Good morning, ladies and gentlemen, and welcome to Tractor Supply Company's conference call to discuss fourth quarter and fiscal year 2020 results. At this time, all participants are in a listen-only mode. Later, we will conduct a question- and- answer session, and instructions will follow at that time. We ask that all participants limit themselves to one question and one related follow-up. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Tractor Supply Company. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Mrs. Mary Winn Pilkington, Senior Vice President of Investor and Public Relations for Tractor Supply Company. Mary Winn, please go ahead. Thank you, operator. Good morning, everyone. Thanks for taking the time to join us today, and I do hope you're all staying safe and well. On the call today are Hal Lawton, our CEO, and Kurt Barton, our CFO. After our prepared remarks, we'll open the call up for your questions. Seth Estep, our EVP and Chief Merchandising Officer, will join us for the question and answer session. Please note that we've made a supplemental slide presentation available on our website to accompany today's earnings release. Let me reference the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. This call may contain certain forward-looking statements that are subject to significant risk and uncertainty, including the future operating and financial performance of the company. In many cases, these risks and uncertainties are beyond our control. Although the company believes the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct, and actual results may differ materially from expectations. Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included at the end of the press release issued today and the company's filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed. Investors should not assume that statements will remain operative at a later time. Tractor Supply undertakes no obligation to update any information discussed in this call. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to US GAAP are included in today's press release and presentation, which are posted on our investor relations website. Given the time constraints and the number of people who want to participate, we ask that you please limit your questions to one with a quick related follow-up. I appreciate your cooperation. We will be available after the call for follow-up. Thank you for your time and attention this morning. Before we get started, may I ask you to please turn your attention to our year-in-review video that can be seen on our webcast. Good morning, and thank you everyone for joining us today. I hope you enjoyed the opening video. We will all always remember 2020. While we'll never recall the year with anything close to fondness, at Tractor Supply, 2020 will be remembered with a small measure of pride as we reflect on our efforts to take care of our fellow team members, support our customers, and invest in the future. None of these results would've been possible without the hard work and dedication of our team, and I want to express my sincere appreciation and gratitude to the more than 42,000 Tractor Supply team members for how they have lived our mission and values and worked together to take care of each other and our customers. My thanks also go out to our supply chain and vendor partners who've done an excellent job supporting our business. The environment continues to be uncertain and challenging. Vaccines are on the rise, but our country's still very much in the midst of a pandemic. Given the pace of the vaccine rollout, it will be at least fall before we're back to some form of normality. Throughout the pandemic, our utmost priority has been to take care of the health and safety and wellbeing of our team members and customers. We've spent tens of millions of dollars on cleaning and masks, plexiglass and sanitizer. We've provided almost 700,000 hours of COVID sick pay. We've conducted nearly 20,000 COVID tests, and we rolled out company-wide a contact tracing wearable devices for all team members to use. We will continue to spare no expense in this area in 2021. In addition to rolling out industry-leading safety protocols, we've also shown our commitment to our team members through appreciation bonuses, increased wages, and broader benefits offerings. At Tractor Supply, we are committed to being a part of the solution for our team members, our customers, and our communities, we remain steadfast in that commitment going forward. Shifting and talking about 2021, we believe there is as much uncertainty this year as there was in 2020. How fast will vaccines roll out? How will the derivatives of COVID impact transmission rates and antibody effectiveness? Will there be another stimulus? How will consumer spending evolve through the year? Given these questions and all the other elements of uncertainty, we're planning for fiscal 2021 based on a range of potential outcomes. The initial guidance we're providing today is consistent with our long-term algorithm that we shared with you at our enhanced earnings event in October. Importantly, our 2021 outlook reflects the strategic initiatives that are foundational to our Life Out Here strategy. With the actions we're taking, we're committed to emerging from the pandemic stronger than before. Now let's shift to the business review section for the fourth quarter of 2020 and the fiscal year. We delivered another strong quarter that exceeded our expectations. In the fourth quarter, we had strong net sales gains of 31.3%, with comparable store sales up 27.3%. We continued to gain market share and benefited from customer shopping with us with larger baskets. All customer segments and all value segments experienced growth. For the fiscal year, we added over $2 billion in revenue. We reached over $10 billion in sales for the year, a significant milestone for the company. Once again, our quarterly results were remarkably consistent across all periods of the quarter, across all product categories, across all geographic regions of the country. Both our transactions and ticket growth we're seeing, and they were very balanced. For the third quarter, e-commerce saw strong triple-digit growth and increased significantly as a percentage of our overall sales. The work we did this year to improve our omni-channel capabilities has certainly resonated with our customers as we've seen several years of digital adoption accelerate into just a matter of months. For the year, about 75% of our omni-channel sales were picked up at a Tractor Supply store, further reinforcing the importance of our stores to our customers. As we've experienced in the last several quarters, we continue to have strong performance and market share gains in our consumable, usable, and edible categories, with growth exceeding 20% for the quarter. In 2020, we had more customers shop with us than ever before, with increased sales across our existing customer groups, new customers, and