Certain statements contained in this presentation constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, project, position, strategy, seek, may, could, and similar expressions. These are based on assumptions and assessments made by the company's management in light of experience and perception of historical trends, current conditions, expected future developments, and other factors that the company believes to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, product demand, energy prices, weather, competition, credit market conditions, cash flows, access to available and feasible financing, future stock repurchases, the impact of recessionary conditions, consumer debt levels, changes in laws or regulations, risks associated with self-insurance, war or the prospect of war, including terrorist activity, the impact of public health issues such as the ongoing global pandemic of a novel strain of coronavirus (COVID-19), ...inflation, the ability to hire, train, and retain qualified employees, construction delays, the compromising of confidentiality, availability or integrity of information, including cyberattacks, historic growth rates, sustainability, downgrade of the company's credit ratings, damage to the company's reputation, challenges in international markets, failure or interruption of the company's information technology systems, origin and raw material costs of suppliers, disruption of the company's supply chain due to public health pandemics or otherwise, impact of tariffs, anticipated impact of new accounting standards and business interruptions. Certain of these risks and uncertainties are described in more detail in the Risk Factors section contained in Item 1A under Part 1 of the company's Annual Report on Form 10-K for the fiscal year ended August 29, 2020. These risk factors should be read carefully. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those contemplated by such forward-looking statements and events described above and in the risk factors could materially adversely affect the company's business. However, it should be understood that it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Greetings, and welcome to AutoZone's 2021 third quarter earnings release conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Bill Rhodes, Chief Executive Officer. Thank you. You may begin. Good morning, thank you for joining us today for AutoZone's 2021 third quarter conference call. With me today are Jamere Jackson, Executive Vice President, Chief Financial Officer, and Brian Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the third quarter, I hope you had an opportunity to read our press release and learn about the quarter's results. If not, the press release, along with slides complementing our comments today, are available on our website, www.autozone.com, under the Investor Relations link. Please click on Quarterly Earnings Conference Calls to see them. I am excited and honored to share with you the exceptionally strong performance our team of 100,000 AutoZoners delivered this quarter. As I've said previously, throughout this pandemic, we could not deliver the kind of results we have without the continued exceptional performance of our entire team, especially our store and supply chain AutoZoners. As our sales volumes have remained at historic all-time highs, our AutoZoners have met this demand head-on with enthusiasm for going the extra mile for our customers. While we have asked a lot of our AutoZoners over the last year, they have taken on the challenge and continued to inspire and impress us all. I also want to reiterate our top priority remains being committed to keeping all of our customers and AutoZoners safe. Thank you, AutoZoners, again. Now to our sales results. Our overall same-store sales were up 28.9% this quarter. Our growth rates for retail and commercial were both strong, with commercial's growth north of 40%. This is almost double the comp growth rate of our DIY business, an incredible accomplishment for both businesses, but especially for commercial. We achieved our highest weekly commercial sales of all time. We averaged nearly $70 million a week in commercial sales. This is incredible considering we averaged $48 million for Q3 of last year. For the trailing four quarters, we have sold domestically $3.1 billion to commercial customers. We are doing some really exciting things in commercial, and we couldn't be more proud of our team's recent successes. Now let's focus on sales cadence. This quarter stretched from mid-February to the first week of May. In the first four weeks, our sales comp was approximately 11.6%. This was lower than the trend we were experiencing at the end of our second quarter. We believe the cause of our sales slowing were the winter storms experienced across the central and southeastern states. Sales picked up for the next four weeks, from mid-March to mid-April, concurrent with the arrival of additional stimulus payments. The final four weeks happened to coincide perfectly with the stimulus payments from last year. It was over these four weeks last year when our sales ramped materially. This year, over those four weeks, we averaged a 14% comp, with the last two weeks coming down to the mid-single-digit range. We continue to maintain solid growth rates post-stimulus. For Q3, our two-year comp was 27.9%. On a two-year stack basis, the first four weeks were up 17.9%, the next four weeks were up an impressive 49.9%, and the last four weeks were still up 26.7%. It was encouraging for us to see sales inflect upward this quarter with both traffic and ticket moving higher. Our traffic growth was roughly double the ticket growth rate as the reintroduction of federal stimulus payments and the execution of our growth initiatives drove a material increase in traffic. During the quarter, there were certainly some geographic regions that did better than others, as there always are. Across both our retail and commercial customer bases, we saw the majority of the country perform consistently well. Normally, we talk about the Midwest and Northeastern markets underperforming the others. No, not this quarter. These markets were in line with the rest of the country for both DIY and DIFM. We believe the winter weather we experienced in February bodes well for our future sales opportunities this summer and into the fall. I could not be more proud to say that based on the retail sales data we have for our industry, we continue to enjoy share gains. The share data we have available for the first eight weeks of this quarter shows we are growing at a roughly 10% higher rate than the remainder of the industry. While we are thrilled to have those share gains, our charge remains to maintain them heading into the summer and fall months. Our number one priority continues to be the health, safety, and well-being of our customers and AutoZoners. On last quarter's call, we shared that we would provide every single AutoZoner with a $100 incentive once they completed their vaccination for COVID-19. That's every AutoZoner, including part-timers. This was the logical next step in our efforts to provide a safe working and shopping environment, as we have with our ongoing PPE efforts. We spent about $1 million during the quarter incentivizing our AutoZoners to get that vaccine. I continue to be inspired by our board and management team's