Good day, everyone, and welcome to AutoZone's 2024 First Quarter Earnings Release Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. Before we begin, the company would like to announce the following forward-looking statement. Certain statements contained herein 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 our management in light of experience and perception, historical trends, current conditions, expected future developments, and other factors that we believe are appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation, product demand due to changes in fuel prices, miles driven or otherwise, energy prices, weather, including extreme temperatures, natural disasters and general weather conditions, competition, credit market conditions, cash flows, access to available and feasible financing, unfavorable terms, future stock repurchases, the impact of recessionary conditions, consumer debt levels, changes in laws or regulations, risks associated with self-insurance, war and the prospect of war, including terrorist activity, the impact of public health issues, inflation, including wage inflation, the ability to hire, train, and retain qualified employees, including members of management and other key personnel, construction delays, failure or interruption of our information services technology systems, issues relating to the confidentiality, integrity, or availability of information, including due to cyberattacks, historic growth rates, sustainability, downgrade of our credit ratings, damage to our reputation, challenges associated with doing business in and expanding into international markets, origin and raw material costs of suppliers, inventory availability, disruption in our supply chain, impact of terrorists, impact of new accounting standards, our ability to execute our growth initiatives and other business interruptions. Certain of these risks and uncertainties are discussed in more detail in the Risk Factors section contained in Item 1A under Part I of our annual report on Form 10-K for the year ended August 26, 2023. 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. Events described above and in the risk factors could materially adversely affect our business. However, it should be understood that it's not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only to the date made. Except as otherwise required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Thank you. It is now my pleasure to turn the floor over to your host, Bill Rhodes, Chairman and CEO of AutoZone. Sir, the floor is yours. Good morning, and thank you for joining us today for AutoZone's 2024 first quarter conference call. With me today are Phil Daniele, CEO-Elect, Jamere Jackson, Chief Financial Officer, and Brian Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the first 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. As we begin this morning, we want to thank our AutoZoners for their contributions during the quarter that resulted in our solid performance. As our pledge states, we lead with putting customers first, which allowed us to grow our total sales by 5.1%, while both our operating profit and earnings per share grew by very impressive high teens% rates. As we have previously said, we have been able to continually build on the phenomenal performance from the pandemic years of 2020 to 2023. Our leadership team and I continue to be impressed with our post-pandemic sales performance. To put this in perspective, our FY 2019 sales were $11.6 billion, and now our trailing four-quarter sales are $17.7 billion, a +50% increase over a four-year time horizon. Congratulations to AutoZoners everywhere who made that enormous success possible. For the first quarter, our total sales—our total company same-store sales were 3.4% and 2.1% on a constant currency basis. As international has become a more important part of our growth story and an area where we are increasingly deploying capital, last quarter, we began disclosing our global sales comp. We encourage you to focus on the constant currency number, where international again had a strong quarter of 10.9%. Both our Mexican and Brazilian same-store sales had double-digit growth. We are very excited about the short- and long-term growth prospects of international. Our expectations are we will continue to grow both mature store volumes, both in DIY and DIFM, and we plan to accelerate new store openings over the next several years, ultimately getting to a minimum of 200 international new stores by 2028. Next, our domestic same-store sales were up 1.2% this quarter compared to 1.7% last quarter and 5.6% in Q1 of last year. Our performance in retail was slightly below our expectations, but still resilient in the current environment. Breaking our sales into three four-week segments, our DIY same-store sales were roughly 1% for both the first and last four-week segments, but were -2% in the middle four weeks or October. Commercial sales, on the other hand, accelerated for the quarter, but we started stronger than we finished. As you know, some of the comparisons over the last few years were distorted, and on a three-year basis, the performance of each of the businesses this quarter was remarkably similar. Our commercial business grew 5.7% against exceptionally strong comps last year. Importantly, we continue to be encouraged by the new initiatives we have in place to accelerate top-line growth in commercial, and those efforts are having a positive impact on our performance. As we further analyzed our DIY and DIFM results, and specifically our second period sales slowdown, our retail business was clearly impacted on a regional basis, as we saw a 70 basis point performance gap between the Northeast and Midwestern markets versus the rest of the country. We continue to attribute this gap in performance to the lack of winter weather last year and lack of snowfall. But enough about, quote, "What happened to us." While not satisfied with our sales performance, we are encouraged as we enjoyed both dollar and unit share gains in our domestic and retail businesses- domestic, retail, and commercial businesses. We previously highlighted that we were not executing at peak levels, and we are encouraged to share that we are seeing steady progress. Our in-stock levels are nearing pre-pandemic levels. Turnover, while still elevated, is beginning to decline. Productivity levels in our distribution centers have improved. The technology we deployed to improve service levels to commercial customers is seeing much higher adoption rates, leading to decreased delivery times. And we have opened a significant number of new commercial programs, reaching 92% domestic penetration for the first time in our history. Even more encouraging is the continued strength in sales we are seeing from those new program openings, as many are only weeks old. Now I'd like to turn the call over to Phil Daniele to give more in-depth quarter on the quarter. Phil? Thank you, Bill, and good morning, everyone. Our domestic same-store sales were 1.2% this quarter, on top of last year's 5.6% growth. While we were up against exceptionally strong same-store sales from a year ago, particularly in commercial, we believe we are making progress with more room for improvement. I want to reiterate what Bill said a moment ago, that we've made many changes across the