Hi, everyone. My name is Oliver Wintermantel. I'm with Evercore ISI on the Broadlines and Hardlines team, covering Petco. I have my partner, Greg Melich, with me, who is heading up our Broadlines, Hardlines team, and Brian LaRose is here with us. Brian brings more than 20 years of financial and digital operational expertise to Petco, having served in senior roles at HP and Deloitte. Thanks very much, Brian, for joining us today. Yeah, no, I'm going to have you introduce me at parties from now on. That was pretty awesome, so thanks. Good. So Brian, maybe we start at, you know, last time we've heard from you, you talked about the premium consumable segment is still strong, but then you're also seeing some trade down to more of the value segment. Maybe talk a few minutes about, you know, what are you seeing in the consumable segment today? Yeah, thanks for the question, Oliver. I mean, I think, you know, relative to the value space, you know, we talked recently about our recent launch of Fancy Feast and, you know, to getting that back into our assortment. You know, one of the things I think we recognized in the current environment is that while our premium offerings have continued to perform very well, you know, whether it be our own WholeHearted brand or others that we partner with in that category, there's certainly a number of cohorts who are looking for value and, you know, certain different assortments. We felt it was the right time to sort of expand our assortment back into different value offerings. Early days, but we saw, you know, double-digit percentage of customers on the early days of the Fancy Feast reintroduction that are new to Petco. I think for us, the good news is that our partners are trained to sort of educate customers on nutrition and move them up the value chain over time, you know, driving purchases of own brands and eventually premium brands. So, you know, when we look at it, we still believe that the long-term trends of premiumization and humanization are true and here to stay. That said, in an environment like this, you need to make sure that you have, you know, the right assortment for, you know, all customers. Got it. Is there. Are you seeing similar trends in the hard goods and supply side as well, or is that more, are you seeing different trends there? Yeah, I would say that on the, you know, on the hard goods side, you know, certainly there's, you know, kind of a bifurcation of customers, where you have customers who are, you know, value seeking, and that leads to, you know, certain trip consolidation. We're taking actions around that. I think there's certainly a macroeconomic component of the hard goods category. You've seen this in pet, you've seen this in other industry segments where, you know, the consumer is pulling back in certain areas, and certainly we've experienced that. That said, again, we're not sitting still. We've done, you know, a number of things to stimulate it. We have introduced a supplies perk program that we have in place to stimulate some of that behavior. I'll go back to, you know, the comment I made on, on introducing value products, even in food. There's a, there's a double component of that, where what you're looking to do is, you know, stimulate the number of trips or traffic that, that customers are coming in, which can help you in the consumables area, but also the more traffic you drive, the more opportunity you have to get customers to go into the hard goods category. So, you know, the, the combination of, you know, some of the supplies perks program, the introduction of value offerings, and some pricing actions that we've taken, are all meant to drive traffic over time and reaccelerate growth in hard goods. Got it. And then. Brian. Yeah, go ahead, Greg. I just wanted to follow up a little bit on the premiumization, 'cause it's been such a long-term trend that you're seeing a, a value-focused consumer shift that a little bit. How do you think the competitive set may be driving some or any of that, where, you know, someone like a Walmart, maybe has gotten better at being convenient and in actually carrying some of these premium products? Do you think that's having any sort of influence and sort of making it easier for people to trade down, out of certain categories, or? Yeah, I- I mean- Yeah, I don't want to spend too much time talking specifically about, you know, a competitor, but what I will say is, from an assortment standpoint, there's not much new there. You know, there are certainly some products that were exclusively at pet specialty three, four years ago that moved into mass. That's not new. I think one of the things that you have seen is trip consolidation, where whether it be trip consolidation, grocery, or other components outside of pet, that has driven some level of consolidation of value in players like Walmart, which they've spoken openly about on their earnings calls. So, you know, for us, that hasn't really been a direct correlation to our premium business. Right. But it is a component of the overall market that we have seen some trip consolidation in competitors like the one you named. Thanks. That's helpful. And, Brian, if you look back during the last big downturn or recession, has the pet segment, is that behaving similar to the last downturn? And, if you look at it, you know, maybe you can give us a little bit of a, you know, some color or timeframe, how long it took for it to come back. And, then lastly there, on this question, what does it do to your margins or your revenues in a downturn? Yeah, I mean, let me first, at the risk of sounding like I'm sucking up, Oliver, I think your launch note, you know, talked about the pet category being resilient, even during a downturn. So, you