventory in the second half.

Well, we're planning inventories down again in the second half. And, Richard, we're going to continue to lean up our inventories going forward. And as I said, we're investing in our systems, and we will probably be able to even be finer and more pointed in terms of the right inventory to the right stores in the future. But that's probably another couple of years plus out.

Our next question is from Jennifer Davis.

Since Europe is going well again, I just wanted to see if you could talk a little bit about the U.K. and Germany and Poland, since Germany and Poland are kind of more the growth avenues.

Well, we're very pleased with both Germany and Poland and the U.K. Honestly, all 3 businesses are doing extremely well. So today, we put out there 850 stores. We absolutely think we can be 850 stores. We're taking things slow and carefully and then we'll see where it leads at that point. And obviously, that's just with our current models in those 3 countries today, but we're pretty excited about it.

Our next question is from Jeffrey Stein.

Question for Scott. Scott, I'm wondering if you could talk a little bit more about the general corporate expense increase year-on-year. I understand you're invest -- making some investments for the future. But I'm wondering if you could perhaps be a little bit more granular in terms of kind of ranking the initiatives, what they are, and should we expect that year-on-year increase to subside at all as we move into the back half of the year.

We haven't gotten into any of the detail in terms of ranking them. The major pieces of the corporate expense increase had been what we said before, e-commerce, investment in systems, as Carol talked about, our new data center and increases to support our growth, primarily in talent. In terms of -- we are on plan on a full year for the corporate expenses we laid out for those items. The only change -- significant change from the first half to the back half, which it is moderating as we said on the last call, is the increase in our incentive accruals because of our above-plan results. And that makes up the majority of the difference between our original plan and our full year plan now.

And our next question is from Roxanne Meyer.

I'm just wondering if you could share with us, in terms of your guidance, your profit margin expectations by division.

We're going to give you the full year.

Sure. Let me -- so I'm going to be going through the full year guidance. Just as a note, all the numbers I'm going to be going through are on a 53-week basis. So let me start -- I'll just go through each division starting with Marmaxx. Marmaxx comps for the full year are 4% to 5%, with a pretax margin of 14.3% to 14.4%. It's against last year's 13.6%, so a pretax margin change of 7 -- plus 70 to 80 basis points. HomeGoods' full year comps, 5% to 6%; 11.8% to 11.9% against last year's 10.6%, so an increase of 120 to 130. Canada, 3% to 4% comp; 13.5% to 13.6% x F, so x foreign currency, against 12.8% on a comparable basis. FX last year were up 70 to 80 basis points. Europe, 6% to 7% comp, 5.5% to 5.9%, again, all on x FX against last year's 2.4% comparable number or up 310 to 350 basis points. And again, just repeating what we said earlier in the script, a 4% to 5% full year comp where we're 90 to 110 basis points, again, over last year, and the same on -- with and without x foreign currency adjustments.

Our next question is from Kimberly Greenberger.

You've been saying in past quarters that your comps have been driven by very significant increases in customer traffic. Did that continue here in the second quarter? I think you had been indicating that ticket was sort of roughly flat. And are there any places in particular where you think you're picking up traffic? And what are the initiatives to sustain that here through the back half of the year?

Kimberly, you know I won't give you all the initiative. But it's mostly driven by customer traffic, again, in the second quarter which is great. And our ticket is pretty much flat, very, very slightly up. But what's even more exciting is the new customers we're getting, we're seeing a lot of younger customers, which is really going to bode well for the future. So we've got some great marketing plans for the back half. I think it's going to be absolutely traffic-driven. So we're pretty excited. I don't see our ticket increasing substantially. We're going after giving extreme value. In terms of just traffic, where is it coming from, we are straight across the board. There isn't an area that isn't -- it's the flattest I've ever seen it across the board in terms of where our comps are. So there's no particular area or region or demographic driving it, really across the board.

Our next question is from Omar Saad.

On the topic of the offense that you talked about, the offensive side of the TJX story, how do you think about the productivity opportunity, long run, even if it's on kind of a theoretical basis, how much higher can sales per store go on lower inventories per store? And is there eventually an inflection point where you're going to need more inventories to continue to drive the comps and the sales and the productivity?