commitment to doing what is right, and that is putting safety first. Our culture and our values of taking care of one another have been in full force and effect over the last year during this pandemic. While we continue to be encouraged with the current sales environment, we are cautious about predicting future trends. The latest round of stimulus payments certainly accelerated our sales, and sales remained at elevated levels through the end of the quarter. We can't fully predict what all the different pushes and pulls on macro trends mean for us. We remain bullish on the industry's ability to grow this year, and we believe we are well-positioned to gain additional share beyond what we already have. I'm sure many of you would like to know how we are thinking about the sales for the fourth quarter of fiscal 2021. I'll remind you that typically in recessionary environments, our business is remarkably resilient. Nothing about this global pandemic is typical. Beyond our primary objective to ensure the safety of our customers and AutoZoners, our focus is on providing our AutoZoners with the resources they need to provide our customers with an exceptional shopping experience. We are optimistic about the sales environment heading into the fourth fiscal quarter, we will obviously have the most difficult comparison in our history as last year's fourth quarter benefited from the April 2020 stimulus package and enhanced unemployment benefits through July, we generated an astonishing 21.8% same-store sales growth last year in Q4. While we understand you would like more clarity on our expectations for this Q4, this remains a very challenging environment to predict, especially in DIY, as many evolving macro factors meaningfully impact our results. Let's move into more specifics on performance for the quarter. Our same-store sales were up 28.9% versus last year's third quarter. Our net income was $596 million, and our EPS was $26.48 a share, 84% above last year's third quarter. Our same-store sales growth this quarter was a record for any quarter since we became a publicly traded company back in 1991. Both our retail and commercial businesses showed strength in the quarter, with DIY same-store sales up approximately 25% and commercial total sales growth of approximately 44%. For commercial, we averaged $70 million in weekly sales, which is approximately $13,500 in sales per program per week. These commercial sales numbers easily set all-time records for us. The initiatives we have in place are helping drive our commercial sales. I'll remind you that this is a highly fragmented $75 billion market. We believe our product and service offerings provide us a tremendous opportunity to significantly grow sales and market share over time. Next, I'll talk about trends across our merchandise categories, particularly in the retail business. Our sales floor categories continue to be strong, with categories like tools, antifreeze, small repair, and floor mats showing strength. Our hard parts business definitely picked up. Our hard parts business comped in line with our sales floor for the quarter. This now represents our second quarter in a row where we saw our hard parts business grow in line with sales floor items. We believe this strengthening of our hard parts business is due to the significant winter weather we experienced, additional stimulus, and the pickup in miles driven the nation is beginning to see as people return to a new normal. Business remained very strong in many merchandise categories, such as accessories and batteries. Notably, brakes and rotors, while still slightly below our average growth, had a meaningful rebound this quarter due to the winter weather. As we expect our sales growth from the pandemic-related surge will moderate over time, we believe the investments we have made in both our retail and commercial businesses position us to deliver outsized share gains relative to the overall industry. In addition, we continue to believe our products and services will be in high demand during more difficult economic times, and this resiliency gives us significant confidence about our future prospects. Now, I will turn the call over to Jamere Jackson. Jamere? Thanks, Bill, and good morning, everyone. As Bill mentioned, we had another outstanding quarter. Once again, our growth initiatives are delivering and the heroic efforts of our AutoZoners in our stores and distribution centers are driving extraordinary results. To start this morning, let me take a few minutes to elaborate on the specifics in our P&L for Q3. For the quarter, total auto parts sales, which includes our domestic, Mexico, and Brazil stores, were $3.6 billion, up 31.8%. For the trailing four quarters ended, total sales per AutoZone store were just over $2.1 million. This compares to just under $1.9 million in Q3 last year. Now let me give a little more color on sales and our growth initiatives. Starting with our commercial business, for the third quarter, our domestic DIFM sales increased over 44% to $829 million. Sales to our DIFM customers represented 23% of our total sales, and our weekly sales per program were $13,500, up 39.2% as we averaged nearly $70 million in total weekly commercial sales. Our growth was broad-based as national accounts and local and regional accounts both grew over 40% in the quarter. Our execution on our commercial acceleration initiatives is delivering exceptional results. As I have said previously, we're focused on building a faster-growing business with disciplined investments in pricing, service, and assortment. We have a tremendous market opportunity as we are significantly under-penetrated in this highly fragmented portion of the market. We now have our commercial program in over 85% of our domestic stores, and we're focused on building our business with national, regional, and local accounts. This quarter, we opened 19 net new programs, finishing with 5,107 total programs. We continue to leverage our DIY infrastructure and increase our share of wallet with existing customers. Our strategy is working as we continue to grow share this past quarter. We are confident that we can continue to gain share as we deliver improvements in the quality of our parts, particularly with our Duralast brand, make improvements in our assortment, maintain competitive pricing, and stay committed to providing exceptional service. These core focus areas have enabled us to drive double-digit sales growth for the past four quarters and position us well in the marketplace. As we move forward, we're focused on our core initiatives that we believe will accelerate our growth even further. First, our mega hub strategy is improving our parts availability and giving us tremendous momentum. We opened two more mega hubs this quarter, bringing our total to 50 locations, and we expect to open between four and seven more mega hubs by the end of the fiscal year. As you might recall from last quarter's conference call, we raised our near-term targeted build-out of mega hubs from 75-90, to 100-110. Mega hubs help us expand coverage and say, "Yes, we have it" more frequently. Expanding our mega hub footprint delivers a meaningful sales lift to both our commercial and DIY business. Second, our technology investments are improving delivery times and service levels. We continue to make enhancements to our AutoZone Pro system