organization, from reinstituting many of our long-term processes, to placing share of voice in vitally important areas, ensuring we are hiring the right AutoZoners, and execution is improving meaningfully. Our domestic commercial business grew 5.7%. We still have work to do, but we were pleased with the improvements we saw in this business. As the business began improving, we believe we grew share and set another record for the quarter with $1.1 billion in commercial sales. Domestic commercial sales represented 30% of our domestic auto parts sales for Q1. Our commercial sales growth continues to be driven by the key initiatives we have been working on for the last several years: improved satellite store inventory availability, material improvements in Hub and Mega Hub coverage, adding new Hubs and Mega Hubs, the strength of the Duralast brand with an intense focus on high-quality products, and technological enhancements that make us easier to do business with. We are also operating more efficiently, with improvements in delivery times and enhanced salesforce effectiveness. In Q1, we opened 121 net new commercial programs, opening the majority of them in the back half of the quarter. 69 of those 121 programs opened in weeks 7 through 12 of the quarter. While programs that open late in the quarter have minimal sales impact on the quarter, they do position us for sales growth for the remainder of FY 2024 and beyond. As Bill previously shared, I want to reiterate, we now have commercial in approximately 92% of our domestic stores. When I was SVP of commercial, we didn't have line of sight to reaching that level of penetration. It really is a great sign of the progress that we've made over the last five years or so. We believe our commercial business will get stronger and growth rates should improve as we move through the year, as comps get easier and our execution will continue to improve. Regarding domestic DIY, we had flat comps this quarter on top of last year's comp of 2.6%. While the data we have available to us indicates we continue to gain share in both dollars and units, our comp is below our expectations, but in line with what we are seeing across the industry. Regarding weather, it was quite mild this quarter. It is this time of year when our sales will fade as the summer sales slow down into winter. This year, October was warmer than last year, and sales in weather-sensitive hard part categories in the Midwest and the Northeast underperformed the remainder of the country. While our retail comp was flat for the quarter, we saw the first four weeks comp up 1%, the second four weeks comp down 2%, and the last four weeks comp up 0.7%. While our performance clearly improved over the last four weeks of the quarter, we fell short of our own expectations for retail for the full quarter. As a reminder, historically, extreme weather, either hot or cold, drives parts failures, and accelerated maintenance.... Regarding this quarter's traffic versus ticket growth, in retail, our traffic was down 1.6%, while our ticket was up similarly. We expect our ticket growth will return to more normalized levels in the 3%-4% range as we get further removed from the large increases from last year due to significant inflation, particularly due to freight costs. Regarding our commercial trends, we continue to see higher growth rates for traffic relative to ticket. During the quarter, there were some geographic regions that did better than others, as there always are. This quarter, we saw a 230 basis point worse performance between the Northeast and the Midwest compared to the balance of the country. As the Northeast and the Midwest experienced a very mild winter last year with below average snowfall, we sold less weather-sensitive hard parts in this part of the country. Heading into the second quarter, we are planning for a more normal weather pattern. But as a reminder, the Q2 is always our most volatile quarter, as weather fluctuations can be extreme, meaningfully impacting our short-term sales performance either positively or negatively. Regarding our merchandise categories in the retail business, our sales floor categories underperformed hard parts as we saw a more discretionary pullback from customers. We do feel the low-end consumer started pulling back on discretionary purchases. Let me also address inflation and pricing. This quarter, we saw low single-digit inflation, and as a result, our ticket was up roughly 1.5%. We believe inflation for the second quarter will be similar as the industry is migrating back to pre-pandemic inflation levels, lapping very high inflation from a year ago. I want to reiterate that our industry has been very disciplined about pricing for decades, and we expect that to continue. Historically, as costs have increased, the industry has increased pricing commensurately to maintain margins. It is also notable that following periods of higher inflation, our industry has historically not reduced pricing to reflect lower cost, and we believe we have entered into one of those periods. For the second quarter, we expect our DIY sales to remain more difficult and our commercial sales trends to improve. We will, as always, be transparent about what we are seeing and provide color on our markets and outlook as trends emerge. Before handing the call to Jamere, I'd like to highlight and give some color on a few of our other key business priorities for the new fiscal year. First, we continue to focus on our supply chain, with two initiatives that are in flight to drive improved availability. One is our expanded Hub and Mega Hub rollouts, and secondly, we are making good progress on transforming our distribution network. Along with having two domestic distribution centers currently under construction, our strategy is focused on leveraging the entire network to carry more inventory closer to the customer, to drive growth with speed and expanded availability and efficiency. Additionally, we plan to continue to grow internationally. At 849 stores open internationally, or 12% of our total store base, these businesses had impressive performance last quarter and should continue to grow at a robust pace for the remainder of fiscal 2024. We are leveraging many of the learnings we have in the U.S. to refine our offerings in Mexico and Brazil. Now I'd like to turn the call over to Jamere Jackson. Thanks, Phil, and good morning, everyone. As both Bill and Phil have previously discussed, we had a solid first quarter stacked on top of an impressive first quarter last year, with 5.1% total company sales growth, 1.2% domestic comp growth, 10.9% international comp on a constant currency basis, a 17.4% increase in EBIT, and an 18.6% increase in EPS. We continue to deliver solid results, and the efforts of our AutoZoners in our stores and distribution centers have continued to enable us to drive earnings growth in a meaningful way. To start this morning, let me take a few moments to elaborate on the specifics in our P&L for Q1. For the quarter, total sales were $4.2 billion, up 5.1%. Let me give a little more color on sales and our growth initiatives. Starting with our domestic commercial business, our domestic DIFM sales increased 5.7% to $1.1 billion, and we're up 20.6% on a two-year stack basis. Sales to our domestic DIFM customers represented 26% of our total company