Good day, and welcome to the SpartanNash Company fourth quarter and fiscal year 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the call over to Chris Mandeville, Investor Relations. Please go ahead. Good morning, and welcome to the SpartanNash Company fourth quarter and fiscal year 2021 earnings conference call. On the call today from the company are President and Chief Executive Officer, Tony Sarsam, and Executive Vice President and Chief Financial Officer, Jason Monaco. By now, everyone should have access to the earnings release, which was issued this morning at approximately 6 A.M. Eastern Time. For a copy of the earnings release, as well as the company's supplemental earnings presentation, please visit SpartanNash's website at www.spartannash.com/investors. This call is being recorded and a replay will be available on the company's website for approximately 10 days. Before we begin, the company would like to remind you that today's discussion will include a number of forward-looking statements. If you will refer to SpartanNash's earnings release from this morning, as well as the company's most recent SEC filings, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. Please remember, SpartanNash undertakes no obligation to update or revise these forward-looking statements. The company will also make a number of references to non-GAAP financial measures. The company believes these measures provide investors with useful perspective on the underlying growth trends of the business, and it has included in the earnings release a full reconciliation of non-GAAP financial measures to the most comparable GAAP measures. With that, it's now my pleasure to turn the call over to Tony. Thank you, Chris, and good morning, everyone. I'm excited to review SpartanNash's 2021 performance with you today and look ahead to our 2022 strategy. First, let's talk about the year at a high level. As of today, we are almost two full years into the pandemic. Despite the unpredictable nature of COVID and its variants, SpartanNash associates, again, executed with excellence to serve our customers in 2021. Every person has been impacted by some way by COVID. Yet, our associates continuously ensure that our stores remained open, shelves were stocked, products were safely delivered, and our military heroes had the supplies they needed. Through our pharmacies, we ensured that patients had access to medication and testing that was critical in keeping our communities healthy. To date, we've administered over 150,000 vaccines. I'm incredibly proud of their efforts. Our top and bottom results for 2021 are squarely in line with the guidance we provided at the start of the year and have reaffirmed throughout. On a consolidated basis, we generated $8.9 billion in revenues and adjusted net earnings of $61 million or $1.70 per diluted share. We also generated $161 million of cash flow from operations and paid down over $86 million of long-term debt to significantly improve our leverage. We did this while reinvesting in the business to support future growth and driving greater efficiencies. Our strong cash flow also enabled us to return over $34 million to shareholders in the form of dividends and stock repurchases. Touching briefly on our segment's fourth quarter performance, our retail segment grew top-line with one-year comps of 7.3%. We have continued to see strength in food-at-home consumption and increased store traffic. Despite the acute labor challenges, we've continued to execute remarkably well at the stores, which drove results. Lastly, our select net price increases had minimal impact on consumption. In our food and military distribution segments, in particular, we continue to navigate through the industry-wide labor and supply chain pressures. We remain focused on our supply chain transformation initiative, which we believe will position the company for improved profitability and long-term success. We are seeing some tailwinds, including food inflation increases, which have improved our gross margin rates. Despite facing steep comparisons to 2020 COVID demand, we're very happy with our 2021 performance as we grew our top line and met our profitability objectives. I'd like to turn now to progress we made during the year in executing against our strategic priorities. Since joining the company in late 2020, I have focused on driving change through our strategy, operating model, and culture to enhance profitable growth and shareholder returns. Over the past year, we've continued to strengthen our leadership team. We welcomed new executives in legal, marketing, merchandising, supply chain, strategy, and communications. Our two most recent management team additions include Amy McClellan, our new Chief Marketing Officer, and Bennett Morgan, our new Chief Merchandising Officer. Going into 2022, we have a new corporate identity that sets the strategic direction for growth and stewardship of SpartanNash. Last year, we engaged more than 1,900 associates, customers, vendors, and partners to help us establish this identity, which