Good morning. My name is Robert, and I will be your conference operator today. At this time, I'd like to welcome everyone to Dollar General's fourth quarter 2021 earnings conference call. Today is Thursday, March 17th, 2022. All lines have been placed on mute to prevent any background noise. This call is being recorded, and instructions for listening to the replay of the call are available in the company's earnings press release issued this morning. Now I'd like to turn the conference over to Mr. Donny Lau, Vice President of Investor Relations and Corporate Strategy. Mr. Lau, you may begin. Thank you, and good morning, everyone. On the call with me today are Todd Vasos, our CEO, Jeff Owen, our COO, and John Garratt, our CFO. Our earnings release issued today can be found on our website at investor.dollargeneral.com under News and Events. Let me caution you that today's comments include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, such as statements about our financial guidance, strategy, initiatives, plans, goals, priorities, opportunities, investments, expectations or beliefs about future matters, and other statements that are not limited to historical fact. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These factors include, but are not limited to, those identified in our earnings release issued this morning under Risk Factors in our 2020 Form 10-K filed on March 19th, 2021, and any later filed periodic report and the comments that are made on this call. You should not unduly rely on forward-looking statements, which speak only as of today's date. Dollar General disclaims any obligation to update or revise any information discussed in this call unless required by law. We also will reference certain non-GAAP financial measures. Reconciliations to the most comparable GAAP measures are included in this morning's earnings release, which, as I mentioned, is posted on investor.dollargeneral.com under News and Events. At the end of our prepared remarks, we will open the call up for your questions. Please limit your questions to one and one follow-up question if necessary. Now it is my pleasure to turn the call over to Todd. Thank you, Donny, and welcome to everyone joining our call. We are pleased with our fourth quarter and fiscal year results, and I want to thank our associates for their unwavering commitment to meeting the critical needs of our communities, particularly over the past two years of the COVID pandemic. Our fourth quarter performance was impacted by sustained and rising inflation, ongoing global supply chain pressure, and a surge in Omicron cases, which impacted staffing levels at our distribution centers, contributing to elevated out-of-stocks. Despite these challenging conditions, our teams continued to focus on controlling what we can control and being there for our customers. Because of their efforts and great execution over the past two years, we believe our underlying business is even stronger than before the pandemic, which positions us well to deliver solid sales and profit growth in 2022 and beyond. While we expect this challenging environment to persist over the near term, which is reflected in our Q1 and fiscal 2022 outlook, we're confident we are taking the appropriate actions to manage through this period and deliver on our full-year plan. In fact, I'm pleased to report our staffing levels are back to 2019 pre-COVID levels in both our stores and distribution centers, and we are seeing a meaningful improvement in our in-stock positions. Additionally, although we experienced higher-than-expected product and supply chain costs in Q4, we are very confident in our price position as our price indexes relative to competitors and other classes of trade remain in line with our targeted and historical ranges. Because so many families depend on us for everyday essentials at the right price, we believe products at the $1 price point are important to our customers, and they will continue to have a significant presence in our assortment. In fact, approximately 20% of our overall assortment is $1 or less. Moving forward, we expect to continue to foster and grow this program where appropriate. With more than 18,000 stores located within 5 mi of about 75% of the U.S. population, we believe we are well-positioned to continue supporting our customers through our unique combination of value and convenience, even in a challenging economic environment. Looking ahead, we remain focused on advancing our operating priorities and strategic initiatives as we continue to strengthen our competitive position, while further differentiating Dollar General from the rest of the retail landscape. Turning now to our fourth quarter performance. Net sales increased 2.8% to $8.7 billion, following a 17.6% increase in Q4 of 2020. E-com sales declined 1.4% compared to the prior year period, which translates into a robust 11.3% increase on a two-year stack basis. From a monthly cadence perspective, e-com sales were lowest in January, with December being our strongest month of performance. Our fourth quarter sales results include a decline in customer traffic, which was largely offset by growth in average basket size. Notably, our average basket size at year-end was approximately $16 and consisted of nearly six items. This compares to an average basket size of about $13 and five items at the end of 2019, which we believe reflects the growing impact of our strategic initiatives and a degree of inflation. In addition, we are pleased with the market share gains as measured by syndicated data in our frozen and refrigerated product categories, where we have placed a good deal of emphasis over the past years in an effort to provide customers with an even wider variety of options. Even as our market share in highly consumable product sales decreased slightly in Q4, we feel good about our share gains on a two-year basis. We are also pleased with retention rates of new customers acquired in 2020, which continues to exceed our initial expectations. For the full year, net sales increased 1.4% to $34.2 billion, which was on the high end of our full year guidance, and on top of a robust 21.6% increase in fiscal 2020. Com sales for the year decreased 2.8%, which translates into a very healthy 13.5% increase on a two-year stack basis. In total, we completed more than 2,900 real estate projects during the year, including the opening of our 18,000th Dollar General store and 50 standalone pOpshelf locations as we continue to build and strengthen the foundation for future growth. From a position of strength, we also made targeted investments in key areas, including the acceleration of our pOpshelf concept, as well as our most recent initiatives focused on health and international expansion as we continue to meet the evolving needs of our customers and further position Dollar General for long-term sustainable growth. Overall, we are proud of our fourth quarter and full year results, which further validate our belief that our strategic actions and targeted investments positions us well for continued success while supporting long-term shareholder value creation. We operate in one of the most attractive sectors in retail, and while our mission and culture remain unchanged as the foundation for our success, with our robust portfolio of short and long-term