Good morning, ladies and gentlemen, and welcome to Tractor Supply Company's conference call to discuss third quarter 2018 results. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. We ask that all participants limit themselves to one question and one related follow-up. 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, Mary Winn Pilkington, Vice President of Investor Relations and Public Relations for Tractor Supply Company. Mary Winn, please go ahead.

Thank you, David. Good morning, everyone. On the call today are Greg Sandfort, our CEO; Steve Barbarick, President and Chief Operating Officer; and Kurt Barton, our CFO. Before we begin, we are delighted to share with you that we're planning on hosting our 2019 Investment Community Day in Nashville on May the 14 and 15. We'll be sending out more details soon, so please be on the lookout for that. Now, 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 the 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 prove 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's 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 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. I appreciate your cooperation. We will be available for the call for follow-up. Now, it's my pleasure to turn the call over to Greg.

Thank you, Mary Winn. Good morning to everyone joining us on the call today. To begin this morning, I want to thank all of the Tractor Supply and Petsense team members for their tremendous efforts during the recent hurricane season as they went the country mile for many of our customers. Our thoughts and prayers continue to be with all of our team members and the communities who have been directly impacted by the recent hurricanes. Now, to the business results, we are delighted with our strong third quarter performance, driven by overall robust sales growth. Once again, 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 merchandising divisions achieved positive comp sales in the quarter. Our third quarter results represent the fifth consecutive quarter of comp store sales above 3% as we cycled our most difficult quarterly comparison of a year ago. During the quarter the Tractor Supply team executed well across many of our areas; store operations, merchandising, supply chain and planning and placement. While the overall retail economy is doing well, our teams did a great job of developing plans that resonated with our customers that were seasonally relevant and continue to drive transactions and our average ticket. We continue to be in stock for our customers with our everyday basic assortments that we know our customers depend on from Tractor Supply, that help them live their Out Here lifestyle. As I shared with you last quarter, I believe the macro backdrop for our consumers is relatively healthy given the recent trends in unemployment and consumer confidence. For Tractor Supply, the macro headwinds we've experienced over the last several years have abated and the team is now in a position to capitalize…

Thanks, Greg, and good morning, everyone. We had a strong quarter results that exceeded our expectations. Our comp sales were broad based and all four walls of the box performed well for the quarter. Our comp sales growth was driven by both average ticket as well as continued increases in customer traffic. The team did a great job developing and delivering on our merchandising plans and marketing events during the quarter. That, coupled with strong execution by our store teams and across the supply chain network, we successfully cycled the most challenging comparison of the year with a two-year stack of 12%. Many of the performance factors that we experienced in the second quarter continue to benefit us in the third quarter. Our strong average ticket growth of 3.6% was driven by strength in our items per transaction, product mix, inflation and, to a lesser extent, growth in big-ticket categories. The store operations and merchandising teams put forth a coordinated effort to grow our average ticket, and we saw that pay off in the quarter. In addition, commodity inflation across categories, such as livestock feed, pet food, steel and oil-based products contributed approximately 90 basis points to our average ticket performance. Lastly, our average ticket improvement experienced some benefit from big-ticket sales. We did experience strength in big-ticket sales across several product lines, which included a go-long (12:36) replenishment strategy around outdoor power equipment. Our supply chain remained nimble throughout the quarter, and we took advantage of the favorable weather trends. We continue to be pleased with our traffic trends, with growth of 1.4% on top of last year's growth of 5%. Please keep in mind that last year we benefited from two major hurricanes. During the quarter, we had strong sales dollars and unit growth of C.U.E. products. Our…

Thank you, Steve. Good morning, everyone. For the third quarter of 2018, we had strong comp store sales growth of 5.1%. All three months of the quarter were positive. Petsense stores continue to have positive comp store sales increases, in line with our expectations. For the third quarter, gross profit increased 8.8% to $653.1 million. Gross margin had a slight decrease of 16 basis points to 34.7%. The team was very effective with their efforts to mitigate the impact of overall freight cost increases through our price management initiatives. The pressure we have experienced on our freight expense is not unique to Tractor Supply, given the industry trends of higher carrier rates and increased diesel fuel prices. Average fuel prices have been running up 20% or more year-over-year. All in, the team did a great job navigating the current environment. Including depreciation and amortization, SG&A as a percentage of net sales increased by 31 basis points to 26.6%. Higher incentive compensation from the strong year-over-year growth in comparable store sales, along with planned investments in infrastructure, labor wages and technology were the primary contributors to the 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 continue to have good underlying SG&A performance. Our effective tax rate decreased to 21.5% in the third quarter. The decrease was driven primarily by the U.S. Tax Cuts and Jobs Act that was signed into law in December 2017. To a lesser extent, an incremental tax benefit associated with higher stock option exercises year-over-year also decreased our effective tax rate. 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…

