Greetings, and welcome to the Grocery Outlet's first quarter 2026 earnings results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ian Ferry, Senior Vice President of Strategic Finance and Investor Relations. Thank you. You may begin. Good afternoon, and welcome to Grocery Outlet's call to discuss financial results for the first quarter ended April 4th, 2026. Speaking for management on today's call will be Jason Potter, President and Chief Executive Officer, and Chris Miller, Chief Financial Officer. Following prepared remarks from Jason and Chris, we will open the call for questions. Please note that this conference call is being webcast live, and a recording will be available via playback on the investor relations section of the company's website. Participants on this call may make forward-looking statements with the meaning of the federal securities laws. All statements that address future operating, financial, or business performance or the company's strategies or expectations are forward-looking statements. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from these statements. Description of these factors can be found in this afternoon's press release, as well as in the company's periodic reports filed with the SEC, all of which may be found on the investor relations section of the company's website or on sec.gov. The company undertakes no obligation to revise or update any forward-looking statements or information. These statements are estimates only and not a guarantee of future performance. Additionally, during today's call, the company will reference certain non-GAAP financial information, including adjusted items. Reconciliation of GAAP to non-GAAP measures, as well as the description, limitations, and rationale for using each measure may be found in the supplemental financial tables included in this afternoon's press release on the investors section of the company's website under news and releases and in the company's SEC filings. Now, I would like to turn it over to Jason. Good afternoon, everyone, and thank you for joining us on today's call. In the first quarter, we delivered results in line with our guidance as our work to strengthen the business gained traction. We reported Q1 revenue of $1.17 billion, up 3.6%, with comparable store sales down 1%, slightly ahead of our outlook for a decline of -2.5% to -1.5%. Traffic remained positive, up approximately 2%, with consistent improvement throughout the quarter. This was offset by continued basket pressure from lower units per transaction. Gross margin of 29.6% was also within our outlook range and included a 50-basis- point impact related to our previously announced store closures. Adjusted EBITDA of $43.1 million came in at the top end of our range, while adjusted EPS of $0.05 was $0.01 above the guidance range we shared in March. As I mentioned, performance improved as the quarter progressed, with traffic strengthening each month and exiting March at a meaningful higher rate than at the start of the quarter. In the month of March, weekly traffic grew in the range of 2%-5% year-to-year, reaffirming that our value-oriented product offering continues to resonate with consumers. While we're encouraged by the progress we're beginning to see, we're not satisfied with our current level of performance and are focused on the work we have in front of us. As we said in March, we entered 2026 with a clear agenda: r estore what makes this brand special, tighten execution where we've fallen short, and improve returns. That work is well underway, and while it's still early, the traction we see reinforces our conviction that we are taking the right action. Grocery Outlet has meaningful strengths, a differentiated model, a highly relevant value proposition, strong independent operators, and a format that resonates when we execute well. Our focus is on translating those strengths into a more consistent performance. Our work to achieve these centers on improving comp store performance while continuing to advance important strategic initiatives that deliver stronger long-term growth and profitability. Restoring customer value perception. Let me start with customer value perception, because that's where our work begins. Our job right now is to make Grocery Outlet a more compelling choice for the customer. In this environment, value matters more than ever. We must make that value visible, consistent, exciting, and easy to shop. We executed on that in several ways during this last quarter. First, and most importantly, we've made meaningful strides to increase the mix of branded opportunistic products in our stores. Our best opportunistic deals offer savings up to 70% versus conventional retailers. These savings, when paired with the excitement of a treasure hunt experience, provide a compelling experience that our customers love. Since the start of the year, we've increased our opportunistic mix by nearly 2 percentage points with meaningful improvement across inventory, shipments, variety, and sales. We've made meaningful progress by improving our sourcing, increasing product visibility, and helping operators further differentiate their stores. That works included upgrading systems and reporting, expanding supplier outreach, shortening delivery times, testing short-dated offerings, and engaging suppliers more directly at the leadership level. These efforts enabled us to move quickly in Q1 on excess inventory from several top-selling brands, delivering significant savings for customers while creating high margin, high volume opportunities for us and our operators. Second, we invested in reshaping value perception. As we work to improve the impact of our opportunistic supply, the near term synthetic promotional support we're providing is driving customers into our stores. It's been especially effective around high traffic occasions like this year's Super Bowl and Easter, where event-driven promotions help drive meaningful traffic gains. This is an important first step in restoring comp performance as the momentum from our improving opportunistic product mix begins