Good day, and welcome to the Dollar Tree fourth quarter earnings conference call. Today's call is being recorded. At this time, I'd like to turn the conference over to Randy Guiler, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Melanie. Good morning, and welcome to our conference call to discuss Dollar Tree's performance for the fourth quarter and fiscal year 2016. Participating on today's call will be our CEO, Bob Sasser; our CFO, Kevin Wampler; and our Enterprise President, Gary Philbin. Before we begin, I would like to remind everyone that various remarks that we will make about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors included in our most recent press release, most recent Current Report on Form 8-K, Quarterly Report on Form 10-Q and Annual Report on Form 10-K, which are all on file with the SEC. We have no obligation to update our forward-looking statements, and you should not expect us to do so. At the end of our prepared remarks, we will open the call for questions. [Operator Instructions] Now I will turn the call over to Bob Sasser, Dollar Tree's Chief Executive Officer.

Thanks, Randy, and good morning, everyone. As you know, this morning, we announced our results for the fourth quarter and full year fiscal 2016. Enterprise total sales for the fourth quarter increased 5% to $5.64 billion, and same-store sales, which now includes our Family Dollar segment, on a constant currency basis increased 1.2%. Adjusted for the impact of Canadian currency fluctuations, the same-store sales increase was 1.3%. By segment, same-store sales for the Dollar Tree banner increased 2.3% or 2.4% when adjusted for Canadian currency fluctuations, and for the Family Dollar banner, same-store sales increased 0.2%. Our gross margin rate improved 130 basis points to 32.1%. We leveraged our total SG&A expense by 30 basis points. Operating income increased 24.9% to $586.5 billion (sic) [ $586.5 million ], and our year-over-year operating margin for the quarter improved from 8.8% to 10.4%. Net income for the quarter increased 40.5% to $321.8 million, and our earnings per share were $1.36. This represents a 40.2% improvement from the fourth quarter a year ago and exceeded the high end of our guidance range by $0.03 per share. This was a very solid quarter across both banners. Total sales were near the midpoint of our range of guidance. Same-store sales were positive in both Dollar Tree and in Family Dollar. Gross margin rate and the operating margin rates improved, and SG&A expenses across both banners were well managed. Operating margin improved 160 basis points to 10.4% for the quarter, and importantly, our EPS exceeded the top end of our range of guidance. We're pleased with our progress on the integration of our Family Dollar business, and we remain on track to deliver at least $300 million in run rate synergies by the end of the third year post acquisition. There's still much more to be…

Thank you, Bob, and good morning, everyone. As Bob commented, we're pleased with our performance in the fourth quarter, but we know we're still capable of doing better. We operate in an environment of continuous improvement and drive the key business initiatives that focus on delivering better in-store shopping experience, top line sales growth, margin enhancements and cost reduction. For the quarter, our enterprise same-store sales increased by 1.2%. Highlights for the Dollar Tree banner include: total sales in Q4 increased 7.9% to $2.9 billion; same-store sales on a constant currency basis increased 2.3%. This is achieved through increases in both traffic and average ticket; gross profit margin improved 110 basis points over Q4 last year; and fourth quarter operating margin was 16.4%, an improvement of 140 basis points over last year's 50%; and Dollar Tree's operating margin for the full year in 2016 grew 130 basis points to 12.9%, a new record for Dollar Tree. To share some of the highlights on the quarter, our top-performing categories for the Dollar Tree banner include candy, seasonal, party supplies, snacks and beverages, toys and household products. Sales performance was balanced between both our discretionary and consumables. We delivered positive same-store sales each month throughout the quarter. November, which benefited from the Halloween shift, was our strongest comp month. And geographically, Dollar Tree same-store sales growth for the quarter was very balanced as each of our operating zones delivered positive comps that exceeded 1%. The Dollar Tree business continues to be strong, consistent and growing. This represented our 36th consecutive quarter of positive same-store sales and a full year operating margin that is historically one of our highest. Our fourth quarter results validate the relevance of the Dollar Tree brand. Customers continue to shop for value and convenience. Highlights for the Family…