Thank you, Kurt. And I'll reiterate again we believe we really had a strong third quarter. We're on track for a very solid year-end. We have a unique and differentiated model that positions us well for the future. I again want to thank the more than 29,000 team members across the company that allowed us to deliver a great quarter, and I appreciate their hard work. And I know that they are providing legendary customer service every day to our out there – and Out Here lifestyle customers. With that, Mary Winn, we would like to open the lines for questions.

Great. Thank you. David, we'll move to our first question.

Thank you. And we'll take our first question from Matt Fassler with Goldman Sachs. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thank you so much, and good morning, everybody.

Good morning, Matt

Morning. Matthew J. Fassler - Goldman Sachs & Co. LLC: My primary question relates to the sizing of incentive compensation. How significant of a driver of the bump this was in Q3? And if you could just remind us what role that plays in the Q4 expense outlook year-on-year?

Sure, Matt, this is Kurt. In regards to incentive compensation, the important thing is that for the third quarter, in particular, it's really about a comparison to prior year, and the comparison is meaningful. The past two years performance was below plan, driving normal – below-normal incentive compensation expense. And the current year, as you know, and the quarter performance was strong and more normalized. So, we're excited about the strong performance. That does drive incentive compensation, and the incentive compensation was a significant part of the SG&A deleverage. That incentive compensation for the third quarter itself was approximately 40 basis point year-over-year comparison. And with that, you can see, we had strong SG&A deleverage in the third quarter, ex-incentive compensation. For the fourth quarter, the only variable difference, as we called out last year in the fourth quarter, with the performance, we had strong SG&A performance there. So, the compares are not as significant in Q4 as it is in Q3. Matthew J. Fassler - Goldman Sachs & Co. LLC: And I guess the follow-up would be, since you said that the delta is, frankly, more about what happened last year than what happened this year, would you say that your incentive – as we think about next year really, would you say that your incentive comp levels in Q3 were sort of in line with what they would be in an average year or were they slightly elevated given the outstanding operating performance?

Matt, we had good solid performance. We're excited about the ability to incentivize our team members with that performance. It's normalized to slightly higher the normalized performance in Q3. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thank you for the clarity. I appreciate it.

And next, we'll go to Simeon Gutman with Morgan Stanley. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Thanks. Good morning. Good quarter, guys. I had a question, sort of...

Thank you. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Welcome. Following up on 2019, and I respect it doesn't sound like we're going to get a lot, but sort of pick your brain on one idea of it. So if comps next year continue their strength, let's say they're 4% or better, do you spend into that or do you allow your margin to float up a little more or quicker than you planned within the context of the 9% to 9.4% (29:56) that you outlined at last year's meeting?

Yeah. Simeon, this is Kurt. I won't go into 2019 specifics beyond what we've given to you. What our strategy is, is we're going to continue the plan of executing on ONETractor, investing in our stores. And we're going to put a plan together that is consistent. And if we drive comp sales higher than our stated near-term targets of 3% plus, then that drops to additional leverage and operating margin. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Okay. And my follow-up is on inflation and tariffs, which Greg mentioned. So, you've had a little bit of inflation in the last couple of quarters, albeit it was following some deflation. Is there any hint about the elasticity, specifically, looking at unit demand? Is there any change that you can either get a glimpse of either what more inflation does or maybe what some of the tariff could do to elasticity?

Simeon, this is Steve. What I can tell you is, is that we're very well positioned here, I believe, a couple of things. First and foremost, Greg mentioned that if you look at the overall model itself, our C.U.E. business over time has really benefited us. And I would also say, and more specific to your question, we tend to be a needs-based retailer. You've heard us talk in the past about our pricing tools that we've invested in. And those pricing tools will help us, as we move forward, test elasticity across the country in the zones that we manage. So, I think we're well-positioned there. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Thanks.