we call our winning recipe. This identity will continue to guide the use of our time and resources. Our new mission is to deliver the ingredients for a better life. This mission expresses the difference we will make in the lives of our customers. We will get there by refining our signature strength, which is to be the most customer-focused, innovative food solutions company. We make good on these promises to our customers by investing in three core capabilities: people, operational excellence, and insights that drive solutions. I introduced these three core capabilities in our last earnings call, and these capabilities inform our five strategic priorities. Those five strategic priorities are, number one, creating a people-first culture. Two, elevating execution to win the day. Three, transforming the supply chain. Four, acting on insights to optimize customer and product portfolios, and five, launching customer-centric innovative solutions. I will take a few minutes now to discuss the strategic priorities in more detail. Let's dive into our first strategic priority, which is creating a people-first culture. Last year, we made great strides to enhance our associate experience by investing in wages, benefits, safety, recognition, and communication. We provided an average of over 10% pay increases for all entry-level roles in retail and supply chain. We shortened the length of time for associates to become eligible for benefits, and we announced a new paid time off policy that provides associates with greater flexibility in how they use their time off. We implemented new retail and supply chain training programs, and we also made dramatic improvements with safety by improving our injury rate by 47%. While we expect the labor environment will continue to be a challenge, all the actions we are taking are critical to attracting and retaining top talent. Our second of our five strategic priorities is elevating execution to win the day. This involves increasing the automation to focus on more value-added activities and implementing winning technology solutions. In 2021, we made significant progress on our development of a comprehensive transportation management system. We will continue to invest in automation and technology to ensure we can execute more efficiently in 2022 and beyond. Moving to our third strategic priority, transforming the supply chain. To date, we have implemented sustainable supply chain improvements to drive savings, optimize our network footprint, and rationalize SKUs. In 2021, we closed two warehouses and opened a new distribution center in Severn, Maryland, which represented our most significant addition to the supply chain network in many years. This facility is alleviating the stress on some of our DCs in the short term and will support our growth in the long term. In addition, as you may have read a few weeks ago, we reached an agreement with Coastal Pacific Food Distributors to expand our distribution footprint on the West Coast. Through our partnership, we will launch operations out of Coastal's 500,000 sq ft multi-temperature distribution center in Stockton, California. This facility will begin servicing our customers next month. Having a West Coast presence allows us to provide faster, fresher, more cost-effective deliveries to our customers, so they can ensure their shoppers have access to the critical food and household supplies they need. The arrangement will also save roughly 1 million gallons of diesel fuel annually by helping us reduce fleet mileage by 10% or more than 7 million miles beginning this year. This agreement also advances our work in ESG by reducing our carbon footprint through lower greenhouse gas emissions by an estimated 10,000 metric tons. As of today, we're on track with our initial cost savings of $15 million-$30 million from our supply chain transformation efforts. We expect that those savings will accelerate and begin to be accretive in 2022. Our fourth strategic priority is acting on insights to optimize customer and product portfolios. We are focused on positioning our military segment for success through a variety of tactics, including portfolio diversification. We are also working to expand customer profitability and services. As a food solutions company with deep expertise across retail, wholesale, and distribution, we are uniquely equipped to provide more insights and services to our customers. We're also working to tailor our retail assortment to align with local community preferences and continue enhancing our upmarket retail experience. Our fifth and final strategic priority is launching customer-centric innovative solutions. We will leverage data-driven insights to help us grow our own brands and their own brands' profitability, and to increase our e-commerce sales. We will also be offering new services through strategic partnerships that create the ecosystem of the future. All right. That's a summary of our 5 strategic priorities, the foundation of our operational plan. We're running SpartanNash differently. As we look forward