Good morning, ladies and gentlemen, and welcome to the Academy Sports + Outdoors Q1 of FY 2021 earnings conference call. At this time, this call is being recorded and all participants are in a listen mode. Following the prepared remarks, there will be a brief question-and-answer session. Questions will be limited to analysts and investors. Please limit yourself to one question and one follow-up. To ask a question during the call, please press star one. If you require any operator assistance during the call, please press star zero. I will now turn the call over to Matt Hodges, Vice President of Investor Relations for Academy Sports + Outdoors. Matt, please go ahead. Thanks, operator. Good morning, everyone, and thank you for joining the Academy Sports + Outdoors Q1 2021 results call today. Participating on the call are Ken Hicks, Chairman, President, and CEO; Michael Mullican, Executive Vice President and CFO; and Steven Lawrence, Executive Vice President and Chief Merchandising Officer. For reference, the earnings release issued this morning is available at investors.academy.com. As a reminder, statements in today's earnings release and the comments made by management during this call may be considered forward-looking statements and are intended to be covered by the safe harbor provisions under the Federal Securities laws. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the earnings release and in our filings with the SEC. The company undertakes no obligation to revise any forward-looking statements. Today's remarks refer to certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in today's earnings release, which is provided on our investor relations website. I will now turn the call over to Ken Hicks, CEO. Thanks, Matt. Good morning, everyone. I'd like to start by thanking our Academy Sports + Outdoors team members for their hard work and commitment as we continue to navigate these challenging times. I remain extremely proud of our team as we pass the one-year mark of being fully open and back to work in our stores, distribution centers, and corporate offices. It is remarkable what we have been able to achieve in the last year. Our top priority remains customer and team member safety as we strive to be the best sports and outdoors retailer by providing fun for all through assortments, value, and experience. Following a terrific fiscal 2020, fiscal 2021 is off to a strong start as we achieved another record quarter. Sales were $1.58 billion, a 39.1% increase over the prior year quarter. Comparable sales were 38.9%, diluted earnings per share were $1.84. This is the seventh consecutive quarter of positive comparable sales and operating profit growth. We continue to see strong demand across all product categories and geographic regions. As we emerge from the pandemic, our customers are coming back more often and shopping more areas of the store as sports and outdoors remain a meaningful part of their lives. While sales did see a benefit from government-issued stimulus checks, we believe there are other important long-term drivers of our business, such as the strategic actions taken over the last few years to increase operational efficiencies and improve margin rates. A change in lifestyle that is driving a shift in consumer spending for sports and outdoors categories, including bikes, camping, fishing, grilling, and backyard entertainment. Existing customers shopping more often and discovering more products in new categories. Introducing millions of new customers to our brand over the past year. Our customer base is strengthening as many of these new customers are more female, younger, and more diverse than our historical base. These drivers have not only increased sales but have also led to significant profit growth as the retail best practices we put in place continue to drive margin dollar flow-through. In addition, we continue to enhance the overall store experience. Importantly, this includes strengthening relationships with partners like Nike, Adidas, Under Armour, The North Face, Columbia, and YETI. Together, we are making mutual investments to improve in-store presentation, attracting new customers to their brands through refined assortments and better storytelling in our stores and on our website, and securing new product lines and investing in and training sales enthusiasts who love their products. We're doing all these things to offer our customers the best shopping experience for the latest and greatest products from some of the world's best brands, including our own private label brands. Steven will provide more color on our efforts to expand that business. Additionally, in the quarter, we added more features to academy.com, executed more targeted marketing campaigns, which have had a powerful impact on our marketing success and cost efficiency, kicked off our supply chain initiative, and continued our power merchandising work. We will continue to invest in all of these areas, focusing on the customer to drive growth in existing stores, online, and in the future. New stores and new markets as we plan eight to 10 new stores in 2022. Our financial results are evidence of the positive impact the ongoing activities are having on the business. Based on the strong performance, we are increasing our full-year 2021 comparable sales and EPS expectations, being mindful of ever-changing macroeconomic factors. Michael will share more details about our updated 2021 outlook. I also want to highlight two actions that demonstrate our commitment to being good stewards of your capital. After the Q1 ended, we participated in a secondary offering as a buyer of $100 million of our common stock. We felt it was a good opportunity to reduce the outstanding shares at a discounted market price. We also reduced the interest rate on our term loan by 125 basis points and paid down the