initiatives, I believe Dollar General is a much different company and is in a much stronger competitive position than it was just a few short years ago. As a result, I've never felt better about the underlying business model, and we are excited about the enormous growth opportunities we see ahead. With that, I'll now turn the call over to John. Thank you, Todd, and good morning, everyone. Now that Todd has taken you through a few highlights of the quarter and the full year, let me take you through some of its important financial details. Unless we specifically note otherwise, all comparisons are year-over-year, all references to EPS refer to diluted earnings per share, and all years noted refer to the corresponding fiscal year. As Todd already discussed sales, I will start with gross profit. As a reminder, gross profit in Q4 2020 and fiscal year 2020 were both positively impacted by a significant increase in sales, including net sales growth of 24% and 28% respectively in our combined non-consumables categories. For Q4 2021, gross profit as a percentage of sales was 31.2%, a decrease of 131 basis points. The decrease compared to Q4 2020 was primarily attributable to a higher LIFO provision, increased transportation distribution costs, and a greater proportion of sales coming from our consumables category. Of note, while we expect some relief as we move through 2022, our Q4 supply chain expenses were significantly higher compared to Q4 2020, resulting in a headwind to gross margin of approximately 100 basis points. These factors were partially offset by a reduction in markdowns as a percentage of sales and higher inventory markups. SG&A as a percentage of sales was 22% in the quarter, a decrease of 16 basis points. This decrease was primarily driven by lower incremental costs related to COVID-19, lower hurricane-related expenses, and a reduction in incentive compensation. These items were partially offset by certain expenses that were higher as a percentage of sales, including retail labor, occupancy costs, and depreciation and amortization. Moving down the income statement, operating profit for the fourth quarter decreased 8.7% to $797 million. As a percentage of sales, operating profit was 9.2%, a decrease of 116 basis points. Our effective tax rate for the quarter was 21.2% and compares to 22.7% in the fourth quarter last year. Finally, EPS for the fourth quarter decreased 1.9% to $2.57, which reflects a compound annual growth rate of 10.6% over a two-year period. Turning now to our balance sheet and cash flow, which remain strong and provide us the financial flexibility to continue investing for the long term while delivering significant returns to shareholders. Merchandise inventories were $5.6 billion at the end of the year, an increase of 7% overall and 1.4% on a per store basis. Importantly, as Todd noted, we have begun to see a meaningful improvement in our in-stock levels since the end of the year and expect continued improvement as we move through 2022, underscoring our optimism that we are well-positioned to serve our customers with the products they want and need. In 2021, we generated significant cash flow from operations totaling $2.9 billion. Total capital expenditures for the year were $1.1 billion and included our planned investments in new stores, remodels and relocations, distribution and transportation projects, and spending related to our strategic initiatives. During the quarter, we repurchased 2.2 million shares of our common stock for $490 million and paid a quarterly dividend of $0.42 per common share outstanding at a total cost of $97 million. At the end of the year, the remaining share repurchase authorization was $2.1 billion. Our capital allocation priorities continue to serve us well and remain unchanged. Our first priority is investing in high return growth opportunities, including new store expansion and our strategic initiatives. We also remain committed to returning significant cash to shareholders through anticipated share repurchases and quarterly dividend payments, all while maintaining our current investment grade credit rating and managing to a leverage ratio of approximately 3x Adjusted Debt to EBITDA. Moving to our financial outlook for fiscal 2022, first, I want to remind everyone that our fiscal year 2022 includes the 53rd week, which will occur during the last period of the fourth quarter. We also continue to operate in a time of uncertainty regarding, among other things, the impacts on the business arising from the current geopolitical conflict and the recovery from the global COVID pandemic, including recovery of the U.S. economy, changes in consumer behavior, labor markets, and government stimulus and assistance programs. Despite these uncertainties, including cost inflation, ongoing pressure in the supply chain and rising fuel costs, we are pleased to provide annual guidance that reflects our confidence in the business. With that in mind, we expect the following for 2022. Net sales growth of approximately 10%, including an estimated benefit of approximately 2 percentage points from the 53rd week. Same store sales growth of approximately 2.5% and EPS growth of approximately 12%-14%, including an estimated benefit of approximately 4 percentage points from the 53rd week. Our EPS guidance assumes an effective tax rate range of 22.5%-23%. We also expect capital spending to be in the range of $1.4 billion-$1.5 billion, which includes the impact of increases in the cost of certain building materials, as well as continued investment in our strategic initiatives and core business to support and drive future growth. With regards to shareholder returns, our board of directors recently approved a quarterly dividend payment of $0.55 per share, which represents an increase of 31%. We also plan to repurchase a total of approximately $2.75 billion of our common stock this year, reflecting our continued strong liquidity position, the benefit from the 53rd week, and our confidence in the long-term growth opportunity for our business. Let me now provide some additional context as it relates to our outlook. In terms of quarterly cadence, we anticipate both comp sales and EPS growth to be much stronger in the second half of the year than the first half. As a reminder, we are lapping a significant stimulus benefit from Q1 2021, including gross margin expansion of 208 basis points. We also anticipate ongoing cost inflation, including elevated supply chain and fuel costs. While we do not typically provide quarterly guidance, given the unusual lap and the significant inflationary environment in Q1, we are providing more specific detail on our expectations for the first quarter. To that end, we expect a comp sales decline of 1%-2% in Q1, with an EPS in the range of approximately $2.25-$2.35. Turning now to gross margin for 2022, we expect to continue realizing benefits from our initiatives, including DG Fresh and NCI. In addition, we are optimistic that distribution and transportation efficiencies, including significant expansion of our private fleet, can drive additional benefits over the year despite continued cost pressures in the near term. Partially offsetting some of these benefits are rising fuel costs as well as an expected return to recent historical rates of markdowns and shrink, all of which are