to 2022, we are tracking metrics across these initiatives to continually measure our success and keep ourselves accountable. Among these metrics, our 2022 key performance indicators will focus on associate retention, safety, outbound throughput, fill rate, and adjusted EBITDA. I'm excited about where we've been and where we're headed as a company. As we continue to execute, I believe we'll make SpartanNash an investment that will yield meaningful long-term returns to all of our shareholders. With that, I'll turn it over to Jason to walk you through our financial performance in greater detail and provide you with our fiscal 2022 outlook. Jason? Thanks, Tony, and welcome to everyone joining us on today's call. Let's jump into the detailed results. Net sales for the fourth quarter were $2.1 billion compared to 2020's fourth quarter sales of $2.25 billion. Outside of the impact of the 53rd week sales of $159 million, our fourth quarter sales grew $5 million. This growth can be attributed to increases in comparable store sales within the retail segment and continued growth with certain existing food distribution customers, as well as inflationary pricing across our portfolio. Our GAAP EPS came in at $0.62 per diluted share in the quarter, compared to $0.34 per share in the fourth quarter of 2020. On an adjusted basis, EPS for the quarter was $0.18 compared to EPS of $0.43 last year. The primary variance between our GAAP and adjusted EPS is related to the transition impact of the new paid time off plan that Tony mentioned earlier. The transition resulted in a $21.4 million reduction in our year-end balance sheet accrual and a corresponding one-time gain. During the fourth quarter, the company elected to transition from a grant-based time off policy to an accrual-based policy, which resulted in a lower required accrual balance at the end of the fiscal year. As Tony mentioned, the new time off policy provides more flexibility to associates and represents a greater ongoing benefit. On an adjusted basis, the decrease in profitability from prior year was due primarily to an increase in our supply chain expenses. Labor market conditions continued to drive higher wages, additional use of overtime, and create additional reliance on costly third-party contractors. Higher corporate administration costs, including incentive compensation, decreased earnings compared to the prior year. The increase in expenses was partially offset by an improvement in the gross profit rate, where we saw an increase to 15.4% compared to 15.1% in the prior year quarter. Gross profit rate growth was driven by improvements within the food distribution and military segments, as well as a change in our overall mix to more margin-accretive retail segment sales. Inflation during the fourth quarter led to higher LIFO expense, which increased $9.2 million over prior year fourth quarter. This incremental expense was equivalent to $0.19 in earnings per share. Adjusted EBITDA was $43 million in the fourth quarter compared to $49 million in the fourth quarter last year. The 53rd week in 2020 accounted for $4 million of the change year -over -year. Now turning to our segments. Retail's net sales came in at $613 million for the quarter compared to $627 million in the fourth quarter of 2020. This decrease was primarily due to cycling the $49 million impact of the 53rd week of 2020. Beyond the impact of the 53rd week, retail sales experienced a solid increase. Our comparable store sales continued to accelerate and were up 7.3% for the fourth quarter, while our two-year comparable sales were up 16.9%, an increase of 340 basis points sequentially from the third quarter. Comparable store sales benefited from the consumer shift towards food at home and rising inflation. Fourth quarter reported operating earnings in the retail segment were $23.3 million compared to $6.9 million in 2020's fourth quarter, driven largely by the transition impact of the new paid time off policy, increased comparable store sales, and lower restructuring and asset impairment charges. Retail adjusted operating earnings were $12.3 million for the quarter compared to $9.4 million in 2020's fourth quarter. Adjusted operating earnings excludes the transition impact of the new paid time off plan, the restructuring and asset impairment charges, and other items detailed in Table three of this morning's release. Net sales in the food distribution segment were $1.03 billion in the fourth quarter compared to $1.11 billion in the prior year, which was driven by the impact of cycling 2020's fifty-third -week sales of $76.4 million. This decline was partially offset by favorable inflation and cycling $5.9 million in stock warrant -related impacts from the fourth quarter of 2020. We continued to see an upward trend in inflation as the quarter progressed, particularly in our core distribution business, averaging above 7%. Certain categories, including proteins and produce, continue to see the largest increases, while core grocery categories increased in the range of about 5%. We still