Good afternoon, ladies and gentlemen. Welcome to Tractor Supply Company's Conference Call to discuss Second Quarter 2018 Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. We ask that all participants limit themselves to one question and a related follow-up question. Please be advised that reproduction of this call in whole or in part is not permitted without written authorization of Tractor Supply Company. And as a reminder, this call is being recorded. I would now like to introduce your host for today's call, Mrs. Mary Winn Pilkington, Vice President of Investor Relations and Public Relations for Tractor Supply Company. Mary Winn, please go ahead.

Thank you, Jenny. Good morning, everyone. On the call today are Greg Sandfort, our CEO; Steve Barbarick, President and Chief Merchandising Officer; and Kurt Barton, our CFO. Before we begin, let me reference the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. This call may contain certain forward-looking statements that are subject to significant risks and uncertainties, including the future operating and financial performance of the company. In many cases, these risks and uncertainties are beyond our control. Although the company believes that expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will be proven to be correct, and actual results may differ materially from expectations. Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included at the end of the press release issued today and in the company filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed. Investors should not assume that these statements will remain operative at a later time. Tractor Supply undertakes no obligation to update any information discussed in this call. After our prepared remarks, we'll open the call up for your questions. Please limit your questions to one and one related follow-up question, if necessary. Our goal is to keep the call to an hour, given what a busy morning it is. I appreciate your cooperation. We'll be available after the call for follow-ups. Now, it's my pleasure to turn the call over to Greg.

Thank you, Mary Winn, and good morning to everyone joining us on the call today. I'll start today's call by providing a review of the operational and financial highlights for the quarter. Steve will take you through several of the merchandising and marketing highlights, along with several of our key priorities. Then Kurt will provide additional detail regarding our financial results and outlook for the year. Following that, we will open the call for questions. So, overall, we achieved a strong second quarter. Our results were driven by broad-based strength across all geographic regions as well as increases in both comparable average ticket and traffic. And all four merchandising divisions achieved positive comp sales in the quarter. Our second quarter results represent the fourth consecutive quarter of comp store sales above 3%. And during the quarter, the Tractor Supply team was very nimble across store operations, merchandising and planning, which allowed us to capitalize on the spring selling season as it arrived across all of our markets. At the same time, we were there for our customers with our everyday basic assortments that we know our customers depend on from Tractor Supply to help them live the Out Here lifestyle. I believe that the macro backdrop for our consumer is relatively healthy given recent trends in unemployment and consumer confidence. And for Tractor Supply, the macro headwinds we have experienced over the last several years have abated somewhat and the team is in a position to capitalize on the current consumer trends. We are experiencing some benefits from the energy-related markets, along with modest inflation, all of which are positively contributing to our top-line performance. Now that we are at the halfway mark for the year, we are raising our full-year outlook given the strength in the first half. Looking…

Thanks, Greg, and good morning, everyone. I wanted to take a moment this morning to give you a brief update on product performance during the quarter, the progress we're making on building out our capabilities to support future sales growth, and a look forward to the back half of the year. As Greg mentioned, during the quarter, we had a solid comp store sales performance, driven by both average ticket as well as continued increases in traffic. The team was well prepared to benefit from the delayed spring selling season with a great lineup of merchandise in our stores as well as online. Our strong average ticket growth of 3.7% was positively impacted by product mix, mainly from growth in our big-ticket items as well as slight commodity inflation. We experienced positive comp sales growth in big-ticket merchandise across the number of product lines during the quarter. Products such as generators, truck boxes, and log splitters, all experienced solid comp sales. But big-ticket was mainly driven by zero turn and front engine riding mowers. We were able to capitalize on the mower business as the result of a new and expanded product lineup, and took advantage of the favorable weather trends during the quarter. For the quarter, commodity price inflation of higher grain prices and, to a modest degree, oil and steel products added approximately 75 basis points to the average ticket. Turning to traffic, we benefited from consistent performance in our everyday merchandise, otherwise known as consumable, usable and edible, or C.U.E. products. During the quarter, we had strong sales dollars and unit growth across these C.U.E. categories. As a company, our mission is to be a dependable supplier of basic maintenance products, and it's these products that drive repeat traffic to our stores. We continue to experience strength…

