Ladies and gentlemen, thank you for standing by. And welcome to the Burlington Stores Incorporated Third Quarter 2019 Earnings Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference to your speaker today, David Glick, Senior Vice President, Investor Relations and Treasurer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. We appreciate everyone's participation in today's conference call to discuss Burlington's fiscal 2019 third quarter operating results. Our presenters today are Michael O'Sullivan, our Chief Executive Officer; and John Crimmins, Chief Financial Officer. Before I turn the call over to Michael, I would like to inform listeners that this call may not be transcribed, recorded or broadcast without our express permission. A replay of the call will be available until December 3, 2019. We take no responsibility for inaccuracies that may appear in transcripts of this call by third parties. Our remarks and the Q&A that follows are copyrighted today by Burlington Stores. Remarks made on this call concerning future expectations, events, strategies, objectives, trends or projected financial results are subject to certain risks and uncertainties. Actual results may differ materially from those that are projected in such forward-looking statements. Such risks and uncertainties include those that are described in the company's 10-K for fiscal 2018 and in other filings with the SEC, all of which are expressly incorporated herein by reference. Please note that the financial results and expectations we discuss today are on a continuing operations basis. Reconciliations of the non-GAAP measures we discuss today to GAAP measures are included in today's press release. Now, here's Michael.

Thank you, David. Good morning, everyone. Let me start by saying that it is great to be here. Under Tom Kingsbury's extraordinary leadership, this company has achieved remarkable things over the last 10 years. Even more exciting though is that despite the success we have had we still have tremendous opportunity ahead of us. I will be talking more about that opportunity later in this call, but for now I would like to step back and talk about our third quarter results. As described in today's press release, we achieved a solid comparable store sales gain of 2.7%. This was on top of our most challenging comparison of the year of 4.4% comparable store sales gain in the third quarter of fiscal 2018. Our total sales increased 8.6%. This was driven by the increase in comparable store sales of 2.7% and by strong performance from our new and non-comp stores. Our adjusted EBIT margin expanded by 90 basis points, this drove a 28% increase in adjusted earnings per share, well ahead of our guidance. This EBIT margin expansion had three components: number one, our merchandise margin increased by 30 basis points, which enabled us to offset 20 basis points of freight costs and 10 basis points of inventory costs related to stores that had to be temporarily closed during the quarter. Number two, strong leverage on our expense base including 40 basis points on adjusted SG&A and 20 basis points on product sourcing costs. Number three, other income and revenue was higher by 40 basis points. This was primarily a timing benefit. We opened 35 net new stores during the quarter. We were also able to accelerate one additional store into the fourth quarter that we had previously planned for early 2020. This brings us to a total of 76…

Thanks Michael and good morning everyone. Let me start with a review of the income statement. For the third quarter, total sales increased 8. 6% and comparable store sales increased 2.7% on top of last year's strong 4.4% increase. New and non-comp stores contributed an incremental $116 million in sales for the third quarter. There were seven stores that were temporarily closed during the quarter due to fire or other building specific issues. These negatively impacted new and non-comp sales by $9 million. Most of these stores have now reopened. Our third quarter comparable store sales performance was driven primarily by an increase in units per transaction with AUR up slightly, traffic flattish, and conversion down slightly. The gross margin rate was flat with last year's rate at 42.4%. Merchandise margins increased 30 basis points offsetting the negative impact of 20 basis points from freight and 10 basis points from inventory write-offs related to damaged inventory in the temporarily closed stores. The merchandise margin increase was driven primarily by lower markdowns and higher markup. We continue to expect freight to be up approximately 20 basis points for the year, which implies that the pressure from freight will moderate further in the fourth quarter of fiscal 2019. Product sourcing costs, which include the cost of processing goods through our supply chain and buying costs were 20 basis points lower as a percent of net sales. Adjusted SG&A, excluding management transition costs was 27.3%, 40 basis points lower than last year as a percentage of sales. This improvement was driven largely by strong sales growth and expense leverage on store-related and corporate costs as well as marketing expense. Other income and revenue was $16 million, $7 million higher than last year and 40 basis points higher than last year as a percentage…

Thanks John. In summary, we are pleased with our third quarter results, a solid 2.7% comparable store sales gain and a 28% increase in adjusted earnings per share. We are well-positioned as we move into the fourth quarter with comparable store inventories down 4%. If the sales trend is there, we will be ready to chase. Before I wrap-up, I would like to thank the entire Burlington organization for the hard work that went into achieving these results. I would also specifically like to thank Tom Kingsbury for his support and counsel over the last 10 weeks. With that, I would like to turn the call back to the operator to open it up to questions.

