Good morning. My name is Robert, I'll be your conference operator today. At this time, I would like to welcome everyone to Dollar General's fourth quarter 2022 earnings call. Today is Thursday, March 16th, 2023. All lines have been placed on mute to prevent any background noise. This call is being recorded. Instructions for listening to the replay of the call are available in the company's earnings press release issued this morning. I'd like to turn the comments over to Mr. Kevin Walker, Vice President of Investor Relations. Kevin, you may begin your conference. Thank you, good morning, everyone. On the call with me today are Jeff Owen, our CEO, 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 2021 Form 10-K, filed on March 18th, 2022, and any later filed periodic report, and in 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 the call unless required by law. 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 Jeff. Thank you, Kevin, and welcome to everyone joining our call. I want to begin by thanking our associates for their dedication to serving our customers and communities this year. I am inspired by this team's commitment to our mission of serving others and the passion they have for helping our customers save time and money every day. Our fourth quarter performance was led by strong comp sales growth of 5.7%. While this result was below our expectations, our performance included market share gains in both consumables and non-consumables, and contributed to a net sales increase of 17.9% to $10.2 billion. Our Q4 comp sales were driven by an increase in average basket size, primarily attributable to inflation and partially offset by a slight decrease in customer traffic, primarily due to a decrease in customer traffic in late December. Similar to recent quarters, average units per basket were down. Notably, both November and January comp sales at 6.7% and 6.5% respectively, were within our expected range of 6%-7% for the quarter. Our December sales performance was negatively impacted by Winter Storm Elliott, which had the most significant effect on our stores in the final days leading up to Christmas. The quarter was also impacted by greater than anticipated inventory damages, which contributed to diluted EPS results that were below our expectations. The storm had some damages impact, we also incurred higher damages than expected as we worked through the residual impact of the storage capacity constraints and related store and distribution inefficiencies we experienced during the second half of the year. Although we expect some of these related impacts to be with us through the end of Q1, we are pleased to have the storage capacity constraints largely behind us, which we believe positions us well moving forward. Turning to a few highlights of the 2022 fiscal year. Net sales increased 10.6% to $37.8 billion and included a benefit of approximately 2 percentage points or $678 million in sales from the 53rd week. Comp sales for the year increased 4.3%, driven by strong growth in basket size. Although a significant portion of the basket growth was attributable to inflation, we were pleased to see an average basket size at the end of the year of more than five items and nearly $17. The team accomplished a great deal in 2022. We closed the year with significant progress on our strategic initiatives and operating priorities while achieving several key milestones in Q4 and the weeks thereafter. We were particularly excited to celebrate the opening of our 19,000th store in Joplin, Missouri in January as we continue to support our customers with our unique combination of value and convenience in their hometown communities. We also completed the initial rollout of our Non-Consumable Initiative, or NCI, with the offering now in nearly all of our stores across the chain. We made strong progress in our supply chain, reducing our storage capacity constraints and improving operations during the quarter. More specifically, as we said we would do, we added significant capacity in Q4, bringing nearly 3 million sq ft of distribution capacity online. These efforts culminated with the opening of our newest distribution center in Blair, Nebraska during the quarter. Also wanna highlight that we have started 2023 with the opening of our first store in Mexico. While the store has only been open a few short weeks, we are very encouraged by the early response from our new customers. These achievements are a testament to this team's hard work and continued focus on execution and innovation as we continue to deliver on our mission of serving others. Turning now to an update on our customer. In addition to adjusting the mix of their baskets, we continue to see customers shift spending to more affordable options, including our private brands, which represent more than 20% of our total sales. Within consumables, private brand growth, both in absolute dollars and penetration, was the highest in the fourth quarter. We also increased our share of wallet and share of trips across all segments of our core customer in Q4, and we believe we will be increasingly important to them in the year ahead. With regard to trade and behavior, customers and income brackets above our core customer are shopping with us at an increasing rate, underscoring our belief that our value and convenience proposition resonates with a broad spectrum of customers. We remain focused on our goal to be priced at relative parity with mass merchants, and we continue to feel very good about our price position relative to competitors and all classes of trade. Furthermore, given the strong demand from customers, we remain committed to offering products at the one dollar or less price point. Notably, during Q4, our comp sales were over 30% in our Value Valley set, which is comprised entirely of items at the $1 price point. Overall, we continue to be pleased with the strong performance of this program and the value it offers to our customers. In addition, we believe we are well-positioned to continue serving both new and existing customers, and we are moving with great intentionality to build on our momentum. To this end, we are excited about our plans for 2023. Building on the investments we made in 2022, we plan to make a larger, targeted incremental investment of approximately $100 million in our stores this year. This investment will primarily consist of incremental labor hours to support our expectations regarding consistent store standards while further enhancing the associate and customer experience. In turn, we believe this investment will position us to drive greater on-shelf availability and capture additional market share while amplifying the potential of our initiatives and ensuring our readiness for our growing customer base. With the progress we have made in the supply chain, the prior investments we have made in wages, and the growing customer engagement we are seeing, we believe we are well-positioned to see a meaningful return on this investment. We operate in one of the most attractive sectors in retail, and we believe our innovation will continue to distance and differentiate Dollar General