Hi, everybody. It's my pleasure to introduce Academy Sports + Outdoors and to moderate our fireside chat today. Today we have Steve Lawrence, Chief Executive Officer of Academy, and Carl Ford, Executive Vice President and Chief Financial Officer of Academy. Thank you so much for joining us today.
Thanks for having us.
We wanted to talk about maybe the consumer first, because while I do think you cater to a slightly lower income consumer, you do see a broad swath of consumer. With the higher gas prices weighing on discretionary spending, particularly for the low income households, how would you characterize the health of the Academy customer today?
Yeah, I would say definitely we saw it change as we progressed through the first half of the year. If you look at our first quarter results, we were pretty happy. Ran almost a 3% comp. Definitely saw a slowdown as we got into the second quarter, where we ran a negative 0.4% comp, grew the top line 3%. I think the difference was the consumer had probably some excess tax refund money in Q1 that helped abate what was happening from an inflationary perspective. I think as we got into Q2, that money was gone, right? I think juxtapose that with gas prices going up at the same time, I think that definitely put pressure on the consumer. If you look at what happened with us specifically, we said in our call that we kind of bucket the consumer into three income groups.
Under 50K, we'll call low income, 50K-100K middle, and then over 100K higher income. We saw the lower income consumer, that under 50K consumer, traffic be down almost high single digits, which was a deceleration from what we saw in Q1, where it was only down low single digits. Conversely, we saw the higher end consumer, north of 100K, shop and come in high single digits up. That was also an acceleration. I think you've got two ends of the spectrum, where you got a lower end consumer who's under pressure, and I think with gas prices inflation being where they are, I think they can't afford much beyond paying rent and feeding their family and clothing their family.
I think they're opting out or only opting in when it's very promotional, and they can get the best deals, and they can stretch their spending. Conversely, the higher end consumer's actually still very strong and hanging in there. As a matter of fact, if you look at our over time, we used to look at it like a third, a third, a third. A third were that under 50K, and a third were over 100K. Just based off the math of it over the past couple of years, that under 30K customer is probably a smaller percentage than it used to be for us.
They're probably in the 30% range. Conversely, the over 100K is probably closer to the high 30s, low 40s now for us, in terms of percentage of contribution. I think it's changing, but I think that low-end consumer, whether it's our customer or not, is definitely under pressure and is pulling back spending.
A lot of questions we are getting recently are on the health of footwear and apparel, athletic footwear and apparel. Do you worry at all that the strong athletic cycle we've seen for the last seven or eight years is waning in any way?
No, I wouldn't say it's waning. We're not seeing that necessarily in our business. We got a lot of questions around this on our earnings call. For us, footwear is about 20% of our business, so it's the smallest of our four divisions, still meaningful. We have a pretty diversified footwear business, so we certainly sell sneakers, but a lot of the shoes we sell are venue. For example, we do the cleated business, right. We've seen no slowdown in that business. Kids are still playing sports, still need cleats to play baseball, football, et cetera. We do a big work boot business. That continues to be very strong. A lot of our casual styles have been pretty strong as well. We talked about brands like Ariat that's doing well for us, or Birkenstock.
There's been a little bit of softness in the lifestyle piece of the athletic business for us. Because we have such a diverse assortment, it's easy for us to move money around between the two. We'd like the footwear business to be better. We're down, I think, 1% for the quarter. According to Circana, we picked up share there, so we're happy with that, although we'd like that category to be positive. But we think we can mitigate it by balancing out the assortment and investment in other categories.
Footwear is not the biggest part of your business, and you don't have a lot of exposure to the legacy silhouette that I do think is the place where inventory is building a little bit, but it does sound like the promotional environment is going to be a little bit more aggressive as a result of that.
Yeah.
Again, even though you don't overlap directly with it, how would you characterize how the promotional backdrop today would impact your business? In what categories are maybe you seeing outsized promotions aside from footwear?
Yeah. I would say that it certainly progressed from Q1 into Q2. I think it corresponds with the customer slowing down and exhausting whatever tax refunds they had. I would say we saw it be more promotional within Q2, particularly back to school. How I think it manifested itself was a couple. I think you saw people extend the length of promotions. Maybe last year where they ran one week, this year they ran two weeks or three weeks. In some cases, more categories were included in those promotions. Our expectation is that for the back half of the year, it is going to play out very similar to how Q2 played out, right? We think holiday will be probably more promotional than it was last year, and we have modeled that in our plans this year.