to translate into stronger transaction trends. Through the first quarter, we received positive feedback from both customers and our IOs, and a s we invest, we're managing the impact on gross margins through disciplined promotional targeting and our ongoing focus on improving our mix. We continue to expect these investments to be in the range of $20 million for this year. Third, we're sharpening our value messaging through our extreme value campaign. This work is focused on making our value proposition unmistakable, highlighting the significant savings customers can find on branded products, often at meaningful discounts to conventional retailers, and reinforcing the excitement of the treasure hunt experience that defines Grocery Outlet. To support this, we're driving awareness through targeted at home and digital campaigns that bring our deals and product discovery to life. In market, we're focused on awareness-based media. In store, we're simplifying signage and elevating key value items to make savings more visible, easier to navigate, and more compelling at the shelf. Together, these three initiatives, with a singular focus on improving value, are beginning to drive a meaningful, positive customer response, reflected in improving sales, improving traffic trends, Net Promoter Score, and survey data while reinforcing one another. Though there's much to do to restore comp performance, the trends we're seeing in traffic are consistent with the initial stages of stabilization that we would expect at this point. Improving the in-store experience. We also continue to improve the in-store experience to support stronger store-level performance across our fleet. One of the most important of these initiatives is our store refresh program, and in the first quarter, we completed 34. As of today, we've completed 58 stores in total. These refresh stores are benefiting from improvements in layout, signage, and merchandising that make the shopping trip easier and reinforce value more clearly. We continue to receive positive feedback from both customers and operators, and we are confident that improving the customer in-store experience is the right step for Grocery Outlet and that it will become an important lever over time. The impact of our value restoration initiatives in Q1 reinforces our conviction that an all- hands- on- deck focus on executing our opportunistic engine is the fastest and most effective path to improving results across the business. With a clear path to deliver on that objective, the results that support that focus, we're prioritizing our initial resources on that work. That requires deliberate choices about how we execute our other priorities this year, including taking a more measured pace on our store refresh program. We will continue to invest in these longer- term improvements to our stores while maintaining a near-term focus on driving comp sales through opportunistic initiatives that I've discussed. As we balance our resources around these efforts, we now expect to complete approximately 100 store refreshes by year-end. This sharper focus will reduce distractions and help us return comp growth as quickly as possible. Supporting independent operators. Independent operators are central to restoring our performance, and they've been clear about what they need: b etter analytical tools, more actionable insight, greater visibility into what is working across the system, and t hat's exactly what we're focused on delivering. In Q1, we made meaningful progress. During the quarter, we held regional forums to share best practices across operators. We enhanced benchmarking capabilities and expanded the functionality of our real-time order guide. We also streamlined commercial communications to help operators simplify execution at store level. Importantly, we also launched a new Annual Business Review or ABR process across our entire store base. This process benchmarks each store against top quartile peers with similar market characteristics and sales volumes, then translates those performance gaps into clear profit opportunities for our operators to pursue. For each store, we can now help operators quantify the potential opportunity across sales mix, shrink, and other important operating expenses while enabling operators to track progress against those opportunities over time. Just as importantly, we pair these insights with best practice recommendations and field support to help operators realize those improvements. While company-wide margin performance in Q1 was impacted by strategic promotional investments as well as inventory liquidations associated with our store closures, we're encouraged by the underlying operational trends we're seeing at store level. Operators saw encouraging trends in profitability during the quarter, driven primarily by better shrink performance. If these Q1 improvements are sustained through the balance of the year, they could translate into meaningful incremental annual operator income per store. Over time, improvements like these create meaningful upside for Grocery Outlet through stronger gross profit performance across the system. Our ABR process encourages accountability while giving operators a practical roadmap to improve their business, supported by quarterly reviews and ongoing field partnership. We believe that as operators see benefits from these enhanced analytical tools, engagement with the key company initiatives will also improve. When operators have the right tools, visibility, and support to execute effectively, the customer experience improves, store performance improves, operator economics strengthen, and the overall business should become more productive and resilient. Optimizing the store base and strengthening returns. As I mentioned earlier, we continue to drive our key strategic objectives as we work to restore comp performance. Among our most important objectives are optimizing the store base and improving our returns. As we outlined in March, we are closing 36 underperforming stores this year. These closures are now complete and have improved fleet