outstanding balance by 25%, or $99 million. Our momentum for 2020 has carried through the Q1. We're focused on maintaining it by cultivating and strengthening our customer relationships in store and online to increase sales and profits and bring fun to all. I will now turn the call over to Michael for a review of the financials. Michael? Thanks, Ken. Good morning, everyone. The Q1 exceeded our expectations as the demand we saw throughout 2020 continued, and in fact accelerated into 2021. I want to highlight our record Q1 results. I will discuss our 2021 guidance, which we are increasing based on the continued strength of our business. As Ken mentioned, Q1 net sales were $1.58 billion, with comparable sales of 38.9%, despite firearms and ammo sales being lower than expected due to continued inventory challenges. When compared to Q1 2019, sales increased 46.8%. Sales were strong across all product categories as well as across all markets. This is the Q2 in a row that all four merchandise divisions had double-digit comparable sales growth. Our e-commerce sales declined 21% over last year as we anniversary 405% growth in Q1 of 2020 when the COVID crisis began and customers shifted their buying preferences to digital channels. When measured against Q1 2019, our e-com sales grew 300%, and the sales penetration rate increased to 7.4% versus 2.8%. Because buy online pickup in store remains approximately 50% of total e-commerce sales, which reduces our overhead and shipping costs, we have been able to grow our e-commerce sales and our profitability. In fact, since 2019, the company's pre-tax income has increased 767%, even as our Q1 e-com sales have grown 300%, highlighting the fact that we have a profitable omnichannel platform. We believe there is even more room for growth and improvement as we continue to increase our investment in academy.com to create a seamless omnichannel experience. We are implementing solutions to improve our search and checkout capabilities, to give our customers more personalized product recommendations, and to provide them with more payment options, like Apple Pay. During the Q1, gross margin dollars increased 89% to an all-time Academy Sports + Outdoors record of $563.7 million. The margin rate expanded by 950 basis points to 35.7%, driven by a more favorable merchandise mix, better pricing management, fewer promotions, and less clearance sales. SG&A expenses were $324.6 million, or 20.5% of sales, which was 450 basis points less than Q1 2020, and 750 basis points lower than Q1 2019. These record results led to pre-tax income of $224.9 million, compared to a loss of $9.5 million in Q1 2020. The Q1 tax rate was 21%, resulting in net income of $177.8 million. Pro forma adjusted net income, which excludes the impact of certain extraordinary items, was $182.5 million, compared to $440,000 in Q1 2020. Q1 diluted earnings per share were $1.84 per share compared to a loss of $0.14 per share in Q1 2020. Pro forma diluted earnings per share were $1.89 per share compared to $0.01 in Q1 2020. Moving to the balance sheet. We ended the quarter with $593.3 million in cash and zero borrowings on our credit facility. We have reduced our net debt by 84% compared to last year, a decrease of over $1 billion. At the same time, we have increased our liquidity, including availability under our credit facility by 42%, which is an increase of over $400 million. During Q1, the company generated $219.2 million in operating cash flow compared to $90.8 million in Q1 2020. Ending inventory was $1.08 billion, which was 7% higher than Q1 2020 and 9% higher than at the end of Q4 2020. Steven Lawrence will provide more insight on how his team has effectively managed tighter product availability while driving tremendous sales growth. As far as capital expenditures, the company still expects to spend $80 million-$85 million in fiscal 2021. On the last earnings call, I laid out four sales-driving opportunities for 2021. Those opportunities were, first, capitalizing on the shopping velocity of new and existing customers. Second, ensuring that we are replenishing and growing categories where inventory was constrained through most of 2020. Third, capitalizing on several product categories that were challenged in 2020 but are positioned to benefit from the reopening of the economy. Lastly, improving our management of several seasonal categories where demand exceeded supply in 2020. Here are some indicators of how we are doing so far. We continue to see an increase in the percentage of existing customers who purchased in a new category in the last 12 months and then returned to that category again. Our inventory levels in categories that saw shortages in 2020, like bikes and fitness equipment, ended in a much better position than a year ago. Team sports, apparel, and footwear all had record sales growth well above the company's total comparable sales after being challenged in Q1 2020. Sales in categories where we didn't have enough supply last year, like water sports and outdoor cooking, exceeded our Q1 comps. Moving to our outlook for the remainder of 2021, we are increasing our full-year sales and earnings guidance. While there is still uncertainty from the impact of COVID-19 and other external factors, based on recent trends and the visibility we have for the remainder of 2021, full year comparable sales are now forecast to range from +6%- +9%. Over the last two fiscal years, this would represent comp growth of 22%-25%. Diluted earnings per share are now forecast to range from $4.15 per share-$4.50 per share, based on 96.5 million diluted weighted average shares outstanding for the full year. This range accounts for various market scenarios and possible outcomes for the remainder of the year, varying from business as it is today to a much more promotional and competitive environment. In terms of