I think we'll go ahead and actually get started here. It's at the top of the hour. Well, thanks for joining us, everybody, to start off the conference. I think I know most of you in the room, but for those I haven't met, I'm Daniel Imbro. I'm the hard lines and automotive analyst here at Stephens. Really pleased to be joined this morning by Tractor Supply Company to start off our conference this year. From the company, obviously, I have Kurt Barton, who most of you know, Rob Mills, and then obviously the IR team, Mary Winn Pilkington and Joseph Underwood. Thank you guys for joining us. Well, Kurt, obviously, and the format here, typically a fireside, I'll kick off with Q&A and kind of lead the discussion, but please get my attention if you wanna ask questions. We welcome audience participation. But, you know, Kurt, I'll start off a little higher level. You know, Tractor has a unique go-to-market. We spent some time talking about it this morning. I think most are familiar, but can you give the room maybe an overview on who your customer base is and how that's different from a lot of other parts of retail, and then maybe just how that customer is doing today versus the broader market, given all the uncertainties we're hearing out there? Sure. Well, first, let me just say good morning to everybody. Glad to spend time with you. Welcome to Nashville. I say that being it's Tractor Supply's hometown. So Rob and I, and Mary Winn and Joseph, glad to be with you. Feel like we're hosting in a way, too, with Stephens. So, Daniel, to your point, and for those that are modestly familiar with this, but even those, perhaps that aren't as familiar with Tractor Supply, maybe the best way to start answering that question is to talk a little bit about when you say our go-to-market strategy as to where are we located, 'cause that's a key part of it, and then that brings to light the customer. So for Tractor Supply, we talk about being rural America, the rural, you know, out here, customer. Think about it as this: very... We're very strategic in that if you take some of your major cities, could be Nashville, Charlotte, Houston, if you take the center point of that, and you go anywhere, depending on the size, Houston obviously bigger, but 30-45 miles out and just create that radius and that belt line around that, Tractor Supply begins to, and, you know, put stores into the market out there. That's really around the suburban, the outskirts of suburbia or exurban. Then you could go another 15 or 20 miles out from there, and sometimes if you plotted our stores, you might see another belt line of another, you know, group of stores. And then, of course, we get other, you know, towns that are a bit more rural. But the important thing is that we're not an urban or even a, you know, near suburban, retailer, principally because of the customer that we serve, and that leads me to, what is that typical customer? And it's a customer that owns land. A very high percentage of our customers own their property. It's 5-plus acres, typically. They either own it outright or they have a mortgage, and in these times, a fixed-rate mortgage that you obtained over the last few years is a pretty, pretty healthy customer from that standpoint. But it's a customer that has a passion towards living and being outdoors, having animals. Eighty-five percent of our customers say they own at least an animal. That's often a companion animal, but it could be livestock, horse, chickens, goats, et cetera, and most of them own multiple animals/pets. So land is important, maintaining the land, having animals. It's a customer that is passionate about that hobby, but it's a customer that, for the most part, isn't one that makes their living and earns their living off the land. They have jobs that could be anywhere from a tradesman, a production warehouse worker, you know, a professional that's working in the city and commuting. And today, you know, as we saw the last few years, many of them moving further out, outside of even suburbia into our markets. But that's the core customer who's very passionate about their animal, their land, and we say often that Tractor Supply is a bit like a grocery store for the animals and even the land, because it's a part of your property that, just like your own home, if you don't maintain it, it begins to decline. So there's needs just even for that as well. So we focus our strategy on that customer, which connects with the fact that a vast majority, a high percentage of what Tractor Supply offers and sells is needs-based versus highly discretionary. It's what they come and need, you know, you know, every day, and we get, you know, good repeat transactions from our core customers. How I think the other part was, how are they? Yep. You know, we look at our customer today, healthy. Healthy customer, and it's a customer base, as I mentioned, that, you know, is passionate about this lifestyle. Even in some of the tougher economic times, if you go back to the financial crisis, 2007, 2008, 2009, where there was high unemployment, and there was a lot at risk, our customers did not give up their passion towards their land or their animals. Even the most expensive animal that a customer would own, being a horse, is one that they're passionate enough about. We often describe our customers and tease that they may love their animals, and particularly their horses, more than they may their own kids. We found that it's a rather healthy customer, but a very frugal and prudent customer, and that's helped us during all different economic times. They are a DIY and a resilient customer that lives off their land, looks for Tractor Supply as a source, whether that's gardening, other areas, to just be like