Ladies and gentlemen, thank you for standing by, and welcome to the Burlington Stores Fourth Quarter 2020 earnings call. At this time, all participant lines are in listen-only mode, so if you require operator assistance, please press star, then zero. After the presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star, then one. Please be advised that today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. David Glick, Senior Vice President, Investor Relations and Treasurer. Please go ahead, sir. Thank you, Operator, and good morning, everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal 2020 fourth quarter operating results. Our presenters today are Michael O'Sullivan, our Chief Executive Officer, and John Crimmins, Chief Financial Officer. Before I turn the call over to Michael, I would like to inform listeners that this call may not be transcribed, recorded, or broadcast without our express permission. A replay of the call will be available until March 11th, 2021. We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks and the Q&A that follows are copyrighted today by Burlington Stores. Remarks made on this call concerning future expectations, events, strategies, objectives, trends, or projected financial results are subject to certain risks and uncertainties. Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company's 10-K for fiscal 2019 and in other filings with the SEC, all of which are expressly incorporated herein by reference. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release. Now, here's Michael. Thank you, David. Good morning, everyone, and thank you for joining us on this morning's fourth quarter earnings call. We are very glad that you could be with us. We're going to structure this morning's discussion as follows. First, I will review our fourth quarter results. Second, I will talk about the outlook for 2021. Third, I will discuss the market share opportunities that we see ahead of us. And fourth, I will provide an update on our Burlington 2.0 strategy and key initiatives. After that, I will hand the call over to John to walk through the financial details. Then we will be happy to respond to any questions. I would like to start my review of the fourth quarter by acknowledging our store teams for their strong execution of safety and social distancing protocols in our stores and for providing a safe environment for our associates and our customers in Q4 and indeed throughout 2020. This attention to safety in our stores was critical to supporting our business. Okay, so let's talk about our results. Comparable store sales in the fourth quarter were flat versus last year. We were down 10% in November, flat in December, and up positive 17% in January. I would like to provide some detail on the drivers of this month-by-month comparable store sales performance. As we discussed on the third quarter call, we believe that the weak trend in November was driven by unseasonably warm weather. Given the legacy of our brand and our particular strength in outerwear, unusually warm weather in the fall tends to hurt our traffic and sales more than most other retailers. This was the primary driver of the 10% comp store sales decline for the month. Our sales trend improved significantly in December as weather normalized, traffic improved, and customers responded to the great merchandise values that they found in our stores. We chased over $100 million of sales above our internal plan in December. We were particularly pleased with this improvement in the sales trend in December given the external environment. The resurgence in COVID-19 cases across the country meant that we faced lower occupancy limits in many stores and reduced operating hours in some of our major markets. We improved to a flat comp in December despite these limitations. Our comp performance in January accelerated further to positive 17%. We believe that this was primarily stimulus-driven. But no matter the reason, this strong performance again demonstrated our ability to react to the trend, to chase sales, and most important of all, to deliver great merchandise value to our customers. Our gross margin in Q4 was up approximately 40 basis points despite a 70 basis points increase in freight expense. I was very pleased with the 110 basis points increase in our merchandise margin, which was driven primarily by lower markdowns. Our receipts are fresher, we are turning faster, and we are capturing the margin benefits of these faster inventory turns. The buying environment in the fourth quarter was very favorable, and we were able to find great merchandise values to flow to stores and to fuel our ahead-of-plan sales trend. At year-end, our in-store inventory levels were down 16% on a comp store basis. As a reminder, at the same point last year, they were down 15%. On a two-year basis, we are operating with significantly less in-store inventory. This is deliberate and consistent with our stated strategy of running our business with much leaner in-store inventory levels. In fact, our in-store inventory turns increased 27% on a comparable basis to Q4. Evidence that our strategy is working. Reserve inventory increased to 38% of our total inventory at the end of the fourth quarter versus 33% last year. This would have been higher, but for the fact that we released some of our reserve early. This was merchandise that we had originally planned to release in February that we accelerated into January to support sales and replenish in-store inventory. Of course, this is exactly what reserve inventory is intended for. I would like to turn now to the outlook for 2021. The consumer environment remains very unpredictable. The pace of vaccine rollouts, the spread of virus mutations, the timing of tax refunds, and the potential for additional federal stimulus. These are all variables that we have no control over and have very little visibility into. These variables could dramatically impact our sales trend in either direction. As John will discuss later in the call, we have planned and we will be reporting fiscal 2021 compared to fiscal 2019. This is to avoid the lack of comparability in our fiscal 2020 results. For internal baseline planning purposes, we are assuming a flattish comp for 2021 compared to 2019. But it is important to understand that this is just a baseline. We intend to manage our business very flexibly. If our comp during 2021 is stronger than flat, then, as demonstrated in