reacquired customers. Shifting to talk about a few other operational highlights for 2020. We added more than 10,000 team members to support the growth of our business. These new team members were critical in our ability to service our customers at these elevated levels and also flow volumes through our supply chain. We pivoted our marketing spending from more traditional print media to digital and national TV. We launched our first national advertising campaign in over a decade. Our research indicates that Tractor Supply has become more top of mind with consumers as our unaided brand awareness increased over 800 basis points. We expanded our in-store and digital capabilities to make it easier and safer to shop at Tractor Supply. We were nimble and agile in offering curbside pickup and same-day, next-day delivery. We also relaunched our website, and we rolled out a new mobile app which already has over 1 million downloads. We celebrated the opening of our 1,900th store in Oakhurst, California, and announced plans for a new distribution center in Navarre, Ohio, that is expected to be operational by the fall of 2022. We reinforced our longstanding commitment to ESG through improved disclosure and transparency. We also surpassed our original target of a 25% reduction in carbon emissions five years ahead of plan. If we just step back, overall, 2020 really highlighted the resiliency of the Tractor Supply team and illuminated the potential for the business. We participate in a large attractive market. We have momentum. We're investing in our business through our Life Out Here strategy. We have the opportunity to create and define our future and extend our leadership for years to come. Before I hand the call over to Kurt, I'd like to address the impairment charge we took for the Petsense business. We recently completed a strategic review of Petsense. Although Petsense had solid sales performance in 2020, we reached the conclusion to reduce the number of new store openings planned over the long term and identified some underperforming stores to close. We expect to close 10-15 stores in 2021. Combined, this resulted in a pre-tax charge of about $74.1 million, or $0.49 per diluted share after tax. Petsense offers a differentiated shopping experience to the suburban and rural pet owner. As mentioned, the business is currently doing well overall. We remain committed to growing and investing Petsense. Earlier this week, we named Matthew Rubin as SVP and General Manager for Petsense. Matthew brings a strong retail background, and I'm confident that he'll be an immediate asset to the business. I look forward to sharing more about our plans with you over time. Now, Kurt will walk you through greater details of the quarter and the year, along with our 2021 outlook, before I return to give you an update on our Life Out Here strategy. Thank you, Hal, and hello to everyone on the call. This year was like no other in the history of Tractor Supply as we delivered record sales and financial performance for the year. The fourth quarter continued to benefit from the macro trends that have worked to our favor. As we rank order our comparable store sales performance, the trends that I shared with you from the second and third quarter continue to play out in our sales performance. The largest driver continued to be our customers' desire for product categories that support their Out Here lifestyle as they shifted spending away from travel, entertainment, and dining to creating their own experiences. For Tractor Supply, this included purchases such as outdoor recreation and living, like UTVs and outdoor fire pits, along with all those indoor projects and winterizing their homes and equipment. This trend also includes living a more self-reliant lifestyle. The adoption of new hobbies like backyard poultry, hunting, gardening, and bird feeding have continued, and we believe these hobbies and trends are becoming more ingrained in our customers' behavior. The strong brand awareness and new customer performance that Hal discussed was the second-largest driver of our comparable store sales performance. This was then followed by tailwinds such as emergency response-related demand due to the hurricane activity and various strategic initiatives such as our investments in digital and the omni-channel experience, same-day delivery, and our private label credit card. Exclusive of the modest hurricane activity benefit, the weather impact was generally neutral compared to the prior year. We had robust performance in our big-ticket categories, which exceeded our overall comp sales growth. This was driven by broad-based strength with safes, recreational vehicles, utility vehicles, trailers, and generators representing the top five product categories. Fourth quarter gross profit exceeded our expectations due to higher demand for our products and a reduction in promotional and clearance activities. These factors were partially offset by higher transportation costs as a percentage of net sales. The result was that gross margin as a percentage of sales was 34.6% in the fourth quarter, an increase of 75 basis points. Moving on to SG&A. The 46 basis point increase in adjusted SG&A as a percent of net sales was attributable to three primary factors. First, incremental costs related to the COVID-19 pandemic. Second, increased incentive compensation due to record sales and profit performance in the quarter. Third, investments in our strategic initiatives. The additional costs incurred due to the COVID-19 pandemic included appreciation bonuses to team members across stores and distribution centers, as well as additional labor hours and supply costs dedicated to cleaning and sanitation to enhance the health and safety of team members and our customers. COVID-19 related incremental costs were approximately $33 million in the quarter, and that compares to our estimate of $15 million-$20 million going into the quarter, which resulted from an unexpected resurgence of COVID-19 cases late in the year. For the quarter, adjusted operating profit increased nearly 36%, with operating profit margin of 9%, an improvement of 29 basis points. Adjusted net income was $193.2 million, an increase of 34%. Adjusted diluted EPS was $1.64, an increase of nearly 36%. For the year, we reached an adjusted operating profit margin of 10.1% and had strong growth in adjusted diluted EPS of 47.4%. Turning now to our balance sheet, which remains strong. Merchandise inventories were $1.8 billion at the end of the fourth quarter, representing an increase of 5.6% in average inventory per store. This level of inventory is still a bit lighter than we would like given the momentum of the business, and we are working with our suppliers and vendors to build our stock to support this momentum. During the quarter, we issued our first ever public offering of debt, and we received investment-grade ratings from both Moody's and S&P, given our strong credit metrics. We issued $650 