homesteading. But they're pretty disciplined, and as we've mentioned, you know, they're in times like we're seeing right now, where household incomes are a bit under, you know, pressure, they're very, you know, prudent on what they'll spend. And that impacts some of the small percentage of just, you know, discretionary products that customers are purchasing from retailers, including Tractor Supply. Yep, and maybe to follow up on that last piece, the discretionary or, or the variances we've seen, it's been a volatile year. I guess when we look backwards or with hindsight, the last 11 months, what are the biggest variances about how you thought about the business, how it would look in 2023, and how it has looked in 2023? Maybe walk through those biggest buckets. Sure. When you look at the results. Yeah, when we entered 2023, there were a number of uncertainties, number of variables, inflation, interest rates, consumer sentiment, all those. When looking back as of 9 months, you know, into the year, the biggest differences as to what we planned for and expected and how we saw 2023 could play out, is really only in two categories, and they're in this order of magnitude as to the 9-month year-to-date performance on comps versus our expectations. First, would really be the performance of our seasonal categories that are heavily impacted by weather. And I'll just pause there to give a few examples of that. When you just go back to the way I described our customer and what they come to Tractor Supply for, it is a very weather-dependent, you know, part of our business, where if you're living and working and hobbying in life out here outdoors, weather's gonna play a part of that. In the fall and winter months, Q4, Q1, it's heavily dependent upon how cold it is. If it's a mild, warm season, a lot of the heating fuels and horse blankets, portable heating units, insulated outerwear, all that a customer needs to be able to continue to keep their animals safe, keep themselves able out there, there's not as much demand for that. In a spring and summer season, we say we make a living out of and being the solution for our customers who have a passion towards, in the springtime, planting, fertilizing, and making things grow, and then we serve and help them find ways to mow it down and cut it down and keep it maintained. It's a great cycle to be able to have. When it's extremely hot, and you're in historic extreme heat, droughts, et cetera, there's nowhere near as much ability to plant and grow, and then therefore not as much need to cut and maintain as well. It shifts a bit of the demand. This has been, by far in my 24 years, you know, the only year I could see where it looks like it's framed up to be four consecutive quarters of challenging seasonal, you know, categories. Weather and seasonality would've been the biggest difference between our expectations. Then, really, the second piece of that is the consumer being a bit more judicious and prudent with their spend. The amount of shift from goods to services throughout the year, somewhat in line with our expectations, but, you know, what it's, you know, what the household budgets have been under pressure and what that's, you know, that's done across retail on big ticket type discretionary and other discretionary purchases, perhaps a bit more, you know, challenging than our original expectations. But other than that, the core consumables, the pet food, animal feed, all growing in units, and we're very much in line with what we set out to accomplish, which was to gain market share in the core consumables and to maintain the traffic and activity from all of the new customers that we acquired during 2020 through 2022. Perfect. And, and, Rob, I can't let you stay out of the discussion too long over here. When we think about your seat in the chief strategy and kind of maintaining the multiyear strategy and digital offering, I guess, how do you balance the strategic multiyear plans you guys have and the things you guys are working on Life Out Here with that near-term volatility? I guess, how do you think about the puts and takes of what to keep investing in, what you have, if anything, pulled back on and make those investments? Yeah, that's great. First thing, good morning, everyone, Rob Mills. Just as a quick 10-second introduction, I have the responsibility for all the tech, the digital part of the business, as well as the corporate strategy and M&A. Most recently, I've been focused on the Orscheln acquisition over the last couple of years, a part of the bigger strategy. I've been with Tractor almost 10 years now. With that being said, you know, when you take a step back, we have a multiyear strategy focus here at Tractor. We don't look just at the current year or the year that's coming, but we lay out what is our overall objective and strategic initiatives that fall into that. You've heard quite a bit about the Life Out Here strategy, and it's a solid platform that really puts our customer at the heart, as well as our team member, in everything that we do. Then we look at not just how we operate the business from day to day, but how do we introduce new strategic growth drivers? And one of those strategic growth drivers is around our digital business. You know, currently, we're about 7%-8% total penetration of our total sales from an online perspective with omni. Omni is about 80% picked up or fulfilled through our stores, so that's the core part of our strategy. Everything is about how we build an ecosystem around the store and really allow the customer to shop on their terms? How they want, when they want, where they want, and to provide them flexibility. What digital does, as well as our strategic initiatives, allows us to