Q4, we have the ability to chase a stronger sales trend. Conversely, of course, we can pull back if that turns out to be necessary. I would like to move on now to talk about the exciting longer-term market share opportunities that we see ahead of us. For many years now, long predating the pandemic, the e-commerce and off-price retail sectors have been gaining market share at the expense of department stores. We believe that the aftermath of the pandemic may drive an acceleration of this trend, leading to further consolidation and additional closures of full-price brick-and-mortar retail stores. As we have described before, as these physical stores close, we believe that many shoppers, especially more affluent, time-starved shoppers, will migrate more of their spending online. But we anticipate that other shoppers, more value-oriented shoppers, will find their way to off-price. With all that said, we recognize that none of the shoppers in our stores cares about our market share. What they care about, as they should, is finding great value on a brand or a style or an item that they love. Our focus and the central objective of our Burlington 2.0 strategy is to improve our ability to deliver this great merchandise value. I would like to pivot now and offer some updates on Burlington 2.0. As I said earlier, we believe our strong performance relative to our expectations in Q4 was primarily driven by the successful execution of our core Burlington 2.0 strategies: delivering great value to customers by tightly managing liquidity, chasing sales, buying opportunistically, operating with lean inventories, getting fresh receipts to the sales floor as fast as possible, and flexing our store model based on receipts and traffic. As we move into 2021, we will continue to look for ways to refine and improve our execution of these key strategies. One of the most important long-term enablers of delivering great merchandise value to customers is to invest in our buying and planning capabilities. As I mentioned in our November call, we are pursuing a major multi-year growth plan for our buying and planning organization. We are heavily investing in these capabilities and will be growing this organization at a much faster rate than sales. This expansion will happen across all merchandise categories and in each of our buying offices. The growth will be especially significant in our New York City and our West Coast buying offices. Headcount in both these locations will grow several-fold in the next few years. We have very strong vendor relationships today, but we want to further expand and develop these key partnerships. We recognize that in some cases, having a stronger on-the-ground presence in New York City and Los Angeles will help us to achieve this. The final update that I would like to provide is on our real estate strategy. As discussed on our November call, our real estate and store operations teams have done a lot of work in the past year on a 25,000 sq ft store prototype. We are excited about this prototype. We expect that about a third of our new store openings in 2021 will be in this format and that over time, this smaller prototype will grow to represent the majority of our new store openings. Of course, the key enabler of moving to this smaller prototype is to operate with leaner in-store inventory levels. When you have less in-store inventory, you need less physical space. This has significant economic benefits, translating to lower occupancy costs and higher operating margins. The smaller prototype also provides important strategic benefits, increasing the pool of potential real estate sites and providing the opportunity to open profitable stores in more locations around the United States. We are very excited to announce that, based on these factors, we are raising our long-term potential store count to 2,000 stores from our previous goal of 1,000 stores. As a reminder, we had 761 stores as we began this fiscal year. So clearly, we have a lot of runway and opportunity ahead of us. Bringing it back to this year, as John will describe in a moment, we plan to open approximately 100 new stores in 2021 while closing or relocating approximately 25 stores for a total increase of 75 net new stores. Moving forward, we will continue to evaluate the pace of new openings each year. Now, I would like to turn the call over to John to provide more detail on our financials. John? Thanks, Michael, and good morning, everyone. Let me start with a review of the income statement. For the fourth quarter, total sales increased 4% while comparable store sales were flat. The gross margin rate in the fourth quarter was 42.5%, an increase of 40 basis points versus last year's rate of 42.1%. This improvement was driven by a 110 basis point increase in our merchandise margins, which was attributable primarily to a reduction in markdowns. This merchandise margin increase more than offset a significant increase in freight expense, which increased 70 basis points over last year's rate. Product sourcing costs, which include the cost of processing goods through our supply chain and buying costs, were $143 million in the fourth quarter of 2020 versus $89 million last year, increasing 230 basis points as a percentage of sales versus last year. Higher supply chain costs accounted for 180 basis points of this deleverage. This was consistent with the expectations that we discussed in our third quarter call last November. The major drivers were higher wage rates, higher wage incentives, the impact of lower AUR and product mix, and inefficiencies caused by safety protocols and the general disruption in the flow of receipts across the global retail supply chain. The balance of deleverage in product sourcing costs came from higher buying costs. This is consistent with Burlington 2.0 and our strategy of investing in our merchandising capabilities. Adjusted SG&A was $554 million versus $499 million last year, increasing 160 basis points versus the prior year. SG&A deleverage was primarily due to increases in store-related and corporate costs, including $39 million in COVID-related expenses. Adjusted EBIT decreased by $70 million to $224 million. All of this resulted in diluted earnings per share of $2.33 versus $3.08 last year. Adjusted diluted earnings per share were $2.44 versus $3.21. During the quarter, the company paid down the $250 million previously outstanding on its ABL facility, ending the fourth quarter