sales and 30% of our domestic auto parts sales. Our average weekly sales per program were $15,900, down 0.6%. It's important to point out that our sales per program productivity was again impacted by a large number of immature programs that have opened over the last five quarters. While these openings depress the point-in-time productivity metric, we're encouraged by the growth prospects of these programs and their early contribution to our commercial business. We have intentionally opened more stores with commercial programs in response to the tremendous opportunity we see to grow our market share. We now have a commercial program in approximately 92% of our domestic stores, which leverages our DIY infrastructure, and we're building our business with national, regional, and local accounts. This quarter, we opened 121 net new programs, finishing with 5,803 total programs. Our commercial acceleration initiatives continue to make progress as we grow share by winning new business and increasing our share of wallet with existing customers. Importantly, we continue to have a lot of runway in front of us, and we will continue to aggressively pursue growth opportunities in commercial, which we believe is our single largest growth opportunity. To support our commercial growth, we now have 100 Mega Hubs locations, with two new Mega Hubs open in Q1. The 100 Mega Hubs average significantly higher sales than the balance of the commercial programs and grew more than 2x the rate of our overall commercial business in Q1. As a reminder, our Mega Hubs typically carry roughly 100,000 SKUs and drive tremendous sales lift inside the store box, as well as serve as an expanded assortment source for other stores. The expansion of coverage and parts availability continue to deliver a meaningful sales lift to both our commercial and DIY business. These assets are performing well individually, and the fulfillment capability for the surrounding AutoZone stores is giving our customers access to thousands of additional parts and lifting the entire network. We will continue to aggressively open Mega Hubs for the foreseeable future, and we expect to have north of 200 Mega Hubs at full build-out. Now, these are difficult-to-find boxes in the right locations, but we are keenly focused on rapid expansion and have 45 currently in the pipeline and growing. On the domestic retail side of our business, our comp was essentially flat for the quarter. As mentioned, we saw traffic down 1.6%, offset by 1.5% ticket growth. As we move forward, we would expect to see slightly declining transaction counts offset by low- to mid-single-digit ticket growth, in line with the long-term historical trends for the business, driven by changes in technology and the durability of new parts. While DIY discretionary purchases were challenging Q1, we continue to see a growing and aging car park, a challenging new and used car sales market, and a consumer that is likely to continue to invest in their existing vehicles. As such, we believe our DIY business will remain resilient for the balance of FY 2024. Now I'll say a few words regarding our international business. We continue to be pleased with the progress we're making internationally. Our same-store sales grew 25.1% on an actual basis and 10.9% on a constant currency basis. During the quarter, we opened five stores in Mexico to finish with 745 stores and 4 stores in Brazil, ending with 104. We remain committed to international, and given our success, we're bullish on international being an attractive and meaningful contributor to AutoZone's future growth. Now let me spend a few minutes on the rest of the P&L and gross margins. For the quarter, our gross margin was 52.8%, up 279 basis points, driven primarily by a non-cash $81 million LIFO charge in last year's quarter versus a $2 million LIFO credit this year. Excluding LIFO from both years, we had a very strong 70 basis point improvement in gross margin, which increased from last quarter's 37 basis point improvement. We've had exceptional gross margin improvement, and in fact, we're at the highest gross margin rate we've had since FY 2021. I will point out that we now have $57 million in cumulative LIFO charges yet to be reversed through our P&L, and we expect this credit balance to reverse over time. We're currently modeling $5 million in LIFO credits for Q2 based on the deflation experience in Q1. And as I've said previously, once we credit back the $57 million through the P&L, we will not take any more credits, and we will begin to rebuild an unrecorded LIFO reserve. Moving to operating expenses. Our expenses were up 7.4% versus last year's Q1, as SG&A, as a percentage of sales, deleveraged 68 basis points. The increase in SG&A has been purposeful as we continue to invest in store payroll and IT to underpin our growth initiatives. These investments are paying dividends in customer experience, speed, and productivity. We're committed to being disciplined on SG&A growth as we move forward, and we will manage expenses in line with sales growth over time. Moving to the rest of the P&L, EBIT for the quarter was $849 million, up 17.4% versus the prior year, driven by our positive same-store sales growth and gross margin improvements, including a LIFO year-over-year favorable comparison. Interest expense for the quarter was $91.4 million, up 58% from Q1 a year ago, as our debt outstanding at the end of the quarter was $8.6 billion versus $6.3 billion at Q1 end last year. We're planning interest expense in the $98 million range for the second quarter of FY 2024 versus $65.6 million last year. Higher debt levels and borrowing rates across the curve are driving this increase. For the quarter, our tax rate was 21.6% and up from last year's first quarter of 18.9%. This quarter's rate benefited 147 basis points from stock options exercised, while last year it benefited 446 basis points. For the second quarter of FY 2024, we suggest investors model us at approximately 23.4% before any assumption on credits due to stock option exercises. Moving to net income and EPS. Net income for the quarter was $593 million, up 10% versus last year. Our diluted share count of 18.2 million was 7.2% lower than last year's first quarter. The combination of higher net income and lower share count drove earnings per share for the quarter to $32.55, up 18.6% for the quarter. Now let me talk about our free cash flow for Q1. For the first quarter, we generated $600 million in free cash flow. We expect to continue being an incredibly strong cash flow generator going forward, and we remain committed to returning meaningful amounts of cash to our shareholders. Regarding our balance sheet, our liquidity position remains very strong, and our leverage ratio finished Q1 at 2.5x EBITDAR, returning to our long-term target. Our inventory per store was up 0.3% versus last year, while total inventory increased 3%, driven by new store growth. Net inventory, defined as merchandise inventory less accounts payable on a per-store basis, was negative $197,000 versus negative $249,000 last year, and negative $201,000 last quarter. As a result, accounts payable, as a percent of inventory, finished the quarter at 124.4% versus last year's 131%. Lastly, I'll spend a moment on capital allocation and our share repurchase program. We repurchased $1.5 billion of