Thank you. [Operator Instructions] Our first question comes from Matthew Boss at JPMorgan. Your line is now open.

Great. Thanks. And congrats on a nice quarter and Michael welcome aboard. So, Michael many times, when a new CEO joins an organization we see larger picture changes to the strategy or direction. I guess as we look forward, should we expect any major strategic or other material changes to consider at Burlington?

Well, good morning Matt and thank you for your question. Certainly, I understand why that would be a natural concern for investors. I think perhaps the best way for me to answer the question is to explain. So, one of the things that attracted me to Burlington was that, when I first talked to Tom Kingsbury and then later on when I spoke to Jennifer Vecchio, it quickly became clear that all three of us share a very similar perspective on the off-price model, and the drivers of success in off-price. If I was to summarize, I would say that, we collectively if you like believe that the principles that drive off-price success in off-price are number one, that the customer cares above all else about great merchandise value. Number two, that to deliver that value we need the best possible merchant capabilities, and number three that, all areas of the company have a role to play in delivering that value. Now, those are the same principles that Tom has used to guide the company over the last several years. And with me as CEO of Burlington, these principles are not going to change. And in fact my goal is to find ways where I can to pursue those principles even more effectively than we already do.

That's great. And then Michael, just a follow-up, I know it's early but based on what you've seen so far. Are you expecting to make any major investments that will have a meaningful negative impact on EBIT? I guess, maybe said differently will the steps you're taking to strengthen the merchant group require any level of reset to EBIT?

So Matt, I think I'll break down that question into a couple of parts. First of all, let me address any underlying concern about whether there are any remedial or catch-up investments required. In other words is anything broken. The simple answer is no. The company is in good shape very, very good shape. And we have a great platform for growth. But the focus now that the focus for me and the rest of the senior team is how do we move the business forward. We have huge upside in terms of sales, productivity and profitability. How do we go after that? Well, the way we've got to go after it, I think is to get much better at what we do. We're an off-price retailer, off-price is winning, we need to get better at off-price. And that requires having the strongest possible merchant capabilities. We have a very good merchant team today, but it's clear that, there are areas where we can further strengthen this team and provide them with more resources and support to make them even more effective. Now on your question of how might that affect EBIT, I don't have a detailed answer today other than it's worth saying that on the other side of the ledger, I see opportunities for faster inventory turns which should lead to lower markdowns. And I also see further potential to leverage expenses. The savings from both of those areas where the markdown savings or expense leverage should help us to offset expense headwinds, while at the same time supporting the merchant investments that I've described. There's one final point I would make. The things I'm talking about strengthening the merchant team, building more chase into the business, going after productivity improvements. We're not going to rush any of these things. We're going to be thoughtful and deliberate on how we move forward on these things. So, it's definitely an evolution rather than a revolution.

That's great color. Congrats again and best of luck, Michael.

Thank you.

Thank you. Our next question comes from Ike Boruchow with Wells Fargo. Your line is now open.

Hi, good morning everyone. Welcome Michael and John and David. Good to hear from you as well. So I guess first question Michael. So in your prepared remarks, you mentioned the possibility of planning the business a little bit more conservatively, I think. And I think you also commented that you've identified potential cost savings to help offset headwinds and support the investments. But directionally is there a way to interpret conservative planning and areas of investment in terms of your ultimate 2020 outlook at this point?

Well, good morning Ike. Nice to hear from you. First, let me elaborate on what I mean by more conservative sales planning. One of the key advantages that the off-price business has versus other retail formats is the ability to preserve liquidity and to use that, take advantage of opportunistic buys that's off-price. One of the most effective ways to do that is to plan comp growth relatively conservatively. That forces more discipline into how we manage and plan liquidity, inventories and expenses. And then once we're in season, the additional liquidity means that we can chase the sales trend. I know you've heard me say this before; I know other people on this call have heard me say this before. This is the off-price playbook. Of course at Burlington, we already do this to some degree, but I think we can lean into the chase much more than we already do. Now, as I explained earlier, there are areas of the business where I want to invest, but there are also areas where we should be able to find productivity and expense savings. Over the next few months, we will work through the specifics, the puts and takes and the timing of all those different pieces. And we'll provide more detail in March. But directionally, you shouldn't be surprised if the guidance we give for sales and earnings growth is a little bit lower than the guidance we gave coming into this year. And to be clear, this does not signal a change in our long-term growth outlook, but rather an attempt to strengthen the business and move it towards a somewhat more aggressive chase mode a more aggressive off-price mode. I'm very confident that by moving in this direction, by becoming more off-price, we'll be even more successful in driving profitable growth in the next few years.