look at not just at today's kind of macro and micro conditions or what's going on with the customer base, but also allow us to pivot, to talk to that customer differently, leveraging our Neighbor's Club data, making it more personalized, using that data to ensure that we're offering the right customer service, the right value back to the customer, and more importantly, the convenience. So we have a strategic planning process that the leadership team comes together on a regular basis, not just focusing on the strategies that we have today and where are we executing well, and what do we need to do to pivot based upon kind of the larger, indicators, but also thinking about what's the next three to five years, and where's our big growth opportunities as a company that we wanna continue to build upon? So we look at today's numbers, we look at today's customer, you know, feelings, emotions, consumer shopping behaviors, as well as kind of the macro and micro, trends, and then we pivot where it makes sense. Perfect. I think Matt, you had a question. Yeah. On the discretionary side, I know it's not a big portion of your mix, but, you know, we saw, like, Lululemon there, their, their comps are really struggling. So I'm wondering what you guys are seeing in your apparel and footwear business, and, yeah, any color there would be really helpful. Oh, go ahead. Please. I'll repeat the question, yeah, recognizing that they're not miked. But the question was more about, you know, with discretionary business, what are we seeing in the apparel side of our business? We're seeing... Well, first, let me just say, on apparel, Tractor Supply, if you've shopped our stores, you're gonna know and recognize that there's not a lot of fashion in the apparel area. We try to stay, like, you know, what is, you know, the best trend in the apparel area, but it's very much about a needs-based work, whether you're a tradesman or whether or not it's, you know, for you on your property, your land, your ranch. And so, a lot of ours is durable, but yet you've got to replace it. So, for instance, our main apparel brand names would be Carhartt, Wrangler, we've got Muck Boots, and then, you know, our private label on Ridgecut as well. So most of ours is going to be based on what they need for work, et cetera. So there's a bit less, even in our apparel area, that's exposed to the discretionary spend. Apparel's been running pretty much in line with most of our categories outside of the core Q traffic driving, where it's a bit under pressured, but against most of discretionary retail, against most of apparel, while we don't get specific to our categories, we see a modest level of softness of demand, but apparel's not, you know, an outlier to the chain average as what we've seen in, you know, the other categories, whether it be truck, tool, and hardware like that, because we've got a really good, practical, needs-based approach. Gloves, you know, insulated socks, all the... That's what you're going to find in hi-vis for those that work in that industry. That's what you find in apparel at Tractor Supply. And real quick, just to add on to that, one of the online strategy is the extended assortment. So where we'll have assortment, core assortment in the store, both national brands, Carhartt, et cetera, as well as private label, we'll bring that full assortment online to ensure that we're offering flexibility to the customer, that they could be picked up in the store or shipped within hours, within a day, same-day delivery, et cetera. So we do look at the assortment, not just focusing on the store, but how do we extend it, not just in apparel, but across all our core categories. Yeah. And maybe to follow up on the discretionary piece, you talked about the weather impact. Kurt, I guess one way to think about it, if we were to frame it up, think about last quarter, were there markets that had more normal weather? And if so, like, how did those comp relative to your initial expectations, and how does that, is that part of what gives you guys the confidence to say it is mostly weather right now versus what you expected? Sure. Yeah, yeah, when we, when we look across our geographies, and we're running now 49 states and have a pretty diverse geographic spread, there are markets that were pretty typical or less impacted by weather. The Southeast, even some of the South Central, like around here and the Far West in the Q3, not necessarily, you know, as impacted by the weather. Very consistent. We don't see from the most impacted to the least impacted, a real disparity in performance. You look at some of the areas that I said that were less impacted by weather, and they were running generally in line with our expectations of positive low single-digit comps. And those that were under pressure, you know, were really kind of the opposite of, you know, negative load and negative mid single digits, and really, the blend came out to that roughly flattish performance for the quarter. And so it also gives a little bit of a visibility that we say it can be impacted by weather, but the resiliency and the amount of strength of the core consumable traffic driving, really, even in those particular cases, mitigates how big of a swing on the top side anywhere from discretionary or weather can impact because the business is so, you know, consistent in regards to its needs-based. Makes sense. And one of the big, Rob, digital initiatives last couple of years has been Neighbor's Club. If we think about it, 31-32 million members now, wherever that number is, I guess, how do you measure incrementality? It's something I think investors wrestle with, is the first 10, I'm guessing, are more higher spending than the last 10. But how do you