BIG
#Thanks Vicki, and thank you everyone for joining us for our first quarter conference call.
With me here today in Columbus are <UNK> <UNK>, our CEO and President, and <UNK> <UNK>, Executive Vice President and Chief Financial Officer.
Before we get started, I would like to remind you 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.
This morning <UNK> will start the call with a few opening comments, TJ will review the financial highlights from the quarter and the outlook for fiscal 2015 and <UNK> will complete our prepared remarks before taking your questions.
With that, I will turn the call over to <UNK>.
Thanks, <UNK>, and good morning everyone.
I am pleased to share once again this quarter our results were solidly in line with our guidance and we delivered on our commitments.
Comps increased 1.6% in Q1, representing the fifth consecutive quarter of positive comps, something BIG hasn\
Thanks, <UNK>, and good morning, everyone.
Net sales from continuing operations for the first quarter of fiscal 2015 were $1.28 billion, essentially flat with last year.
Comparable store sales for stores open at least 15 months increased 1.6% which compares to our guidance of plus 1% to plus 2%.
Furniture at low doubles, soft home mid-singles, food mid-singles and consumables at low singles were the key drivers.
As <UNK> mentioned, we are pleased with this result particularly given the challenging weather in the month of February.
On our last call, we indicated February was a tough month and we expected sales trends to accelerate in the combined period of March and April or Marple.
This is exactly what did occur as Marple comps were up in the high 2s with positions us well as we head into Q2.
Income from continuing operations for the first quarter was $32.3 million or $0.60 per diluted share, which compares to our guidance range of $0.55 to $.
60 per diluted share and represents a 20% increase over last year\
Thanks, TJ.
Before we open up the lines for questions, I want to share a few thoughts in closing.
I recently had my two year anniversary with Big Lots and when I look back and consider where we came from, I could not be more proud of this team and what we have accomplished together.
We established Mission, Vision, and Values and we live them every day.
We have significantly improved our Company culture and we measure and hold ourselves accountable.
We developed the SPP focused on three key pillars, Jennifer, our Associates, and our Shareholders.
We completely changed our buying processes and disciplines i.
e.
, QBFV.
We focused our portfolio on U.S. retail operations with the wind down of our Canadian and wholesale businesses.
We have driven five consecutive quarters of positive comps and delivered upon our financial commitments each and every quarter.
We returned over $320 million of cash to our shareholders through dividends and share repurchase activities.
We have a seasoned group of professionals and have attracted top talent.
I am confident in our leadership team.
In fact, just last week we announced the appointment of Rocky Robbins as General Counsel and Corporate Secretary.
Rocky is a highly respected member of the legal community and will be a tremendous fit to further enhance our culture and contribute to the long-term success of our strategic plan.
Next, we are managing our business for the next three to five years, not quarter to quarter.
Recently we announced to our associates our intention to relocate to a new, state-of-the-art distribution center in California.
The new facility will be equipped with upgraded hardware, vehicles, and systems to support more West Coast Big Lots stores and potentially our Ecommerce platform.
We expect the new facility to open in mid-2017 and will require modest levels of net investment.
Additionally, we have established the Big Lots Foundation and our associates have enthusiastically supported our philanthropic efforts focused on healthcare, housing, hunger and education, elevating the perception of Big Lots in our communities.
And finally working with our Board, the combination of enhanced governance practices and consistent performance enabled us to receive very high marks from our shareholders during this most recent proxy season.
All major accomplishments in two short years.
At yesterday\
Thanks, <UNK>.
One final comment.
During Q1, two additional sell-side analysts initiated coverage on Big, increasing the total number of analysts to 17.
We are very appreciative of the support.
In an effort to give you an opportunity this morning, please ask just one question.
We will keep the lines open as time permits for a second round of questions.
Feel free to get back into the queue if you have additional areas you would like to discuss.
Alternatively, I will be available after today's call.
Vicki, we would now like to open the lines for questions.
Sure.
Thanks, <UNK>.
The merchandising process is always going to be evolving and I tell my folks all the time ---+ it drives them nuts sometimes that I say we are at the beginning of the beginning.
It is really about honing in and sharpening the saw and always making improvement and driving the QBFV and other challenges that we put in front of ourselves.
I would say that discipline obviously is working and you can't lose focus on that or you become complacent.
So it is evolving and it will continue to evolve and we believe a lot of the heavy lifting is done.
