are the management of AutoZone. My name is Brian Campbell. I'm Investor Relations and Treasury and Tax work. And to my right is Bill Giles, our Chief Financial Officer and to my left is Michael Lasser.
Go ahead.
You introduced yourself as the infamous Head of Investor Relations for AutoZone. And Bill Giles has been the CFO since 2,006. He started when he was 4 years old. Appreciate that. We are very thrilled to have these gentlemen with us today.
It's been a very interesting time in the aftermarket. After seeing steady, stable conditions for quite some time, then aftermarket has been a little more volatile. So looking out and what we've seen thus far is it's been a more normal winter than we've seen in the last few years. So do you think there's been enough cooperative weather conditions to really drive the industry for the next several quarters and put to rest some of the concern that maybe it's not the weather, it's some other factor that's maybe weighing on the industry?
Yes, I think so. I think if we go back and look at it over time, you would recognize that we have talked a lot about this 2 mile winters in a row and that culminated with what is our FY 'seventeen. Our fiscal year is August to September, just to clarify that. And so that '17 was a little bit of a softer year and I think that was the combination of having a soft winter. So clearly for all of you who live in the Northeast area, we've had a very harsh winter here and that's helpful for us.
And yes, I do believe that that positions us well, not only for the quarter for which we just completed, which we feel really good about the performance of that quarter, but also for an extended period of time because it does seem to have a bit of a tail to it. And so we had strong performance, particularly in failure related parts during that time period. And I think our maintenance business was probably a little bit more flattish. And that's good because that's when our failure related parts should be strong and our maintenance will come after that. And as you mentioned before, you've got a lot of roads and things that are all torn up, etcetera, that is just going to permeate itself into more undercar, more brakes, rotors, those kinds of things that will drive some of that demand.
And that will work out well for us as we proceed over the next couple of quarters. And one of
the areas of question coming out of the conference call from last week was your partner Phil Rhodes made a statement that when there's a big blast of winter, you get an initial wave of demand and then each subsequent blast of winter doesn't drive as much. Maybe you can just elaborate on that. I think it confused some people in the marketplace and say, hey, when it's cold, it's cold. So maybe you can give us a sense. Yes.
Because you know
what is helpful is that and we see this just as any quarter progresses. If it's super cold for 2 days or so, that doesn't help all that much. It helps a little bit. When you've got 30 some odd days of extremely cold temperature like we experienced here, that's really when you get the benefit of that. Once that transpires and then you get back into that choppy period where it's warm and then it's a little cold, etcetera, or it's just incredibly rainy, that isn't really necessarily helpful.
We've kind of moved past the failure related parts at that point and now we're moving into the maintenance categories. And if it's just a deluge of rain like we had the last few weeks, 1st few weeks of February, this is not going to be helpful. Nobody's going to get under their car during that time period. And there's a perception in the marketplace that
trends in the aftermarket are more volatile today than they've been in the past. What's your perspective? Is that just there's a recency bias and people are thinking because there's a real short term focus on day to day trends or has it always been kind of volatile in
that price?
It's actually been pretty consistent. Mike's first question he said was, hey, investors want more performance, better results due to weather right now or do we're a pretty consistent metric. I think we try to talk about the same store sales performance in a pretty tight band. And that has really sort of been the story. We talk about anywhere from a 0% to 3% range, very steady business model.
So I do agree with you, Michael, that the introduction of macro points, gas prices, weather, all benefit and have short term
impetus and impacts. Over the long run, it's pretty steady.
Yes. 1 of the pretty steady. One of
the factors that have been absent from the aftermarket for the last few years has been inflation. After seeing maybe a point or 2 of pricing contribution for some time, Are you seeing any signs that inflation is starting to come back? Do you think the aftermarket has the ability to pass through pricing in light of all the price transparency itself? It's a
good question. You're right. We've had very little inflation over the last few years and that's not been helpful from a sales perspective because you're right, historically and we certainly believe as we look out into the future that there will be an ability to pass price inflation on to consumers. It has happened fairly consistently over time and there's no reason to believe that that won't continue as we move forward. At the same time, we've seen a little bit of inflation, commodity based mostly, but we don't have visibility on an increase in inflation.