How we are funding that is we are being very mindful about the fact that the customer is really leaning. We talk about episodic shopping, right? They are coming out and buying during the times of need when they can get the best deals, and they are kind of pulling back in the lulls. We are rationalizing promotions in the lulls, and we are kind of in one right now, once you get past back to school until you get into middle part of November. You are going to see us be very thoughtful about how we promote in there and then save some of those promotional dollars to fund what we think will be a more promotional holiday.
On the merchandising side, you have made a lot of changes in the last year to 18 months. You have brought in Jordan Brand for the first time.
Yep.
You have expanded your assortment in Nike, and now you just announced the 15 stores that are going to have HOKA.
And online.
And online. Sorry, all online.
That is okay.
Only been 15 stores with HOKA. Could you maybe talk a little bit about what these brand extensions and additional brands have meant to your business, and what do you think it begets for you longer term?
Yeah, I think, if you think about Academy, we've changed a lot over the past six or seven years. If you go back pre-pandemic, we were always good at that good level of pricing, right? The example I always use is when my son was starting out playing sports, and you needed to get him the little league gear. You could find the bat, the ball, the glove at Academy for under $100 and get out. The next month, when he decided he wanted to play soccer, we put that stuff in the closet and go buy him his soccer gear. What we really weren't good at, though, was that better best level. If he wanted to stick with a sport and maybe play in a rec league or even a traveling ball team, we didn't have that gear.
We've been upgrading the assortment broadly across all the different categories, whether it's in sporting goods, apparel, footwear, outdoor, to layer on that better best end of the spectrum, so that we had the gear that we could stay with people as they progress through the life cycle of their passions. In doing that and adding these brands and assortments broadly, I think it's given customers who in the past didn't think of us as a viable option for their sports and outdoor needs, a reason to come check us out, right? That's been more of a longer-term evolution. Most recently, what we've found is that as we've been adding assortment, there's still pieces, there's brands, and we look at, I'm sure like everybody else does who's in retail, null search terms on your website.
That's what's the most requested thing that you don't have in your assortment? It used to be Jordan. That led us to start up a dialogue with Nike about how do we get access to Jordan. Six or seven years ago, they probably would not have given us access to the brand because we hadn't built a footwear business north of $100. We built a really nice running business with Nike between $100- $200, and that gave them confidence that we could sell the price points like Jordan. We added that in 145 stores initially last year. We now have shops in over 200 doors, and we have some of the product in all stores. That also helps open up doors for other brands that were requested.
HOKA, behind Jordan, was the second most requested brand that we didn't have access to. We're excited that we're going to launch that in 15 stores and online. The good news of having it online is, we, like a lot of retailers, have handheld devices in stores. If you come into a store that doesn't have HOKA, that person working in that department can sell you the HOKA shoe that you want. They can either ship it to the store for you to pick it up, or we can ship it to your house for free. It expands that reach beyond just the 15 doors. We're going to continue to add brands that our customer is looking for. I think what that does is twofold.
I think it, A, attracts a customer who maybe didn't consider us before for it, and B, it helps a customer who was shopping with us, who had to leave our store to go some other place to find what they're looking for, to stay with us. I think there's kind of a twofold effect there.
Nike, Jordan, and HOKA get all the top billing just because they're big brands. I know you've brought a lot of other brands into the store as well. I wondered if you could highlight maybe a couple of examples of that as well.
Sure. Yeah, those are the brands I think people are most familiar with. We have a very broad-based, eclectic assortment. You think about in apparel, we do a big athletic business, but we also do a big work western wear outdoor business. The team's gotten really good at this. I'm really proud of the work they've done of incubating a brand in a small door count, and then once it hits, expanding that out broadly. We launched a brand, God, about three years ago, called BURLEBO, which probably a lot of people in the audience haven't heard of, but it's a younger trending outdoor brand that was founded by an ex-football player for The University of Texas at Austin. He saw a void in the marketplace where he wanted outdoor apparel, but in a younger man's silhouette and styling.
We had that in 25 doors. We now have that in all doors. It's in kids and men's. It's a top 10 apparel brand for us. We've scaled that very quickly. There's a new running short brand, conversational print running short brand called ChicknLegs. I've never heard of it, but we're seeing it in a lot of our research in some of these run specialty stores. We put it in 25 stores. It did very well. We expanded that out to 200 stores. We've got work western wear brands. You think about a brand like Ariat that's been around a long time. We've had Ariat in our stores, but the demand for that just keeps growing and growing. We just launched Ariat shops in 200 stores. We're pulling together a fully integrated presentation that we're really excited about.