AutoZone stock in the quarter, and at quarter end, we had just over $300 million remaining under our share buyback authorization. The strong earnings, balance sheet, and powerful free cash we generated this year has allowed us to buy back 3% of the shares outstanding in the quarter. We have bought back over 100% of the then outstanding shares of stock since our buyback inception in 1998, while investing in our existing assets and growing our business. We remain committed to this disciplined capital allocation approach that will enable us to invest in the business and return meaningful amounts of cash to shareholders. To wrap up, we remain committed to driving long-term shareholder value by investing in our growth initiatives, driving robust earnings and cash, and returning excess cash to our shareholders. We're growing our market share, expanding our margins, and improving our competitive positioning in a disciplined way. As we look forward to the remainder of FY 2024, we're bullish on our growth prospects behind a resilient DIY business, a fast-growing international business, and a domestic commercial business that is reaccelerating. I continue to have tremendous confidence in our strategy and our ability to drive significant and ongoing value for our shareholders. Now I'll turn it back to Phil. Thank you, Jamere. During the quarter, we launched our new fiscal year, and I'd like to take a moment to discuss the key takeaways from our national sales meeting in September. At the meeting, we launched our operating theme for the new year, Live the Pledge. While we have used this theme previously, it continues to deeply resonate with our AutoZoners. Simply put, it differentiates us from everyone else. The energy at the event has never been higher. The pledge is the core of our culture, and I, our Board, and our leadership team believe we can never overemphasize our culture. It is defined by helping solve our customers' challenges and optimizing the performance of their vehicles. It is based on a team-based approach of recognizing everyone's contributions and performance, putting team goals ahead of personal goals. It sets the standard at exceptional performance, not mediocrity. It's about caring about people, both our customers and our AutoZoners. It's about providing unparalleled career opportunities to a very diverse population of AutoZoners, and it's about the AutoZone family. Calling yourself a family comes with great responsibility, and it's so much more. The pledge and our values summarize our operating strategy succinctly. Fiscal 2024's top priority is enhanced execution. Additionally, we have many strategic projects in varying stages of completion. We will continue opening new Mega Hubs and Hubs. Construction on our new distribution centers and the optimization of our new direct import facility are a focus, as we are also ramping up our domestic and international store growth to achieve 500 annual new store openings by 2028. As you noticed, our international teams posted same-store sales comps on a constant currency basis of 10.9%, much higher than our domestic comp. International has been strong for a few years now. While I mention all of these investments in FY 2024, the number one focus for the remainder of the year will be on growing share in our domestic commercial business. We believe we have a solid plan in place for growth over the next 12 months. We know our focus on parts availability and better customer service will lead to additional sales growth. We are excited about what we can accomplish for the remainder of this year. Finally, I'd like to update you on our leadership transition plan. Next month, Bill will become Executive Chairman, and I will become President and CEO. It will be one of the greatest honors of my life to move into that role. While that role will come with new opportunities and challenges, I continue to be very bullish about the prospects, because I know we have an extraordinary culture in a terrific industry, and as you have seen, an ever-evolving but exceptional team. As Bill and I both continue to say, and it may sound a little bit cliché, but we both believe it, AutoZone's best days lie ahead of us. I want to thank Bill for his wonderful nearly 19-year tenure leading this company and thank him for his leadership. I'm excited about the opportunity to continue to leverage him and his experiences in this new role as Executive Chair. I also want to thank three other long-term senior leaders for their amazing contributions to our success: Grant McGee, Charlie Pleas, and Al Saltiel, with their respective 34, 27, and 10 years of service to AutoZone. They have had an enormous contributions, and their legacies will be evident in the teams they have built and the contributions those teams will make over the coming decades. I congratulate each of them and wish Grant and Bonnie, Charlie and Doris, and Al and Sue well-earned happiness in their next chapters. Now we'd like to open up the call for questions. Certainly. Everyone at this time, we'll be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. We do ask that all participants please ask one question and one follow-up, then reenter the queue. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we pull for questions. Your first question is coming from Bret Jordan from Jefferies. Your line is live. Hey, good morning, guys. Good morning, Bret. How are you, Bret? I'm good. Can we talk a bit more about the international margins, since that's gonna be more impactful, how it compares to what you see in the U.S., and I guess Brazil versus Mexico, is there much difference? And is there, I guess, an investment phase that is gonna be required to ramp that? Yeah, I mean, you know, from a margin standpoint, we're very pleased with the progress that we're making on margins, both gross margins and total operating margins. You know, in our business in Mexico, which is much more mature than obviously what we have in Brazil, we've been very pleased with, you know, the actions we've been able to take on the merchandising side of the business, and that's given us a very healthy gross margin in that business. And then if you also think about the inherent advantages that you have from a cost structure standpoint, particularly with wage rates and labor, it's a very attractive operating margin structure in Mexico. And we believe, as our business in Brazil matures and scales over time, that we'll see similar advantages in Brazil. You know, net-net, what we're doing on the international side, while it's a fast-growing business, it's also gonna have a lot of margin calories that come along with it. Yeah, I think I would also add, we continue to say that in Brazil, we're still losing money there. So, we're in an investment phase. We're ramping up our store count very aggressively, but with that comes some operating losses that are kinda consistent with what we've been seeing over the last five or six years. I guess, what kind of scale do you need to tip Brazil into profitability? I mean, the incremental margin would seem to be very high in that case. I think that's right, Brett, but frankly, we have a lot of-- a whole lot of very new stores that are in very new markets as we're expanding. I mean, we've opened 40 stores or so in the last 18 months, and those stores are very immature. So we've got to see