We can only maybe look out 5 to 6 months or so. So we don't necessarily see it coming per se, but there's an inherent belief that we will definitely have inflation at some point in time. Obviously, on the Straits horizon, there's going to be more increases to input costs overall. And as a result of that, we do believe that there will be some inflation in the marketplace at some point in time. And we do believe that that will be helpful both from a sales perspective and at some level of margin perspective.
And it's early in these discussions, but obviously tariffs are front of mind for a lot of folks in light of what's happening. How do you see that impacting the aftermarket? Maybe you can give us some sense of steel and aluminum and what percentage of raw materials that might comprise the product portfolio?
Yes, I think on the hard part side of the business, there's a good of steel that is located in many of those core products on the hard part side. And we're in the same boat that you're in a little bit as that. It's new. We're taking a look at it to see what the impact will be. Somebody else had asked me that same question a few minutes ago.
And it's really hard for us to predict what will happen or how that will impact the industry overall. But obviously, if it does, there will be some level of inflation across the board for everyone. It won't be certainly an auto zone specific issue. It will just be an element of the inflation, I think, at some point in time.
I was going to add one comment
that Bill had asked about with the merchandise part when this came out. He called a meeting and we sat down, we talked about the first comment from the merchandise part was, we believe this is rolled steel versus finished goods. So these are not terms you guys would live with and hear every day, but rolled steel is just the giant tubes and that is initially the last time there were tariffs on the rolled steel. So we're buying as a company finished goods. So in answering the question on inflation, if we go with the past, it doesn't affect us, but we'll have to understand going forward.
I just want to let you know that it's more about the raw material versus the finished goods.
So it's more about the raw material, but wouldn't the raw material eventually find its way to the finished goods or input? Well, the tariff wouldn't be on the finished goods per se,
it would be on the raw material, we believe.
We have to understand that. And maybe the point is that you guys are already doing some contingency planning or at least having the conversation to say, what would we do? How would we approach this in the event that this does happen? We are so fresh. We don't have an answer for you.
But yes, there's discussions going on and
so on both that and NAFTA. Yes.
And what lessons can you use is from if we roll back the clock a year ago when we were talking about the border adjustment tax, it was probably a similar type of situation where you had to at least start to have the conversation. Would you were you planning on taking any actions at that point that you could now apply now?
I think to be honest with you on those and probably on this as well, it would be reactionary. We would have to see how it applies to the marketplace, what the manufacturers are doing, how they respond to it, how can we help them respond to it. So I think from our perspective, we wouldn't lead it. We will end up being a reactionary since we're really buying, as Brian said, to finish good at the end of the day. Yes.
And set the record straight, because there is a lot of debate about the ability to pass along price increases in light of Amazon charging lower prices online for similar goods. So help shed some light on why there would actually be an ability to pass along some of these pricing?
Yes, I think part of it is ultimately it's going to be whatever the market is bearing or whatever your competitors are doing as well. I mean historically, we as we have had price increases, we've been able to pass those on because obviously it's based on the cost of goods sold. And look, there will be a gap in prices between us and online only because there's a totally different value proposition that's taking place inside the store. And so the experience that you receive when you come into an AutoZone store, we're allowing someone to do a check engine light to utilize our fix finder program in order for us to figure out exactly what the issue is and why that light is on, what the repair could be, whether we have the product or not, whether you're capable of doing it or not or whether you prefer for us to refer you to one of our commercial garage customers that we have and be able to solve it from that way or whether you want you have a battery issue and you want somebody to come in and test the electrical system for you, the battery starter alternators.
We always will say, we're we are more than happy to sell you a $2 cable than $100 battery when that's not your issue. The issue is the cable. So there's a lot of things that can transpire on that or if you're buying wiper blades, our ability to put those wiper blades on for you. So there's all sorts of things that take place when you come into a store that create a slightly different value proposition.
And we've got a question about China, because it sounds like it might not only be on particular raw materials, but it could be the source of the product. So how much exposure, what percentage of your products are sourced from China? I know there was some debate on where the China office is actually, but No
problem. Right now, we're all impacted. Like it or not, in the United States, a lot of the goods that we sell are not manufactured here. And so in answering the question about imports and tariffs and duties, guys, it's not easy to move business back home. So I'll probably let the politicians, I think, for us to answer that over how we deal with it, but we'll all be in the same boat having to deal with paying for and dealing with higher cost.