from the rest of the retail landscape. In summary, we are excited about our plans to deliver strong growth in 2023, while also making significant and deliberate investments in the business. We believe our customer and communities will need us even more as we move throughout 2023. As a mature retailer in growth mode, we are well-positioned to serve them while also creating long-term value for our shareholders. With that, I will turn the call over to John. Thank you, Jeff. Good morning, everyone. Now that Jeff has taken you through a few highlights of the quarter and full year, let me take you through some of the 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 Jeff already discussed sales, I will start with gross profit. For Q4, gross profit as a percentage of sales was 30.9%, a decrease of 35 basis points. This decrease was primarily attributable to an increased LIFO provision, a greater proportion of sales coming from the consumables category, and an increases in inventory shrink, damages, and markdowns, partially offset by higher inventory markups and a reduction in transportation costs. Of note, product cost inflation continued as a significant headwind, resulting in a LIFO provision of approximately $164 million during the quarter and approximately $517 million for the full year. SG&A, as a percentage of sales, was 21.7%, a decrease of 29 basis points. This decrease was driven by expenses that were lower as a percentage of sales, the most significant of which were retail occupancy costs, incentive compensation, and retail labor. These were partially offset by certain expenses that were greater as a percentage of net sales in the current year period, primarily utilities. Moving down the income statement, operating profit for the fourth quarter increased 17.1% to $933 million. As a percentage of sales, operating profit was 9.1%, a decrease of 6 basis points. Our effective tax rate for the quarter was 23.2% and compares to 21.2% in the fourth quarter last year. This higher effective income tax rate was primarily due to decreased income tax benefits associated with the stock-based compensation compared to 2021. Finally, EPS for the fourth quarter increased 15.2% to $2.96. For the full year, EPS increased 5% to $10.68 and included an estimated positive impact of approximately 4 percentage points from the 53rd week. 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 $6.8 billion at the end of the year, an increase of 20.4% overall and 14.3% on a per store basis. This increase continues to reflect the impact of product cost inflation as well as a greater mix of higher value products, particularly in the home and seasonal categories, primarily due to the continued rollout of NCI as well as the earlier receipt of seasonal goods. While inventory growth is still elevated, the pace is moderating as we expected. Notably, our Q4 inventory growth rate per store was essentially half of what it was in Q3. Looking ahead, we anticipate more normalized growth rates as we move through 2023. Importantly, we continue to believe the quality of our inventory is in good shape. In 2022, the business generated cash flows from operations totaling $2 billion, a decrease of 31%, which was primarily attributable to higher inventory levels. Total capital expenditures were $1.6 billion and included our planned investments in new stores, remodels and relocations, distribution and transportation projects, and spending related to the strategic initiatives. During the quarter, we repurchased 4.5 million shares of our common stock for $1.1 billion and paid a quarterly dividend of $0.55 per common share outstanding for a total payout of $121 million. At the end of the year, the remaining share repurchase authorization was $1.4 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 in 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 the fiscal 2023 year. We anticipate the challenging economic and operating environment to continue into 2023, but we believe we are well-positioned to drive strong growth as we move throughout the year. For 2023, we are reiterating the financial guidance we provided on February 23rd, 2023, and providing additional financial guidance to include the following expectations. Net sales growth in the range of approximately 5.5%-6%, including an anticipated negative impact of approximately 2 percentage points due to lapping the 2022 53rd week. Same for sales growth in the range of 3%-3.5%, and EPS growth in the range of approximately 4%-6%, including estimated negative impacts of approximately 3 percentage points due to higher interest expense and approximately 4 percentage points due to lapping the 2022 53rd week. Our EPS guidance assumes an effective tax rate in the range of approximately 22.5%-23%. We also expect capital spending to be in the range of $1.8 billion-$1.9 billion, which includes the impact of significant inflation in the cost of certain building materials, construction of new distribution centers, and continued investment in our strategic initiatives and core business to support and drive future growth. With regard to shareholder returns, our board of directors recently approved an increased quarterly dividend payment of $0.59 per share. We also plan to repurchase a total of approximately $500 million of our common stock this year. This is a lower amount as compared to recent years, but consistent with our capital allocation priorities and reflects our commitment to our current credit rating, our continued strong liquidity position, and 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 expect EPS growth to be much stronger in the second half compared to the first half. This is due in part to our expectation of continued headwinds from sales mix pressure, higher interest expense, and increased shrink and damages as we move through the first half of the year. We anticipate certain of these headwinds to be most pronounced in Q1, including an estimated year-over-year increase in interest expense of approximately $40 million, inventory damages, and residual impacts of the storage capacity constraints and related inefficiencies that Jeff mentioned earlier. In addition, we expect the year-over-year net impact of the labor investment to be most significant in Q1 as we don't begin lapping last year's smaller investments until Q2, and we believe the benefits of the incremental labor will become more significant later in the year. As we move into the back half, we also anticipate a benefit from lapping the significant supply chain costs and Winter Storm impacts from the second half of 2022. Turning now to gross margin for 2023. In addition to the material benefit from lapping the increased supply chain expenses in the second half of 2022, we expect significant benefits from greater distribution center capacity and productivity, lower carrier rates, expansion of our private tractor fleet, and other distribution and transportation efficiencies. We also expect to continue realizing benefits from our initiatives, including DG Fresh and NCI. We anticipate a significant contribution from our DG Media Network, which Jeff will discuss in more detail in