Even in private label, we have a stable of over 20 private label brands that we have in our store, depending upon the different category. One of the things we saw a void in was in opening price point hunting rifles and shotguns. We have a shooting sports brand called Redfield that used to be just about optics, that we've expanded into other categories. We're launching Redfield firearms for the first time. What we have is market leading product that has features and benefits that we can retail for about $100 less than comparable national brand items. You're right, newness is not just apparel and footwear in from the big brands. It's across the store. Another thing that's having a moment is trading cards.
You wouldn't think of us as a place for trading cards, but we have these queuing sections in the front of our store that the mom takes the kids through as they're checking out. Kids want the Pokémon cards or the baseball or football cards that we have, so that's also been a driver for us. The team has, I think, really stepped up their game on this front, and I think it's really helped us unlock a lot of different things over the past couple of years.
Great. Just to close the loop on merchandising, what does Texas winning over The Ohio State University mean for your stores?
Well, it'll mean a lot if they win the national championship.
Right.
But certainly, we have a bigger footprint in Texas than we do Oklahoma, so you definitely had a bias towards Texas, at least most our team over the weekend.
But in all seriousness, it was a great game, though. With the Women's World Cup,
Yeah.
it was a big contributor to your second quarter, but I think you've talked about it having a halo effect on the whole soccer franchise maybe for the rest of the year. Could you maybe talk a little bit about now that we're outside the Women's World Cup, has that come to fruition? Are you seeing what you thought you would see in the soccer category, and how do you think about lapping that in 2027?
Yeah. So, we had plans like everybody did, for Women's World Cup. I think we had over 30 matches, 40 matches in our footprint, and it generated a lot of excitement. We actually set up shops at the front of our stores that pulled together jerseys and balls and all kinds of fan gear. And I would say that it did exactly what we planned it to do. It hit the plan. We're very happy with it. So it drove traffic into our stores. I would say that it wasn't as accretive as we thought because I think what we found was maybe for Father's Day, somebody got a Team USA jersey instead of a Magellan Outdoors fishing shirt. But we certainly were very happy with the traffic it drove in during that time period. Longer term, to your point, I think the benefit's going to be on youth soccer participation.
We have seen that business generate double-digit increases within Q2. Those trends have continued into Q3. We are very happy about that. This is going back a long way, but last time that the World Cup was held in the U.S., we saw a dramatic, sustainable surge in youth soccer, and we think that is going to happen into next year. As we lap it going into next year, we think that there is Women's World Cup, although that is not necessarily in our footprint. It is in our hemisphere, so the games will be broadcast real-time. You have to believe the women's team is going to be a favorite, so I think we will see some surge there. We also think there is upside just in our licensed team apparel business to get better at localization.
One of the things that did not work out as well as we had last year, the Oklahoma City Thunder winning the NBA championship. Unfortunately for us, we did not have the Knicks in our footprint, so we were big Spurs fans. We did not get that side of it, but maybe we will get one of our teams in the NBA finals next year as well. So we think there is upside between Women's World Cup, soccer in terms of participation, and then hopefully other licensed businesses that we can capitalize on.
Great. Thank you. Carl, maybe I can turn it to you with regards to unit growth. Academy's unit growth strategy is now you announced 125 stores to open over the next 5 years with 20% of those in new markets and a focus on outer suburbs. Could you maybe walk us through the strategy in opening a new store since it is a little bit of a shift in what you have done prior?
It sure is. If you think about our long-range plan, we are going to go from $6 billion- $8 billion. The bulk of that sales growth is going to be through launching the 125 stores. We changed a lot. We restarted our new store opening program back in 2022. I would say it was very opportunistic. If there was a box available, we were interested in talking about it. We have really honed what it is that we are looking for in a new store, and I think it has to do a lot with the demographics of the market around there. What we found is that stores come out of the gate at $12 million- $16 million in year 1 sales. It is going to be $12 million where there is low brand awareness. As an example, we launched our first new stores in the state of Ohio last year.