And next, we'll go to Steve Forbes with Guggenheim Securities.

Good morning.

Good Morning, Steve.

I wanted to start with Neighbor's Club, right? So, I think you mentioned for the second quarter in a row here the shopping trends, right, three to four times more than the average customer. But any insight into spending habits, average basket size, category penetration? Really just any additional color you could provide on the Neighbor's Club member.

Yeah, Steve, this is Steve Barbarick. Glad to do it. Just to start with, Greg mentioned that we've got about 10 million members or will have by the end of the year. And these are some of our most important members. And we can tell not only because of how often they're shopping in terms of frequency, but also what they spend. They tend to spend about 10% more on any given visit than a regular customer would. And because they shop more often, our ability to communicate and personalize those communications to them, based on what they're actually buying, that allows us to upsell, cross sell and even convert them into our exclusive brands, is really a great value to us. So, we're still pulling apart a lot of the data. It's incredibly rich right now. And now, it's about the quality and how we're using it.

And then, just maybe a follow-up on the other strategic initiatives you talked about, Stockyard and mobile kiosks. Right? I think you mentioned about a third of the chain will have the Stockyard, and 20% to 25% will have mobile POS. What's the plan today as you think about the rest of the chain for both those initiatives?

Yeah. Well, first off, we're seeing some great signs from both. And it's been a methodical rollout. As you know, we talk about being a test-and-learn company. We learned a lot as we've implemented both of these two devices into our stores. As we move forward, we believe that we'll continue to populate our store count with both devices themselves. We've laid out the plan. And you will see us rapidly expand both the kiosks as well as mobile point-of-sale as we get into 2019.

Thanks, Steve. Take care.

Thank you.

Thank you.

And as a quick reminder, we ask that you please limit yourselves to one question and one related follow-up. Next, we'll go to Christopher Horvers with JPMorgan.

Thanks. Good morning, everybody.

Good morning, Chris.

Can you talk a little bit about sort of the hurricane comparison year-over-year? How you think about sort of how much of that headwind was, on a net basis, considering what rolled through this year, obviously, less geographic exposure? And then, also on the seasonal side, you had the extended seasonal period last year that seemed to replay this year. And seems like you're really ready for that on the OPE side. So, can you talk about how, perhaps, the seasonal benefit was compared to last year as well?

Sure, Chris, this is Kurt. I'll start with the first question on hurricane, and I'll pass the second part of that over to Steve. The hurricanes, as you recall and was stated earlier, that we had Hurricane Florence this year, but cycling up against two hurricanes last year. Hurricane Florence had a modest benefit to the top line, drove approximately about 40 basis points of benefit on the top line. But that's cycling those two hurricanes last year that we called out at about 120 basis point. So while we were able to capture sales and Florence was part of our benefit on the top line this year, when we look at all the compares in Q3, the actual emergency response was about a 80 basis points drag in comparison to Q3 of last year.

And I'll take the second question here on the extended selling season. I don't know how much of it was the season and how much of it was some of the work that we did that actually extended that season itself. I will tell you our supply chain team looked at what we did last year. And as we become more national in scale, we're seeing a little more benefit maybe from the southern stores and the length of season that they've had. So when you look at the total comp of the 5.1% that we ran for the quarter, it wasn't a material impact, just because it's a smaller portion of our total business as we move into the quarter. But we certainly were able to comp that extended selling season from a year ago.

Understood. And then, as a related follow-up, as you look at the fourth quarter, you didn't raise the comp outlook, it looks like, and implied about a 2% handle comp. Your comparisons get a lot easier. You don't have the hurricane comparison, the seasonal comparison. And clearly, it's been cold in October here. So, can you talk about your thoughts around the fourth quarter and, perhaps, not taking it up? And how you're feeling about the season so far?

Sure, Chris. This is Kurt. Here's how I look at it. First, you can see from our raised guidance, that there is strong momentum in the business. We are going up against a solid 4% plus comp last year in fourth quarter. And with that said, there's a lot of meaningful portion of the quarter still ahead of us, and we're going up against December, which had a real strong benefit from the cold snap. And as a reminder, December is a real strong portion of the quarter. So to give clarification, the start of the quarter has been considered and factored into our guidance.

Understood. Thanks very much.

And next, we'll go to Michael Lasser with UBS.