and mobile app to enable faster and more efficient parts ordering. We're leveraging technology to improve delivery times and making it simpler to do business with AutoZone. All of our efforts are driving efficiency for our sales professionals, drivers, and customers and will help build a meaningful competitive advantage. Third, we're committed to being price competitive and the strategy's working. We have a laser focus on the key categories, regions, and segments where investments in pricing are leading to accelerated sales growth and higher EBIT dollars. We're using data science and market intelligence to test our approach in different markets and different customer segments and delivering solid results. We will continue to lean into this strategy and live up to our pledge to have the best merchandise at the right price. Our execution in the commercial business gives us tremendous confidence in our ability to create a faster-growing business. On the retail side of our business, we're excited about the gains we're seeing in our DIY market share, and our initiatives are driving solid share gains. Our growth in the quarter was broad-based across regions and categories. In the quarter, we delivered double-digit comps in eight of the 12 weeks, and all 12 weeks had positive comps, despite some weeks having tough comparisons from a year ago. Our sales floor market share, as measured by NPD, grew nearly two points for the first eight weeks of the quarter, and we saw double-digit growth across both failure and maintenance categories in the quarter. We also grew share in April, despite the tremendous growth last year, signifying that those customers have likely changed their buying behavior. Our growth in retail is driven by our continued focus in a few key areas. First, the relentless focus on execution by our AutoZoners in our stores and distribution centers has been remarkable. Our supply chain AutoZoners have processed and handled record volumes, and our store AutoZoners have handled record store traffic and delighted our customers. To be clear, we are winning in the marketplace, and the execution of our AutoZoners who are taking care of our customers is a key competitive advantage. Second, the assortment work and mega hub strategy continue to improve our coverage and availability, leading to a meaningful lift in sales. Third, we continue to focus on improving the customer shopping experience with our e-commerce efforts. Buy online, pick up in store, next day delivery, and ship to home, which were up again significantly this quarter, have helped us meet customers when, where, and how they want to shop. We're particularly pleased with buy online, pick up in store, the fastest-growing portion of our e-commerce offerings, which enables our customer to shop our broad array of products online and maintain the opportunity to get expert advice from our AutoZoners when they pick up in store. This is a significant competitive advantage versus our pure-play competitors. Fourth, and similar to our commercial approach, we're using discipline and sophisticated data analytics to ensure that we're competitively priced. This is a data-rich environment, and our data-driven approach, tools, and capabilities give us a meaningful competitive advantage. We've tested our approach in key categories and markets, and this effort is yielding increased top line and gross profit dollar growth, albeit at slightly lower gross margins. The strategy is working, we're going to lean into this approach more as we live up to our pledge of having the best merchandise at the right price. DIY has been a strong contributor to the growth of our company, and while comps get more difficult as we lap the accelerated sales growth that we have seen over the past four quarters, the fundamentals of our business have never been stronger. Our strategy and execution are delivering solid results. Now let me spend just a few minutes on international. We continue to be pleased with the progress we're making in Mexico and Brazil. During the quarter, we opened seven new stores in Mexico to finish with 635 stores, and one new store in Brazil to finish with 47. On a constant currency basis, we continue to see solid sales growth. More importantly, as those economies stabilize, we remain committed to our store opening schedules in both markets and expect both to be significant contributors to growth and earnings in the future. I am particularly excited about our prospects in Brazil, where based on all of the hard work by our Brazilian AutoZoners over the past several years, we're now poised to significantly accelerate our new store growth rate over the coming years. Let me spend a few minutes on the P&L and gross margins. For the quarter, our gross margin was down 118 basis points, driven primarily by the accelerated growth in our commercial business and our investment in our pricing initiatives. As I mentioned, our commercial business grew 44% this quarter, and we're also making disciplined pricing investments to drive top-line growth and gross profit dollars. The strategy is working. Our work is translating into higher sales and profits as evidenced by our sales and share growth that outpaced the remaining market this quarter. Our approach is disciplined and specific to certain categories where we have rigorously tested and determined which actions move the sales and gross profit dollar performance in the right direction. We're beginning to see some cost inflation in certain product categories along with rising transportation costs. To be clear, overall, we have pricing power. The industry's pricing remains rational, and we're pricing accordingly. All of the actions we are taking have resulted in us growing our DIY and DIFM businesses at roughly double the rate of the overall market or better, and we're committed to capturing our fair share and improving our competitive positioning in a disciplined way. This is a good outcome for our business, and as such, you should expect to see similar margin performance in the fourth quarter. We will continue to drive new customers and over time grow absolute gross profit dollars at a faster-than-historic rate in our total auto parts operating segment. Moving to operating expenses, our store operations and commercial teams continue to manage our expenses well in this environment. Our expenses were up 11.3% versus last year Q3 as SG&A as a percentage of sales shows leverage of 550 basis points. Included in this quarter's expenses were over $1 million of COVID-related expenses compared to last year's third quarter COVID expenses that totaled $75 million, which included provisions for additional emergency time off. Excluding this comparison, SG&A levered 284 basis points, driven by our exceptionally strong sales growth. While our SG&A dollar growth rate has been higher than historical averages, we remain committed to managing SG&A in line with sales volumes over time. Moving to the rest of the P&L, EBIT for the quarter was $804 million, up 63% versus the prior year's quarter. Our EBIT margin was 22%, up 432 basis points versus the prior year's quarter, driven by the strong top-line growth and operating expense leverage I spoke about earlier. Interest expense for the quarter was just over $45 million, down 5% from Q3 a year ago, as our debt outstanding at the end of the quarter was just under $5.3 