million in 10-year notes at a coupon rate of 1.75%. The proceeds from the debt issuance were used for refinancing and repayment of term loans as we plan to maintain a leverage ratio below 2.5 x. Fiscal 2020 was a year of strong cash flow from operations, which totaled $1.39 billion, an increase of $582 million or 72%. For the full- year, we returned a total of $518 million in capital to our shareholders through the combination of share repurchases and cash dividends. We currently have approximately $1.1 billion remaining on our authorization for share repurchases. Today, our board reconfirmed our commitment to returning cash to shareholders through a 30% increase in our quarterly dividend, which puts our dividend payments in line with our target of at least a 30% payout ratio. Moving now to our guidance for 2021, that is detailed on page 11 of the supplemental deck. The impact that the COVID-19 pandemic will have on the broader economy, the consumer, and our fiscal 2021 results remains uncertain. Given that backdrop, we are planning our core fiscal 2021 based on a range of potential outcomes. To date, while still very early in the first quarter, we continue to see strong sales momentum in the business. For fiscal 2021, we expect net sales in the range of $10.7 billion-$11 billion. Comp store sales are anticipated to be in the range of down 2% to up 1%. For the year, we anticipate operating profit margin to be in the range of 9.3%-9.6%, a significant step up when compared to our baseline 2019 performance. In fiscal 2020, approximately 90% of the operating margin year-over-year gain was driven by gross margin improvement. For fiscal 2021, we anticipate some give back in gross margin and SG&A to slightly increase as a percentage of sales compared to fiscal 2020 on an adjusted basis. Let's go into a little more detail on each of these areas. Our expectation is for modest gross margin contraction in 2021 as we anticipate incremental promotional activity along with higher freight costs. Partially offsetting these pressures are an expected benefit from vendor funding for our Field Activity Support Team program. While the FAST program expenses will be reported in SG&A with a year-over-year impact of about 40 basis points on each. Breaking down SG&A. The leverage from reduced COVID-19 costs and more normalized incentive compensation is expected to be offset by ongoing wage pressures, investments in our supply chain and digital space, and higher depreciation and amortization expense. As a reminder, the FAST program costs are reported in SG&A. We are forecasting SG&A as a% of sales to slightly de-leverage. Adjusted for normalization of the FAST program costs, SG&A is expected to remain relatively flat as a% of sales. As always, we would encourage you to think about our business between the first half of the year and the second half, as this is in line with how we manage the business. As you model 2021, I want to point out a few items that will impact comparability. Appreciation bonuses impact the second and fourth quarters of 2020, while wage increases of about $13 million per quarter took effect in the third quarter of 2020. Costs related to the COVID-19 pandemic remain an uncertainty for us in 2020, as our utmost priority remains the health and safety of our team members and our customers. For the first quarter, we anticipate costs related to the pandemic will continue at elevated levels. Additionally, as you think about the cadence of 2021, our business performance is expected to be stronger in the first quarter as our comparisons step up starting in the second quarter. The first quarter of 2021 is forecast to have the highest comp performance of the year and correspondingly, the highest operating profit growth rate. The second quarter is likely to be our most difficult earnings comparison of the year due to a couple factors. Please recall the second quarter of 2020 experienced the strongest gross margin performance, driven by the least sales promotional activity. In addition, we expect incremental costs in Q2 of this year as we support the launch of an upgrade to our Neighbor's Club loyalty program. Moving to below the line, we expect total interest expense for 2021 to be approximately $27 million, while our effective tax rate is anticipated to be in the range of 22.5%-22.8%. Our capital spending is anticipated to range from $450 million-$550 million, with more than 80% of that spending going towards growth initiatives. The vast majority of the capital spending increase is attributable to new in-store initiatives and supporting technology for our Life Out Here strategy. Depreciation expense is estimated to increase approximately $50 million. This is above our recent run rate as we accelerate our investments in the business. For the year, we expect share repurchases to reduce our diluted weighted average shares outstanding by about 1%-2%. For modeling purposes, we've assumed weighted average shares outstanding of about 116 million shares in 2021. Net income is forecast in the range of $750 million-$800 million, or $6.50-$6.90 per diluted share. With our strong performance in 2020 and the current momentum in our business, the team at Tractor Supply is excited about the Life Out Here strategy. Our clear focus enables us to continue to be the innovation leader in our channel and emerge from the pandemic stronger than before. Now I'll turn it back to Hal. Thanks, Kurt. Now let's shift into 2021. As Kurt said, we're laser-focused, and we're focused on continuing to gain market share. We're going to do this in three different ways. One is capitalizing on our numerous macro trends benefiting us. Second is nurturing our existing, new, and re-engaged customers. The third is executing our Life Out Here strategy. Let's talk about each one of those in a little more detail. We believe that many of the consumer behaviors that we've seen over the last nine months will continue through most or all of 2021. These trends we've mentioned before, but they include rural revitalization, trip consolidation, omnichannel adoption, a self-reliant lifestyle movement, consumer spending that's shifting from travel and entertainment to home and land, and an all-time high pet ownership. We exited the year with nearly 19 million Neighbor's Club members. For the full- year, over 11 million new identified customers and more than 6 million reactivated customers shopped with us at Tractor Supply. We're seeing strong retention with these customers, and we have plans in place to engage them with new capabilities, marketing, and product offerings. The third way we're gonna be focused on gaining share this year is our Life Out Here strategy, and it really positions us to strengthen and transform the company. As we shared last quarter, there are five pillars to our Life Out Here strategy. The first is deliver legendary customer service. The second is advance our ONETractor capabilities. The third is operate the Tractor way. The fourth