a moment. Partially offsetting some of these expected benefits are the anticipated sales mix pressure and increased inventory shrink and damages I mentioned, as well as increased markdowns as we return to rates more in line with historic norms. With regard to SG&A, we expect continued investments in our strategic initiatives as we further their rollouts. In aggregate, we continue to expect they will positively contribute to operating profit and margin in 2023, as we expect the benefits to gross margin from our initiatives will more than offset the associated SG&A expense. As Jeff noted, we plan to make an incremental investment of approximately $100 million in our stores, primarily through additional labor hours. While this investment will pressure SG&A in 2023, we believe it is the right thing for the business and will drive stronger in-store execution, positioning us well to build on the momentum we have with our customers. We expect a headwind from inflationary pressures in our business, though we continue to pursue efficiencies and savings through our Back to Basics program, including Fast Track. In closing, we are grateful for the team's hard work to deliver for our customers in 2022. Looking ahead, we are excited about our growth plans for 2023, including strong sales and operating profit while simultaneously making significant and deliberate investments in the business. 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 for the long term. We are 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 back over to Jeff. Thank you, John. Let me take the next few minutes to update you on our operating priorities and strategic initiatives, which have transformed this company in recent years, resulting in strong growth and enhanced profitability. Our first operating priority is driving profitable sales growth, starting with NCI. With the initial rollout phase now complete, we will focus on continuing to refine the assortment and enhance the treasure hunt offering to provide value to our customers in the non-consumable categories. Overall, we are very pleased with the success of NCI, including market share gains and non-consumable sales in Q4. Moving to our popshelf store concept, 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 majority of our items priced at $5 or less. During the quarter, we opened 37 new popshelf locations, bringing the total number of stores to 140 at the end of 2022, located within 14 states. While sales in this economic environment have been somewhat softer than our earlier results, we continue to be pleased with the customer response. Looking ahead, we plan to more than double the popshelf store count in 2023, bringing the total number of popshelf stores to nearly 300 by year-end, and we are excited about our goal of approximately 1,000 locations by year-end 2025. Turning now to DG Fresh, which is a strategic multi-phase shift to self-distribution of frozen and refrigerated goods, along with a focus on driving continued sales growth in these areas. We are now delivering perishable products to more than 19,000 stores from 12 facilities, and we continue to be pleased with the cost savings from this initiative and importantly, the significantly enhanced profitability of our perishables offering. In addition to capturing cost savings, DG Fresh also aims to increase sales in 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, which had our strongest rate of comp sales growth during 2022. Going forward, we expect to realize additional benefits from DG Fresh as we continue to optimize our network, further leverage our scale, deliver an even wider product selection, and build on our multi-year track record of growth in cooler doors and associated sales. 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 2022, we offered fresh produce in more than 3,200 stores, with plans to expand this offering to a total of more than 5,000 stores by the end of 2023. DG Fresh has also extended the reach of our cooler expansion program. During 2022, we added more than 66,000 cooler doors across our store base. We plan to install a similar number of cooler doors in 2023. Importantly, despite the meaningful improvements we have made and savings we have realized to date as a result of DG Fresh, we believe we still have an opportunity to drive significant additional returns with this initiative in the years ahead. Turning now to an update on our health initiative, branded as DG Wellbeing. As a reminder, the initial focus of this is an expanded health offering, which consists of approximately 30% more selling space and up to 400 additional items as compared to our standard offering. This offering was available in nearly 4,400 stores at the end of 2022. We plan to expand to a total of more than 5,500 stores by the end of 2023. Looking ahead, our plans include further expansion of our health offering and testing of our mobile clinic, with the goal of increasing access to basic healthcare products and ultimately services over time, particularly in rural America. Finally, we also plan to make significant enhancements to our private brand offering in 2023, as we know how important these value offerings are for our customers. We are increasing private brand offerings across many important categories, including candy and snacks, perishables, pet food, and over-the-counter healthcare products. We believe these products will further differentiate Dollar General in the marketplace as we look to provide our customers with tremendous value on quality products. In addition to the initiatives I just discussed, as well as the anticipated supply chain efficiencies I mentioned earlier, we continue to pursue other opportunities to enhance gross margin, including improvements in global sourcing as well as shrink and damage reduction. Our second priority is capturing growth opportunities. Our proven high return, low risk real estate models has served us well for many years and continues to be a core strength of our business. In 2022, we completed a total of 2,961 real estate projects, including 1,039 new stores, 1,795 remodels, and 127 relocations. For 2023, our goal remains to execute approximately 3,170 real estate projects in the United States across our Dollar General and popshelf banners, including 1,050 new stores, 2,000 remodels, and 120 store relocations. Notably, this would be the most real estate projects we have executed in one year. Our ability to innovate on store formats continues to be an important strength of the business, and we expect to leverage multiple formats to drive strong returns in the year ahead. Approximately 80% of our new stores and nearly all of our relocations will be in one of our larger store formats, which continue to drive increased sales productivity per square foot as compared to our traditional store. With regard to remodels, approximately 80% will be in our DGTP format, which provides the opportunity for a significant increase in cooler count, as well as the ability to add fresh produce in many stores. In addition to our planned Dollar General and popshelf growth, we are excited about our international expansion. We were