However, it is continuous improvement so we will continue to improve in all of our categories throughout the area and as we identify those five big categories where we win and then we have the convenience businesses that are really coming to life and you see that evidence in the store.
As far as the Furniture department, I would tell you that Martha has been running that thing now without a divisional for quite some time and she is working directly obviously with the team and she has done an outstanding job of really getting them focused and there have been changes in there.
You just may not see them but there is some improvement in price points and quality and especially in some price points in upholstery and also in mattresses.
Those two areas have really, really stepped up and I think in case goods, we are seeing the quality improvements as well.
So again, it is just an evolving process that we will never let up on.
It is just the way ---+that is what real merchants do, they are never, ever satisfied.
<UNK>, it is TJ.
I heard three different things in there.
So let me try to address the trajectory questions and ask <UNK> to maybe speak to the quality of assortments and how he feels about the businesses going forward.
I think first as a general statement, let me kind of just share with everybody because I know this is probably a question everybody has.
In terms of guidance for the second quarter at a 2% to 3% comp coming off of a 1.6% comp in the first quarter, we do see an acceleration in the overall store performance coming out of first quarter and second quarter.
That is based on two things.
That is based on comps in the month of Marple or Marple, March and April combined, where comps were up in the high 2s.
It is based on May sales to date including the all-important Memorial Day weekend where comps are solidly in that 2% to 3% range.
So we have seen acceleration coming out of first quarter but really in the back half of first quarter and we have seen that sustained in the month of May.
In terms of category trajectory, Furniture continues to outperform the store as expected.
Soft Home with expanded footage which was an SPP initiative and executed at the end of first-quarter, is also a leading category.
Food, which we commented on as being up mid-single digits internally, we would have hoped for a little bit more than that in the first quarter.
However, we have got our arms around that business like no other.
The team is doing a great job responding to trends and I\
<UNK>, just to add to that, I would tell you that back to what <UNK> asked about is, it is a continuous improvement and tweaking of the businesses.
And I would tell you the last two weeks I sat through the planning meetings for all the businesses for spring 2016 and in those areas that we are now calling convenience businesses, electronics, home maintenance, stationery, etc.
that some of it sits in Hard Home, some of it sits obviously in Electronics, the teams are doing an outstanding job of putting together plans as we continue to reduce some linear footage as we have talked about in our SPP.
It is not a one year hit, it is a three year plan that will continue to evolve, and we think the assortments in there have improved significantly and what I am seeing for spring 2016 is significant improvement in electronics, home maintenance categories, stationery strategy looks very solid.
From a QBFV point of view, I couldn't be more excited, and I think that what you need to know and TJ obviously talked about the trajectory, the businesses that we said we were going to win in, we are winning in and the strategy is absolutely working.
There is nothing embedded in this that is not.
In fact, I am more pleased than ever with how well Michelle's team has managed Electronics and parts of the Accessory business and has made plan in the first quarter and they continue to perform at a level that we expected them to perform.
I believe by the time we get into 2016, those big headwinds will be behind us and those businesses will start to comp positive as well.
Yes, <UNK>, it is TJ.
We are measuring traffic now in all of our stores and developing a baseline, looking at it week to week, day to day to try to understand and get comfortable with the data.
It is a nice byproduct that we are receiving as a result of rolling out EAS, or electronic article surveillance measurement and equipment in our stores.
It is premature for us to comment on traffic levels though candidly.
That is not a metric and conversion is not a metric that we are holding our teams accountable to yet.
That is a 2016 initiative as part of the store revolution that Nick and Lisa are leading.
So I'm not going to comment on traffic or those metrics at this point.
I would just tell you that the challenges that we incurred in the first quarter are going to be predominantly transaction driven.
Think about our prepared comments on weather particularly in certain markets of the country.
The good news for us though is building out that basket, she is recognizing, Jennifer is recognizing and communicating back to us the improvements that she is seeing in our store not only from an execution standpoint although it is still very early, but as <UNK> said from a QBFV standpoint.
So to have transactions to be lower than last year in the first quarter and still comp up 1.6 on top of a positive comp last year, it tells you some of our bigger businesses are working, we are building out that basket.
She sees the value, she is willing to pay higher average item retail in certain categories and importantly too, she is filling out the basket with units.
So from our perspective, <UNK> and others who may have the question, I don't want you to walk away feeling as if it was our plan that transactions should have been up in the first quarter, it was not.