Good morning. Thanks a lot for taking my question. Greg, you spoke talk about your thoughts on the tariffs in general terms. But can you quantify the percentage of your sales that you import from China?

Michael, we can quantify what we bring in on direct basis. We said for a long time, about 10% of our overall mix of products comes from outside the country. A high percentage of that mix comes from China. But the part that is difficult to quantify, and we're now starting to see the impacts of it, is the indirect things, the componentry parts that are going into U.S.-make products or U.S.-assembled products. And the team has done a great job of quantifying and putting together a plan not only to deal with what we've got coming on a direct basis, but what we're seeing as, I'll call it, artificial inflation, okay, on the products that are being tariffed, that are componentry driven that driving costs up in some of the categories. So yes, we understand it. We've got our hands around it. We've got a great plan behind it and we'll execute to that.

And is your expectation that you'll be able to pass along most of the pressure that you're going to see both directly and indirectly through price increases? And Kurt, when you talk about this year being a trough in the operating margin, does that assume that the 25% tariff does not go through? Would that cause incremental pressure on your operating margin next year? Thank you.

I'll start and let Steve and Kurt come in here. We baked into the plans the expectation that tariffs are going to move to 25%. I'll also tell you that you just can't artificially raise price. There will be some consumer, we think, pushback potentially in some categories. So, we're working diligently with our manufacturing base to look for cost reductions from them. We've also bought some push from goods in forward to get ahead of some of that tariff impact. And then there will be a combination of some price increases in certain categories. It's just going to be unavoidable. But we are going to do all we can to keep the impact to our customer at a minimum.

One other thing I would mention on that, Michael, this is Steve, is that unlike a lot of other retailers out there, we are well positioned being a needs-based organization. When you need fencing to contain an animal, you're going to buy fencing. There's really not many other ways around it. So when you look at our model, our box and our product type, we are less discretionary than many others, and I think that really bodes well for us. The second factor is our purchasing power. We are well positioned in our space to push back and to mitigate a lot of those costs coming through. And the last thing I would tell you is, is not everyone uses the same pricing tools that we've got. And so, we're able to really manage elasticity, probably as well as anyone in our space.

Thank you.

And next, we'll go to Chuck Grom with Gordon Haskett.

Hey. Good morning, guys. How are you? It's Andrew Minora on for Chuck.

Good morning.

Hey, Chuck (sic) [Andrew] (40:57).

I was wondering, first, if you can give us a little bit more detail on the cadence in the quarter. I know you said all three months were positive, but if you can give us any sense of how that trended throughout the quarter.

Sure, Chuck (sic) [Andrew] (41:10). This is Kurt. All three months were strong. The cadence was pretty tight and what we expected to see was September had the toughest compares going up against a couple hurricanes. And so where we saw any variation may have been in September where there was the toughest compare. But very excited about how it started out and how we were able to compare that toughest month of September against the hurricanes.

Okay. Great. Thanks. And then one quick follow-up. I know you guys talked about carrier rates in the quarter. Would you be able to quantify the increase year-over-year in the carrier rates? And if you can, like what's your expectation for these in the fourth quarter and then 2019, to get worse, stay the same? Just any color around that would be helpful.

Sure, Chuck (sic) [Andrew] (41:58). This is Kurt. As been mentioned, is part of the industry average and well documented, and we're seeing similar things. While the fuel prices are up year-over-year, similar like they were in the second quarter, about 20% plus on fuel costs, the carrier rates have been averaging year-over-year in the teens. And we saw that in second quarter, again in third quarter. We believe we'll see persistence on that into the fourth quarter. And then just looking ahead, while we believe transportation cost pressures do continue, when you see where it began to really increase in the beginning of 2018, the compares a little bit easier. So, we believe the year-over-year impact starts to moderate. The key is what we're doing to take action on that and the efforts that Tractor Supply have in regards to mitigating any cost increases on that. And we're doing a few things right now, today, and laying the foundation that we believe really help with the impact in 2019. And we're managing with our vendors and our carriers the ordering time frames to avoid spot rates. That's been effective as we've seen our usage of spot go down compared to some of the peaks in the first half of the year. And we're leveraging our strategic sourcing group to reduce stem miles. And part of our profit improvement initiative that we mentioned for this year to lay the foundation, we're addressing also the utilization of trucks to a greater level and working on our carrier rates. There's some great momentum on that. We believe that will help us going into 2019.

