Good morning, my name is Devin and I will be your conference operator for today. At this time, I would like to welcome everyone to the UNFI First Quarter Fiscal 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Vice President of Investor Relations, Steve Bloomquist, you may begin your conference.

Good morning everyone and thank you for joining us on UNFI's first quarter fiscal 2023 earnings conference call. By now you should have received a copy of the earnings release issued this morning. The press release and earning presentation, which management will speak to are available under the Investors section of the company's website at www.unfi.com. We've also included a supplemental disclosure file in Microsoft Excel with key financial information. Joining me for today's call are Sandy Douglas, our Chief Executive Officer and John Howard, our Chief Financial Officer. Sandy and John will provide a strategy and business update after which we'll take your questions. Before we begin, I'd like to remind everyone that comments made by management during today's call may contain forward-looking statements. These forward-looking statements include plans, expectations, estimates, and projections that might involve significant risks and uncertainties. These risks are discussed in the company's earnings release and SEC filings. Actual results may differ materially from the results discussed in these forward-looking statements. And lastly, I'd like to point out that during today's call management will refer to certain non-GAAP financial measures. Definitions and reconciliations to the most comparable GAAP financial measures are included in our press release and the end of our earnings presentation. I'd ask you to turn to slide six of our presentation as I turn the call over to Sandy.

Thank you, Steve and good morning everyone. We appreciate you joining us for our first call of our new fiscal year. Our focus continues to be executing our Fuel the Future strategy, underpinned by our priority of bringing more value to our customers, improving the way we partner with suppliers, creating unmatched career opportunities for our associates, and supporting our communities in the planet. As you will have seen in our release, we started the fiscal year with a nearly 8% increase in sales, as more customers are buying more categories from UNFI than ever before. The competitive advantages I laid out in September, namely our scale, vast distribution network, data and analytics capabilities, diversity of customers and suppliers, and growing management talent have led to a strengthening customer pipeline. We are investing in an elevated level across the company to better serve our customers, including training and upskilling for our customer support and sales teams and we're beginning to see early results. We continue to gain share of our addressable wholesale market and we're confident that we'll be adding more new customers and new categories and services with current customers during the back half of this fiscal year. Our sales growth this quarter also reflects a complex operating environment characterized by persistently high levels of food inflation and elasticity as consumers increasingly look for ways to stretch their household budgets, translating into unit weakness across much of the industry. Changes to the grocery landscape will inevitably continue shaped by both macroeconomic factors such as inflation and supply chain, as well as changing and evolving consumer preferences. For the past two years, UNFI's customers have had to reassess and adapt nearly every facet of their operations and we've done that right alongside them. Our customers face growing competition and changing…

Thank you, Sandy and good morning, everyone. As you heard from Sandy in the first quarter, we delivered increased sales, gross profit dollars, and adjusted EBITDA, all of which keeps us on pace to meet the full year outlook we provided in September. Turning to slide eight, let's start with net sales, which grew by nearly 8% in the first quarter and totaled $7.5 billion, setting a new first quarter record. Wholesale growth included inflation, net of elasticity as well as new customers, and new categories with existing customers, partially offset by a decline in unit volumes. In wholesale, we delivered widespread sales growth across all three primary channels, which grew by close to 8% on a combined basis. This includes incremental volume from new customers added over the last year, additional categories and new store openings in supernatural, and increased item and category penetration with existing customers. As Sandy mentioned, we expect contributions from new customers and existing customer expansion to increase in the back half of the year. Sales in our retail business increased by about 2%, which was driven by higher average unit retail pricing. Our Cub banner, which remains the market leader in the Twin Cities continues to generate strong sales in its pharmacy, which shows the trust and confidence shoppers place in the brand. We're also continuing to grow our e-commerce business at Cub as we look to migrate consumers to a new and enhanced platform. Flipping to slide nine, adjusted EBITDA totaled $207 million up 3.5% over last year's first quarter. Our gross profit dollars prior to the LIFO charge in both years increased by $64 million over last year's first quarter and gross profit rate declined to 20 basis points, driven by changes in both wholesale customer and product mix. Within our retail…

[Operator Instructions] Our first question comes from John Heinbockel with Guggenheim.

So, Sandy, let me start maybe 2 longer-term questions. One, the changes to the merchandising organization. Maybe talk to the key structural changes and what you think the benefits of that will be? And then secondly, when you think about the pace at which you can get automation rolled out, what's your thought process on that today versus maybe three months ago?