know, look, we grew last quarter. I think if you go back to the last economic downturn, the pet segment grew, you know, on a multi-year period. If you go take a 2008 to 2011, you know, that category grew kind of, you know, mid-single digits, and you saw, somewhat similar patterns in the hard good categories, where you saw that those categories at a, you know, at a macro level, at a total market level, go negative for a period of time and then ultimately, return. I would say that, you know, we are not prognosticators on the overall macro environment. We control what we control, and so, you know, I don't want to put a definitive timeline on it. But I'll go back to some of the things that we've already touched on, Oliver, that, you know, consumers are certainly, you know, value-conscious in this environment. And you have seen, you know, that bifurcation where, you know, one cohort is maybe trading up and there's some trip consolidation and trade down. So, you know, overall, I'd say that, you know, the pet category remains resilient in this downturn as well as in the last. Got it. And is there a. I don't think we've seen really additional promotions or aggressive promotions. Is that a risk in this category that you know, I don't want to call it a race to the bottom, but you know, if sales slow, especially in one category, that some of the players are starting to be a lot more promotional? I think, you know, we made a comment on our earnings call about the promotional environment, you know, sort of returning to normalized levels, pre-pandemic levels. You know, and certainly that's been the case. You know, we watch out for, you know, all sorts of, you know, I'd say, pricing in total. You know, we look at promotional activity with competitors. You know, there is a component of products that are regulated by MAP, so you know, there's certainly an element of control over a portion of the market. But we monitor pricing of our competition as well as our own. We monitor pricing and promos across the board, and, you know, we take action where we need to. We talked in the last call about, you know, adjusting some pricing on our end. And then looking at Petco in the active customer count, I think you added about 5 million new customers between 2019 and 2022. And the spend per customer is up about 7% over the same time horizon. That said, the second quarter, I think it was the first time that we've seen a slight decline in active customers. Maybe you can talk a little bit about, you know, the dynamics there. And then also, you know, what are you seeing in cohort behavior? The cohorts today, maybe the five million that you gained, versus the ones that you had before the pandemic. Yeah, I think you raised a good point, Oliver. I think it's important to kind of zoom out for a second and just make the point that, you know, customers are still up significantly from pre-pandemic levels, you know, even acknowledging the customer change last quarter. But, you know, we have seen, again, value-seeking behavior, which is why we announced strategic actions like we did on the call, to open up our assortment, provide more value, resonating with customers. And we're hopeful that that reaccelerates customer growth, which will translate to, you know, both top and bottom line. In terms of cohorts, we continue to see the highest customer churn in our lowest income cohort, which again, leading to our decision to sort of reintroduce more value. Is there, when you talk to customers, is there anything that they would say, "How did Petco change?" Right? Is there anything that the customers say differently today versus a few years ago? I think the biggest thing for me, and it's, it's good that you have Dr. Miller on a panel coming up, you know, quite shortly. For those of you, you know, listening, I would encourage you to stay for that. The biggest thing for us that's different is, I would say, our vet build-out. I mean, if you go back two, three years ago, there were questions about our ability to actually be successful in this market. Including, you know, we have something called the Wellness Council that is made up of, you know, some of the finest minds in the vet industry, nationwide, whether that be, professors and/or some of the best vet practitioners in the market. When we established that Wellness Council, as we were entering the vet market, you know, quite honestly, some of their feedback is, What right do you have to play in the market? You know, they're very protective and respectful of the vets that they serve, and they wanted to know our intent and questioned our ability to go execute. And I think probably investors at that time were curious on our ability to go scale that market. So that was, y ou know, you go from, you know, starting at zero in, you know, 2018, 2019, to, you know, less than 150 vets just a couple of years ago. You know, we think we'll be close to, you know, 300 by the end of the year. That's a big deal. That's scale. So I think what's mostly different about how companies think about Petco for us is when we talk about kind of a one-stop shop and having the ability to serve vet customers, grooming customers, food, hard goods customers, all in one place, you know, that has changed the perception of Petco. And I would say that the vet build-out has been a success story and kind of a, you know, a key cog in our ability to kind of change that mindset. Would you say now that you're adding a little bit more of the value brands to your assortment, is that, is that, you know, you know, reacting to the macro environment, or do you think it's a, you know, a little bit of a shift in strategy? I think it's an acknowledgement of the need to have, to have a certain level of