quality and will strengthen the earnings profile of the business over time. Based on the progress we've achieved to date, we continue to expect adjusted EBITDA improvement of approximately $12 million at the conclusion of our restructuring on an annual run rate basis. We've also tightened our approach to new store growth. We continue to believe that there is substantial white space ahead for Grocery Outlet, but g rowth must be disciplined, productive, and supported by the right economics. That means being more selective on real estate, applying rigorous underwriting, and holding ourselves to high standards on capital returns. This approach should position us to grow from a stronger foundation and create more value over time. We're focused not just on growing, but growing in a sustainable way. Finally, as we noted in March, we're continuing to explore strategic options for UGO, and we'll provide updates when we have more to share. Securing top talent. Having the right strategy is critical to our success, so is having the right talent to execute it. We recently welcomed Jim Porterfield as our next Chief Marketing Officer. Jim brings more than 30 years of brand leadership and consumer insight experience to Grocery Outlet. Jim previously served as Chief Marketing Officer at Pinsight Media and as a Senior Vice President at Bernstein-Rein Advertising before founding his own firm, Meaningful Works. Most recently, he's advised several well-known retail and restaurant brands, including Grocery Outlet. Jim's experience, strategic judgment, and passion for building strong brands make him the right leader to help advance our strategy and strengthen Grocery Outlet's position as one of America's most loved brands. Securing top talent is also a priority at our board level. In April, we added two exceptional independent directors. Frances Allen brings over 40 years of consumer and food industry expertise across brand strategy, marketing, franchising, technology, and operations. Felicia Thornton brings more than 30 years of executive leadership across grocery retail, specialty retail with deep expertise in corporate finance, strategic growth, and operational restructuring and governance. Both new members have highly relevant experience that will help our efforts to strengthen execution and reinforce Grocery Outlet's longstanding leadership in value. Finally, in closing, when taken together, we believe that our near- term actions and continued execution against our strategic priorities position us for improved performance. While we still have work ahead, we're making solid progress that's beginning to be reflected in the business. We're executing our plan, improving consistency, and building a more durable foundation. I'm confident that the work underway will position Grocery Outlet to become a stronger, more productive, and more profitable business for many years to come. I want to thank our independent operators, our team members, and our supply partners for their hard work and their commitment. I'd also like to thank our shareholders for your continued support as we move the business forward with focus and attention. I'll now turn it over to Chris to walk through the quarter and the financials in more detail. Thank you. Thanks, Jason. Our first quarter results demonstrate the early progress we're achieving against the initiatives we began implementing at the start of the year. The work we're undertaking to reinvigorate our opportunistic product flow and the investments we made in promotion helped stabilize and improve our sales trends. At the same time, we advanced our store refresh program as well as our planned store closures to strengthen performance across the fleet. I'll walk you through our first quarter results and then comment on our outlook for the year in second quarter. Please note the comparisons I will provide are on a year-over-year basis unless otherwise indicated. Starting with the top line, first quarter net sales increased 3.6% to $1.17 billion, driven by stores opened over the last 12 months, partially offset by a decrease in comparable store sales. In the first quarter, we opened seven new stores and closed 28, which includes 27 as we began implementing our restructuring, ending the quarter with 549 stores in 16 states. We closed the remaining nine stores tied to the restructuring in April. Comparable store sales declined 1% in the first quarter. As Jason mentioned, this was slightly ahead of our outlook and driven by continued positive traffic, which was up 2.1%, but was offset by a 3.1% decline in average transaction size. We noted in our March call that our lower mix of opportunistic products has weighed on our ticket size. We're addressing this by improving the levels of opportunistic products in our mix, investing in promotions, and sharpening our value messaging. Since implementing those initiatives at the start of the year, we saw a month-over-month improvement in comp results throughout Q1. While the primary benefits thus far have been seen in customer traffic, we expect benefits to ticket to follow. Gross profit increased just under 1% to $345.2 million, representing a gross margin of 29.6%. Gross margin included approximately $6 million or 50- basis- point impact from inventory liquidations and write-downs related to the announced store closures. The 80- basis- point year-over-year decline in gross margin was driven primarily by promotional investments as well as the impact from store closures, partially offset by improvements in inventory management. SG&A increased 4.8% to $347 million, representing 29.8% of net sales, a 40- basis- point year-over-year increase, driven primarily by higher professional fees, commissions, and other costs to support the growth of the business, partially offset by lower incentive compensation. In the quarter, we had restructuring charges of $18.2 million related to the store closures and a non-cash goodwill impairment charge of $158 million related to the decline in our market capitalization. Below the operating line, net interest expense was $6.4 million, roughly