expected to be headwinds in 2022. With regards to SG&A, we expect continued investments in our strategic initiatives as we further their rollouts. However, in aggregate, we continue to expect they will positively contribute to operating profit and margin in 2022, as we expect the benefits to gross margin from our initiatives will more than offset the associated SG&A expense. We also continue to pursue efficiencies and savings through our Save to Serve program, including Fast Track, and we believe these savings in 2022 will offset a portion of an expected increase in wage inflation. In summary, we are proud of our fourth quarter and full year results in 2021, which are a testament to the perseverance and execution by the team. Looking ahead, we are excited about our plans for 2022, including our outlook for sales and EPS growth, as well as our planned significant returns to shareholders via an increased dividend payout and increased share repurchases. As always, we continue to be disciplined in how we manage expenses and capital with the goal of delivering consistent, strong financial performance while strategically investing in our business and employees for the long term. We remain confident in our business model and our ongoing financial priorities to drive profitable same-store sales growth, healthy new store returns, strong free cash flow, and long-term shareholder value. With that, I will turn the call over to Jeff. Thank you, John. Let me take the next few minutes to update you on our operating priorities and strategic initiatives, including our plans for 2022. Our first operating priority is driving profitable sales growth. We have a growing portfolio of initiatives which are contributing to our strong results, as well as strengthening the foundation for future growth. Let me take you through some of the recent highlights as well as some of our next steps. Starting with our Non-Consumables Initiative, or NCI, which was available in more than 11,700 stores at the end of 2021. We continue to be very pleased with the strong sales and margin performance we are seeing across the NCI store base. Notably, NCI stores outperform non-NCI stores in both average ticket and customer traffic, driving an incremental 2.5% total comp sales increase on average in NCI stores, along with a meaningful improvement in gross margin rate. We expect to realize ongoing sales and margin benefits from NCI in 2022, and we are on track to complete the rollout across nearly the entire chain by the end of the year. Moving to our newest store concept, pOpshelf, which further builds on our success and learnings with NCI. As a reminder, pOpshelf aims to engage customers by offering a fun, affordable, and differentiated treasure hunt experience delivered through continually refreshed merchandise, a differentiated in-store experience, and exceptional value with the vast majority of our items priced at $5 or less. During the quarter, we opened 25 new pOpshelf locations, bringing the total number of stores to 55 and exceeding our initial goal of 50 stores. Additionally, we opened 11 new store-within-a-store concepts during Q4, bringing the total number of Dollar General Market stores with a smaller footprint pOpshelf store included to a total of 25 at the end of the year, and we continue to be pleased with the results. In 2022, we plan to nearly triple the pOpshelf store count and open up to an additional 25 store-within-a-store concepts, which would bring us to a total of more than 150 stand-alone pOpshelf locations and a total of approximately 50 store-within-a-store concepts. We continue to anticipate year-one annualized sales volumes for our current locations to be between $1.7 million and $2 million per store and expect the average gross margin rate for these stores to exceed 40%. In addition to the early success of pOpshelf, we have been able to take some of our learnings and apply them in our Dollar General store base, particularly in further enhancing our non-consumables offering. Overall, we are very pleased with the results from this unique and differentiated concept, and we are excited about our goal of approximately 1,000 pOpshelf locations by year-end 2025. Turning now to DG Fresh, which is a strategic multi-phased shift to self-distribution of frozen and refrigerated goods, along with a focus on driving continued sales growth in these areas. As a reminder, we completed the initial rollout of DG Fresh across the entire chain in 2021 and are now delivering to more than 18,000 stores from 12 facilities. The primary objective of DG Fresh is to reduce product costs on our frozen and refrigerated items, and we continue to be very pleased with the savings we are seeing. Notably, DG Fresh was a meaningful positive contributor to our gross margin rate in 2021, and we expect to see continued benefits in 2022. Another important goal of DG Fresh is to increase sales in our frozen and refrigerated categories. We are pleased with the performance on this front, including enhanced product offerings in stores and strong performance from our perishables department. In fact, our perishables department had a high single-digit comp increase in Q4 and contributed more comp sales dollars than any other department for both Q4 and the full year. Importantly, the sales penetration of these categories has increased to approximately 9% as compared to approximately 8% prior to the rollout of DG Fresh. In 2022, we expect to realize additional benefits from DG Fresh as we continue to optimize our network, further leverage our scale, and deliver an even wider product selection. While produce is not included in our initial rollout, we continue to believe that DG Fresh provides a potential path forward to expanding our produce offering to more than 10,000 stores over time. To that end, at the end of Q4, we offered produce in more than 2,100 stores, with plans to expand this offering to a total of more than 3,000 stores by the end of 2022. Finally, DG Fresh has also extended the reach of our cooler expansion program. During 2021, we added more than 65,000 cooler doors across our store base. In 2022, we again expect to install more than 65,000 additional doors as we continue to build on our multiyear track record of growth in cooler doors and associated sales. Turning now to an update on our expanded health offering, which consists of up to 30% more feet of selling space and up to 400 additional items as compared to our standard offering. This offering was available in nearly 1,200 stores at the end of 2021, with plans to expand to a total of more than 4,000 stores by the end of 2022. As we move toward becoming more of a health destination, particularly in rural America, our plans include further expansion of our health offering with the goal of increasing access to basic healthcare products and ultimately services over time. In addition to the gross margin benefits associated with the initiatives that I just discussed, we continue to pursue other opportunities to enhance gross margin, including improvements in private brand sales, global sourcing, supply chain efficiencies, and shrink reduction. Our second priority is capturing growth opportunities. Our proven high return, low risk real estate model has served us well for many years and continues to be a core strength of our