billion versus just over $5.4 billion last year. We're planning interest in the $60 million-$61 million range for the fourth quarter of fiscal 2021 versus $65.6 million in last year's fourth quarter. Our adjusted debt level metric finished the quarter at 2 x EBITDA. While in any given quarter we may increase or decrease our leverage metric based on debt and equity market conditions, we remain committed to both our investment-grade rating and our capital allocation strategy, and our share repurchases are an important element of that strategy. Moving to tax, for the quarter, our tax rate was 21.4% versus 22.8% in last year's third quarter. This quarter's rate benefited 211 basis points from stock options exercised, while last year it benefited 26 basis points. Stock option exercises aren't predictable, and as such, they will affect our tax rate and ultimately our net income and EPS. For the fourth quarter of fiscal 2021, we suggest investors model us at approximately 23.4% before any assumption on credits due to stock option exercises. Because we cannot effectively predict this activity, we remain committed to reporting the stock option impact on the tax rate. Moving to net income and EPS, net income for the quarter was $596 million, up 73.9% versus last year's third quarter. Our diluted share count of 22.5 million was lower by 5.5% from last year's third quarter. The combination of strong earnings and lower share count drove earnings per share for the quarter to $26.48, up 84% over the prior year's third quarter. Let me talk about our cash flow. For the third quarter, we generated $1.2 billion of operating cash flow. This was up $539 million over last year's Q3. Our operating cash flow results benefited from the strong sales and earnings previously discussed. As we move forward and make the investments that we have discussed to drive growth, you can still expect us to be an incredibly strong cash flow generator that returns meaningful amounts of cash to our shareholders. Regarding our balance sheet, we now have $976 million in cash on the balance sheet, and our liquidity position remains strong. We're also managing our inventory well, as our inventory per store growth was up 2.3% versus Q3 last year. Inventory per store was $701,000 versus $685,000 last year and $715,000 last quarter. Total inventory increased 5.1% over the same period last year, driven by new stores. Net inventory, defined as merchandise inventories less accounts payable on a per store basis, was -$167,000 versus -$56,000 last year and -$93,000 last quarter. As a result, accounts payable as a percent of gross inventory finished the quarter at 123.9% versus last year's Q3 of 108.2%. Lastly, I'll spend a moment on capital allocation and our share repurchase program. We repurchased $900 million of AutoZone stock in the quarter. As of the end of the fiscal quarter, we had approximately 21.6 million shares outstanding. At quarter end, we had just over $1.3 billion remaining under our share buyback authorization. Year to date, we've bought back $2.5 billion of stock, or approximately 2 million shares. The powerful free cash flow we have generated this year, combined with excess cash carryover from last year, has enabled us to buy back over 8% of our shares over the first three quarters of the year. As such, expect to continue reducing the level of cash and cash equivalents on hand through the remainder of this fiscal year. Our business remains remarkably strong, and this will enable us to invest in our existing assets, grow our business, and as I emphasized earlier, return meaningful amounts of cash to shareholders as part of our disciplined capital allocation approach. To wrap up, we had another very strong quarter highlighted by exceptionally strong comp sales, which drove a 74% increase in net income and an 84% increase in EPS. We're driving long-term shareholder value by investing in our growth initiatives, driving robust earnings in cash, and returning excess cash to our shareholders. Our strategy is working, and I have tremendous confidence in our ability to drive significant and ongoing value for our shareholders. Now I'll turn it back to Bill. Thank you, Jamere. These continue to be unique and extraordinary times. Our team has done a wonderful job of managing and leading throughout this time frame. I am proud of our team across the board for their commitment to servicing our customers, but doing so in a very safe manner. At the start of this pandemic last year, we could never have guessed the positive impact it would have on our sales. To be able to report our largest domestic comp sales number ever this quarter, 30 years after going public, is just amazing. With this fortuitous outcome, we knew we had to take advantage of this window of time and experiment. We've tested to understand the origins of our share gains and potential for retaining those gains as the world goes back to some sense of normalcy. We believe the environment continues to allow us this chance to learn, but we will be deliberate. We understand the value of the capital invested as our capital is our investors' capital. We must have an appropriate return. We've worked exceptionally well to deliver on our commitments thus far, but we must keep focused and continue to deliver. There are no layups. We must continue to innovate. While our domestic retail business continues to do tremendously well, we understand that trends will slow, but we're going to work hard, real hard, to gain as much share as possible now in order to limit our future headwinds. Our goal is to retain all of these new customers and new occasions where existing customers are choosing AutoZone. As we've discussed, our domestic commercial business is still in the very early innings of the maturation process. It is an honor to have reported this morning that we are now doing materially over $3 billion in domestic commercial sales on a trailing four-quarter basis. We hope and we believe the best is yet to come for our commercial business. As always, we have work to do as we head into our summer selling season, but we are excited to exploit the opportunities that are in front of us. First and foremost, our focus will be on keeping our AutoZoners and customers safe while providing our customers with their automotive needs. Secondly, we must continuously challenge ourselves during these extraordinary times to position our company for even greater future success. We know that investors will ultimately measure us by what our future cash flows look like in three-five years from now. Lastly, I continue to be bullish on our industry, and in particular, very bullish on our company. Now we'd like to open up the call for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that you please limit yourself to one question and one follow-up question. One moment, please, while we call for your question. Our first question comes from the line of Bret Jordan with Jefferies. Please proceed with your questions. Hey, good morning, guys. Good morning, Bret. Good morning, Bret. In your prepared remarks, you talked about the improvement in quality of the Duralast parts obviously started as a driver of the commercial traction. Could you talk about how maybe higher input costs, obviously buying a higher value part, is impacting margins versus the price investments? Yeah. Jamere talked about the fact that