1-800-FLOWERS.COM, Inc.

Good morning everyone and welcome to the 1-800-Flowers.com incorporated 2024 first quarter results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Andy Millivoy, Senior Vice President of Investor Relations.

Sir, please go ahead. Good morning, and welcome to our fiscal 2024 first quarter earnings call. Joining us today are Jim McCann, Chairman and CEO, Tom Hartnett, President, and Bill Shea, CFO. Before we begin, I'd like to remind you that some of the statements we make on today's call are covered by the Safe Harbor disclaimer contained in our press release and public documents. During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any of the forward-looking statements that may be made or discussed during this call. Additionally, we will discuss certain supplemental financial measures that were not prepared in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables of our earnings release. And now, I'll turn the call over to Jim.

Thanks, Andy, and good morning, everyone. Thank you for joining us. This morning, I'll share a few of my thoughts on the current environment, and then I'll turn the call over to Tom, who will provide a business update. We will conclude with a financial update from Bill, and then we'll open it up for your questions. As we announced this morning, our first quarter performance came in line with our expectations. Most notably, our gross margin expanded quite substantially, led by an 830 basis point improvement within our gourmet foods and gift basket segment. We began to turn the tide last fiscal year and are benefiting from certain macro trends that have started to revert to the mean of sorts, along with other favorable trends that Bill will discuss in more detail. Beyond these improvements, our organization has been executing on several key initiatives, including our Work Smarter initiative that is focused on operating more efficiently through the use of technology and automation, and also includes our logistics, labor, and inventory optimization efforts. Work Smarter is an evergreen initiative that we expect to provide benefits and be increasingly effective in the years ahead. Beyond Work Smarter, we've made great progress on our relationship innovation efforts, which Tom will highlight to you in a few minutes. It is important to remember that our fiscal first quarter, which is historically our smallest quarter by far, is comprised of everyday gifting occasions with no major holidays. As we turn our sights to the holiday period that we are now just beginning, we expect our sales trends to improve as our business has historically proven to be more resilient during holiday periods. Quite simply, we believe consumers tend to view holiday gifting as being more of a necessity rather than a purely discretionary purchase. They may trade up or trade down, but will look to buy gifts for the holiday periods. As Tom will discuss in more detail, we have never been better positioned to serve our customers and help them find the perfect gift for everyone on their list. We have introduced new product offerings, launched new tools to help our customers who may be lost for words better express their sentiments, and we have broadened our price points both lower and higher to serve more budgets. We've also had a helping hand from Mother Nature, who provided quite a bit of snow near Medford, Oregon this last winter, which helped us produce our best pear crop in the Rogue Valley since 2019. The pears, our number one seller this season, are simply beautiful and delicious. Our Royal Riviera pears are available for sale now, and if you haven't already, I highly recommend you place your order today. I'll now turn the call over to Tom. Tom, please take us through the... Your business update.