assortment in that space, coupled with our intent to do what we control to drive traffic. You know, this is all about traffic and getting back to what are things we can augment in our portfolio to make sure we reach the broadest breadth of customers and get more feet through the door. All right. Yeah. And so we just talked about the growth in spend per customer over the last two years. Can you maybe, you know, talk a little about the drivers of that growth per customer? Yeah. You know, I think our team, I, I'll go back to our team. I think what's unique about our Petco partners is their ability to educate consumers coming through the door. And, you know, once you get somebody through the door, having the ability to sort of cross-sell across the broader portfolio. So spend per customer is a sort of an output of that. As you know, Oliver, we launched Vital Care Premier a few years ago, again, starting from zero. That's a subscription-based business, where for a monthly fee, you get $15 back in rewards. For us, you get discounts on nutrition, you get free vet visits inside of our clinics that are inside of our four walls, you get discounts on grooming. That, you know, that launch of that subscription business was, was twofold. One, to get an annuity-based business into our financial construct. The second is to have another on-ramp for us to have different touch points with customers and expand that over time. So really, that growth in net spend per customer is getting more and more customers across the different components of our ecosystem, and making sure that we have as many on-ramps into that ecosystem as possible, whether that be vet customers who are new to food, food customers who are new to grooming, Vital Care Premier customers who are new to all, and we just continue to look for more ways to bring people in. Yeah. Yeah. Good. And I know you just mentioned, you know, traffic a little bit, and I know you don't report ticket versus traffic, so I'm not going to ask ticket versus traffic. Maybe I'll ask it a little bit different, right? So your growth in services should be a traffic driver into the store, right? And I think, you know, the consumable space within pets is still relatively strong, but the hard goods side is a little bit weaker. So is it fair to assume that your reported comp today is mostly ticket, but then also services is driving traffic into your store? So maybe in a bigger picture, if you could talk a little bit about the traffic drivers there. Yeah, you're right. I would acknowledge that, you know, ticket or basket was the driver of comps. I think as inflation abates, we'll see that become, you know, maybe less of a factor in the future. On a go-forward basis, we'd expect, you know, transactions to increase given the assortment and the pricing actions that we're undertaking. You know, as it relates to, you know, beyond this year, 2024, we'll give more color on 2024 in our year-end call. But I will also come back to your first point on, yes, services has been a great driver of traffic in the store, not just for services and for basket, but the center store uplift that we get. You know, one of the things I didn't mention in the, you know, the vet commentary before is anytime we add a vet into our center store, we typically get, in first year, kind of a mid-single-digit center store lift. So you get a basket lift from services transactions themselves, and then the ancillary benefit of that center store uplift. If I could follow up a little bit there on the prior question as well, like, as you think about growing spend per customer and engaging them as members and to get stickiness, how, how should we think about the Lowe's store-within-a-store relationship? Is that more of a, just try to get more customers because it's in areas where you just don't have anything? Sort of maybe describe a little bit how you're thinking about that initiative and as, as you merchandise it, and how it links in with the rest of the base. Yeah, it's a good partnership that I would say is sort of mutually beneficial to both companies. It's a fast way for us to expand into 300 locations that are primarily rural markets by year-end. Importantly for us, that kind of zero capital outlay. You know, it's good for us to have Petco shop-in-shops featured in such a strong brand like Lowe's. It does give us the ability to acquire more customers. I mean, that's ultimately the end goal. You know, I talked about, you know, on-ramps, you know, into our ecosystem. This is another way to do that, you know, an on-ramp into the broader Petco ecosystem by more touch points, and those touch points happen to be shop-in-shop inside of Lowe's. You know, so I think it's a good model for us. We're happy with, you know, the early cohorts with Lowe's, and that's why we, you know, expanded the relationship with them. Is what you have in the store what we would expect to see in a regular Petco, or how does it change when you go into a rural market? Oh, yeah. I mean, because they're shop-in-shops, you're not going to have the full breadth of assortment that you'd have in a full-scale Petco, right? You have a small footprint inside of a Lowe's. You know, we work directly with them in terms of cultivating that assortment so that it's something that's successful for both parties. You know, it'll, because it's a shop-in-shop, just like you'd see in different segments, whether that be beauty or otherwise, you're going to have a small piece of it. You know, ideally, you would acquire more customers who then do go online and visit us at petco.com or come inside the store to get the full assortment. Just because, as a shop-in-shop, the sales that are there, is it your inventory and your sales, or is it