with no outstanding balance. We ended the period with available liquidity of approximately $1.9 billion, including approximately $1.4 billion in unrestricted cash and total balance sheet debt of approximately $1.9 billion. Before I provide our outlook, I wanted to comment on how we are approaching planning our business and reviewing our performance during this year. As you know, fiscal 2020 was a highly unusual and volatile year, making comparability of fiscal 2021 results to fiscal 2020 very difficult. Accordingly, not only are the plans we have developed benchmarked against fiscal 2019, but our comparable store sales results and many of the financial measures we will be reporting in fiscal 2021 will be compared to fiscal 2019 as well. Given the uncertainty caused by the ongoing pandemic, we are not prepared at this time to give specific sales or earnings guidance for fiscal 2021. That said, we can provide some guidelines to help you model fiscal 2021. Let's start with sales. As Michael said, for internal planning purposes, we are using a baseline of flat comp in fiscal 2021 versus fiscal 2019. In a moment, we will discuss the cost headwinds that we expect to face in fiscal 2021. But before we do that, it's important to call out that as we compare 2021 to 2019, we will have naturally incurred two years of expense growth. Typically, on a flat comp, our EBIT margin would decline 20-30 basis points on a one-year basis or 40-60 basis points over two years of expense growth. Staying with sales for a moment, as you think about total sales growth for FY21 versus FY19, you should factor in two years of new stores over that time period: 34 net new stores in fiscal 2020 and 75 planned net new stores in fiscal 2021. Moving on to gross margin, we expect higher freight costs to continue to pressure our reported gross margin in fiscal 2021. But we do expect merchandise margin improvement to offset higher freight costs as we continue to plan our comp store inventories down, which should result in further reduction in our markdown rate. Moving down to P&L, we expect continued cost pressure and deleverage from product sourcing costs in 2021, primarily from higher supply chain costs. We expect significant deleverage versus 2019, driven by similar headwinds to those we experienced in the fourth quarter. In terms of SG&A in FY21 versus FY19, you should also factor in ongoing COVID-related SG&A expenses in fiscal 2021. After combining the deleveraging effect of a two-year flat comp, the incremental expense pressures that I just outlined, and various offsets and mitigation strategies that we have identified so far, our modeling would suggest an EBIT margin decline of 70 to 80 basis points if comp sales are actually flat in fiscal 2021 versus fiscal 2019. Again, to be clear, this is based on comp store sales growth being flat on a two-year basis. If our comp store sales growth is stronger than this, then we would expect our operating margin performance to be better. Finally, let me share some specific outlook items for your modeling purposes. Net capital expenditures for fiscal 2021 are expected to be approximately $470 million net of landlord allowances. In fiscal 2021, we expect to open 100 new stores while closing or relocating 25 stores, resulting in 75 planned net new stores. This includes 18 new stores that were shifted from fiscal 2020 into fiscal 2021. Depreciation and amortization expense, exclusive of favorable lease costs, is expected to be approximately $260 million. Interest expense, excluding $32 million in non-cash interest on the convertible notes, is expected to be approximately $80 million. We expect our effective tax rate to be approximately 24%-25%. With that, I will turn it over to Michael for closing remarks. Thank you, John. As I wrap up my remarks, I would like to thank the entire team at Burlington. It is an understatement to say that we operated in a very difficult environment in 2020. I am proud of how the Burlington organization handled these challenges, and I am amazed at the progress we made on our strategic priorities. To express this appreciation, we announced earlier today that we will be paying a special thank you bonus to the majority of our store, supply chain, and corporate office associates in recognition of their hard work and commitment in 2020. This is a very exciting time for us at Burlington. We are all energized by the significant growth opportunities we see ahead of us and by the strategies we are pursuing to go after these. With that, I will turn it over to the operator for your questions. Operator? Ladies and gentlemen, if you'd like to ask a question at this time, please press the star, then the number one key on your touch-tone telephone. To withdraw your question, press the pound key. In the interest of time, we ask that you limit yourself to one question and one follow-up. Our first question comes from Matthew Boss, J.P. Morgan. Great thanks, and congrats on the material improvement. So, Michael, first, how did you arrive at the baseline comp assumption that you're using for planning purposes this year? And more so, could you just elaborate on your thinking behind this forecast overall? Sure. Well, Matt, good morning. Great to hear from you. I guess there were really two main thoughts behind this baseline. Firstly, I should reiterate, 2021 is a very difficult year to forecast. There are a number of potential positives: the rollout of vaccines and the potential for additional stimulus spending. But there are also some risks and some negatives: the possible spread of additional variants, the continuing high unemployment rate. So, a lot of uncertainty. But with all that uncertainty, we need a baseline that we can plan against, but one that will give us flexibility so we can chase the trend if our comp growth turns out to be stronger, or we can pull back if we need to. Our feeling is that by starting with a flat-ish baseline, we can move in either direction. So, that was the first thought. The second thought is that our recent trend gives us confidence that this is a good baseline to start with. So, let me talk about Q4, and then I'll talk about the quarter to date. So, Q4, obviously, we just reported a flat comp for Q4, but there are a couple of important puts and takes to this number. We know that the federal stimulus checks helped us in January. And conversely, we also know that the unseasonably warm weather really hurt us in