year-over-year growth, net income at the midpoint of this guidance and earnings per share using a normalized share count of 96 million shares are both 35% higher than fiscal 2020 and 248% higher than fiscal 2019. With that, I will turn the call over to Steven for more details around merchandising operations. Steven? Thanks, Michael. I'd like to give you a little more color around our Q1 performance. As we already mentioned, we delivered a 38.9% comp. Unlike many of our competitors, we never closed our stores last year. As a result, this quarter's comp is on top of a 3.1% increase in 2020. The early part of this quarter was negatively impacted by store closures during the winter storms in February. Once we got past the weather disruptions, we saw a strong rebound in March and April, fueled by our merchandise initiatives, pent-up demand, consistently warm temperatures, of course, the government stimulus did not hurt. Looking at the results by category, apparel and footwear are our two strongest divisions, both with high double-digit comps during the quarter. These categories were the two hardest hit businesses last year when most of the country went into lockdown, so they're generally up against softer comps. Breaking it down by category, apparel sales were up 80% versus 2020 and +38% versus 2019, while footwear was up 58% versus 2020 and +23% versus 2019. All of our key national brands, such as Nike, Adidas, Under Armour, Columbia, and The North Face, had strong performances based on improving inventory positions and better content. We're pleased by the performance of our private brands, with one of the key drivers being the launch of two new initiatives. In February, we launched our new women's athleisure brand called Freely, offering new products in both apparel and footwear that focus on bridging function with comfort and an outstanding value. We also launched a better tier of Magellan Outdoors with Magellan Outdoors Pro, focused on more technical fabrics and features. Both initiatives got off to a strong start and are tracking above plan. As a reminder, our private brands count for roughly 20% of our sales and play a key role in our business by reinforcing our value message, filling in gaps that are not occupied by national brands, while also being margin accretive. Our sports and rec division posted sales growth of +36%. This is one of our businesses that really surged last year during the shutdown from COVID, so when you compare to 2019, we picked up 59% over the two-year span. The best performing category is team sports, driven by the return of sports being played across all of our markets. In addition, we saw strong growth in many of our outdoor recreation categories, such as water sports, outdoor cooking, and furniture, as people were spending more time outside when the weather warmed up. Another win during the quarter was the categories that experienced huge surges during lockdown last year, such as fitness and bikes, managed to drive single-digit comps despite being up against historic volume levels in 2020. In our outdoor division, we managed to drive a 13% increase, while compared to 2019, the business has grown 61% over the last two years. Key drivers were camping and fishing, which also benefit from people continuing to enjoy the outdoors. During our fourth quarter call, we discussed a less promotional environment. This carried through in the Q1, where we continued to see strong regular price selling. This, coupled with the lower clearance levels we entered the quarter with, helped drive our gross margin to 35.7%, or up 950 basis points versus last year. As the year progresses, we're anticipating that we'll see a more normalized promotional cadence. Our plan is to thoughtfully add back in promotions around key must-win market share opportunities as needed. Another big win for us was that despite the unprecedented sales increase and all the disruptions in the supply chain, we managed to end the quarter with inventories up 7% to last year. You may remember that we entered this quarter with inventories down 10%, so I'm sure you can tell that the merchants, supply chain, and stores did an outstanding job of working through all the challenges that will keep us in stock to set us up for the summer months. The team has worked to ensure that we have a flexible flow of receipts that should allow us the ability to keep up with demand going forward, protecting us against any downside risks. I'm looking forward to updating our progress against all of our initiatives in our second quarter call. I'd like to turn it over to Ken. Ken? Thanks, Steven. Looking ahead, as the country continues to reopen, we are focused on winning the summer season, which started this past weekend with Memorial Day and will continue through Father's Day, the Fourth of July, and the start of fall team sports. We want to be top of mind for consumers as they continue their newly found recreational lifestyles and resume some of the fun activities they enjoy most, like hosting family and friends at backyard cookouts or celebrating live sporting events. In the coming months, we will continue to focus on executing our priorities, building a stronger omni-channel business, improving our shopping experience, continuing our power merchandising work, increasing our targeted marketing, and strengthening our supply chain. These initiatives are instrumental to achieving our long-range goals and delivering fun for all as we work towards being the best sports and outdoors retailer in the country. Thank you. We'll now open the call to questions. The company will now open the call up for your questions. We will pause for a minute to wait for the queue to fill. Also, as a reminder, if you have a question, you may press star one on your telephone keypad. Our first question is with Robert Ohmes with Bank of America. Please