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#Good afternoon.
You know, I would tell you that it's probably as much to do with relentless dissatisfaction.
You know, we've always done resets.
We haven't really talked a whole lot about them on the call.
For those of you who attend our IR conference, where we've got our sales meeting, you see a lot of the changes that take place with our vendors on the sales floor down there at the convention center.
So I think that this has been an ongoing thing for Tractor Supply; and I think if you go back and you look at our traffic count, you look at our comp store sales performance, you'll see that in a lot of the numbers.
We're just probably today giving more color around some of the changes we're making.
I will say, however, that when it comes to some maybe more of the commercial product, we are testing more there than we have in the past, and it seems to be resonating pretty well with our customers.
The higher price points that we have out there right now and how we're selling those price points, I think are a real show of support from our customers and their trust in the Tractor Supply brand, and also their trust with the team members that we have in our stores and the relationships they've built.
So I think we're taking advantage, quite frankly, of a foundation that's been built for years and we'll continue to try and test new things.
<UNK>, it really relates more to the maturation cycle of our new stores.
We believe that in several of the areas, it is very competitive out there, and that's why we're extremely pleased with the ramp of the stores out West and that accelerated comp that we're experiencing with those Western stores.
We'll likely see, if these hold, and as our costs tick up, we'll see it start to moderate at the end of Q3 and into Q4.
But again, we're still watching that very closely and our teams are challenged to keep costs down, so we'll see how good of negotiators they are.
I would say that the upgrades that we made when it comes to engines that are in the same size mower, but by changing the deck style and the frame, as well as upgrading the engines, if you want to call that commercial, I guess you could.
But our customers tend to like things of high quality when they can see value, and that's what we'll continue to focus on.
I'll use one other quick example.
And that is, is we added a $5,999 commercial zero-turn mower into a handful of stores.
And at the beginning of the season, we saw it performing really well and we expanded it out to even more stores and we were delighted with the sales.
And to be able to sell a $6,000 riding motor at a Tractor Supply Company store is something that I wouldn't have felt we could have done years ago.
So there is a need, and I think we're filling that need and that gap really well.
<UNK>, it's <UNK>.
We're seeing a lot of positive signs.
The comp ramp there is far greater than we'll have in our four-wall stores, because it's still a very immature business.
But no question, with the new website launch, the reason we did that was to give customers more options as far as the way to acquire the product.
Our goal is to be 24/7 Tractor.
So in order to do that, we had to do the upgrades and give ourselves the ability to have a platform that can handle that.
We are adding more and more drop-ship vendors, as we speak, daily.
We are seeing very good customer response to those additions, and more of our business is coming from that element today than probably, I would say, direct fulfillment is coming greater than what we've seen in just normal replenishment from the Franklin DC, which is the replenishment point for the on-line business.
So we're encouraged with that, because that's a direct connection between us through and it's a drop ship from the vendor.
So lowest cost for us, a little faster delivery for them.
But in general, our conversion rates are moving upward.
The amount of people that are hitting the website is increasing.
We're looking at adding new extensions of products.
You're going to see this thing develop over the next several years into something that I think can be much more meaningful.
However, I will caution you, there are a lot of things that we sell at Tractor Supply that would be very difficult to sell online and deliver to the customer, because of their cost of transportation.
So there will be a point when there's going to be some things that could be somewhat prohibitive, but all indications, all signs right now are that this thing is moving ahead well, and we are very pleased with our performance.
Mobile is growing very rapidly, <UNK>.
And the consumer who is buying from us is still somewhat within a proximity of our store base.
So we're not seeing someone in some distant place, in let's say, Alaska trying to buy a product on TractorSupply.com.
That has not been prevalent.
It's been customers that are looking at that as a convenience factor.
They can buy it at 3:00 in the morning, they can buy it at 6:00 in the evening.
That's what we're seeing.
So it's really still somewhat based around the current consumer base, the distance of our stores, within the base of the ---+ that's where the base of the business is coming from.
The only thing we have noticed, and we mentioned it in the write-ups, <UNK> commented to it, it's a little more expensive to do business in the West.
No question that occupancy costs are higher.
But our retails are different out there and the volume of those stores will be considerably different.
So we're finding plenty of sites.
There doesn't seem to be any concern for finding quality sites.
And one thing I should mention is when we open stores, we don't look at it as just opening the all A locations.
We will open stores across a spectrum of small, medium and large in volume and in size, so that we can continue to see productive store opening improvements over the next decade or so of store growth.
So we're not looking at just A stores.
We're looking at A, Bs and Cs.
We're looking at different markets, some larger, some smaller.
The mix of stores is just as important as finding the location of that store.
Thank you.
<UNK>, let me just comment on HTP and I'll let <UNK> take it from the other side.
In HTP, we can attribute generally all of our customers that are coming through from a purchasing standpoint, because it's a different format.
It's very intimate and they're willing to give us their information, so on and so forth.
Little different in Tractor, however.
<UNK>, what I would tell you is that the acquisition of new customers is critically important.
We talk a lot about the aware non-shopper and we talk a lot about how difficult sometimes it is to get people in our stores that just look at the name Tractor Supply.
We've done a lot with our assortments over time.
We've done some different things with our marketing and how we target different areas.
So I would tell you that we're making good strides.
I would tell you by the comp transaction growth, we're continuing to see that in our numbers.
And so while there is more work to be done here, I'm pretty pleased with the degree of support that we're getting from our marketing team in bringing new folks in.
I would tell you deflation has had the biggest impact.
So whether it be in our brands like Royal Wing in bird seed or some of what you're seeing on the livestock feed side of our business, we're selling some good units.
We continue to think that we're gaining share.
Units are a focus for us.
But it is difficult when you're pedaling uphill here, because of deflation on the top line.
So it's still a focus for us as an organization, and that's what I can tell you at this point.
Okay.
Thank you for your interest, everyone, and your support of Tractor Supply.
We look forward to speaking to you again in October regarding our third quarter performance.