anticipate further inflationary increases into 2022. However, as we previously noted, we expect that these increases will be passed through to our customers. Reported operating earnings for food distribution in the fourth quarter totaled $11.7 million compared to $11 million in the prior year quarter. This increase in reported operating earnings for the segment related to the transition impact of the new paid time off policy in the current year and lower restructuring and asset impairment charges. These gains were partially offset by higher supply chain expenses and a higher rate of inventory shrink. Adjusted operating earnings totaled $4.8 million in the quarter versus the prior year's fourth quarter adjusted operating earnings of $13.1 million. Adjusted operating earnings exclude the transition impact of the new paid time off plan and the restructuring and asset impairment charges. Military net sales of $445 million in the fourth quarter decreased by just over 13% compared to prior year sales of $514 million, which included an incremental $33.4 million due to the 53rd week. In addition to the 53rd week, the decrease was related to the continuation of lower demand at domestic commissaries and a reduction in export sales as a result of continued supply chain challenges at international shipping ports in the current year quarter. These decreases were partially offset by price inflation in the current year quarter. The fourth quarter reported operating loss in the military segment was $1.6 million compared to $0.5 million in 2020's fourth quarter, reflecting the continued decline in volumes as well as a higher rate of supply chain expenses similar to what we have observed in our food distribution business. These declines were offset by the transition impact of the new paid time off policy and improvements in gross margin. The segment's adjusted operating loss of $4.7 million for the quarter excludes the transition impact of the paid time off policy in the current year and is down from $0.4 million-dollar loss in 2020's fourth quarter. Our fiscal 2021 adjusted EBITDA is $213.7 million compared to $239.1 million in the prior year. Due to the reduction in our net long-term debt balance of $71.5 million, our leverage ratio improved to 1.8x compared to 2x at the end of fiscal 2020. For the full year, we generated consolidated operating cash flows of $161 million compared to $307 million in the prior year. The decline was driven largely by cycling the prior year's significant increases in sales volume related to COVID-19, which resulted in incremental earnings as well as a reduction in working capital in the prior year. The strong cash flow performance in the current year enabled the continued paydown of long-term debt, resulting in favorable interest expense compared to prior year. In fiscal 2021, the company paid over $28 million in cash dividends equal to $0.80 per common share. The company also repurchased 265,000 shares during 2021 for a total of $5.3 million, continuing our focus on shareholder return. As covered in today's press release, we're providing our initial guidance for fiscal 2022, which incorporates both the elements of our long-term strategy and current expectations for the 2022 retail and supply chain environments. Overall, we expect the strong results from this past year to continue into 2022, with consolidated net sales to remain consistent with fiscal 2021, with a range of $8.9 billion-$9.1 billion. In retail, we believe revenues will be stable and will result in comparable sales ranging from flat to 2%. In food distribution, we expect sales to increase 2%-4%. We're projecting that trends in our independent customer base will be similar to that of our corporate retail segment. We also expect to see growth in other areas of our portfolio. Within our military business, we expect a continued decline in commissary demand, resulting in a 3%-7% sales decline. Our guidance also includes an increase in the company's profitability over the prior year. We expect fiscal 2022 adjusted EBITDA to be in the range of $214 million-$229 million, compared to 2021's adjusted EBITDA of $214 million. As discussed in our earnings release, we will be revising the presentation of adjusted EPS beginning in fiscal 2022 to include an adjustment for LIFO expense or benefit. We believe this change will better enable investors to evaluate our performance and reduce unnecessary variances between our non-GAAP performance measures. Prior to considering the revised presentation, our fiscal 2022 adjusted earnings per share ranged from $1.75- $1.90, compared to $1.70 in 2021. The revised presentation, excluding the impact of LIFO, reflects 2022 adjusted earnings per share ranging from $2.10- $2.25. This guidance compares to fiscal 2021 pro forma adjusted earnings per share of $2.08, which was prepared on a consistent basis. Profitability increases in both adjusted EPS and adjusted EBITDA are expected due to margin rate improvements across our portfolio and the positive impact of executing elements of our