November. After adjusting for these specific factors, we estimate that our underlying comp store sales trend in Q4 was down around 1%, so minus 1%. The other data point is our quarter to date trend. Now, I caution you, we're only, what, four and a half weeks into a 13-week quarter. But at this point, our quarter to date trend is flat. In other words, at this point in the quarter, our trend is consistent with the baseline plan that I've just described. So, I guess to summarize it, 2021 is going to be a tough year to forecast. Lots of things that could happen that could help or hurt sales. And what we need to do is to plan our business and be ready to react to a stronger or weaker trend as we did in Q4. And as I say, given the data that we have right now, it feels like a flat comp seems like a reasonable assumption for baseline planning purposes. That's great. And congratulations on the performance in February, particularly given the weather that I know certain parts of the country have seen. As a follow-up for John, how best to think about 2021 margin pressures, maybe in the context of your goal to close the margin gap versus peers over time? Meaning, do you see any structural barriers that might make this more difficult? Yeah. Good morning, Matt. Thanks. It's a good question. I think maybe the best way to answer it might be to separate out into two different time periods. First, the period from now until we kind of get through the whole pandemic thing, and then that could be maybe the next 12 months, and second, the period after we emerge from the pandemic, so that's probably 2022 and beyond. For that first time period, maybe up to the next 12 months, hopefully a little shorter, the sales trend is still going to be really difficult to predict. Traffic into our stores is probably going to continue to be off. The industry-wide supply chain issues that we're seeing are probably going to continue putting pressure on freight and supply chain expenses. And the various COVID-related safety measures that we have in our stores and distribution centers will likely need to remain in place for some time. As I said in the prepared remarks, if you combine the deleveraging effect of a two-year flat comp plus the expense pressures and the various offsets that we've identified, this would suggest an EBIT margin decline of 70-80 basis points if comp store sales are actually flat in 2021 versus 2019. As we said previously, we typically don't expect margin leverage unless we achieve a 2%-3% comp sales growth in a year. So, for 2021, this would require two-year comp growth of 4%-6% versus 2019. If the recovery from the pandemic were to accelerate over the next few months and our comp trend were to pick up, then we could be back on track. But that all depends on external factors, well beyond what we can actually control. All right. So, let's switch over and talk about the subsequent time period after the pandemic. At this point, when that's all behind us, we don't see any structural expense changes that would interfere with our longer-term margin opportunity. As we've discussed in the past, we see three main drivers of operating margin improvement. Of course, the first one is sales. Higher sales productivity drives leverage. There are a number of steps that we're taking to drive sales, focusing on wow values, tightly controlling liquidity, chasing the sales trend, going after great opportunistic buys, and investing in our merchandising capabilities. The second piece would be gross margin. We think we have a significant opportunity to continue to turn our inventories faster than we have historically. And by doing that, that's going to drive lower markdowns. I think we demonstrated that pretty well in Q3 and especially in Q4 of 2020. And that gives us a lot of confidence that we have additional opportunity to increase our turns. The third point I'd mention is occupancy costs. Our stores are bigger and less productive than our peers. Driving higher sales will help. But as we discussed in our prepared remarks, we also see significant opportunity to reduce the size of the store, which in turn would reduce occupancy costs in our stores over time. With Burlington 2.0, we have specific initiatives in place to go after each of these opportunity areas. Despite all the challenges we faced in 2020, we're really happy with the progress that we made in each of these areas. Most importantly, we remain confident that with good execution, we will drive a significant improvement in operating margin in the next several years once we have the pandemic behind us. Great color. Best of luck. Thanks, Matt. Thanks, Matt. Our next question comes from Ike Boruchow with Wells Fargo. Hey. Good morning, everyone. Two questions. First for John on the product sourcing costs, major source of deleverage in the fourth quarter. Just any more detail you can kind of give us on the puts and takes, that line item. And then to that point, I think it's been, I mean, $143 million the last two quarters. Is that a good way to think about the next couple of quarters as we start the first half? Yeah. Good morning, Mike. Thanks for the question. The product sourcing cost is complicated. So, let me kind of explain the way that we think about it. So, as I mentioned in our prepared remarks, product sourcing costs delevered by 230 basis points in the fourth quarter. Higher supply chain costs represented 180 basis points of that deleverage. So, let's talk about that first. It is probably easier if I break it into a few buckets. First, 90 basis points of the supply chain deleverage came from higher wage rates and from wage incentives. Similar to what we discussed in the third quarter, the higher wage rates accounted for about half of the 90 basis points, and we expect that increase to be permanent. We anticipate that over time, we're likely to find some efficiencies that could partially offset the higher costs. The other half came from the temporary wage rate incentives. These were used to increase staffing when extra work was needed to overcome situational factors like the receipt flow volatility that we faced, COVID-related safety measures. Of course, we would expect these factors to abate over time. The next bucket to think about includes components of our business during the quarter and how that impacted product sourcing costs and drove some of that deleverage. So, in this bucket, I throw a bunch together. I would include AUR, which