Good afternoon, everyone. Thank you for joining us at the Goldman Sachs 27th Annual Global Retailing Conference. I'm Chandni Luthra, the U.S. Discounters Analyst, and it is my absolute pleasure today to introduce members of the management team of Big Lots, and to moderate our fireside chat. Big Lots is a discount retailer with roughly 1,400 stores nationwide. It offers value priced merchandise across multiple categories and is undergoing a number of exciting initiatives to elevate the business, both in store and online. I am really happy to have on the call today, Bruce Thorn, President and CEO. Bruce joined Big Lots in 2018 as the sixth CEO of the company since its founding in 1967, and has a wide array of experience in leadership positions across multiple retailers. We also have with us on the call today, Jonathan Ramsden, EVP, CFO, and CAO.
Jonathan was appointed to his current role at Big Lots in August 2019 and comes with over 20 years of experience in senior executive roles with U.S. public companies. Bruce, Jonathan, thank you so much for joining us today. Before I start.
Thank you, Chandni.
Thank you, Chandni.
Before I start with the questions, I'm just going to quickly hand it over to Andy Regrut, VP of Investor Relations. Andy, the floor is yours.
Thanks, Chandni. We really appreciate the opportunity to participate in this year's conference. Before we get started, I'd like to remind everyone that any forward-looking statements we make on today's call involve risk and uncertainties and are subject to our safe harbor provisions as stated in our press release and our SEC filings, and that actual results can differ materially from those described in our forward-looking statements. All commentary today is focused on adjusted non-GAAP results. In case you missed it, we recently reported the results for our second quarter of fiscal 2020.
Our earnings press release is available in the investor relations section of our corporate website, and it includes reconciliations of GAAP to non-GAAP adjusted results. In addition, a replay of our Q2 earnings call is also available on the corporate website through tomorrow, September 11th. Chandni, I'll now hand the call back over to you to start the Q&A.
Thank you, Andy. Bruce, Jonathan, let's start from the top. 2Q was obviously an exceptional quarter for you, and you managed to maintain great momentum in August, even as fiscal support dissipated. How should we think about any potential pull forward of demand in 2Q, especially given the large discretionary nature of the offering?
Hey, thanks, Chandni. I'll start this first, and Jonathan, if you want to add a few comments afterwards, that'd be great. First of all, I just want to thank everyone for joining us today. Secondly, this second quarter, first quarter this year has been unprecedented with this pandemic. It's been an incredible time for all of us and a very difficult time. Having lived through it now as an essential retailer and now competing in Q2 with competition opening up, I think that we're well positioned if there's a silver lining coming out of this. We are showing up very well for our customer, Jennifer. Q2 was unprecedented results, 31.3% comp, double-digit comps along with growth across so many categories, was just unprecedented for us. In terms of a pull forward, I think that what we've seen is an increase in our customers.
We're up year-over-year 9% in terms of customer growth. Our rewards enrollment is up 60% versus last year. Active membership continues to grow. We are growing across multiple categories, and that's been great for us. The stimulus obviously helped us, but our strategy, even before this pandemic broke out, it positioned us well for success. Stimulus pretty much at the end of July had all been distributed. Unemployment checks stopped. As we said in our call a couple of weeks ago, while overall second quarter was over 31% comp, July, because we comped a Friends & Family Event without having that event because of social distancing as well as the 4th of July social distancing type of activity, we still were high single digits in July and then accelerated in August.
We're competing quite well, and we're really proud of how our strategies and our assortment are stacking up. Third quarter's off to a great start. We believe that right now that our assortment has really attracted new customers and reactivated lapsed customers because the focus has really moved from everyday essentials to how do I make my home better for working at home, schooling from home, and cocooning. Our value offer, from closeout to great own brands, has really allowed us to excel in Q2, and that continues in Q3.
I would just add a couple of comments, Chandni, to that. Again, thanks very much for having us today. It's nice to be here at the conference. Even pre-COVID, we were always confident that as we went through 2020, we would see an acceleration in comps because we knew we had things like The LOT! and Queue Line , Broyhill coming. We knew we had pantry optimization coming. We also knew that, again, pre-COVID, we were also accelerating our e-com efforts. We always had that expectation that our comps would be accelerating through 2020. To some degree, that's been getting masked by other dynamics that are going on and that Bruce just alluded to. We still are seeing those benefits flowing through in our underlying numbers. Maybe there's some pull forward. I guess, time will tell on that.