There's zero brand awareness of what Academy Sports + Outdoors is there. You have to invest into that in Pennsylvania, some new stores that we're launching. On the flip side of that, when we launch in one of our legacy markets where Academy is a known commodity, but maybe the closest store is an hour or 2 away, they're going to come out at $16 million. They are comping mid-single digits in the second quarter. Very pleased with that. If you think about from an overall ROI standpoint, $3 million-$4 million in CapEx, about another $1 million in net inventory, 20% ROIC, EBITDA positive in year one. If you look at where it is that we're opening those stores, they tend to not be in urban centers.
They tend to be in the suburbs or exurbs, where a lot of the categories that we sell around outdoor and grilling and backyard fun and things of that nature, they resonate more with that local consumer. We've pivoted our strategy significantly. I like what we're doing. I love the pipeline that we've got visibility to, so we feel good about 125 stores.
I think the biggest unlock is the work we've done around our customer. We've done so much customer research over the past 2 years or 3 years, and I think we have a really good bead on who that core customer is. It sounds like a pretty logical thing, but putting stores where your biggest base of customers is, that's been the biggest change. They live in these suburbs and exurbs and mid-size markets that are underserved, and that's been the big unlock for us.
Great. I know there's a great waterfall effect with some of these newer stores coming into the comp base over the next couple of years because of how they're performing. How are you looking to your older locations, your more mature locations, and what steps are you taking to continue to improve the comp trajectory there?
Yeah. If you think about our new stores, I am talking about stores from 2022- 2025. We have launched 63 new stores. 47 of those stores were in the comp base at the end of the second quarter. They provide mid-single-digit comp, provided about a 50 basis point tailwind to comp. If you look at e-commerce, up 12.8%, about a 12% penetration. That is called 150 basis point tailwind to comp. By default, those stores that are non-new have a low single-digit comp, and that is what is drawing us down to a 0.4% negative comp in second quarter. I do not think you can think about those stores in isolation from what is going on with the e-commerce channel.
I think over half of the goods that we sell online are picked up in store, whether it is through buy online pickup in store or a special order firearm. The customer is coming into those stores. This sounds cliché, but that is a miniature fulfillment center in those locations that it is helping to prop up the overall growth of the business. We were up 3% in total sales in the second quarter, 4.7% first half of the year. We are investing into shops. We have talked about Jordan shops or Ariat shops. We have talked about the loyalty program, this three-tiered loyalty program that we have launched. It is providing a tailwind. We are refreshing those doors to make sure that they are fresh for the customer and that it is an appealing environment. We are launching new brands. Where we are launching those new brands, those tend to not be in these underserved markets.
They are in those doors that are non-new doors, those legacy doors, if you will. It is a part of our overall strategy. They are improving, and they provide a meaningful EBITDA to the company.
If you think about what Carl just said, the thing that we are also going to embark upon, and we talked about this in our Analyst Day, is we are going to start refreshing roughly 30- 40 of our legacy stores a year, so we will call it 35 at the midpoint. When you think about that over a five-year period, that gets you to about 175 of those stores that we will refresh. Refreshing could be, it is a very bespoke kind of program, depending upon what the store needs. In some cases, some of those stores do not have our new queuing, which is kind of that maze that people walk through to check out. They have more of that grocery store with central lanes. We see dramatic productivity uplift in the stores that have queuing.
In some stores where they do not have queuing, and they get queuing, it could be paint, light, tile, whatever that brings that store up to standard. If we get those 175 stores done, and then you juxtapose that with the new stores we are opening and have opened, we will have about 80% of our stores over a five-year period kind of refreshed or touched over that time period. We think that is a pretty good place to be in in terms of having the health of our fleet in a good place.
Right. Just to touch on the digital piece, I think you just recently launched Instacart for same-day delivery. Is this something that your customers are asking for? Do you expect a comp lift from this fulfillment?
Yeah, absolutely. We did not have same-day delivery till about two years ago, and we launched a partnership with DoorDash, and that was a two-pronged partnership. First, we have a storefront on their site, right? People who shop on their site and who need the goods we sell can find it on their site. Then they also power our same-day delivery. If you order something on academy.com and you want it delivered same-day, DoorDash is the person who is filling that for you. What we found was, with DoorDash, that a lot of the customers who are shopping through their portal are customers who do not shop us.
It is a younger consumer. In a lot of cases, a lot of our stores are out in the suburbs, and we are seeing a lot of this traffic going into the inner city, right? It is apartment dwellers, and it is interesting. It is different categories of merchandise. Number one selling item on DoorDash for us, believe it or not, is air mattresses. It is somebody who has got somebody who showed up out of town and needs a bed for them to sleep on, and they are ordering air mattresses. I would never have guessed that would have been the number one thing. That gave us confidence because we started doing the research on Uber Eats and on Instacart is the customer base is very different for each one of these, or it is a very different customer. You have one subscription service. You do not tend to have three.