Yes. Omar, it's really not about the level of inventory. What we're trying to do is speed up, almost on a daily basis, freshness into the store. So when we look at the initiatives that we have in place for the future, we don't look at it as here's the inventory level. We really look at it as that speed to store. So I don't know. It's a great question you just asked in terms of productivity per store because I don't know how high is high, and we ask that question because we're just -- we're at the beginning and obviously, every day, we see more and more opportunity. So the idea of speeding up that freshness and every day and in some stores, even twice a day, delivering to the store plus the in-store initiatives of treating our customers better, we're going to continue to improve the remodels and the things we have to do within the store. So I don't have the answer to the end game. And then the third element to that is we're still not sophisticated to the level that we think we can be in terms of category to the right store. So for example, we have certain stores that are just much better in juniors and the younger customer. We're not great at targeting that perfectly yet. So there's just a lot, a lot of opportunities.

Our next question is from Mark Montagna.

Just regarding the new customers that you've been getting, is there any particular ramp in terms of they're much stronger in their second year of becoming a TJX customer versus their first? And then just dealing with those systems that you were talking about, is that -- are we going to see incremental gains along the way, or is it the type of thing that in a few years, the whole thing is plugged-in and that's when we start to see the gains?

I think it's going to -- it's just going to keep eking. As I say, what tends to happen with us is we try something, we see it, and then we're like, "This is interesting, we may have some other opportunities." But this is -- we have 2 big initiatives in place in terms of systems, and they're not going to be simultaneously. We're going to be doing one first and then the second one. In terms of the customers in the second year, I don't -- we don't have data on that. But we just know that we're keeping our customers, and they continue to come back. We're also -- when our customers learn more and more about us and they shop more than one brand, we really see incremental spending. And that's what's exciting about our marketing game plan going forward is getting more customers to not only find us, but to find all 3 brands, let's say in the United States like a HomeGoods, a Marshalls and a T.J. Maxx.

Our next question is from Rick Patel.

One of your off-price competitors, Daffy's, is currently liquidating. Can you just talk about the implications of this on your business? Do you see this as a big market share opportunity for you either from a sales or merchandising perspective? And secondly, can you also talk about any real estate opportunities that emerged from this around the New York metro area? Is this a region where you'd be looking to increase your store base further?

Well, we are looking to increase our store base further. And you're going to see more stores in the future in New York and, honestly, all over because we keep increasing the count. Daffy's isn't that significant. We always tend to gain a little bit if it's near one of our stores. But we don't look at it that way.

Our next question is from Paul Lejuez.

Just wondering if the higher merchandise margin that you saw during the quarter was more a function of initial margins, or was it more of an issue of having lower markdowns? And I guess I'm also wondering which of those pieces do you kind of view as more sustainable if, in fact, they came from both. And then also just curious about where you are today on packaway levels versus same time last year.

I think we gained a lot in markdowns, and I think we gained a little bit in the merchandise margins. But again, that all comes back to turning the business a lot faster. Ernie, you want to comment on our packaway?

Packaways have been kind of in a similar realm to where we've kind of had them in the past, maybe they've eked up a little bit, I would say. But nothing substantially different. The only thing I would say is the quality of the packaways has been -- a lot of opportunities, so we're very happy with the content and the excitement there. The brands that are really in the packaways this year feel like a notch up from where we've been in the past. So we're looking forward to the future on that. That feels good. And in total and generally, packaways reflect that there's just a lot of desirable goods in the marketplaces, and that's all the different families of business, and that actually applies, as you can see from the results in Europe or Canada or the U.S. and in the home categories as well, HomeGoods is feeling it. So again, we're very happy with what we're finding in the marketplace out there.

Just as a follow-up, where are you guys in the split between upfront versus in-season buys? Have you kind of seen a peak on the in-season side, or is there still an opportunity to push?

Good try, Paul, but we don't comment on that.

We do not talk about it.

No not -- I don't want the numbers, I just want directionally, can it go higher in season?

We're very, very happy with our liquidity. We are in great shape.