their inventory and their sales? Yeah, you can think of it as a wholesale model. So, they kind of own that inventory. So that's how I think about the model. Got it. Thank you. The labor, is that your employees or is that Lowe's employees? Primarily Lowe's. There may be select locations where it makes sense for us to have an adjacent Petco partner work there. And then, you know, there'll be some locations where we'll have vaccination clinics, and that would be Petco labor. So that's, and that's our existing model. That's, we have 1099 vets who run our Petco mobile clinics, and certainly for some of those locations, it makes sense for us to have those clinics. Okay. How does that compare to your, the standalone, more rural stores that you also are opening? I think you have about 10 of them running. How does that compare to this, you know, or how does the strategy work together with Lowe's? Yeah, different. I mean, I think, you know, all the similarities would be that anytime we see an opportunity where there's an underserved portion of the market that we can get incremental benefit for the company, then we'll take a look at it. But the standalone Petco stores are just like our regular Petco stores with a broader breadth of assortment that is lined up better with the demographics of that market. So, you know, in those standalone stores, and they, again, they are standalone Petco locations. They look and feel a little bit different. You know, they have a bit more of that farm-and-feel appeal to them. We have entered into new components of the market there, whether that be bovine or equine. We have multiple different species of chicks at those locations. So, you know, it's, again, early days on that one, but we've been, y ou know, I think it's just another part of the market that I would view more in terms of an overall kind of store footprint, whereas Lowe's is good partnership with a great brand that allows both of us to sort of attract new customers. Is that a strategy to go after a certain, you know, customer from, you know, trying to get market share from other retailers? Or is that for you, really think a new, greenfield, where you, where you just, you know, get it from mom-and-pops? Or how do you think about the competitive set with these either standalone stores or Lowe's? Yeah, mostly for us, it's, we always look at things sort of what's incremental to us, and whether that comes from mom-and-pop or competition, or it's in, you know, we're ultimately trying to get new customers into Petco. We don't necessarily bifurcate it in that way, Oliver. It's more just if we think there's an opportunity with good ROI to get new customers into our ecosystem, you know, then we will make those investments. Okay. And now, because the CFO, we need to ask a lot of the. Yeah, sure. Pretty margin questions. If you look longer term, right? So the growth in your services business and the growth in e-commerce put some pressure on gross margin. And I understand for the vets, it's really the geographic location where labor sits. So it's EBITDA enhancing, but it's put pressure on gross margin. Maybe you can talk a little bit about your longer-term gross margin outlook, how you think about that. Yeah. You know, to the extent that we would comment on any longer-term expectations, I would do that at kind of a future, future analyst day, Oliver. What I, what I can tell you is the dynamics you talked about on gross margin are true. So, the services business, traditionally has a lower gross margin than, than company because of the, the labor component. So not just for vet, for even groomers, the cost of labor sits in cost of sales. So you have a different gross margin profile. E-com, the digital business we've been open about has a, has a lower gross margin than total company, not dissimilar to, you know, what you'd see in a, in a, in a pure play e-com margin. So, you know, for us, we're focused on, we're focused on customers, we're focused on controlling what we control. We talked in the last call about, you know, a series of strategic cost initiatives, you know, on a multi-year basis, where, we targeted $150 million of sort of, you know, cost actions and gross margin productivity actions over the next, several years. Those are in flight. The first year, we would expect, you know, $40 million of that, and then, exiting 2025, kind of at that $150 million run rate. So, you know, we're focused on what we control, and we're focused on, on, you know, getting customers, customer growth. Of these $40 million, what is, y ou know, can you give us a little bit more detail? Is it, is it mostly in labor or, or how do you, how do you get these, the, the $40 million down? Yeah, we haven't provided that level of detail, Oliver. We did comment on the call about actions that we have already taken on the corporate workforce side, so certainly that's a labor component. More broadly, though, there are opportunities over time for us in areas like supply chain. You know, I think while our team has done an exceptional job managing inventory, and if you look at our inventory last quarter dollars were down with increasing sales and improving in stocks. I mean, it doesn't, you know, that's a pretty good situation. That said, when it comes to, you know, efficiency and effectiveness of our supply chain, I think there are opportunities for us to improve there and, you know, extract some value out. There are, you know, other productivity enhancements in our services model that we're driving towards, and then some other cost of sales actions that we didn't get into too much detail on. Okay, okay. And then just on the cash flow side, when we look at, you know, let's take a step back before we get there. I think over the