was down slightly, meaning that we processed more units, category mix, which included a shift toward higher handling cost items like home, and less overall efficiency in our DC processing, resulting partly from the safety protocols in our DCs, but also from the impact of the volatility around timing of receipts and when they were going to arrive at our DCs. We had more goods moving into and out of reserve during the quarter as well as we reacted to the disruption in those planned receipts and to our stronger than original planned sales trends. So, all these factors together drove about 60 basis points of the supply chain deleverage. Many of these factors are directly or indirectly related to COVID and the disruption in the global retail supply chain that we've seen and continue to see. But once the pandemic is behind us, we would expect much of this to improve. The last 30 basis points of supply chain deleverage was driven by occupancy, where we added some new currently underutilized capacity and deleveraged on our fixed cost base at a flat comp. With higher sales and fully utilized warehouse and DC capacity, we would expect leverage on these expenses to improve and drive operating margin expansion in the future. So, just to kind of wrap it together, I think the balance of deleverage, the remaining piece of deleverage in product sourcing costs, came from higher buying costs. And that's consistent with our Burlington 2.0 strengthening our merchandising capabilities objective. Over time, we would expect to see continued deleverage as we continue to invest in the team. So, to the other part of your question to the specific dollar amount, we're really staying away from specific dollar amounts because we really don't know what the sales volume is likely to be. We may have to flex up. We may have to flex down. We can't really predict what we're going to do as far as receipt processing capabilities or actual processed dollars or receipts. So, I'm going to stay away from anything to do with predicting a fixed dollar amount. But as we discussed, whatever sales trend we see, if it's better or worse, we're going to flex with that, and our variable costs will move the same direction. So, I hope that helps. Yep. Yep. Thanks. And then just on a real quick second one, on inventory, thank you for any comments on what you're seeing with the merchandise availability out there. We know the port congestion has been talked about, but just any high-level comments there would be great. Good. Yeah. Good morning, Mike. Thanks for the question. So, first of all, inventory levels. Let me start with in-store inventories, and then I'll talk about reserve. Our in-store inventory levels, I would say, were really well controlled throughout the fourth quarter. On a comp basis, they were down 20%-30% for most of the quarter. And just think about that for a minute. We did the same comp sales as last year, but we did that with 20%-30% less inventory in a pandemic. As you know, operating with leaner inventories is a core element of our Burlington 2.0 strategy. And of course, this faster inventory turn, as John referenced in his remarks, expressed itself in higher merchandise margin during the fourth quarter. At the end of January, our in-store inventory levels were down 16%. But it's important to remember that we began to cut our inventory levels in the fourth quarter of 2019. So, this 16% cut was on top of a 15% reduction at the end of January 2019. In other words, we're now operating with much lower inventory levels than we have historically. You'd expect that we will continue to manage our in-store inventory levels tightly going forward. There'll be variations depending on the quarter and the time of year. Overall, I would say that in-store inventory levels will be down double digits throughout 2021 compared to 2019. Let me move on to reserve inventory. Our reserve was 5% higher at the end of Q4, but that statistic doesn't really capture all the movement in and out of reserve during the quarter. In fact, our January reserve receipts, so goods that were coming into reserve in January, were actually up 42% versus last year. So, what happened, of course, is that our reserve releases were up even more. They were up 62% versus last year. So, reserve releases being goods that came out of the reserve. In order to fuel our ahead-of-planned sales, we accelerated those releases from reserve. In other words, merchandise that we had planned to release to stores in February or even early March, we pulled up to support our very strong sales trend in January and to replenish our in-store inventory levels. As I said in my earlier remarks, this is exactly what reserve inventory is intended for. We see reserve as a very important tool that our merchants can use to chase sales and to take advantage of great deals in the market. But with that said, that does make it difficult to forecast what reserve inventory levels are likely to be at the end of each quarter. Reserve inventory balances could move up or down in 2021, depending upon those two things: our sales trend versus plan and the availability of great opportunistic buys that we want to pack away. Let me finish up the last part of your question, availability. Overall, I would say that we were very happy with availability in the fourth quarter. Our merchants were able to buy terrific merchandise at great values to support our ahead-of-planned sales in the quarter and to transition our assortment to spring. So, we're very pleased with the merchandise we have in our stores right now. Got it. Thanks so much. Thanks, Mike. Our next question comes from John Kernan with Cowen. Good morning. Nice finish to a challenging year. Can you talk about the impact of industry-wide supply chain issues you reported in third quarter, particularly versus sell-side expectations that were out there? So, I'm just wondering how incremental supply chain costs and headwinds affected Burlington and then, perhaps more importantly, how they're going to affect the model in 2021. Good morning, John. It's actually a really good question. Let me do this. I'll provide some high-level commentary on what we're seeing in the industry and how we're working around those issues, and then I'll ask John Crimmins to talk about the financial impact. The supply chain issues across the retail industry, I would say over the last several months, have been extraordinary. The magnitude of the bottlenecks, the