Thanks, Jim, and good morning, everyone. Our first quarter adjusted EBITDA loss improved $5.5 million over the prior year to a loss of $22.5 million. Our results benefited from certain improving macro trends in our Work Smarter initiative that led to the 450 basis points improvement in gross profit margin and lower expenses, which mitigated the 11% sales decline. Heading into this fiscal year, we anticipated the bifurcation in our sales trends would persist, with consumers moderating their spending on everyday gifting occasions while continuing to shop for the major holiday events. Our view was informed by our trends over the past fiscal year and the broader macro environment in which consumers continue to remain pressured by persistent inflation, higher interest rates, and more recently, the resumption of student loan repayments. Knowing this, we expected ourselves to be the most challenged during the first quarter, as there are no major holiday occasions during the quarter, and to begin to improve as we head into the holiday season. For the quarter, we attracted 680,000 new customers. Existing customers represented 70% of our revenue, and our AOV increased approximately 5%. It's not surprising that in the current environment, our higher-income consumers are performing better, representing a greater portion of our customer base and revenues, which in part contributed to the AOV increase. And now I'd like to share an update on some of our relationship innovation developments, which encompasses everything from new or enhanced product offerings, our merchandising efforts, as well as user interface enhancements. We had a number of developments here, and I'm excited to share a few of them with you today. To meet consumers where they are, we are expanding our price points, both higher and lower, to accommodate our various customer segments, including those who are attracted to higher value, higher price point offerings, as well as those who are more price sensitive in the current environment. For our customers looking for higher value offerings, we're offering new product bundles that combine a variety of products from our family of brands and delivering them in one gift box for the recipient. Our continued focus on enhancing the customer experience led us to streamline the process to create a better experience for both the gift giver and the gift recipient. Customers can select from an increased selection of multi-brand bundles that will be sent to their gift recipient in one shipment. This is possible due to the investments we have made in our systems and our multi-brand distribution centers over the last few years. And by leveraging our fulfillment network, we expanded our last mile delivery capabilities to offer customers same day delivery of not only floral, but also certain confection bundles. Customers can now order a beautiful 1-800-Flowers bouquet and bundle it with our Sherry's Berries Cheesecake Bites or birthday cakes that can be delivered on the same day to help them celebrate a special occasion. Furthermore, we continue to add more options to our assortments. One that has been a standout is providing our customers with the option to choose one or two bottles of wine to go with some of our key gifts. Making it simple for our customers to add a second bottle of wine with their order has resulted in our customers adding a second bottle nearly 50% of the time. Speaking of making things simpler for our customers, just in time for the holidays, we're launching a new feature within our checkout process to make it easier for gift givers to express themselves. We were very innovative in our use of AI to offer customers free gifting tools to help them express themselves with their moms and dads during Mother's Day and Father's Day. We've taken that a step further and now empowering customers who may be lost for words with generative AI to help them craft the perfect message to be sent with their gift. Incorporated seamlessly within the checkout process, customers can respond to intuitive prompts, including recipient details, the occasion, and desired tone to provide just the right message for their recipient. This truly gets at the heart of who we are, a company that helps people express themselves improve their relationships, and stay connected with the most important people in their lives. This effort is part of our ongoing AI roadmap to increase the use of this technology throughout our platform and enhance the user experience. For our corporate gifting partners, we're excited to leverage our acquisition of Smart Gift and launch Smart Gift for Business. This new offering revolutionizes the way organizations can build more and better relationships with their key stakeholders. SmartKit for Business provides an all-in-one system that tracks campaigns, measures success, and provides recommendations for future efforts to help organizations maximize their business relationships. We are excited about the opportunities these enhancements present as we continue to grow our offerings and provide customers with a unique experience that they can only get from our family of brands. As you can see, our Work Smarter and Relationship Innovation efforts are having a clear and beneficial impact on our business. They are the driving principles of our business, and we look forward to providing future updates on our progress in these areas. Now I'll turn it over to Bill to provide the financial review.