in line with prior year. Our effective tax rate was 2.2% compared with 19.7% last year. The year-to-year change was primarily attributable to the goodwill impairment charge recognized during the quarter, which reduced the effective tax rate by 13.2%. Net loss for the first quarter was $180.3 million, or a net loss of $1.83 per fully diluted share, owing primarily to the restructuring and non-cash goodwill impairment charges I mentioned a moment ago. This compares to a net loss of $23.3 million, or $0.24 per fully diluted share last year, which was also impacted by restructuring charges. Adjusted net income, which excludes restructuring charges and the goodwill impairment, along with other items, was $4.6 million, or $0.05 per fully diluted share. Adjusted EBITDA was $43.1 million for the quarter, representing 3.7% of net sales, compared to $51.9 million or 4.6% of net sales last year. Turning to the balance sheet and cash flow. We ended the quarter with $59 million in cash and approximately $175 million in available capacity on a revolver. Total debt net of issuance costs was $489.3 million at the end of the first quarter, down $3.6 million from the end of 2025, with net leverage of 1.8x adjusted EBITDA. Net cash provided by operating activities during the first quarter was $52.6 million, down from $58.9 million last year. The decrease in operating cash flow was driven primarily by changes in working capital, including inventory and accrued liabilities, partially offset by a lower net loss in the current quarter after adjusting for non-cash charges. CapEx for the first quarter was $56.8 million or $53.9 million net of tenant improvement allowances. We expect to spend approximately $170 million in CapEx for the year. Now on to our outlook. We are reiterating our guidance for the full year, the details of which are included in our earnings release. For the second quarter, we expect comparable store sales to decline between 1.5% and 2%. This includes an estimated 50- basis- point headwind from the Easter calendar shift. We expect gross margin between 29.8% and 30% as we expect to continue promotional investments to bridge the ramp of our opportunistic product mix. Adjusted EBITDA between $55 million-$58 million and diluted EPS of $0.11-$0.13 per share. In conclusion, the execution of the initiatives we laid out at the start of the year is driving early results. We're restoring the value and shopping experience customers expect, and that has contributed to stabilizing and improving comp trends. At the same time, we're managing the business with discipline while continuing to advance our important strategic initiatives. We're confident that the work we're doing today will better position the company for sustainable growth, and we look forward to sharing more about the progress we're achieving throughout the year. With that, we'll now open it up for questions. Thank you. We will now be conducting a question- and- answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. 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. The first question is from Edward Kelly from Wells Fargo. Please go ahead. Yeah. Hi. Good morning, guys. I wanted to start on the guidance. You know, you maintain the guidance for the full year, Q1, you know, a little bit better. I mean, you sound certainly a bit more, you know, optimistic. But the backdrop, if you think about the macro, the low-income consumer is under more pressure. Supply chain costs are probably higher with fuel, I would think. I'm just curious if you could sort of take a step back because, you know, you are still implying better results, especially in the back half of the year. How have you thought about, you know, these considerations and what's baked into the guidance for it? Yeah. Thanks, Edward. It's Jason here. First, I'd just say, you know, our business has typically benefited from a countercyclical demand when there's pressure on the consumer. And we have every expectation the work we're doing now will benefit Grocery Outlet as we improve value for customers. When we take a look at our progress we're making against our opportunistic plan, it gives us confidence that the results so far, or our results so far that we're gonna have continued progress that's gonna drive performance improvement through this year. I think, when we think about the year, the only thing I would say is, you know, given our recent comp volatility, and the short period of time we've had comp stabilization, we think we're being prudent with the outlook given those backdrops. Can I maybe just follow up on the outlook as it pertains to, you know, the gross margin? You've dedicated $20 million to the sort of promotional bridge in Q1. Curious as to how you're thinking about sort of confidence level around not needing to continue that in the back half. Then, could you specifically maybe just talk a bit more about what the impact of fuel is on your supply chain costs and what's in guidance for that? Hi, Edward, it's Chris. Yeah. In terms of gross margins, you know, this business has been very consistent in delivering gross margins in the past, right, and w e fully expect to get back to those levels once we, you know, get through the promotional spend that we've talked about, the $20 million, and opportunistic product begins to be a bigger component of our mix, which we expect towards the back half of the year. O ur first quarter, we saw 29.6% margin, and we've talked about the 50 basis points there from the store closures, so t hat gets you to, you know, a little bit over 30% for Q1 with a promotional spend in there. Our guidance also includes some additional liquidations in the second quarter, $1.5 million related to the closures, so w e'll have a little bit of that in there for the second quarter and then the promotions. After that, we start to kind of wind down or lessen the promotional spend in Q3 and then totally in Q4. So, we expect to be at, you know, higher levels of gross margin as we, in the back half of the year. The impact of the fuel is not all that significant at this point. It's about