Thank you, Steve, and good morning, everyone. For the second quarter of 2018, we had solid comp store sales growth of 5.6%. May and June were the strongest months of the quarter, with May being the highest comp overall. Petsense stores continue to have positive comp store sales increases in line with our expectations. For the second quarter, gross profit dollars increased 9.2% to $769.4 million. Gross margin was relatively steady with a slight decrease of 16 basis points to 34.8%. The decrease resulted primarily from an increase in freight expense, which was due to higher carrier rates and increased diesel fuel prices. Our average fuel prices have been running up 20% or more year-over-year. Partially offsetting these items were our effective price management initiatives and a lower level of promotional activity compared to the prior year. Including depreciation and amortization, SG&A as a percentage of net sales increased by 27 basis points to 22.4%. Higher incentive compensation from the strong year-over-year growth in comparable store sales, along with investments in infrastructure and technology to support our ONETractor strategy, were the primary contributors to SG&A increase. Partially offsetting these increases were leverage in occupancy and other costs from the increase in comparable store sales. Normalizing for incentive compensation year-over-year, we had good underlying SG&A performance. In line with our expectations, our effective tax rate decreased to 22.8% in the second quarter. The decrease was driven by the U.S. Tax Cuts and Jobs Act that was signed into law in December 2017. Now to our balance sheet and cash flow. We have a strong balance sheet and we continue our track record of generating strong cash flows from operations. At quarter end, our merchandise inventories were $1.63 billion, an increase of 3.5% on a per store basis from the 2017 second…

Thank you, Kurt, and I'd like to express my appreciation to the more than 29,000 team members here at Tractor Supply and Petsense for their commitment to our mission and values as they focus on delivering a great customer experience every day to our Out Here lifestyle customers. We have a strong and growing business which addresses a unique niche operated by an exceptional team of – team members. And as a team, we are energized about our prospects as we go forward for the remainder of the year. With that, Mary Winn, I'd like to turn it over to you and open the lines for questions.

Sounds great. Jenny, if we can start with Q&A.

Thank you. And our first question comes from Ben Bienvenu of Stephens.

Hi. Good morning. Congratulations on a nice quarter.

Good morning.

Thanks, Ben.

Thanks, Ben.

I wanted to ask about the big-ticket strength that you called out. Certainly, it sounds like secularly improving energy and stabilizing ag markets helped to some degree. But I'm curious what role your private label credit card played in this quarter, specifically, and then how you imagine it playing into big-ticket longer term.

Yeah, Ben, this is Kurt. In regards to your question about private label credit card, I'll give you a couple points on our private label credit card program, which we're excited about. We saw solid growth in the program. For example, couple key points. Year-over-year sales on the program are up and were up in every month. Our tender penetration on the private label credit card also was up in the quarter. Our initial focus on the program right now is deferred financing offers. And we believe that the offers that we put together this year for our customers resonated well. It allowed customers who were looking for deferred financing on bigger tickets to be able to accept that level of program. So, we're excited on private label. We believe it has a great level of potential in the future. But this is a long-term initiative, and we believe that not only is it something that resonates for deferred financing and can be a contributor to big ticket, but we'll be focused in the future as we mature this program to be able to drive more tender to that card, and believe we can find efficiencies in our tender by driving more of our business to the card.

Understood. And then, Greg, if I could ask a quick follow-up about your comments on the tariffs. You said as things stand today on tariffs, you'd expect no impact for FY 2018. Is that also the case for FY 2019 as things stand today on the tariff front?

Ben, I would say that no, that is not the case for 2019. Many of these tariffs will start to have some impact in 2019. As I mentioned, we don't know the full extent yet, although we've run some preliminary numbers. And like I said, we have two options. One option is going out now and looking to resource those products, which we are doing, in some cases, looking at alternative countries and places where we can build product. And then, again, some of this could be a pass on to the consumer. But let me remind you, only about 10% of our overall receipts are directly imported. We do have another percentage that we can't totally qualify yet that would be coming through, I'll call it, indirect, meaning it's components that are put into products that are probably assembled here in the U.S. that we buy from, I'll say, the U.S. maker. Those things are the more difficult ones to get our hands on. But we feel very comfortable through 2018 we're in good shape. In 2019, we'll deal with this as we know more and as we can quantify one of those two positions we need to take.

That's great color. Thanks, and best of luck.

Thank you.

Thank you.

And our next question comes from Simeon Gutman of Morgan Stanley. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Thanks, everyone, and nice quarter, guys.