Those trends and that customer mindset we think takes longer to change than even just the 12 months we have been at it in 2014.
Again, from our perspective, we are very pleased with where we ended the first quarter and how we have started the second and that is what is most important from our perspective.
<UNK>, that is a great question.
We are very bullish on the Easy Leasing program and the opportunity for more and more customers to learn about financing Furniture and other categories in our store.
That is all based on results.
That is not a gut feel on the part of the team, that is based on results.
I think in the prepared remarks we talked about stores that are now in year two of having financing available.
They are comping the comp, and in any given week, <UNK>, those stores are seeing Furniture comps that are up in the mid- to high-single digits on top of very strong performance in the prior year.
So we do believe we are still to coin <UNK>'s phrase, we are still at the beginning of the beginning on this one.
The addition of Soft Home has been well received early.
The expansion or really having the Seasonal area of the store, big-ticket Seasonal available for the full spring season this year versus last year obviously is an opportunity for us, and as we look to the back half of the year, candidly as part of the Store Revolution that Lisa and Nick are leading, there will be an expanded Furniture sales training program available to our teams for the first time maybe ever in terms of the training that we are providing them on how to raise that ring and really close the sale.
Furniture financing or Easy Leasing is another tool for them to be able to execute to that.
So we feel like we are still very early in developing out this program with our customers.
Again keeping in mind that that Furniture customer may be in the market to buy Furniture maybe once or twice a year if that.
So for those customers who haven't been in the market, it is not inconceivable to think they may not know we have a Furniture financing program.
So that is where <UNK> and his team from a marketing perspective really take over too and have made a big deal about it in circular, in print, socially and some of the loyalty card programs and couponing activities that we have tested here in the first quarter.
So we could talk about Furniture financing probably for a very long time but I will stop there.
<UNK>, this is <UNK>.
It is a good question.
I would tell you in the prepared remarks I called out that there was a little disruption in the port activity primarily more impact in the seasonal area with Patio Furniture and Lawn and Garden, a much lesser degree in Furniture obviously.
As you know Serta, Seeley, those guys are all domestic.
So the Upholstery piece, Ashley has factories here in the U.S. as does United so we really didn't have big backups on what we call the kits that come in from Asia and then they get built here, the Upholstery and so on so that area was not really impacted.
I would just tell you that Carlos' team, our guys that are in that transportation area just were really out in front of it, and I think we talked about this on the last call about Christmas and how we felt about coming into the first quarter.
They really have just been on top of it ,and I think that that has been our key is managing to get those containers out of there.
We were behind I would say early on in the first quarter.
There was probably a three to four week concern on some items and categories but they managed to get it caught up and we are absolutely fine now and it is behind us, but it really did not have any material impact on the business.
<UNK>, it is TJ.
So I will play marketing guy for a minute.
Jennifer loves coupons.
She sees value in coupons and that is what we are all about, surprising her in every aisle every day with value.
It is a little bit of a new tool for us, and we were very pleased with the response we got when we executed some of those types of events in the first quarter.
Additionally, I want to point out from an inventory and merchandise management standpoint, we were able to execute those all within our markdown plan and markdown budget which again speaks to the disciplines that <UNK> mentioned in his prepared comments.
So we feel very good about the opportunity at certain times of the year to utilize that if need be.
The second part of your question, Texas, I am sorry.
That is a great call out.
From our perspective, again the results that we saw in March and April and particularly here in the last couple of weeks of May are encouraging to us in total recognizing there were certain regions of the country, particularly Texas, where we had a tough go over the last couple of weeks.
As you know, it is a big state for us, well over 100 stores, the majority if not all of those comps stores.
So to be able to execute to deliver the comp in first quarter, Marple and in early May is very encouraging to us.
To my knowledge, we have not had any significant store closure activity, any significant damage related to our stores and really that is a very seasoned team down in Texas led by one of our more senior regional team leaders, and I am sure they are working extremely hard to be ready for Jennifer every day.
We watch sales every hour, every day, <UNK>, as you know and of late in the last couple of days, it looks like maybe people are starting to come out again so hopefully the toughest part is behind us.
But whether it is Texas, whether it is other states or whether it is a deal we had last year that we don't have this year in a certain category, that is what we get paid to manage as a business and I think again, the consistency that <UNK> and the new team have brought from a merchandising standpoint helps us weather those ---+ pardon the pun ---+ helps us weather those difficult times whereas in the past we weren't as good at that.