we're beginning to see some pretty significant inflation on certain product categories. I don't think that's been a big driver of our performance in Q3, but it is something that we are very mindful of as we move into Q4, and frankly, we're having to pass some of those costs along to our customers, just like we've done for the last 40 years. Okay. I guess on the price investment conversation, I guess when you think about the DIY business versus the commercial, could you maybe just sort of bucket it for us? Do you see more aggressive price investment on one side versus the other? Within commercial, are you seeing more competition in national accounts versus regional? I guess where do you see the heat zones of price competition? Yeah. What I'll say in general is that we've been very disciplined about the investments that we've been making in pricing. As I mentioned, this is a very data-rich environment. We're using data-driven tools. We're using artificial intelligence and data science to help us figure out exactly where to price, which categories to price, which regions to price. It's a very dynamic environment in that regard. We're fortunate that we don't have to peanut butter spread this across the chain, if you will. What we're doing is very surgical and very strategic. What I'll say in terms of the competitive response is that the industry remains very rational. We're seeing rational pricing across the industry, the response to that extent has been pretty muted. Our strategy is working. Our goal is to create a faster-growing business with higher-margin dollars. It's a much more sustainable way for us to grow cash and ultimately shareholder value. On the commercial side, what we're seeing is that all the initiatives that we put in place, which price is just one element of it, and I would argue it's probably the smallest element of it. You mentioned the investments that we're making in our Duralast brand, including some of the offerings that we have in Duralast Gold. Those things are very meaningful to our customers. The investments that we've made in technology that have helped us be easier to do business with, it's helping us lower our delivery times, is a significant impact on the business. The work that we're doing around mega hubs to increase our parts availability is huge for us and huge for our customers. When you put all of those initiatives together, that's why we're so bullish on the commercial growth. What I'll say is that even as we move through this environment, that commercial growth is sticky. Once we win those customers and continue to delight those customers, and we're competitively priced, that gives us a lot of confidence about our future prospects in this area of the market. Great. Thank you. Thank you. Our next question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question. Hey, everyone. Good morning. I'm going to stick on the pricing topic. My first question is, did you get more aggressive in this quarter? It looks like the margin compression got a little worse, and there were some other factors. If you did, why now? Just to be clear, are these price investments more on the DIY side or the DIFM? Yes. Simeon, good morning. Thank you for the question. Clearly, they're on both sides of the business. We've had very targeted approach on the DIY side that has been focused more on two different spectrums of the business. One, on commodity products that are highly available in lots of different environments. Two, on very slow-moving, hard-to-find parts where maybe our value proposition isn't as different as it is when you can walk in the store and get the immediate product availability. The DIY piece is smaller than the commercial piece today. We've done that work, and it's all in place. On the commercial side, we did get more aggressive. We didn't get more aggressive because we took prices to a different level. We continued to roll out the pricing initiatives that were working. We originally started with six regions, then we went to 14 regions. As of the beginning of this quarter, this has been rolled out. The pricing initiatives in our commercial business have been rolled out across the chain. You'll see this mature over the next year or so. We don't plan on having a round two of these pricing initiatives. What we have seen is these have worked. As you know, in the commercial business, pricing transparency isn't what it is in the retail business. Also, more importantly, the competitive set is vastly different. When you think about the large players, if you add all of us up in the commercial sector, we're around 20% of the market share. These pricing initiatives are not designed versus our traditional in-channel competitors. They're more making sure that we have the right pricing and value proposition against other sectors of the industry. Got it. Okay. I guess the follow-up is in, I guess, the same vein. It seems like you're having success with the strategy, which on the one hand is showing that there is some elasticity of demand, and now we're going to be going through some inflation, and you're already starting to see it, and I would think in theory, the industry would try to pass that along. Is there any sort of disconnect? Or how should we think about an inability to pass along pricing if the customer is showing elasticity, if that makes any sense? Might you lean into pricing more next year if this is working and you have inflation? Yeah. Yeah, I would say it's elasticity of demand for us, but it's not driving elasticity of demand for the industry. I think in some respects, it's improved our competitive position, not against our end-channel competitors, but against other competitors, and that's proven to be successful. As we think about an inflationary environment, I know AutoZone will make sure that we pass those costs along to our consumers, just like we always have. I don't think that that'll be any different than normal. Okay, thanks. Good luck. All right. Thank you, Simeon. Thank you. Our next questions come from the line of Christopher Horvers with JPMorgan. Please proceed with your question. Thanks, and good morning. I'll stick to the pricing side too for my first question. It seems like the transition here is the rollout of the commercial side, but you're going to start lapping through the DIY price investment. As we think about Q3 and Q4, it would seem like the peak gross margin pressure is now and then that starts to moderate as we lap through the DIY side of the business price investments. Is that fair? Yeah, that's the right cadence to think about. One of the things that Bill mentioned is that we don't have a round two planned here. As we've rolled the price investments through the entire chain and all the categories that we're going to roll it through, you'll start to see us anniversary this in the back half of next year. Again, we're pleased with the execution of those initiatives. Again, it's one element of the strategy, if you will. It certainly gets a lot of attention, but we would not be in a position to even be talking about making pricing investments if we weren't executing so well on all of the other elements of the strategy. When I think about, again, the work that we've done on assortment, I think about the work that we're doing to lean into technology. Those are things that have been the foundation or the enablers for us