We still feel a confidence level that our underlying trend is going to be strong because of all those initiatives and the investments we've made to support them and drive the business forward. Then I think on the question of pull forward, I think there are going to be a lot of moving parts in the equation going forward. We're clearly benefiting from the spend shift to the categories in which we play, and we foresee that continuing for some time. As Bruce referenced, we're benefiting from bringing new customers to Big Lots. Whatever state we went into the crisis in, we feel very confident that we're coming out of it in a better place, regardless of whether there's a pull forward or not or what other factors may be near-term factors in our comps. We believe we're much better positioned for the longer term.
That's very comprehensive. Thank you for that. If I could switch gears to inventory. That's been a big theme and a big question for a lot of retailers here. Your 2Q comps were exceptional, but in terms of inventory, you spoke about leaner in-stocks constraining the business in July and August. What gives you confidence to manage in-stock levels in the back half and, what categories are you seeing more constraint, versus others, and when do you expect all this to normalize?
Yeah. It's certainly a more challenging environment than normal because of the lack of visibility and, I think there's no question that for us and many other retailers, that makes it more complex and challenging. On the flip side of that, I think we've also learned that, a couple of really important things. One, that we're able to operate with lower inventory levels and still drive very strong comps. I think as we talk about getting back to more normalized inventory levels, normalized isn't going to mean back to where we've historically been in terms of the spread between inventory and sales. We think we have the ability to drive a more favorable spread on that going forward. That's an important sort of caveat.
We are also making good progress in getting back to what we think is an appropriate level of inventory, as we move through Q3. I think things like seasonal were challenging in Q2. In particular, we had very early sell-through, strong sell-through on lawn and garden, for example, that made that challenging. We're working to get back to a good place. We feel confident we're on a good trajectory there. I think the other positive is that we've learned that we have the ability to be more nimble and reactive than we perhaps thought in the past, in both directions, whether we need more inventory or maybe less inventory at a certain point in time. I think we have a greater confidence level now than we did in the past about our ability to react to that in a more agile way and with shorter lead times.
Just to add a little bit to what Jonathan said, a little bit more color. Furniture, soft home, hard home, manufacturing plants, just given the way they produce and with close proximity of workers are still recovering from their shutdowns and social distancing. We've got great relationships both domestically and internationally, and they're coming back online in a nice way. That's been hand-to-mouth a little bit, but getting better. Seasonal, as Jonathan said, it's a good problem to have when you sell through your lawn and garden early. We are well positioned for Halloween and harvest and seeing very encouraging signs, which is usually a prelude to how holiday Christmas will play out. Food and consumables supply chain is pretty much returning to normalcy at this point, with the exception of a product like antibacterial wipes and some of the paper products.
Everyone has gone past the stockpiling and hoarding. I believe we're well positioned overall. Good relationships, good things going into Q3 and Q4.
That's great. Switching gears to closeout. In a way, you're basically going back to your roots as you've started playing more in the closeout space. What has been your experience so far? What are the kind of deals that you're getting access to and what categories do you see more opportunities in when you think about the closeout space?
Yeah, I'll start this one, Jonathan. Closeouts, I think many of you have heard me say this before. I've known this business my whole life, born the same year this company was born in Ohio. My mom's favorite store still is today. Our roots, our DNA has always been closeout business at a great value. In the last five plus years, the company really shrunk that assortment into just food and consumables where we penetrated anywhere between 20%-25%. Pre this COVID outbreak, it's something that Jonathan and I, as we continue to shape Operation North Star strategy, we felt that we needed to offer more extreme value and be more of a neighborhood discount value store than what we were over the last five plus years. It's something that we were leaning into, and with the outbreak and everything else going on, that just accelerated.
Just to give you some color on this, we are running year-to-date at 36% growth in closeouts over prior year. We're buying closeouts in all categories. Less seasonal at this point, just seasonal in and out business. We're seeing it play in numerous areas from apparel, bedding, appliances, food prep, pretty much across the board with great vendors, great products, and great opportunities. I think the thing about us is that if you think about why customers visit Big Lots, why would they put us on their shopping trip? It's really looking at it and why they come, and there's two major reasons. One, for everyday shopping, which might be 50 shopping journeys a year, or a destination shopping journey where they're trying to fit out a room or a makeover of their home.