business. In 2021, we completed a total of 2,902 real estate projects, including 1,050 new stores, 1,752 remodels, and 100 relocations. For 2022, we remain on track to execute nearly 3,000 real estate projects in total, including 1,110 new stores, 1,750 remodels, and 120 store relocations. As a reminder, we expect approximately 800 of our new stores in 2022 to be in our larger 8,500 sq ft store format, allowing for an expanded assortment and room to accommodate future growth as we respond to our customers' desire for an even wider product selection. Importantly, we continue to be very pleased with the sales productivity of all of our larger format stores as average sales per square foot are about 15% above an average traditional store. In addition to our planned Dollar General and pOpshelf growth in 2022 and included in our expected new store total, we are very excited about our plans to expand internationally with the goal of opening up to 10 stores in Mexico by the end of 2022. Overall, our real estate pipeline remains robust with more brick-and-mortar stores than any retailer in the country, and we are excited about our ability to capture significant growth opportunities in the years ahead. Next, our digital initiative, which is an important complement to our physical footprint as we continue to deploy and leverage technology to further enhance convenience and access for our customers. Our efforts remain centered around building engagement across our digital properties, including our mobile app. We ended 2021 with over 4 million monthly active users on the app and expect this number to grow as we look to further enhance our digital offerings. As with everything we do, the customer is at the center of our digital initiative. Our partnership with DoorDash is the latest example of these efforts as we look to extend the value offering of Dollar General, combined with the convenience of same-day delivery in an hour or less. This offering was available in more than 10,700 stores at the end of Q4, and we are very pleased with the early results, including our ability to generate profitable transactions as well as better than expected customer trial, strong repurchase rates, high levels of sales incrementality, and a broadening of our customer base. In addition, our DG Media Network is becoming increasingly more relevant in connecting our brand partners with our customers. To that end, we significantly grew the reach of this network in 2021, increasing from 6 million unique active profiles to more than 75 million, enabling our vendors to now reach over 90% of our DG customers through the DG Media Network. After establishing the foundation over the last few years, we are poised to meaningfully grow this business in 2022 and beyond, as we expand the program and enhance the value proposition for both our customers and brand partners while increasing the overall net financial benefit for the business. Overall, our strategy consists of building a digital ecosystem specifically tailored to provide our customers with an even more convenient, frictionless, and personalized shopping experience, and we are pleased with the growing engagement we are seeing across our digital properties. Our third operating priority is to leverage and reinforce our position as a low-cost operator. We have a clear and defined process to control spending, which continues to govern our disciplined approach to spending decisions. This Zero-Based Budgeting approach, internally branded as Save to Serve, keeps the customer at the center of all we do while reinforcing our cost control mindset. Notably, the Save to Serve program contributed more than $800 million in cumulative cost savings from its inception in 2015 through the end of 2021. Our Fast Track initiative is a great example of this approach, where our goals include increasing labor productivity in our stores, enhancing customer convenience, and further improving on-shelf availability. The first phase of Fast Track consisted of both Roll Container and Case Pack Optimization, which has led to the more efficient stocking of our stores. The second component of Fast Track is self-checkout, which provides customers with another flexible and convenient checkout solution while also driving greater efficiencies for our store associates. Self-checkout was available in more than 6,100 stores at the end of 2021. We continue to be pleased with our results, including strong and growing customer adoption rates and high scores on speed and ease of checkout. In 2022, we plan to expand this offering to a total of up to 11,000 stores by the end of the year as we look to further extend our position as an innovative leader in small box discount retail. Looking ahead, the next phase of Fast Track consists of increasing our utilization of emerging technology and data strategies, which includes putting new digital tools in the hands of our field leaders in 2022. When combined with our data-driven inventory management, we believe these efforts will reduce store workload and drive greater efficiencies for our retail associates and leaders. I also want to highlight our growing private fleet, which consisted of more than 700 tractors and accounted for approximately 20% of our outbound transportation fleet at the end of 2021. We are focused on significantly expanding our private fleet in 2022 as we plan to more than double the number of tractors we expect will account for approximately 40% of our outbound transportation fleet by the end of the year. Importantly, we save an average of 20% of associated costs every time we replace a third-party tractor with one from our private fleet. Moving forward, we believe our private fleet will become an increasingly significant competitive advantage as it gives us greater operational control within our supply chain while further optimizing our cost structure. Our underlying principles are to keep the business simple, but move quickly to capture growth opportunities while controlling expenses and always seeking to be a low-cost operator. Our fourth operating priority is investing in our diverse teams through development, empowerment, and inclusion. As a growing retailer, we created thousands of new jobs in 2021, providing career growth opportunities for existing associates and the start of a career for many others. In 2022, we now expect to create more than 10,000 net new jobs as a result of our continued growth. Our internal promotion pipeline remains robust, as evidenced by our internal placement of more than 75% of our store associates at or above the Lead Sales Associate position. We also continue to innovate on development for our teams to provide ongoing opportunities for career advancement and, in turn, meaningful wage growth. These investments include offering an enhanced college tuition benefit for our associates and their families, as well as continuing to facilitate driver training programs for associates who would like to become drivers in our private fleet. In addition to our focus on development, we continue to focus on further enhancing the associate experience and our strong workplace culture. Collectively, these investments continue to yield positive results across our organization, including healthy applicant flow and strong critical staffing levels. We believe the opportunity to start and develop a career with a growing and purpose-driven company is a unique competitive advantage and remains our greatest currency in attracting and retaining talent. Overall, we made significant progress against our operating priorities and strategic initiatives in 2021. These efforts have further strengthened our foundation and position heading into 2022 as we continue to drive long-term sustainable growth. In closing, I'm proud of the team's strong and resilient performance in 2021. As we enter 2022, we are laser-focused on executing and delivering our robust plans, which we believe will further enhance our unique combination of value and convenience for our customers while delivering strong returns for our shareholders. I want to thank our approximately 163,000 employees for their tireless dedication to fulfilling our mission of serving others every day, and I am looking forward to all we will accomplish together in the year ahead. With that, operator, we would now like to open the lines for questions. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. As a reminder, we ask that you limit it to one question and one follow-up. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question. Great. Thanks. Maybe to kick off, Todd, with a number of moving pieces between employment and inflation, could you speak to health of your low-income consumer? How do you view the opportunity to potentially take share in this environment? Just drivers of top-line improvement that you see as the year progresses within your 2.5% comp guide. Sure, Matt. Thank you for the question. Yeah, I'll first start by saying, you know, we've always said here that the health of the consumer, this low-end consumer that we serve the most here at Dollar General is usually geared and attached to whether they're gainfully employed or not. I'm happy to say that with the labor market the way it is, that she is gainfully employed, working as many hours as she would like to right now. Matter of fact, we believe that approximately, $1.20 year-over-year increase in her wages are in her wallet. That is a significant amount. Now, to your point, there are some other things, other headwinds here that we watch out for. Obviously, inflation has definitely taken a toll on some of that additional wage growth that she's seen. Recently, you know, over the last couple weeks, gas prices are up $0.70 a gallon. That we watch that very carefully. Now, we always also said that once that gas price reaches over $4 a gallon, which it has now, that we normally see the consumer stay closer to home, which bodes very well for that value and convenient message that we have out there for our core consumer and that we deliver every day. You know, that value convenient message reigns supreme at the end of the day across the company here at Dollar General and with our core customer. Again, as you think about it, tougher times for the consumer normally means that she needs us more, and we normally start to see a trade down once that occurs, and we'll be watching out for that. Again, that value and convenience really attracts that trade-in, trade-down customer. As far as the drivers of what we believe, well, our initiatives, Matt, as you know, have been very successful over the last six to seven years here at Dollar General. They're the cornerstone of why we feel confident in our guide for 2022. Obviously, a lot of years ahead of us, but those initiatives are truly the cornerstone of that. When you think again about that value and convenience message we have, if the market gets a little tighter from a labor perspective or inflation continues to pull more money out of the consumer's wallet, we feel that we're very well-positioned as we move through 2022 as well. Great. Maybe, John, as a follow-up on gross margin, just to dig a bit deeper. I guess what level of runway remains with DG Fresh in terms of the gross margin opportunity from here? Are you seeing anything in pricing in the promotional landscape as we think about your assumption for markdowns to return to historical levels? And then just last, the net of distribution and transportation efficiencies relative to fuel costs, is that a net headwind, tailwind, neutral? Just kind of trying to size those three up in terms of a net for the year. Sure. A lot of pieces there. I'll try and attack all those as I kind of walk through the puts and takes of gross margin. You know, I'll start by saying we're really pleased what we've done with gross margin in recent years. You know, as you look at 2021, it's up about 100 basis points over 2019 levels. Now, we didn't give specific gross margin guidance for 2022, but we did mention that Q1, in particular, would be pressured as we're lapping a pretty significant expansion last year of 208 basis points that certainly benefited from favorable mix fueled by stimulus. In addition to that tough lap, you know, we have cost inflation continuing in Q1, which is driven by supply chain, fuel, and product costs. To a lesser extent, a return to recent historical rates of markdowns and shrinks. Still lower than the pandemic levels, but normalizing a little bit. Certainly, there's some near-term pressures persisting in Q1 in the first part of the year. Bear in mind, as we move through the year, the lap gets easier in the second half as we're lapping the heavy inflation from this year. Just as a frame of reference, in Q4, we had about 200 basis points of added pressure to gross margin from the combination of supply chain, which was about a $100 million incremental year-over-year impact, and the LIFO provision, which was $72 million. We don't see this as structural. We anticipate some moderation in cost pressures. We're already seeing this in transportation, you know, supply chain, for instance. You know, when you look at the benefits of the initiatives and the cost reduction actions we have in place, you know, we see a growing benefit from that. For instance, if you look at private fleet, we mentioned we're gonna double that in size from the end of 2021 to the end of 2022. That drives, as Jeff mentioned, about 20% savings each time we switch from a third-party carrier to in-house. Of course, we have the growing benefit of the initiatives that Todd mentioned, which not only help the top line, but the bottom line when you think of DG Fresh, NCI, and pOpshelf. There's still, to your other question, there's still a lot of runway there as we continue to optimize DG Fresh, get the leverage from that now that we can negotiate directly on that, and we're top three vendors or customers in many cases. NCI, you know, we'll continue the rollout of that and virtually complete that this year. You have the growing benefit of pOpshelf, which we mentioned comes out of the ground with margins north of 40% and should only grow from there as we get scale. We've talked about all the other levers we have. Not to mention just our, you know, ability to leverage our scale as a limited SKU operator. You know, we've contemplated all this in the EPS guidance, which we feel very good about. While there's some near-term pressures, especially in the early part of the year, we feel great about the initiatives, the other levers we have, and we still believe we can expand gross margin over the long term. That's great color. Best of luck, guys. Our next