Thanks, Tom, and good morning, everyone. On our last call, we discussed our long-term historical trends and our expectation for our sales, gross profit margin, and adjusted EBITDA metrics to revert to their mean over time. This includes returning to organic revenue growth and a gross profit margin in the low 40% range. Part of this reversion will be led by the external macro forces, such as the broader consumer environment and commodity prices, and part will be led by our own work smarter and relationship innovation efforts that we expect to grow sales, increase margins, and tightly manage expenses. As Jim and Tom highlighted, Our first quarter performed according to our expectations, and we saw improving revenue trends, a significant improvement in gross margin, and a reduction of expenses that led to a $5.5 million improvement in adjusted EBITDA. Let's take a moment to review each of these. Our quarter-over-quarter revenue trends improved, with revenues declining 11.4% for the first quarter as compared to 14.8% during the fourth quarter of fiscal 2023, excluding the impact of the 53rd week in the fourth quarter of fiscal 2022. The gross profit margin, which was a real standout this quarter, increased 450 basis points over the last year to 37.9 percent. This was led by an 830 basis point improvement in our gourmet food and gift basket segment. The gross margin benefited from several factors, including lower ocean freight costs, our strategic pricing initiatives, the decline in certain commodity costs, our automation efforts to operate more efficiently, and better inventory management. We expect these variables to continue to be a tailwind throughout the fiscal year, even as we cycle against the gross profit margin improvement that we began to realize in the second quarter of last year, and to a greater extent in the second half of the year. Gross margin improvement, combined with our reduction in operating expenses, enabled us to improve our year-over-year adjusted EBITDA loss by $5.5 million. As we look out to the holiday period, while the current consumer environment remains complex and discretionary consumer spending remains pressured, we believe that consumers will be more inspired to shop for the holidays. And as we witnessed a year ago, we anticipate that they will shop later in the period. Now let's review our key metrics for the quarter. Our first quarter revenues declined 11.4% as compared to the year ago to $269.1 million. The gross profit margin increased 450 basis points over last year to 37.9%. The gross margin expansion was led by improvements across each of our business segments, and most notably within the gourmet food and gift basket segment, which increased 830 basis points to 31.5%. Beyond the gross margin improvement, we also reduced our operating expenses by 3.3 million, or 2.3% for the quarter. as we remain steadfast in managing what is in our control and reducing expenses despite higher labor costs and inflationary increases. As a result, our first quarter adjusted EBITDA loss improved $5.5 million to $22.5 million as compared to the prior year despite the top-line pressure. Net loss for the quarter improved to $31.2 million or $0.48 per share as compared to a net loss of $33.7 million, or $0.52 per share, in the prior year. Now let's review our segment results. Our gourmet food and gift basket segment revenues declined 9.3% to $98.1 million, compared with $108.2 million in the prior year. Our wholesale revenue component was roughly flat compared with a year ago. This segment's gross profit margin expanded 830 basis points to 31.5 percent, compared with 23.2 percent in the prior year period, improving on lower ocean freight costs, a decline in certain commodity prices, and the company's strategic pricing initiatives and better inventory management. Segment contribution margin loss improved by 7.7 million to 11 million, compared with the segment contribution margin loss of 18.7 million in the prior year period. This improvement primarily reflects the gross profit margin improvement combined with more efficient marketing spend. Now, consumer flow and gift segment. Revenues decreased 12.3 percent to 142.2 million compared with 162.2 million a year ago. Profit margin expanded 140 basis points to 39.6 percent compared with 38.2 percent in the prior year period, improving on strategic pricing initiatives and lower ocean freight costs. Segment contribution margin was $8.8 million compared with segment contribution margin of $10.8 million in the prior year period, reflecting the lower revenue. Now, blue-med segment. Revenues for the quarter decreased 13.5 percent to $28.9 million. Post-profit margin increased to 50.2 percent, improving 680 basis points compared with 43.4 percent in the prior year period, primarily reflecting strategic pricing initiatives, lower ocean freight costs, and product mix. Segment contribution margin was $9.4 million compared with $9.5 million in the prior year period as the gross margin improvement helped offset revenue decline. Turning to our balance sheet. Our cash and investment position was $8.4 million at the end of the first quarter, seasonally low as we prepare for the holiday period. Inventory was $280.6 million compared with inventory of $342.6 million at the end of the same time last year, benefiting from this component of our Work Smarter initiative that is focused on operating more efficiently with lower inventory. In terms of debt, we reduced our total outstanding debt by $67.5 million as compared to last year. We had $197.5 million in term debt and borrowings of $35 million under our revolving credit facility in preparation for the upcoming holiday season. This compares the total outstanding debt of 300 million at the same time a year ago. We expect borrowings under the revolver to be fully paid during the fiscal second quarter. But in guidance for fiscal 2024, we continue to expect total revenues on a percentage basis to decline in the mid single digits as compared with the prior year. Adjusted EBITDA to be in the range of 95 to 100 million and free cash flow to be in the range of $60 to $65 million. I'll turn the call back to Jim for his closing comments before we open it up for Q&A.

Mr. Thanks, Bill. That was a good review. For us, the main takeaway from the first quarter was that so far this year, essentially, it's unfolding as we expected, and we are on a path of a multi-year aversion to the mean journey. While everyone's crystal ball on consumer behavior for the holiday period is a bit cloudy right now, With the enhancements we have made going into the holiday period, we have never been better positioned to help our customers celebrate the holidays with the important people in their lives. As Tom highlighted, we are providing consumers with a broader array of gifting options and price points to help them find the perfect gift for anyone on their list. We look forward to helping them nourish their relationships. After all, we know that the greatest gift of all is having more and better and more meaningful relationships. And now we'd be happy to open the call for your questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to ask a question. Our first question today comes from Michael Kapinski from Noble Capital Markets. Please go ahead with your question.