You kind of lean into your one. We thought it would be accretive and help us reach customers we weren't reaching. Having those storefronts, it's early days, but we're really excited. We think it's attracting a younger, newer customer and one that is probably very comfortable using that platform who probably wasn't shopping with us already.
I wanted to make sure I asked about margins, both kind of in the shorter term and the longer term. Obviously, there are quite a few headwinds now just with fuel and freight. Yet there have been tariff refunds, so I think have softened that a little bit. Carl, could you maybe talk about some of the good guys and bad guys going into the back half of the year? Then I wanted to talk a little bit about your longer-term goal of getting increasing margins by 100 basis points.
Sure. In the guidance that we put out, the back half of the year gross margin is flat to last year. I think there's three tailwinds and two headwinds. I think from a tailwind perspective, we're seeing some progress with organized retail crime and shrink. It's been about a 25 basis point improvement year to date. I think that we've got some more coming to us. I think from a tailwind standpoint, Steve spoke to it, the IEEPA burden rate in the fall of last year has been backfilled with 232s and 301s, but that overall level of tariff is lower. Then I think we've made really great progress as it relates to where we source our private brands goods. Private brand's about 22% penetration for us. I think those three things are tailwinds for us as we think about gross margin.
From a headwind standpoint, the promotional environment is amplified from last year, and we saw it amplify from the second quarter compared to the first quarter. I think promotions are a headwind, and I think fuel, I don't know what others are baking into their gross margin outlook for fall, but I don't think it's going to get better. I think in the second quarter, diesel index was up about 50% to last year. I think it's going to remain at about that level.
And then just with regards to capital allocation, can you maybe talk a little bit about you previously explained 50% of your cash flow from operations is reinvested back into the business, and then you expect to return the remainder to shareholders through dividends and share repurchases. But can you provide us with an update on how you're thinking about planning for 2027 in terms of both CapEx priorities and share buyback?
Yeah. I'm not going to give specific guidance to 2027, but our capital allocation philosophy is not going to change. For those of you who are not as familiar with Academy, we've been a public company for almost six years. Over that six-year time period, we have bought back about 43% of the shares that we went public with at what we consider to be pretty attractive prices. We've paid down about $1 billion in debt, have a very stable balance sheet in terms of inventory, and I think would be one of the lower levered folks in the retail space as it relates to the balance sheet. Going forward, we have a very simple capital allocation philosophy. We're going to invest about 50% of the cash flow from operations back into the business.
The bulk of it is going to be on the three main growth pillars that we've talked about, new stores, omni-channel, and then that existing base of stores, which would include loyalty and some shops and some new brand launches and refreshing stores that need a little bit of love. The other 50% is going to be through a pretty modest dividend yield and an outsized share buyback program. I don't think that's going to change going forward. I think if you think about the long-term algorithm for the LRP, it involves 5% sales growth every year from a catered perspective over the next five years, low single-digit comps, and double-digit EPS growth. If you look at what this business can do with low single-digit comps like we've experienced in the first half of the year, it throws off a ton of cash.
Half will be reinvested into us, and half will be given back to shareholders.
Great. Thank you. We ask four questions of every company that sits with us here. Again, we always touch a little bit already on some of these questions. First, just on the health of the consumer, thoughts on the consumer in the second half of 2026 versus the first half. Do you think things will be the same, better, or worse?
I think they will be about the same as what we saw in Q2, certainly not what we saw in Q1.
As Carl already said, I do not see gas prices getting much better over the next couple of months. Certainly, I think they are still digesting some of the price increases from tariffs. I do not think they are going to be in better shape than they have been in Q2. What we worry about are the things we can control, right? We know promotional backdrop. We can plan for that. We know we have got a customer who makes under $50K who is under stress. We do know they come out and shop. One of the things as we have done this customer research is they will tell us that if you are an under $50K household, you have kids in the house, you are still going to play baseball, right? The kids need new cleats, new bats, et cetera. What they told us is, "Hey, we will buy ahead of need.