strategy, which Tony discussed earlier. We expect some of the same challenges within supply chain labor and product availability will persist into 2022, partially offsetting the growth potential from our strategies. However, we are reaffirming our expectations for run rate savings from our supply chain transformation initiative of $15 million-$30 million. We expect to begin achieving savings within this run rate range by the end of 2022. Due to our improved leverage, we have revisited our capital allocation for 2022. Our fiscal 2022 guidance reflects total capital expenditures in the range of $100 million-$110 million for the fiscal year, which is an increased investment in our core operations and growth initiatives. In addition, we plan to increase our share repurchases in connection with a recently approved $50 million buyback program. In 2022, share repurchases will be balanced with other value creation opportunities to deliver the best value to shareholders. We will also continue to provide our regular quarterly dividend. Depreciation and amortization is expected to be in a range of $90 million-$100 million, and interest expense from $15 million-$17 million. We expect our reported and adjusted effective tax rate to range from 24%-25.5%. Now I'd like to turn the call back over to Tony. Thank you, Jason. Before I turn to my concluding remarks, I want to briefly address the announcement we made earlier this month about the three new independent directors that are appointed to the company's board of directors. Last summer, we began a comprehensive board refreshment process with the assistance of a leading executive search firm. We are delighted to welcome Julien Mininberg, Jaymin Patel, and Dr. Pamela Puryear to the board. I am certain SpartanNash will benefit from their technology, distribution, retail, consumer brand, and human resources expertise. We also announced that current board members, Frank Gambino, Yvonne Jackson, and Elizabeth Nickels, will not be seeking reelection as SpartanNash directors at this year's annual meeting. On behalf of the board and the company, I wanna thank them for their years of guidance and dedication to SpartanNash and its shareholders. All right. In closing, we are very pleased with our fourth quarter and full year 2021 financial performance. We're in a solid position heading into 2022. As we are navigating industry-wide labor and supply chain challenges, we are focused on our five strategic priorities, which include improving operational excellence and our supply chain transformation initiative. We are confident that we are very well positioned to deliver value for shareholders this year and in the long term. We are eager to share many more details around our achievements and strategy. We are still working toward hosting our investor day, which is likely to be virtual due to COVID. Details on this meeting later this spring will be forthcoming. We hope you'll be able to join us. With that, I'd like to turn the call back to the operator and open it up for your questions. We will now begin the question -and -answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Chuck Cerankosky from Northcoast Research. Please go ahead. Good morning, everyone. If you could, Tony and Jason, can you talk about labor supply and supply chain issues over those, call it, the first two months of the new year, versus how things progressed in the fourth quarter? Great. Happy to, Chuck. I would say the year has started in a similar way as it left off at the end of last year. The labor market is still very tight. We have made, as we noted here in our comments earlier, a number of improvements to our offering for, particularly for frontline entry-level jobs. We've seen improvement there, but it's still been, you know, difficult sledding. There's still quite a bit of tightness in the labor market. Even though we have seen a waning of some of the highest level of turnover we may have seen, you know, back in Q2 and 3, it's still very high and still very challenging. But improving modestly, I would say, kind of every week in and week out. On the overall supply chain on our inbound, I would say candidly, we have not seen any real improvement there. We're seeing the same type of disruptive effects. If you think about what's going on there, the labor that we just talked about here has impacted all of our manufacturing community. They're still struggling to produce the orders that we make. That actually hasn't changed much. Matter of fact, it's probably got a little bit worse since the middle of the fourth quarter. What the headline I think is that with the labor issues and challenges, there's less surge capacity in the overall supply chain. Whether it's from agriculture, manufacturing, trucking, even the inventories that are held at store level, all those capacities are more limited. Something like a normal disruptive effect, like a snowstorm in the Midwest, will cause outages to be more significant and linger for a little bit longer. We don't see a snapback on the overall supply chain issues