congestion, and the delays in getting merchandise into the country, and then moving it around the country, I would characterize all of this as unprecedented. It's not difficult to understand why this has happened. For a good chunk of last year, industry supply chains slowed down or completely shut down in some cases. And then for several months after stores reopened, retailers and vendors were understandably cautious. They didn't know what was going to happen. And then all of a sudden, in the fourth quarter, there was a rush to bring in merchandise for holiday and then more recently for spring. Now, you add to all of that the ports, the major transportation hubs, and the vendors' warehouses have struggled to operate at normal capacity because of COVID-related precautions or because of staffing issues. A few months ago, I would have said that the situation would probably correct itself once we got through holiday. That did not happen. There are still very, very significant industry delays coming through the ports, the transportation hubs, and our vendor warehouses. To cope with these issues, we've had to juggle the timing of purchase orders, reserve releases, and inbound receipt flow. I feel like we lived through a version of this last summer, and we learned some important lessons. It's been very challenging, but I would say our buying, planning, and supply chain teams have really been able to stay on top of it, and we've been able to get the receipts that we need to support our sales trend. Even though we've been able to manage through these issues, there's clearly a financial impact in terms of higher freight rates and supply chain expenses, and in a moment, I'll let John provide more detail on how those might impact us in 2021. But before I hand off to John, let me make one final point. Usually, these situations where merchandise orders are disrupted or delayed, usually these situations end up expressing themselves in terms of increased off-price supply. Once these issues unwind, and of course, they will unwind, but maybe not for a little while, we think this could be a very, very good off-price buying opportunity. Okay. I'll let John Crimmins talk about the financial impact. Yeah. Thanks, Michael. Good morning, John. Thanks for your question. So, I guess obviously there are two areas on our P&L that are impacted by all this stuff: freight and supply chain. I've already talked quite a bit about Q4, so I'll focus a little bit more on the potential impact in 2021. As Michael was describing, these industry-wide supply chain issues haven't gone away now that we're in 2021. It continues to be huge pressure on the ports, on rail and trucking systems across the country, and obviously, this has had a significant impact on freight costs. We don't believe that all, or even most of this cost pressure, is permanent, and we would expect that at some point, supply and demand for freight is going to return to some kind of an equilibrium, but we really don't know when that's going to happen, so our expectation is that we'll be facing similar headwinds to what we saw in the fourth quarter and what we've seen so far this year well into 2021. As I said earlier, talking about gross margin for 2021, we believe that we should be able to cover these higher freight costs through higher merchandise margin, driven primarily by the opportunity we see to have lower markdowns again this year. Okay. Let me move on to supply chain costs. The main impact of industry-wide issues on our supply chain is that they create unpredictability in receipt flow. This unpredictability causes inefficiencies in our distribution centers. To deal with the kind of ups and downs, ebbs and flows, we have to add shifts and weekends to be staffed whenever the receipts actually do show up in our DCs and are even through to get them out to our stores. This drives up overtime, and it's driven some of the other wage incentives that we have in place that we talked about. Once the industry-wide situation normalizes, we would expect these expense pressures to go away as well. But again, there's no sign of that happening yet. So, these costs could be with us for some time. Just one more comment, and I'm probably just going to echo something that Michael just said. At some point, these industry-wide issues and delays will resolve themselves, and when they do, this could be a really good off-price buying opportunity, so, yeah, the situation is driving expense headwinds for us now, but there could be a nice silver lining for us in the future. That's helpful. Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Thanks. Good morning. I'm interested to hear more about the increase in your store potential. Can you talk about what the thinking was behind that? How'd you come to the 2,000 store number, and how confident are you in this potential? well, good morning, Lorraine. Thank you for the question. We've done a lot of work on this topic over the last 12 months, and we're very excited about this opportunity. As you know, our previous target of 1,000 stores had been in place for a while, but that estimate is pretty dated. It was based on a set of assumptions around store prototype, store economics, and market share opportunity that really no longer apply. Let's start with the store prototype. As we talked before, we're introducing a new, smaller 25,000 sq ft store prototype. Our real estate merchandise planning and store operations teams have collaborated. They've done some really great work to develop detailed operating plans for this prototype. Over the next couple of years, we expect that this smaller format will become a central element in our new store opening plans, and as I described in my remarks, the key enabler of moving to this smaller format is to operate with leaner in-store inventory levels, which is obviously a core element of Burlington 2.0. The smaller store prototype, not surprisingly, has some significant economic benefits, and John referenced this in his remarks. The smaller footprint drives lower occupancy costs, and of course, this means higher operating margins. The smaller footprint also means improved real estate availability for new stores and relocations. We worked with a specialist third-party analytics firm to analyze the information on our new store prototype together with data on the demographics of our target customers. We then combined that analysis with what we're seeing in the marketplace