That everyday shopping, Jennifer, if you will, we want to get more trips out of her. To do that means that you've got to have something better just than competitive name brand pricing. We've got to have the closeouts or engineered big buy alerts. We're adding that at an increasing penetration rate across all categories. The only thing that would really hold us back is our ability to continue a high-quality buyoff of those types of products, which we have not seen yet. We're at the top of every vendor's list now. Everyone knows we're back in it.
We've got good muscle from what we've done in the past. We've retrained all our DMMs, et cetera. Through our buyers, it's the art of the deal. It's a little different than normal procurement of product. We feel really confident about continuing to grow this in three and four, Q3 and Q4 and beyond. Really helping our Jennifers live big and save lots.
That's super helpful. Just sort of a follow-up to that. It's a question that sort of came up on the webcast. Thinking about closeouts, do you see a risk of alienating your core customer or any kind of risk to your core merchandising mix as you add more closeout product to your stores?
No, it's a good question. Once again, in food and consumables, we've been playing like that. What's nice is it's a huge differentiator because you've got what we're doing with pantry optimization, basically in entertainment, food focus, and consumable cleaning, home cleaning, is having those name brands competitively priced within pennies of mass merchandisers, but also then having a section that is closeout or big buyout alert in the same aisle that's 10%-40% lower. That's a compelling reason to put us on the shopping journey. That now is extending into soft home, hard home, et cetera, where many of the products we have is either an engineered own brands compelling offer or an off-price name brand that we're able to pick up that has high quality. So, it's not at all disrupting in terms of the category makeup and the vendors. It's only augmenting.
Keep in mind that closeouts by nature, and for most cases, almost all cases, it's accretive margin rate and the sell-through is very strong and there's no need to mark them down because they come in competitively priced. This is a very good all-around focus for us. Once again, the only thing that would hold us up is just making sure that we maintain a certain quality level, because we don't want to be selling new Broyhill leather sofas and having pillows that spell love, but with an A. Just because it's cheap doesn't mean we want to sell it. We want good quality product, and we're able to find that at this point in an increasing manner.
That's very helpful. Let's focus on the holiday period coming ahead of us. You have hinted at a pull forward in the shopping calendar in 2020. How do you plan to approach the coming season? When you think about the promotional backdrop, that's going to be very wide, perhaps, across different channels of retail, depending on the demand and inventory levels. How do you think about the promotional backdrop impacting your business?
Yeah. Chandni,
Go ahead, John.
Go ahead, Bruce. Oh, okay. Yeah. Chandni, great question. We certainly expect this is going to be a holiday season unlike any other. It'll be probably unpredictable in some respects. I think we're very focused on having plans that also have some flexibility in them so we can be reactive if we need to be. On multiple fronts, we feel good about coming into the holiday. We feel good about the assortments. As Bruce referenced, the early reads on Halloween and harvest have been good, and we think that's a good sign. Generally, we have good momentum in our business. We feel good about where we're going to be on inventory coming into holiday. Compared to last year, we've got much better e-com capabilities. We have same-day delivery through PICKUP Now, and curbside pickup and so on.
I think those are capabilities that we didn't have last year in the holiday season. I think they hurt us, particularly as we got closer to Christmas last year. We've also learned a lot from the last few months about different promotions and their effectiveness. As we've had to pull back from some of the full store mega events and replace those with smaller or more targeted events, we've learned a lot about the returns we get from those things.
As we think about our promotional calendar, we have a level of visibility and confidence in what different tactics are going to do to drive the business. We're laser focused on it. It's a top priority. We have great momentum, but we are very focused on making sure that we have the right promotions at the right time, that we have some flexibility to adjust. The underlying point, I think, is that for all the reasons I just enumerated, we feel very good coming into the back half of 2020.
Jonathan, thank you.
The only thing I'll add.
Go ahead, please.
I think.
Go ahead.
Yeah, I think Jonathan covered it. I just wanted to add a couple other things. We get into holiday 2020, one thing that we've done differently, we've got some really smoking deals that we haven't had before, that we've planned in advance. You need to get out there, all of you, and shop. You're going to love what you see there also b ecause there's less spend in terms of travel, luxury, leisure, I mean leisure and things like that, we think this is going to be elongated holiday season. Once again, because we've got capabilities, as Jonathan mentioned, on e-commerce, we'll be able to serve our customer later than we did last year, which should improve results.