So what would you say, a quarter of what you sell, 50% of what you sell? Somewhere between those
two numbers, I would say, is probably a fair amount. I mean, as Brian mentioned before, we do have an office in Shanghai. And I think as you look through gross margin opportunities that there's opportunities for us to continue to lower acquisition costs by being able to seek out different places for us to get our Duralast product manufactured in different areas and create competition, healthy competition. So as that office continues to grow, as we continue to grow our direct imports business, that there's real opportunity for us to lower our acquisition costs. So that percentage is probably in a pretty good ballpark and it may grow.
And give us
a sense of the pricing architecture at AutoZone because more than 50% of the sales do come from Duralast and you have complete and total control over the pricing there. But that also influences and provides an umbrella for how you would go to market on other more branded goods. You want to have some distance between your private label and the branded goods. So does that influence your ability to lower prices on some of the branded goods? Because there has been more talk about using analytics to be sharper on price on maybe those goods that are more elastic and less sharp on price than those goods that are more elastic?
Yes, that's a good question. I think one
of the things that we do find over time is that there is a healthy amount of inelasticity on our product, and so particularly on the hard part side of the business. And so much of it is all about what wins in the business is your ability to say yes, but you have the product, both on DIY and on commercial. So that's where you'll see us make most of our investments is increasing the amount of inventory availability in the marketplace between hubs, mega hubs and being able to say yes on a more frequent basis. Relative to the price gaps, etcetera, we don't have a lot of categories where we've got Duralast competing with a branded product per se. I mean, typically the branded product is in a category that maybe it's well deserved there and it stays there, etcetera.
In many cases, we really just either have ValueCraft Duralast or Duralast Gold. And we also try to manage the amount of choice that we're providing as well because it's a very SKU intensive business and this is a capital intensive business. I mean, our churn is at a 1.3. So this is about making sure that you've got the right assortment, that you've got the right level of coverage where appropriate choice, but where if you you on the side of being able to say yes.
And are you seeing elasticities change at all, maybe oil and some of the lubricants have been more elastic in the past. Is that extending to any other categories or not really?
And I would say, to be honest with you, what we're finding is that in some cases, oil and some of these chemicals are not as elastic as we might intuitively believe. So time will tell as that continues to migrate its way through, but quick answer is no. We don't see it migrating to other categories necessarily. Yes. And switching
straight up, I guess the question has been what other ways do you see Amazon impacting the business aside from price? Do you think Amazon is taking share from AutoZone?
We don't and we don't see it necessarily and the numbers don't indicate that that is the case by any means. So we continue to take market share and so we continue to be very competitive And we don't see it impacting our sales. I always say very consistently, we don't believe we're immune to online retailers by any stretch of the imagination, but we believe that we have an assortment of coverage and a value proposition that does differentiate ourselves on a long term basis. And we're not seeing the impact necessarily from online only retailers and those things. I mean, certain categories like performance and accessories, those could be good categories online because they're very SKU intensive, they can very customizable, etcetera.
We're just not heavily penetrated in those for that reason.
Yes. Switching gears to the commercial business. AutoZone's taken a lot of actions, put a lot of tests in place, recently announced that you're going to be increasing the frequency of delivery to 3 more times per week to 25% of your stores. Why is that the right mix? And how do you see that influencing your ability to take share within the commercial side of the market?
Because Autozone's got a very interesting model where you've got this margin rich DIY business that makes a lot of money that you can then use to fund the growth in arguably what will be a faster growing side of the industry.
That's right. I think and let me back up a little bit on a point of clarification relative to more frequent delivery. That's one of those tests and programs that we've had in place for a while that just recently we kind of concluded where we were going to be on that. And so that was really about delivering from the distribution centers to the satellite stores or the retail stores on a more frequent basis. And you may have heard us talk about this in the past where we typically do it once a week.
We started testing 2 times, 3 times, maybe even 4 times. And so at the end of all that, what we really concluded was, so 3 times a week was the appropriate number of times to deliver to the retail store, but only for 25% of the chain, representing about 40% of our sales. So we already were delivering 3 times a week to a majority, very vast majority of those. And then we were doing 3 times a week to some stores that were lower volume. And those were the economic drivers for us.
We believe that the returns that we were going to get on the higher volume stores was what was going to be able to pay for that program to continue forward on the lower volume stores. It just didn't mathematically work economically. So going forward, we're going to do it on 25%, but many of those were already getting that. So now we're just kind of rebalancing and re tweaking it. So we were somewhat there.