Thank you. Simeon Ari Gutman - Morgan Stanley & Co. LLC: My main question is on – no problem. My main question is on EBIT margins, which are under some pressure today, and it looks like the guide has them accelerating in the second half. As we know, there's a big inflection expected in 2019. So, can we address what some of the key components of that inflection are and how could we sort of get comfort or confidence in some of those today?

Yeah, Simeon, this is Kurt. In regards to the operating margin opportunity for us and where we see that going in the future, it's part of our strategy that we manage both, the gross margin and the SG&A factors that play into the operating margin. For the second half of the year, the key factors that we consider in the EBIT margin is that gross profit does have higher transportation pressures this year and going forward. We believe that continues into the second half. And based on our performance and the comparisons to last year, you have a bit of a headwind on the incentive comp. In regards to the transportation, the efforts we have on cost mitigation as well as what our merchants are doing on the pricing side, we have momentum to not only mitigate the cost on the transportation side, but as well as be able to find offsets on pricing. So, we believe there's some headwind on operating margin in the back half as we saw a little bit in Q2, but we're managing and controlling what we can control and focused on the transportation costs and driving efficiencies in there. Simeon Ari Gutman - Morgan Stanley & Co. LLC: And I'll make the related follow-up to 2019, and I realize it's too early to talk about numbers. But is 2019 about investments rolling off or are there certain profit pools that start to increase from some of the efforts that you've been investing in 2018?

Sure, Simeon. There's three key factors that I would give to you to remind you on looking-forward ahead, as we expect to be able to steady the operating margin beyond 2018. First, the investments we've been making over the last few years are beginning to plateau. So, the burden that you see on the operating margin is in the run rate. The second thing, those investments are beginning to contribute to the top line, as you indicated. And a good example of that, four quarters now of 3%-plus comp sales. And then, lastly, our efforts on operating efficiencies, which is part of our ONETractor strategy, are focused on offsetting the cost pressures in the industry. So, the combination of those three things are what are core to driving our expectation to steady the operating margin.

And we'll go to our next question from Zach Fadem of Wells Fargo.

Hey. Good morning.

Good morning.

I'd like to dig into the comp strength in the quarter a little bit. How much would you characterize as a shift in seasonal merchandise from Q1 just with the slower start to spring, and how much would you describe as your omni-channel loyalty initiatives beginning to gain traction?

Yeah, this is Steve, Zach. What I would do is I would say that there was a modest impact that we saw when it came to seasonal merchandise, and that was noted in some of the earlier remarks. When you look at the totality of the business, what gets me really excited is that there was strength across the four walls and growth on the digital side as we continue to work toward that seamless shopping experience for our consumer. And so, I'm looking at this and I'm looking at all the initiatives we have within ONETractor, a lot of the technical ones, what we're doing with Neighbor's Club, and how we're working the inside of the store, and they're all playing a role in some of the foundational comps that we've experienced.

Okay. And you also mentioned earlier that your customer engagement had been improving. Curious if you could comment on just some of the specific metrics that you track there and then, how your ability to capture customer data has improved and how you are now able to learn more about your customers.

Zach, I'll take the first piece and throw the second piece over to Steve. On the SMG scores, we use this company to track our performance with the consumer. And we have one metric that we use, it's the GURA metric, the greet, uncover, recommend and ask metric. And we can actually measure through customer responses how we're performing on that. And I can tell you when we see higher levels of greeting and higher levels of recommendation, it seems to drive our comp sales. And we saw quite a bit of that improvement as we went into the second quarter of this year. This is something that John Ordus and his team in the field have been working on for the last, I would say, two years or so. And we're seeing very nice improvement in those customer, we'll call it, loyalty or customer response scores. So, we can track this. And by tracking it and understanding where we need to place emphasis, John's team has been able to bring those scores up and we're seeing that in the comp sales. Steve, do you want to take the other piece?

Yeah, I would just say when it comes to the Neighbor's Club loyalty program, there's one data point that I think is really meaningful. And that is that the stores that have a higher penetration of sales and transactions of Neighbor's Club members generate higher comp store sales. And I would say that there's a reason for that, and that has to do with our work toward email communication, personalization, and how we're working with the customer on quarterly rewards. I think all that ties together to show the difference between stores that are performing well with a higher penetration versus those that aren't. How we grow it – and this is what the team's been working on, this thing has scaled dramatically. And I believe Greg said that at the end of the quarter, we had almost 8.7 million members en route to 10 million members. The benefit that we're getting is the loyalty from them and, at the same time, we're getting the benefit of the e-mail communication that we can deliver directly to them, and we can be incredibly nimble. So I guess I feel very good about the direction we're headed and I think there's a lot more work that can be done to even enhance where we're at today.