guys think about what is truly being driven by Neighbor's Club, and what are the innovations you guys are rolling out to maybe push that sales number higher, given you've grown the member base so much? Yeah. So we clearly look at comp base of new members that are being added to the Neighbor's Club program, but also with the tiering of how do you move a customer from one tier to a higher tier? And this is where the power of the data that we have. As you mentioned, we're 32 million plus strong. We have a lot of data that we're able to mine, and the purpose is to drive a level of personalization and see how that customer is shopping, both online as well as in store, and then really be specific about the products that we're either offering up through email, through mobile, SMS, or even from an in-store experience, how do you drive more of a personalization? You've all heard quite a bit about AI, GenAI. You know, it's definitely the buzz out there from a technology perspective. And what I would say is, over the years, Tractor has been investing, leveraging this data and the technology behind it to drive more predictive and more, what I would say, real personalization. But ultimately, our goal is to take the customer and allow them the flexibility and the information that they could buy additional products or services through an online channel or within the store, and it's about leveraging that data. The last call-out that I'll make is right at the start of the pandemic, we introduced a mobile app. That mobile app is now about 6 million strong downloads. We have a high stickiness rate, and the mobile app is really built around two components. One is to drive a level of personalization with the Neighbor's Club customer to influence their next, shopping behavior, their next add-on to the basket, all the above, as well as to drive a level of personalization, related to their pet or large animals, or their property. So it's about taking the data and driving a true personalized experience. Got it. You mentioned retention. I guess I'm curious, how have the different cohorts of new customers been retained? Early on, very high retention rates, but through COVID, when you gained tens of millions of new customers quickly, have those customers matured at the same rate as the previous customers or... and how is that maturity curve looking? Yeah. I mean, overall, we've shared that, through COVID, we've attracted not just through Neighbor's Club, but through our brand, through brand awareness, and going back to Kurt's point about being a needs-based retailer, a higher customer base, especially, within the Neighbor's Club program. The retention rate has been extremely strong, and it's about really three things: around how we're driving a superior customer service experience while you're in the store or online, how do you ensure that we offer the, the convenience to the customer, to get their product, we have the product available, and then lastly, it's about how do we, ensure that we're listening to the customer and responding around the value that they're looking for? We've seen really strong retention rates as well as we do believe with the current customer base, there's an opportunity to continue to grow just their comp transactions as well as their average basket size. When you do your survey work or your customers, you talk to your customers, is there any consistent feedback you get of things Tractor doesn't offer, either product or type of transaction, that you guys could provide for your customers looking forward, or what's the feedback customers give that you guys could improve? Yeah. The two areas... We get very, very high remarks on our customer service. And if you walk into a Tractor Supply store or online, it's about having product and expertise around living the Life Out Here lifestyle, which at times can be fairly technical and complex, just either what you care or feed for your animals or your property and maintaining of your property. But with that, how do we ensure through the last mile delivery that we're efficient, that we could get the product to the customer when they need it with the flexibility? So we're investing in delivery programs, both through third parties as well as our own team member delivery, which has been extremely successful. As well as even within that delivery program, how do you offer more bulk, bulk type of delivery for that customer that needs pallets of feed or food, and they need it on a certain day, or the flexibility that somebody on their ranch or on their property could actually receive the goods? So an area that we're really going deep into is on the whole last mile and delivery service, both in store as well as online. Helpful. Kurt, maybe going back to the near-term trends that you talked about last call, obviously, big ticket has been a consistent weak spot for the last year and a half or so. I guess we go into 2024, it'll be 18 months. How long do these cycles, have you seen them typically last in your time at Tractor? How long should a big ticket down cycle last, and how does the private label credit card or some of your other offerings, can you lean into that to help offset that at all? Yeah, Daniel, it's a fair question on big ticket. I think the answer, though, has been there's not one typical cycle. We've seen, you know, some down cycles, 2008, 2009, even 2016, 2017, and there's not necessarily any standard type pattern to that. Each cycle has, you know, some of the different, you know, drivers of it. For instance, in 2008 and 2009, you were coming off of pretty consistent, like, mid-single-digit comps, and the, you know, the U.S. consumer had, you know, high unemployment. It was a shock to the system, and the consumer