We don't expect to have much of an increase in cost on that going forward. Now on the commercial side of the business, another good one to clarify is that the more frequent delivery impacts DIY as much as it does commercial, because it's all about being better in stock on those 25,000 SKUs that we're carrying in the retail store. So it isn't about commercial or retail, it's about both businesses. And so it benefits both sides of the business per se. Does that help answer that?
That does. There's been some debate about the influence of the car park, the lower cohorts of vehicles flowing through the sweet spot. Arguably, it's potentially having more of an impact on the DIFM side. You wouldn't necessarily see it in your numbers because you've been growing faster than the sector. But and people slice and dice these numbers in a lot of different ways.
What's your personal view on how that has had an impact on the industry and when it's going to be less of an issue?
I think going forward, it will be from our vantage point a little bit of a tailwind because to be intellectually honest, we said it was a little bit of a headwind going into it. So, we had never seen it as being a huge impact on that front end as that was kind of moving its way through the bell curve and therefore we don't see it being a significant impact as it passes through. The reason is that there is 260,000,000 registered vehicles. That number didn't change. So in essence what happened was that as you have these 6, 7, 8 year, 10 year old cars moving their way through and there was a little bit of a dip to it, the reality of it is you still have the same number of vehicles.
So all you've done is you've extended out the age of many of the vehicles. So you're still selling parts on 260,000,000 vehicles. You're just selling a little bit less in this one segment of the category that might have a slightly higher per unit price to it, but not significant. Okay. And speaking of
the split between DIFM and DIY, last year one of the factors that weighed probably more on the DIY side of the business was the delay in the tax refund distribution. This year it's down slightly, maybe 1.5.
Is that enough to matter? Probably not. I think the biggest change last year was the shift. So there was a huge amount of money that was shifted out 2 or 3 weeks relative to the that tax refund money going into the United States economy. This year, it's virtually the same timing to your point, it's within 1% or so.
So there is no difference. One of the things that was interesting last year was is that we didn't see a big impact when the tax money came into the economy in a manner similar to what we had seen in years past. This year, it's too early to tell whether we will get a pop when the money comes into the economy. But if we do, that will be great and that will be a bit of a tailwind. If we don't, it will be the same as last year.
There won't be any difference. We'll just be comping against it.
Can you be theory on why you didn't see a benefit? I don't know.
I don't know whether or not the I mean, certainly, it was a mild winter. The weather was better. I don't know whether or not people migrated to outdoor home improvement type of things that they might have wanted to do. We don't have anything empirical to say about that, but that's what was our theory. Got it.
The question, have you studied Amazon's distribution network? How does it compare to yours? What happens when they're able to serve 90% of the population within one day? Probably as part of that's a good opportunity to discuss the hub network, how that compares to what O'Reilly does with larger distribution centers, Advanced does with the whole potpourri of different distribution models.
Distribution, the question is really around distribution. How quickly can you get a product to a customer, either from the customer coming to you and picking it up at a store or you delivering it to the home? So you could interchange, Michael did Amazon with the competition. It will continue to evolve. We utilize 10 domestic distribution centers for our 5,500 stores.
We also have 188, a large number of hub stores and a subset of those with something called mega hub stores. So what you're going to continue to hear ourselves talk about is how can we push our assortment Going to be as close as possible. The Amazon model has been in 2 days be near an airport, for example. With us, we're trying to use our stores in each metro market to supply that. We do not deliver retail to home, but we have capabilities to deliver to all of our commercial accounts.
So, we sort of are one of these industries that have had that last mile built in. The question is how do you do it cheaply and not lose money? All of the retailers are willing to talk about, we'll spend, we'll spend. We're very ROIC focused. We're always trying to figure out a way to get the customer the product as fast as possible, but not be egregious with our expense structure.
It's just a balancing act.
Speaking of balancing act, one of the areas of focus coming out of this most recent quarter was some of the commentary around 60 to 90 basis points of investment. I think that message was as part of that message you said we're going to balance it. We're going to do it over a 12 to 24 month period. So A, can you give us a sense for how you're going to deploy those investments, where they're going to go? And B, you've invested in the past and size investments only to have those investments be offset by other factors in the business to keep your profitability stable.
So should we think about this as a similar type of situation?