Got it. That's helpful Michael. Thanks. And then John one for you, maybe could you walk us through the Q3 earnings beat drivers, as well as how that impacted the increase in your updated guidance for this year? And it just looks like you held a few cents back. I want to understand that and how you're thinking about maybe just the gross margin and SG&A that's embedded in the Q4 outlook that you provided? Thanks.

Sure Ike and thanks for your question. Yes there were a lot of moving pieces in the quarter. So, I'll be happy to kind of walk you through the puts and takes. Let's talk about sales first. While our comp sales at 2.7% were close to the high end of our guide, our non-comp sales were lower than we expected. We've already mentioned we had the seven stores closed for extended periods during the third quarter. All but two of these stores are now reopened. We expect one to open very soon and the other store is going to be closed indefinitely. We lost about $9 million in sales from these unexpected closures, but notably, our new stores actually outperformed our plans nicely. The combination of the slightly lower comp and the unexpected store closures cost us about $0.04 of EPS versus our thinking when we gave our guide at the beginning of the quarter, about half of that was directly related to the closures. Also related to the closures, we had to write-off damaged inventory from new stores and that cost us about $0.03 of EPS. Now, this was offset by good news in product sourcing costs versus our assumptions that were embedded in our guide of $0.03. That save was driven by fewer receipts processed and some efficiency gains in our supply chain. So, our gross margin less product sourcing costs was about as expected, but we had kind of a bad news offset by some good news within that line. SG&A expense leverage was the biggest driver of the beat responsible for about $0.12. Within SG&A, occupancy costs particularly utilities and common area maintenance and real estate tax true-ups for some of our leases drove about $0.05 of the SG&A save. Another $0.03 from the save came…

Thanks John. Thanks everyone.

Thanks Ike.

Thank you.

Thank you. Our next question comes from John Kernan with Cowen. Your line is now open.

Good morning, everyone. Thanks for taking my question. Michael and John congrats on your new roles.

Thank you.

Thanks, John.

Michael, can you provide more color on some of the key assortment trends and strength that you saw in the quarter and what progress you're making in critical businesses like home and lays?

Sure. Thank you for your question, John. I would say that – well, first of all, what worked really well in this quarter was that we did a very nice job, in fact, I should say that the merchants and the planners did a very nice job transitioning the assortment, firstly from summer to fall, and then more recently into fourth quarter and holiday. And actually, the execution of those transition programs by our supply chain and our store teams was really, really excellent. In terms of individual businesses as I mentioned in the prepared remarks, we were pleased with our assortments in Home, Missy, Kids and Accessories. These businesses all turned in a strong third quarter performance. Let me focus on -- let me add a couple of comments on Home & Missy. As we've said before several times, the Home business continues to be a big opportunity for us with penetration at about 15% of the store. That compares with our longer term goal of 20% or more. Obviously, Q4 is a particularly important time of year for this business. And I feel like our assortments are very well-positioned, especially in gifts and toys as we go into the fourth quarter. On the Ladies Apparel business, firstly, Missy sportswear, this business continued to perform well in Q3 as it had in the second quarter. I think the work that the merchants have been doing to distort more casual classifications has really been paying-off. And we still have opportunity there. Meanwhile, during the third quarter other areas of Ladies Apparel continued to show improvement. So, taken as a whole we're pretty happy with the performance of the ladies Apparel business in Q3.

Got it. And then Michael when you say you want to strengthen the merchant team. Can you expand upon that please?