on our inbound service. We're optimistic that we're seeing some good progress on labor, although again, still very difficult. Can you give us some numbers on your fill rates, where they've been, where they are, say over the past six months? Maybe also the kind of out of stocks you're seeing on the inbound side. Yes. Great question. These are the rough numbers, of course. We saw if you go back to right about a year ago, we had gotten up to numbers that are around 70% on fill rate on inbound supply. That number has eroded over the last nine months. What we're seeing right now is more something closer to 60% overall. As you know, that's on overall variety. Volume might be a little bit better than that in terms of the volume of the goods we're receiving. As manufacturers are struggling to fill orders, they're cutting SKUs that are lower performing, slow moving SKUs, and that shows up as bigger cuts for us on the inbound. Somewhere in that neighborhood of probably about, you know, 10 overall percentage points of decline over the course of the last year. How about fill rates outbound to your customer? Outbound fill rates have actually gotten a little bit better than what they were. We separately measure our performance in terms of what we have and how well we service what we can send going out of the building. We actually set that as one of our top five KPIs this year to focus on that discretely. We are approximately on plan for that. We're fulfilling about 90% on the outbound, roughly. We believe that with our supply chain transformational programs and all the efficiencies that come from that, there'll be upside to that number as well. The team's doing a pretty good job of managing what inventory we do have, and that number's actually gotten better over the past several months. Thank you. The next question comes from Greg Badishkanian from Wolfe Research. Please go ahead. Good morning. This is Spencer Hanus on for Greg. I just wanted to talk about food distribution for a minute. Maybe you could just walk us through sort of how you guys get to the top and bottom of that $15 million-$30 million cost savings target that you have there? Then I guess more near-term, how much of a drag was incremental supply chain costs on profitability in food distribution during 4Q? Hey, Spencer, this is Jason. Good morning. Good to speak with you. Starting with the first question on the 15-30 and how do you get to the top and bottom end of that range. We've talked a little bit about our initiatives over the last couple of quarters and really at the core of it is ensuring that we build momentum on our operational transformation in our warehouses, that we continue to execute against our network optimization. You've seen a little bit of that already with a couple of warehouse closures, one opening, and then the West Coast expansion with the Coastal partnership. Then also many of the kind of behind-the-scenes building blocks elements of supply chain performance. For us to get to the bottom end of the range is really to build out those core components. To move to the top of the range would really be exceeding or excelling on some of the operational improvements in the warehouses. That said, you know, the reason you've got a range here is this is not an overnight transformation. It takes time for these things to materialize and for the programs to be codified. This is all with the backdrop of the labor market conditions that Tony mentioned earlier. We're operating under a context of a tight labor market with a fair amount of attrition, not just at SpartanNash, but more broadly, that causes a longer lead time to make some of the changes stick. That said, we're convinced and have a lot of conviction behind the $15 million-$30 million, and that's why you see it in our outlook. We believe that we've got real value creation opportunities here, and we're running against it. Got it. Could you just provide a little bit more color on the sales guidance for this year and what your underlying assumptions are for volume in particular, just given with inflation running at 7%, I guess that would imply sort of a big decline in volume. Just talk a little bit more about what sort of how you guys build up to that, sales outlook. Yeah. Maybe starting from an inflation standpoint, we expect elevated inflation to continue into 2022 and frankly don't see inflation easing at least in the next few months. That said, if we look at the year in its totality, we're projecting a lighter inflation outcome than we saw at the end of 2021. When you think about the revenue outlook, you should think about it with a lighter inflation assumption and more flattish volumes. Remember that we're still coming off of a post-COVID surge in food at home versus food away from home, and also the tailwinds of some of the government stimulus that supported demand and has supported demand going forward. The way I think about it is kind of flattish volume with support from a 3%+ inflation on the year. Really, you know, there's a lot of uncertainty in the market and I'm