pleased to open our first Mi Súper Dollar General in Monterrey, Mexico last month, and we have been very encouraged by the customer response and community reception we have seen so far. Looking ahead, our goal is to have approximately 20 stores serving underserved communities in northern Mexico by the end of 2023, as we look to leverage our brand awareness while extending our value and convenience proposition to a customer base that is similar to our core customer in the United States. Overall, our real estate pipeline remains robust and with more U.S. brick-and-mortar stores than any retailer, 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 customers. Our efforts remain centered around creating a digital front porch for our customers as we look to continue building engagement across our digital properties, including our mobile app. We ended 2022 with approximately 4.5 million monthly active users on the app and expect this number to continue to grow as we look to further enhance our digital offerings. Our partnership with DoorDash continues to serve us as an important extension of the value offering of Dollar General, combined with the convenience of same-day delivery in an hour or less. DoorDash is available in nearly 14,000 stores. We anticipate extending this offering to an additional 1,000 stores in 2023. We are pleased with the incremental sales growth attributed to this partnership, as well as its profitability. We believe we have an opportunity to drive even stronger growth moving forward. In addition, we are excited about the continued growth of our DG Media Network. We are seeing significant interest and participation from CPG companies and brands who are seeking to connect with our more than 90 million unique customer profiles, especially rural customers, who represent about 30% of the country. We expect our DG Media Network to grow significantly in 2023, as we expand the program and enhance the value proposition for both our customers and brand partners, while substantially increasing the overall net financial benefit for the business. 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 approach, internally branded as Back to Basics, keeps the customer at the center of all we do, while reinforcing our cost control mindset. Our Fast Track initiative is a great example of this approach. The first phase of this initiative, which included roll container optimization and self-checkout, is focused on enhancing customer convenience and labor productivity in our stores. Self-checkout, which provides customers with another flexible and convenient checkout solution, was available in more than 11,000 stores at the end of 2022. We continue to be pleased with our results, including strong customer adoption rates. Looking ahead, our goal is to have a self-checkout offering in more than 13,000 stores by the end of 2023, including the full self-checkout option in more than 2,000 stores as we look to further extend our position as an innovative leader in small box discount retail. Moving forward, 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. When combined with our data-driven inventory management, we believe these efforts will drive greater efficiencies for our retail leaders and their teams while laying the foundation for additional phases of Fast Track in the future. We also continue to reduce costs through the expansion of our private tractor fleet, which is one of the largest private retail fleets in the U.S. Our fleet consisted of more than 1,600 tractors at the end of 2022 and accounted for more than 40% of our outbound transportation needs. Looking ahead, we plan to have more than 2,000 tractors in our private fleet by the end of 2023, which would account for more than 50% of our outbound transportation fleet. Overall, 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 more than 10,000 new jobs in 2022 while continuing to drive opportunities for personal and professional development and, ultimately, career advancement. Our internal promotion pipeline remains robust, as evidenced by internal placement rates of more than 70% at or above the lead sales associate position. Additionally, more than 10% of our growing private fleet team, which nearly doubled in size in 2022, began their careers with us in either a store or distribution center. We continue to have great success hiring the talent we need, and we are pleased with our staffing levels and applicant flow. Ultimately, we believe the opportunity to start and develop a career with a growing and purpose-driven company is what sets Dollar General apart from the competition and remains our greatest currency in attracting and retaining talent. We added incredible individuals across the organization in 2022 as we grew teams in our stores, distribution centers, private fleet, and at our store support center, while also adding a local team in Mexico to support our new customers in those communities. In addition to new opportunities, we have made significant investments in our people, including raising average hourly retail wages by approximately 23% over the last three years and investing over 4 million training hours in 2022 to promote education and development. The people of Dollar General are our greatest strength and the driving force of this company. In closing, we made great progress against our operating priorities and strategic initiatives in 2022 while making a difference in the lives of our customers. As we enter 2023, we are excited about our robust plans for growth, which we believe will further enhance our ability to serve our customers in meaningful ways. We are the innovation leader in our space, we are laser-focused on executing at a high level to continue driving long-term sustainable growth while delivering strong returns for our shareholders. Finally, I want to thank more than 170,000 employees for their commitment to serving others every day, I am looking forward to all we will accomplish together in 2023. 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. 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. As a reminder, we ask you to please limit to one question and one follow-up if necessary. 