Good morning, everyone, and welcome to Lowe's Companies Fourth Quarter 2014 Earnings Conference Call. This call is being recorded. [Operator Instructions] Also, supplemental reference slides are available on Lowe's' Investor Relations website within the investor packet. While management will not be speaking directly to the slides, these slides are meant to facilitate your review of the company's results and to be used as a reference document following the call. During this call, management will be using certain non-GAAP financial measures. The supplemental reference slides include information about these measures and a reconciliation to the most directly comparable GAAP financial measures. Statements made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Management's expectations and opinions reflected in those statements are subject to risks, and the company can give no assurance that they will prove to be correct. These risks are described in the company's earnings release and in its filings with the Securities and Exchange Commission. Hosting today's conference will be Mr. Robert Niblock, Chairman, President and Chief Executive Officer; Mr. Rick Damron, Chief Operating Officer; and Mr. Bob Hull, Chief Financial Officer. I will now turn the program over to Mr. Niblock for opening remarks. Please go ahead, sir.

Good morning, and thanks for your interest in Lowe's. I'm pleased that we delivered another strong quarter, with comparable sales growth of 7.3%. Comp growth was driven by a 4.9% increase in comp average ticket and a 2.3% increase in comp transactions. The mix of comp ticket and comp transactions was consistent with our expectations. Comparable sales growth for our U.S. business was 7.4% for the quarter. We saw balanced performance across the country again this quarter, with all 3 divisions, the North, South and West, generating comps within a tight range. In fact, all 14 regions had comps greater than 5%. Likewise, we reported positive comps in all 12 product categories, and our ProServices business continued its strong performance, with comp sales in line with the company average during the quarter. I'm also pleased to share that our team in Canada delivered double-digit comps in local currency for the seventh consecutive quarter. We remain focused on improving our profitability even while investing in key capabilities to drive sales growth. For the quarter, we drove 115 basis points of operating margin expansion and earnings per share of $0.46, a 59% increase over last year's fourth quarter. For the year, we delivered comparable sales growth of 4.3% and earnings per share of $2.71, a 27% increase over fiscal 2013. Delivering on our commitment to return excess cash to shareholders, in the quarter, we repurchased $1 billion of stock under our share repurchase program and paid $225 million in dividends. For the year, we repurchased $3.9 billion of stock and paid $822 million in dividends. As we head into fiscal 2015, macroeconomic fundamentals are aligned for modestly stronger home improvement industry growth. Jobs, incomes, household financial conditions are expected to continue strengthening in 2015, building on the momentum gained in 2014. Coupled…

Thanks, Robert, and good morning, everyone. As Robert stated, we delivered strong performance in the quarter, and I'm pleased to share that our store employees earned a record payout from our Sales Service Employee Incentive program. This program rewards store employees for achieving their sales and profitability targets and for delivering outstanding customer service. We continue to capitalize on an improving macro backdrop through our enhanced sales operations planning process, improving relevance with the Pro and expanding customer experience design capabilities. In the fourth quarter, we used our enhanced Sales & Operations Planning process to coordinate inventory flows, advertising and training around our Celebrate the Season winter campaign. With this campaign, we targeted 4 important shopping occasions: interior refresh, holiday decorating, gifting and getting organized. For each occasion, our store, logistics, merchandising and marketing teams collaborated to ensure that we had relevant products available to customers at the right time, that they were effectively advertised and strategically promoted to drive traffic and cross merchandise to build the basket. As a result, we drove both online and in-store transactions and ticket growth, and we fulfilled orders in the most convenient manner for customers. Our ability to sell products from a store, online, in-home or through our contact centers is a distinct competitive advantage because it allows us to engage customers on their terms, whenever and wherever they choose. We know that for many projects, more than half of customers research online before making an in-store purchase. And for purchases made on lowes.com, approximately 60% are picked up in-store, 10% are delivered from the store and the remaining 30% are parcel shipped. This speaks to our ability to leverage our existing infrastructure with the omni-channel capabilities we are introducing. From a category standpoint, we drove above-company-average comps in flooring, kitchen, appliances, lumber,…