maybe 10 basis points that we've seen so far. Okay. Thank you. The next question is from Mark Carden from UBS. Please go ahead. Good afternoon. Thanks so much for taking the question. To start, I wanted to dig into the store refreshes a bit. Sounds like you guys have made good progress getting to 58, but you're reducing the target to 100 this year. Just as you've deployed these, have you seen any deceleration in their comp lifts, which would just be great to get a little more color on your decision to slow these a bit and reprioritize some of the investments in value. Yeah. Mark, it's Jason here, t hanks for the question. First, I just want to say, I believe, we believe we have a huge opportunity to improve the in-store experience and execution in the business over time. Just as a reminder why, you know, we began this journey on refresh was to improve the customer experience. The feedback we got from customers has been directly incorporated into what we're doing there, and it's intended to improve the customer experience in three ways. One, improving the ease of shop. Two, improving our in-stock and the consistency for customers there. And we also improved the merchandising and implemented stronger signage to communicate value. What we've seen so far is in all of the executions, as we measure customer feedback, we've got improvements in perception. The operators have loved the changes and have gotten, you know, really fantastic feedback. The first group of stores that have one full quarter of sales reporting is, you know, hitting the numbers we've been talking about. We feel good about that. This is really about pacing for us. It's important that as we prioritize the company's resources to focus wholly on OP execution, which is the fastest way for us to improve our comp sales, that this is a calibration of effort. I do wanna share, though, that as we've scaled this up, we have had some more variability in sales and execution, and the team feels that pacing this to more like 100 locations will give us the needed support we need to help operators through that change. We expect that in the fullness of time, all the stores will meet our sales expectations. Great. Appreciate the color there. As a follow-up, just with respect to traffic, you guys have seen a nice acceleration there. Are you seeing any meaningful differences right now in behavior between some of the different income cohorts? And just what specifically are you seeing with respect to the SNAP customer? Thanks. Yeah. I guess first on the SNAP customer, still a little less than 10% of our sales and everything we see there on EBT dollars and customers is relatively stable. I don't think there's anything we can add at this point where that's what we see there. Second question, on traffic, again, not seeing a big difference in kind of cohort, but continued improvement in traffic month-on-month-on-month as the quarter progressed. Great. Thanks so much. Good luck, guys. Thank you. The next question is from Simeon Gutman from Morgan Stanley. Please go ahead. Hi, this is [Zach] on for Simeon. Thanks for taking our questions. I wanted to ask about the OP mix improvement. You mentioned that there was about a two-point improvement in mix, and that has supported transactions. I'm curious why that wouldn't have translated to better units per transactions as well, since y ou also said UPT was still under pressure this quarter. Thanks. Yeah, thanks for the question, [Zach]. You know, the reason why we're talking about OP is it's the value engine that drives this company's comp sales, and we think we're on track to make that happen. Couple bullet points on the improvement on mix. Shipments are up, inventory is up, sales are up over 200 basis points in the mix. We did not see a major improvement in UPT, but we did see the traffic improvement. We feel that the work we've done on promotion, communication, and the work on OP shows up in a number of ways. First and foremost, we're seeing traffic increase. Secondly, we're seeing that NPS, our value scores increase, and we think that's directly related to the work we're doing on OP. Now, as the, you know, year goes on, we expect to see improvement in basket over time. At this point, we've had the nice bump in traffic. We see and feel that that's now on track, and we'll look to continue to see basket improvement as we work that mix. The next question is from John Heinbockel from Guggenheim Partners. Please go ahead. Hey, Jason, you referenced all hands on OP. I'm curious, you know, what does that entail differently, right, than what you might have had a couple of months ago? Then, what's the importance of the short-dated product, right? I imagine you can get good value, but there's shrink risk. How are you attacking that? Yeah, thanks for the questions, John. I'll start with the last first. Short-coded product is something we've started to experiment with. You know, with visibility in the system, we're able now to see what's happening in a different way than we did previously, so w e're flagging that product differently. We've started with one major vendor. We are monitoring it through the supply chain differently. Obviously, the work we've done on improving reporting, visibility, and tracking helps us increase speed and flow of OP through the supply chain. As that pilot works its way out, we'll continue to expand that into other vendors for the, you know, obvious benefit of expanding our OP mix and margin and value for customers. On the other piece with focus, whether it's operations, the buying team, what have you, it's a matter of narrowing our focus to make sure that all hands and all functions of the company are working to help execute our OP plan, given how important it is to our comp sales and the relationship we have with those two things. Just one example that I think really helps people understand why this is so important. There's a relationship in our highest comping locations where we have strong OP, and that OP has everything to do with how it's ordered, how it's merchandised, and the focus. We continue to work on