That's really helpful. Thanks a lot. Have a great day, guys.

Thanks, Chuck (sic) [Andrew] (43:50).

Thank you.

And next, we'll go to Elizabeth Suzuki with Bank of America Merrill Lynch.

Great. Thanks, guys. Is there any color you can give on the performance of Petsense stores year-to-date? I know you mentioned that comps are positive and that you added seven new stores in the quarter. But any other details you can provide about the performance of those stores?

Liz, this is Greg. Here's what I'll tell you about Petsense. We're pleased with our overall performance. It was very positive. We'll have 180 stores by year-end. As you know, we're going through a lot of back house integration right now that won't be complete until about the mid of 2019, and that's giving them the capability to manage and operate their business very similarly to the way we do here at Tractor Supply. As you probably recall, they were a private company that was run a little more entrepreneurial and we've kind of brought them into the way of thinking about how if they're going to someday be a 500 to – 800 to 1,000 store chain, they needed to have the capabilities of Tractor Supply, and as a back house for them. So, we're very pleased with how that integration is going. We're also testing several new store formats within Petsense. New color pallet, new décor, new layouts. And so far the few that we've got up, we're very pleased with those performances. We're also doing some other things within the mix of product. The differentiation of product's important. Just as Steve mentioned about what we've done within the categories of Tractor, we had the same opportunities in Petsense. And we launched True Source about a year ago. True Source is becoming a major force inside the Petsense brand. And then what our belief is, this is still going to be a growth vehicle for us as a company in both that rural and next (45:43) suburban community over the next five to seven years. But very pleased with the performance, and more to be shared as we get a larger store base out there.

Great. And is the e-commerce division there growing kind of at a similar pace to the Tractor Supply e-commerce?

It is not. It is a very simple, straightforward format. We have not converted over to the Tractor platform just yet. That will be in 2019. We're today using a third-party format through the disturber, one of our major distributors, but that also will be an opportunity going forward. But to be very honest, there hasn't been a tremendous amount of e-commerce business being generated from the Petsense locations. It's a very convenient one-stop shop. It's a high-service location. So, the food side of it could accelerate once we get the new platform in place, but I think it's more of a store where people like to visit. They come there with their pets, grooming is a big component and adoption and so on. So, it's a little bit different format than just selling product online. This is really more an experience store, just like Tractor.

Got it. Thanks very much.

And next, we'll go to Scot Ciccarelli with RBC Capital Markets.

Good morning, guys.

Good morning.

I was wondering if you might be able to – hi. I was wondering if you might be able to dig in a little bit more on the increase in average ticket the you guys had. Specifically, can you quantify what the impact has been from your deferred financing program on average ticket?

Sure, Scot. This is Kurt. What I can tell you is that our big ticket was a contributor to the average ticket increase. We're very pleased with the performance on big ticket. Big ticket was slightly above chain average growth and it drove about 40 basis points of the overall comp ticket growth. And we do see a good correlation between the customers' acceptance and use of the new extended financing on big-ticket items. So trying to be able to exactly connect on average ticket and big-ticket to the new credit card is difficult, but we can say that we're pleased with the results and there's a strong correlation to growth in big ticket as well as growth in the private-label credit card program.

Okay. That's helpful. And I guess kind of related to that, what has been – I mean, the first thing you cited in terms of average ticket was number of items in the basket. Just kind of generically kind of what are the top two or three items that you're doing to drive the items in the basket? Because obviously, there has been a pretty big inflection in the average ticket performance in the last two quarters.

Scot, this is Steve. Here's what I would tell you. There has been a concerted effort here to work on average ticket. Our store teams have put together some contests, and it's all about add-on selling. It's interesting, when you hire your customer, you're not hiring professional salespeople. You're hiring people just like yourself, quite frankly, that are customers. And by giving them confidence that they can recommend products to customers, that goes a long way. And so we're seeing, from a store operations side, some benefit in adding more to the basket. And another thing we implemented on the technology side, we haven't talked much about this, is multiples. We're now able to enforce multiple purchasing. And during the quarter in our Center Court Events, we had a Buy More and Save event. And it's where you come in and you buy 3-for or 4-for (49:32). And now that we're able to enforce that, we're finding that people are taking full advantage of that opportunity. And between that and some other things that we're doing internally, we're really seeing the items per transaction move up.