last year, the interest costs, you know, were a little bit higher than what you thought about at the beginning of the year because of the interest rates. Are you now, when you look across the street or where people model interest rates, happier with where the street is modeling interest rates today versus maybe a few months ago when the street was a little bit low, and you had to guide to higher interest costs? Yeah, tough for me to comment directly on what a street number is on interest, Oliver. I would tell you that one of the things we feel good about is that today, roughly two-thirds of our debt is protected in some way through some of the actions that we've taken around hedging instruments. And so we, like you, continue to make sure that we reflect what the current interest rate expectations are. Okay. Okay. And then now going to the free cash flow side and your leverage. Can you remind us what your leverage ratio is today and what the, you know, medium or longer-term goal is to get to? Yeah, again, I would say to the extent we have any updates on an interest leverage ratio, we would do that at some kind of future event. I can tell you what our capital focus is. Our capital priorities remain debt as top of the stack, right? We made a $100 billion debt commitment pay down this year, and we're well on our way to that, you know, as of the date of last earnings. And you know, secondly, making the right investments in the business. So, you know, if I look at CapEx, you know, last year, our CapEx was, you know, close to $280 million, and certainly, we've guided well below that this year. At the same time, we continue to make sure that we make investments to make sure this business is set up for the mid and long term. So we, you know, if we have a high ROI area of investment, we want to make sure that we can make it, but with more balance. And that's why I said we'd start with a capital priority of, you know, debt paydown. Secondly, reinvesting in the business. To enable that from free cash flow, I think our team's done a really good job on working capital. If you look at our working capital metrics over the last nine months, you know, we have done a really good job of improving our cash conversion cycle and our working capital metrics, which has enabled us to generate free cash flow to help pay down that debt. And the reduction in CapEx, is that just moving maybe some expenditure into next year, or are you cutting back on growth opportunities? Or how maybe explain a little bit what the lower CapEx number is entailing. Some of it is sort of one-time things. We talked a lot in last year's CapEx about investments that we were making in areas like freezer buildouts. So we are still really excited about the fresh frozen market and still think there's a lot of capacity for growth there. We wanted to make sure we were well-positioned, so last year we made an investment in freezers to get ourselves in over 1,000 of our locations. So that's a non-repeatable CapEx number this year, that comes out. Secondly, I think we've done a good job at retiring what I would deem sort of technical debt. You know, there are some areas of IT that are more fundamental and sort of, you know, again, a technical debt component, and then there's areas of innovation. So I think the, you know, our IT team has done a really good job of getting past some of that technical debt, which allows you to kind of pull some CapEx down on a run rate basis. And then B, and then third, I'd say just being more selective, Oliver, on the, you know, the investments that we make. You know, we're mindful of our, you know, the importance of making progress on our overall debt position. And to do that, you know, we continue to look at every single CapEx dollar we spend as what's the best return we can get for that, whether that be in that investment or against our debt profile. Got it. But the, I think you said about 50-55 vet hospitals per year, that's still a good opening run rate? For this year, that's what we've committed to, yes. Yeah. Is there any, you know, problems finding vets from a labor perspective, that it's too tight and, you know, that you might not. You could open these 50 or 55, but there, there's a shortage in vet labor, or is that not an issue for you this year? It's, you know, that certainly has been a challenge and remains a challenge, but I don't think it's changed. You know, that component of things haven't changed. Our team feels really good about the value proposition that we can provide, and certainly Dr. Miller can comment on that, but she's involved. You know, so when we actually have a recruiting engine for vets, one of the benefits of having somebody as respected as Dr. Miller on your staff is that you can actually have them talk to a vet if they need to talk to somebody who can tell them directly what it's like to work at Petco and why they should. So, you know, we offer something very different. We offer vets the opportunity to come in and practice medicine. You know, if you're an individual vet, and there may be some listening, you know, there are components of your day that are spent on things that are way outside of practicing medicine. You know, you're running payroll and doing scheduling and staffing and dealing with a landlord. For some people, that may not be what they want. They may have wanted to get into the industry to practice medicine. We allow them to do that. So we allow them to come in and operate in a clinic that we've put the capital in, we have the equipment, we have the staff, we have the point of sale and the ordering scheduling system. They come in and practice medicine. We think we have a competitive package, compensation-wise, that is a combination of, you