That's very helpful. Just to touch base on that, in terms of the promotional background, do you think that it's going to be more aggressive in the back half from other retailers? Feel free to pass this.
I think we'll see on that, Chandni, but we're prepared for a range of different scenarios. I think much more so than we were coming into holiday season last year. We don't necessarily want to show our hand on what our expectations are around that, but we do believe we're well positioned to be flexible and reactive if we need to be, to whatever transpires.
Great. Let's switch gears to real estate. Your store count has been fairly stable over the last couple of years, but as you think about a post-pandemic retail landscape, how do you assess your real estate strategy? Has your thought process changed with regard to, say, store openings as you think about beyond 2020? And then are there other opportunities in this area, say, vis-à-vis better boxes or perhaps rent negotiations?
All great questions, Chandni. As you know, as we came into the crisis back in March, April, we did pull back on 2020 openings to some degree, then we've accelerated some of those into the first quarter of 2021. We'll be spending some capital on those in late 2020. There's really multiple prongs. There is new store openings where, as we've spoken to on prior earnings calls, we do believe there's an opportunity to significantly accelerate there. We've been doing a lot of work on that over the last few months. We have much better analytical tools now to help us identify where we have opportunities to open new stores, and we think there is some meaningful white space out there. While our store count has remained static for pretty much a decade, we've seen many of our competitors open a lot of stores.
We think there's opportunity we've left on the table there that we're going to go after. We also think the environment for us to do that is very favorable right now. We're a highly desirable tenant, given all of the disruption across the retail space. We think our brand profile is improving. We do expect that there are going to be more opportunities than in the past. We expect to open more stores. We've also had a program running, though, to look at the stores that we would typically have closed in the past, and we've been looking to intervene there and figure out more precisely what's driven the performance of those stores to the degree that we've needed to close them.
We've done an excellent job, or the team's done an excellent job in 2020 of reducing the number of closures from what we originally anticipated. We're also looking to get that part of the equation down so that that net spread between openings and closings should widen significantly going forward. A little early to be precise on that. I'm sure we'll give more color when we get to December or March and start talking about our specific plans for 2021. We definitely think there is a real opportunity in real estate, and that between real estate and e-com and growing the productivity of our existing stores, we have three major levers of growth going forward. We see real estate as being a very important component of that.
That's great. That's a perfect segue into e-commerce, which you just mentioned. You've obviously embraced omni-channel in multiple ways through the pandemic. How have your customers responded to these different channels, and what are the categories that are resonating most well with your customers online?
Yeah, I'll take that one, Chandni. Just picking up where Jonathan left off, I think we and our investors should be really excited about our future. There's not too many retailers that feel like they've got a strong growth platform, both in brick and mortar in the future, as well as our e-com business. When I started back in Q4 2018, we finished 2018 with, I think it was like 0.6% of sales penetration on e-commerce. Through Q2, we're running at nearly 5% penetration of sales. Really happy about what we're doing here. We're 4.5x last year's sales through Q2. Year -to -date, site traffic is up over 70%. Conversion rate, 3x last year. Growing profitability in the business. We were profitable last year. We're leaning into that this year. We've added all these new features of Instacart.
Basically, anything a customer can order, and it fits in the back of a sedan's trunk, which is mostly your food and small consumable items, is now same-day delivery. PICKUP Now is something we added as well, which basically unlocks the whole store for delivery same day, to include furniture, sectionals and all that. Our partnership with that company has gone very well, and Jennifer is very much liking it. We've got new things that we'll be adding in the fall. We'll talk about that as they open up. Our ability to do curbside pickup, with our buy online, pickup in the store, has been very successful. We've now launched lease online, pickup in store, which allows Jennifer easy leasing capability online and getting all that done. We're really proud about the accomplishments we've made in the e-com business.
It'll continue to grow and be a billion-dollar opportunity in the future. What we're seeing is that with the addition of PICKUP Now and the result of the pandemic and social distancing and people wanting to stay home and invest in home, that many of these customers that are buying online are investing in homes. The key products are furniture, soft home, bedding, window treatments and hard home, the appliances. All those items have good AUR, have good margin, and it's been a growth area for us prior to digital, prior to COVID-19.
Many people may not realize it, we're a top 10 furniture retailer in the United States. Now it's just growing at an increased pace, and we believe that will continue to do so. That's the type of customer we're seeing, and I think so far they've been very pleased with the new services that we're adding to reduce friction.