in terms of retail real estate opportunities. The updated store count potential that we announced today is based upon all of that detailed modeling. The final point to make, though, is that with this kind of exercise, with this kind of modeling, it's important to do a reality check. Is this opportunity real? Is there enough market share opportunity to support 2,000 Burlington stores? So, in addition to the detailed modeling that I've just described, we looked very closely at how retail market share might evolve over the next several years, what will happen to the share of department stores, specialty stores, and mall-based retailers. Of course, we also looked at how successful e-commerce is likely to be in penetrating the categories that we compete in at the price points we offer and with the customer segments that we serve. The bottom line from all of this analysis is that we feel very confident about the market share opportunity that we have ahead of us and very confident about our potential to get to 2,000 Burlington stores. Thanks, Michael. And then can you share any additional details on the economics of the 25,000 sq ft prototype? Yeah. Sure, Lorraine. I'll take that question. So, as we've kind of described, just operating in a smaller box brings your cost base down. And if we're able to drive the similar sales volume in a smaller box, all of the costs related to operating in that box are less expensive. So, the performance that we've seen over the last, really, it's been for a couple of years for us, but particularly in the second half of the year when we've really been operating with very lean inventories and driving sales volumes really gives us additional confidence that we should be able to operate in these smaller stores and deliver very similar sales levels to what we have in some of our larger boxes. The cost savings come on the occupancy line, but they also come on the rest of the operating expenses in the store, smaller space for utilities, for cleaning, for maintenance. So, all of those things help the overall performance of the store. And these will become a tailwind as we look to continue to improve our overall operating margins. So, we're really excited about the opportunity that we have there. As Michael said, there's a lot of additional sites that become viable for us in a smaller store format. So, we see it as kind of a top-line driver as we are able to find more sites and open more stores and a driver of operating margin expansion improvement as we'll be able to have four-wall operating margins at a higher level when we're driving similar sales and a less expensive operation. Thank you. Our next question comes from the line of Kimberly Greenberger with Morgan Stanley. Great. Thank you so much for taking the question. Michael, I wanted to follow up on your comments that you chased over $100 million of sales above plan in December. By my math, this would suggest about a 10-percentage-point delta. Is that the right zip code? And do you think that the opportunity to continue chasing and sort of fine-tuning this skill over time will allow you to chase an even larger delta to sales? Good morning, Kimberly. So, yeah, your math is right. We do approximately, actually just over $1 billion in December. We came into the fourth quarter, you'll remember actually, in November, we were running a comp of minus 10. So, that was actually our original plan for the fourth quarter. We saw no reason why that would be better at the time. In fact, in mid-November, people were getting very anxious about the upsurge in COVID-19 cases around the country. So, our original plan going into December was minus 10. As you correct, the math is right, but we ran 10 points above that to hit that to December. Yeah. Obviously, that required a lot of work for the planners and the merchants and supply chain to go out there and find that merchandise and flow it to stores and to support sales. And some of that, as you will have heard, was moving around reserve releases, which helped us as well. Now, in terms of your question, can we chase more than that? I hope we don't have to in some ways. I kind of hope that things settle down a bit. I think in a pre-pandemic world, I would be happy back a year or two ago if we had planned a one to two comp and chased to a five. Obviously, the past 12 months has been pretty abnormal. I would hope in a post-pandemic world, as I say, things will settle down a little bit. And again, it's going to be very important that we chase and we chase well. But I don't think over the long term, I expect this kind of volatility. I do for the next 12 months. But once we're out of the next 12 months, I think things should settle down a little bit. We all share that wish, I think. My follow-up, Michael, is just on the investments in the buying department. And I think you mentioned that that is an ongoing investment for 2021. Could you maybe just talk about where those investment dollars are going? Is it going to be broader coverage, more buyers in certain categories? And if you can talk about some of the support that you're giving to your buyers in order to give them greater tools to, I guess, enhance that in-season chase, that would be great. Sure. Yeah. So, it's actually all of the above. If I start with the merchants themselves, I would say the growth that we've planned, the three- to five-year growth plan that we've developed, shows significant headcount growth across all areas of the business. Now, there are some differences. So, as you'd expect, the areas of our business where we're, I would say, less penetrated or underpenetrated versus our peers, we're going to invest more in those areas so we can catch up. But the growth is going to happen across the board in all areas of the business and at all levels in terms of levels within the merchant team. The other very important component is the planning group. Similarly, a lot of growth in the planning group to support the merchants and to support growth across different businesses. I called out in my remarks that the growth will be disproportionately high in our New York City buying office and our West Coast buying office. Our New Jersey buying office will also grow, but not to the same degree as New York and California for the reason I described in the prepared remarks, and then on your point, your question about support, I think that's a really good question because we've been putting a lot of thought, and