So I take it has a very positive sign that we are able to work our way through more difficult times on a regular basis now, not just on an exception basis.
I'm glad you asked, <UNK>, or <UNK>.
I'm glad you asked finance question.
I think it is important to note because I know again that a lot of models had different expectations for second quarter than we have guided to or that we are talking about today.
I think it is real important for everybody to understand in many areas of the business we are investing ahead of benefit, not necessarily always from a CapEx standpoint but also from an expense standpoint.
So for instance, in first and in second quarter again, the Store Revolution and the rollout of all the different initiatives and training related to those initiatives being dock to stock, automated labor scheduling and coming soon in the third quarter, Furniture sales training, those are investments ahead of a benefit.
Additionally, from an asset per (technical difficulty) standpoint in terms of EAS systems, alarming our stores, cameras in our stores, all of those different activities that have been going on that are now complete as of the end of the first quarter, there is expense associated with those and really the benefit comes later as we move through 2015 and we start to see hopefully markdown activity as well as return activity.
And then as we get into the end of the year when we take our next physical inventory, we would expect lower shrink results.
So in many regards in the first and second quarter, we are investing ahead of benefit to come later in the year.
So that is why it was so important that we wanted to call out the calendarization of how we are guiding is very consistent with how we planned the business and what our expectations were internally.
There will be CapEx incremental to our original SPP that will hit primarily in 2016.
As soon as we are finalized with kind of, I will say the financing aspect of how we are going to go about building and relocating our distribution center, I will be more prepared to speak to those comments.
But there will be CapEx coming in 2016 that might not have been, was not in our original SPP expectations.
Having said that, from a cash flow standpoint, you know from following the Company for a long time now, <UNK>, that we own all five of our distribution centers including the one we anticipate relocating in California.
That location is of high value, it is on distribution center row so of speak in the Inland Empire and we don't see a need for two distribution centers in California which is why we are going to relocate here sometime in the next couple of years.
So from a cash flow standpoint, it is important to understand obviously we will be looking at some point to market that building and as we get prepared to move into the new one.
So CapEx yes, in 2016, cash flow opportunity to partially offset if not fully offset the CapEx need is what we are looking at as we market that building here in the next several quarters.
<UNK>, this is TJ.
I guess from our perspective, there are a lot of questions around what amount of business do you recover versus what is permanently gone.
We watch that every day, every week, follow a glide path.
Actually the team has daily forecasts when it comes to the Seasonal business so we are as on top of it as we can be.
Could there be a little bit of incremental markdown risk in the second quarter.
That is absolutely a possibility.
So I wouldn't want to diminish that.
But I guess from our perspective, what we are encouraged by is the fact that almost to the day when we see weather trends improve whether it is in Texas or California in warmer weather markets or whether it is here in Columbus, Ohio and it is now in the 80s instead of the high 60s or low 70s, we see those businesses respond.
So I think the important thing for us is we are all over it from a daily, weekly forecasting standpoint.
We are looking at how to flow the inventory maybe differently than the original plan meaning we know different markets are responding differently based on their weather pattern.
So there is a lot of detail that goes into understanding what our business looks like every day.
We are doing the best we can with it, we think we have tried to capture what if any risk there might be and candidly if we need to make decisions and take more markdowns in Seasonal and look at other promotions in other areas that might not be as important in the second quarter, we will do that.
Coming out of the second quarter clean on inventory compared to last year or compared to plan is a priority.
As you know, the Seasonal business, particularly and Lawn and Garden and Patio Furniture, etc.
, does have a longer life than say Christmas trim or maybe even Pools.
So long-winded answer but the team is all over, we've got an experienced team in that area.
We feel very good about what we are offering, but we will work our way through the second quarter as best we can.
<UNK>, it is TJ.
We have not updated the long-term model as you know.
Candidly, that is something that we are going to be going through here over the next few months with our Board of Directors and that would include an update on 2016, 2017, and as <UNK> mentioned, three to five years out, where do we want to compete and how do we want to differentiate further.
Having said that, we have delivered every single quarter on what we guided to from a financial standpoint on the last earnings call as we talked about annual guidance, I mentioned to you that in order for us to deliver on those SPP goals ---+ primarily I'm thinking about the 6% operating margin goal ---+ we have to be toward the higher end of our guidance or the higher end of that model which called for a 2% to 3% comp.