is go the country mile for our team. Lastly is generate healthy shareholder return. Let me highlight some of our planned efforts that we have this year in support of our strategy. In 2021, we plan to open 80 new Tractor Supply stores and 10 Petsense stores. Additionally, we plan to remodel 150-200 stores with Project Fusion and to execute Project Side Lot in 150-200 of our stores. That brings our total construction activity for the year to 400-500 projects. This is a significant step up in the team's workload and also is being executed in the midst of COVID. Our Project Fusion remodel program is designed to drive space productivity and to enhance the customer experience in our mature store base. It is a combination of both changes in the store layout and imagery that creates a greater lifestyle impression and drives space allocation for product assortment. Fusion stores help create a more welcoming destination and offer a compelling showcase for our brands. Our Side Lot program is a full transformation of the space from primarily a storage location for agriculture equipment to a state-of-the-art outside garden, feed, and farm shopping center that also provides for greater convenience through the expansion of buy online, pickup in store. While still very early with both of these projects, we continue to be very excited about the sales trends we're seeing from the first tranche of Fusion remodels and Side Lot transformation projects. Importantly, the customer feedback has been overwhelmingly positive. Given the size of our store base, these initiatives represent a multi-year opportunity to continually refresh our store base and drive further comp sales. Another initiative we have is our FAST team, and they are already having a significant impact on the business. Since their implementation in August, they've taken on execution programs like executing merchandising programs like center court, endcap, planogram reset, seasonal programs, and sales-driving initiatives. What this is doing is it's really allowing our store teams to focus more on customer service and improve their in-store execution, then really ultimately allow us to focus more on the customer and driving comparable sales. We're very pleased with the FAST rollout. We're also committed to ensuring our digital capabilities stay ahead of our customer expectations. We did this in 2020, and we'll continue to do this in 2021 and beyond. Big areas of focus for us in the first half are ship from store, search engine optimization, payment options like Apple Pay and Google Pay, subscriptions both online and in-store, and also the recent launch of our PetRx platform. As Kurt mentioned, we have plans in place for an upgrade in our Neighbor's Club loyalty program by mid-year. We anticipate that this new program will really drive incremental customer retention and also provide strong incentive to allow us to grow our share of wallet with our customers. As we get closer to the launch of our new Neighbor's Club program, I look forward to sharing more of the details about the changes with you. Now, just stepping back, we're excited about spring. We believe our customers will continue to be focused on their homes as their oasis and creating their own experiences, whether that's through things like gardening, grilling, or homesteading with their family and friends and neighbors. Spring Chick Days create great retail theater and support existing and new customers who want to expand their flocks. This was a big category for us last year. We expect it to be so this year. We will have a broader selection than we have historically of chicken coops. Tractor Supply is the clear destination for this on-trend category. Given the strong trends we're seeing in our companion animal categories and the recent growth in pet ownership, we're focused on being a more complete resource for pet parents. In store, this includes relevant product assortment and brands, expansion of self-serve pet wash locations across 150-200 stores, and the build-out of 50-75 additional pet wellness centers. Currently, about 1,600 stores have vet services in store through our mobile vet clinics. Starting this quarter, pet prescriptions can be fulfilled online at Tractor Supply, as I mentioned earlier. In our app, we're now offering on-demand veterinary advice from a team of experienced veterinary professionals. Our customers can call, chat, or email a team of veterinary professionals to get all their pet health questions answered. These expanded and new services allow Tractor Supply to offer a complete solution to care for our customers' pets, whether in store or online. Our stores will be ready for the change of seasons as we move into spring. In closing, we have a unique opportunity. We compete in an attractive and fragmented market. We have a track record of success and outperformance in our business. We see a unique opportunity to capitalize on the powerful customer trends we are benefiting, transform company. Our goal is to make strategic investments that enable us to create greater competitive advantage, capture the opportunity we've discussed, and generate shareholder value. With that, operator, we would now like to open the lines for questions. Thank you. I would like to remind anyone who would like to ask a question to please press star one on your telephone keypad. That is star one on your telephone keypad. As a reminder, please keep your question to one and one related follow-up. Your first question comes from Scot Ciccarelli from RBC Capital Markets. Your line is open. Good morning, guys. Scot Ciccarelli. Hope everyone is well and healthy, first of all. Second, I do appreciate you guys providing guidance. Obviously not easy given the amount of uncertainty in the environment. With that being said, I was hoping you guys could help us better understand how you went about constructing your top-line expectations and maybe outline a couple of your key inputs or assumptions. Thanks. Hey, Scot. It's Hal Lawton, good to speak with you this morning. I think the guidance that we provided is very consistent with the commentary that we had at the end of the third quarter and I think aligned with the spirit of the dialogue in our opening remarks, which is that we expect COVID to remain a large kind of consumer driving force for the foreseeable future, certainly into the fall, if not for the balance of the year. As a consequence of that, many of the macro trends which have benefited us will continue. We also think a number of these macro trends are sticky regardless of COVID, so we kind of see those two coming together in a way that shapes the year as follows. The first quarter we're in now, we expect momentum in this quarter and our results in this quarter will be much like what we saw in Q2 and Q3 and Q4 with elevated sales levels. As we start to comp on top of those in Q2 and Q3 and Q4 this year, we do expect that the comps will start to turn to more normal levels. The collectiveness