Thank you, Gary, and good morning. Total sales for the fourth quarter grew 5% to $5.64 billion. This was at the midpoint of the guidance range of $5.59 billion to $5.69 billion. Dollar Tree segment total sales increased 7.9% to $2.9 billion, and Family Dollar segment total sales increased 2.2% to $2.74 billion. Beginning in our fourth quarter, the acquired Family Dollar stores are now included in our overall same-store sales. Enterprise same-store sales on a constant currency basis increased 1.2%. Adjusted for the impact of the Canadian currency fluctuations, same-store sales grew 1.3%. On a segment basis, same-store sales increases were 2.3% for the Dollar Tree banner and 0.2% for the Family Dollar banner. As expected, we experienced incremental cannibalization from Family Dollar and Deals stores that have been converted to Dollar Tree stores. We estimate the incremental cannibalization impact to the Dollar Tree banner comp to be approximately 50 basis points for the quarter. Gross profit for the combined organization increased 9.3% to $1.81 billion for the fourth quarter of 2016 compared to the prior year's quarter. As a percent of sales, gross profit margin improved 130 basis points to 32.1% versus 30.8% in the prior year's quarter. Gross profit margin for the Dollar Tree segment was 37.5% during the fourth quarter, a 110 basis point improvement compared with the prior year's fourth quarter. Factors impacting the segment gross margin performance during the quarter included lower merchandise costs due to higher initial mark-on and favorable trade costs and lower markdowns due to the Deals conversions in the prior year. These were partially offset by higher distribution and occupancy costs as a percent of net sales. Gross profit for the Family Dollar segment increased 6.6% to $718.5 million. Gross profit margin for the segment was 26.3% during the fourth…

Thank you, Kevin. Again, I am extremely pleased with our solid performance for the fourth quarter, and I'm proud of our combined Family Dollar and Dollar Tree teams. We continue to make meaningful progress with our integration plans. We believe that we are well positioned in the most attractive sector of retail to deliver continued growth and increased value for our long-term shareholders. Dollar Tree is now a diversified combination of a 6,000 store chain and an 8,000 store chain, each with its unique ability to effectively serve more customers through all types of markets. With the combination of these 2 great brands, we have great flexibility in how we choose to grow while expanding our opportunity to grow. We will continue to focus on providing greater values to our customers while delivering superior returns to our long-term shareholders. Recently, I joined our combined merchandise teams on their postholiday overseas buying trip. I was very pleased and encouraged by the results from this trip as we continue to develop business relationships, identify and secure tremendous values, improve our supply chain and quality control while meeting our targeted margin thresholds. We have developed valuable experience and expertise over the years, and we're leveraging this for the benefit of our customers across all banners. In recent months, there's been an inordinate focus on the proposed border adjustment tax. We, like most other retailers, feel that the border tax would result in a significant burden to the consumer, both through reduced choices and higher prices. We're working with the National Retail Federation, Retail Industry Leaders Association and the Americans for Affordable Products group to express our concerns. At this early stage, we cannot answer questions regarding potential impacts until we know what, if anything, is passed. But I do know that -- this:…

[Operator Instructions] We'll go first to Matthew Boss with JPMorgan.

So Bob, on same-store sales, what's the mind-set around including flat at the low end of the flat to low single-digit guide for this year? I guess any change in the competitive landscape? Or any change in the way that you view the Family Dollar productivity opportunity?

Yes. Matt, we're extremely excited about the opportunity productivity increases in Family Dollar and in Dollar Tree. But as we sit here first quarter, looking out across a whole year, we have great confidence in our ability to implement and to execute our initiatives. We have great confidence in our models and our initiatives. Our value retail model is as good as there can be. I believe we're positioned exactly where we need to be as we go into 2017. So it's not a lack of confidence. It's more just it's first quarter, and we're looking out across the year. We're looking at our business. We're looking at some uncertainty out in the economic environment and some fits and starts. So as a result, we put all that together. We put what we know on the page and then we put the uncertainty, and that's how we come up with our guidance. We want to always be fair and measured and make sure that we give you the best information that we can possibly give you. As always, we intend to continue to improve and exceed expectations wherever possible.

That's great. And then just a follow up. At the core Dollar Tree, so roughly 90 basis points of operating margin expansion this year, almost 13% today. How would you rank the margin opportunity from here at the core Dollar Tree banner?