Very helpful. Thanks, guys

Thank you.

And next, we'll go to Zach Fadem with Wells Fargo.

Hey, good morning. Appreciate all the...

Good morning.

...incremental color on the Neighbor's Club. But is there any way to isolate what the impact of the program has contributed to comps in the quarter and year? And at this point with nearly 10 million members, what percent of your sales would you say are being derived from Club members today versus the potential ahead?

Yeah. Well, this is Steve. And we've done some work. First off, the whole collection of all the efforts we're putting forth, whether it be the investments we've made, the initiatives, some of the things I just talked to Scot about, they all add up to the 5.1% comp. And we're not really breaking and isolating all those apart. I will tell you that we do see continued momentum in the Neighbor's Club program. It's still in the very early stages of what the opportunity is in front of us, to be quite frank with you. And we haven't quantified the specifics relative to the actual incrementality of all the communication that we've been sending out. We are seeing more per visit with these customers. We are seeing more frequency from these customers. So, we know that there is a benefit there. And then, the second portion of your question had to do with the percent of sales. What I can tell you, that percent is growing. We have not communicated what that looks like publicly at this point as it continues to scale. But with 10 million members, you can imagine, it's probably a pretty good percentage of our business. And I suspect in the future, we'll have more dialogue around what that might look like.

Got it. Thanks. That's helpful. And just quickly on your online orders, any callouts in terms of basket size or customer frequency compared to in-store orders?

Sure. This is Steve again. I will tell you our online orders are typically significantly higher than any given transaction that takes place in our store. Greg mentioned earlier that about 70% to 75% of those orders are picked up in-store and with about a 20% attachment rate. So, we see a real benefit of giving that customer an opportunity from a convenience standpoint to go online, buy, pick up in store, have shipped to store, or ship to home. Just a couple of other quick things I would note on that. We're really excited about the fact that our web visits are up about 30% year-over-year. Unique visits are up double digits. And our store locator – and this is the one that I always go back to and why it's so critically important to have the website that we have, and the traffic. Our store locator hits were up 50% year-over-year. And what that tells me is there's a lot of customers who may have never gone to a Tractor Supply Company store before, but may have done some research and said, you know what? I'm going to check it out. They start with the website, and they migrate to the store. And so, we're seeing a lot of momentum here.

Thanks, Steve, appreciate it. Thanks, guys. Appreciate the time.

Thank you.

And next, we'll go to Peter Keith with Piper Jaffray. Peter Jacob Keith - Piper Jaffray & Co.: Thanks. Good morning. Great quarter, guys. I wanted to dig...

Thank you, Peter. Peter Jacob Keith - Piper Jaffray & Co.: ....dig into the inflation trend a little bit. It's continued to accelerate here with Q3. Hearing in the channel that some of your large animal feed branded suppliers are now pushing through price increases. I guess, could you confirm that? And how should we think about the inflation trend looking forward in terms of continued acceleration?

Well, I'll start. This is Steve. I don't know if we get into specifics about individual categories or vendors. I will tell you that Tractor Supply has significant purchasing power. So maybe what our competitors are saying is one thing. I'm not going to necessarily suggest that we follow those same trends. In terms of inflation in general, I would tell you that a lot of inflation rises and falls based on commodity prices, which are fairly easy to track. We track those on a regular basis and work with our suppliers based on the trends that we're seeing. So, I think it's a better gauge probably to look at the quantifiable data rather than the subjective.

Peter, this is Kurt. I'll follow up with that on your – second part of that question. We've seen the inflation rise slightly, it was about a 75 basis point impact in Q2 to about a 90 basis point in Q3. We do expect inflation at this point to continue, perhaps, somewhere around those ranges into Q4. As Steve mentioned, principally in the commodities, looking out, this is very fluid. It's hard to predict. You may start to see some inflation beyond just the commodities as the macro cost pressures start to put emphasis across other categories of it. But we'll continue to balance keeping competitive pricing for our customers as well as managing the margins for our investors. And we've been dealing with inflation and deflation and we'll continue to manage pricing and margins to be rather consistent. Peter Jacob Keith - Piper Jaffray & Co.: Okay. That's helpful. I'll stick to Mary Winn's rule, and thank you very much.

We appreciate that.

Much appreciated, Peter.

And next, we'll go to Peter Benedict with Baird.