of that will kind of compile to the guidance between a -2% and a +1%. It is heavily weighted in the first quarter with kind of Q2, Q3, Q4, recognizing that we'll be comping on top of last year's elevated levels, but with still likely strong underlying momentum supporting those quarters. I appreciate that, Hal. Obviously, the macro trends, we actually agree with that assessment. How much of your expectation is from some of the company's specific initiatives, the Side Lots, some of the store remodels, or is it just kind of all thrown together in a mixing bowl there? Thanks. Yeah. We're certainly looking to piece apart our various initiatives, and we have some pretty sophisticated analytics tools that allow us to do that. At these more elevated volume levels, it is a little bit harder to see than what you might see in a normal mid-single-digit comp environment. I will say that it's our view that we are gaining share and winning in all the categories that we participate in. That's really consistent across the board, whether you're looking at industry level data or we're talking with vendors. That would lead us to believe that not only are we benefiting from the macro trends, but the work that we're doing to support the business is also helping with that. I'll call out a few things that kind of give us that sense. First off, I'll point to kind of some data sets around our customer. Our unaided brand awareness, due in part due to our national television campaign that we launched last March, is up eight points in the year. That's a very significant improvement in unaided brand awareness. The benefit that we've seen of that is the most customers that we've ever had shop our store in one year last year, including 11 million new customers and 6 million reacquired customers. Those customers are shopping with us at repeat rates that are at kind of all-time highs. Those repeat shopping rates for the new customers have held through the year. Whether it was a new customer we saw in March or April or May, or a new customer that we saw in October, November, December, all those repeat shopping rates are holding at all-time highs. Last thing I'll talk about is if you look at our team members and you look at our customer SAT scores, if you look at the customer's perception of safety and health and wellbeing in our stores, customers seem to be voting with their wallets and shopping at Tractor Supply, indicative of both our strong transactions, but also our strong ticket. I think that would speak to the fact that customers are certainly aggregating their ticket. You're hearing that from other retailers, more units per basket driving basket up. A lot of these retailers are talking about negative comp transactions. With us, it's very balanced with about half coming from comp transactions and about half coming from average ticket. We're seeing that stock up, but we're also seeing more transactions in the store. It's hard to kind of piece it together, but we do think the initiatives we're taking, the support we've given the business on inventory and adding staffing, our focus on cleanliness, plus our digital efforts and our early efforts around Fusion and Side Lot and FAST are helping us drive share gains and kind of added to the macro trends we're seeing. Your next question will come from Elizabeth Suzuki from Bank of America. Your line is open. Great. Thank you. Could you just elaborate a little bit more on the strategic review of Petsense and what came out of that review that resulted in the decision to slow the growth of new stores? It just seems like with pet ownership at all-time highs, unless those stores were significantly underperforming the company average, just kind of wondering what some of the specifics were of that review. Yeah. Hi, Elizabeth, good morning. This was just completing my first year as the CEO of Tractor Supply. kind of steps back and did a of Petsense. The net takeaway is where the business is doing well. If you look at the broader landscape of pet and where the shifts are coming, where things are growing, and you look at what's playing out in specialty, through that work and then us revisiting our real estate model as a part of that, we made the decision to reduce the long-term store count expectations that we have for that business. In doing so, that led us to revisit the value that we had of that business on our balance sheet. We've now kind of reset our expectations for the new store counts of that business. We've hired a new leader for the Petsense business. We will continue to invest in Petsense as we see opportunities. As I said, the business is doing well. We do think it's gaining share in the specialty space, and we will continue to support that business, moving forward, just at a lower long-term store count target. Okay. Could you potentially shift more of the sales in that business online if you're not going to grow the store count to quite as much as you thought? Like, do you just view a shift towards the e-commerce side of the business as a way to expand into new markets? Yes, I look forward to sharing with you more about the Petsense strategy as Matthew comes in and has an opportunity to engage and chart the future of the company. We're very pleased with the performance. The stores are doing well. The website's doing well. As you said, Liz, we do know pet online is doing well. You can look at the industry data, and that's certainly something I know Matthew will be looking into as a way to accelerate our efforts there. More to come. Your next question comes from Karen Short from Barclays. Your line is open. Hi. Thanks very much. Congratulations on a great year. Wanted to just talk a little bit about this three to five year algorithm. You had originally called out 9%-9.5% operating margins. Your fiscal 2021 bottom end range is already 30 basis points higher than that algorithm. I guess what would make the range, I guess, decrease in 2022 and beyond? I guess maybe asked a slightly different way, when I looked at 9%-9.5% range, that would imply flat operating profit growth in 2022, and that doesn't seem like a likely scenario. Hey, Karen, this is Kurt. Yeah, thank you for the question. Really the question, as I understand it, is about the outlook on the operating margin, the flow through going forward. One important thing that I pointed out in our prepared remarks is we had tremendous upside in benefit in 2020 from the gross margin side of the business. The principal drivers with that was for the majority of the year, we had stable transportation. The most significant was unusually low levels of promotion and clearance. I mean, the inventory at some points really felt like it was going hand to mouth to the consumer. We anticipate this year, in 2021, as we still have some of that extended pandemic demand before we start to cycle into that there's benefit on less promotion and clearance. We'll start to normalize on that. The important thing is to manage the business, ensuring