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#Yes, <UNK>, it's <UNK>ert <UNK>.
I'll start.
As you're aware, we have announced some staffing changes over the last 30 days or so, both in the store and at the corporate office here.
And you know, as we see what's rapid shift that's changing in customer expectations and what they expect in retailers, our whole movement to be a customer-centric omni-channel home improvement company really dictated that we needed to allocate our resources differently so that we could better meet the needs of customers.
That's something we have to continually do, obviously, to make that sure we have our resources in the right places so we can continue to meet their needs.
From a store standpoint, I think our new staffing model helps insures that we're optimally prepared for the upcoming Spring selling season.
The change we made in the store, we think, will really improve our leadership capabilities, with an enhanced focus on training and really empowering our associates to deliver on an improved experience for the customer.
So we're really pleased with the receptivity we've seen in getting that done before ahead of the Spring selling season.
Here at the corporate office, the change that we just made at the corporate headquarters, are really designed to create a more agile, efficient and customer focused operating structure.
We needed, as we continue to migrate from being a single channel retailer to an omni-channel home improvement company, we really needed to step back and make sure that we had our resources aligned in the proper way so we can best take advantage of the opportunity that we see in front of us.
And as we've talked for many quarters here, online, in-home, contact centers, those other things that are part of our omni-channel strategy, are where we're seeing the highest growth, and we wanted to make sure we had our resources aligned behind that.
So we're excited about it.
It's always tough when you make those changes impact peoples lives, but I think it's the thing that was the right thing to do to continue to move us forward and capitalize on the opportunity we see ahead of us.
Related to the impact to our guidance provided at the analyst conference, they were incorporated in the outlook that we shared at that time.
<UNK>, we look at a number of factors, macroeconomic factors, our ongoing performance, input from vendor partners and other sources, to try to understand what's going on with the consumer industry demand drivers, et cetera.
So certainly, as we came out of the third quarter and saw trends in fourth quarter leading up to the December meeting, we're certainly aware of our performance, also mindful of actions we were taking to drive consumer demand, to drive productivity, et cetera.
So what I would say is we talk about our outlook for the year, is I feel really comfortable about our opportunity to hi the 464 for the year.
It's going to happen differently than we planned it, but as far as getting the EPS, I think there's confidence with the team that figure's more than achievable.
No real impact, <UNK>.
So our comparable sales calculation does use the comparable weeks.
So week 53 of 2016 comped over week 1 of 2016, which is the comparable week for the period, which is consistent with how we've reported comps the prior three 53-week years since I've been CFO.
The 14-week period was compared against the comparable 14-week period.
So yes, the comps as reported are what they are.
<UNK>, I don't think we really measure it that way.
What I can tell you is that as we've gone through and looked at, as I said earlier, the evolution as we've gone from a single channel retailer to an omni-channel home improvement company, we certainly have made changes along the way in the way that we have reallocated the resources.
But we look at the continual shift that you see taking place in the customer, in the way that they want to interact with us, you realize that we needed to continue to evolve.
So if you think about it, you're sitting back with an organizational structure today that has evolved over time, not the one that we would have designed from scratch if you were starting out as an omni-channel company.
So as we continue to see that evolution, we said we really needed to step back and say, okay, where do resources need to be allocated at the corporate office.
We took out some spans and layers to make us a more agile, nimble organization from a corporate office standpoint so that hopefully we can better respond to opportunities, better respond to the stores and our other channels after they've taken care of the customer on a daily basis, and then also did some hard look at our management structure in the stores to say, how can we ensure that we're organized in a right way to make sure that from a leadership standpoint, we're leading people in a way that's going to provide a better experience.
So it was really more driven from that standpoint.
We look at productivity more as, how do we take dollars and reinvest them in the areas that are going to drive better performance.
So yes, there's obviously, through that process there's a cost savings impact, as well, but it's also, if we get them aligned appropriately then we drive better performance, which leads to the productivity loop.
So you're right.
it was strength of our Kitchen and Appliance business in the quarter, <UNK>, that drove that.
Also, the above average pro performance is a driver for growth in average ticket.
Certainly, as we take a look at our own execution, we strive to be better every day, as the items that Mike described in his comments are all items of focus for the quarter to allow us to take advantage of demand and serve customers.
Yes, this is <UNK>ert.
We did see continued improvement in the North and our performance there.
So I think certainly some of the action that the team has taken to better resonate with the customer has certainly started to take traction.
So we're pleased with the improvement in performance that we saw there.
As we look at 2017, if you look at, whether it's the underlying macro fundamentals that are out there, still seeing a very healthy housing market, whether it's from a turnover standpoint, whether it's from an appreciation standpoint on housing, incomes continuing to rise, as we've spoken about, employment continuing to improve, all of those things, I think, set up home improvement to continue to gain shares as a percentage of share of wallet in 2017.
We've seen that trend for the past few years, and I think it sets us up well for this year.
And then on top of that, we've actually, behind, or post election, we've actually seen, from our consumer sentiment survey, a really strong increase in homeowners' intention to invest in their home and start a project over the next six months, as we talked about.
So as we look at just the underlying factors, some of the momentum that we saw coming out of our quarterly consumer sentiment survey, it sets us up that we think that sets us up well that a 3.5% comp should be achievable as we look out to 2017.
So as we talked about in addressing <UNK>'s question, the productivity savings were contemplated in the model we put together at December analyst conference and consistent as the outlook today.
What I would say is if you think about prior EBIT expansion and prior flow through expectations, there was a component of gross margin in there.
We've taken that out, and the entirety of the flow through and EBIT expansion is driven by expense leverage.
So it's embedded in our SG&A outlook for the year going forward.
Thanks, <UNK>.
So in the fourth quarter, <UNK>, we actually had modest deflation.
We had Building Material deflation of 25 basis points, driven by roofing insulation which offset the, call it, 15 basis points of inflation in lumber.
For 2017, there's only very modest inflation contemplated for the year.
Less than 20.
<UNK>, really don't have a decomposition of that 9% growth in front of me.
It is all of the above, right.
It is the strength of the performance in those categories and the tactics we've been taking over the number of years to better serve pro customers that are driving the 9% growth.
The private label card penetration was 28.7%, up about 20 basis points versus the same period last year.
Thank you.
I'll take the first part, let Mike address the second part.
So as we think about the 35 store openings, that's roughly 9 US big box stores, 10 stores in Canada, a few in Mexico, and 14 Orchard locations.
So they're varying formats and varying geographies.
As we think about the spend for new stores, that is roughly $400 million in 2017.
As we think about return hurdles, we've got risk adjusted return hurdles for all of our investments, including real estate.
We do expect the portfolio of stores to more than exceed those hurdles going forward.
So <UNK>, if you'll recall, we had fairly substantial deleverage in the fourth quarter of last year, based on the strength of performance, which really impacted our annual accruals.
So we had significant deleverage Q4 last year, which, as we planned 2016, that was expected.
While we had really good performance this year, it didn't compare to what we saw last year, therefore the rate of change was less, giving rise to expense leverage in the incentive comp area Q4 2016.
Going forward, we've got a variety of plans that have sent the store management and store associates to serve customers every day to ensure we help meet their needs, omni needs going forward.
So no real change in how we're thinking about incenting the folks that are on the front lines interfacing with our customers every day.
Regina, we've got time for one more question.
Thank you.
Thanks, and as always, thanks for your continued interest in Lowe's.
We look forward to speaking with you again when we report our first quarter 2017 results on Wednesday, May 24.
Thanks, and have a great day.