sentiment hit some pretty strong lows, and big ticket was under pressure, and it lasted maybe 12-15 months. You look at this period of time, what's really different about it is, you look at the periods of 2020 and 2021, maybe the early part of 2022. Coming off of pretty consistent trends as well, except the stimulus and everything that boosted the economy, the stay at home, we're coming off of, in total, and big ticket was running higher than the averages at this time, but a three-year, 45% comp. And so I think the scenario is, and it's always been the question of, you just ran three years, three-year stack, 45% comp sales growth, and big ticket, you know, was, you know, a part of it, and it was running in line or a bit better than even the 45%. Can you keep that? Can you continue to maintain, or would there be reversion back? And what we're basically seeing is a consistent, maintained growth pattern of the core of the business. The big ticket was fueled as we expected, as we signaled, because we said there'd be some reversion on that. You had fueling of some one-time purchases through stimulus. You had new customers moving into the market, maybe buying their first, you know, zero-turn riding lawnmower and that. So you pretty much had, like, a bit of a hump. We're now seeing a bit of reversion back to the historical, you know, norms on a per store basis on big ticket. So it's really about, you know, coming off of some of the highs on big ticket and being back a bit more normal. We may have two or, you know, one or two more quarters of that. We said in Q3, while big ticket was negative, it was better than Q1 and Q2's performance on big ticket as we're beginning to cycle that. So, the only thing else to consider with big ticket is, it's not just about discretionary. Big ticket was under pressure this year because some of the seasonal parts of our business are big ticket related. In Q1, having one of the most mildest January, February, you know, limits the demand for heating units, for snowblowers, log splitters. In the summertime, the drought limits the, you know, the demand for riding lawnmowers, zero-turn, those types of big ticket items. So there is some discretion in there, but even some of the seasonality puts pressure on big ticket. So we're, you know, not surprised at big ticket, considering what we're coming off of and the pressures on the seasonal part of the business. Perfect. Yep. Do you just have a sense for how much your comps may be, may have been pressured this year, just from existing home sales slowing down as much as they did? I'm sure, like, you know, people, you know, getting a new home out there, there's probably certain items that are common, just tied to the home purchase. And I'm just wondering if you guys have been doing any kind of analysis to- Yeah. Estimate what that headwind might be and what we might see going forward to see if we're...? Yeah. So the question was, you know, how much correlation, how much do we believe, you know, a slowdown in home sales, you know, may be impacting the business this year? And, you know, I certainly acknowledge the question. The indication right now is that, you know, home sales in general, not only is it going... In units, going to be below, you know, the highs of 2021 and 2022, but really, at this point, looks to be forecasted to be a 13-year low. You have to go back to the financial crisis to see these numbers again. So we understand the question on that. You know, for the years, as we look at the business and what drives the demand for our business, home sales correlation in units, there's not a real strong correlation that we can see, and it's understandable that we don't sell. When we sell fencing, our fencing is T-posts, barbed wire, gates, et cetera. We aren't selling lumber and drywall and, you know, a lot of the appliances that go into that. That's not a business for Tractor Supply, but what we do sell are some of the things I mentioned, like a riding lawnmower, a push mower, some of the fencing, if you've got multiple acres, you know, some of our fencing. So I think there's certainly a... Whether it's a positive or a, you know, a unfavorable halo, there may be a bit of a halo that we watch and, and are aware of, but, as much as sometimes we get grouped in with other retailers, home sale units is not as, as much of a strong correlation, you know, for us, as much as, you know, some of the other things that we talk about being those that enter into the rural markets, enter into our lifestyle of owning pets, owning chickens. You know, pet ownership, you know, was a bigger impact, you know, for us on the, on the upside than, than home unit purchases over the last few years. And same thing with the explosion of, you know, backyard chickens. Yeah. I know it's out of your control, like weather and the macro, but if you had to root for a certain macro environment in 2024, what's your kind of environment that really you thrive in? Sure, sure. I'll start with the- Repeat the question. Okay, the question was, you know, in 2024, if you had to think macro and what would be the root for ideal scenario in there? And, you know, the topic of weather comes up, you know, often, so I'll just hit that first. After 2023, as I mentioned on the Q3 earnings call, one would think, one would hope it can't be worse than 2023. So I would put in there that you would have, cold and heavy precipitation in the Q1 and Q4 timeframes, and in spring, you would, you know, have a nice early start to spring with a, with mild weathers and, and a, you know, a moderate level, good level of precipitation. That would, certainly from that standpoint, that's ideal. What we would typically plan for is not ideal, but a bit more of the