question comes from Karen Short with Barclays. Please proceed with your question. Hi. Thanks very much. I wanted to just talk a little bit about the longer-term algorithm and relationship between sales growth and EBIT. When I look at 2022, excluding the extra week, it looks like 8% for the top line and about 6% EBIT growth. I just wanna get a sense, is that the right relationship or algorithm to think about going forward? Like, slight EBIT margin expansion off of the 9.3% that I think you're guiding to excluding the extra week. I had a bigger picture question. Sure. You know, I would say as you think about the 10%+ model, every element of that is very well intact. You know, starting at the top, you know, we've never had a bigger pipeline of new unit growth with the for everybody in discount retail, about 17,000 potential opportunities there, not to mention Mexico. We're still seeing the same great unit level economics on the top line, the bottom line, and the returns. A ton of initiatives in place to drive sales as well as we're seeing an outsized bigger impact from real estate. You know, not only are we seeing a 15% increase in sales per square foot productivity in the bigger box stores, but as we've mentioned, we're accelerating the number of new stores we're putting out there and again, seeing really good impact on comp sales from the initiatives. As you look at, you know, margin overall, operating margin overall, you know, a lot of levers, you know, as I just mentioned on Matt's question with gross margin, SG&A, we stay laser focused on that. You know, we'd mentioned in the prepared comments, you know, our Save to Serve program is alive and well. You know, since 2015, we've saved over $800 million from that. As you look at all the pieces, you know, each year might be a little bit different. I think that's the way to think about that is the unit growth we've talked about, we feel very good about and are accelerating that a bit. We're seeing, you know, we've talked before about the impact of real estate, you know, 150- 200 basis points, and we're seeing the benefit, the high end of that, and then you have the initiatives on top of that and all the levers. I feel very good about our ability to drive 10% growth over the long term. I think directionally you're thinking about it right in terms of ongoing top line strength in that 2%-4% comp range and the ability over time, we believe, to hold and cases expand our EBIT margins. Okay, that's helpful. You know, just in general, I think, you know, there's definitely been a concern that you're lapping in 2022, you know, tough discretionary comparisons. Obviously, you know, you talked about that. Wondering if you could give a little bit of color on how you think about that discretionary specifically and baked in terms of expectations, baked into your guidance. You know, it sounds like you're certainly not leaning away from discretionary in calendar 2022. Maybe just some color on that, given that that is probably a category that will be pressured in the year, this year. Sure. You know, as you think about the non-consumable sales and discretionary sales, you know, what we have contemplated in our guidance is some moderation of that. You know, we still continue to feel great about that side of the business, the growing benefit of the non-consumable initiative, as well as the scaling of pOpshelf. But what we have contemplated, given the backdrop, you know, from a macro perspective, is somewhat of a moderation of mix back toward consumables, but not going back to where they were. So holding on to a lot of the strength in that business and the mix benefit from that, but some moderation. Great. Thanks very much. Our next question comes from Simeon Gutman with Morgan Stanley. Please proceed with your question. Hey, guys. Wondering if you've given any thought to the 20% of the mix being at $1. Has there been any debate around that mix moving? Todd, you mentioned that the customer, this could be a good environment for you. I take it as you haven't seen any signs yet that there's been any sensitivity to the current inflation. We didn't hear your first part of the question, Simeon. The 20% of the merchandise mix, how do you think about that? Is there debate about changing that? The one dollar mix. Yeah, but I would tell you that, you know, every time we talk to our core customer, she tells us the same thing, how important that one dollar is so that she can round out her month. You know, we've always said here, it's an unfortunate situation, but our customer runs out of money before that month runs out. That one dollar bridges that last few days for her. Always has, and that continues to do so. What we've done is, in light of that information, also with some of the inflationary pressures that we're seeing on other goods, we've actually leaned into our one dollar price point. What you'll see if you come into our stores over the near term will be even more displays of $1 items on end caps and off shelf displays, and really pushing that side of the business because I think our customers will need us even more there. We believe that over time, we could grow that where appropriate, and not even stay at that 20% level. We feel really good about that $1 price point. The great thing is, our vendor community across the board has leaned into that $1 price point with us as well. Great. Hey, guys. This is Michael Lasser. Simeon, you got this? Yeah. I just wondered if there are any signs of trade down yet or there hasn't been any, Todd? Yeah. You know, right now, we haven't seen a lot of trade down yet. The great thing, though, Simeon, is we actually have a lot of that trade down already embedded in, and I think there'll be more as inflation comes in. The reason I say it's embedded in is that we are extremely confident and glad to see that the gains that we got during COVID, so call it the 2020 gains, we've kept a lot more of those customers than we even thought we would have kept, and that continues. Actually, we saw a slight acceleration of that as we moved through Q4. It was great to see, and we know that, based on the credit card data and our marketing against that, a lot of these customers are in that trade down area that would happen, when trade down occurs. We've got some of it already, and I believe we'll get even more as inflation continues to take hold, across the U.S. Thank you very much. Thank you. Our next question comes from Rupesh Parikh. Please proceed with your question. Excuse me, with Oppenheimer. Good morning. Thanks for taking my question. I was hoping to just touch on, you know, I guess, on the comp line. I wanted to better understand the building blocks for comp growth this year, whether you can touch on inflation, traffic, the new store contribution. The guidance implies an acceleration on the comp line as the year progresses. Just wanted to better understand, you know, what gives you confidence to drive that acceleration. Just any color there in terms of the stronger trends in the back half of the year? Yeah. I think you're thinking about it the right way as we see our comp growth accelerating as we move sequentially from quarter to quarter throughout the year. We feel great about you know, we've said before, this model works very well at 2%-4% comp, and we feel very good about the 2.5% comp