Yes. I think this is a little unique from the standpoint that there's no question that we're picking up about $200,000,000 that we wouldn't have otherwise picked up maybe 3 months ago from lowering the tax rate from like, say, 35 to 24. And so 11% on $2,000,000,000 is how we get to that number. From our vantage point, as we look at it as a unique event, it's an opportunity for us to go back and invest a portion of that investment, less than 50% of that investment back into the business. And the areas for which we believe that we want to do that are in the somewhat order wages benefits and technology.
And from a wage perspective, we've had some pressure in the past, but we've definitely seen a lot of activity from wages going up on a market by market basis. It isn't a blanketed number across the country. And I suspect that as much as we've tried to make adjustments, we're off on several markets relative to what our median is versus what we're paying our folks. And so it's an opportunity for us to get more right with the market. We're not necessarily going to lead in that.
And we're also very conscious of the fact that other competitors or other people within retail in general that are competing for the same labor pool are saying the exact same thing. So it's clear to us that others are going to be investing in wages over time. We don't live in a vacuum. We to respond to the market conditions for which we compete in. And so therefore, we will respond to that in kind.
So that's how we're looking at it. Now from a wage perspective, it's easier to execute that over a shorter period of time than say, for example, some of the technology investments that that would be the longer 12 plus months impact. But relative to wages, that's something that probably can be impacted over a 6 month time period or so. But I don't so I don't want to set us up that we're we'll offset that. Obviously, we wouldn't do any of this if we didn't think it was better for our business on a long term basis and drive sales on a long term basis.
We're still going to generate more income because we were investing less than 50% of what we're going to generate from a net income perspective. So it's a unique opportunity and we want to take advantage of it. Will the tax rate stay at this rate forever?
I hope so, but it's not law And it will only be for a short period of time. And speaking of longer term view in nature, we are seeing more signs that wage inflation is here to stay. Target yesterday talked about $12 that's on the yields of Walmart going to $11 not too long ago, maybe $15 will become the new norm. So is your expectation that this is a multi year cycle of wage pressure, wage investment? And are there elements of the business that you can pull back on to offset some of this pressure?
Yes. I think on a short term basis, it will wind up being a bit of a step function change and then there may be some continuation of that over time. There's always things that we can do, but we also want to make sure that we're delivering that customer service, those experiences inside the store that do differentiate yourself from everybody else. And so we want to be able to continue to invest in that. The other is and we don't see it yet today, but it's interesting to note that much of the wage increases that are occurring are typically at the lower income levels, which also happen to tune in with our core customer.
So over time, we would think that this would create a healthier customer for us, one with more discretionary income than they have today, whether that translates to sales or not, we'll see, but it certainly would put our customer base in a better position.
And you made an interesting comment that this your earnings will go up because the tax rate is coming down, so all else being equal should be helpful. Now with that being said, a critical part of your economic model is maintaining a constant leverage ratio on an EBITDAR basis. In that, you don't necessarily get benefits for your lower tax rate. So how does that play into the fact that you've been a very consistent deployer of excess capital back to shareholders by purchasing your stock. So would you consider taking that leverage ratio up because you may not be getting credit for a lower tax rate within that leverage ratio?
I'm sure there's lots of fixed income investors here that love that question.
They're trying to keep it interesting, Ryan.
Keep it a nervous on that one. The model that we apply, guys, is the free cash. If we're able to generate more free cash because taxes are lower, we'll continue to run our model. We're going to invest in existing stores, new stores and deploy the remaining cash to buybacks, and we still like that. We do in fairness have to balance fixed income demands and to say, hey, it's important for us.
We'd like to be investment grade, especially in a rising rate environment. So it's a balancing act. Historically, basically, to cut to the chase, can you lever up further? Can you change your metric further, further, further? We have to ask ourselves those metrics and those same questions, guys.
But we can't do it. We want to keep the rating. It's too important for us, especially in a rising environment. So we have to balance all that. There's more to come on that, but at this point, we'll continue to run what we run.
And how do rising rates impact the business? Well, we have debt. And obviously, every year, we've laddered out the debt accordingly. And so as the debt expires and we replace it with new terms, we have to make sure that the interest reality is it costs us more. So we watch the environment very, very closely.
But so far, we're very fortunate. From a tax law perspective, there wasn't as much change. I don't know if you know what I'm talking about, but the deductibility of interest will not affect us negatively per se. So I would say that the interest has been in a tight band. We hope to continue to land that and balance that with our earnings and not have that as lead story number 1 with AutoZone.