reversion to the norm and the mean on weather. In regards to the, you know, the other parts of the macro, you know, the consumer certainly feeling confident that we are either seeing the worst behind us, that there's more optimism. Inflation in the past few years has not been healthy for the consumer. We've been able to manage through it. We at this point, we expect, and we're pretty much targeting like most would be, that between inflation and deflation next year, maybe it's more of a neutral-ish. But we always say, in deflation, there's favorable aspects to our business. Gross margin expansion, other, you know, drivers of traffic for our product, you know, help. But if we were framing up ideal, you know, a good, modest, small amount of inflation would be your, you know, ideal situation. And those really are gonna be the main factors that move our business outside of the consumer already having their need for their lifestyle and hobby. As we start to frame up and plan out, and we're in the middle of it now, 2024, besides the core part of our business, the strategy that we believe has got meaningful tailwind to drive, where we can control the comps, and additionally is, you know, plan for what's likely to be the scenario with the consumer, the inflation, more normalized weather. That's a bit of how we'll think about and be framing up our planning for 2024. Are you seeing any inflation or disinflation in the core categories today? Yeah, the question was, are we seeing any disinflation or deflation in the core categories today? We're certainly seeing disinflation. As for the best example, we said, and it's played out very much like we expected, our year-over-year inflation on a retail price side was high single digits in Q1. It moved to mid-single digits in Q2, to low single digits year-over-year in Q3, and will be in the lower end of a low single digit and even potentially getting to more flattish on a year-over-year retail price, inflation, you know, by the end of this year, and that leads you into 2024. Have we seen some deflation? We have in some commodities. Corn, in particular, as an example, hit a high at, in the back half of 2021 is... has come down over periods of time since then, but yet, corn is, you know, still above its pre-pandemic levels. And in many of the commodities, I think there's a strong argument to say you're seeing a bit of the bottom or the trough on that, because as it plays out in the cost of goods sold, there's the commodity, but then there is all the other input costs. And about every other input cost besides the commodity is still at elevated levels. Wages, occupancy costs, transportation costs have come down meaningfully in import, a sizable amount in domestic, still above pre-pandemic levels, and I think the argument still plays out that transportation costs not likely to be reverting back to pre-pandemic levels. There's the increased regulations, the higher driver, you know, wage costs, et cetera, that keep those... So there's a reason to say we've seen some of the deflation, disinflation in some of the commodities over the last 12-18 months, and there could be some movement in there, but throughout this period of time where there's been inflation in pet and other areas, we've also seen, you know, that being offset by some levels of the commodity prices coming off their highs of 2021 and 2022. Perfect. Well, maybe, you know, if I want to think about taking a step back in 2024 and just think about the long-term guide, all the different sales drivers you guys have, the 4-5 comp, if we build up to it, can you maybe just help investors frame up how much of that is coming from these remodels? How much of that's from the digital strategies that Rob's overseeing? How much of it's new stores? Just kind of help us build to what a normal year would look like. Yeah. Then we can obviously make our own assumptions about all the everything else. Yeah. The expectation on our long-term guidance and what we believe we can drive in our target to achieve a 4%-5% comp over the long term, and we've said that doesn't mean it's gonna be a straight line, you know, upward on there. It could have some years of higher or lower, et cetera, and so forth, and we're experiencing, you know, some of that in 2023. But the core drivers from our strategy of what we can control, the Fusion remodels, interior and the side lot garden centers, the growth that Rob talked about on the digital side of the business, e-commerce expected on its path to double-digit penetration in sales. We expect, and if we continue even in this year, to see it well outpace our performance of the chain average. Third, our Neighbor's Club, as we've gone pre-pandemic, 14 million members, 32 million members plus today, representing 77% of our sales. We believe there's still opportunity to grow that number, but more importantly, secondly, on Neighbor's Club, grow the share of wallet on the 32 million, you know, members that are with us today. We know from our surveys with them, we see it from the other third-party data, they're shopping at us and as well as competitors, that in products that we share, and how we get them to shop across all four corners of the store is key. And then lastly, our growth in our new stores. New stores continue to add in its maturation process of 3-5 years to a, to a mature level. It drives a comp sales over that period of time, and we're growing from 70 stores this year to a target of 80 next year, and then after that, 90 stores a year. And so that continues to add to the comps. That is the biggest chunk of the 4-5. We generally say Tractor Supply historically has run at or slightly above the GDP growth for goods in the U.S. And so if that's 2 percentage points