guide, which would imply pretty healthy three-year stack with that. As you look at the building blocks of that, you know, what we're seeing right now is we're retaining, you know, we're exceeding our expectations in terms of what we've done in terms of retaining the new customers, holding on to those bigger basket sizes. You know, we're seeing a bigger impact from real estate, you know, at the high end of that 150-200 basis points we've talked about. As we mentioned, you know, seeing a growing impact from our initiatives as they scale. The other thing to point out is we're improving our in-stocks. As we improve our in-stocks, that's driving sales as well. You know, Todd mentioned, you know, that we're closely watching the consumer, but history tells us that, you know, we do very well in all cycles of the economy. If the consumer is pressured as they are, you know, increasingly with inflation, you know, what we've seen is that customer more productive. With high fuel prices, we've seen them shop, as we mentioned, you know, closer to home, and we've seen trade-in, all of which benefits us. When you put all these pieces together, you know, we feel great about the fundamentals of the business, and we think we're very well positioned for this backdrop to deliver that, comp we've guided to, and we're gonna go after more. Great. Maybe just one follow-up question on the CapEx line. This year, CapEx as a percent of sales is closer to 4%. I think historically, you've been in that 2.5%-3% type range. Going forward, is this the right way to think about CapEx at a more elevated level? No, great question. There's two pieces of that. We have been, you know, for the last few years, a little above 3%, but rounding down to 3%. This year, we're rounding up to 4%. There's really two things I'd point to there. One is we've stepped up our real estate. You know, we're accelerating our new unit growth, which obviously delivers great returns and helps the bottom line, but does add a little bit of CapEx. That impact is outsized this year, really due to inflation, steel inflation. It's up substantially. Still getting great returns, even with that steel inflation factored in, still getting the same returns. We've talked about that 20%-22% after-tax IRR. That really is the nearer term pressure, the commodity pressure from fixtures, HVACs, things like that, as we do these projects, that we see that coming back down over time. If you exclude the impact of that near-term inflation, that puts us back to a point where we're back to close to where we were rounding down to 3%. We don't see something structurally different here other than we have stepped up our real estate, which is a great decision, which we're pleased with. It's really the difference in the short term is that commodity inflation. Great. Thank you. Our next question is from Michael Lasser with UBS. Please proceed with your question. Good morning. Thanks a lot for taking my question. There's puts and takes with your margin outlook for this year, but if we assume you take on a little bit of leverage to buy back stock, it could imply that your operating margin is flat to maybe down 20 basis points versus last year. If that's right, have all the initiatives that you've deployed translated to Dollar General's operating margin now being about 100 basis points higher than it was in 2019? To what extent could this be eroded moving forward by a return to promotions and discounting in a broader, retail environment? Thanks. Yeah. Look, I'll answer your question. If I don't, let me know. What I would start with saying is that we continue to see the initiatives contributing to operating margin at or above what we expected. They're delivering across the board. You know, there are some near-term pressures. We talked about the puts and takes of gross margin, and as you look at the gross margin, you know, the biggest piece of that being inflation, much of which we don't believe is structural, and we see signs of that easing and certainly taking actions to make sure that eases. When you look at the SG&A side of that, you know, there, too, we don't see a structural change there. You know, we've talked about some geography as we spend a little bit of SG&A to save more gross margin. Again, those initiatives are delivering at or above what we expected. Throws off the geography a little bit. The other thing we have talked about is we did see some wage inflation above norm. You know, we've said in the past that, you know, our wage inflation was running about 3%-4% pre-pandemic. It was higher this year. As we look ahead to next year, you know, we expect it to be a little bit higher than that 3%-4%, but lower than what we saw in 2021. We're already seeing moderation there, and we're in a great spot. In terms of staffing levels. You know, as I look at our EBIT, I don't see anything, you know, structurally changing there. As I mentioned to Karen, you'll see the ability for us over the long term to, you know, modestly increase that over time while driving the top line too. I feel very good about, you know, the algorithm and our ability to manage all the levers within gross margin and SG&A. Hopefully that answers your question. It's helpful. My follow-up question is the competitive dynamics in the environment are ever so changing. The mass merchants and the grocery stores have been comping well above Dollar General for the last several quarters, which is unique in recent history. There's likely to be some changes at your big competitor. How do you see this playing out over the next few quarters? Do you see some of these share changes as just a function of the unique dynamics, and you can reassert the leadership that that Dollar General has so historically had in the marketplace? Yeah. Michael, this is Todd. I would tell you that there is nothing that we see that doesn't suggest that our share gains won't start to come back to historical levels as we move through 2022. There's nothing structural that says that our comps won't get back to you know, a more algorithmic level over time. I think you have to look at. We had well oversized gains in 2020. When you start looking on a two-year stack basis, we stack up pretty well on a comp to you know to those other classes of trade, and by far out exceed our chief competitor in the space. We feel very good. Then you've heard John and myself already talk about all these levers that we have. These are not new, right? These are ones that are well established and some newer ones that are already being embedded in our, you know, inside of our chain, where we can deliver, we believe, comp sales as we continue to move forward. First quarter is gonna be a little challenged as we've already said. As we move through the rest of the year, we feel better and better about where that comp's gonna be. Lastly, I would tell you that, your first part of the question, the competition, I would say it's very much the way it's been. I would tell you we're on a little over two years now, a pretty tame promotional environment. Obviously, we've had to take some price as others have done on an everyday basis due to some of the inflationary pressures that have been well documented out there. Matter of fact, you know, our pricing position has never been better. As I said in my prepared remarks, our indexes are