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 Simeon Gutman with Morgan Stanley. Please proceed with your question. Hey, guys. Open-ended question, Jeff, for you. The business has executed well over a long period of time. Last couple of quarters, we've had some, you know, missteps or things that haven't gone to plan. Not all of that, I think, is clear to us or the street. Yet, you know, all these growth initiatives are still happening at the same time. The open-ended question is, have you debated or is it debate the balance of sort of the growth against investments with focusing on the core? Well, Simeon, thank you for the question. I'd first wanna say, certainly the last two quarters have been challenging, and I can tell you we're disappointed in our results. This team takes great pride in delivering on our commitments, and we've been doing that for the almost 30 years I've been here. That is something that is not changing. I can tell you, we have a tremendously deep and outstanding team that's laser-focused on executing and innovating over the long term. Certainly, we have faced some challenges, but you know what we do here at Dollar General is we control what we can control, and that has allowed us to emerge even stronger as we move forward. As I think about our balance between execution and innovation, one of the things I think it's important to remember is we have a long track record of execution and this team will continue to deliver on that. On the innovation front, we don't do things on the side of our desks. As we do innovate, one of the things that our team does, more than anything is, as you know, capital is not an issue for us. It's all about organizational capacity. I think the team has done an excellent job of making sure that we've dedicated the resources, the focus, and the time to be able to grow this foundation. It certainly served us very well. You know, if you think about these challenging times we're in right now, this company is in a much different place. As our customer has gravitated towards more consumables, the investments we've made in our strategic initiatives have allowed us to serve her even better and more profitably. As we look forward, we're excited about some of the investments we announced today, which will be on top of the strategic investments we've made previously, which has put us in a very, very enviable position of having a rock-solid foundation strategically and a laser-focused eye on execution. This team's committed to delivering that as we look forward into 23 and beyond. The one follow-up to that is the $100 million in wages, I don't think is a big surprise, but it was maybe in that it's hours and not rates. Can you talk about that trade-off or the balance between those two and where, I guess, you feel comfortable where you are on rate? Yeah. We absolutely do, Simeon, that's a great distinction. You know, here at Dollar General, for the 85 years we've been around, the store's always been the company. Our ability to serve local communities is something that we do better than anybody. We take great pride in that. When you think about the investment that we're very excited about, the reason why it's in hours rather than wages is because we've been paying competitive wages for many years. You heard in my prepared comments that our wages have increased over 23% over the last three years. Our ability to attract and retain talent remains one of our core competencies. The other thing you gotta remember is where our stores are located. They're located in rural communities, 75% are in communities of 20,000 or less, and we provide career growth opportunities that are unmatched in retail, which leads to our staffing levels being very robust, which we mentioned. That gives us the opportunity, because we're in such a good position, to invest in the hours. As we think about hours, we're pleased at what we believe this will do to elevate our store standards and our consistency, which we believe, the customer will benefit and the associate will benefit. As we move throughout 2023, when you combine the improvements we're making in our supply chain, which really gives us the timing to do this, and you combine that with the in-stock improvements, our customers will begin to see our standards improve, our on-shelf availability will improve, and we'll be ready to serve that growing customer base that we're really pleased that we're seeing. That's what gives us the confidence in this. We feel this is the right level of investment. The reason we feel that way is because we've been testing and learning this in 2022. You know Dollar General very well. We don't do things just on a whim. We test and learn. We've been doing that in 2022. We liked what we saw, and we wanted to make sure our supply chain was in a position where we could take advantage of the ability to elevate the experience for the customer while we flow goods freely to the stores. Right now, we're in a good position to do that as we enter 2023, and we're excited about what this is gonna do for the customer and ultimately, the return we're gonna see over time. Thank you. Thank you. Our next question is from Matt Boss with JPMorgan. Please proceed with your question. Great, thanks. Jeff, could you speak to recent behavior that you're seeing from the low-income consumer or maybe any changes in the ranking of their priorities from those customer surveys that I know you run regularly? John, help us to think about the cadence of comps as we think about the year or just any color on the first quarter same-store sales or any comments on business to date, just relative to that 3%-3.5% full-year forecast? Well, thanks, Matt. I'll start, then I'll kick it over to John. As you think about the customer, you know, one of the good things about Dollar General is, we're an all-weather brand, and we've shown over the last three decades how we can serve that customer in any economic environment. What we're seeing right now with our customer is, the best news we have is that she's still employed. As we've talked about for many years, that is the single most important factor to her economic health. We are certainly, as we talk to our customers, and as you know, Matt, we do this very, very frequently, and our digital capabilities allow us to do it in many different ways, which we're pleased. We're seeing that she's worse off financially, and it's primarily due to food inflation. Obviously, as you think about how that changes her behaviors, one of the things we're seeing is she's relying more on savings, credit cards, and also borrowing money, quite frankly, from friends. As that shows up in the store, what we're seeing in the shopping behavior is that translates into our customer coming more often. She's buying fewer items on occasion. I got to tell you, one of the things we're very, very pleased with is the fact that we are still leaning hard into our dollar price point, and we're there for that customer. As you saw in our prepared comments, that is resonating extremely well with her, as you saw from the comp sales we're seeing in that category. Also we're seeing her lean into private brands and we're seeing her shift her purchases more to consumables. As you know, our core customer, she's the smartest customer, I believe, in retail, and she figures this out over time. Our box is more relevant than ever as a result of the investments we've made over the last several years. That allows us to go where the customer wants us to go and do it more profitably. That's a very enviable position for us, and I think our market share gains kind of show that. That's kind of what we're seeing from the customer standpoint, and certainly there's some near-term challenges that have just recently emerged. I'll let John talk about that in the Q1. Yeah. In terms of the customer, you know, as Jeff said, we're continuing to see an increasingly economically strained customer, and we're seeing, you know, shopping behaviors indicative of this environment. You know, the two recent events we're monitoring is the termination of SNAP benefits, the emergency waivers in the