And moving on, we have a question from Chuck Grom of Gordon Haskett.

Hi, thanks, nice quarter. Just to follow-up on the Neighborhood Club (sic) [Neighbor's Club] loyalty program, any sense for what you think the ultimate potential could be? I know you cited 10 million by the end of the year, but what do you think that could be over the next couple of years? And then just on the guidance, just to clarify the comp view, did you say that you expected it to be below the 3% to 3.5% or slightly below? Just wanted to clarify for our models. Thanks.

Chuck, I'll start with the question. One of the things that we're really careful about is setting a target that could actually produce maybe poor or bad behavior. And I get the question, Greg does too, a lot of times on exclusive brands and what percentage should it be. One of the things that we believe is that our team members have a connection in the small communities that we're in with our customers. We're a relationship-based business. We're going to continue to ask if our customers would like to be part of the program and then show them the benefits. How it scales from there, we're going to have to see. But what we're not going to do is get in a position where we're going to force some uncomfortable experience there at the point of sale to try to drive the number up. So while we've got some internal targets that are relatively rough that I'd rather not communicate at this point, I would just tell we're working toward continued growth.

And Chuck, this is Kurt. In regards to the second part of the question, yes, just to clarify, our anticipation on the back half of the year is that we will have positive comp sales in both quarters. But the back half of the year would net below the revised guidance range of 3% to 3.5%. And a point of perspective there is we're running first half 4.7% and we anticipate the full year to be at 3% to 3.5%. And so, we anticipate the back half, because principally the stronger compares we've got in the back half, that those positive comp store sales will be below the 3% to 3.5% range.

And we will hear next from Seth Sigman of Credit Suisse.

Seth?

Seth?

And one moment. Seth I. Sigman - Credit Suisse Securities (USA) LLC: Can you guys hear me?

Yes, we can. Seth I. Sigman - Credit Suisse Securities (USA) LLC: Okay. Hey. Sorry about that. So a couple follow-ups here. First on the average ticket, very strong, strongest in many years, inflation seemed to accelerate a lot. I think you called out a 75 basis point benefit. As you think about the outlook, I mean, this seems to be tracking higher than what you assumed previously. If I recall you were expecting about neutral for 2018. So, can you just elaborate on what you're seeing and give us a sense of what you're embedding in the guidance now?

Sure, Seth, this is Kurt. Just a little bit of point of reference on where we're at. We anticipated to see some modest inflation in 2018 when we set our original guidance. And we saw in first quarter some modest level inflation. We mentioned it was the first time, so 20-plus basis points of inflation first quarter. So, we did see a pickup in the second quarter. And we anticipate in the back half to have some level of inflation, impact in the back half to be generally in line with what we saw in second quarter. 60 basis points to 80 basis points may be a good range to anticipate from what we can see today on the inflation. Lastly, on inflation – go ahead. Lastly on inflation, most of the inflation we've seen so far principally from the commodities and grain. And we've seen, that has some volatility and can change. We're starting to see lesser extent some inflation in oil and steel-based product as well. But overall, we anticipate at this point about 60 basis points to 80 basis points impact on the back half of the year.

And moving on, we will go to a question from Steven Forbes of Guggenheim Securities.

Good morning.

Good morning.

Good morning, Steven.

Regarding 2Q gross margin, can you expand on the freight and fuel headwinds you mentioned in the release? And really just as it relates to what you're seeing between – the cost differential between spot and contractual rates, and how successful you've been, right, if you were to rate yourself and maybe talk about the initiatives, right, internally on limiting your exposure to the spot market as we kind of digest the impact to the back half and into 2019?

So, why don't we – Kurt, why don't you take the first portion of that, and then maybe I can talk a little bit to the spot.

Sure. Steven, in regards to the transportation costs, if we – and I'm just breaking out the gross transportation that we've seen. First, our carrier average rates are higher year-over-year, and I would say they're running greater than our original estimates. And probably in line with what we're seeing on the industry, there's variations, but anywhere from high-single digits to low teen-type increases year-over-year. The fuel costs are slightly above our original expectations to start the year, running about 20% year-over-year increases. We do see spot rate usage increase, and that is playing into the transportation costs. But we are working to manage that. And what we're working on right now and our solutions are a number of key efficiencies in our transportation side of the business to be able to mitigate that. And, Steve, I'll let you mention what we're doing on the transportation side.