Our next question is from Brian Tunick. Brian J. Tunick - JP Morgan Chase & Co, Research Division: Was wondering 2 things, I guess, maybe can you talk about the lift you are seeing from the remodels or the prototypes? Can you maybe talk about how much that might be contributing to the above plan sales? And then I think, Carol, on the last call, you might have mentioned from a flow-through perspective, normally, you guys think of 1 comp point equaling about $0.05. And I think this year, you thought about $0.02. So just wondering, as some of the initiatives, e-commerce, et cetera, roll off, can we look back or look ahead to next year? Will every 1 comp point get back to equaling $0.05 of earnings?

Yes, well, first of all, for each comp in the back half, it's equivalent to about $0.03. And we really don't discuss our lifts for our remodels. And we'll just continue to look for the next initiative. So, Scott, you wanted to make a comment?

Yes. Again, certainly, it's something we've been, as you know, by the number of remodels we're doing in that 300-plus range this year and we always try to get -- we feel real good about the remodels, and we try to get them done early in the year in terms of the capital spending. Thus far, year-to-date, we have completed the majority, almost 275 of our remodels. So that's something -- that's usually how we plan it every year. But we still -- we haven't given out plans for the future, but it's still a big part of our capital spend program for the next few years.

Brian, I'm just going to make one other comment, just on the flow-through and going forward. Omar asked a great question in terms of the productivity per store. So again, we don't know the end game. We just know that we've got to -- we execute and we keep the flexibility and our ability to find ways to keep driving sales. It's just going to keep moving us, what we feel in a positive direction. We have lots and lots of seeds, so I really don't know the end game of the comp and the flow through. But we just see tremendous opportunity.

Our next question is from Evren Kopelman.

A 2-part question on Europe. As your comps improve, what's your thought process in terms of the timing of returning to higher square footage growth there? And the second question is the segment margins are mid-single digits significantly below obviously U.S. How much of that is just scale? Because it doesn't look like a sales productivity issue. Is it -- is the merchandise margin structurally lower in Europe, or is it almost all scale issue?

Well, the majority of it is a scale issue. We've always put the model out there. I think we've put an 8% model out there. And obviously, as we grow, we hope to beat that. Ernie, you have a...

Yes, I'll address -- Evren, I'll address that on a scale, we were at a margin at one point before. And as Carol mentioned in the script, they're growing too fast, we've learned from and so -- and their growing too fast really became an issue of we needed more experienced people in the right jobs and in the right country. So with that, I think you're going to see the margin continue to get back and go back toward that higher level that Carol just talked about. And on the square footage growth, I think that's really one step at a time. So we've learned our lesson when we too aggressively went after the square footage growth before the infrastructure was there. We're happy with the business right now. As you can see, we're happy with the top line and the bottom line. Directionally, it's really a couple of hundred basis points up. So that all feels good. But we don't want to ramp up the square footage growth until we have consistency. So, again, one step at a time. Yes, we have a lot of opportunity ahead of us there, but we're taking it slow and steady.

Ernie and his team are really looking at all the real estate opportunities though and taking full advantage of it. So we are very, very pleased with what we're seeing, and there's so much destoring, especially in the U.K. that, that's one thing we are not going to miss is taking advantage of that.

Our next question is from Patrick McKeever.

Do you feel like you're picking up any business from Penney's? I guess just looking at the stores that you have that are close to Penney's, are those performing any differently than stores that are not so close?

Yes. So, Patrick, Marmaxx has been -- all of our businesses has been consistently strong across the board. But even where we don't have a JCPenney's, it's very consistent. We don't take the time to analyze that. But I can tell you, across the board, where there isn't Penney's, we're very pleased with our business.

And then just real quick one. On the month-to-month guidance for the quarter, for the third quarter, August 5 to 6 and then September and October, 1 to 3. Is that largely the comparisons, the cadence?

Part of it's a comparison and, again, we want to build our plans and work very hard to beat our plans. That's how we run our business. We try to keep them lean and always strive to be if we can.

Our next question is from Howard Tubin.

Maybe, Carol, generally speaking, can you give us an update on your marketing plans for the full season, whether you're spending more this year for fall versus last year and when your TV impressions will up versus last year?