optimizing our assortments. We've made some reductions on our MTO and private label product to make room for OP. We're working on our communication of extreme value positioning that we've talked about. We've rolled out new reporting and visibility, and we've done some of that in operations as well. That helps people see and understand what's happening. And we've increased our supplier engagement to refocus our teams on what we do best, which is prioritizing OP and making, you know, deals and translating that into value for customers. Thank you. Thanks, John. The next question is from Robbie Ohmes from Bank of America. Please go ahead. Oh, hey, Jason. Hey, Chris. A couple of quick follow-ups. The first, just on the second quarter comp guidance, I think you said - 1.5% to - 2%. What's the traffic and ticket sort of assumption that we should be using there? Well, I think, I mean, from a traffic perspective, I think we'll continue to see the positive traffic that we, you know, exited Q1. Then, as Jason talked about improving the basket, you know, that will start to happen as OP becomes a greater percentage of the mix. I think, you know, we're expecting to see that start to improve probably towards the back half of the second quarter. Gotcha. Just on the, you mentioned promotions in a couple of different ways. The promotions you're doing, were you doing promotions that were a significant benefit to the comps in the first quarter? Like, are promotions helping the 2.1% transaction comp? Yeah. Just to kind of reference what we're talking about, Robbie, is, you know, we typically are not a promotional company. The key way that this company delivers value is through opportunistic supply. The way you can think of this, we saw in Q4, we had a shortage of product, and w e wanted to make sure that we bridge a gap between what we felt we needed in, call it, value-driving product and what we had in the system, so t he promotions that we developed, the synthetic promotions that we created with branded product are meant to be a bridge as we work our OP plan. So, what's happening through Q1 and w hat's happening as this year goes on is as we improve our mix, as we improve the inventory and range that we see progress on right now, we'll start to taper those mechanical synthetic promotions, turn those down as the OP turns up. You know, what we're seeing in the business is that's we're making that trade-off kind of as we speak and feel good about the progress on that front. Got it. That's helpful. Thank you. Thanks, Robbie. The next question is from Jeremy Hamblin from Craig-Hallum. Please go ahead. Thanks for taking the question. I wanted to come back to the opportunistic mix. As you're going through the store refreshes, as you're looking at kind of building back, you know, opportunistic product, can you give us a sense for like, what portion of the mix do you want it to get to? Is there potential to take it even further, if it's driving, you know, better basket and driving more traffic? Just ultimately just gaining a sense for where you think this will go and how long you expect it to take. Yeah, thanks for the question, Jeremy. We have a historical sort of mix that where we think the weight of this is very helpful for the business. We see that with our highest performing stores and comps. I don't think we've talked about this, but, you know, something that gets close to half and half on a mix basis is very healthy for us. You know, as we promote the mix or talk about adding range and variety in our operations, we see improvements in the mix or the for OP versus, like, as an example, MTO. There's still value created with our made to order product, but clearly the level of discount, the level of value, and the accretion of margin is very helpful for our business. That's something we're just gonna continue to work on broadly, by category and by store. I'd love to see that get to, you know, closer to a 50/50 blend. We're not at that level at this point, but where we see a high level of OP, we see a high level of sales. Where is the mix blending at across the chain today? It's not something we'll release on a call, but I think what's important is we've had about a 200- basis- point improvement in that mix since the beginning of the quarter, and we can see clearly the relationship between that mix and the value that gets created for the customer. As I said, that's helpful given that's how we differentiate our business as well as very helpful on the margin front. Fair enough. Switching gears, just on the, on the UGO strategic alternatives, are you at this point in time getting a sense for what the options are with that if there's potential bidders for that business? Can you share with us the expected timeframe in which you would be able to share with us, kind of what decisions are being made? Is that, is that a 2026, initiative? Sure. Yeah, no, thanks for the question. Yeah, we're getting a sense of what the options are, and we'll share more when we have something substantial to share. Definitely a 2026 conversation Got it. Thanks for taking the questions. Best wishes. Thank you. The next question is from Corey Tarlowe from Jefferies. Please go ahead. Great. Thanks. I was just wondering if you could talk a little bit about kind of the improvements that you saw within the quarter, maybe by month, and then quarter- to- date. If you could just give us kinda what you saw from a traffic and ticket perspective, b ecause one would think that, you know, based on you talking about the improvements and how the business is value-oriented, that when gas prices rise, maybe there was an inflection in the business. I'm curious, could you kinda talk through what you saw and what you're seeing? That would be really helpful. Thanks so much. Yeah. Thanks for the question, Corey. Again, I think we're firm believers the business is gonna get back to healthy levels of comp sales performance over time. January, as we shared in March, we believe we hit bottom after experiencing, like, traffic erosion and sales erosion through Q4. On the last call, we talked