Thank you. And congratulations. You actually did better than what I was looking for in the quarter. It looks like revenue trends were a little bit better and the adjusted EBITDA came in better. So congratulations on that. I have a couple of questions. How many of the new customers that you've gained in the quarter, you mentioned that the higher income customers were actually performing better. Can you kind of give us a sense of those new customers that you're adding? Are they the higher income customers that you're seeing?

Hi, Michael. This is Jim. Thanks for your question. The questions, I'm pleased that you're pleased, but we would like to have done better on the top line this quarter. Everything else seems to be going as planned. In terms of new customers, We're not sure, I'll ask Tom to give you the data here. We're not sure if it's that the existing customers who are tend to be higher economic performers are doing better or just at the lower end customers, customers that are more economically challenged are just not there for us. Tom, how would you interpret that?

Yeah, Michael, we don't have exact figures on our new customers for this quarter, but our targeting efforts are, you know, more and more refined to go after you know, our better cohorts. So I would expect that our new customers continue to evolve towards, you know, a higher demographic, if you will, higher household income.

During the quarter, we did introduce, you know, new product offerings both at the high end and at the low end. But with, you know, our AOVs being up, a lot of that is driven by, you know, more customers buying The higher end product.

So the question that I guess that Michael's asking, is it just that they're buying more high end products or there's fewer customers for the entry level price points?

Correct.

Probably a little combination of both.

Yeah. And then it seems like you stepped up your marketing. Can you talk a little bit about pricing for marketing? Are you seeing weakness in the pricing? Is that another reason why you're stepping that up? Or can you give us a sense of your marketing campaigns?

Michael, I don't think we really stepped up marketing this quarter. In fact, I think we're keeping our powder dry because the CAC, the cost of acquiring a customer, is still pretty stiff. Isn't it, Tom?

Yeah, I think it certainly is moderated from where it once was. And, you know, depending on the platform, and we use a ton of them in a ton of different ways we market, there are some that are higher from a CPM, et cetera, basis, and some are a little lower. You know, I think overall the environment is certainly not what it was, you know, a year or two back as far as being that level of efficiency. So it's more expensive now. It's more expensive now, yes.

And we didn't step up our marketing this quarter, did we? No.

Okay, great. That's all I have. Thank you.

Thank you, Michael.

Our next question comes from Anthony Libovinsky from Sedoti. Please go ahead with your question.

All right, good morning. How are you guys doing?

Good, Anthony.

This is, by the way, this is Stephan Gil, on for Anthony Lebedinsky. Sorry about that. I guess my first question is, which commodity costs have you seen the most declines in, and which ones are still pressuring your costs?

Bill will have the actual data, but when we talk about a reversion to the means, Stephan, it's hopefully a multi-year reversion. We've gotten some benefit this quarter and actually for the last couple of quarters. From a macro point of view, some things have reverted comfortably. And ocean freight, which was a kick in the head for us a year ago, it's actually come back to almost pre-pandemic levels. So that one has almost come back completely. So it's reverted. Hopefully it stays there. The commodities piece is the one that took off after The ocean freight thing hit us. And we do a lot of baking, and we make a lot of baked goods, chocolate products. All of our food products require a lot. Cookies, for example, require a lot of butter and eggs. And those commodity costs went through the roof. They've moderated some, but they're not backed. They haven't reverted back to their more traditional means. Now, I'll just build it on the actual data.

Yeah, so as Jim was alluding to, things like butter and eggs, even wheat have come off there, the significant highs. Eggs are actually back down to normal norms. Others are working their way down. Commodities like sugar and cocoa, big ingredients in some of our product lines, are still very high. And obviously a big one is fuel. And while fuel has moderated a little bit over where its highs were a year ago, Obviously, we all read about fuel, and it's still very high versus historical norms.

Thank you for the call. I guess my second question is, in the past calls, you have talked about optimizing logistics with your shipping partners, mostly FedEx. So as you prepare for the busy holiday season, how should we think about potential benefits from this initiative?