how those new stores and new markets mature. Right now, they're causing a pretty good headwind, but not unanticipated. Okay, quick follow-up. The U.S. Do It For Me, any channel dispersion, national account, tire service chains versus independents performance? Yeah, there is. You know, if you kind of looked at the business and talking about the big traditional nationals and, you know, the up and down the street or the local shop, those folks have performed pretty well. The national accounts, particularly the ones that are focused on tires, have been where we've struggled the most. And this really goes back to a lot of the weather conversations we had from last year. Those tire organizations just aren't getting the tires off at the same rate. They take the tire off, they see the calipers frozen or lots of rust on those parts in there, and they get the job. That's just not happening at the same rate it has previously. Okay, great. Thank you. Thank you. Your next question is coming from Michael Lasser, from UBS. Your line is live. Good morning. Thank you so much for taking my question. Given the performance of the domestic commercial business this quarter, while there was an acceleration, it did fall short of that double-digit level that you had anticipated over the long run. Do you still think this is an achievable goal eventually? And is it more dependent on the performance of the industry to be stronger in order for AutoZone to achieve that goal? Yeah. Thanks for the great question. I think, you know, as we said, we're slightly disappointed with our commercial growth for this particular quarter. We're happy that it accelerated, but we frankly thought it would accelerate a little bit faster. We're happy with the progress that we're making. And to your question about, you know, double-digit long term, you know, yeah, we think we can get back to those types of growth numbers over time, particularly because we have such low share percent on the commercial side of the business, you know, in that 4%-5% range. Over a long time, we believe we will be able to continue to expand our market share, and as we continue to have these newer stores that we've opened over the last, you know, five quarters continue to mature, and we continue to improve our execution, we believe we will continue to grow our comps in the DIFM space. Got you. Thank you very much for that. My follow-up question is on the gross margin. It seems like there is a benefit right now from costs coming down, retails remaining stable. How long is that sustainable? And is there a case where it might make sense to roll back some prices in certain areas in order to drive the retail business to grow a bit faster in the coming quarters? Thank you. Yeah, we're pleased with the progress that we've made on gross margins, and it's really comprised of two pieces. Number one, from a merchandising margin standpoint, we've done a great job inside our merchandising organization of finding cost opportunities and pricing opportunities that have given us accretive gross margins, and we're doing a tremendous job there. Second element of that, quite frankly, has been the work that we've done inside the supply chain. If you recall, our supply chain was under tremendous pressure over the last couple of years or so from a cost standpoint, and we're now starting to see some benefits as some of those pressures have abated. But if you look at this business over the long term, I mean, we have historically been able to churn out, you know, positive gross margin improvements in a very disciplined fashion over time, and that has enabled us to, you know, grow our earnings very predictably as we move forward. And when we think about the pricing environment, as we've said, and we continue to reiterate, pricing's a pretty dynamic environment. We don't feel like we need to make any pricing investments at this point to be able to operate the business and grow share. But if we do have to make those moves, we'll certainly do those if it results in us improving units and ultimately growing EBIT. But at this point, we're in pretty good shape in terms of where we are from a pricing standpoint, and feel that we're very competitive in the marketplace. Thank you very much, and have a great holiday. Yep, you too, Mike. Thank you. Your next question is coming from Max Rakhlenko from TD Cowen. Your line is live. Great. Thanks a lot. So first, can you speak to the competitive environment and if you're seeing any changes there? And how would you frame the level of competition today from the WDs compared to both, a couple of quarters ago as well as pre-pandemic? Yeah, I'll break that up into two parts. You know, if you think about the DIY competition, you know, we've had a very stable base of competitors there for a very long period of time. You know, that business is pretty stable, and there's not a whole lot of, you know, new or changing strategies it appears from the competition. On the DIFM side, if you kind of think about our, you know, what we call our close-in competitors or the public folks, not a lot of changes there other than what O'Reilly did, you know, a year and a half ago or so on their pricing strategy. On the WD side, you know, I think you kind of have to look at pandemic time versus today. One of the things that we believe is they really struggled with some in-stock in some key categories over the pandemic. Over the last, you know, say, year or so, it appears that they have become more in stock on those key categories, like everybody has, but they were probably more acutely impacted than a lot of the public players, and they've returned to more normal levels. You know, as a reminder, we are still not back to our pre-pandemic levels of in-stock, but we're pretty darn close. Got it. That's helpful. And then you guys touched on delivery times improving a few times throughout the prepared remarks. So can you speak to what your average delivery times are now in the markets where you've got the megas? And then how much more room do you have to improve? And then just the cadence we should think about in order to get there. Yeah, just, you know, delivery times can be wildly different depending on proximity of the part and how close that, you know, shop may be to a given store or Hub or Mega Hub. And the delivery times on, you know, Mega Hub inventory, or what we call expanded parts, can differ wildly if it has to be relayed through a store or delivered directly. You know, our average delivery times, you know, you're kind of thinking in that 30-minute range. So a 10% improvement in delivery times is pretty meaningful, but it may be three-five minutes, and that matters when a customer is sitting there trying to turn their bay. So we believe we'll continue to leverage and improve our delivery times, and that's a key strategy for us 'cause it's a measure of customer service. Great. Thanks a lot. Best regards. Thank you. Thank you. Thank you. Your next question is coming from Chris Horvers from JP Morgan. Your line is live. Thanks. Good morning, and congratulations to everybody. So I wanted to follow up on the question more broadly about the consumer. You talked about, you know, some of the tire businesses remaining weak. You talked about some discretionary, you know, front room pressure in DIY. I guess, you know, how much of this do you think