sure you've heard this from many of the companies that you cover. There's no perfect crystal ball on what inflation's gonna look like at this point. We're predicting, like I said, continued inflation early into 2022 and a bit of a moderation in the back half. We'll keep you updated as that develops. Great. Thank you. The next question comes from Scott Mushkin with R5. Please go ahead. Hey, guys. Thanks for taking my questions. I wanted to get back into distribution as well. You know, at least compared to our estimates, the revenues were a little bit light. Then, looking at the industry itself and what you did in retail, you know, I would've thought there might have been some outperformance there. I just wanted to understand, you know, what may be driving that. Are there some customer losses? Are the independents just not performing as well? Anything you could shed light on that'd be great. Yeah, Scott, this is Jason again, and good morning. Thanks for joining. You know, thinking about the distribution business, our core business, our independents have grown broadly at a similar pace to our retail business. The important difference here is that, and I mentioned this last quarter, we hit the trough with DG last quarter, but we're still lapping higher comps on that from last year. You're seeing that muddying some of the comps overall. Okay, that's great. I know you guys gave a little bit update on the military business, but I thought maybe, you know, getting a little bit more detail on how you're trying to change that, a little bit more granularity if you would. Sure. Scott, this is Tony. We had, you know, a tough year in military on the top line, really the last two years. As you know, COVID actually provided a surge for retail broadly, but because of the base closures and other complications of the military business, it was the opposite. We had declining sales that were greater than our expectations in 2021 with the military business. We had done some really fine work in improving the variable margin in that business. They don't all show as sort of discretely because of the declining volume. As we start settling in and what we think the longer run volume is there, we'll be able to make some of the fixed changes to that business, fixed cost changes where those margins will manifest. We are monitoring the base situations very carefully. Most of the bases are back now and have a few or no restrictions for retirees to come on base and buy their groceries. We're still looking at that very closely. We also saw in the fourth quarter a little slightly disproportionate loss in the international business because of the difficulty with the shipping lanes, as you're well aware. We had a little bit more, a higher ratio of that decline was on the international business than what that represents for our total business. You know, monitoring carefully, the story here is gonna be to continue to drive the efficiencies, particularly through the supply chain, improve our overall cost, and our efficiency and effectiveness there as we settle in on what we think the long run volume is going to be, which we hope is gonna get settled here pretty quickly. We'll be able to make other modifications of the business, and we think we'll be on the right track from a profitability standpoint. Perfect. I'm gonna slip one last one in, and I just wanted to, you know, obviously, the change in the way you're reporting EPS. I guess you're excluding LIFO. I think that's what I got. You know, what drove that? I don't think other people are doing that in the industry. I know we look at EBITDA a lot, but I was just wondering what kinda drove that decision. I'll yield. Thanks. Sure. This is Jason again. Yeah. What drove the decision was that our adjusted EPS already excludes LIFO and adjusted EPS did not. You had a divergence in the adjusted measures that we believe was potentially confusing. What we've done is lined up those two measures with respect to the treatment of LIFO. We also took a step back to compare how other peers were reporting in this space, both with whether they were a FIFO reporter already or how they adjusted for their LIFO expense. We wanted to make sure we lined up consistent with what the predominant practice was, which we found to be adjusting the adjusted EPS for LIFO. All right. Perfect, guys. Thanks for taking all my questions. The next question comes from Kelly Bania with BMO Capital Markets. Please go ahead. Hi. Good morning. Thanks for taking our questions. First, just wanted to ask about the quarter and the gross margin at retail. I think the other two segments were called out as drivers of supporting the gross margin expansion in this fourth quarter. Curious what you are seeing at retail and how we should think about 2022 gross margin at retail as well. Hi, Kelly. Good morning. Good to have you on here. This is Jason. Our gross margin in the retail business was, I would say, down moderately, consistent with what you would have seen the better performers in the retail space looking like. In the comments