to then focus on this element of being competitively priced. I said it a couple of times in my prepared comments about having the best merchandise at the right price. That combined with the other things that we're working on gives us a meaningful competitive advantage, and it's why we're so bullish about being a faster-growing business in the future. Yes. That leads to my follow-up. If you look back versus two years ago to try to neutralize versus what happened last year, your gross margin's down 120. Your operating margin is up more than 200 basis points, given the share gains and the sales leverage that you're driving. You'll have continued gross margin headwinds, but as you think at the operating margin line into next fiscal year, is it fair to think that the operating margin can at least be flat, if not better, as we look out, given the increased scale and share gains that you've driven? Well, we've done a couple of things in this environment where we've had accelerated sales. Number one, we've had outstanding leverage on the SG&A line, which quite frankly has served as a little bit of a bill payer for some of the investments that we're making in gross margin. We do have the ability as we move forward to continue to price in a very disciplined way. When we're in an environment where there's inflation, quite frankly, that gives us an opportunity to price, and we are seeing cost inflation in certain categories. With a rational industry pricing environment, we're going to price to recover those inflationary impacts. Going forward, as we think about managing the business, we're going to manage the business to maximize the cash that we generate inside the business, grow our EBIT dollars. That's going to give us a tremendously powerful free cash flow. You can tweak margins by a point or a point and a half. Doesn't change the underlying story here, which is this is a business that is generating a tremendous amount of cash, and we're putting that to work by investing in our existing assets. We're investing in our growth initiatives, and we're returning meaningful amounts of cash to investors in a meaningful way. That portion of the AutoZone model does not change, even with all the things that we've talked about this morning in terms of investments. Understood. Thanks very much. Thank you. Our next questions come from the line of Michael Lasser with UBS. Please proceed with your questions. Good morning. Thanks a lot for taking my question. How are you? I got to be consistent and ask about price investment. The bottom line is, Bill, is it worth it? To help frame this question, if you just take a 1% investment in your price in this most recent quarter, what that means is it's $35 million of sales that you're investing back into price to get something more than that. In any given quarter prior to the pandemic, AutoZone would regularly see an average of $70 million in year-over-year sales increases. Now you're having to invest almost half that amount to drive these share gains. How do you find that point at which it really becomes worth it, especially as the longer that you do this, the more attention it's going to attract from your competitors? One of the fundamental underpinnings of why investors allocate capital to this space is because of the margin stability, and this strategy could call into question that margin stability. I understand your point. Your point about the $35 million investment is exactly right, and that's one of the things that we wrestled with over time, is clearly there's a sales headwind before you even begin talking about picking up the gross profit dollars. As I said earlier, Michael, we've tested this. We've tested it extensively for over a year. Again, these are very surgical pricing investments. They're not across the board. Yes, some of our close-in competitors may follow us. They may not on some of these things, but that's really not where our focus has been on making sure that we have the right value proposition. It's been making sure that we're priced right with other competitors that are outside of the close-in competitors. We feel like we're doing exceptionally well with that. I think I also want to go back to what Jamere said. This strategy is not a pricing strategy. This strategy, which we have been working on for over three years now, it had the single largest technology investment in our company's history in it, where we rolled out handheld devices, where we improved our website, all making us much easier to do business with and substantially lowering our delivery times. We've continued to invest in the Duralast brand, which is one of the strongest brands in the automotive aftermarket, if not the strongest. People used to think that that was a headwind. Now people understand that it is a tremendous asset. We've continued to roll out hubs and mega hubs where we're substantially improving our immediate availability of parts and products. This is a holistic strategy of which pricing is an element of it. I understand what you're saying, that a lot of people have invested in this sector for years because of the margin characteristics. Not just gross margin characteristics, but the overall operating margin characteristics. Michael, you've been around long enough to remember in 2005, when I came into this role and we made an SG&A investment, everybody said, "Okay, this is the beginning of the operating margins going from 17.5% down to 12%." What happened? Over time, we found a way to increase our operating margins. I'm not sure if that'll happen from here, but these are very marginal investments to make sure that we are in the right competitive position against all channels. Okay. All right. I think the market would get a little bit more comfort if you did a fixed or very clear about a time frame associated with it. It seems like what you're suggesting before is, look, we're going to do this for another four quarters. While it's going to be a bit more intense over the next couple of two, it should start to abate after that. Is it fair? Just a quick follow-up for Jamere, how will a higher commercial mix in the business in fiscal 2022 impact the gross margin so we can frame out these two pieces as we try and model the business moving forward? Thank you. Hey, Michael, before I turn that second part over to Jamere, I want to hit your earlier part. I was very clear in my comment a few minutes ago that as of now, we have rolled out this commercial pricing initiative across the vast majority of the chain, and as Jamere said, there is no act two under development or under consideration. As we annualize this time next year, we'll be annualizing those investments. Jamere? Yeah. In terms of our commercial mix, we're very bullish about our commercial business. As we talked pretty extensively about today and last quarter, we're investing in a disciplined way in our commercial business. This past quarter, our national accounts and our regional and local accounts both grew over 40%. We are pleased to see the nationals actually snap back. Car counts are up, staffing's improved, miles driven is improving. We're under-penetrated. We think we're roughly a four to five share in a $75 billion category. There's a tremendous opportunity to create a faster-growing business here. As we execute on this growth playbook and see significant share gains, we will likely be in a