Well, I was just going to mention that the spot buy for Tractor Supply Company is a very small percentage of our overall carrier business. So, it is very low-single digit and continues to get lower. And some of the things that we've done to mitigate that is really open up the window another day or so with our carriers, and that's dropped the spot buy down considerably. So, again, I think going forward, I don't see the spot portion of this being the biggest risk. We're watching diesel prices and just, in general, capacity, probably more importantly.

At this time, we'll hear from Brian Nagel of Oppenheimer. Brian Nagel - Oppenheimer & Co., Inc.: Hi, good morning.

Good morning, Brian.

Good morning, Brian. Brian Nagel - Oppenheimer & Co., Inc.: Congratulations on a nice quarter.

Thank you.

Thank you. Brian Nagel - Oppenheimer & Co., Inc.: So I've got two, I guess, bigger picture questions, and I'll merge them into one. But first off, with regard to just the farm economy, a lot of chatter out there related to headlines and some pressures on the farm community, given tariffs and other factors. Have you seen any impact or do you anticipate any impact to Tractor's business from that? And then my second question, Greg, back to your tariff comments earlier. How nimble is Tractor Supply? So it seems like you're saying you don't expect any impact here in 2018, but you're looking to 2019, how quickly can Tractor Supply move sourcing or how quickly could you act to adjust prices in your stores to offset any potential tariffs? Thanks.

Let me address both of those, Brian. This is Greg. First, the farm economy pressures, as you know, less than 10% of our customer base is truly impacted by production farming. So, it's a small number. I think what the President has done recently with the soybean scenario is going to play out much better. That aid of $12 billion and such will help. But so far, we've really seen no impacts. Again, I think the next several rounds of the tariff conversations, where these settle, could have a little bit more to play as we go into 2019. But for 2018, so far so good is the way I would say it for us here at Tractor Supply. Now, the second piece on tariffs, how nimble are we? How fast can we resource products? Remember, only about 10% is direct from factory to Tractor. There is some other factors involved there with, what I'll call, indirects, where it's products that are being pulled through the supply chain, components that are used to assemble products here and such. And what I can tell you is we're very nimble. We have a very strong presence in the Far East. We are sourcing product now in multiple countries. We have the ability to move products probably faster than anyone else in our channel. But we will still continue to watch this closely to make sure that we don't overcorrect, because some of this is a bit of a Washington pushing the envelope with China, try to get some concessions. And this is really all about intellectual property rights. Let's face it, that's what this big concern is from Washington. So, I'm hopeful that we'll see some concessions on both sides that'll bring this level of intensity down over the next several months. And by the end of the year, maybe this will be somewhat of a non-issue. But we are very nimble. Our supply chain is much more sophisticated today than it was 10 years ago. We have ample places to source product. And we're working with our extended vendor community, those who we buy, I'll call it, domestically from who have ties to China for components and such as well as the things we do on a direct basis.

And at this time, we will hear from Peter Benedict of Baird. Peter S. Benedict - Robert W. Baird & Co., Inc.: Hi, guys. Thanks. I guess my question will be around – hey, Greg – around the operating efficiencies that Kurt you'd mentioned and, Steve, I think you mentioned some. But just any color – more color on what you guys think you can accomplish there. You mentioned some things on transportation, but what other areas of the business do you see these operational efficiencies really coming through, which will help you kind of offset the investment headwinds as we look into 2019 and 2020? Thank you.

Yeah, thanks, Peter, this is Kurt. On the operational efficiency, I'll give you a couple key updates on that. First, I'd say for us, when we look at that, this is transformational. It's implementing and introducing productivity and efficiency measurements in the business. And where we're at with that program, we said we were going to do a comprehensive review and initial assessment in the first half of the year, and we're completing the initial assessments now. We are, in the second half, launching the efforts to implement the first initial waves of some change and improvements in the second half. And the big buckets of those areas: first, supply chain, which does have a heavy portion in transportation; store productivity, and indirect procurement. And as I started, I would just say, this is a long-term strategy. It is part of our ONETractor strategy. And this is something that we will be focused on over the next few years. I'd expect savings not to occur until 2019, as we're beginning to make those investments and those changes in the back half of 2018 and into 2019.