Thanks, Rick, and good morning, everyone. Sales for the fourth quarter were $12.5 billion, which represented a 7.6% increase over last year's fourth quarter. Total average ticket increased by 4.9% to $66.17, and total transactions increased 2.5%. Comp sales were 7.3% in the quarter. As you heard from Rick, further momentum from our initiatives and improving execution drove balanced performance in the quarter. Comp average ticket increased 4.9% and comp transactions increased 2.3%. Looking at monthly trends. Comps were 6.7% in November, 7.2% in December and 8.2% in January. For the year, total sales were $56.2 billion, an increase of 5.3%, driven by a comp sales increase of 4.3%, a full year of Orchard sales compared with a partial year following the August 2013 acquisition and new stores. For 2014, comp average ticket increased 2.4% and comp transactions increased 1.8%. Gross margin for the fourth quarter was 34.6% of sales, which is roughly flat to last year. In the quarter, the mix of products sold negatively impacted gross margin by 25 basis points. Also, price actions hurt gross margin by approximately 10 basis points. These items were essentially offset by value improvement and better seasonal sell-through, which helped by 15 and 10 basis points, respectively. For the year, gross margin of 34.79% represented an increase of 20 basis points over 2013. SG&A for Q4 was 25.24% of sales, which leveraged 88 basis points. The SG&A leverage was driven by a variety of factors. In the quarter, store payroll leveraged 28 basis points due to better alignment of hours and customer traffic and strong comp sales. Property tax expense leveraged 21 basis points due to favorability in property valuations recognized this year. At our analyst conference in December, we noted that expense productivity would come from utilizing our scale to reduce…

[Operator Instructions] Our first question will come from the line of Alan Rifkin with Barclays.

Robert, maybe looking at the industry and your performance kind of from 30,000 feet, it suddenly seems that the macroenvironment is improving even if housing is okay, but not great. As you look at your business, do you think there's less cyclicality and is it less tied to housing today than it has been in years past?

Well, Alan, I think we've talked about this some in the past and how, really, when you look through all the prior cycles, when housing was -- turnover was going up and down, home values continued to maintain their -- homes continued to maintain their value and actually continued to increase during a lot of those cycles. The -- but we saw that kind of disconnect in this most recent -- this most recent downturn, when home prices dropped dramatically. So we're kind of going through this cycle. We're getting home prices starting to come back up. That's driving confidence among homeowners that they can reinvest in their home again. And certainly, there's been a lot of deferred investment, kind of the wish list, the to-do list on the refrigerator. So people are reengaging in that. That's what we saw in our survey, where we're starting to see a slight increase in those that are not only taking the discretionary projects on, but also starting to move into larger projects because they're getting confidence in the macroenvironment, confidence in the value of their home. But at end of the day, income and housing are continuing to be the things that drive our business. So there was a little bit of a disconnect in the downturn, but we are seeing consumers reengage. And we feel good about that, and that was built into our guidance for 2015.

Okay. And one follow-up, if I may. With respect to foreign currency effects, what were the effects on your '14 numbers in aggregate? And what impact do you have built in, in your 2015 guidance as a result of the strengthening dollar?

So Alan, the impact was essentially nominal to us. Our international business, Canada and Mexico, are relatively small pieces of our portfolio of businesses. We did have a modest drag on comps, 10-or-so basis points for the quarter and about the same for the year. As we think about FX going into '15, at this point, we've modeled roughly the same levels as where we are today.

The question will come from the line of Simeon Gutman with Morgan Stanley.