That's very comprehensive. Thinking about basically digital fulfillment, are there other investments that are to be made in this area?
Yeah. Good question. Right now, what we've got going on is now just improving the experience. That's pretty much incremental spend that's in accordance with the growth of the business. We don't have a major re-platforming or anything else we need to do at this point. Our supply chain continues to get built out. We're now looking at how we leverage our stores even more than we have in the past, beyond curbside pickup, et cetera. How do we make them potentially hubs for continued last-mile delivery? These all will be designed in a way that's built into the price of the product and then gets passed through it, similar to in-store purchases profitability. That's where we are, Chandni, and we're doing this in a smart way. Once again, it's penetrating just less than 5%, which has been tremendous growth.
We think there's a lot more out there when you start benchmarking us. What's nice is there's not too many value discounters being able to do this. The real winners during this time have been those focused on the home and with a digital presence, both of which we now have firmly established.
That's great. Let's talk about Operation North Star. What drives the decision to do a full-fledged store of conversion versus other light refreshes where you sort of focused much more with The LOT! and Queue Lines? How do you draw a balance between standardizing your fleet versus more individual configurations?
Yeah. Hey, Chandni. I'll take a first pass at that. I think what we've historically referred to as Store of the Future has really contained three separate elements. There has been putting furniture front and center in the store, has been one key piece. The second key piece has been what you could think of more as being routine maintenance type CapEx, redoing the HVAC, remodeling the bathrooms. The third piece has been aesthetics around things like floors and trellises, particularly around the furniture area. As we think about it going forward, we're kind of breaking that apart into its three components. If you think about the furniture reconfiguration piece as a standalone, what we've learned is there are certain contexts where that does work and has a good return on investment, and there are others where it doesn't.
The analytics we have now is leading us to a much better place on that piece. You've got the sort of maintenance type CapEx piece, and I think regardless of Store of the Future, over time, you have to touch your stores, and you have to freshen them up on things like that. Redo the bathrooms occasionally and so on. That is something we think about as really being sort of part of a separate kind of capital stream. The aesthetic components, they continue to evolve. We think about different components of that and different signage and so on, and we're trying to continually figure out what is the right mix on all of that.
As we think about it going forward, I think you're going to hear us talk much less, maybe not really at all about Store of the Future, but more about how we're configuring all those different elements in the store. What we're focused on prioritizing near term is The LOT! and Queue Line, which we've seen very strong returns on investment. There is some capital associated with that, but the ROI on that is very strong. We'll continue to look at moving furniture into that front and center location where it makes sense, and that's a question we'll address as we finalize our plans for 2021. We're looking to optimize the mix of all those things. I think the second part of your question is standardizing the fleet versus more individual configuration. I think there's a couple different pieces to that.
One is we do want to have some standardized sort of boxes for the most part, but there could be two or three different iterations of that. Not every single store is going to be the same. We don't want to have 20 or even 10 different types of store. We want to have models that we can use pretty consistently. What we're also looking at deploying are things like space planning, assortment planning tools that we haven't had in the past that will enable us to better operate and sort any particular store, regardless of which format it's in. I think we're thinking of all of this differently. We're thinking of it more as a store investment program, store evolution program, where we use different terms.
It's moving on from that focus historically on Store of the Future, which was a bundle of various different elements which don't need to be bundled. Again, on all of this, we're focused on what's going to give us the greatest return, and we want to be disciplined and focused on that and not get locked into something that, as we've seen with Store of the Future, certainly does drive a sales improvement, but hasn't in many stores driven enough of an improvement on a sustained basis to warrant the investment we'd made in the past. We feel good about all that.
We think we have much better analytics. We think we have much kind of clearer, rational path in terms of how we think about those different components. We're thrilled with what we're seeing again on The LOT! and Queue Line, and we expect there will be more programs of a similar nature going forward that will continue to help us drive the productivity in the stores.
That's helpful. Continuing with that theme of Operation North Star, let's talk about your cost structure. You sort of laid out $100 million original target, and you also talked about basically some specific buckets in this. As we think about these cost savings, what are the next leg of opportunity beyond this $100 million? How should we think about that? Can some of it flow through the bottom line, and when can we expect that, really?