is just a deferral that's building that you typically see as a category and, you know, as you start to see the slowdown in the consumer front, consumer starts to defer? So, are you seeing evidence of that? And do you think we're still in the point of that, you know, sort of getting worse before ultimately that demand potentially releases? That's a terrific question, Chris. You know, let's step back and talk about this on a long-term basis first. If you think about the retail business, which we have much more experience in the retail business, and you think about it over long periods of time, we don't spend a lot of time talking about the strength of the consumer. Much more so when tough times happen, i.e., recessions, those have been the periods where we've outperformed more so than any other periods of time. So we don't spend a whole lot of time on the consumer. We certainly see in the retail business there's some trading down, going down to good, better, best product assortments. I think in the commercial side, we have suppositions that we haven't yet proven because we haven't been in that business at this level for an extended period of time. I believe we think that there may be some consumers that are trading from DIFM into DIY in certain jobs as they're trying to save money. The thing I would encourage us all to focus on, more so than minor fluctuations in consumer sentiment, as we enter the second quarter, the one thing I always worry about is the weather patterns in the second quarter are extremely volatile, and they can have big impacts on our performance, both positive and negative. And as we've said, those impacts of the weather, particularly in the Rust Belt, can have ongoing implications as we get into the spring and summer and even the fall months. If we get significant snow and ice, particularly in the Rust Belt in the Northeast, that bodes well for us. If we don't, then we're gonna have a, a little bit of a challenge. To me, that is the, the more impactful thing that's gonna happen in the near term than consumer sentiment. And so as a follow-up to that, I think last year, December was pretty good in terms of the weather impact, right? So it would seem like as you look past today, you know, the comparison gets tough, but it was a record warm winter last year. So I guess as you look into your crystal ball, do you think there's sort of a ends up being a bit of a weaker start and stronger finish to the second quarter? Yeah, it's interesting, Chris, because the beginning of the quarter last year, there was no weather. We had significant weather around the holidays for a couple of weeks and thought, "Okay, here we go," and our business responded really, really well. Then the January, February into March, particularly in the Rust Belt, it was lack of snow and ice and fairly moderate temperatures. Unfortunately, we don't have a meteorologist on staff either. And at the end of the day, we're running this business for not quarters, not years, but for decades, and the weather and implications are gonna—they're gonna even out. I just always try to make sure and caution everybody at the beginning of the second quarter that we could have really strong performance, or we could have really weak performances driven by weather, and that doesn't need to change how we approach our strategy or the long term. Got it. Thanks very much. Have a great holiday. Yep, you too. Thank you. Thank you. Your next question is coming from Seth Sigman from Barclays. Your line is live. Hey, good morning, everyone. I wanted to follow up on commercial. It seems like you've really accelerated the rollout of new programs over the last few quarters, obviously, at a time when sales growth on a comp basis has been lower. So can you just help us better understand what's driving that decision right now, particularly as we think about, you know, your comment around in-stock levels, you know, improving, but not necessarily where you want it to be? How do we think about that thought process around accelerating right now? Yeah, that's a great question. If – and I even mentioned it in my, in the prepared remarks. You know, if we go back to when I was SVP of Commercial, the facts are, our per store performance has improved, on a per store basis, the productivity of those individual stores. You know, looking back over a decade's worth of time, we went through this phase where we had less than 50% of our stores, or around 50% of our stores had commercial, and we, not slowly, we ramped up to roughly 70%, high 70s, low 80%s of our stores in commercial. Then we had a period of time where we really focused on per store productivity, and that's been going on for the last, you know, several years, say five to seven years. Today, we're at a spot where we've had stores that previously didn't have commercial in them, and we look at the market differently with a much different share ownership, where we believe those stores are now productive, and we're opening them. You know, if you kind of forecasted that out into the future, we think we've probably opened the vast majority of those stores that previously didn't have commercial. There'll probably be some, but I don't think you'll see this large opening of previously opened stores that didn't have commercial programs that do today. But we think those stores over time will be as productive as the stores we have that have been open for a long period of time, and we'd like that productivity model going into the future. Okay. Thank you for that. And then just a follow-up would be around thinking about the investments that may be required to drive that improvement in commercial, and I think this was talked about in a few different ways, including around pricing, but I'm thinking more from an OpEx, from an SG&A perspective. You know, it's been growing at a relatively steady 4% rate per store. That seems reasonable, but I'm curious how you're thinking about that, how you're planning for that throughout this year, and whether you need to start to see a pickup in your SG&A growth. You know, we like the investment profile that we have today. And, you know, we have been very, very clear that, you know, we're investing in SG&A at a pretty accelerated pace and have done so over the last couple of years or so, and that's come in the form of, of store payroll, particularly around our commercial program, but also IT. And these are the kinds of things that are enabling us to drive the growth initiative in commercial. For example, Phil mentioned what we're doing on delivery times. You know, the work that we're doing to improve our delivery times is all underpinned by investments that we've made in technology that make it easier for us to deploy drivers, and quite frankly, give us a better opportunity to tell our customers, you know, exactly where our, our drivers are in the route and how fast they're gonna get the parts. So those are some of the examples of things that we've invested in, and we're gonna continue to do that. And that investment profile is gonna pay dividends for us in terms of speed, in terms of productivity, and in terms of better results, in terms of customer service. You also mentioned price, specifically on the DIFM side. And although we made a price investment several years ago, today, we like our pricing strategy. Now, you know, the pricing is