Just a minor point, but just to clarify. Investor Day, I think you mentioned margin of at least 9.5% in 2015. I think the guidance range for 2015 now, if our math is right on GAAP EBIT, is around 9.3% to 9.5%. Is that the right interpretation? And if so, is the range -- I guess, the wider range, is that just conservatism? Or has something changed in how you're looking at next year?

So what I would say is that, when we put our outlook for the year, this is something that we expect to achieve and hopefully beat. So if you think about our EBIT guidance for 2014, we started the year at 65 basis points and delivered 76 basis points. So I would suggest that it's some level of conservatism. As I mentioned in my comments, we took a prudent outlook -- a prudent approach for our outlook for 2015, and the 80- to 100-basis-point range is consistent with that.

Okay. And then a follow-up is, I think you mentioned the Pro grew in line with the house. And I think, the past few quarters, it was a little stronger. So is that just a fourth quarter thing? Did you just so well around Black Friday with consumers that, that kept the consumer rate a little bit higher? Or was there something that changed on that side?

Yes. This is Robert. You hit the nail on the head. We actually -- we had, for a number of quarters, the Pro exceeding our overall business. But we had really good strong performance, which led to the strong comp that we delivered in the fourth quarter, with great response from our retail consumer. I'll let Rick jump in and talk a little bit more detail about what we're seeing from the Pro.

Yes, Simeon. It was really the result of the holiday and the retail consumer. When you look at the Pro in general, we still saw strong demand across all regions with the Pro. As a matter of fact, when you look at account growth, which is a measure that I look at to determine health of the Pro and still the viability of our processes and programs, our Pro accounts grew 24% during the quarter. So still a huge take rate from Pros as they look to leverage our benefits of our value proposition, as well as we continue to meet their needs. We did see positive comps across all ticket sizes and ticket ranges for the quarter as well, which showed strength that we did not lose anything relative to any type of transaction size that we monitor or watch during that time frame as well. So we feel good for Pro. We still feel good with the strength of the Pro and their response to our process and programs. And we -- and moving into 2015, we still think that we have room to continue that growth with the brands that we're launching in 2015, a lot of what we talked about during the AIC with GAF roofing, Owens Corning, LENOX, Golblatt, other brands that we're bringing back into the portfolio, as well as those brands we launched during the Q4. So we feel really good from where we are today and entering into of 2015 with relevance for the Pro.

Your next question comes from the line of Mike Baker with Deutsche Bank.

Two questions. One, just on the margin efficiency point. So 25 to 30 basis points, rule of thumb, for 2015, which is higher than you've targeted in the past. But in the fourth quarter, it was only 18 basis points. Is it really just that insurance issue? Was that the only factor that led you to come in below that rule of thumb? Or are there other things on the margins in particular to call out?

So Mike, a bit of it was the impact of insurance. Some of it was the bonus payout that Rick mentioned going into the quarter. We expected a little bit more leverage in Q4 on the bonus line than we experienced, but we're happy to pay the associates. They delivered strong results for the quarter and they deserve it. The other piece I would mention, Mike, is the mix between -- that basis point mix impact hurt the flow-through as well.

And actually, so if I could follow up on that. Two points. One, within the gross margin, you talked about price action. Can you give us more details there? And secondly, when you say less leverage on the bonus, I'm sure it's not that you expected a better comp. It's just that the payout was evidently higher. Is that the right way to think about it?

So 2 things. The payout is based on our planned performance. So as we -- our outlook for Q4 was a 7.3% comp. So we outdelivered our expectations by a greater degree going into Q4, which led to the increased bonus payout. As it relates to your first question on price actions, really, Mike, that ties back to Rick's comment on targeted promotions.

Your next question comes from the line of Michael Lasser with UBS Investment Bank.

I was hoping to get a little bit more perspective on how you think your share is trending within the different buckets of ticket. So we saw really good performance for your big-ticket bucket and slower performance from your smaller-ticket stuff. Does that -- is there any suggestion that as the consumer's reengaging with some of the bigger-spend projects that the store location matters a little bit less, so you're picking up more of your fair share in that spending arena? And then conversely, is that potentially coming at the expense of -- from the smaller-ticket stuff?