Sure. Yes in the last 10 weeks, I've spent a lot of time with Jennifer Vecchio, the senior merchants and the broader buying organization. We have a strong team with some exceptional merchants and they've built a very strong and supportive partnerships with our vendors. But I think we have an opportunity to do more to further strengthen the team that could mean additional headcount, it could mean more training, it could mean greater support. Jennifer and I need to work through all those details. But as I said in my remarks, buying merchandising is the critical -- the critical skill-set that drives success in off-price. For us I've become better at executing the off-price model. Our merchant capabilities have to become an even bigger priority than they already are. And in off-price merchant investments always generate a great return.

Thanks a lot. Thank you. Happy Thanksgiving and best of luck and holiday.

Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Your line is now open.

Thanks, good morning everybody. It sounds like in the near-term some of these new strategies will lead you to guide below your prior low double-digit earnings algorithm. But could reap rewards pretty quickly? I just wanted to ask about the longer term. There's a big margin gap between Burlington and its competitors. Do you think this gap can be narrowed or raised over the long-term?

Good morning Lorraine. Let me respond to that by saying that first of all, I feel like we've done a very nice job and under Tom's leadership, we've done a very nice job driving up margins over the last five to six years, I think in that period margins are up something like 400 basis points. But it's clear -- and what you're referencing is clear, when you look at the numbers and you look at the benchmarks, it's clear we have significant potential ahead of us. And as I look at that potential, I think the big jumps in margin -- the breakthroughs in margin are going to come from sales productivity. If we can drive sales then merchant margin and expense leverage will take care of themselves. Now, the way to drive sales is kind of what I was talking about in the comments and in some of the earlier questions. The way to drive sales in off-price is to -- number one, strengthen the merchant capabilities. Number two, chase the business with leaner inventories and more liquidity, so we can go after opportunistic buys. And really those are the things those are the reasons why off-price is winning. And if we can do those things better I think that will drive sales and if we're able to drive sales, I think we can go after the margin potential that you referenced in your question.

Thank you.

Thank you. Our next question comes from Kimberly Greenberger with Morgan Stanley. Your line is now open.

Great. Thank you. It's great to hear from you, Michael and thank you and John this morning for the really comprehensive call so far. I wanted to ask a little more about the chase mode. I'm wondering, if you can talk about how you see the knock-on benefit to some of your financial metrics from this chase mode? Is it a comp benefit, a merchandise margin benefit? And I don't know if you have any early thoughts on quantifying where they might come from. There might be also other financial benefits that I'm not thinking of; I just wanted to sort of draw the link between increasing the chase capabilities in the organization and the follow-on financial benefits you would expect to see from that?

Sure. Well, first of all, good morning Kimberly. Thanks for the question. Yes, so the sales chase, so what happens in off-price and I know you know this. We've talked about it before. What happens in off-price is if you set the business up a more of a chase mode that means you have more liquidity when you're in season, you can go out and you can take more advantage of opportunistic buys. Why is that important? It's actually important for all of the financial metrics you just described. But let me start with the sales line. Opportunistic buys tend to be the most attractive merchandise that we get. So, if we're in season and we're buying opportunistically that merchandise typically is much more attractive than the merchandise that we may have bought before the season. And by definition because it's opportunistic, we're probably getting a better deal. So, by putting that merchandise -- buying that merchandise in season flowing it to stores, we're flowing more exciting merchandise to the stores and that's improving our assortment and the customer -- the off-price customer responds to that. So, that should drive sales. So, I know it's paradoxical. You by planning sales more conservatively you can end up with a higher sales number than you otherwise would have been able to achieve. But that's kind of how the off-price model works and the benefit of opportunistic buying to sales, but also implied in what I just said is the fact that that merchandise is going to turn faster which means you should take lower markdowns. It's also going to -- because it's opportunistic, you have a potential for a better overall merchant margin and therefore, you see financial benefits on that line too. And then, of course, by driving the sales line up, you get expense leverage on your operating expenses. So, it's all of those benefits. If you can chase the business more, if the sales trend is there then, there are numerous financial benefits both sales and margin and expenses.

Terrific, that's very helpful. Thank you. And then one of the things that I've observed over time at Burlington and I sort of benchmark it to peers is that the commonary maintenance, let's say the non-base rent expenses for Burlington tend to be a bit higher as a percentage of sales. Potentially the function of sales productivity, but also may be a function of the larger store base that the company had historically. Obviously, that strategy is moving stores in a much smaller way. So, I had just a follow-up on ultimately have you looked at TAM? And do you think there's an opportunity to work that number down over time? And on the store size, which might be an ongoing area of opportunity, have you looked at store size? And do you have any thoughts on what you think the optimal size of Burlington's future fleet of stores would look like?