And our next question comes from Michael Lasser of UBS.

Good morning. Thanks a lot for taking my question. Do you think there was a net impact to your traffic in the second quarter from the weather? And, Kurt, I think you made the comment we should look at traffic on a two and three-year stack basis in the third quarter. And if we do that, it would imply that traffic's going to be flat in the third quarter. Is that the right way that we should be modeling traffic for 3Q?

Well, Michael, I'll take the last one first. That comment I would not – I'm not try to infer anything particular to a quarter. We're real proud, and there's a strong momentum in the business on comp sales and traffic has been consistent. So, we recognize Q3 has some strong headwinds facing on the comps from last year, but the momentum of the business puts us in a position that we believe we can drive good, positive comp sales in the third quarter. I do believe looking at the overall comps on two-year stack is a good way of looking at it. And if you do, you're seeing 6% or 6%-plus comps not only in some of the past quarters, but going forward in the back half of the year. And then in regards to the first part of your question, which was the weather, weather is a favorable contributor to the second quarter results, not really a key driver. And I'll give you two points of reference to think about with that. First, as Steve mentioned, there's strong trends in the seasonal business that we had in the second quarter and that may indicate benefit from the weather. But then also the core business was strong across the second quarter and across a lot of that everyday merchandise throughout the quarter. So as you balance those out, you really come to the fact that weather was a favorable contributor, but not necessarily that key driver.

And our next question comes from Oliver Wintermantel of MoffettNathanson.

Yeah. Good morning, guys.

Good morning, Oliver.

Good morning. I had a question regarding your online sales. You said they were up double digits. If you could maybe help us over the last few quarters what the trend was there, maybe in percentage points, and then also what the percent of total online sales of your total business is right now.

Yeah. This is Steve. We talk a lot about continued growth and momentum in that channel. What I can tell you is, as Greg mentioned, it's continued to be strong double-digit growth. And as we look forward to the remainder of the year, it will likely be between 2% and 3% of our total business as a company and that continues to scale pretty dramatically.

And our next question comes from the line of Peter Keith of Piper Jaffray. Peter Jacob Keith - Piper Jaffray & Co.: Thanks. Good morning, and nice results, guys.

Thank you, Peter. Peter Jacob Keith - Piper Jaffray & Co.: I'm curious on the way that the guidance was raised, certainly great to see and a great first half of the year, seems like there's pretty good kind of steady momentum in the business. Greg, you talked about some tailwinds to the spending environment. What's been the change to the back half, if any? Do you guys see more opportunity or just kind of sticking with original plan and seeing how the quarters unfold?

Yeah, Peter, this is Kurt. There's a few variables that play into the revised guidance, and I'll mention a few of those. First, I mean, the momentum we see on the top line and the strength of the core business is a key factor for the increase in the top-line sales. When you look at the rest of the P&L, the two other key factors is we've seen with pressures in the transportation costs that there will be a higher pressure on that and slightly lower gross margin rate as well as the performance of the business, particularly the top line, drives higher incentive compensation. And you're looking at 2018 at a more normalized or slightly higher incentive comp versus the compares of last year. So, those are two key points that play into the back half in regards to the bottom line on the revised guidance.

And one comment I would make is on the top line it's really more of a factor of the really solid performance that we had in the second half of last year and comping up against that. Peter Jacob Keith - Piper Jaffray & Co.: Okay. Thanks, guys.

And we will hear next from Christopher Horvers of JPMorgan.

Thanks. Good morning. So two questions. So first is, can you talk about the performance of the stores in the oil markets? I think in the back half of the last year you started to see those get back in line. And I think the past two quarters, it has slightly outperformed the chain average. Has that accelerated? And my follow-up question is, as you think about last year, July you saw nice inflection, you had an extended seasonal period partly driven by favorable weather. So, the quarter seemed sort of bookended by July and September with the hurricanes there. How are you thinking about the extended seasonal business here in the third quarter and how that might play out from a weather perspective? Thank you.

Yeah, Christopher, this is Kurt, I'll start with the questions and hit the oil markets. When it comes to geographic, I'll back up and just say one of the things we were excited about the second quarter is all geographies positive comp and the range was pretty tight. But in regards to the oil markets, as you mentioned, Texas, Oklahoma area was the strongest geographic region that we had during second quarter. And so in comparison, where you saw some headwinds causing there to be a little bit of a pressure in that area, I would say that it helped this year being slight – part of the benefit and contributor to Texas, Oklahoma's performance on the business. And then Steve, you can take the next question.