Well, there's still plenty of opportunity. There are some headwinds that we have in our ocean freight and some of the things that Kevin called out, with diesel fuel higher now. But we've always been able to -- as long as we can see it coming, we've always been able to manage around that and always drive our operating margin. As you know, I've always said, we're in charge of our gross margin at Dollar Tree. We go to market with 2 things in mind, and our buyers are looking for the best value for the dollar for the customers at a margin we're willing to accept. So the -- we decide, sometimes it's -- we take the opportunities we find in the market, and we use those to drive sales. Sometimes we take it into our margin, but we're always in control of what we're doing. So I feel really good about our Dollar Tree margin. Again, this is our 30th anniversary. It's 30 years. Everything is $1. Every increasing improvements in the business, still hitting some high watermarks at 12.9% operating margin, and I think we can continue that.

And we'll go next to Karen Short with Barclays.

I'm wondering if you can give an update on kind of where you are on synergies to date and costs incurred to achieve the synergies. And then just an update on whether $150 million is still the right run rate to think about for 2017.

Yes. Karen, I think -- as we've said, from day one, our expectation is to be able to achieve $300 million and hopefully exceed that at the end of the day, and we kind of broke that out. Yes, we kind of broke it out as $75 million the first year, $225 million by the end of the second year and $300 million by the end of the third year. We think we're right where we need to be, on track, maybe just a little bit ahead. So I think that feels pretty good. The onetime cost to achieve, again, we spoke a little bit to that last quarter. And again, when we originally talked to that, we talked about it being about -- half of that being operational expenses and half of it being capital expenses. I think to this point, it's probably been a little bit more on the CapEx side, again, because of: the rebanners we've done, the 300 rebanners as well as the 200 Deals rebanners; the system integration that's gone on; the work around co-bannering the Utah distribution center. On the OpEx side, it's been a little less, but there has been some consulting professional fees and some various other costs there. But -- so overall, I think we feel like we're well on target and going to be able to hit and work very hard to exceed that $300 million.

Great. And just to follow up on the first quarter guidance. I guess the earnings guidance was a little lighter than consensus. Is there anything just to point to there?

Yes. I don't know if there's anything specifically to point to. I think as we look at it, a couple of things. One, Q1, from the diesel cost perspective, it is the biggest change quarter-to-quarter. So the diesel cost is about $0.02 of headwind in basically Q1. So that's bigger than it is in any other one. And again, I do want to make sure that people are comparing it to the adjusted number of last year of $0.89 as opposed to what was reported because of the tax benefit of a year ago. But that's probably the biggest thing I would point out is diesel costs. And otherwise, I think, we feel pretty good about the number we've been able to put out there.

We'll go next to Scot Ciccarelli with RBC Capital Markets.

You broke into positive comp territory for Family Dollar this quarter. And as you continue to work on improving the store format, the -- updating the merchandise, et cetera, is there anything we should keep in mind as to why that banner may comp negative at some point during the course of the year? Or do you expect it to be kind of stable going forward?

Scot, this is Gary. The way I think about the business is we got to a slight positive comp in Q4, and that was with a core that was positive, both in November and January. As we've made our plans for the year, the foundational things that we're putting in place, running better stores, and that revolves around just having our products in stock, cleaner, fuller. The retail basics that we've been talking about, those are the things that I think start to deliver, year-over-year, better comps for us. Some of the strategic things that we mentioned in the call, core expansion. We'll be starting a renovation program. Those are things that will, over time, shift our fleet of stores from how they operate today to something different in the future. And then maybe the third piece is really around the merchandising and the assortment. So as we think about what a Family Dollar customer needs and wants, those are the longer-term enhancements we'll see as we go through buying cycles, both on imports and our domestic products. So I take a look at the year. And we're a retailer. We're always bullish. We're doing the foundational things that help us stay more consistent with our progress on top line sales and then continue to work very hard on the things that are going to drive margin and cost down in the business to get us to a consistent growth trajectory on operating margin.

And Gary, given some of the competitive commentary, whether it's Walmart, Target, Dollar General, et cetera, do you think there is going to have to be any kind of price adjustments at Family Dollar during the course of the year? Or is that already contemplated in your expectations?

Well, everything we know is in our guidance. I think the current news that everyone's reacting to, clearly it's in the grocery sector. It doesn't mean that we're not on the fringe of that. But a Family Dollar business is driven more by our convenience and controlling our own 4 walls, and those are the things that we're focused on to stay in front of for 2017.

And we'll go next to Brad Thomas with KeyBanc Capital Markets.

I wanted to follow up on the -- some of the Family Dollar questions and hoping you could just highlight a bit more where you think you've made the most progress from a daily execution, blocking and tackling standpoint and where you really want to focus the most in 2017.