So, Kimberly, let me take the second part of your question on store size and then I'll let John respond on the common area maintenance question that you have. But on store size, I think a big part of the Burlington story over the past few years is that the company has really demonstrated an ability to operate in many different store formats, sizes, and locations. And that's helped us to really ramp up our new store opening program. And you've heard some of that in the commentary. Now, as I look forward, do I know what the right store size is over time? I don't at this point. But I think you can expect that we're going to continue to push the envelope. We're going to continue to further explore the limits of store size and knowing that we have the confidence to be able to operate in numerous different store formats as we've demonstrated over the last few years.

So Kim, I'll take the second, I guess was the first part of your question. So we don't really focus on individual line items, when we're doing our models to consider underwriting a store. Our focus is on the expected EBIT performance of the store. So, we're not going to say, we're going to try and drive TAM to a lower level. But we are – we update our EBIT margin hurdles for our stores each year based on how the fleet is performing. We look for our new stores to be accretive to EBIT, and we've been very pleased with the overall performance. So, I can't really answer, how we would attack TAM. I would just tell you that we're very conscious of the profitability of our stores and that's what drives our decision-making.

Great. Thank you both.

Thank you.

Thank you. Our next question comes from Michael Binetti with Credit Suisse. Your line is now open.

Hey, guys. Michael let me welcome you nice to talk to you in another great company and John congrats again on the new role.

Thanks Michael.

Michael, let me just be clear. We've talked about the outlook, but you came from a business that was known and appreciated for very conservative guidance framework that had a lot of the touchstones you mentioned here. Given this business and some of the differences here, I think the framework has been to guide fairly consistently to two to three comps, so if we think about you walking us to a more conservative starting position to planning, I have to ask the algorithm the business is focused on closing that 300 to 400 basis point gap in operating margins versus larger peers that I think Lorraine asked about. It seems a bit counterintuitive that you'd be able to make much progress against that gap if you are talking about a comp range that's a little lower like a 1% to 2% range it seems hard to close the gap on the low end of that range with comps down near 1%. Hard to imagine, you'd be able to leverage the business as you move into stores that are going to have higher rent per foot and just the natural age inflation in the industry. So, I'd love to hear your thoughts on, how we should think about that if we think about the upside and downside of the framework you're trying to help us think about today?

Sure. Well, thank you for your question, Michael. I think that's a good question. I guess, what I would say is I want to be clear that by planning the business slightly more conservatively I'm not signaling a change in our long-term growth outlook. I'm not, I'm part from it actually over the last 10 weeks I've become more confident and more pessimistic about our long-term growth prospects. The reason to plan and manage the business more conservatively is because that's the way you get the most out of the off-price model. That's the way that you make sure that you can go out there and get the great opportunistic buys is by doing that you can really drive sales and you can really drive margin and expense leverage. So, that's how I would answer that, but I'm not signaling to you that, I think that our earnings algorithm over the next several years should be lowered. I'm saying actually no. But the right thing to do here is to plan and manage the business more conservatively from a comp perspective, so that we can actually become stronger at the off-price model and hopefully achieve our sales and margin potential perhaps more effectively and more rapidly than we might otherwise have been able to.

Okay. Let me ask you a follow-up on the chase question a little bit differently. What is it you think in your early days of the company kept the organization from pursuing the strategy of maintaining higher liquidity and then chasing into the quarter after deeper value opportunities in the past? What do you think is I guess what do you think has kept them from doing that in the past?

I actually don't think there's anything. I think this is all part of a natural evolution. I think that if you look at Tom's record over the last 10 years, I would say Tom has been doing many of the things I've described and there's a direct line between what Tom has done and what I'm proposing to do here? And that includes I think over the last several years there's been a very good investment in the merchant organization. There's been -- certainly we have liquidity plans and we do chase business. And we've been doing that for some time. So, we're not new to the off-price model here. I'm not taking a non-off-price company and turning it into off-price that's not what's happening. What I'm taking is a very good off-price platform and looking at ways to make it even more off-price to make it even more effective. So, there's nothing that's been stopping us for doing that. I think this is just part of a natural evolution if you like.