as good, if not better than they've ever been. We feel great about our everyday price. Promotionally, we don't see anything in the near horizon that would say promotional pricing is going to escalate to any large degree. Thank you very much. Sure. Our next question is from Chuck Grom with Gordon Haskett. Please proceed with your question. Hey, thanks. Good morning. Todd, could you size up for us the impact that in-stocks have had on comps over the past couple of quarters, particularly in your traffic trends? I'm looking ahead where you are on the restoration of those in-stocks. Yeah, Chuck, that's a great question, and thanks for it. Yeah, we believe it had a significant impact in Q4. We called it out in our prepared remarks due to many factors. One, obviously, we had some labor challenges in Q3 and Q4 in distribution. We're happy to report that we are now back to pre-pandemic levels on staffing, so we feel good about that. It constrained our inbound and outbound. We also, if you recall, Jeff indicated in coming out of Q3 that we prioritize seasonal to ensure that our seasonal goods got onto the shelf. That slowed down our everyday goods onto the shelf. Obviously, it led to more out-of-stocks there. Now, as we move through Q4 and now into Q1, we feel much, much better about where our in-stock levels are. Are we back to historical levels yet? Not quite. I don't think anybody is. The majority of our opportunities still lie within the vendor community in that the constraints from the vendor community has continued into Q1, not nearly at the levels we saw at the end of last year. We continue to work with our vendor partners to ship on time and in full. Once we get to that point, which we believe we're working towards pretty quickly here, we'll be in much, much better shape as we move through the back half of the year. Okay, great. That's helpful. One for Jeff. You called out that sales per square foot in the 8,500 sq ft stores is 15% higher than the typical box. I was wondering if you could just unpack, you know, the delta, where you're getting that greater productivity from. Thanks, Chuck. You know, we are pleased with our larger format stores and really seeing that sales per square foot productivity. I think it goes back to what we've started a while ago, and that's really providing a fuller fill-in shop for our customers. You know, when you build a bigger store, anybody can do that, but you gotta have what the customer wants. You got to have a customer that wants more from you. This 8,500 and above sq ft store allows us to really expand all the best of those merchants have brought to bear. We've got expanded wellness. We've got our NCI in full. We've got our full cooler assortment in these stores as well, an expanded queue line and quite frankly room to grow. We also have produce in many of these stores as well. When you step back and you look at that's really what has driven the productivity in these stores. I can tell you right now that we're just getting started here, and we look to be able to further serve our customer by listening to what she's asking for and leading on our best-in-class merchant team, our supply chain team and operators that can execute this across a wide group of stores. We feel real good about where that is headed in the future. That's great. Thank you. Our final question comes from Edward Kelly with Wells Fargo. Please proceed with your question. Hi, guys. Good morning. Thanks for all the great color today. One quick one to start on SNAP. There's been, you know, a lot of investor anxiety around, you know, reduction in SNAP benefits, what it means for you because it, you know, has grown considerably as a percentage of sales. What are you seeing as these payments have decreased? Yeah, we've seen a modest decrease as we move through the year. It peaked middle of the year around May. We've seen it come down a little bit as some of the states rolled off the emergency allotments. With the Thrifty Food Plan benefit still in place, it's remained elevated. If you look at Q4 this year versus Q4 last, still well above where it had been, just not quite where it was at the peak in May. As we move into next year, you know, we're anticipating it to continue to moderate somewhat. However, that may be tapered just based on the cadence of when states roll off of that. As we look ahead to next year, what we're assuming is that the benefit isn't as much as it was this year, but still elevated to pre-pandemic levels. Again, we've been taking share over a long time with these SNAP customers as we serve them so well and you'll continue to see that as a key part of our business. Great. Just a, you know, follow-up on self-distribution. You talked about, you know, significant expansion, doubling this year. Can you talk a bit more about the benefits, you know, operationally? You mentioned significant competitive advantage, you know, maybe more detail on what you mean there. From a P&L perspective, you know, this 20% cost savings, is that 20% of domestic freight? Like, is that how we think about what you're saying there? Hey, Ed, this is Jeff. First of all, thank you for the question. You know, our private fleet is something we started several years ago, and I think you nailed some of the reasons why we're so excited about it. You know, first of all, our drivers are on the same team as our store teams, our merchant teams, and that certainly just brings a better service to the overall operation. Also it allows us much more flexibility and our control over the environment. When you think about it right now, with about 20% of our outbound fleet, we're pleased with that, but we're even more excited about where this thing goes, and we like to use that term early innings. We're certainly in the early innings of this initiative. As you mentioned, with the 20% reduction in our outbound transportation, every time we convert, it's obviously a very good return. As you think about this year, we're pleased to be at doubling that to about 40% of our outbound transportation needs, and we look to grow that even further over time, as we scale this initiative and really distance ourselves and provide that competitive advantage, because it is an incredible lever that we're able to pull and excited that we started this several years ago. Great. Thanks, guys. We've reached the end of the question and answer session. I'd now like to turn the call back over to Todd Vasos for closing comments. Well, thank you. Thanks for everyone joining the call and for all the questions. Thanks for your interest in Dollar General. I'm proud of this team which continues to execute at a high level, even in a consistently evolving environment. As you heard today, we're excited about our initiatives and plans for 2022, which we believe positions us well to grow same-store sales, new stores, operating profit margins, and market share over time. Overall, a mature retailer in growth mode, we believe this company is in a very strong position, which I think speaks to our strategy, our resilience, and the strength of our culture and our people. As I said earlier, I've never felt better about the underlying business model, and I can't wait to see what 2022 holds for Dollar General. Thank you for listening, and have a great day. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.