know, salary, bonus incentives and equity. And then, you know, quite frankly, the fact that not only we allow them to practice medicine, but to do so autonomously in a way that is attractive. There are going to be some vets who that's not what they're looking for. I think our recruiting team does a good job of identifying the ones that do. Jason, who runs our services business, Jason Heffelfinger, and the team have done a really good job at staffing these hospitals as we build them. Well, there's a long timeline, too, at Oliver. We, you know, we know what markets we're strong in, and we know what markets we can be strong in, and there are certain markets that if we don't feel good about making the capital investment, we'll wait, and we'll leverage the ones that we are strong in. We tend to get better the more density we have in a market. So if we have, you know, one clinic, you know, there's maybe some learnings in that market, the more we get, and there are some markets where we have some significant density, the better we do. Got it. Okay. And then, another growth opportunity or initiative from you is the loyalty and membership program. Maybe can you talk a little about the different approaches, how you want to convert customer to, you know, maybe from a free to a paid membership, and overall, how the Vital Care membership works? Yeah, thanks for that question. I mean, I get excited about Vital Care. You know, when we launched it, you know, it was truly our effort at consolidating all components of the ecosystem into one. So for those of you not familiar with it, you pay a monthly fee to Petco, which that for new customers, that fee is now $24.99, but if you pay the entire year upfront, you get a discount off of that. For that, you get $15 back per month in instant rewards, so you automatically recoup a large component of your monthly outlay. Secondly, you get free vet visits inside of our four walls. So if you come to a Petco, Vetco clinic, a Vetco hospital, you get that exam for free. You get discounts on nutrition, you get discounts on grooming. So when you do the math out, it sort of pays for itself and then some. For us, what's compelling about it is, you know, those customers tend to spend three times as much as kind of a lookalike customer. So, you know, we have approximately 650, 660,000 members today. I think this program will continue to evolve over time. It is today one offering, right? If you want Vital Care Premier, that's what you get for it. You could see us over time, sort of cultivating an offering that has more choices within it, where, you know, whether it's, you know, good, better, best or something like that, where you'll continue to see this evolve. But, it is a, it is a growth area that we're excited about. The cohorts have behaved very, very well. Going back, Greg, to one of your questions, like, you know, in terms of, you know, kind of monetizing customers and growing, and growing net spend per customer. Vital Care is a good example. Approximately 30% of Vital Care customers are new to food, and about 40%, plus of Vital Care Premier customers are new to services. So, you know, that's an indication that if you can get, you know, people on those on-ramps into the ecosystem, and, and this is a good program to do that, you can scale them across to other parts of your portfolio. Is there a, w hat is the sign-up, the link between sign-ups and a Petco that gets a new vet hospital? I would imagine that because you get some of the perks is, you know, free exams and all of that, so that there's a big growth driver is the rollout of vet hospitals, or is that, is that not the case? That, that as well as our customers, inside of the brick-and-mortar locations, just being very well trained at point of sale, to have that as an offering to customers. So they're very good at. I would say, you know, I'll give you a true story. I sold one. So one of the things that I do from time to time is, I go work in a pet care center for the day. It's a great way for me to actually connect with customers and actually learn about our assortment. And, you know, there's no better way to learn about the products we carry than to unload a bunch of U-boats from the back room and toss around 50-pound bags of dog food. But I was working in a pet care center, and I was challenged by one of our younger, you know, 25-year-old Petco partners to sell Vital Care. Because if you go in the back room of our pet care centers, it's very data-driven, and the general manager every day will actually educate the Petco center partners on what the sales goals are for the day, but also some of the other goals, like how many Vital Cares do we need to sell? How many of X, Y, or Z? Whatever our priorities are as a company, that they're driving. So I was challenged, you know, by one of our partners to go sell one, and immediately I see a woman walking out of our grooming salon with a, you know, 56-pound bag of WholeHearted. I thought they planted her. I thought it was a setup, and so because I walked over to her, and I just said, "Hey, all right, have you heard about Vital Care? I see you came out of grooming, and you have a bag of food." I ended up getting her to sign up on the spot. Now, that's an easy one, right? That one was a layup for me. There are more difficult ones, and our customers, our, our partners are well-trained to, as they identify a customer who may already be, without them even knowing it, hitting two or three or four of the components of what Vital Care offers, knowing, okay, that's somebody I can actually just have a quick conversation with and engage. If you engage them in the right manner, and you can do the math for them on the spot, you can get them to flip. So yes, hospitals