that we're everyday low price. We're giving our customers a great value in our product and our price. Over the years, we're going to manage the operating margin, ensuring that we continue to gain market share. The important thing is that there may begin to be, in the next couple of years, as inventory more normalizes and more clearance exposure normalizes, there's some anticipated risk with gross margin. We'll continue to manage gross margin with our benefits of our driving and staying at EDLP, not anticipating to revert back to the promotional activity of the past. With our investments in the business the next couple of years to continue to gain this market share, we anticipate still staying around that range. We think it's a great sweet spot to allow us to continue to hit those revenue gross targets and to continue to gain on the market share. We want to manage to a reasonable operating margin to continue our opportunity to gain market share. Our outlook for 2021 and the long term really anticipates that. As we progress, we'll continue to update you as we see more visibility as things change. Okay, that's very helpful. Just my follow-up is looking at the comp in 2Q to 4Q, obviously as you have said and as we all see, you had very evenly kind of split composition on the comp from 2Q to 4Q. How do you think about when we start to lap those in 2021? Do you think the pressure will come more from ticket or traffic in terms of the comp comparisons? Yeah, it's a great question. As we think about traffic and ticket in 2021, there's a lot of variables and still some uncertainty as we begin to lap that. We're going to be nimble and have shown in the past that we can shift very well to that. As we think about the business with ticket and traffic, I'll give you some thoughts on ticket drivers. Certainly some level of inflation that could be driving ticket. If there's continued trip consolidation, it helps in the ticket. But other aspects on traffic, if there's a bit more normalization on trip consolidation as we begin to cycle some of the COVID-19 demand. If there's inflation, it sometimes has an offset on the traffic. Point being, there's a number of variables in there. As we cycle this, we see our opportunity in both categories, and there can be some risk and shift in both. We've contemplated those aspects in our guidance for comp sales as we begin to cycle the COVID lift that we saw starting in Q2 of 2020. We anticipate that there's not a meaningful shift from either one as we see it at this point. Both have variables that could drive it up or down. Your next question will come from Steve Forbes from Guggenheim Partners. Your line is open. Good morning. I wanted to start, Hal, with the new and reengaged customer trends. You mentioned repeat rates at all-time highs. Curious if you can provide more color here. Are these customers engaging at a level that's more comparable to your Neighbor's Club members? Are they shopping across more categories than the average customer? Shopping both channels? Why aren't we seeing greater entrance into the Neighbor's Club loyalty program, as I would imagine that's sort of a core initiative for 2021. Yeah. Hey, Steve, and good morning. A couple of things I'll say. First of all, on the Neighbor's Club program, we are very pleased with the growth in the membership of that program, reaching 19 million members, representing approximately 60% of our total sales. We have plans, as we've talked about, to reinvigorate that program in the first half of this year, which I think will drive a step change in engagement with those customers, also migration upward of their spend. We're looking forward to that promotion and getting it out there and look forward to sharing more details with you at our next earnings call on it. As it relates to our new customers, we've mentioned in the past that we see approximately 20% of our new customers return and shop with us within 28 days. That trend really hasn't changed since the beginning of the year. It's held very stable. It's two or three points higher than what we would have seen in a historic period when we cohorted new customers. I would say, we also continue to see strong repurchase rates as you get out to kind of two months at the 56-day count and at three months. We're very pleased with their reengagement. We see them engaging first in categories like poultry and dog and pet. They start to broaden their purchases across things like apparel and garden. If they started in pet, they might move to poultry or vice versa. A higher percentage of these groups than our normal business starts online and does the pick up in store, then you'll see in their next purchase them coming into the store for purchase. Our new customer SAT scores are higher than historic as well. I'd say all around, we are pleased with the 19 million members. They represent the growth that we had this year, particularly in the midst of the pandemic. Our sign up is really at the register there face- to- face. People are really trying to check out much faster, as we all know. The ability to still sign up those Neighbor's Club members and gain the millions that we did this year, we're very pleased with. Then the new customers are exhibiting very strong reengagement behavior. Thanks, Hal. Just a quick follow-up as we try to conceptualize the opportunity here. How does the 11 million new customers and six million reengaged customers compare to 2018 or 2019 levels? I don't think we disclosed that in the past. What I will say is, and we'll give that some thought on whether to do so, but what I would say is they are material increases from previous years. Awesome. Thanks so much. Best of luck. Stay well. Thanks. Appreciate it. Your next question will come from Peter Benedict from Robert W. Baird. Oh, hey, guys. Thanks. I guess first question, Kurt, you kind of mentioned inflation in 2021, and I'm just curious where you're seeing that most acutely, and size it up, but which categories you're seeing inflation in the business. That's my first question. Yeah. Hey, Peter. I'm going to let Seth take that. Yeah. Hey, Peter. This is Seth. Hey, Peter. As we look at some of the inflation of this coming year and what we're seeing kind of early on, if you just look at the kind of base commodity markets that are out there, I'd say early reads are steel-based product as well as some of the grain-based goods, if you look at those commodity markets. Feel really good about the handle that the team has on the business to be able to manage it accordingly with our tools that we have on the pricing side. Those would be the areas that I would say that we're starting to see that have come through in the early reads. Got it. Okay, that makes sense. Then maybe, Hal, one for you. Just on the competitive environment out there. Obviously, it's been strong. Even with the strength in farm and ranch, and in the pet area, we're seeing some reasonably large chains have trouble, even shut down