Well, I think we have a program that we've referred to a few times this morning called our Work Smarter Program, which Bill has been quarterbacking with a team of people across the enterprise. And you'll see that they've done lots of things. For example, we opened our East Coast Large Distribution Center for our multi-brand operations. We opened that in Georgia a year and a half ago. We spent a great deal of time and money on an automation project there in the last year, and we're seeing the fruits of that now. So that's one example. So freight out of our finished goods will come from that facility, which might have either come from our Ohio facility, which covers the Midwest, or our West Coast facilities in Oregon. So there is a significant freight savings by having a national footprint of major distribution centers. And we've also coordinated and distributed our products on Aurora Greetings basis into a finished goods facilities across the country as well. So we have deep freezer space now in Ohio and in Georgia, and we've had it for a long time in Oregon. But Bill, give us a little bit more color on what our Work Smarter initiatives have yielded, particularly in the area that Stefan is asking us about in terms of logistics.

You know, first off, you know, we have a great working relationship, you know, with our, you know, with our carriers. And we do have, you know, contracted, long-term contracted rates that do have, you know, modest increases, you know, every year. But there are certain components of the rates that aren't capped. They're variable. And so, they are a little more variable. Fuel is one of the, you know, one of the bigger ones. So, we've embarked on a number of initiatives logistic initiatives to help offset those rate increases. Jim was alluding to the opening of Atlanta not that long ago. But a lot of it is the placement of inventory around the country, making sure we're as close to the consumer as we can be so we can use a lower priced service and still meet customer expectations on delivery. But WorkSmart is much broader than just from a logistics standpoint. It really is a number of work streams that we have that are all about working more efficiently through the use of technology, automation. It includes logistics that we talked about, labor, inventory, and inventory management. And we can't go much further in the call without mentioning AI so that we're consistent with every other company on the planet. Good. Absolutely. Certainly from a manufacturing and distribution, from an automation standpoint, we've talked about these in the past, the capital efforts that we've done at both our Ohio, Medford, and Medford, Oregon, and Atlanta facilities. We've invested within our service center platform from an automation standpoint using some AI, but certainly from a chat standpoint using bots. From a self-service portal, they'll improve the customer experience. From a WorkSmart standpoint, inventory management, bringing our inventory down to more in line with where our current demand is, has saved us money from both a working capital standpoint as well as from an inventory, you know, right off the bat.

Why don't you touch on that inventory point? It might help Stefan understand the achievements we've already had there. Last year at this time, inventory levels versus this year, and how we've spread the inventory out to meet where we anticipate demand to be, which gives us a freight savings and enables us to lower our overall inventory investment.

Yeah, the inventory is down around $60 million or so, a little more than $60 million at the end of the first quarter this year versus it was a year ago. And we have it better placed around the country.

Well, we think we do.

And we're producing it in a more efficient manner closer to the holiday. So we're saving on labor. We're ultimately saving on freight costs by having it better placed around the country. Does that help you, Stefan?

Yeah, thank you. And I guess That leads to my last question. Can you talk about seasonal labor availability and labor rates for the current holiday quarter, and how does that compare to last year?

Sure. It's a good story for us, Stephan, in that two years ago, so Christmas of 21, we really struggled. We wound up the season with 2,000 positions we never filled, and that just kicked us in the head from a labor cost point of view because it required so much overtime. Last year, we filled those spots better, and we just got reports as recently as Monday of this week that we're really not having a problem with labor anywhere in the country. Now, I will caution you that when we talk about reversion to the mean, we have no illusion that on the cost of labor side that there is a reversion to the mean to get back to pre-COVID levels. We were pre-COVID $12 to $13 an hour bill for entry-level seasonal holiday help. and now it's much 20 or so, and that's not going back. That G&D is not going back in a bottle. So our planning anticipates that labor costs overall will be a constant. I will say, though, the asterisk there is it's not higher than it was last year for us. That's right.

Thank you so much. I'll jump back in the queue.

Thanks, Tiffany. Once again, if you would like to ask a question, please press star and 1. To remove your questions, you may press star and two. Our next question comes from Alex Furman from Craig Hallam Capital Group. Please go ahead with your question.

Great. Thanks, guys, for taking my question. Jim, it sounds like you're pretty optimistic about your positioning for the holidays. Can you talk about what you're doing to attract consumers this holiday season that might be watching their spending a little more than in prior years?