are a big piece of it, but more importantly, just the education and the knowledge that our partners have on the floor to identify customers who might be a good target. And then another growth opportunity that you always mention is digital and, you know, multi-channel. How has that changed since the pandemic? You know, during the pandemic, there's a big, you know, obviously spike in multi-channel or e-commerce. Today, do you still think there's a big opportunity in digital for Petco? We do, and I think in twofold, standalone as well as what it means for us from an overall customer experience. I mean, you have seen patterns of behavior since 2020, Oliver, where, you know, obviously at some point, everyone kind of went online, and then as brick-and-mortar locations opened back up, you had a migration back. What really emerged from that was offerings that we have and others, for buy online, pickup in store, and same-day delivery options. I think, you know, for us, that's where we think digital is a differentiator. If you think about, you know, going back to one of the areas that I talked about before, about fresh and frozen. Fresh and frozen as an opportunity is still a significantly large and growing market. If you are ordering a fresh frozen product, the ability for us to deliver it same-day delivery through one of our partners to that end customer on that day, at a cost that is very low to us, is an advantage. If you're shipping that fresh frozen product from ADC, it's going to take a significant level more of cost, more costly packaging to ship that product. So, you know, I think for us, we look at digital as, you know, I'd say. I said twofold, but maybe more threefold. Standalone in terms of a business, what it can do for us from a customer standpoint to get the product to them. And third, kind of the epicenter of how we actually manage customers. So today, I think, you know, I think the last stat Jason gave was, you know, 70% of our services appointments are being enabled through the app, which two, three years ago wasn't the case. And so the convenience of being able to schedule even services through the app is, is how we think about digital as an enabler, too. And then, one of my last questions, and then, Greg, I will, you know, if you have others. But if you, Brian, if you look at, you know, Petco over the next few years, what do you think are the biggest, you know, risks or opportunities for you? You know, I'd start with macro. I mean, macro remains a big uncertainty, and, you know, we can't predict when discretionary or broader macro stabilizes. You know, I can tell you, and we've touched on this on the call a bit, you know, we're not standing still. We're controlling what we can, whether it be the cost and productivity initiatives that we talked about or, you know, continuing to scale out our vet hospitals, which remains a bright spot. You know, we control what we can, but I think that, you know, I'd go back to macro as the biggest one. For opportunities, you would say, you know, the rollout of vet hospitals or? The rollout of vet hospitals, you know, certainly, and I think, you know, our efforts to return to customer growth that we've touched on during the call. If we have time for one more question, Oli. Yes, we do. I would back in the beginning, Brian, we talked about premiumization as sort of that longer-term trend and how some of that's turning this year, I guess, cyclically. I'm wondering if you think that there was too much pricing maybe at the high end or what is the price gap or premium for products now versus five or 10 years ago? And do you think that might be adding to some of this trade downs that we went so far up, if you will, compared to history, that cyclically, we sort of have to come off some. So that it's just a. I'd just love your view on that. We've, just in just regular food, we've had that, where there's been a lot of pricing from everything from beverages to, you know, human food, and we didn't see much price elasticity the last couple of years, and now we're starting to see it this year. So I'd love to hear your, your take on that for the, for the pet area. Yeah. I probably can't go back 10 years, Greg, because 10 years ago I was, you know, monitoring component costs of PCs in a, in a very different company. But, but what I can tell you is, yes, certainly the industry, the industry had pricing increases starting in the back half of 2021, through H1 of 2022, and then abating some after that. I think more broadly, rather than comment on pricing, I'd say you just have a consumer dynamic where people are, more mindful and value conscious. You know, we talked in our last call about taking pricing action, in the third quarter to, you know, to make sure that we were lined up the right way, and that over time, those pricing actions, you know, typically, return within the first year. So, I think, you know, as an industry, we'll continue to monitor the pricing environment. Again, I think you've seen less pricing action happen, more recently, and I would expect, I'll go back to kind of an inflation point, from an inflation standpoint, I think you're seeing that moderate and, you know, heading towards kind of a disinflationary environment. That's great. Thank you. All right, Brian, looks like we're up on time. Thank you very much for today and all the best for the rest of the year. Yeah, and you know, good luck to you today. For those of you listening, you know, I know Dr. Miller is on next for Petco, but the rest of the report agenda looks really good. So you've got some good panelists lined up today that I think can give a pretty broad spectrum of what's happening in pet. Thanks, Brian. Appreciate it. All right. Thanks, everyone.