remaining states, coupled with lower tax refunds in recent weeks. It's possible, you know, this could further pressure the low-income customers somewhat in the, in the near term. Remains to be seen. You know, we didn't see an impact last year. Some rolled off, but the customer's in a different place now. We'll carefully monitor that. You know, we continue to believe that the customer needs us even more in tough environments as history has shown, and our full-year guidance is reflective of all we know today. In terms of the shape of the year, you know, I'll kind of talk to first half, second half, and then Q1, both in terms of sales as well as earnings. As you look at the shape of the year, you know, as we indicated, it's really a back half story for EPS growth. Now we're expecting sales comp to be relatively even between the first half and the second half, slightly higher in the second half. We expect continued headwinds, as we mentioned, from sales mix pressure, higher interest expense, and increased shrink and damages as we move through Q1 or rather the first half. In the second half, we anticipate pretty sizable benefit from lapping the significant supply chain costs and Winter Storm impacts from the second half of 2022, as well as the benefit of the initiatives that we're driving. As you look at Q1, we mentioned that, you know, we anticipate certain headwinds to be most pronounced in Q1. That includes the estimated year-over-year increase in interest expense, which we quantified as $40 million, as well as inventory damages, and then the residual impact of the storage capacity constraints and related supply chain inefficiencies we've mentioned. The other piece is with regard to the labor investment. You know, we expect the year-over-year net impact pressure from that to be most significant in Q1. That's because we don't begin lapping last year's smaller investments until Q2 and believe the benefits of the incremental labor will be more significant later in the year. Great. Maybe just a follow-up, John, on the balance sheet. Could you just update us on free cash priorities? What is the multi-year debt leverage target? How best to think about CapEx as a percentage of sales moving forward and just share repurchase as a use of cash going forward? Sure. You know, I'll start by saying that our capital allocation priorities have not changed. Our first priority remains investing in the business. You know, when you have high return growth opportunities like new store growth, remodels, and our strategic initiatives, that's where we focus our capital. You know, then our second priority is then returning the excess cash to shareholders based on the excess cash and debt capacity, paying a competitive dividend as we increased this quarter, and then buying back shares with the remaining excess cash and debt capacity. We remain focused on protecting our current investment-grade credit rating. By keeping our adjusted debt to EBITDAR around three. In terms of CapEx, you know, that is up a bit this year. We guided to $1.8 billion-$1.9 billion. Really includes the impact of pretty significant inflation, you know, particularly when you think of steel as we accelerate the unit growth story here, the remodels as well as build. We're working on three distribution centers here, which is gonna help our capacity. It takes some capital to do that, but we see great returns in these. You know, as you look at the stores, not only are we doing more stores, we're doing bigger stores. We love what we see with these bigger stores with both more sales, more profit per store. A little more CapEx, but really like the return from these. I think that's the way to think about our capital allocation priorities and the drivers. Our next question is from Peter Keith with Piper Sandler. Please proceed with your question. Hey, good morning, everyone. You had commented, just in one of the last questions around tax refunds and SNAP as potential headwinds. I was hoping you could also address the Social Security cost of living increase that kicked in at the beginning of the year. Has that been any tailwind to your business that you've noted so far? Yeah, you know, I'll elaborate on SNAP a little bit, and then I can talk about tax refunds and then talk about COLA. You know, in terms of SNAP, it's interesting. You know, you had a increase, pretty good increase in the tender over the last few years since the pandemic as states enacted the emergency allotment benefits. Over the last couple of years, we've seen about 18 states roll off of this, some of our key states. What we saw is, with the elimination of this, we saw an offset in other tender methods. We didn't see an overall impact to our sales. You know, what we are monitoring, though, is that coupled with the tax refunds, which are lower in general. They're a little bit ahead in terms of the number of returns filed, but per return, what we're seeing so far and everybody's seeing is a lower return overall in terms of the dollar. We're monitoring the two. Too early to call, but monitoring if those two and where the customer is at right now has a different impact remains to be seen. In terms of COLA, you know, we did see some bump from COLA, particularly those consumers in those stores, you know, that over-index with that consumer that receives benefits based on COLA. I would say, while a benefit, we saw some bump, not a significant impact. Okay, thank you very much. I wanted to ask you a little bit about the LIFO impact. $517 million in the full year is pretty meaningful headwind that you've experienced. I guess if the Fed's gonna achieve their mission and moderate inflation here over the next year or two, you should probably have less of a LIFO charge. Do you have any LIFO benefit or lower charge here factored in for 2023 at this point? Yeah, you know, the way to think about this is very significant LIFO charge last year. We don't expect a deflationary environment this year, so we do expect a LIFO charge, but we're assuming a more moderate LIFO charge, so less of a headwind this year. I think one thing to just bear in mind as you think about the year-over-year, you know, we did mitigate where we could the LIFO charge by taking targeted pricing actions as we saw the market move. That mitigated the impact of that. I wouldn't consider this fully a tailwind, but certainly less of a headwind as we go into this year. Okay, thank you very much. Our next question is from Scot Ciccarelli with Truist Securities. Please proceed with your question. Hi, guys. First, can you just clarify, John, like, are you expecting earnings to actually be down in the first half or just lower? Then my main question is, we've seen a pretty significant decrease in payables inventory over the last couple quarters. This quarter, for example, inventory was actually up over $1 billion. Payables were actually down year-over-year. Can you just provide any more color on what's happening there? Do you expect that to ramp up to, you know, kind of the payables inventory to ramp up back up to historical levels? Or is there some sort of structural change, whether it's mix or capacity