proceed with your question. Hey, good morning. Terrific quarter, guys. Thank you. I was hoping you guys could speak a little bit to the second quarter and how we should think about puts and takes. The comparisons should be a little bit harder in 2Q versus 1Q in apparel and footwear, and a lot of these other categories. Maybe just some thoughts on how we should think about that. The inventory levels seem to be in really good position. Do you think you benefited from smaller competitors not being able to get inventory, and are you seeing signs of that coming back on? Is that why you guys are thinking about being thoughtfully more promotional? A long question there, really maybe some more color on the puts and takes on how we should think about 2Q and the rest of the year. Yeah, Robbie. Thank you. We don't give out inter-quarter guidance. I will say, we are up against the biggest quarter of the year last year, up 27%. What I will say is, we're seeing on a two-year stack basis a continued performance as we did in the Q1. Our business continues to do well. With regard to inventory, we're in what I would call an acceptable level. We're not back to where we want to be. We're probably still that $100 million short. Overall, we are in a reasonable position. We've got a couple of areas that are still challenged that Steven mentioned in the call. We don't have as the depth or the presentation quantities that we would like to have. Overall, it's an acceptable level. It has allowed us to get the sales results that we've had. I think that the supply chain is still very challenged, we're all working very hard. Steven's team, along with Sherry Harriman, our head of supply chain, have done a terrific job to get us the inventory that we need. It's a lot of work. I think that some of the smaller competitors may be having challenges. They also don't have some of the vendors that we have, and that is providing an opportunity. All in all, we feel comfortable where we are, but we know we have more room to go before we have the inventory where we would like it to be. Yeah, Robbie, it's Michael. From a guidance standpoint, I think first off, as a management team, we want to do what we say we're going to do. We want to make sure we can do that. As you called out, we're up against not only a big quarter next quarter, but really three pretty large quarters in the back half of the year. Three quarters that came up roughly to a 20% comp last year. It's still a tough environment to read. There's a lot of uncertainty in the environment. There's more competition for customers' wallet. As you called out, the supply chain is still a challenge. The labor pool is becoming more challenging. The guidance that we've provided contemplates those risks, along with potential for more promotions. We believe we can achieve it, and if we do our job, we believe we can exceed it. Yeah. The situation right now, there's some big headwinds, as Michael called out, and there are some tailwinds. Back to school, back to sports, people continuing with their hobbies, the teams playing again and people getting out. The uncertainty in the environment makes us continue to be cautious. We've got confidence that we will continue to do well. That's very helpful. Thanks so much, guys. Thank you. Our next question is from Christopher Horvers with JPMorgan. Please proceed with your question. Thanks. Good morning, guys. I had a follow-up to that question. As a reminder, I think July was pretty weak relative to the rest of the quarter last year, given that many school systems went back later in Texas and there was this delayed back to school. Is that fair to say that May and June were tougher months, better months last year than July? Yeah, I would say that's fair. Certainly, we saw a lot of our markets back to school either moving out or not happening. For us, in a lot of our markets, the back to school time period starts in the late July time period. We certainly did see Softer comps in the back half of the quarter versus the front half of the quarter last year. That said, when you're up 27% for a quarter. Yes. Every month on a more normalized basis was pretty good. The front half was stronger than the back half of the quarter. When we think about going forward, we talk about things that give us a little optimism going forward. Yeah Ken mentioned is certainly we think back to school is going to be more normalized. We're in better inventory position than we've been in probably in a year. We think and see people returning to sports. We saw baseball get off to a fast start this year. That gives us optimism about the football season as we round the corner. We've got over five million new customers. We got all the new pastimes and hobbies that our existing customers have picked up and are cross-shopping more across our categories. There's a lot of reasons to be optimistic despite some of the big comps that we're up against. Understood. Maybe could you break down the gross margin expansion, give us some sense on sort of the buckets of it. Longer term, how are you thinking about the margin potential of the business? Clearly, promotions will eventually normalize, but you're a much better retailer and you have this supply chain initiative coming as well. Yeah, from a gross margin standpoint, the big driver there was merch margins. Literally all elements of our gross margin were up, with the exception of those related to freight and the supply chain. Obviously the merch margin performance more than offset that. From a merch margin, just jumping in, obviously we had a favorable mix within the quarter. We talked a lot about how last year we had a negative or a mix where we were getting mixed down because outdoor and sports and rec were bigger business or bigger contributions in the first half of the year. That reversed this year with apparel and footwear. That