Peter, are you there? Peter S. Benedict - Robert W. Baird & Co., Inc.: Hi, can you hear me?

Yeah, go ahead.

Yes, now we can. Peter S. Benedict - Robert W. Baird & Co., Inc.: Sorry about that. Just a question around labor management and the opportunities you guys have to use systems or technology to be a bit more efficient, whether that be in the stores or in the distribution centers. That's my first question.

Peter, this is Kurt. We feel good about where we're positioned on labor. I mean, this is certainly a challenging one for the entire environment. But specific to Tractor Supply, we feel good. And I'll mention a few things that we're doing with that. Like great retailers, in a situation like this on labor, you focus not only on managing your wages specific to the market, but you focus on productivity. And we're driving change in our profit improvement initiatives to help offset wage pressures. You've heard us talk about investment in labor hours and wages in the past couple of years. Our focus going forward is laying the foundation for the productivity. And that's a key part of our profit improvement initiative, focusing on that. We'll be utilizing the labor scheduling and task management as well as initiatives that were actually in certain test stores today, testing and adding science into taking work out of certain task functions so that our team members are more focused on serving customers. We believe the combination of those, all participate in helping us being able to offset challenging labor pressures. Peter S. Benedict - Robert W. Baird & Co., Inc.: Okay. That's helpful. Then maybe one for Steve. Just an update on kind of the private brand efforts, where you see the most opportunity for new categories or products to get some private label, or private brand exposure, and then also maybe line extensions? So just your latest thoughts around that, Steve. Thanks.

Yeah. Well, that's one of our key strategic go-gets on the merchandising front. And I will tell you the team's made some great progress. We've seen ourselves expand in a couple of different lines, including the 4health line. We've recently expanded the Retriever line to a Mossy Oak look, and we think that there's more upside across the entire four walls of the store, to be quite frank with you. I think the bigger challenge that we've got is not just expanding the brands and adding new ones, but marketing them. Now, that's something the team's doing really a lot of right now behind the scenes. And I would tell you, this is where the digitization of our business can really take hold. So very cost effectively, we can build out small vignettes and videos, get them out to our consumer using the social media platforms that we have in the engagement with our customer. And I would tell you, Peter, that we probably have more opportunity in marketing what we have than just expanding more of the brands out at this point. Peter S. Benedict - Robert W. Baird & Co., Inc.: Okay. Great. That's helpful. Thanks, guys

Thanks, Peter.

Thanks, Peter.

David, I think we've got time...

And we have time for...

...for one more call.

We have time for one more question. Next, we'll go to Brian Nagel with Oppenheimer. Brian Nagel - Oppenheimer & Co., Inc.: Hi. Good morning. Thanks for slipping me in.

Good morning, Brian. Brian Nagel - Oppenheimer & Co., Inc.: Nice quarter.

Thank you.

Thank you. Brian Nagel - Oppenheimer & Co., Inc.: Since we're at the end of the call, I'll keep it pretty quick. But just with regard to weather, I think, Greg or Steve, you commented when talking about the Q3 period that you benefited from, I guess, it was an elongated summer season. But how should we think about the trade-off between that benefit and then what was likely a slower start to the cool temperatures later in the quarter? And then, at least it seems here, I mean things have – now things have gotten more seasonable, cooled down early in the fourth quarter. I mean, we could just kind of think about how that dynamic – how it impacted Q3 and how should we think about it in Q4?

Yeah. Brian, this is Steve. Here's what I would tell you. You're looking at the tale (59:39) of both sides. So when I say that, what I mean is that the spring-summer at the very end of the quarter makes up a very small percentage of the total. And the cold winter at the very beginning of the fourth quarter makes up a very small percentage of the overall quarter in fourth quarter. So, if you really bookmark those two, you're not looking at a tremendous amount of material impact. That's how I would phrase that. Brian Nagel - Oppenheimer & Co., Inc.: Okay. That's fair. I appreciate it. Again, thanks for the nice quarter.

Thank you.

Thanks, Brian.

That will wrap up our call. We really appreciate you joining us today. We look forward to having you join us on our next quarterly earnings call in January of 2019. As I mentioned at the start of the call, please mark your calendars for our Investment Community Day to be held May 14 and 15 in Nashville. We will be sending out more details in the coming weeks. Please feel free to reach out to me with any questions, and we thank you for your interest in Tractor Supply.

Thank you.

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