Mike, I'll start and I'll get Mike Jones to jump in a little bit. I think, certainly, it's a lot of the things we've been working on when we talk about the omni-channel, differentiating on experiences. When you talk about the project nature of the business and the way we're focused on the project nature of the business, why we saw -- that's why we saw strong performance in areas that we outlined for you like kitchen and appliances, flooring, those types of things. And I think a lot of that is dovetailing with my comments earlier about the consumer getting reengaged in some of those projects that, for a lack of a better term, have been deferred in the middle of the downturn, as they're now getting more comfortable with the macroenvironment, getting more comfortable with their income, job outlook and more comfortable, quite frankly, that the value of their home is going to continue to move in the right direction. So a lot of what the team's been working over the past few years was setting ourselves up to take advantage of the macroenvironment that we find ourselves moving into now, which, I think, played itself out in the fourth quarter, and I think it's what's built into our guidance for 2015. So Mike, if you want to dovetail and talk about it?

Absolutely. Thank you, Robert. Yes, I'd add to it, that along with -- really doing well on large ticket and gaining share, Rick talked about with respect to Pro, ensuring that we continue to build out our portfolio of brands, have the right inventory depth, have the right breadth of assortment. We think that's going to help us over the long term, continue to build better traffic. So we think our plans will allow us to go after both. We think that we're seeing our -- some of our project execution, relative to being able to engage with customers, start to pay off early.

That's very helpful commentary. My follow-up question is, when you look at your different categories, can you give us some sense of where -- the categories relative to peak that are still furthest off of -- from a sales perspective and where you think you can just still have an opportunity to regain those sales?

Michael, that would be all of the big-ticket discretionary categories. As Robert commented, the consumer is feeling better about the situation, feeling better about reengaging with big-ticket categories but hasn't necessarily started in earnest. So if you think about kitchens, flooring, millwork, all 3 of those categories are the furthest away from where they were back in the peak?

Can you give us some -- can you quantify in some way?

What I can tell you is, at the peak, those items were -- those 3 categories were close to 19%, 20% of our sales. Today, they're 16% to 17%. So while all of those have been rising, they're still lagging as a percent of the mix.

Next question comes from the line of Scot Ciccarelli with RBC Capital Markets.

So it seems to me like you guys have been a lot more aggressive with adding new brands the last couple of quarters, from Sherwin-Williams to some of the new products and brands mentioned during the call. Now are these still all part of the value improvement efforts? Or is this a specific focus to expand your Pro business, which is a clear initiative? Or is this just some of the -- a more overall aggressive stance on the merchandising front?

Scot, I'll start and then have Mike jump in. Certainly, as we talked about it in AIC, we have a strong focus on the Pro customer. And we know that to continue to -- and that we've had great performance, as Rick outlined for you. But to continue to drive that relevance with the Pro, it's everything we're doing from the quality of people to the account executives, the service in the aisle of stores, the depth of inventory and also the key brands that they rely on. So that's been a dedicated focus for Mike and his team to make sure as -- when we talk to the Pro customers, we have the dedicated brands that they want. So Mike, if you want to...