in your growth, those initiatives we believe can be driving a you know a greater portion and a decent chunk of the 4%-5% comp. We still feel very strong about that. We're seeing all those lifts this year helping offset some of the pressure points. We'll continue to invest in those categories to continue to expand in all of those areas. Got it. And then, Rob, maybe one on your side, you said you were overseeing Orscheln and the integration. Yes. How is that going, and should that be a further comp driver as those stores come up the maturity curve to look more like Tractor stores? Yeah. So overall, the Orscheln acquisition, we announced, October, we announced the closing October of last year. Over the past year, we have spent, the most of the effort in converting the store, remodeling the store, bringing the team members up to our standards, as well as introducing, the community to Tractor Supply, as well as just the customer base. Overall, we're very pleased, with what we've seen. From a team member feedback, they're extremely excited about the future. When you hear the feedback from the customer around the dependability, the products that we offer feeds directly into their lifestyle. Going to back to the market share, we were able to enter, the Midwest market, that really, accommodates very well our product, as well as a customer base that was extremely, welcoming, to the Tractor Supply brand. By the end of this year, first week of January, all stores will have been remodeled, converted, and fully re-grand-opened as a Tractor Supply. We do see it as a driver of next year. Now it's about operational execution and really building that muscle into the Tractor Supply kinda flywheel that we have about how we operate our stores. And then, Kurt, a little on the merchandising side. You guys recently rolled out YETI. I guess that's an exciting maybe brand introduction, but is that material when you think about introducing new national brands? Historically, has that been a big comp driver? And then how do you weigh the long-term private label versus national brand mix in Tractor? Yeah. Not one particular national brand is the silver bullet or the key, but having a great presence of national brands that, you know, shows the relevance and the importance of of that brand and Tractor Supply being a destination for key brands is all part of it, and making sure that you've got a good, better, and best across the business. So, you know, over the last few years, if you've shopped our stores, you see newer national brands that we've added to our strong list of national brands. Some of the names I've already mentioned, but, you know, what we have now today, like, in the apparel side of the business, where we've now brought in Columbia. Columbia, you know, performance fishing, Columbia performance hunting, you know, type apparel. In the power tools with Makita, Bosch, and Dremel, what we're adding there is we continue to show our presence in power tools and for our tradesmen as well. All of that plays into it. And then, of course, we've got a really strong presence in feed and food on the, you know, the Purina Checkerboard brand, which is critical. That's complemented by the strong exclusive brands that we've got, like 4health, and DuMOR and Producer's Pride, you know, all of those areas on apparel, Ridgecut, which is very much a high quality, you know, comparable to your Carhartt, that we offer, along with, you know, having, you know, Carhartt in our stores. Those are all, you know, critical to it. And so for us, exclusive brands, there's not a goal as to how much our, our percentage. We're roughly a little over 30% exclusive brands, but making sure when there's a great national brand that shows, you know, the importance it is to Tractor Supply and the customer, but to have a complementary and exclusive or where there's not a critical aspect to have a national brand. In some areas, there's just you know, it's not necessary. There isn't one. How do you have a really great exclusive brand to it? So we'll continue to find and bring in great national brands. We think YETI is a great partner for us. It's a product that our customer has an affinity towards and buys, and we think it's been a really nice match. I'm looking forward to seeing the holiday sales in YETI the next, you know, year, spring, summer. We're adding YETI as we open up Fusion stores in the new Fusion model that has space for, you know, the YETI lineup. And so that's how we've added in, you know, even some national brands as we've completed a Fusion remodel. Maybe one on the margin. Sorry, Doug. Oh, thank you. Maybe go backwards, but the conversation around the three-year 45% comps, and can you just talk about how much of that was price? And, you know, trying to rationalize that conversion and seeing upskill, I suspect a lot of it, that call is on price. Do you have to give back pricing? Just sort of curious- Yep. how much the price and maybe what would cause more price giveback, whether promotion or just outright- Yeah. -you know, changes to those prices? Sure. So the question was, on the three-year stack, historical comps, how much of that was price, average ticket, inflation, et cetera? What's the risk of some of the giveback in some of that? I'd start by saying, historically, even pre-pandemic, if you look at the 20- to 30-year history, we're pretty balanced in growth in comps coming from both traffic, new customers, or additional traffic from existing customers, and ticket. That played out very similar in the 45%. Roughly anywhere from 20%-25% of that of that 45% is ticket slash traffic. We had significant growth in traffic, and we've continued to maintain and even have slight improvement in traffic. So the key