Sure. In terms of the extended seasonal sales, we have baked in what we believe is the current run rate into the forecast for the back half of the year, so that's solidly in there for you.

Understood. Thank you.

And we'll move on to a question from Matt Fassler of Goldman Sachs. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thanks, I'll squeeze two quick follow-ups into some topics that have already been touched upon. The first is whether with the strength in the top line you've amended the pace of investments in the second half relative to what you had initially expected? And then somewhat relatedly, if you could just remind us of the benchmarks that drive your incentive comp, is it purely top-line driven or is there a profit component to that as well. Thanks so much.

Matt, this is Kurt. I'll address those, but let me first just ask for clarification. You had said baked into the guidance was a slowdown in the investments. Did I hear you correct? Matthew J. Fassler - Goldman Sachs & Co. LLC: No, I guess what I asked was whether you had changed – presumably, raised – the pace of investments, or changed them one way or the other, in the second half of the year given the strong start that you had to the first half and the stronger pace of sales...

Okay. Matthew J. Fassler - Goldman Sachs & Co. LLC: ...that you've seen year-to-date.

Yeah. No, we've not really had any meaningful shift in the level of investments, either the capital spend or any operational investments on the back half of the year based on the first half. We're sticking with our plan and we're executing it well. And the SG&A spend is pretty much consistent with what our plan was. In regards to the incentive comp, our team members in the field are incentivized on a monthly store sales bonus. So, you'll see in strong performance on the top line, all of our team members are eligible for store sales bonus monthly. And we're real excited to be able to pay our store managers and our team members out in the store a sales bonus when they have a performance like Q2. And when you compare, as I mentioned earlier, first half of last year on incentive comp, first half was a 0.2% comp sales and this year was a 4.7%. So, you can see how incentive comp plays in. Both store managers and then management within the company is incentivized on a profit bonus, bottom line, return driven compared to our plan that we pay out against target for the year. And so, those are the two key contributors on the incentive comp. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thanks so much.

And we'll hear next from Seth Basham of Wedbush Securities.

Thanks a lot and good morning. My question's around big ticket. If you could give us more color on how big-ticket comps trended for the quarter and how much of that was being driven by – whether it be seasonal factors with the weather, your more compelling financing offers, or other factors, that would be great. Thank you.

Yeah. So, Seth, this is Steve. As mentioned, it was really driven by product mix. It was driven by slight or moderate inflation, like we talked about. And then, of course, the big ticket. In big ticket, there was a variety of categories that were impacted. So, it wasn't relegated to just one specific area. The one area that I would point to is riders and mowers, and a lot of it had to do with the new and expanded lineup, along with some seasonal benefit. The card was used for a number of those categories, but I would just caution us as we look forward that every quarter is very unique and very different at Tractor Supply Company. And the first half and the back half is very different. So while the vast majority of our business was benefited in big ticket by riders and mowers, that doesn't necessarily translate into the back half of this year. So overall, we were pleased with the big ticket. We think that our assortments were laid out well for that customer to come in and get it, and we certainly benefited from it.

And our next question comes from Chuck Cerankosky of Northcoast Research.

Good morning, everyone. Good quarter.

Good morning.

Good morning, Chuck. Thank you, Chuck.

The one thing I noted in the press release was a decrease in promotional activity. Could you talk about that a little bit? Was it perhaps affected by strong demand and less markdowns, strong traffic as part of that?

Yeah, Chuck, this is Steve. We got off – throughout the quarter one of the things we talk a lot about is being nimble. And I would say there's probably not a better example of that than our ability to go in and take a look at our promotional cadence and make adjustments where we need to, to refine the business. As we got through the second quarter and sales were pretty solid, we were able to pull back and do some things there. And I think that overall it benefited the business and the overall margin rates.

All right. Thank you.

Thank you.

Jenny, we've hit the top of the hour. So, I think that wraps up our call. I want to say thank you to all of us for joining us today. We look forward to you joining us on our next quarterly call in October. Please feel free to reach out to me with any questions and thank you for your interest in Tractor Supply.

Thank you all.

Bye.

And again, that does conclude our call. We would like to thank everyone for your participation. And you may now disconnect.