Thanks John. Good morning. The merchandising changes we made, we took our two strongest leaders who deal with suppliers end-to-end from procurement all the way down through working with customers in markets around the country. and we link them together with all of our regional merchandising organizations. And the idea is that our customers obviously operate locally. There are local opportunities that we are working with them on, on a regular basis. And what we've been working on is improving the link and visibility between local opportunity and the suppliers themselves, so that we can facilitate their ability to see the opportunity and facilitate their ability to invest in it and get a return, which creates a positive cycle in terms of growth. And the leaders are very experienced. They were in place, but we just made the organization much more seamless, so the process works better. Regarding automation, while our implementation schedule on automation is obviously competitively sensitive. The way I would think about that is that we will begin the implementation in fiscal 2023, we're going to learn a lot about that based on kind of working through the process. And then we will implement as quickly as we can over the next few years assuming that we can continue to validate the strong returns that John talked about and the customer benefits that were designed to deliver through the automation initiative.

Great. And then maybe my follow-up, if I think about your commentary on pipeline, right? Maybe speak to your visibility now because it sounds like there's a good deal of visibility in the second half. Your visibility maybe versus a quarter or two ago? And then where is the visibility greatest right? What do you think the impact, is it going to be new customers? I know nothing is like [Indiscernible], but new customers or new categories with existing customers? Where is the visibility greatest?

Sure. And John we've been commenting in the five calls that I've been a part of about the strength of the pipeline. But obviously, one of the benefits of a pipeline is converting that to new customers or new categories. And as we did comment in the call, we have some visibility to that in the second half. I would always want to say when talking about new opportunities, though, that the most important thing we focus on every day is our existing customers, making sure that we're serving them well, we're merchandising with them well, and we're helping them compete and succeed in this environment. And probably the most positive thing about our pipeline is the majority of the opportunities are expansion with existing customers, which is good for a couple of reasons. First, it leverages our infrastructure that we're using to serve the customers. And secondly, because it reflects the healthy relationship that we're building. And so I would say if you were to look at where the biggest opportunities that we see are and where our near-term visibility is, it would be more of that kind of expansion with existing customers rather than new ones, although there are some new ones as well.

Thank you.

Our next question comes from Leah Jordan with Goldman Sachs.

Hi, good morning. Thank you for taking my question. First, I wanted to start off on gross margins. I saw they were down a little bit in the quarter. You called out the mix shift to larger customers. Should we think about that pressure kind of persisting throughout the year? Or is there anything specific about this quarter that we should keep in mind?

Thanks Leah for the question. I mean, effectively, we're focused on driving healthy growth in gross profit dollars. And the reason for that is that we look at every single one of our customer agreements with disciplined eye for economic returns. A lot of our growth in the first quarter came with some of our bigger customers. But over time, I think you saw that all of our channels grew. And so there'll be some fluctuation, but I would describe what you saw in the first quarter is minor and just more a function of the temporary growth drivers in our customer file.

Okay, great. Thank you. And then my follow-up is kind of around the topline, building a little bit off of that pipeline discussion. You guys have been pointing to kind of 4% topline growth for the year, a little elevated this first quarter, how are you thinking of the balance of food inflation and the outlook of that through the year with volumes as well as the new opportunities in the back half?

Sure. Well, like all people in my line of work, we're interested in what the future holds in inflation, but we're not economic experts. So, -- and I didn't just become one over the last month or two. I think from a growth perspective, we do expect that inflation will level off and moderate some in the go-forward periods. But our focus is on driving the things that we can control, which is taking care of existing customers, merchandising well, and then activating our pipeline for growth and from our perspective, our growth prospects against the $140 billion addressable market that we've identified is very strong. The mix of inflation and elasticity and units -- I mean, our unit performance in the quarter was down 3%. We saw about10% inflation, down 3% was in line with the total industry, including some of the large box retailers that have been driving growth because of value in the more recent past, and we're continuing to work really hard to make sure that our customers are as competitive as they possibly can be. And by virtue of that, that of course, drives our ability to earn more business with them as we go forward. So, those are the pieces, the way they add up is in line with our guidance that we reformed this morning.

Great. thank you.

Our next question comes from Andrew Wolf with CL King.