We will buy out of cycle." At the end of each season, we are going through summer clearance right now. They are buying cleats from 2026 or bats from 2026 that they will use for 2027. We know they will do that. Having that clearance promotion as part of our calendar is a way for us to activate that customer. That is what we are going to continue to do, is find ways to get them to come in and shop with us.
With regards to pricing, do you expect your prices or AUR to be higher, lower, the same in the second half of this year versus the first half?
I think that we'll continue to see AUR increases year over year, fall versus fall of 2025. As a percentage, I think it'll be less than what we experienced. We're up high single digits in the first half of the year. My guess is it'll be closer to mid-single digits as you go through the back half of the year. One reason is we're lapping some of the pricing increases from last year, and first half of the year was non-comp, right? Most of the price increases that we saw coming off the tariff news happened in the back half of last year. I'd also say that we're smarter today. We know where we've taken prices up. We're seeing prices go up, and the customer has reacted favorably.
We've also had some places where they haven't reacted as favorably, and we've had to reinvest back into price and take things back to pre-tariff levels. We certainly have done that, and that's what you'll see reflect in the back half of the year. To Carl's point, how we fund that is hopefully a slightly less robust tariff burden in the back half of the year as the settle out has happened. Then we've also been able to resource some things, move some things into new countries where a year ago, we weren't sure where this whole thing was going to settle out.
I wouldn't say it's perfect certainty, but we have a pretty good idea what the tariff rates are going to be by country, and we've managed to move some things around that should allow us to support some of the pricing investments we've made moving forward.
Great. Then we talked about margins for the back half with the three tailwinds, two headwinds, but is there any way you can dimensionalize that into 2027? More headwinds or tailwinds?
Oh, outside of 2027, I think our long-range plan calls for EBITDA expansion or EBIT expansion from 9%- 10%. I think some of that comes from just sales leverage associated with fixed costs. We're going to be in three distribution centers. We're going to have one corporate office, and we're planning to grow $2 billion. I think there's fixed overhead that we can leverage. I think supply chain has a lot of upside associated with how we receipt from vendors and how we ship to stores. Our new Chief Supply Chain Officer, he's not new anymore, right?
No, two years in now.
Rob Howell, he's got a great background in delivering efficiency and effectiveness. We've launched a retail media network. I think it provides some profitability. I think there's also some other alternative revenue sources that we're looking at. We think that we can grow private brand penetration from approximately 22%- 25%. I think if we do all of those, we'll have a little bit left over to give back to promotionality associated with specific lines of business where we want to take outsized market share.
I'd say the one thing that's different, and we talked about this on earnings call, obviously, the tariff refund impact in Q2, that's a one-time
Mm-hmm. Yeah.
Non-anniversable thing. So longer term, we think our algorithm is somewhere around 34.5%- 35% from a margin rate perspective. That's what we're going to continue to aspire towards, and we see no reason why we can't achieve that over five years.
Great. The fourth question has to do with AI. Do you expect a significant increase in efficiency as a result of AI in 2027 versus 2026? What part of your business would you expect to change the most?
Yeah. So obviously, it's a buzzy topic that's out there, and I think we, like other retailers, are trying to figure out how it makes sense within our four walls. So some preliminary use cases, we're switching our search on our site to be agentic based. It's still small, but we're seeing good results from that. Within productivity of the company, I think there's a lot of manual things that as retailers we traditionally do, like item setup. That's not fun work. It's making sure you got the right attributes and fields set up. I think there are things that are very rote and automated like that, or in accounts payable, that we can probably use AI to automate and get more productive.
I think what you'll see us do in those cases, though, is not necessarily pull that through to workload savings, but to take the time that these people are spending on those rote tasks and get better at the higher functioning things like localization. That's the panacea in retail and getting better at localization. It's hard to do, but I think we can certainly now that we'll have some of this time freed up, spend more time on getting the assortments right on an individual store-by-store basis. That's certainly one. I think you're going to see us get better at business intelligence. We're already starting to test a couple use cases where traditionally in retail, you come in after the weekend, you're pulling all the reports, and you're seeing what happened last week.
Imagine having a dashboard that can pull all that together for you and make recommendations. Then you're spending time qualitatively deciding between what the recommendations are versus doing the work of pulling all that data together. I think you'll see more productivity increases from that as well. But once again, I think that's just going to free up people for more higher functioning things, not necessarily a flow through to the bottom line from a workload savings perspective.
All right. Well, thank you for joining us today.
Thanks for having us.
Thank you.
Appreciate all the time. Thank you.
Thanks, everybody.