Brad, thank you, and I would thank you for the question because it gives me a chance to brag a little bit on our folks who have worked very hard on really just the basics, but the hard work that goes into running our stores. And where are we? Well, we know we're not to the finish line. But I would color it this way, our in-stocks, what our customer sees on the shelf is certainly better than where we started 18 months ago. And our efforts to catch up on some of the deferred maintenance in cleaning and the basics that we need to run a full, clean recovered store are in place. Our operational teams are heavily focused on our consistency of providing that day in and day out. And I commented it on it, but for our customers, it really revolves around are we first-of-month ready at Family Dollar. And that's a very important focus for us to gain consistency with our customer and it tends to show up with our first-of-the-month business and our share of SNAP that we take. And so those are the things that, I would say, we've improved on. We have more work to do across all of those. I am pleased with the efforts our folks are putting towards it. It's going to be one of just the basic table stake foundational initiatives that we stay with for several years, because we will always be able to find a way to improve. As we start to be able to renovate some of our older stores, our customers, store by store, will see something that's different, and that's just as important when we're talking about the stores that serve their neighborhood. So I'm encouraged with where we're at, more to be done, but it's consistent message and focus throughout the organization right now.

And we'll go next to Paul Trussell with Deutsche Bank.

Just wanted to inquire about Duncan's hiring, if you can touch on that. And then also, if possible, could you just describe in a little bit more detail maybe the expectations on both comps and margins per banner? So to the extent that, how should we be thinking about comps for FDO versus Dollar Tree? Is it 200 basis points spread between the 2 banners as we saw in the fourth quarter? Perhaps, the thought process over the rest of the year. Or could that spread narrow or widen? And similarly, on margins, is there more opportunity or more pressure at the Tree segment versus FDO?

Paul, this is Bob. I'll take the first part. And in order to answer your question about Duncan, let me take you back to about 18 months ago when we made the acquisition of Family Dollar. At that time, if you remember, there was no President at Family Dollar. The President already -- had already left. I thought that when we made the acquisition that it was extremely important, first day, to have a president in place. Gary Philbin, who had been President -- that had been President at Family Dollar, my partner here for a long time, stepped up and went down -- moved down to Matthews. And on day one, we had a President of Family Dollar in place to lead the team. He's done a terrific job energizing the team, communicating, building the initiatives, getting some traction on the business, cleaning up old inventory, doing all the things to revitalize the marketing campaign and the customer communication. I couldn't be more proud of what Gary has done. But I was still one president short with that combination. And as Gary went down to Matthews, we launched into a national search with a national search company looking for a president, a future president of Family Dollar, and we found Duncan. And I will tell you that Duncan, when we met, I knew that he was exactly the right person for this job. His background, he had consumer products background. He had supermarket background. He had a big time discount store background, and he had demonstrated throughout his career a real ability to build store teams, to build merchant teams, to build an organization and to drive success. So I was real pleased to bring Duncan onboard. Duncan has been down there just a short period of time. But I will tell you, he is -- he's stepping in. He started out running. And if you talk to the folks down at Family Dollar, I think you would hear from them that they really have engaged with Duncan, and he has engaged with them in a positive way. So we're very, very excited about adding Duncan to the management team. In addition, at this point in time, we brought Gary, we elevated Gary to Enterprise President. And as Enterprise President, Gary now has responsibilities for all the customer-facing initiatives, all of merchandising, all the store operations and real estate across both banners. Gary reports to me as does the shared services organizations report to me. So that's the -- that was sort of the trail of how all this began, and we're really pleased to have Duncan onboard. We're also pleased to have Gary in the new role. I let Kevin to speak to the second part of the question.