So we know 1.6 every quarter is not going to get it done and not going to get us there.
I don't know <UNK>, that we think that even that model ---+ I know we think that that model does not at $170 a foot and a 6% operating margin rate, that just kind of gets us into the conversation.
Our goal as a management team is obviously set much, much higher than that and looks much, much further out.
So from our perspective, we know that comps have to accelerate and they have as we have come into second quarter which enabled us to guide to 2% to 3% instead of low singles.
We believe we have a number of initiatives to drive topline going forward.
It is premature though for me to sit here and kind of update three year goals until we have really added that third year in now because it is rolling and walk through that process and engage with our Board.
I would just say that again from an execution standpoint and a consistency standpoint that has long been a challenge for shareholders to get comfortable with the inconsistency in our business, I think we have taken down that barrier, we are more consistent today.
We've got a team in place that is managing their business with much more discipline than we have had, and I think we have total buy-in on the part of the team now extending on into the Store Revolution.
So we feel very good and feel like we have done exactly what we said we were going to do.
We know we need to see some level of sustained acceleration in comps and we are hopeful coming into the second quarter that those trends are now starting to unfold just as we thought they would.
If I can just add one comment too, <UNK>, is that we are in it for the long haul, not the short haul, right.
And so as we changed many, many habits and processes over the last 24 months and it was very well embraced by the BPARM teams, I would just tell you that I intentionally did not launch a very strong campaign on velocity per lineal foot, units per door, per week and that is the next level of conversation that is taking place at this point and we are challenging ourselves to do more.
And when you talk about sales per square foot, obviously we look at that gondola on a linear basis and how much more productivity can we get in every 4 foot section and those conversations are happening now about being bolder and thinking bigger.
And again, this isn't a one year fix, this is a long-term strategy that is going to drive some of that operating power that you are talking about over time.
We just can't put a number to it yet as we continue to work our way through that.
And I would say by the time we get to the end of the year or the first part of next year we are going to have a much clearer understanding of how big is big.
Matt, I would tell you that directionally again absent markets that have weather, absent a tough February, those I will call them outliers but they are part of our business, but I don't think are a true indicator of how the business is performing.
Directionally, we have seen some level of the improvement from a transaction standpoint but again, I want to caution when we are talking about improvement, it is relative to the trend.
I'm not sitting here telling you that transactions were positive in the first quarter, they were not.
We articulated that a little bit ago, but I think from our perspective directionally in certain quarters where comps are stronger, we have had some level of encouraging signs.
It is a long-term view that we are taking on this as <UNK> said.
And really from our estimation anyway, we have traffic in our stores each and every day.
We are starting to understand better what conversion looks like and how big that opportunity could be, hence the Store Revolution, roles and Responsibilities, Dock to Stock, Automated Labor Scheduling, those are all tools that a store team leader, district team leader, regional team leader now have to try to be better prepared to convert Jennifer when she is in the store today than they have ever had before.
Additionally, albeit small in terms of transactions but big in terms of opportunity from a sales training standpoint in Furniture, that is ahead of us.
2016 and measuring and holding teams accountable to conversion and that traffic that we are working hard to generate each and every day from our view that is an opportunity that we have really not even touched the surface on.
So this is not something that we expected to turn overnight.
We have improved the consistency in our business clearly.
And maybe most importantly at least from my standpoint and we talk about this a lot as an executive team, as we have come into the first quarter and we are up against positive comps for the first time in a long time, we are comping the comp.
So a lot of positives happening in the business and from our perspective, no real surprises, big surprises that have said to us the strategy needs to shift, move or change and I think that is important for everybody to understand.
Matt, I would just add to that, too, this is <UNK>, that our guys enthusiastically jumped all over this traffic counter thing in our stores and what Nick and Lisa and the team are doing there is measuring prior week's traffic to this week's traffic as we build history and that is the important thing is this is the year of building history.
So next year to TJ's point, we will be able to speak to it clearer and we will also be able to hold our folks accountable for traffic and conversion.
So it is exciting because we have a dashboard that we are looking at on a daily basis, but it is measuring last week to this week so it can look a little goofy some days and drive me crazy.
But the most important part of it is Nick is and the seven regional team leaders are looking at it every day and pushing hard to improve our performance and those are things that you guys need to understand out there.