is that we're maintaining and holding these customers. Those that have moved into our markets, they've owned a home, a mortgage, they're staying, and they're engaged in the lifestyle. On the ticket side of it, while most of our growth was really fueled by the traffic, ticket was fueled by a mixture of big ticket, you know, scaling a bit higher, inflation in there over 3 years, high teens, you know, stacked, you know, inflation rates across the board, and then more units per transaction. And some of that units per transaction over the few years has been some of the discretionary, the add-ons, and the impulse. To your point, we've seen some modest give back, and I think that's a real testament to the resilience of the business, is the modest part of it. I talked earlier about big ticket, as we expected. As we've seen some level of disinflation, or if we've seen the discretionary UPT a little bit under pressure. You've seen ticket more pressured than transactions are this year. But again, I believe we've hit... Over the time, we've seen some of the deflation in the commodities, that has really been absorbed over the last 18 months. There could be some future impact. We really believe it's more of a neutral-ish. There's a lot of structure in the cost of goods sold versus, you know, historical. If commodity prices go up or down, so do the cost and the retail prices. So we've seen some reversion on the ticket, but the, we don't see, and we're not planning that there's an extensive, you know, continued amount of that. The key part of that is the transactions, the traffic, the units are pretty consistent in there. There's a little bit of noise, expected that in the normalization of it, but we've got a lot of optimism towards being able to grow both ticket and transactions, you know, in the go-forward years. Maybe one just on the operating margin side. Kurt, you talked a lot about the offsets in the business. And what, I guess, two-parter, as you think about SG&A growth, you guys have pulled forward a lot of investments, but what is the right SG&A growth for the business as we think about it? You've talked about if we get deleverage on a lower comp, there's normally a natural offset in gross. Can you just walk through those dynamics and what makes you more bullish on the gross margin outlook, maybe in the near to intermediate term, as we digest this kind of tougher period? Yeah, sure. On SG&A, I'd start by saying, right now, if you look at the core SG&A, and I say that because we are very purposeful in a growth mode for these strategic initiatives, and, I'm very purposeful on the earnings call to talk about the growth on strategic versus the core area. If you just bifurcated that, looked at the core, around a 2% growth rate, on the core SG&A being the, you know, the cost of, the variable costs and the cost in our stores, the labor in our stores, the labor in our distribution centers, the occupancy cost. If you saw roughly 2, maybe even a 3%, that's pretty normal in that. And what that means is labor costs are gonna be growing at higher than that number. There's other variable costs that are in there, but we continue to drive, as part of our strategy, efficiency and productivity in the business. We're coming off of, for the company, an overall nearly 80% growth rate in the last three years. That came through a lot of muscle, and even some inefficiency. And as we begin to come off of those, we're being able to claw back, whether it's cost or claw back or improve on some of the efficiency. So we believe the core can grow modestly. Then, what gives us the opportunity to be, you know, it may grow another two points from there, just in the investments we're making in the business. And that's why we've said, under normal algorithm, 4%-5% comp growth, SG&A can be relatively flattish as a percentage of sales, and gross margin, we see expansion opportunities. The reason we say expansion opportunities, some of our investments in the business, particularly supply chain, are gonna burden our SG&A. All of our distribution costs are in SG&A, but drive down stem miles and drive efficiency and cost of goods sold. So where we invested in a new DC this year and next year, that pressured SG&A, as an example, by 20-30 basis points, and will for the next one, but driving that much or more benefit in gross margin. So we continue to see a favorable outlook on transportation. Controlling what we can control, we believe our micro initiatives are driving down stem miles and more efficiency in supply chain. The scale of this business as a $15 billion size business versus the pre-pandemic $8-$9, we are, you know, scaling our size, and we are creating the lowest cost to serve and being able to grow gross margin expansion. So in general, we still see upward opportunity. Even if there's pressure where you have less big ticket, that means less pressure on mix. Where you see a downward turn in the economy, that means transportation and other costs, you know, tend to start coming down. And in a deflationary environment, if we saw something like that, we generally manage to... Just like an inflation environment, you know, we try to manage to profit dollars and just put pressure on the margin rate. Deflationary, we've typically improved our gross margin. So, you can see a number of the list of things why, you know, what's in our control or visibility. We've got consistent trends on the cost structure, but we believe that we've got the right initiatives helping us with some, over the long term, gross margin expansion. Perfect. Well, I hear the crowd in the hallway, which tells me I'm running up on time. Okay. Kurt, Rob, thanks so much for the time today, and appreciate all the color. Yeah, thank you.