we're going to be putting a lot of investment into supporting our merchant teams. And that support takes a number of different forms: professional development, training, giving the buyers better tools, better visibility into their business, making some improvements to our merchandising and planning systems so we can react more quickly to what we're seeing. And then also on the sort of the operating side of things, sort of making sure that the interface between our merchant teams and our supply chain organization works as smoothly as it can. So, a lot that we're doing in that area. Very exciting. Thanks so much. Thanks, Kimberly. Our last question will come from Michael Binetti with Credit Suisse. Hey, guys. Good morning. Congrats on a great holiday and obviously a tough environment. Michael, I want to talk to you about the opportunity here that's so attractive to the investment community, what has been to close the 300-400 basis points gap that you have versus the off-price peer group. And that was at the 1,000 store target. And I know it's early, and you just told us about 2,000 today, but I'm curious what adding 1,000 stores to the long-term fleet does to that margin target. Sure. Well, good morning, Michael. I think I'd anchor my answer to that question by sort of going back to the framework that John Crimmins used a bit earlier when talking about sort of the margin gap, quote-unquote, margin gap. So, John outlined three levers to sort of close that margin gap. Number one, driving sales. That really means driving comp store sales. And we talked a lot about all the things we're doing to try and drive comp store sales. Secondly, gross margin. And the key element there is really tighter inventory control and therefore driving faster turns. And then the third bucket, which is the one that relates most closely to your question, is occupancy costs, where we feel like our stores are bigger, less productive than peers. And as we cut inventory levels, we've got an opportunity to move into smaller boxes. So, bringing it back to your question, how does the 2,000 store, the increase to 2,000 stores help us? It helps us in the sense that it opens up more of those opportunities. It gives us the chance to increase the pace of our new store openings. So, obviously, as we said in the remarks, we're planning 100 gross new stores this year that will net to 75. But that's a lot more than we've opened historically. And opening stores more rapidly like that gives us the chance to go after that operating cost opportunity more rapidly, if you like. So, that's how I would think about it. Yeah. So, Michael, let me, oh, go ahead, John. Michael, if I could just add one thing to that. As we consider new store sites, one of our financial hurdles is for the individual store to be accretive to the company's EBIT margin. So, it's kind of built into the way we think about what stores to move forward on. We're very conscious of that operating margin opportunity. So, as Michael described, we'll have more of these stores that almost by definition, if we're going to approve them, should be helping us close the operating margin gap, so. Okay. Thanks for that, John. And then if I could just ask one follow-up, Michael, maybe talk about the journey since you've been here now. John referenced the two- to three-point same-store sales leverage point that you guys have always spoken to in the past. And you spoke about the annual cost inflation, natural inflation. I guess the evolution of that two- to three-point leverage point is the input to closing that margin gap versus peers. So, it was obviously impressive that you sold the same amount, same revenue in goods this year with 20%-30% less inventory. So, obviously, a lot of progress has been made already. What is the evolution versus when you got here of that two- to three-percent leverage point today? And based on the investments you talked about for this year, where will that be at the end of this year as we start looking out to more normal years ahead? Sure. Yeah. It's a great question. I would say the journey over the last. I've been at Burlington almost 18 months. I would say the journey over the last 18 months has not quite been the journey that I expected when I started. I feel like the fundamentals haven't changed. The opportunity, actually, in my view, is now greater than I thought back then. And the strategy we're pursuing is very similar to what we talked about, actually, a year ago before the pandemic happened. Everything we've talked about today, we were talking about a year ago. All that's really happened, I say all that's really happened is quite a big thing, is we've had this very significant event that's happened over the past 12 months. Now, what has that done to our journey? Again, it hasn't changed the fundamentals. If anything, I think the opportunity actually looks bigger now. But it's also, in many ways, it's accelerated some of the things that we had talked about. And I think it's probably always true that in any business situation, when you're confronted with an unexpected challenge or a severe crisis, and this has been a severe crisis, it forces you to adapt and to change at a much faster pace than you otherwise might have. So, at the core of Burlington 2.0 is this concept of delivering great value by tightly managing liquidity, chasing sales, buying opportunistically, operating with these inventories. We did all of those things in 2020, especially in the fourth quarter, and because of the circumstances we faced, we had no choice. We had to do those things and actually to do them more so than we would have. In normal circumstances, I think the progress that we made in 2020 would have taken much longer. Now, I want to sort of temper that a little bit. The fourth quarter is just one quarter. Let's talk again when we wrap up 12 or 16 or 20 quarters. We're not done. We have a lot of work ahead of us, so I think we feel pleased about the progress we've made, but we're humble enough to recognize there's still quite a lot of work ahead of us here. Thank you so much, guys. Thanks. That concludes today's question and answer session. I'd like to turn the call back to Mr. O'Sullivan for closing remarks. Well, thank you, everyone, for joining us on the call today. We appreciate your questions. We look forward to talking to you again in late May to discuss our first quarter results. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.