The impressions will definitely be up. We're being pretty aggressive on TV, so you're going to see our tri-branding, all 3 businesses coming together. You're going to see gift certificates. You're going to see the ability for the consumer to have the choice when they do gift cards. So we're pretty excited about all of it.

Our next question is from Marni Shapiro.

I'm curious about that gift card that you can use across the brands. That sounds very interesting that you just mentioned. But my question was, you have a younger shopper coming in, and I was curious if this was across the brands and if due to this, you're seeing any segments distort sales wise and growing at a faster pace. And are you able to chase those businesses?

Well, we're not going to get into specific businesses, but we are seeing a younger customer, without a doubt. HomeGoods is probably the one business where we don't have that young teen customer, but don't put it past us to not have things up our sleeves. So our goal is really to keep our customers in that average. We always ran in an average in the high 40s, age wise. Our goal is to keep our customers all ages and to gain new customers and have them for the future. And we're pounding away at that.

Excellent. And the gift cards, you'll be able to use them across all of your brands, is that what you said?

Correct. So if you get a gift card, you can use it at a HomeGoods, a Marshalls or a Maxx.

Our next question is from David Glick.

Scott, just a quick question on the incremental investments you're making in your growth initiatives. I'm just wondering if you could quantify those this year and whether going forward we should still expect you to make those investments. And do you still anticipate being able to leverage SG&A in your long-term, the 10% to 13% EPS growth model?

So in terms of the investments for this year, again, we haven't specifically addressed all the details. But on a full year, they're impacting us approximately 30 basis points this year. In terms of going forward, we expect them to moderate. I think as we've called out before, in terms of us -- on our SG&A rate, on our model, which we do on a 1 to 2 comp, we expect to be flat to slightly leverage. If we beat the 2 comp, then we will leverage on -- leverage the SG&A. So that's no real change there, other than we expect to moderate our incremental investments going forward.

Great, that's very helpful. And just one follow-up on your free cash flow in the first half was very powerful from lower inventory levels and higher net income among other reasons. And you referenced, Carol, some pretty strong -- pretty high excess cash levels or total cash levels. I mean, do you think any differently about how you return cash to shareholders going forward? I mean, you're already buying back well over $1 billion in stock. Do you think more about the dividend, or just kind of continue on the same path?

Well, we're going to -- obviously, we look at that every year. We want to keep giving cash, but dividend -- increase our dividend each year. So we look at that every year, and we'll evaluate it. But we always want to, obviously, have a good amount of cash in case something interesting comes up in the future. Scott, you want to comment?

Yes, I mean, again, we certainly love having the flexibility of slightly more cash than we might need. But we, I think, over time, we have, as Carol pointed out, was in the script, increased that dividend and also that we've been, over time, increasing the shareholder buyback. So I think we remain committed to that.

Our next question is from Brendan Fox [ph].

So I have a quick follow-up on inventory levels. One, the inventories on a dollar basis were down 12%. If you could help us understand what that was on a unit basis. And then also as a follow-up, I wanted to ask, from a very high level, if you could tell us, has your buying organization expressed to you any sort of change in where they've seen the best opportunities over the last, say, 3 to 6 months to buy the fashion? And also, how do you see that evolving over the back half of the year?

So, no, in terms of buying organization change. I mean, understand, we really buy from over 15,000 vendors. And we're all over the world. So we continue to try to just spice it up and make it very exciting. So they're just out there paving the pound -- pounding the pavement -- sorry, every day. In terms of our unit basis, we really don't give the -- we don't go into our units by store or unit basis. That information is a little bit on the competitive side.

And our next question is from Jaime Katz.

Can you guys talk a little bit about the productivity of maybe some of the new stores in Canada and Europe versus some of the established stores and whether or not it's been more difficult getting established to new markets versus the ones that you were in?

I can tell you, Jaime, our, every -- all of our new stores are very highly productive, as well as -- that's where our comp is coming from. Number one, our comps have been terrific, and our new store performance across the board has been above plan. So we're just seeing the overall business very strong.

And I am showing no further questions at this time.

Thank you, everyone, and we really look forward to reporting on Q3. Thanks again.

Thank you. And this does conclude today's conference. You may disconnect at this time.