certainly was a tailwind for us from a merch margin perspective. We talked about coming into the quarter with less clearance. We talked about having less promotionality. We do expect that the promotional environment will normalize going forward, and we're going to have to thoughtfully add those things back in. We have a lot of initiatives that we talked about in terms of better markdown optimization, better ready to replace optimization, better inventory flow and management. We believe that those should give us some tailwinds to kind of offset some of those headwinds we're going to be facing and still expect to see some margin expansion. Certainly not at the level we experienced, though, in Q1. One point of clarification there, just to be clear, we saw a more favorable mix shift compared to Q1 of last year, but we still believe there's an opportunity to have margin uplift from mix. Yeah. The other thing, and you called it out, Chris, was we are literally just starting the supply chain opportunities that we have. We're doing the roadmap now, and we'll begin those projects, and we expect those to support. I will also say that as the company has developed a culture in making sure that we manage our expenses thoughtfully, and we will work hard. While the Q1 was quite impressive and maybe long term, a bit of a stretch, we see continued opportunity for development of our margin over time. Yeah, Christopher Horvers, just to tag onto that a little bit. We're in this for the long term, and our plan is certainly to hit that double-digit EBIT margins on a long-term basis and sustain that. The things that we look at, first, are we taking share? We look at NPD data, which I think is probably the best source, and we can see that we are getting a bigger piece of a bigger pie. Two, are our investments working? Certainly from a power merch perspective, the credit card, buy online, pickup in store. We've had great growth in our dotcom business over a two-year basis. The ROI that we're delivering, we feel good that our investments are performing. Third, are we leveraging? If you work your way down to P&L, on the 39% comp, we delivered a margin expansion of 89% increase. Net income up almost 2,000%. We're getting the leverage that we want to get. Fourth, are our customers coming back? We continue to see existing customers shop new categories and come back to those categories more and more. We're happy there. Lastly, are we positioned to grow? Are we building the platform to grow and resume the brick-and-mortar growth and continue to invest in dotcom? We feel like all of those things, when we look at them, we're happy with the progress. Thanks, guys. Very helpful. Sure. Our next question is from Daniel Imbro with Stephens Inc. Please proceed with your question. Hi, guys. Congrats on the quarter. This is Andrew on for Daniel. Ken, I have one for you. I wanted to ask one on firearms. Obviously, guns and ammo have been really strong for almost a year now. Do you think that was a one-time bump? Is that sustainable? How is the team handling buying inventory for that category as we get into the back half? Yeah, that has not been a huge driver for us because of the supply situation. It's in line with the performance of the store, but the supply situation has been and probably will continue to be challenged. Historically, as a company, we would be dependent on one element to drive the business. That is not the case now. Our strong performers, as Steven P. Lawrence said, were footwear and apparel, and we did have good performance in outdoor, but it did not overwhelm where we were. I don't want people to think that was a driver for what we had. Our goal is to be the most responsible person retailer in the firearms area, and we will continue to do that, and we will make sure that we are in the business and support the business, but not take it beyond where it should be. Great. Thanks. I got a follow-up too. Sure. On the supply chain side, can you talk about how you're handling this inflationary freight backdrop? What's the headwind, and are you able to pass these through? I will tell you that within the supply chain right now, and you've probably heard this from everybody, there probably is not an element of it that's not under pressure, starting from overseas to the docks overseas, to the ships, to the truckers here. We are managing, we are working with our partners, looking at what we can do to ensure that we get delivery, that is first and foremost, and that we get fair pricing while we do that. Our team is working hard to manage the cost as best as we can within the current environment. We also are looking at other areas at this point to offset how we can do that. For example, one of the things that we're doing is within our distribution centers where we can control, we're actually getting more productivity. We put in a pay for performance element, and that is showing dividends. Our productivity in our DCs has actually improved in helping offset some of those costs. Perfect. Thank you. Our next question is from Michael Lasser with UBS. Please proceed with your question. Good morning. Thanks a lot for taking my question. Ken, you're on pace to have a 25% increase in your sales per square foot or sales per store this year compared to where it was in 2019. Coming in and as you and the team had established the transformational roadmap, surely you did not expect to witness a pandemic and all this sharp increase in the demand for sporting goods. As you look at this increase in productivity that Academy has already achieved, how much of it, is there any way that you could dimension how much of it has come from the transformation that's already been achieved by Academy, and what is left on the horizon such that even if demand in the marketplace slows, Academy can still make progress because of what it has in