changes, et cetera, that is influencing that? Thanks. Yeah. In terms of the, you know, cadence of the year, what we said is it really is a back half story. You really are gonna see the growth in the back half of the year. You know, we're not anticipating a sizable drop in the first half. You know, we're looking at it to be, you know, modestly up to flattish. It's really a back half story in terms of the earnings. In terms of the AP to inventory, you know, what we have seen is the driver that is really higher inventory levels coupled with the timing of payments. You know, as you look at the timing of payments, one of the things, for instance, that impacts that is with the 53rd week, it then pulls in the week 1 rent payment. As we look, you know, further, we expect inventory levels to normalize. You know, as you look at in Q4, we saw our inventory per store drop in half. You know, it was 14% on a per store basis, which was about half the growth rate we saw in the previous period or pre-previous quarter. Again, it reflects the same drivers. It's really the product cost inflation and a greater mix of higher value products, particularly in NCI, as we completed the rollout of that. Important thing to note here is it is seasonal goods. These or early received seasonal goods was our other driver. It's important to note that these are evergreen type products which aren't time sensitive. We feel really good about the quality of the inventory, the ability to move through that, and expect this to continue to normalize as we move through the year. Okay, very helpful. Thank you. Our next question comes from Rupesh Parikh with Oppenheimer. Please proceed with your question. Good morning, thanks for taking my question. I also wanted to ask on CapEx. Historically, CapEx has been about 3% of sales, and last year and this year it's above 4%. Just wanna get a sense of, you know, where you think the normal level of spending could be in a, in a normalized environment as a percentage of sales or any other commentary. Sure. You know, again, getting back to the capital, a big driver of that was the inflation as well as the stepped-up real estate and the number of projects we're doing in terms of DCs. You know, working on three DCs in one quarter. Again, feel great about the returns of these. You know, I don't wanna speculate on and give, you know, future guidance on CapEx. You know, could see an environment where with the inflation coming down, it would moderate that. You know, more to come in terms of the CapEx, but you know, what we're really focused on is the returns of these and feel great about the returns and you know, we'll see what's required to grow the business going forward, but more to come. Great. Maybe just one follow-up question. DG Media, the commentary very positive there in terms of what you're seeing with your vendors. As you think about the dollars there, how do you think about reinvesting the business versus flowing that through the bottom line? Rupesh, you're right. We are very excited about what we're seeing on our DG Media Network, and quite frankly, our digital acceleration in general. You know, one of the things that we've learned over the last couple of years when we started this journey, was how digitally savvy our customer is and how much it helps her to be more connected and more loyal to Dollar General, and it shows up in her ability to spend with us. Certainly as you think about the network and you think about what we're able to bring to the market, we're able to bring access to a segment of the population that's really difficult to connect with. When you think about the rural population, 30% of the United States population, that's meaningful. That's why our brand partners and our CPG partners are very excited to partner with DG, and we're excited about where the DG Media Network will go over time. In terms of kind of how we handle the dollars that we're receiving from that, you know, obviously, one of the things that's great about this company is our ability to grow our operating profit and reinvest in the business, and this is one of the ways it allows us to do that. That's why we're all very excited about the strategic foundation we've built here, the muscle we've built, and we're excited about some of the initiatives that we're gonna bring to the forefront as we look forward, especially in 2023 and beyond. Great. Thank you. Thank you. Our next question comes from Karen Short with Credit Suisse. Please proceed with your question. Hey, thanks very much. Good to talk to you again. John, sad to see you go. It's been great working with you. Thank you, Karen. I just wanted to go back to the overall algorithm for DG. You know, obviously there's noise in 2023, and we all appreciate that. Can you just maybe give a little bit of an update on what you think the long-term algorithm should be as we get beyond 2023? I wanted to just clarify on the wage investment and the wage. Can you just let us know what your average hourly wage rate is and how you think about that as opposed to investing more in dollars? I realize you need to invest in hours, but dollars. Yeah. Karen, I'll take the first part of that question. Then John, I'll kick it to you for the, for the algorithm question. You know, Karen, we don't disclose our average hourly rate, but what I can tell you is, as I said earlier, is we have and we continue to pay very competitive wages. I think the one nuance to Dollar General that I frankly believe is underappreciated is the ability to come into this company as a part-time sales associate and grow into a career. You can do it faster than you can in any other retailer because we're committed to internal development, and we have the opportunity to provide you with growth opportunities because of our dynamic growth. I think those two things are the reason why we feel great about our staffing levels, our ability to attract, and our ability to retain our talent. That's why we're investing in hours. Right now, we're very pleased to see that wage grow 23% over the last three years. We're in a great position, and that's why we're able to put this investment more towards the hours in the store rather than having to catch up on wages. John. As you think of the algorithm, if you just step back and look over the last three years, while it's been, you know, up and down over the last three years in this environment, you know, every element of that well in excess of the algorithm. If you look at sales, comp well in excess of the algorithm, expansion of gross margin and operating margin, operating income, EPS well in excess of the algorithm. We feel very good about the performance over this period of time, and we feel the model remains very strong and very resilient. We continue to see ourselves as 10%+ EPS growers over the long term, not every year. Some years, we see it prudent to invest to protect that growth over the long term. You look at the business model and fundamentals, they're very strong. With the unique combination of value and convenience resonating as strong as ever, we continue to see very compelling store-level economics in new store returns and then