always a pretty dynamic point of our business, and we'll continue to monitor that, but we like where we are from a pricing strategy today, so we don't see any major or deviation from our current pricing strategy. Okay. Thanks, guys. I appreciate it. Thank you. Thank you. Your next question is coming from Zach Fadem from Wells Fargo. Your line is live. Hey, good morning. So when you look at the sequential uptick in your commercial business, but also a sequential downtick in DIY, can you help us parse out the impact of broader industry trends versus your own idiosyncratic factors? And as you put these together, is it fair to say that you expect Q2 and fiscal 2024 as a whole to look a lot like Q1? Or are there factors that give you confidence in both DIY and commercial acceleration as we move through the year, even if the industry is slowing? Yeah, I'll separate the two. First of all, we've been in the retail business for a very long time. We've had lots of periods of time where we grow in the 0%-2% kind of range. We're coming off a period of time in the pandemic where our retail volumes went up 25%-30%, and we are frankly tickled to death to still be holding on to those retail volumes. And we believe we've retained about 85% of the share that we gained during that three-year period of time. So we're very pleased with that. We always want to grow faster. We're basically flat this quarter. We're trying new things, but we're pleased with where we are in the retail business. We aren't pleased with where we are in the commercial business, but let's don't forget, this quarter's comp of 5.7% is comping against about a 15% comp last year. So, so while we didn't meet our goals or aspirations in the quarter, 5% or 2%, we're not disappointed. We're not discouraged. We know we have a long runway to go in the commercial business. Again, we're going to play this in decades, not quarters and years. We feel like the depending on the weather in the second quarter, it's probably going to look all similar to, you know, plus or minus a 10% or 2%, similar to what we've seen in the first quarter. Our hope and our plan is to accelerate, particularly on the commercial side of the business, as we enter the second half of the year and we continue to improve our execution. Got it. And then for Jamere, just wanted to follow up on, on the gross margin, up about 280 basis points. I think you said about 208 basis points of that was LIFO. So first question is, how do you expect the LIFO impact to, to trend in Q2 and going forward? And then if we look at the other 70 basis points of benefit from, from the supply chain and, and merch margins, is it possible to talk a little more about the impact of these two individually going forward, as well as the impact of mix? Yeah. So you know, if you think about LIFO, you know, we've got about $57 million or so that we still need to get back through the P&L before we sort of wrap up that piece of our discussions, hopefully. We expect this quarter to be, you know, in the $5 million-$10 million-ish zip code, depending on, you know, what we see in terms of deflation. And, you know, the cadence going forward is likely going to be in that zip code. If it changes, as we've done in the last few quarters or so, we'll give you our latest update and our latest guidance. And if you think about what we're doing from a gross margin standpoint, again, if you look at our business over the long term, we've typically driven gross margin improvement, you know, from a merchandising standpoint in that, you know, call it 30-35 basis points range. And, you know, what we said after we came out of the pricing changes that we made a couple of years or so ago, that, you know, we would continue to run that play with discipline and intensity and be able to drive that. You know, from a supply chain standpoint, again, we are improving in supply chain, but it is largely because our supply chain was under tremendous pressure for a couple of years or so. So I wouldn't expect that, you know, portion to be 40 basis points every single quarter, but we're making steady improvements there. And last quarter, in particular, was a tough quarter from a supply chain standpoint, and our teams have done a great job of turning that around. Appreciate the time, guys. Thank you. Thank you. Thank you. Your next question is coming from Simeon Gutman from Morgan Stanley. Your line is live. Once again, your next-- Simeon, are you there? Hello, Simeon. Hey, can you hear me now? Yeah, we can. How are you? Hi, Simeon. Okay, sorry about that. I guess the AirPods don't work. I wanted to ask about gross margin and get your temperature on this, that the input cost environment is, is somewhat unique. Forward pricing is coming in a little bit, freight costs are coming down. Is it a unique moment? You mentioned you're not going to-- you don't see a need to reinvest in price. What happens to any excess? Because this industry has pretty good pricing power. You know, do prices come down, or is that potential a benefit to the gross margin? Well, I think what we've said historically, and you've seen us, certainly behave this way, is that, you know, as we saw inflation in the business, you know, we took pricing accordingly. And as we come out of that, particularly with things like freight starting to come down, that is an opportunity for us to improve the gross margin profile, of the business. The pricing environment has been, incredibly rational, has been for decades, and it's certainly behaving rationally today. And so, you know, we don't see a need to go, deliberately invest gross margin improvements in the pricing to drive demand. But if the case was that, you know, we thought that, you know, the pricing bands which we've established that have, you know, helped us grow our market share, sort of got out of line, then we would not hesitate to go invest gross margin to be able to go do that, to drive units and to drive market share growth. But the environment that we're operating in today is very, very rational, and we believe that the gross margin improvements that we're seeing today are an opportunity for us to expand margins and ultimately, add more calories to the bottom line. Yep. And then my follow-up, just on the health of the business. In any way, do you think that this DIY softness is a lead or could preclude the progress that you'd like to make on commercial? I heard Bill Rhodes comment regarding it could take a little bit longer, but how do you think about the connectivity of both of these businesses? Thanks. I think I'll go back to what I said, Simeon. I think we understand the retail business very well. As we've ramped so significantly in the commercial business, I don't think we know what the cyclical nature of that business is. We have, as I said, a supposition that there are certain people that in difficult recessionary periods of time, will trade down into DIY to do a brake job or a battery job where they might have taken it to a shop before. But remember the last time we saw a real recession, our commercial business was $1 billion. Yeah. You know, we should surpass $5 billion this year. So I just don't think we have the deep insights that we do in the retail business. Thanks, guys. Good luck. All right, thank you. Thank you. Your next question is coming from Daniel Imbro from Stephens Inc. Your