Well, I don't mean to betray optimism, but we're hopeful. Maybe that's a better term. The things we're doing, and I won't be the only answer on this question. I'll ask Tom and Bill to contribute. But Tom mentioned in his remarks, Alex, about how we're broadening the range of our price points on products. I think that we have a lot of opportunity on the high side to offer more attractive products that... the average consumer wouldn't go for, but the well-heeled customer who really wants to make a splash will find attractive. And frankly, we just always surprise ourselves all these years later about what the elasticity in demand would be at the higher price points. And so we're making an effort to go after that. On the other hand, as we look at, we were just chatting before we started this morning about the comments that Brian Cornell from Target had made on CNBC this morning about what they are experiencing. And it's very similar to us in that the tighter-walleted consumer is struggling right now. And you can see that. I was reading in the Wall Street Journal an article by Greg Ip about how the University of Michigan long-running consumer sentiment index is at recession-like levels. And it just seems to me, I told everyone here the story that when I was in LA a couple of weeks ago, I was running around a lot and I Ubered everywhere. And I had maybe 14, 12 to 15 different Uber rides over the course of the four days I was running around LA. And every single driver that I had, all of them nice, the experience was good in every case. Every single one of them chatted about how they were under pressure. Cost of fuel, they pointed frequently to the gasoline price signs on the roadway. We were on Lincoln Boulevard a lot. And it started with a seven. And they talked about the cost of fuel. They talked about the cost of housing, rent for them. And they talked about food costs. And that consumer, 62%, I read in the Wall Street Journal piece, 62% of consumers are working paycheck to paycheck, 62% of Americans. And they don't have the discretionary dollars to say, oh, let me go buy a birthday gift for $50 from one of our brands. But our thought is when it comes to Thanksgiving, when it came to Halloween, and especially when it comes to Christmas, they moved from discretionary items to need-to-buy items. And, Tom, I think you would add that we've added a lot more price points that would be affordable and attractive to a consumer who's struggling a bit.

Yeah, Alex, it's Tom. You know, we've definitely doubled down in the lower price points. On the Harry and David brand, we have a number of new products at a $29.99 price point. On our 1-800-Flowers brand, we've also entertained and have a number of lower price points than we've ever had on the site. And especially around our other brands where, they are start off at lower price points. We're in a $15 to $19 price. The bottom line is in really reinforcing the ability to shop by price, et cetera, in those brands. So we understand that a certain segment of our customer base is under pressure. We want to meet them where they are so they can convey their expressions for the holidays. So we're really focused on that.

But we've also introduced you know, some higher price point items and some bundled products that, you know, combine, you know, some of the things that our more affluent consumer and customer, you know, wants to buy. And we've seen, you know, and we've seen some positive responses to those items.

Tom, why don't you shine a little light on what the bundled product that Bill referenced that we're seeing some good traction.

Yeah, we mentioned wine on the call earlier. We, you know, we have, you know, we've have new products with Harry and David, Christmas party products that are, you know, $799 products. We have Ultimate Hearthside gift basket that's $500. So we've kind of seen consumers gravitate, a segment of our consumers gravitate towards these higher prices. And, you know, so we're continuing to advance some of that catalog.

The wine is a category we've mentioned, especially, Alex, Tom's mentioned it a couple of times now. We really only sell, we're a winery. You know, we grow grapes, we make wine, and so that's a decent margin product business. Right now, we really only sell it as an add-on. And what we discovered, and Tom mentioned that earlier on in his opening remarks, What we discovered is customers like the idea of being able to add a bottle of wine onto their food basket gift or onto their bakery gift collection. And increasingly, when we make it available to them and affordable, they're going for the second bottle to make it a really nice package. So the bundles are where we're seeing some really good traction.

That's terrific, guys. Thank you, all three. Always good to hear your perspective on the consumer, especially heading into this holiday season.

Thanks, Alex.

And ladies and gentlemen, at this time, and showing no additional questions, I'd like to turn the floor back over to management for any closing remarks.

Well, thanks, everyone, for joining us today. We want to wish everyone a wonderful holiday season. As I just mentioned, we are hopeful that the consumer will – We'll be there, and we have the right mix of products and services for them. You've heard all the things we've done to invest in our logistics and our capabilities to give them really good product, really fresh, in a very inexpensive way to them just when they want it. So if you have any additional questions, please don't hesitate to get in touch with us. We're ready to engage with you and answer any questions you may have. So have a wonderful and healthy holiday season.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your line.