Thank you. Good morning. Wanted to ask about industry-wide supply chain issues, which are noticeably not in your press release this quarter versus last year or so. So, -- and I'm kind of -- context here is are we fastly approaching or are we, kind of in a normal environment for the trade and how the trade is going to market up and down the supply chain? And the second part of that is -- so first, the general observations on the supply chain and normalization. And secondly, assuming we're -- that's the case, we're approaching some type of normalization. With volumes down 3% for the industry, what are the manufacturers now that they can sell product reliably, but with negative volumes. What's their appetite for turning up their promotional spending through you and through the retailers directly?

Hi Andy, the way I describe the supply chain environment is that it's improving, and it's somewhat gradual. We talked a little bit about staffing being the best it has been since the beginning of the last fiscal year. In fact, our supply chain vacancy rate is down to 6%, which is almost fully staffed. We saw marginal improvement infill rates in the quarter, sequential from Q4 by about 1.5% year-over-year, about 4%. So, I would say we're seeing improvement in stabilization, which has allowed us to activate the kind of supply chain program that you'd expect around improvement, process normalization, training, tactical use of technology and then more strategic use of automation. And that's why we're confident that with all those actions, we should see an improvement in our operating rates as we go forward, expense rates and continue to see improvements in our service to our customers. And it just bears remembering, in the first quarter of last year, which we're comparing to in this quarter, there was a lot of distress in the supply chain, which got even worse than the second quarter. So, we've taken a lot of action around people and recruitment and staffing. Our first priority was making sure that we were serving our customers in a stable way and in a reliable way. And I would say we've made some improvements. But I think collectively, our team and I, working with our suppliers believe, we have a very long way to go and a rich opportunity to improve going forward. Regarding promotions, we -- what we're seeing in this environment is private label brands, our own brand program performed very strongly in the first quarter, and we outgrew private brands in the broader market. We've added some brand and commercial talent to the private brands group. And we have made it a significant priority to make that program significantly more competitive and to sustain that kind of outperforming growth rate. Where all that comes back to our suppliers is through their strategies and our efforts to make customer opportunity more visible to them, we do expect promotions to improve sequentially. We hear that, that's in many of their plans, and we're continuing to want to make sure that they can see a good return from those investments because in the end, unit declines, which equal brand occasions is not good for their business over a sustainable basis. And so we want to work really hard to attract that investment, and we expect it to improve going forward.

Thanks. And John, I believe it's probably for you, just a quick follow-up on the accounts receivable program you talked -- you quantified, I would guess that's pretty attractive financially. So, I don't know if you could speak to any of the terms of that. But also kind of economically, if you're selling your receivables, it would seem like at least the internal activities around collections and accounting for receivables, stuff like that. At least some hours would come out, if not some personnel. So, is there a direct bit of an economic advantage to the firm as well as whatever the financial aspects of it are.

No, great question. The -- so on the AR monetization, we -- all we did was monetize the receivables, the responsibilities for the credit and the collections, et cetera, that's still with UNFI. So, there's no additional productivity within our SG&A functions as a result of the AR monetization. But what it does provide is just away for us to reduce our cost of borrowing using the working capital that is tied up on our balance sheet. It is -- by far, it's our cheapest borrowing option, including our ABL, which has historically been our lowest borrowing option. So, for us, it's just another tool for us to optimize our cost of capital, and it's relatively common within our industry, as you know.

All right. Well, thank you for that. Appreciate it.

Yes. Thank you.

Our next question comes from Bill Kirk with MKM Partners.

Hey, thanks for taking the questions. I want to go back to margins. If I remember 2Q of last year correctly, there was some rather significant COVID absenteeism that resulted in extra overtime pay or even having to use some third-party for the quarter. So, I guess, as you're lapping that, how should we think about the incremental margin that would come back from the P&L if that type of disruption does not happen again?

So, Bill, this is Sandy here. What I would say is your recollection is obviously correct. And that's a little bit of the history that I was going over. What we saw in the first quarter of last year was buildings trying to run without enough people. And there was a fair amount of distress in our operating system. We were very focused then on addressing the vacancy issues. And then, of course, Omicron made the second quarter very difficult over the holidays and so we had to rely on a lot of third-party labor. As the year progressed, we've been able to replace third-party to a large degree with our own employees, and we've seen some other inflation around buildings and maintenance and supplies, et cetera. But the net effect of that is that we saw that sort of peak in the fourth quarter of last year, and we sequentially improved in the first quarter versus the fourth quarter. And as John mentioned, we expect based on the programs we have, the comparisons and more importantly, the general staffing and improvement agenda that we have to see sequential improvements from the first quarter, which will start to compare more favorably to prior year in the second quarter.