earlier, what we talked about was gross margin improvement in the other two segments, as well as the benefit of retail as a share of the total business driving total gross margin up. The improvement to 15.4% overall gross margin was helped by unit-level improvements in military and food distribution, as well as the share of total business that retail represented in the quarter, even though retail slipped backwards modestly in gross margin. Any color on what to expect there in 2022? Yeah, we expect to have relatively strong margins continuing going forward. One of the other nuances to highlight in retail is the, you know, there's a little bit of variability with retail gross margin related to fuel. Fuel is, as you know, been up and down. Fuel prices themselves on a per gallon basis are up more than 50% year-over-year. You've got a little bit of noise in that overall retail margin. I wouldn't read too much into the decline as a deterioration as much as a little bit of variability in the market. Again, the way I characterize it is at our performance on gross margin, though we don't report it, the decline is modest and is at or better than some of the other players that you've seen report recently. Okay. As we think about your guidance for 2022, is it fair to think about the majority of that or really all of that being driven by the supply chain initiative? You reiterated that $15 million-$30 million target, I guess, maybe being at that run rate towards the end of the year. Is that really driving all of the improvement in EBITDA? Can you help us think about how that impacts segment profitability as we go through 2022? Sure. I would say that it's certainly a significant component of the improvement plan, but it's not the only action out there. I'd be remiss if I didn't highlight the fact that the plan and the outlook continues to reflect increased labor costs in the wage environment that we're operating in as a significant headwind. That would be offset by the supply chain transformation as well as significant gross margin improvement programs that we have and we expect to continue going forward. You've seen us build our gross margin in both food distribution and military. You've seen us stabilize or improve in most quarters the retail margin. We expect margins to continue to be solid and gross margin solid and growing, partially offset by that labor headwind and supply chain headwind context, and topped off with the supply chain transformation that we've talked about the last couple of quarters. Are you able to quantify the labor cost inflation or your plans there for the year just to help us understand the magnitude of that? In round numbers, we're looking at somewhere in the neighborhood between $40 million and $50 million overall. To put that in context, that's probably somewhere between 2 and 3 times what we would normally see. That's sort of the numbers we're up against. Great. Just last one for me, just as we think about the distribution segment, is there still any noise from lapping the DG impact as we move through 2022 or is that kind of leveled out now as we move through the rest of the year? We are still lapping higher comps. Certainly in the fourth quarter. What we talked about last quarter was we hit the trough or roughly the trough in the third quarter, but we still have four quarters of higher comps to lap as we kind of burn off those higher periods. Okay, thank you. As a reminder, if you would like to ask a question, please press star and then one to join the question queue. The next question is a follow-up from Chuck Cerankosky from Northcoast Research. Please go ahead. Thanks. If we take your inflation forecast, Jason, of about 3.5% I think you said, what kind of LIFO number does that give us? Our LIFO expense this year, just for color, in 2021, the LIFO expense was about a little north of $18 million, on a slightly higher inventory or a slightly higher inflation. For color and perspective, yeah, what you should expect is a number that's gonna be in the teens. It's not perfectly precise and linear as you know, going through this, but it's gonna be a number that's in the teens. Perhaps a little less than what we saw in 2021? Yeah. Potentially less than what we saw in 2021. What I mentioned in my comments earlier was on the prior EPS method. We had an EPS range that I noted in my comments. That EPS range was slightly higher versus 2021 than what the 2022 range is versus the new pro forma. Part of the reason for that differential is because of the LIFO decline that we're projecting in 2022 versus 2021. All right. Thank you. This concludes our question -and -answer session. I would like to turn the conference back over to Tony Sarsam for any closing remarks. All right. Well, thank you all for your participation on today's call. Really appreciate the thoughtful questions and the ability to spend time with you today. We look forward, as always, updating on our continued progress throughout the year. Thank you all again, and have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.