front of it? Yeah. One of the things that I've looked at in prior opportunities that I've had and I've brought to Academy is that in retail, there are really three main levers, your inventory, your real estate, and your people. To increase the productivity of all of those is very important. Our strategy that we put forward three years ago really targeted efforts against all three of those. I would say more of what we've done and seen in terms of productivity, for example, in our real estate, our sales per square foot, were from initiatives. We got out of some businesses. We reallocated space in the store. We improved the presentation. We changed the way that we stock the stores to make sure that we had a better flow of merchandise to allow for more productivity. We did a lot of things to make the productivity of the stores better. We set a long-term goal of $350 a foot in the five years. If you go back in time and look at both Foot Locker and JCPenney, we did the same thing. Then we reset the goal because we found that we could get the productivity up by driving traffic, by making the space more useful and more thoughtful. We're doing the same thing with store labor. We are not planning to reduce the hours that face the customer, but we take out other tasks. We give our team members tools such as handheld electronic devices so that they can better serve the customer and make themselves more productive. The flow of merchandise helps our team members to be able to satisfy the customer. It also helps us get better use of our inventory. We don't have trapped inventory. The initiatives that we've got against all three of our biggest assets, I think are really what's making it. As Robert Frost said, we have miles to go before we reach our goal. We've got a long way to go. We're early in the second chapter. I've got a lot of confidence that we can continue to grow all three with productivity measures. One more thing, Michael. The line we have certainly in the finance department is good fortune favors the prepared. We feel like we were working on all the right things prior to the pandemic. If you go back and look at our performance before the pandemic, all the indicators were pointing in the right direction based on the initiatives. COVID was really the accelerant to that. We did learn a lot through COVID, as Ken said. We feel like all the efficiencies, we can hang on to those. Mike, that's helpful. It's a lead into my follow-up question, which is your stock price is having a pretty muted reaction to these results, suggesting that a market is questioning the sustainability of it. You have offered a lot of confidence on this call that you think the margin performance can continue to improve, noting that you think you can have a double-digit operating margin, you can get some gross margin expansion from here. Is it going to move in a linear path, should we expect as we're modeling out the next few quarters, that as you return to promotion, that there may be a step back before you're able to get a step forward? As part of this discussion, how are you thinking about redeploying some of the ample cash you have on your balance sheet to buying back stock? I'll start, Michael. No tree grows straight to the sky, and there will be some ups and downs, but we feel that, as you said, we've got good confidence. We've got programs in place to allow us to grow and continue to grow the productivity measures, which will result in the profitability. We do not think that this is anywhere near done. We know that the things that the team is working on, and we've got a very strong team here, will allow us to continue to see growth that may not be exactly linear. We've planned and, for example, our plan for promotions and if there are promotions and if they're not, we can handle that. If there are, we can handle that. Our goal is to plan for the contingencies and think about the what-ifs and be prepared for them so that when they happen, we don't panic and overreact. We take thoughtful action against what we may face and drive it forward. I think that's the history that this team has demonstrated and will continue to demonstrate. I'll let Michael talk to the other parts of your question. Not much to add on that. We are, in my opinion, really scratching the surface on what we can achieve. We have large initiatives that we are just now starting to tap into. Targeted marketing is a certain example of that. The supply chain work that Ken discussed. I certainly feel like there is a lot more that we can work on and do. A lot of it's foundational. We're still in that phase of operating the business. With respect to the cash, I reiterate what we said in the past. Our priority is stability, managing through that in the uncertain times, making sure we're stable. Second is to fund our growth initiatives. Then lastly, we'll look at ways to return the value back. Obviously, we were opportunistic last quarter. We were able to participate on the secondary offering and get the underwriting discount, which, if you look at the way the stock has performed, was a good decision. We used the $100 million to help reduce our interest on our term loans. We'll continue to look at those opportunities. Thank you very much. Thank you, Michael. Our next question is from John Heinbockel with Guggenheim. Please proceed with your question. Let me start with the higher AUVs over the last year and a half. Has that changed the new store model maturation curve, in your opinion? Does it now open up real estate opportunities that might not have existed two years or more ago? Well, the higher AUV is really a function of mix. Again, the more outdoor products that we're selling, that's most of it. Of course, there's been some price increases that we've taken in certain categories, but most of it is mix-related. Steven, I don't know if you want to. In