Got it. And so I had a follow-up also on the invoice factoring. You're doing it within the proceeds go to pay down debt, but it's happening, I think, right around the leverage ratio that put -- would put a little restrictions on you? So, does the invoice factory have anything to do with those -- getting those covenant restrictions out of the way, getting that leverage down quickly? Or is it as you kind of said more cost of capital play?

It's more of a cost of capital play. From our perspective, the ability to monetize those and get that lowest cost of capital for us just that economic value for UNFI and as shareholders is the primary focus.

Okay. So it's not we needed a lower leverage ratios really quickly even quicker than the inventory would turn. Okay. Thank you.

That is correct.

Our next question comes from Eric Larson with Seaport Research Partners.

So I just want to focus a little bit on retail. Your sales were up a little bit less than, I think, 2% in the quarter. And it just seems that given the inflation that we have in the industry, that number should have been a little higher. Is there something with the retail side? I know it's not a big part of your business, but I would have expected revenue to be a little stronger there. Can you have some comments on that?

Sure. I mean our retail business performed in line with our expectations in the quarter. I think one of the things to keep in mind is that our retail business is largely concentrated in one market, which is Minneapolis, St. Paul. And we are the market leader there, but it's a very competitive market, but we're excited with the plans we have for our brand. We'll be opening a couple of new stores and the future, we think, is bright. The customer response to some of the new programs we have there has been positive. So, I would view that as a continuing profitable growth story, and we have positive expectations for both Cub and the Shoppers in the Mid-Atlantic.

Yes. And so on the shoppers on the Shoppers commentary, I think John said that you reacquired three Shopper stores and reopened them, I think it was actually dilutive a little bit to your EBITDA in the quarter. I'm assuming that's just like a one-time -- this doesn't signal a change in strategy of how you want to approach retail. I'm guessing. So, I'm curious as to the reacquisition of those three Shopper stores.

Sure. Let me comment on the strategy, and then I'll let John confirm your question on EBITDA. But no, our strategy for retail hasn't changed. We are optimizing it that translates to driving profitable growth and optimizing the profitability. What we saw was an opportunity to reacquire three stores that were -- we saw a growth opportunity and then we decided to act upon it. But our strategy for optimizing retail for profitability and also as a learning lab for our business has not changed at all. John, do you want to comment about the EBITDA.

Yes. No, absolutely. And what you're suggesting, Eric, exactly right. Those stores came right back in towards the end of Q3, we had to incur some of the start-up costs just to get them back into the appropriate condition to open them up before the holidays, so it is, from a dollar or a rate perspective, it is dilutive just to incur those costs right at the end of the period.

Okay. Thanks guys. Appreciate the commentary.

Appreciate. Thanks Eric.

Our next question comes from Kelly Bania with BMO Capital.

Good morning. Thanks for taking our questions. Sandy, I wanted to just go back to the discussion of volume and inflation. I think you cited a volume figure of down 3%. Just wondering if you could help us unpack how Key Food is tracking relative to your expectations and maybe impacting that number? I'm just trying to kind of map to an underlying volume figure, and just as you look at volumes, also just some more color about the categories that are working or that are declining just a little deeper dive on the volumes here.

Sure Kelly. As you know, we don't comment about individual customers. But the way I try to frame the minus 3% is obviously the consumers reacting to significantly high prices, and that's happening across the market. And so there's some negative elasticity there. Our system, if you think about all 32,000-plus outlets are actually when you add them all together, performing in line with the market that includes the big box retailers and the cloud stores, et cetera. As far as expected performance from past customer acquisitions, they're in line. Our customer file is growing and it's healthy. And in fact, as we mentioned earlier, we have some new growth on tap for the second half of the year. I think one thing I'd like to digress on for just a second and then see if you have a follow-up is that the reason why the customer file and gaining new customers and serving existing customers is so important, is that as we drive its growth, obviously, we get sales and profit growth out of it. But we also created an even more attractive opportunity for suppliers to invest to drive their growth across an incredible range of very innovative, very agile, locally and regionally positioned retailers, and that supplier investment is something that drives the retailers' competitiveness, drives higher sales and profitability growth, and that then allows us to make our cost base more efficient in line and in addition to the programming we have to drive process improvement, technology improvement, and ultimately, automation improvement. So the customer filing UNFI is healthy. Our existing customers are competing like crazy across the country, and that's why I spend so much time focused on it as a strategic priority in the business.