From a big picture perspective as regards to comps, obviously, from a Dollar Tree side of the equation, we expect the cannibalization we've seen from the rebanner process to dissipate as we go through Q1 and Q2 and really be pretty much done by the end of Q2. So the back half really shouldn't have any headwinds per se from the rebanners, for the most part. So that's a positive on that perspective. I think on the Family Dollar side, we think it's been a little harder for us to forecast just in general, I would tell you, just from a rhythm standpoint at this point in time. So we take that into consideration. There's been a little bit more variability to the business. Doesn't mean we believe that they're not going to comp positive and be able to be a meaningful contributor at the end of the day. So I think the way we're going to look at it as we go forward is we're going to give you enterprise guidance, and then when we report the quarter, we will break it out and give you the 2 segments as well. So that's how we're thinking about it going forward. From maybe a little bit bigger picture for the year, from a -- speaking to the kind of the moving pieces within our P&L, so to speak, on a consolidated basis. We do expect to see improvement in our gross profit this next year -- or this year we just started, I should say. Really, expect mark-on to continue to improve in both banners. We're going to work to lower our markdowns, as a percent of sales, in our Family Dollar banner. We're going to continue to see a little bit of geography change from the standpoint on the…

We'll go next to Dan Binder with Jefferies.

I just had a follow-up on some of the pricing investment that was asked about earlier. If we look at your Family Dollar results, you've allowed gross margin to go up a decent amount over the last several quarters, and the comps have been slightly negative to slightly positive more recently. And I'm just wondering, philosophically, do you think if you were to take some of that gross margin and reinvest it in price, particularly against the backdrop where many of your competitors are, that you might see better comp results and then benefit from the flow-through on that?

Dan, Gary. I think one of the things you sort of point out with the question is the synergy does give us some flexibility in our sector. We certainly monitor all the price checks, like everyone else, and what's happening across, not just to our sector, but also the other channels as well. And over the last 18 months, we have had a very mindful eye exactly where we are compared to each of the targets we have by market. Our answer to that has been Smart Ways to Save, which gives us flexibility, and maybe even more that, points to the way we show our offers to a Family Dollar customer. And so we do see a customer that shops differently. I mentioned first of the month before. Clearly, that's a big driver for us. And so what's on shelf and end caps and either it's on sale or a price drop is how we're approaching it. So looking forward, we're going to watch everyone this year as we go into price checks and see what they're doing across the shelves and we'll react accordingly. But to some degree, it's not new news. Everyone has been waving their flag on saying they're going to bring value. We're in a sector that delivers that with a convenience factor attached to it for our customers, and that's how we're thinking about it starting off the year.

And then just a follow-up, a different topic. But again, a philosophical question. I know you can't say a lot about the impact on border-adjusted taxes. But if one were to go through, are you strongly opposed to breaking the buck? Or do think it would be smarter to just keep that level and engineer the product packaging and count, so forth, to keep it at that level?

Well, Dan, again as I said in my prepared remarks, it hasn't been passed yet. And if it is passed, we really need to see what it covers and how it's done and what the rules are and all that, and I'm sure we'll be able to respond accordingly to that. We have a lot of levers across both banners that we can do. I believe that the pressure on the consumer is going to be potentially, if passed the way everybody is contemplating, it could be a real issue for the consumer. But as far as retailer, we're -- just like everyone else, we will respond accordingly. And I will tell you this, at Dollar Tree, we are -- for 30 years, we've been $1. You talked about the price point. I've been asked that question for a long, long time on other issues as cost changes, as expense has changed, as the markets changed, as inflation, deflation and the like. And we are able to manage that, because we're able to manage our assortment at Dollar Tree. As long as the dollar is the unit of currency, I believe we can -- and we can offer the best value, then we've got a business. So let's wait until we get there. Let us see if it's passed. And if passed, that how -- what the rules are, and then we'll respond accordingly. But I believe we have as much a right as anyone to respond and run a great business going forward. So it'll be different, but let's see what the rules are first.

We'll go next to Dan Wewer with Raymond James.

Can you talk about the new -- the 300 new Family Dollar Stores you're opening in FY '17? And what will be different about these stores compared to the Family Dollar stores you inherited? Perhaps, any commentary about rural versus suburban versus urban locations, things you're doing different, anything different with the store layout, number of coolers? Give us some insight as to how you see the long-term vision for this concept changing.