terms of higher AUV? Yeah. Yeah, it is mix-related, but as Michael said, we did have some cost pressures. That was one of the questions earlier that we passed along. If you go back when we were doing the roadshow, we were talking about the mix of our business traditionally has been about 50/50 soft goods, hard goods. If you look at where we ended last year, it was more like 57/43 hard goods. A lot of big-ticket things in there like kayaks, gun safes, things like that have driven that up. In terms of the real estate strategy, look, we're not starving for places to grow. We're only in 16 states, we've got a lot of opportunity. Our challenge is making sure we sequence it the right way and in a responsible way. We're not an organization that's going to struggle to find good locations. Within our existing markets and in new markets. Maybe then as a follow-up to that. Assuming the higher productivity holds for the most part, the only change in profitability would be a normalization in promotions. Would your point be that if I think about the supply chain opportunity, which sounds like it could be 50 to 100 basis points, maybe, that that would equal or exceed whatever you gave back on normalization and promotion? Is that a fair thought? Well, I'd say there's a couple other puts and takes in there. When we're talking about adding back in promotionality, whatever we would do would be thoughtful and probably wouldn't be going all the way back to where we were a year or two years ago. At the same time, there are cost pressures out there. We talked about some of the supply chain challenges with raw material shortages, et cetera. Those are also creating certain margin headwinds. We believe, though, that the initiatives that we have in place in terms of better planning allocation disciplines, better allocation of goods, better markdown management, better sales driving initiatives, better increased productivity of our stores and our inventory, all those things are going to be offsets to that increased promotionality. Should give us some margin headwinds. We just want to be careful and not set the expectation we're going to pick up 950 basis points over these couple quarters. That's probably not going to happen. Again, you still have the offset where we expect the merchandise mix to normalize over time. We're still a little heavy in the hard goods side of the business right now. Thank you. Our next question is from Greg Melich with Evercore ISI. Please proceed with your question. Hi, thanks. I have two questions. First on top line. If you look back two years, you're up, I guess, 42%. Is it fair to say that ticket and traffic both helped that strongly, or was there one that really dominated it? It's a combination of both average ticket and traffic were up. The actual number on a pure basis is up 47%. Yeah, all basket metrics are up. All basket metrics are up. I imagine transaction counts go up double digit versus a few years ago. Yeah, transaction counts are up. Yeah. Okay. It was more average basket was a bigger part of the 47% growth. Long-term. We haven't gotten to the detail of breaking it out. We haven't broken it out like that publicly, but we had, as Michael said, all of our measures were up and performing strongly. Again, to get that kind of increase, you got to hit on all six and you got to hit on all six hard. I actually would've said eight years ago, but nobody has an eight-cylinder anymore. My second question is, I think we got a lot on gross margin. It sounds like there's a lot here that's foundational still to come, but the promotions is the biggest thing to go away. I guess I want to go on SG&A a little bit. If you think about the flow through you got there, if you go back versus two years ago, you have SG&A dollars up around 8%. Is that a fair kind of benchmark to think, is there a scenario where SG&A dollars could be up 10% or 12% versus 2019? Is eight about as high as it goes? No, I think, on the SG&A side, there's nothing really there. We're benefiting from the leverage on the increased sales. Then we're benefiting, I think, from being a lot smarter with our labor scheduling in the stores. Both of those things, we feel good can stick around. Yeah, we're making investments to continue to make our expenses more productive, if you will. A labor scheduling system that we put in place that will make our store labor more productive. We talked about the CapEx for productivity in our distribution centers, the effort that we're putting in place with our roadmap to improve the efficiency of our supply chain. The move that we're making in targeted marketing to make our marketing more efficient and effective. As we look at our expenses, we do not see the expenses growing as fast as our sales because we're going to make them more productive as we're investing in them. Another great example there, our cost per unit to move things to the DC is down pretty significantly, and that's not happenstance. That's a function of the initiatives that are working on there. That shift should stick around. Continue to improve because we're not through with it yet. There's still room there. That's great. Thanks. Good luck, guys. Thanks, Greg. Our next question is from Lavish Aman with Credit Suisse. Please proceed with your question. Hey, guys. Thank you for taking my question and my congrats on the quarter. I have a follow-up on the gross margin for the balance of the year. Understanding that there are some supply chain initiatives that are just underway, can you share some update on the timing of these key initiatives through the year, especially as you lap all of these, or not lap, in fact, actually consider all of these incremental headwinds that are basically persisting on the supply chain side? As I said, we are just now finishing up the roadmap and starting to put in place some actions against