When we talk about the Store Revolution, not having traffic counters, not having cameras in the front of the store, not having cameras in the stock room, all these things that we are doing are things they are loving it because we didn't give them these tools.
And they are getting all the things they need.
Automated scheduling is going to be game changing for us as well.
So again, hopefully a year from now when you ask that question, we will be able to give you a very clear picture.
The average number of diluted shares for the year, yes, which can be different than outstanding as you know.
But yes, that is what we are utilizing for our EPS estimates.
<UNK>, it is TJ.
Actually let me clarify, I think what we said on the March call was that embedded in our annual guidance is about a nickel a share in drag in terms of Ecommerce expense.
Again ahead of a benefit which in terms of a sales benefit comes in the form of 2016.
I think what you might be remembering is in our investor day when we talked about our goals of a 6% operating margin, there was no accounting for Ecommerce and the related potential EPS drag in our SPP model so that was totally a retail number.
So for this year, nickel drag.
To anticipate the next question, we saw about $0.5 million of expense in round numbers in the first quarter related to Ecommerce.
So again, if you tax effect that, it was not quite a penny but it is close.
So $0.5 million in first quarter, nickel drag to the year, Ecommerce was not embedded in our SPP model which called for 6% operating profit number.
That was a retail only goal.
Sure, <UNK>.
We don't plan severance coming into the year.
I think that is the quick answer.
We had a couple of different situations where changes were made in leadership, both here in the home office and in our stores.
We are not talking about a store team leader, we are talking about much higher level that would round up to some of those types of numbers.
As <UNK> mentioned in his prepared comments, we welcomed Rocky this past week.
Additionally, we haven't spoken a lot to it but as it relates to the rollout of the Store Revolution and some of the metrics that we are going to be holding our teams accountable go forward, we actually have as you know seven regions throughout the country sitting here today.
We have people in new positions or new regions that have mostly come from outside the business.
So the assessment of talent that <UNK> and the team went through and the Board went through when he joined us started here in the home office and now as we move into the Store Revolution has rolled out into the stores.
So it is both home office and stores.
It was not planned and that is the reason to call it out to help everybody understand that from a leverage standpoint and how we are operating the business, we still feel very good that we can leverage SG&A in that flat to slightly positive comp.
And the calendarization of it we have done internally and I think it is just a little bit different than maybe what other analysts and investors might have been expecting but it is very consistent with our plan.
<UNK>, it is <UNK>.
I would just add to that that I have been very consistent in talking about what makes us successful is our people and the strategy is great, but if you don't have the right people to execute it, it doesn't matter.
So we again in the quarter made some decisions that we needed to change the talent and improve the talent and that is what we do and quite candidly sometimes you make a hire and you make a mistake and I am the kind of leader that recognizes that and is fully transparent if we made a mistake let's take care of it and move forward and that is what we have done.
It shouldn't be ---+ I think this is probably one of the biggest quarters we will probably have for the rest of the year for sure and again I think that we have got a solid team of seven out there and so that is behind us and here in the corporate office as well, but it is truly about making sure that we have A players in the building who don't tolerate anything beneath that.
I will try to answer both of those and maybe have TJ weigh in a little bit too.
But I would tell you we do have a strategy that we have been very clear about over the three year period of closing more stores than opening.
As you know, the guys go through a renewal process on a monthly basis and we make decisions on which stores we are going to close or renew and so on.
But I think that as we continue to get the business stabilized which we have done, that we need to improve as I said earlier to one of the other guys, the velocity sales per linear foot in the box.
The productivity needs to improve so that we can turn the inventory faster and drive more topline and that is really the strategy of growth.
I would tell you that that doesn\
I think just to add on there, <UNK>, I think on the store count question from our perspective as the business continues to be more consistent, grow sales per square foot, as the operating margin expands, our hope would be that the number of store closings actually comes down a little bit over time and that net number starts to flatten out over the next two to three years.
Again that is not what is embedded in our SPP but clearly as we are working toward a more productive company and a more productive box, that could be one byproduct.
I think what we all are aligned on internally including our Board of Directors is we do not want to open new stores for the sake of opening new stores.
And our real estate team is very plugged in and connected throughout the country and candidly there are some markets we would love to grow in that we just can\
Thanks, everyone.
Vicki, will you please close the call with replay instructions.