about expecting sequential improvement in comps driven by traffic through strengthening our Net Promoter Scores and obviously through the OP metrics that we had outlined, and t hat's played out as planned. Traffic was close to flat at the beginning of the year, and we saw, again, sequential improvement. We saw a nice range of traffic in March, although we had, you know, there's an Easter shift kind of there, something between 2% and 5% traffic on given weeks. As I mentioned in the prepared remarks, we thought we did, you know, a really nice job connecting with the customer on some key events in Q1 that we think will help with momentum as we go forward, including Super Bowl and we thought we had a very strong Easter. Not as much progress on the basket as was asked earlier, but we do think that, as we work this plan, that we'll see improvements in units per transaction as OP becomes a stronger part of our mix. Got it. I just wanted to ask a quick follow-up. It looks like your comps were -1% in Q1, and then in Q2, it sounds like you're guiding to, I think it was -1.5% to -2%. If traffic is improving, is the offset that, I guess the units per transaction has been lower? I'm just trying to understand the deceleration from Q1 to Q2. Thanks so much. Yeah. Yeah, great question. I just think, just to share, you know, given our recent comp volatility and the short period of stabilization we've had, we just wanna be prudent with our outlook. Got it. Thank you. The next question is from Leah Jordan from Goldman Sachs. Please go ahead. Hi, thank you for taking my question. I wanted to go back to one of Ed's questions, you know, 'cause what has changed since we've last connected is the inflationary backdrop, but your outlook is staying the same. Just, you know, we talked about fuel, but maybe just digging deeper on the cost side, how are you thinking about inflationary pressures in the year? You know, what are you hearing from suppliers? You know, anything there. Then ultimately, how do you think about your ability to pass anything on as we move through the year in this environment, as you're still kind of working on your value messaging as well? Yeah. Thanks for the question, Leah. I think, you know, when we look at the business, what's important right now is we run a basket savings gap of something between 15% and 20% with mass and 30% to 40% against conventional players. We're monitoring this. We monitor it regularly, and we're gonna maintain that spread, regardless of the external conditions or as they necessitate. You know, we see and hear, you know, whether it's a supply, suppliers, PPI index, inflation, the inflation numbers, fuel, and so on. You know, if this persists, obviously there'll be some downstream effects. We feel that we, with the work we're doing on opportunistic supply, given its profile, the average unit retail of opportunistic product as we work the mix, that we should see a nice benefit for our customers in a period like this. Okay. That's helpful. Maybe a follow-up separately. I wanted to go on the value messaging and marketing. You know, two quarters back, right, it was an issue. You've fine-tuned it here. Maybe we've had some wins around Super Bowl and Easter, but m aybe you could talk about what you're doing around every day. You know, what's resonating, what's not. You know, where would you say you're in that journey of, like, fine-tuning the message, and what really still needs to be done at this point? Yeah, no, thanks for the question. We've had very good success on a broad basis with awareness-based marketing. Our outdoor work as well as social search has been very effective. For our IOs, they've been very effective in telling stories related to opportunistic product and sharing basket comparisons. We think that those elements have resonated. We've done a bit of work on that, and we can see that our value scores are improving with customers related to the communication support that we thought was important to deliver and continue to deliver. Okay. Thank you. Thanks, Leah. The next question is from Joe Feldman from Telsey Advisory Group. Please go ahead. Thanks for taking the question, guys. I wanted to go back to the conversion, I guess. I'm curious as to, you're getting much better traffic, which is terrific, and it seems like people are seeing the better value, but why wasn't the ticket stronger? Like, are people just don't have enough cash in their pockets or, you know, why are prices not low enough, so they're still not putting in enough items? I mean, what is, i t just doesn't something doesn't compute for me, I guess, on the conversion side. Yeah. No. We're pleased with the traffic improvement. Converting those trials into, you know, loyalty takes time. We think that working our value messaging and being consistent in that experience for customers as well as working the customer experience in store, all of those things will contribute to more loyalty, affinity, and larger baskets. It's, you know, we wish it would happen a little faster, but that's generally, in my experience, what it takes. That consistency of approach is something that we're very committed to. Got it. I guess, maybe we'll ask some more offline about it, but I guess on the comp for the quarter, did that exclude the 27 stores that you closed already? I presume that it did. Like, is that an accurate statement? Yes, that's correct. Okay. I just wanna confirm that. Thanks. Yeah, I will, I know we have another call later, so I'll ask some more. Thanks. Absolutely. Thank you for the questions. The next question is from Oliver Chen from TD Cowen. Please go ahead. Hi, Jason and Chris. Regarding the baskets and opportunistic opportunity going forward, which parts of opportunistic have the most opportunity to impact that basket, if you thought about categories, or is it overall? Then, you mentioned the Annual Business Review process, w ould just love some insights into that and how it's, how that will manifest with the independent operators and things they can do or what opportunity you see when you implement that. Third question