Sure, absolutely. I'd say, the customers of Pro, the tools, value improvement that we use to go after better serving this customer and certainly brands we're enabling [ph] to make sure we serve those customers well. And so to Rick's point earlier, if you think about that and heavy-coated [indiscernible] wiring devices, cage [ph] fasteners, LENOX, HVAC, Owens Corning, installation, just really, really great job by the merchants, starting with our team store operations to [indiscernible] the brand. But it's not just in Pro. I think what we've done in the DIY space -- HGTV by Sherwin-Williams, the granddad, that the quality of Sherwin-Williams [indiscernible] HGTV, we're really, really excited about that. And if you look at grills as an example, another one that we don't talk a lot about, but we have both Weber and Char-Broil, the #1 and #2 brand in grilling. So excited, and it's a ton of work in tools very specifically as well. IRWIN, LENOX, we talked about both the IRWIN brand and the LENOX brand. We've made reference of Hitachi pneumatics. You couple that with our exclusives of Bostitch, makes us the destination for pneumatics. Rick spoke about adding back Goldblatt hand tools, and that's added to our current portfolio of brands, which includes Bosch, DEWALT, Kobalt and Porter-Cable, to name a few. So the merchants have done a phenomenal job at really going out into the supply base, working with our vendor partners to bring back the right brands that both the Pros [indiscernible] want as well as shoring up both for DIY and the -- and our customers looking for strong tool performance. We're excited about what's going on. And to your point, great, great work.

Next question will come from the line of Jessica Mace with Nomura Securities.

My question is about the online business. I was wondering if you could give us a little bit more color on the performance. And maybe talk about, with such a large portion of sales from that business, picked up in-store, are there any particular categories you see really driving overall sales?

Yes, Jessica. This is Rick. I'll start, and then I'll let Mike jump in as well. We continue to be pleased with our performance at lowes.com. It was up 25% for the quarter, 2.5% of our total sales for the year. When you look at dot-com, the thing that we're really working on is, as you said, we've been doing online pick up in-store for over a decade. So it's something that we really continue to focus on. Dennis Knowles and the team have done a phenomenal job on store operations and improving the experience on the front end to make it easier for the customers to transact and get the products in and out of store quickly. And it continues to focus on our ability to drive our omni-channel aspects of what we're trying to accomplish and do as an organization and create that visibility across stores, dot-com, contact centers and on site or in the home. So it's a component of what we're really doing from an overall strategic standpoint. What we've been focused on over the last couple of quarters and in 2014 is really enhancing the experience that the customers have when they jump on our sites. So we've been working on delivery scheduling. You've seen us work on improving our search capabilities and adding several thousand additional search terms to avoid getting back those no search results. We've improved our filtering of products. And we're also working on improving our content -- improved content for 17,000 highly visible items on the site. So we're really looking holistically at the site to make sure that we continue to drive what we are working on. The thing that we're still extremely pleased with is that the store remains very relevant with the customer. And in fact, almost 97%, 98% of all transactions still go through our stores. That's evidenced by the fact that we talk about a 60% pickup, the other 10% delivered and then a large portion of our parcel orders are actually shipped from our stores. So they continue to play a critical role as we leverage that asset and continue to move forward in the future. Mike, I don't know if there's anything that you want to add.

I think I'd just add, anything you purchased online -- so if a consumer often starts online for inspiration, getting a better sense of how they can want to pull their projects together and they'd like to couple that with the in-store experience, so that they can think and work their way through the project. But appliances, fashion fixture, outdoor power and tools are certainly mainstays for online. And we take the approach that for the consumer, they want us to be relevant whenever and wherever they want to interact with us. And so we recognize that often we sell online and from there, it becomes an in-store discussion. We're also very careful to make sure that as we tie back our merchandising approaches, that we're leaning into both what's important from a pricing perspective as well was what's important from an online perspective. To Rick's point earlier, a couple of brands have been added, Progress Lighting and Kichler Lighting will be featured online, and our online tools will help them both make selections and ship to the home or make selections and come into our stores and see that product and make the selection. So it's -- for us, it's about the cohesive experience, of which online is certainly a key piece of it.

Your next question will come from the line of Matthew Fassler with Goldman Sachs.

My first question relates to the mix issues that you discussed impacting gross margin in the fourth quarter. If you could just give us a bit of color as to what categories drove that and how you would expect that dynamic to play out as we start the new year.