Chandni, great questions in there. The answers are a little bit complex, again, because of everything that's happened this year and all the incremental costs we've incurred related to COVID, which have sort of masked some of the underlying movement in our cost structure. To recap what we've said in the past, we originally talked about a $100 million cost reduction opportunity, some of which was in gross margin, but most of which was in SG&A. We said we expected to accomplish that over three years. We said we were confident we would get there within two years, i.e., by the end of 2020. We've also said that we expect that number to grow well above $100 million. We continue to believe that. We're now rolling out more incremental savings beyond the $100 million, and they come across multiple areas of the business.
We expect to keep going. I think my experience has been on this in the past, that you're never done on that, and you can continue to look and find more opportunities to be more efficient going forward. We have a top-down approach, where we would identify the areas where we think the data indicates there is an opportunity, and then we also have this bottoms-up perspective, what we refer to as a culture of frugality, where we're trying to engage and are being very successful in engaging the whole organization in thinking through every dollar we spend. Is it being well spent? Is there an ROI on it? Being very disciplined about that. We sort of cut out inefficiency and waste on a sort of bottoms-up basis, while at the same time, we have these top-down structural cost reduction goals.
In terms of how that actually shows up in the income statement, it is a bit complicated because of the dynamics we discussed with COVID and also with some of it going through gross margin and pieces of it being reinvested in marketing and e-com, for example. On an underlying structural basis, we are confident that we will have more than $100 million taken out of the base by the end of this year.
That's very helpful. If I may go into the survey questions that we are asking all companies, I totally understand and acknowledge that some of this might be borderline guidance, feel free to give some very broad answers if you see fit. If taxes were to go higher next year, would you expect to pull back on any investments?
I mean, certainly, Chandni, it'll be part of the ROI evaluation that will get plugged in, and we intend to remain very disciplined around that. If it causes certain projects not to hurdle, then that would potentially be the case. The types of things we expect to be investing in, we would expect are going to have strong returns even after a potential step up in the tax rate. We'll keep a close eye on it. We'll build it into our thinking. I would say at this point, it would be premature for us to say it's going to result in any significant reduction in our CapEx.
Got it. Do you expect margins to be higher or lower in 2021 versus 2019?
There's a lot of moving parts on margin. It's a complex picture because we have initiatives we're being very successful on that are helping us support our gross margin rate this year. We have an in-store initiative around eliminating or reducing waste and mark-outs and so on, and that's chugging away very nicely and delivering a nice benefit to gross margin. We've had an adverse movement on shrink this year, which we're working hard to rectify, but we won't see the benefit of that until we get into 2021, when we start to do our physical inventories then. There are other things we're trying to do to take costs out of cost of goods. There are huge mix issues for us. The gross margin rates across our different categories are significantly different and that will certainly influence the overall margin rate.
I think we have an open mind as to where our gross margin rate ends up. I think what we've seen over the past few months is that productivity is such a driver. We get so much leverage out of growing the top line, that even if we had to sacrifice a little bit of gross margin rate, which we're not saying we are doing, but even if we did have to, if that was going to support productivity going higher, we would still likely get a very significant leverage flow through benefit from that.
We've got an open mind about that. We're doing a lot of things that we think will support gross margin. If we had to give some of that back to invest in price, for example, we'd have some room to do that. If that were a smart thing to do in terms of the overall store economics, we would be open to doing that.
Got it. You already answered my question around basically store base in 2021 versus 2019. I'll just skip over to my question as part of the survey. Do you expect pricing power to be stronger or weaker in the future versus the past?
Do you want to lead off on that, Bruce?
No, I'm fine with it. Go ahead, Jonathan. Yeah.
I think there's a lot of dynamics out there again on that. It's probably hard to say at this point. I think there's just so many variables in the mix that to know what the world's going to look like this time next year, it's hard to say. I don't know that we have a strong point of view on that at this point in time. Again, we're focused on the things that we can control, and we feel very good about those, and we feel we're going to be very well positioned through the balance of this year and coming into 2021.
I guess I will just add one thing to that. I think that, relatively speaking about us in terms of pricing and what we can do, our focus on closeouts, our focus on engineered big buys, and our messaging of that, I think will be sharper and will add more value, and that's going to position us very well.
I think that's my cue. Well, Bruce, Jonathan, thank you so much for joining us. We really, really appreciate. This was fantastic. Thank you to all the investors who joined us. I hope you all have a wonderful day.
Thanks, Chandni.
Thank you, Chandni.