is as you engage in the store closures, how is it helping perhaps inform your store openings and what you're thinking about in terms of prudent site selection? Thank you. Okay. Thanks, Oliver. On the first question on OP, it is a cross broad-based approach that's always required. We've made progress across certain categories and less on others but overall, feel good about where we are with shipments and inventory range and how that's showing up in sales. We can see the relationship there that drives comps, so feeling good there. Wouldn't call out any one specific thing, but it always needs to be a broad base of categories for the customer. The second question you had was around the annual review process that we've implemented now with our operators. This is a two-pronged piece, which is creating reporting and visibility for our operators so they can see where they are on a relative basis to their peer group. Peer groups include things like relative sales, location or state, like customer profiles and so on. The reporting that we're providing puts them in that group where they can see things like shrink dashboard. It can show them specific SKUs that they're where they may be out of pocket on. Our operators are really excited about having this information. It's something they've been asking for. You know, we've been at this stage, just able to turn that on, and so we can see that it creates a lot of engagement. It's easy to understand, and it's allowing them to take immediate action and make improvements in their business. We think that, you know, that's just good retail practice and they're excited about it, and we're excited to see how that's gonna translate for our business over time. The second part of that is in operations, in particular, when our folks are visiting stores, they're also judged on their support for the operators on that front. They're coming to the stores with that information and assisting our operators, helping to activate those opportunities throughout the business. I think the third question was on, specifically, on real estate. Obviously, we wanna make sure that we're not picking challenged locations, being disciplined about location selection, making sure that we're building quality long-term earnings for the company is essential. You know, we wanna pick locations that have higher potential for volume, that are easier for egress, ingress, you know, neighborhoods that make sense for our business. The return selection criteria includes higher hurdle rates for returns. I think 26 is over 25, 27, we're working hard to, you know, push that number closer to 30. We've clustered openings and we're shifting our mix to more core markets as we, you know, work that part of the decision tree to make sure that, you know, this business can get back to a 6% EBITDA margin over time Okay, thanks. Jason, a follow-up on opportunistic is so important and the people behind that infrastructure and the buyers are working hard, you know, day-to-day or hour-to-hour. What's happening with the people side of the opportunistic talent that you have, now and any thoughts there? As you, with the new CMO, was this something you always thought the organization needed? Just would love your context on timing and how this interplays with what's happening now, you know, versus when you had first started. Yeah, no, it's, y ou know, I've learned a lot in the first year of being here. Clearly, opportunistic and value for us go hand in hand. It's a big chunk of the value equation for this, making sure that our stores resonate with customers on the affordability front. At the same time, it's important to recognize the customer experience, things like quality, you know, wait times, flow of stores, ease of shop, those kinds of things are also critical. So, having a clear focus on making sure that we deliver value for customers with OP is our number one and focused priority for the whole company. Clearly, merchandising is an important component and something that we will weave in over time. For everyone involved, including our new CMO, opportunistic supply and everything we're doing there is what that team is wholly focused on. Thank you. Best regards. Thank you. The next question is from Bill Kirk from Roth Partners. Please go ahead. Hey, good evening, everybody. I wanted to go and keep going on Joe's second question. I imagine the closures would include some stores that were comping worse than reported results. Could you give us a sense for what the closed stores as a group had been comping before they exited the comp base? Do you think any of their traffic shifts from those closed stores into your other locations? I would just say that it's really not material, the impact of those store closures on our overall comp. From a, you know, cannibalization or just, other, you know, shifting to other stores, that's also not material. Okay, easy. Are you able to tell in the transaction growth if it's coming from new customers into the stores, or could it be existing customers that are splitting their trips? If the traffic is new customers, are there any notable traits among those new shoppers? Can you tell if they're completely new or if they're lapsed folks who are returning to your stores? It's a mix of new customers and existing. You know, some of what we did obviously drove frequency and, you know, there's been some comments about basket. We didn't see as much basket translation into higher UPT, but clearly, the frequency piece is there, and the new customer piece is there. I don't have any other further insight for you on specific customer kinda segmentation, but we do see and know that it's a, it's a mix. Okay. Thank you, Jason. I'll pass it along. Thank you. There are no further questions at this time. I would like to turn the floor back over to Jason Potter for closing comments. Well, again, thank you very much for your interest. We appreciate all the questions and look forward to your engagement with some of you a little later on today. Thank you very much for your time. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.