within both of those areas. I'm just curious, as you've got a lot of strategic initiatives in place, but is the competitive environment shifting in a way that maybe has you thinking differently on any maybe longer-term initiatives over the next couple of years? Just kind of curious your view on that. I know you've got a lot on your plate, but just wanted to hear you out on that. Yeah. Thanks, Peter. What I'd say is I think the dynamics that are playing out in the market right now, whether it's with customers or vis-a-vis our competitors, those dynamics are really playing to the sweet spots of Tractor Supply. First off, people are struggling with in-stocks, and I think you're going to see more of that as we get into the spring with the supply chain disruption that's out there. Our team has done an outstanding job managing inventory through the year. You saw how we ended the year with inventory above last year. We're tracking to continue with that at those levels, if not higher, as Kurt mentioned in his opening remarks. We plan for our spring shipments to arrive earlier than they have historically. While we are seeing some container backlog, we are going to be able to manage through that and get it kind of in on a normal timeframe. That's to our benefit. I think anywhere where you've made investments in inventory and you've leaned in there, anywhere where you're making investments in customer service, because right now that makes such a big difference in this environment. We've certainly done that through the net hiring of 10,000 team members, and providing appreciation bonuses and others, and raises to drive their engagement. Also in technology, if you've invested in technology and you can do curbside pickup and you can do same-day, next-day delivery, and you can do those with great customer service, that leads to advantages as well. I think the scale that we have in our distribution systems, the scale that we have in technology, the leverage and scale that we have with our vendors. Of course, our advantage of our 42,000 team members, which wake up every day looking to provide legendary service. All that just plays well for us. You think about the convenience and location of our stores. That's why if you go across every category, we're confident that we're taking share in a significant way. If you look at our C.U.E. business being up over 20% for the quarter, and using that as a proxy for the businesses that are in there around animal feed and pet food and others. Those rates are well above industry estimates for those categories and certainly a lot of other companies that are out there reporting that play in those categories. I think it really just speaks to the business model of Tractor, the resiliency of it, and the foundation of it, and then the investments that we're making day to day to ensure that our customers and our new customers are having a great experience. Hal, I know we're both back. Michelle, let me just say one thing, if I may. Yes. I know we're at the top of the hour, but we're going to let the call go about 10 minutes longer. Thank you. Okay. Your next question comes from Scott Mushkin from R5 Capital. Your line is open. Hey, guys, and Mary Winn, thanks for letting the call go on a little bit longer, and I'll try to be quick. I was wondering if, maybe I missed it, but the percentage of the new customers, I know we talked about this a little bit, that are purchasing C.U.E., and then the percentage of those that are repeating? I'm not sure I got that data and if you're willing to give us that data? Yeah. Hey, Scott. How are you? Good morning. Good morning. We have not mentioned what% are buying C.U.E. in their first purchase. We did mention what% are coming back and buying a second time. About 20% of our new customers return and shop with us again within 28 days. We said that's above historic run rates by several points. We feel very good about our retention of these customers. That's a proxy at one time marker, but it's the same if you look across seven, 14 days, two months, three months, et cetera. As it relates to what they're buying on their first purchase, the two dominant areas that they're buying on their first purchase are pet food or poultry. Supplies and such around those two categories. That's interesting. That's going to be my follow-up. I was going to actually ask something else. A 20% repeat rate sounds high, but if it's skewing towards C.U.E., you might think you can actually make that number higher. Are there any initiatives to figure out how to make sure they're repeating at a higher rate if they're engaged in C.U.E.? Then I'll yield. Yeah, absolutely. This is what the full focus of our marketing team is focused on is exactly this. We've invested over the last year and a half or two in our CRM capabilities, moving that platform to the Azure cloud, upgrading our analytical capabilities, adding new personalization tooling in place. Also looking at behaviors, whether on the site or inside of the store, and then looking for kind of like comparing them to lookalike shoppers. Whether it's emails that those new customers get. Or whether it's digital banner ads where we're retargeting them. All those sorts of marketing channels and vehicles are being used to engage with these customers and encourage them to re-shop with us. In addition, obviously, we just have the investments we're making in our team members, the investments we're making in our store experience, the investments we're making in inventory, and those sorts of things that drive repeat behavior as well. One interesting anecdote that I'll give on this is we ask our customers in our checkout survey, kind of post-purchase survey, what their top criteria were for why they selected to shop at Tractor Supply. Typically, the responses are similar to what any other retailer would have with price and location convenience, having the right product, customer service, those sorts of things that are the dominant criteria for shopping for retail. During the midst of the pandemic over the last six months, the number one and number two criteria have been cleanliness and safety. Never in my 20-plus years of retail have I seen those two criteria at the top of a customer's decision-making criteria. That's why we've invested so much in those areas. I highlighted the tens of millions of dollars we've spent on those areas in the last quarter. Your next question will come from Peter Keith from Piper Sandler. Your line is open. Ramping up to record levels we haven't seen in 9- 10 years. Do you have an inflation benefit factored into comp? If so, could you provide that for us? Yeah. Hey, Peter, this is Kurt. In regards to inflation, let me first start with what we've seen here in 2020. We saw a bit of elevation as we worked our way through the year. In Q4, we still saw a bit of a modest level of inflation, less than 100 basis points of commodity inflation into the product cost. We anticipate that as all of the inflation