So Matt, as you might expect, the bigger -- the biggest driver of that was appliance, strong growth of appliances in the quarter, double-digit growth in appliances, also some strength in lumber and building materials, a lower-margin category. Those are the 2 main drivers of the -- and I guess, third, outdoor power equipment, some elevated generator sales in the quarter based on weather. As we think about 2015, we're modeling a lot of mixed rag [ph] going into 2015, but that's embedded in the roughly 20-or-so basis point improvement that I mentioned.

Great. And then my second question, your inventory was actually down outright year-on-year, which is a very strong performance, perhaps even more than you're guiding for going forward. So is that a function of the strong Q4? Is the port a part of it? Or is it just you're outperforming your goal with no constraint to sales as a result?

So I'll take a part of it, and Rick will talk about the ports. As I mentioned, we're trying to grow comps in the mid-single digit, keeping inventories sort of flat. So a lot of effort and energy around improving the productivity of inventories. So -- and that showed up in Q4. The second is improved seasonal sell-through. So I think some of these seasonal goods are good-quality product that we'll choose to carry over throughout the course of the year. We, in fact, did that in Q4 '13. Based on the strength of the seasonal set, the customer experience design worked with far better seasonal sell-through Q4 '14 than we did in '13. Therefore, we didn't have any carryover inventory.

Yes. And Matt, I'll just add that we also account in-transit inventory in our numbers. So whether it's sitting at port or in our DCs, that's still in our total inventory numbers. As it relates to our ports -- to the port issues, I'm extremely pleased with the efforts of our supply chain in getting our products moved through the port during this slowdown. As a matter of fact, we feel fairly good and confident about our inventory position heading into spring. Currently, we have over 3 months of forecasted sales of seasonal products already in our distribution centers and in our stores. So we feel good from that perspective. We continue to monitor the process, in general, with the ports. And we continue to take steps to minimize any further impact such as moving product and cargo through other ports, rerouting the product to where we can get it to our stores the most quickly and time-effective means possible. But the teams have done a great job in flowing our product off the port, getting the containers moved through and really proud of what they were able to accomplish. So we feel good going into spring with our current inventory levels, and it's -- particularly against our forecasted expectations for the first 3 months.

Next question comes from the line of Christopher Horvers with JPMorgan.

So I think there's a great debate out there on how much of the gas price declines will flow through to the consumer, what categories are going to benefit and when. From where you sit, whether the consumer research or what you're seeing, is there a way to attribute any of the 4Q comp to -- and the industry growth, really broadly, to lower gas prices? And do you think that the lift is accelerating and still on the come? Or how would you frame that out?

So Chris, as we think about drivers of our business, it's really 3: household net worth, employment and housing. So certainly, less dollars going towards fuel is going to be more discretionary dollars for the consumer to spend. So that's a fact. What we don't know is exactly how much of that's going to savings; how much of that's going to restaurants, vacations, et cetera; and how much is going towards home improvement. So we know the customers got a little bit more walking-around money. To your specific question, Chris, I can't determine -- we can't determine the specific impacts to our comp in the fourth quarter.

Is there anything to say that -- I guess, especially because you saw a lot of big-ticket durables, is there anything to say that the benefit should actually accelerate? I mean, I think it's sort of general anesthesia, it helps all categories. Is there anything that you're seeing or could say that, perhaps, that once it's believed to be sustainable by the consumer that the home improvement category would see a greater lift in the future?

Chris, this is Robert. I'm certainly -- I think, as you listen to economists speak out there, they would say that the longer that we're going to go on, yes, the more that it becomes part of your discretionary income versus kind of a onetime impact. And so, yes. So I think it's reasonable to assume the longer that goes on, the more likely consumers will spend a portion of that and more likely part of it winds up in our channels. So that's positive. We view that as a potential positive as we think about our outlook for 2015. On the other hand, depending on how long it takes place, the impact it has almost on a slowing global economy, U.S. exports, multinationals, and the impact that can have on overall jobs and those types of things, don't lose sight of that. It's not just a one-way street. There can be other impacts as well that we need to take them into consideration.