That's very helpful. I guess my follow-up would be just going back to this robust customer pipeline, I guess a couple of questions there. Is there any specific factors that you are thinking that may be driving that? Or is this just a typical RFP kind of process, and what is baked into your guidance? Or would any new customer wins be upside to your guidance in the back half?

Okay, Kelly, I'll let John comment on guidance. But what I would say is and I mentioned this before, the driver of our pipeline improvement is going to be expansion with existing customers, which is the best kind of growth for the reasons I said earlier. And clearly, how we're servicing our existing customers is what drives that. Now there are also new customer opportunities in our pipeline. And as we've mentioned all the way back to Investor Day, we see $140 billion of opportunity out there. So, you can find opportunities of every kind. But the short-term visibility that we have that's driving ours is expansion with existing customers. John, do you want to comment about how that all figures in guidance?

Yes, happy to, Sandy. The way we think about guidance, Kelly, is we come back to that core of the Fuel the Future, which is that we would grow faster than the market. And so we have anticipated some of this within the guidance that we provided, and we are comfortable with where we are, as Sandy and I said in our script, we're comfortable with where we are to affirm that guidance for FY 2023.

Okay. Thank you. And if I could just squeeze one more in, just on the services, given that was a big focus back in the June meeting. I think I heard that services were up double digit, but can you share with us any metrics today, how you are measuring the success of that? What percent of your customers are engaged, which particular services are attractive in the current environment or working? Just a little more color on the service strategy.

Sure Kelly. And you did hear right. We had a strong topline and double-digit bottom line growth in our services business in the first quarter. We have, as you know, added management focus to the services platform, which includes brands and services and e-comm and the digital interface with our customers and we're extremely bullish about it. It's part of that flywheel of our business because the more customers we have, the more demand we have for services. In this environment, the way I would think of our over 100 services is they either help the customer drive their customer experience and growth or they help our customers save money. And I would say the latter is particularly important right now and so we see demand for a wide range of the services. We continue to create new services in response to customer demand. And we're -- with the leadership we put in place over services and brands, we're very bullish about the future of that part of our business. And obviously, it's profitable for us because it creates lots of value for our customers. So, there's a strong economic reason for our attention there.

Our next question comes from Scott Mushkin with R5 Capital.

Hey guys. Thanks for taking my questions. So, Sandy, you've been in this business a really long time. So, buy -- question I keep getting from both buy-side customers and also our consulting clients is take us to the end of 2023, if the Fed is successful driving down inflation, maybe we get some deflation in the unemployment rate up? What does the business look like?

It's a good question, Scott. I have had a lot of experience in this industry, but an economist, I am not. But let me give you the core assumptions we're making. And that is that this environment and the retail competitive environment is going to remain very intense. The one thing that's been true across all of my experience is that retailers are very innovative, they're agile, they change, and they compete incredibly hard with each other. So, whether we're dealing with inflation or supply chain challenges, the one thing the industry has built in the last three years and I think UNFI has done a nice job of is becoming more agile. Our focus is increasingly on what do we need to be doing to create unique value for our customers to help them compete, grow and be more profitable. And that's what we're doing. And the interesting thing and one of the most exciting things for me is I joined UNFI 15 months ago is learning about our customer base and how they're segmented. They're ethnically segmented, they're top value, low value, they're regional, there are stores in small towns, and they represent a very, very dynamic group of retailers and a tremendous opportunity for suppliers, because most of my experience, as you know, was as a consumer products company person. And if I could have seen the customer opportunity that lies behind the UNFI support service into the retail community that we serve, it would have excited me to know end. And part of what we're doing now is working with our suppliers to help them see the customers that are there so that they can invest and get a great return. So, I didn't really answer your question because I don't know the specific answer, but what I think we can assume is that it's going to be very competitive and that it's going to be up to us to be increasingly value-added in day-to-day operations, and in the services and brands we provide. And then finally, what I would say is we continue to see in the capability agenda that we talk about an immense opportunity for our own improvement, improvement that will drive more value for our customers, but also significantly more efficiency in our business to create more value for our shareholders. And that roadmap of opportunity for improvement continues to grow as I get more experience in this job.