position where we see a little bit of a mix drag from commercial on the overall margins, and that's going to be perfectly okay. This will be a faster-growing and still high-margin business as we move forward. As we see that growth materialize, we'll be very transparent about what our expectations are. Okay. Thank you very much, and good luck. Thanks. Thanks. Thank you. Our next question comes from the line of Scot Ciccarelli with RBC Capital Markets. Please proceed with your questions. Good morning, guys. Love to ask a pricing investment question, but I just couldn't do that to you. Thanks, Scot. You're welcome. You talked about seeing product inflation starting to ramp. Can you talk about the potential impact on the cost side of the ledger, particularly on wages, given the current employment environment? Yeah. We're seeing cost inflation in certain categories. We're also seeing some higher transportation costs. As I said before, the industry pricing is rational, and this has always been an industry that's priced to recover those inflationary impacts. We're pricing accordingly in this environment as well. On transportation costs in particular, we've had some contracted rates that are below the spot market, so this has protected us to some extent, but we'll see more of those as we move forward. From a labor standpoint, it's a very tight labor market, and you have to look no further than what you're seeing amongst other retailers or even in your local neighborhoods with the pressure that local restaurants are seeing. We're certainly not immune to those dynamics, but the value proposition of having a career opportunity at AutoZone, we think gives us a little bit of a competitive advantage. Our store operations teams and our distribution center teams and our supply chains are doing a fantastic job of recruiting talent. We're working really hard to retain talent in this environment. We also believe that from a macro standpoint, as some of the enhanced unemployment benefits start to ease and be retracted, we think that will sort of unstick the labor market to a certain extent. All the efforts that we're doing inside of our company to attract talent is, quite frankly, one of the reasons that we've been able to put up the kind of numbers that we put up in both our DIY and our commercial business. Jamere, just as a follow-up, is there any kind of estimate regarding what might happen to labor costs if we actually did eventually get a federal mandated $15 an hour minimum? Well, I think a couple things will potentially happen there. One is that we'll see labor costs start to go up in different environments. We're already seeing some markets where labor costs have gone up in that ZIP code. What you have to be able to do is, more importantly, you have to be able to price accordingly so that you don't have the margin and profitability drags. When I think about the impacts of inflation, it isn't just what we're seeing in product costs or transportation costs, but labor is a part of that equation, and we'll be disciplined enough to price accordingly in that environment as well. Yeah, let me jump in there. As you know, Scot, we've been dealing with accelerated labor inflation for some time, four or five years. We have many markets where we're already at $15 or above. I was recently in Seattle. Our minimum wage in Seattle is $16.70. We have figured out a way to make sure that we manage through that, and part of that is our pricing has to be different when we have that kind of change in our labor component of our cost structure. Excellent. Thanks a lot, guys. Thank you, Scot. Thank you. Our next question comes from the line of Zachary Fadem, Wells Fargo. Please proceed with your questions. Hey, good morning, guys. As we look back over the past year, your business has accelerated to a double-digit growth rate despite a double-digit decline in miles driven. Now that miles driven is starting to recover and return to growth, do you expect this dynamic to be a tailwind for your business despite the tougher compares? Are there any other puts and takes that we should keep in mind? Clearly, we've said over a long period of time that miles driven is a good indicator of how our business is going to perform. However, we've also said, and we said this back in the Great Recession, that in certain times it's not a good predictor of what happens in our business. Clearly, if you just straight line what happens to miles driven, you would have never forecast what happened to us over the last year because miles driven were down significantly. There was a new element called federal stimulus, and we were talking this morning, a family of four, over the last four quarters, has picked up over $10,000 in federal stimulus. That does not count enhanced unemployment benefits. That is just the stimulus. For our customer, that's a tremendous amount of money. Many of those customers turn to their automobiles and enhanced them, repaired them, or whatever the case may be. Clearly, as miles driven's return, there will be some small tailwind, but I don't think that it will be nearly enough to offset the headwind that will come from us lapping those tremendous amounts of economic stimulus that were in the environment. Got it. Is it possible to break out the makeup of the commercial growth across new customers versus existing customers or nationals versus independents? When you think about your average weekly commercial sales in that mid 13,000 range, was that relatively stable through the quarter? Is it fair to call that a new run rate for the business? We're calling it Fed internally. We're putting pressure on the team. We got to keep that. I think that there's some level of stimulus that's been in our commercial performance as well, but not nearly to the extent that it has helped accelerate the DIY business. We have big expectations to continue to grow commercial at fairly robust rates going forward. Clearly, the DIY piece will be more challenged as we head into Q4, and really frankly, the next 12 months. Commercial, we think, is a much stickier business. Yes, we've picked up new customers. More importantly, we've penetrated our existing customers with new categories or deeper levels of their business. As Jamere said, as far as the trade-off between the up and down the street customer or the national account customer, before this quarter, our up and down the street business was performing much better than our national account business. This quarter, the national account business was generally in line with our up and down the street business. As we talk to those leaders, their businesses have improved along the same lines. Got it. Appreciate the time today. Yep, thank you. Thanks. Thank you. Our next question has come from the line of Michael Baker with D.A. Davidson. Please proceed with your questions. Hi, everyone. This is Kate McShane for Michael Baker. Just want to say great job on the quarter, and I know you guys touched on recently about how stimulus might have impacted the commercial sales versus DIY, but I was kind of curious about within that 44% growth in commercial, how much would you attribute to the mega hubs? Kind of checking on the stimulus and the pricing initiative. Curious about the mega hub impact. Yeah. Parts availability is a big piece of the story that we have in the commercial market today. When we put a