What about as it relates to your vendor financing program? Will rising rates have an impact in
your ability to finance your receivables?
I would say it wouldn't have an impact. We don't believe it will have an impact at all. I think there will be availability of credit for our vendors to be able to pursue that. There's no question that that will increase their cost if rates go up. But we view it as an input cost.
And so it is no different than any other input costs, and they'll have to manage their way through that.
Bill, we've gotten some questions on some of the longer term issues in the industry. Has there been, in your view, a mix to within the commercial side to the dealers? Are they taking share? How are you positioned for that? And is it different now than in the past?
And I'll follow-up with a couple of other longer term ones.
Yes. We don't see that necessarily. We don't see dealers necessarily taking market share from being selling auto parts into the marketplace. Or servicing cars more so than We sell we do sell product to some dealers as well. So that those dealers can be a customer of ours as well, particularly if they're working on used cars or older cars or possibly off branded cars.
And so and it also is a unique opportunity for them to be able to offer their customer with a lower option from a pricing perspective. So we don't see that as an impact necessarily. In fact, we've got some great programs from dealers today where we're selling product. There was a second part to that question.
Is it different in the past? I don't
think so. I don't think it's certainly not over the last 2 or 3 years, I would say it hasn't really changed dramatically. If anything, we're growing that business from a vertical perspective. We caught aggressively the commercial accounts,
the dealerships. They're a big customer and potential customer. And as far as
longer run risk, there's talk of electric vehicles, telematics, maybe you can describe what telematics, what that means and why it could have an impact in the industry? And then I'll have a follow-up.
Yes. So on electrical vehicles, I mean, we just think of it as, it's such a small piece of the population today. And even though it will continue to increase in sales, there's 260,000,000 vehicles registered in the United States today. And so whatever it will take an enormous amount to change that car park. And whatever does happen, we'll have a long line of sight in order to be able to respond and react to that as it moves forward.
But certainly over the very near to midterm, we see very little impact whatsoever to that. And on the telematics side, telematics is really about extracting information off of the car and being able to diagnose. For example, when you have a check engine light on today, you can come into AutoZone and we will put an onboard device underneath your dashboard and extract that information off of the sensors in the car. And then from there be able to within reason be able to tell you what the issue is with the car and what needs to be done and how to fix it and then either sell you the parts or refer you to one of our commercial customers. Telematics, other aspects of telematics is being able to extract that information from the car remotely and be able to determine when you need maintenance, when you need etcetera.
We've looked at a lot of these things where there's a lot of programs in place, there's ways for us to be able to interact. It has not resonated with the consumer today for them to be able to tie into that information and be able to monetize it. And I think that's one of the biggest challenges. We haven't seen any good way to monetize that data today from a consumer's perspective, being a consumer is not willing to pay to be able to get their information. This may not
be an easy question. We don't want to make it a little fun for you. All on you. Get them up here. If you had to rank between telematics, electrics and Amazon in terms of risks to the business over the next 3 to 5 years, how would you prioritize those 3?
I think, well, I'll address them individually. I won't rank them necessarily. I think telematics is an interesting one from the standpoint that the OEs need to be able to have that open so that people I think if people felt as though they had a closed loop system on their car, that they wouldn't be happy about that relative to the fact that that would constrain them to only their OE dealership. So that would be one that I think is more of a social issue on a longer term basis to have an open platform to ensure that everybody has the ability to extract that information. Electronic vehicles, then let's throw in autonomous vehicles at the same time.
I think that long term, 30, 40 years from now, those may have a bigger impact. In ride sharing, let's put all of those into one group, electric vehicles, autonomous vehicles, ride sharing, does that create a different environment for how we transport ourselves around? That may have a bigger impact on a 30 to 50 year basis. And then Amazon, look, Amazon is going to be a strong competitor. They're obviously growing in all spaces.
All competitors make you better. So we see it as some impact. We're just not seeing the impact today, but we're going to continue to focus on the things that we do really well to differentiate ourselves from a consumer's perspective and make sure we're executing those really well. And when I think about the tax reform stuff, wages, we want great people. Technology, we want to improve the productivity of our people.
Okay. Thank you very much. Please join me in thanking the team from Autozone for a very