information, as I know everyone's seen, is certainly at higher levels. We're anticipating that to accelerate in 2021. We've seen where inflation on commodities can rise as quickly as it did. It can also shift, as you know, just as quickly. Like we said in our prepared remarks, we're planning for 2021 under a number of scenarios. In our guidance, we assume that over the year, a weighted average of about 1%- 2% inflation into the product cost. That certainly could vary first half versus second half of the year. Right now, we're seeing the point that Seth mentioned on grains and steel being primary drivers of some inflation at this point. As we picked up an assumption of that range of about 1%-2% is where we landed in our assumption. Okay. Very helpful. Maybe pivoting over to a question for Hal or Seth on the pet trends. Everyone knows 2020 was a record year for pet adoption and acquisition. What are you guys seeing out there in the field? Are you seeing continued strength? What would you expect then for 2021? There's arguments that there's been a pull forward and the acquisitions will drop off, or there's other arguments that the same adoption trends are going to continue for the year. We are planning for the pet category to continue to remain strong, and to over-perform relative to our overall business in the year. I think on the last call, we talked about poultry and chickens and flocks and how they're a bit of an annuity stream given that they have a seven to eight year lifespan. Obviously, pets are very much the same way. With pet adoption up at an all-time high, those pets as they grow, they're going to move from puppy food to adult food. We're seeing that, by the way, in our trends. Typically with dogs, as they get a little older, they eat a little more as they get bigger. We're actually seeing the benefit from that a little bit on the tonnage side. We expect the humanization of pet will remain very strong this entire year as people continue to work from home really for the foreseeable future, potentially all of 2021. They're around their pets. They're buying toys. They're buying snacks. They're upgrading their bed. They're getting them a new bed. All those things I expect will continue this year. As I said, we're very pleased with our pet business. We are confident we're gaining share in our pet business. We're seeing strong growth in our pet business, both in store, just through brick and mortar channels, as well as online. Certainly, the sweet spot for us on pet is our omni-channel, where we're seeing a significant amount of pet purchases online picked up in store. As I mentioned in my opening remarks, we're investing heavily in this category to remain a strong destination for our customers in it, whether it was the release recently of our new PetRx solution online, whether it's the rollout of focus subscriptions in-store in a similar way that we have it online, whether it's the addition of 150 to 200 more pet wash stations this year, also the build-out of more pet wellness clinics in our stores to support the mobile pet clinics that we have that drive significant engagement with our stores from our customers. We feel really good about where we are in pet and we'll be continuing to invest here. I guess I neglected to also mention, apologies, our marketing campaigns that we've been doing the past year. We have a significant amount of dedicated marketing, both TV and digital, devoted to pet, and it's systemic, meaning it's always on, and we do spike it at certain periods. It's a consistent program that we're doing now. It's the first time we've done that. We've been doing that for about six or nine months. Michelle, we'll call this our final question as we wrap up the call. Okay, perfect. Chuck Grom is your final question for today from Gordon Haskett. Your line is open. Thanks. Good morning. A nice quarter. Great first year, Hal. My questions are on Side Lot. Seems like a tremendous opportunity for you guys. I'm curious how you plan to approach it from a marketing perspective, and also how quickly you think it's going to take to ramp up to optimal productivity levels. Yeah. Hey, Chuck. We remain very bullish on the Side Lot project. As we've remarked before, garden is the category that our customers say they most participate in that we don't fully address their needs. In the Side Lot that we have open, the customer engagement with the product and the purchase rates, it's like an overnight switch. Once the project is complete and the product's in there, we saw really strong engagement with customers. This is in the midst of fall and winter when live goods assortments are very limited and gardening activities is much less. We've got over 50 of these Side Lots underway right now. Some we're in the process of applying for permits. Some we're in the final stages of getting the certificate of occupancy. We've got 100 plus more scheduled for the year. We're very excited about their potential, and the team's doing an excellent job navigating this environment to get those built. In the context of COVID, you've got construction crews that at times will have to quarantine for a couple of weeks if one of the team members on the project tests positive. You've got city municipalities that getting permitting done is very difficult. Getting someone to come out to do a certificate of occupancy is much slower. The team's just doing an excellent job managing through all those twists and turns. We remain very bullish on Side Lot. Like I said, a number of them underway. I just visited a handful of them in the last week and real excited to have our first batch of them open in time for the spring season. That's great. Just as a follow-up, I believe that the garden center pad is going to be about 4,000 sq ft. When you compare that productivity opportunity to what your stores typically do today, any sense for what you think that can eventually generate over time? It's very seasonal. In my experience elsewhere, the garden centers are very productive, if not more productive than the store during the core spring season. In the wintertime, the productivity falls off well below the core of the store. We're looking forward to having a full- year ahead of us with these projects to be able to get a sense for what's the max productivity in the midst of spring, how much can we prop the productivity up with things like Christmas trees and pumpkins and harvest type stuff in the fall. We'll see where it plays out for the full- year. We are very confident that it'll drive significant productivity relative to how the space is being used now and will drive strong shareholder returns. The question is to what magnitude, and we'll know more as we get into spring. All right. Thank you, operator. This will conclude our call today, and thank you to everyone for joining us. We look forward to speaking to you on our first quarter call in April. Thank you, everyone. This will conclude today's conference call. You may now disconnect.