Okay. Thanks for all this help. Thank you, guys.

Thank you.

Thank you. Our next question comes from Daniel Hofkin with William Blair. Your line is now open.

Good morning. Michael just a question for you. As it relates to e-commerce and obviously your former employer not having an e-commerce transaction site, Burlington does. Just curious how you're thinking about that here initially in terms of how you think it fits into off-price in general and Burlington in particular? Thanks.

Sure. So, you're right we do have an e-commerce business, but it's very small. It's approximately 0.5 percentage point of our sales, so it's not very material. So, my focus in the first 10 weeks has really been -- hasn't been on e-commerce. It's been on the 99.5% in the bricks-and-mortar business. That's really where I'm focused. So, no other comments at this point.

And then maybe just a quick follow-up. In terms of -- you may have touched on this a little bit earlier but any particular categories at this early stage that you're able to share in terms of where you think there might be outsized opportunities to further develop them maybe against the context of what Burlington has already talked about for some time, but just curious what your thoughts are there?

Sure. Yes. So yes -- there are certainly businesses where we have opportunity, but my answer to this question is going to be very similar or sound very similar to the answer that I think Tom would have given on a previous call. Because it's very clear that our areas of under-penetration our biggest opportunities are in our Home business and in our Ladies Apparel business. The Home business which as I mentioned earlier, our penetration to the store -- our Home business has about 15% share of our total sales. And that compares with a longer term goal of 20% or more. And certainly when you look at our peers that seems like a pretty reasonable goal. Similarly, the Ladies Apparel business, I think we have opportunity there and I think we have been making nice progress with our missy sportswear business. And there's still more opportunity to come there. So, more opportunity there. Now, there are other businesses where we are either underdeveloped or we have just a market share opportunity. And I guess the two callouts there would be beauty and toys. On beauty, we feel good about the progress we've been making. And again our third quarter performance was good there. And toys, obviously, we're about to walk into a very important period in toys over the next few weeks, but we feel good about our assortments at this point. So, yes, I think we have plenty of opportunity by category, but it's very much along the same lines we as what we've been pursuing over the past year or so.

Great. Thanks very much. Best of luck in the holiday.

Operator, we have time for one more question.

Thank you. Our next question comes from John Morris with Davidson. Your line is now open.

Good. Thank you. My congratulations on a great start here. And welcome to you all. Question; I think I know the answer to this, but I want to give you a chance I think to answer it and here in your own words. We're hearing about the shift to chase mode getting more opportunistic. Do you see that adding upside, but also adding risk or not necessarily?

Yes, John, it's a good question. And that's always been the debate in off-price, but let me share my perspective actually my experience. And what I would say is in off-price, you can absolutely conceptually imagine why having a chase mode might create risk because maybe you go into the season with more liquidity and perhaps the goods aren't there, perhaps the availability is dried up. Conceptually, that's possible. But let me tell you in reality, it never happens. In reality, there's always goods available. So, -- and that's why off-price has been growing for had structural growth now for, I don't know 15, 20, 25 years, because there's always availability. So, I understand why people conceptually might be worried well if you don't plan for a full comp, maybe won't be able to chase it, but that's not really how it works out. But let me actually shift your question a little bit and talk about the risks of not chasing the business. So, the risks of baking in a more optimistic comp it seems to be much greater. If you take that approach and you bake in a more a more optimistic comp, you end up making commitments before the season starts to buy goods. And then if the sales trend doesn't materialize, if the sales trend weakens, you end up in a much more difficult position. You have to, in some cases, try and cancel those commitments if you can, so you end up having a really difficult time protecting your earnings. So, -- and that's actually part of the reason why off-price has been so flexible over the past five or 10 years that off-price can actually deal with environments where the sales trend weakens and actually you can deal with environments where the sales trend is really strong. So, I guess, I'm really just preaching the benefits of off-price here and saying that I think when you look at it in a full risk assessment, I think actually the more off-price you can be, the more you're actually minimizing risk rather than taking risk.

Excellent answer and best of luck for holiday. Thank you.

Thank you.

Thank you.

Thank you. This concludes today's question-and-answer session. I would now like to turn the call back over to Michael O'Sullivan for closing remarks.

Thank you all for joining us on the call today. We appreciate your questions. Let me close by wishing you and your families all the very best for the season. Happy holidays. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.