that. We will see some early results, but we will not see a lot of impact from the project this year. We'll start to see more of it next year and the following year. I would jump in, though, and say that we're further along on a lot of the merchandising initiatives around better planning, better allocation. We do think that those impacts will definitely be felt this year and have been being felt over the past year and a half, two years. Got it. One other quick follow-up on working capital. On the payables leverage has been pretty steady in that 80% range. If I look at balance of the year and into next year, what is the right number to think about going forward? I'm sorry. Could you repeat the question? We lost you there for a second. Sorry, I'll repeat. My question is on working capital, especially on the payables leverage, has been around that 80% range for the last four quarters now. Going forward into the back half of this year and into next year, what's sort of the right number to look at there? Yeah, we wouldn't expect any, frankly, change to the payables. Anything but substantial change. Substantial change, yeah. Great. Thank you. Thank you. We do, ladies and gentlemen, we do have time for one more question. Our next and last question is from John Zonis with BMO Capital Markets. Please proceed with your question. Hey, guys. Thanks for fitting me in. Yeah. I have two questions. The first one is a clarification question. I'm estimating that sales per square foot on a two-year basis were up 44% in the Q1, and I think you mentioned 47% for comps. Did you mean to tell us that the Q2 is running at a similar rate to the Q1 two-year? When I said up 47%, that's a two-year comparison to 2019. That's comparing 2021 sales against 2019. Ken's comment, we try not to and don't give commentary inter-quarter around what's happening. We are anchoring this year candidly off of 2019. When we talked about how we planned this year, we talked about using the shape of 2019 because it's a more normalized sales curve and distribution with the size from 2020. When we go back and look at comparisons against 2019, we've seen strong trends through Q1, and looking back in that same sort of lens, we see those trends continuing. Okay. Thank you. My second question is longer term in nature. If you think about the change in the consumer and also your financial position relative to 18 months ago, does this unlock any objectives or plans for the business that you wouldn't have considered previously? What might those things be? I'll jump in with one. First, from a vendor perspective, you think about the vendor relationships that we have today versus where we were several years ago. You talked about the improved financial strength of the company. That's certainly unlocked a lot of doors for vendors with us. I would say that our partnership is probably the best that it's ever been. We see this manifested a couple different ways. From an availability of product perspective, we're getting better product offerings from our vendors. We're getting new brands that are coming into the space for us. We're seeing the vendors want to invest mutually in building a better in-store presentation, along with a better digital footprint on our site. We're getting better allocation of inventories. That certainly helped us build our inventories up this year. In some cases, we're getting better terms. I would certainly say that's been a pretty big impact of the performance. Yeah. The other one would be certainly with the ROIC, we're getting our investments in the way that our newer markets have performed. I think next year we're committed to the eight to 10 new stores, after that, we are certainly rethinking our ability to grow a little faster and accelerate that. Yeah, and our ability to invest in the opportunities to continue to invest in improving our.com capabilities, our ability to invest in the supply chain to make it stronger. Obviously, it's managed the growth that we've had, but what we think is coming, we will need more capability there. The other thing I think that's important is one of our merchandising objectives was to do more, better, and best. We are stepping up in team sports with better balls and bats. In our vendor structure, things like Nike Yoga, putting in North Face in all stores, North Face camping. I was in a store the other day, and a couple were in there looking at the North Face sleeping bags, and they said, "Yeah, we've started camping now, and we bought some of your Magellan bags. Now that we're going to be more active in camping, we thought that The North Face might be a better bag for us. We're seeing significant opportunities from the success that we've had and appreciate the customer as they've come to us and new customers have come to us. What they want is that assortment that we offer from beginner to enthusiast and the great value that we offer with those items. I think we have reached the end of our question and answer session. I'll now turn it back to Ken. Yeah. I'd just like to recap and thank everybody for participating on the call and the interest that I think we had a good set of questions. We are very proud of what we've done, and the team has done a terrific job in the Q1, but we have much more ahead of us and significant opportunity to grow and develop in all of our aspects in terms of our real estate, in terms of our.com, in terms of our operational effectiveness. It's not always going to go straight up to the sky, but we're in the early phases, and we appreciate all those who are shareholders who are participating with us as we move the business ahead and feel confident that we've got the team, we've got the strategy, and we have the capabilities to really become the best in the business, and want to thank all of you for your support. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.