mega hub in a market, two things happen. Number one, we see a lift in sales in the four walls, if you will, of the mega hub. It also gives us an opportunity as we're selling to commercial accounts. It gives us an opportunity to tell the commercial accounts in that area, if you will, that we have parts available, significantly more parts available than we would otherwise. That gives us a meaningful lift in sales. A big piece of that strategy that we talked about is improving that assortment, putting mega hubs in the marketplace, signaling to the market that we have more parts available in the marketplace, and then taking advantage of that opportunity. We've talked about lots of things that drive our commercial business, but in the top one or two is parts availability. If we have the parts, if we can get them there in a reasonable amount of time, they're competitively priced, we're easy to do business with, that gives us a tremendous tailwind for this business, and that's what we're excited about. Okay, great. Thank you. Just sort of a follow-up, and this is a more broad question. Where are you guys seeing the most opportunity for your share gains? Does it seem like the industry is sort of through the thick of store closures as we're kind of approaching what could be the end of the pandemic, and just kind of curious about what you're seeing in the industry. Thank you. Yeah, I think the share gains that we got because of store closures were really over around May of last year. We've continued to grow share gains as consumer behaviors have changed. Just think about not whether or not a store is open, but think about your own personal shopping habits. Are you going in more convenient, smaller box stores? I think we've seen a lot of that across all kind of channels, including ours. Part of our desire is now that we're getting those new customers or frankly, more so new occasions from existing customers, how do we make sure that we provide them a stellar shopping experience now and permanently change those shopping behaviors so we keep those occasions going forward? That's what we're really focused on. Just to build on that, one of the things we've been paying a lot of attention to internally is just the tremendous success that we're having in our loyalty program. Our loyalty member sales are up 32% versus last year. When I look at the stats around the number of members that are earning rewards, the number of members that are redeeming rewards, the spend for those loyalty customers relative to last year on a per transaction basis, and the retention rates, all of those numbers are up. That gives us a lot of confidence that the things that we've done in terms of our in-store execution are driving great results. As we think about share gains, there are lots of things that are part of that mix, including some of the dynamics that you talked about on a macro basis. Our execution has just been fantastic in this environment, and the data around our loyalty programs certainly suggests that we're doing the right things, and those are the kinds of sales that are a lot stickier than when you have non-member sales. Thank you. Our next question comes from the line of Brian Nagel with Oppenheimer. Please proceed with your questions. Hi, good morning. Great quarter. Good morning. Thank you. The first question I want to ask, Bill, this goes back to earlier your prepared comments. You talked about the cadence of sales through the period. Where did you end? What was the exit rate as the quarter concluded? I know this is a bit of a follow-up to all the other questions, but as you look at the business now, do you think stimulus is still driving it now, or has that largely been burned through? We exited. I don't have the numbers right in front of me because I quoted some of them in the script, we were very intentional about that, to talk about those four-week differences so that you can see. Before stimulus, we were seeing a slight deceleration of our sales coming out of Q2. When stimulus happened, I think we said we were up roughly 50%. I think it was 49.9. We came out the other side, on a two-year basis, we were still up 26.7 in those last four weeks. Our comps, as we exited the quarter, the last four weeks this year were 14%, with the last two weeks coming down to the mid-single-digit range. What we have seen is that stimulus, those stimulus dollars that came in March, they stayed and had a lingering effect in helping drive our business longer than we would have expected. Similar to what happened last summer. If you remember, our business was really strong post the April stimulus. Last year, you had the enhanced unemployment benefits at $600 a week versus $300 a week this year. Clearly, that will be a headwind as we look into Q4, but not completely. Does that help? No, that's very helpful. I appreciate it. My second, I guess my follow-up question would be something maybe bigger picture, but if you look at the commercial business, and obviously a lot of your crosscurrents at this point, but commercial's been a bright spot for AutoZone for a while. It's strengthened here lately. As you look out there, what do you view as still the slack within your model? You're talking about opening the Mega Hubs and launching new programs. How should we think about the real drivers going forward, particularly as we pull out of this COVID-19 crisis? As Jamere mentioned, we have 50 mega hubs now. We're on a path to have 100 - 110. We will more than double the amount of mega hubs that we have today. I will tell you, Jamere, who's in charge of store development, has a big bogey out there to make that happen very fast. You'll see a significant amount of mega hubs come online this quarter and over the next year. I think that that will help us in a big way. As Jamere said, this business is about parts availability. It was that way when we started 42 years ago. It's still that way today. If you don't have it, you can't sell it, and we're getting parts closer and closer to our customers. I also talked about all this technology that we've rolled out, and we're still in the very early innings of that. We've seen reductions in our delivery times, but we are looking for significantly bigger, larger reductions in delivery times as this technology matures, as our team understands how to utilize it and how to change. Getting parts and products, frankly, out of the building is our biggest focus, not necessarily the drive time. I appreciate it. Thank you. All right. Thank you very much. All right. Before we conclude the call, I want to take a moment to reiterate that we believe our industry is strong and our business model is solid. We're excited about our future growth prospects, but we take nothing for granted as we understand our customers have alternatives. We have exciting plans that should help us succeed for the future, but I want to stress that this is a marathon and not a sprint. As we continue to focus on the basics and focus on optimizing long-term shareholder value, we are confident AutoZone will continue to be very successful. Lastly, as we celebrate Memorial Day next Monday, we should remember all of our country's heroes, both past and present. We owe these Americans a tremendous debt of gratitude. Thank you all for participating in today's call. Have a great day. Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.