line is live. Yep. Hey, nice. Good morning, everybody, thanks for taking our questions. Yeah, thank you. Good morning. I want to start on the domestic DIFM growth. I guess you mentioned, Jamere, in your comments, the recent openings are creating an optical headwind just with more immature programs. What is the expected maturity curve or normal maturity curve for a new commercial program? And is it different in a new build versus when you're retrofitting and adding commercial to an existing store? That's a great question. Yeah, it's not, it's not necessarily different between a, a net new store and one that's, you know, a store that's been open for some number of years, and then you add the program later. But those maturity curves, you know, as you would, as you would probably imagine, they ramp pretty quick on the very front end, and then you know, it has a hockey stick over those first couple of years, and then they tend to grow, you know, consistently after that. Keep in mind, and I'll go back to one of the things we said earlier, we, we think an individual store should grow for a pretty long period of time, based on the fact that we continue to improve execution. And oh, by the way, we only have 4%-5% market share. That market share, although it may be slightly different, depending on the size of the city or the market that we're competing in, we're still at a pretty low share, specifically relative to the, you know, the WD space, who owns the vast majority of that share. I think I'd just add also, you can't think about these new stores as if they're in isolation. Many of those customers we're servicing already from another store and will take, you know, you know, 40% of the projected volume from another store because we can service them so much better because we're in much closer proximity. So every one of them is a little bit different. If they're in a rural area, we really don't service those customers, so they start from the ground zero. But many of the urban and suburban markets, we have a little bit of a head start already. That's true. It's a net opportunity to help service them better. Therefore, you get more share of wallet. Understood. Helpful color. And then my follow-up, just a question on, on the private label, I guess. How has the Duralast penetration trended in recent quarters? If I'm remembering right, you invested a lot in parts quality the last couple of years. I would think as the consumer becomes more price sensitive or discerning, the value of private label should go up. So I'm curious how that penetration is trending, and are we seeing that trade into that, either on the DIFM or the DIY side? Yeah, keep in mind, so the Duralast investment in product quality and brand perception has been going on for, you know, decades, frankly. But I think we really accelerated that probably 10 years ago, maybe a little more. You know, as we think about our family of brands, you know, Duralast has, you know, essentially a couple of tiers: Duralast, Duralast Gold, Platinum, and we have some other private labels. But for the most part, we are, you know, generally speaking, we go for coverage first over choice. So we don't have a whole lot of good, better, best, up and down. We do in some categories like batteries and brakes and things of that nature. But for the most part, we may have a Duralast brand, and that's what we have. In some cases, we have a TotalPro brand, which would be a opening price point, but we don't have a whole lot of choice in our stores. We're, generally speaking, coverage first, except in key categories, brakes, batteries being the best example. Got it. Appreciate the color. Best of luck, guys. Great. Thank you. Thank you. Your next question is coming from Seth Basham from Wedbush Securities. Your line is live. Thanks a lot. Good morning. Thanks for squeezing me in. Just wanted to follow up on the DIY business. You know, weather aside, it seems like you expect the DIY business to not only remain resilient but also potentially improve a little bit if you're anticipating a slight decline in transactions and low to mid-single digit ticket growth. Is that an accurate read? I think that's absolutely accurate, Seth. You know, as we've said for many years, the quote-unquote, I've said, "The dirty little secret about the retail side of this business is that the transactions have been challenged," and they've been challenged for over 25 years. They're challenged for a lot of reasons, because the OE manufacturers are making vehicles and their components much better. Used to, you'd had a lot more frequency of failures on those components. Today, they're not. They don't fail as much because they have a lot of technology involved in those components. So what has happened over very long periods of time is you have this 2%-4% drag on transactions, but you have an equivalent amount on the average price per piece because the cost of the technology that's going into those parts. We eliminated that transaction drag during the pandemic and frankly, grew upper single digits in transactions. Today, our transaction count is starting to look a lot more similar to the way it has been in the past. One of the challenges that we're still dealing with in the retail business is, last year we had, you know, hyperinflation, double-digit inflation. And so our ticket isn't up as much as it normally would be, and I think that's because we're normalizing getting past that super high inflation from last year. As we think about the DIY business, thinking out three or four or five years, first of all, we're gonna have to continue to improve it, and we have efforts underway to do that. But we believe, you know, it's a, you know, 3% kind of ticket drag and hopefully more than—or, or sorry, transaction drag on a same-store basis, and more than offset that from the average unit retail. That's helpful. Just thinking about calendar 2024, if you look at the growth rate expectations for DIY versus DIFM on an industry basis, which one would you expect to accelerate more from 2023? I think that everybody thinks that DIFM is gonna grow at these very rapid rates and DIY is going to decline. What we've seen over very significant periods of time is DIY usually grows 3% to 4%, and commercial grows a half a point to a point faster. I think if you rolled out the next three years, unless there's some big economic shock or something like COVID, that'll probably continue to be the case. Appreciate it. Thank you, guys. Yeah, thank you. Seems appropriate, Seth, that you got to ask Bill the last question that he probably gets to answer on these calls. So before we conclude the call, I'd like to take a moment to reiterate, we believe that our industry is in a strong position, and our business model is solid. We are excited about our growth prospects for the year, but we will take nothing for granted as we understand that our customers have alternatives. We have exciting plans that should help us succeed for the future, but I wanna stress that this is a marathon and not a sprint. As we continue to focus on the basics and strive to optimize shareholder value for the future, we are confident AutoZone will be successful. Lastly, I wanna wish everyone a happy and healthy holiday season, and thank you for participating in today's call. Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.