significant bumps from the remodel. And we, you know, continue to see 16,000+ new store opportunities for everybody in our space. Obviously, we've been getting an outsized share of that, so significant runway for growth. The initiatives are performing very well, helping both the top line and bottom line. They're focused o n both. We see, as I mentioned, you know, a lot of levers within gross margin, to continue to expand that over the long term. The business generates a lot of cash to then buy back shares and reinvest in the business. We think, you know, top to bottom, the business model and fundamentals remain very strong. Is it fair to say or reasonable to think that that's more of a 24 return? I mean, I know you haven't given guidance, but just. I don't wanna give specific guidance, but I would just say we feel very good about the future and the strength of the business. Okay. Thanks so much. Our final question is from Corey Tarlowe with Jefferies. Please proceed with your question. Hi, good morning. Thanks for taking my question, and congrats, John, on your retirement announcement. It's been a pleasure to work with you. My first question for Jeff on market share. You talked in your prepared remarks about seeing customers trade in to Dollar General. You talked about higher income consumers trading down to Dollar General. I think it's clear that Dollar General is gaining share across income cohorts and categories, and you talked about Value Valley as well, comping up over, I think it was 30%. Maybe could you talk a little bit more about where you think this market share is coming from and where you see it likely to come from even more so as we look ahead? Well, Corey Tarlowe, you know, first of all, we are very pleased at the market share gains that we've been able to achieve, both on the consumable and on the non-consumable segments of our business. You know, when you think about our customer as well, we're also incredibly pleased with the fact that we were able to increase our productivity with really all segments of our core customer. We increased our share of wallet, our share of trips. Those are all really encouraging signs, and I'm very, very pleased to see that. It's a credit to our team and their ability to connect with this customer, bring an assortment that she's looking for and delivered in a consistent fashion. As you think about the donors, it's really the same donors we've had for quite some time. Primarily, drug is our biggest share donor. As we look forward, to continuing to refine our assortment, our strategic initiatives really allow us to really bring even more, we believe, re-relevant assortment to our customer. You know, we think we're in the early to mid-innings on many of these initiatives when you think about our treasure hunt with NCI, when you think about DG Fresh and the relevance of the perishable and frozen offering, you think about produce. We're very pleased on our digital strategy that's allowing us to, quite frankly, through our first-party data, our ability to understand this customer on an even greater level than we ever have before. We'll be able to continue to bring the relevance she's looking for. When you think about our growing store base, we continue to see our share opportunity, very optimistically, and we would expect us to continue to take it from the same donors we've seen in previous. Great. Just a follow-up for John. It sounds like there's a couple moving parts in terms of the gross margin, specifically as you look out over this year, and I recognize it's a first half, second half story, but could you maybe stack rank the drivers that you anticipate, from maybe most important to least important to be affecting, the gross margin line this year? I recognize mix shift is also a fairly, prevailing factor in this. How does that also factor into how you're thinking about the consumables mix shift as we look ahead for the next 12 months? Yeah, you know, as you think of the headwinds and the tailwinds, I'll start with the headwinds, but then go to what we see as a pretty sizable tailwind, tailwinds. You know, the ones we talked about were one sales mix, you know, that pressure continuing. We've assumed that. We've also assumed shrink in damages as we move through the first half, in particular, and then increased markdowns, and that's really just getting back to rates more in line with historical norms. You know, I wouldn't say of these one really stands out significantly over the others, but they all, you know, contribute as headwinds. Again, the shrink and damage is more of a first half pressure than back half as we see it now. Damages in particular are a Q1 pressure as you look at the cadence of the year. You know, we mentioned the LIFO impact, and we do think that will provide, you know, some benefit, but I wouldn't flow the whole thing through because you had the pricing that went with that last year. As you think of the tailwinds, you know, the biggest one I would point to and the biggest, you know, overall driver I would point to here is the supply chain. You know, we expect a pretty material benefit from lapping the increased supply chain expenses in the second half of last year, as well as, you know, the sizable benefits from greater distribution center capacity and productivity, lower carrier rates, as well as, you know, the benefit of expanding our private tractor fleet, which we're growing from 1,600 tractors at the end of last year to over 2,000 by the end of next year. Again, as we make those conversions, it's about a 20% savings. In addition to other benefits that we expect as we optimize DG Fresh, NCI, and then, you know, expect a pretty sizable benefit from DG Media Network, to name a few. Obviously, you know, we intend to leverage our scale as we have as a limited SKU operator, and that's another lever amongst the other levers we've mentioned in the past. Again, as you look at, you know, the guide for the year, we gave the top line and the bottom line. We didn't give gross margin, but I think it implies pretty healthy operating profit growth and rates overall, despite pretty sizable investment in the business. It's really helpful. Thank you so much. Best of luck. We have reached the end of the question- and- answer session. I'd now like to turn the call over to Jeff Owen for closing comments. I'd like to thank you all for your questions and your interest in Dollar General. While our operating environment is dynamic for our customer and business, we are staying focused on the things that we can control, which is continued innovation and execution in our business. If I could summarize our discussion today, I'd like to leave you with these three things. First, we have a powerful growth strategy. Second, we are investing in the future. Third, we are doing this while also planning to deliver strong results in 2023. We're excited about this business, and I am confident we are well-positioned to serve our customers and also create value for our shareholders in the year ahead. Thank you for your listening today, and I hope you have a great day. This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.