That's helpful. Maybe a little follow-up to that because you were talking about like the company-specific initiatives, the winning of business if your core business or even the industries, I'm not really specifically thinking of UNFI, but like if your core -- the core business is units down, which it is right now, pricing down, but labor costs up, which is really possible as we get to the end of calendar 2023, it's possible, maybe strongly possible. What I mean, is there enough in that -- in your business to offset some of those negative trends? Is there enough juice there with the company initiatives, maybe some other costs coming down where that's okay. We had someone that's a disaster, not for you guys, but for the industry.

Yes. I mean, Scott, at this stage, I think there is a very significant relationship between prices being up strongly and the unit elasticity that's creating weakness in units. If your scenario is that inflation starts to abate, the pressure on units year-over-year will also abate. Now, there's the economic factors and there's competitiveness factors in and around retail. But I don't think that we are headed to a place where prices will be down and volume will be down. I see us in a place where price is up now. There's pressure, the economy is softer, there's pressure on consumers, and so elasticity is giving us a negative unit picture. But the consumer products companies will want to grow their business. However, their revenue management strategy guides them and that will include some combination of volume and price and our job will be to manage that in the best possible way to keep our customers competitive. In parallel to that, as the supply chain incrementally stabilizes, and I think there's still, as I mentioned, a long way to go, we have in place a series of more progressive programs around process and technology and automation and improvement and efficiency that will keep our expenses improving in relation to sales on a sequential basis. So, we're going to play both sides of that. But at the heart of it is our ability to serve our customers and to have more customers and more categories as we go forward, which drives the flywheel that I talked about earlier.

All right. Great color. I have more questions; I'll just take them offline. Thank you.

We appreciate it. Thanks. Thanks Scott.

And our final question comes from Peter Saleh with BTIG.

Great. Thanks. Most of my questions were asked and answered. But I did want to come back to a comment you made earlier, Sandy, on value. I think you mentioned consumers are seeking more value these days, but not necessarily the lowest price. Can you elaborate on that? Were you alluding to the private label or something else? Just trying to better understand that comment? And then I have one more follow-up. Thanks.

Yes. Sure, Peter. Yes, I believe that -- I mean everybody on this call understands that value is the relation of what you get versus what you have to pay. In this environment, I think it's important for consumers to have options. That's what our customers are telling us. Options can take the form of our private brands program, which I mentioned we're investing in to make sure that we have the private brand offer that gives our customers the products and brands that they will want to merchandise to give their shoppers the best possible choice given the retailers' merchandising strategy. And that's a huge part of our focus there. The other comment I'd make, and I talked a little bit about changing and improving the way we do local merchandizing back to our -- linked all the way back to our suppliers, gets into a little bit of how their portfolios are deployed and what their brand pack architecture is and how that changes as the month goes on, for example, later in the month, right before federal support comes out, we might need smaller packages being merchandised at lower price points just to help the consumers where they are in the month. So, there's a set of levers around value, but in the end, our particular initiatives to support it, our private brands program and our merchandising improvement, working with suppliers and our retailers to make sure that their offer fits their customer base's needs throughout the month.

Great. Thank you for that. And then just lastly, I think your prior guidance on inflation for FY 2023 was low to mid-single-digits. Does that still hold for this year? Has that changed at all?

Yes. So, from my perspective, by affirming guidance, we're basically maintaining that. That guidance for the inflation was for the full year that we talked about. We're one quarter in. We don't want to make any adjustments on that right now. We still anticipate how that inflation is going to play out for the next eight or nine periods and baked into our affirmation of our guidance is a continued assumption.

Great. Thank you very much.

That concludes the question-and-answer portion of the call. I now turn the call back over to Sandy Douglas for his closing remarks.

Thanks operator and thanks to everybody for joining us this morning. I hope you've heard and take away from today's call that UNFI continues its relentless focus on improving the service we provide our customers and has well thought out plans to drive growth and efficiencies this year and beyond, all leading to strong returns for our shareholders. For our customers and suppliers, we thank you for your continued partnership and the business we do together. For the UNFI associates listening today, our thanks to each of you for everything that you do for our business, our customers, our communities, and each other. And for our shareholders, thank you for the continuing trust you placed in us through your investment in UNFI. We look forward to updating you again after our second quarter.