And you're not seeing anything in the oil patch now that's a concern to you, stores that are exposed there?

No. As I said in my comments, we saw a broad outperformance across all of our divisions in all of our regions in the company. So...

Your next question comes from the line of Peter Benedict with Robert Baird.

A couple of questions. First, on the Pro account growth, up 24% in the fourth quarter. Can you give us maybe some perspective around that, give us a sense of how fast that has been growing, how fast it grew for the year? I'm just trying to understand -- put that into context.

Sure, Peter. When you look at this, like I said, we've been investing to grow our Pro business over the last couple of years. We talked about the organizational designs that we've made, the inventory investments that we've made and the value propositions. As we go through -- and the addition of the programs continue to resonate very well with the Pros. So when you look at account growth for the year, in context, the accounts grew by 16% for the year.

Okay, good. And then I guess, on some of the categories, you talked about the OP strength, snow throwers, maybe generators. Anything on the early spring side though, maybe out west as you see kind of temperatures warming out there, kind of the view towards the OP category this spring?

The only thing I would say, Peter, is that -- like I said, we're early into the process. If you recall, last year, we talked on the call extensively about the outdoor living experience and how we'd set that and the great response that we saw from customers from an outdoor living. By the time we were setting it out over the majority of our stores, the Deep South, we were already into spring. And so therefore, we didn't want to disrupt the spring selling season in the Deep South. We came back in the fall of the year, reset all of those. And so that's the earliest indication we would have would be from the Deep South. And what we're seeing, the receptivity from those consumers, after what we've done with outdoor living experience, has been very strong. So we're pleased with the early indications and just waiting for spring to get here for the rest of the country.

Okay. And just lastly, just on the flooring business, looks like above-average here in the fourth quarter. It has been running kind of, I guess, I think, in line. So what drove that change? Was there -- it was something that you guys think you did? Or was it just kind of a broader pickup in that category?

We did do tile reset late last year. But we're seeing pretty good strength beyond when we did the reset. So I think it's just that the category itself -- the industry has done better.

Our final question will come from the line of Aram Rubinson with Wolfe Research.

Had a couple of questions on the cost. Wondering if you can delineate, round off a few costs that you look like you're digging into in a pretty minute way, which is intriguing to me. So I'm wondering if you can kind of just highlight some of the costs again you're looking to kind of trim back on. You mentioned advertising, I think, and a few other things. And then I know, in the past, when I've asked you, you've mentioned that the profit margin gap between you and your nearest competitor, you think, is almost entirely drew -- due to volume. I'm wondering, though, as you drill in a little deeper, if you think you might be finding some kind of SG&A opportunities that might be -- as the opportunities irrespective of volume.

So Aaron, when I take a look at relative profitability, when your gross margins are essentially the same as [indiscernible] as operating expenses. As we think about operating expense opportunities, we do think there's a number of areas that we talked about. So certainly, with some elevated bonus in '14, we'll plan for target levels in '15, increase levers in store payroll, some advertising leverage. Those are the big buckets. And the depreciating dollars actually fall in '15 so we have some healthy leverage there. Beyond that, the whole indirect spend category, we talked about it at the analyst conference in December. I talked about some discrete items in Q4, not because they were large drivers. And I mentioned telecom and armored car. Specifically, this give you a sense that it's real and it's working. And we've got a number of categories in '15 that we're looking at things from store fixtures and displays, supplies, the entire [indiscernible] category and various services. So there's a variety of different activity around that, where we think we can become much more efficient going forward that will help improve the flow-through that we talked about, the 25 to 30 basis points.

And as always, thanks for your continued interest in Lowe's. We look forward to speaking with you again when we report our first quarter 2015 results on Wednesday, May 20. Thanks, and have a great day.

Ladies and gentlemen, this does conclude today's conference. Thank you, all, for joining. You may now disconnect.