Dan, this is Gary. Let me take a swing at it first. We're excited to have 300 stores in the renovations. And what you're going to see, listen, the headline is how do we drive a more productive store for our customers at Family Dollar that really enhances the shopping environment. And you're going to see some things that both drive traffic and enhance the customer shopping experience, especially on the discretionary side as well. And I'm not going to give the blueprint of everything that you'll see out there, but I -- the model will be a small box, still. We certainly know how to run our box, both in urban and rural. And what we're going to drive is really the categories and adjacencies that make sense in a Family Dollar world. And I think our opportunity is to find the categories that consistently drive in traffic, week in and week out, which has not always been the case as the box has been developed over time. And we certainly have the pieces to make that a better shopping environment for our customer, and some of that can be our consumables and frozen food. And on the margin pieces, so the elements that we do on seasonal, we're not -- we aren't the same party department that Dollar Tree is by a long shot. But certainly, our customers still have birthdays and celebrate seasons, and those are things that we can enhance and shine up in a Family Dollar world. And the difference that we really have is we still have apparel, and apparel is a category that, for us, we can win in. It's always been a matter of space and the dedication that you give it within the store. And so those are some of the items that, when you combine with the basic elements, our Smart Ways to Save that will sort of come to life in these stores in a way that show our customer categories, adjacencies and the items they need and want, we think, in an exciting shopping environment, is what these will look like. You'll see a split with both urban and rural locations. We know we can be successful in both. And you'll see that split, maybe not evenly between the 2 locations, but it'll be fairly close on both.

Okay. And then as a second question. Most of the Family Dollar Stores that we have visited, not all, but most, the in-store standards are continuing to look a lot better than they did a year ago, yet I'm sure that the same-store sales growth you were hoping would be a bit better. There's been some discussions about pricing this morning. Our pricing surveys show that your identical pricing is about 10% above Walmart on the consumable items with -- the gap widened because of what Walmart is doing. With the addition of Duncan and his background at Walmart, I believe, in using pricing to drive share, do you think that could be the catalyst that could -- his addition could be the catalyst that leads to Family getting more competitive in pricing on branded items?

Well, I'm counting on it. But I'm clearly happy with Duncan as a partner, number one. And Duncan is going to help us tremendously, I would tell you that. And if I kind of echo what Bob said, his experience doesn't need me to polish it up, but...

Well, I was thinking in terms of pricing with his background at Walmart, and using pricing promotional strategy to drive share. Do you think that he'll have a stronger voice for Family Dollar making that change?

He's going to be President of Family Dollar. He's going to have as strong a voice as anyone at the table. Here's what I'd like to think about. And listen, the price checks, I get more than everybody out in the field, I'm sure. The way I take a look at the price checks and either it's 10%, which I don't know where you're checking, but we react accordingly. And it comes across both on shelf, everyday pricing. We're rooted on EDLP. We need to show a weekly promotion when we put our ad out there. We launched our customer savings on price drop, which are some of the things they buy most often. So it's a combination of all those things that we go to market with that react to a Family Dollar customer. And so we're going to be mindful where Walmart is and certainly anybody in our sector, but we have more than one tool to go to show our customer value in our store. And that's how we think about it.

And we have time for one more question. We will go to Laura Champine with Roe Equity Research.

And I'm sorry if I missed this. But when you look at 2017, do you think that the mix shifts more into discretionary? Or do you expect consumables to stay just as strong as they have been?

Well, I would say, Laura, that as strong as they have been, in my opinion, the mix at Dollar Tree -- we have 2 different banners here. So we're a lot more discretionary on the Dollar Tree banner than in the Family Dollar banner. My expectation is it will continue to grow both discretionary and consumable, but the mix is going to be pretty much, I think pretty much the same. At Family Dollar, I think there's an opportunity to sell a little more discretionary. The -- we're going to still go after the consumable business. We want to be the place where our customers shop for the things they need every day. We want to be convenient. We want to be -- have great values for our customers on all the things that they need. So we're not backing down on the consumable business. At the same time, we want to offer them more of the things that are discretionary and great values. Gary mentioned some of the things, everybody has birthdays, our apparel business, our home business. We have, I believe, terrific opportunities at Family Dollar in driving more discretionary business in our home departments, for example. So it's a big question. It's a good question, but it's -- at the high level, that would be my answer. As we get down into walking the stores, 4 by 4, that's how we like -- we look at it. And where should we expand. Where do we have the opportunity to expand. What's our customer tell us that they want more of. How are they responding to our tests when we expand a category, and that's really where we're going to get our answers.

And that will conclude our question-and-answer session. At this time, I'd like to turn the conference back over to Randy Guiler for any additional or closing remarks.

Thank you for joining us on today's call and for your continued interest in Dollar Tree. Our next quarterly earnings conference call is tentatively scheduled for Thursday, March -- I'm sorry, Thursday, May 25, 2017. Thank you, and have a good day.

That does conclude today's conference. We thank you for your participation. You may now disconnect.