Aug 17, 2017
Executives
Barbara Rentler - Chief Executive Officer Michael Balmuth - Executive Chairman Michael O'Sullivan - President and Chief Operating Officer Gary Cribb - EVP, Stores and Loss Prevention John Call - EVP, Finance and Legal Michael Hartshorn - Group SVP and Chief Financial Officer Connie Kao - VP, Investor Relations
Analysts
Ike Boruchow - Wells Fargo Mike Baker - Deutsche Bank Omar Saad - Evercore ISI Lorraine Hutchinson - Bank of America/Merrill Lynch Paul Lejuez - Citi Laura Champine - Roe Equity Research Oliver Chen - Cowen & Company Michael Binetti - UBS Simeon Siegel - Nomura Instinet Kimberly Greenberger - Morgan Stanley Bob Drbul - Guggenheim Dana Telsey - Telsey Group Lindsay Drucker Mann - Goldman Sachs Brian Tunick - RBC
Operator
Good afternoon and welcome to the Ross Stores Second Quarter 2017 Earnings Release Conference Call. The call will begin with prepared comments by management followed by a question-and-answer session.
[Operator Instructions] Before we get started, on behalf of Ross Stores, I would like to note that the comments made on this call will contain forward-looking statements regarding expectations about future growth and financial results, including sales and earnings forecasts and other matters that are based on the company’s current forecast of aspects of its future business. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical performance or current expectations.
Risk factors are included in today’s press release and the company’s fiscal 2016 Form 10-K and fiscal 2017 Form 10-Q and 8-Ks on file with the SEC. Now, I would like to turn the call over to Barbara Rentler, Chief Executive Officer.
Barbara Rentler
Good afternoon. Joining me on our call today are Michael Balmuth, Executive Chairman; Michael O'Sullivan, President and Chief Operating Officer; Gary Cribb, Executive Vice President, Stores and Loss Prevention; John Call, Executive Vice President, Finance and Legal; Michael Hartshorn, Group Senior Vice President and Chief Financial Officer; and Connie Kao, Vice President, Investor Relations.
We will begin our call today with a review of our second quarter and year-to-date performance, followed by our outlook for the remainder of the year. Afterwards, we will be happy to respond to any questions you may have.
As noted in today’s press release, we are pleased with the better-than-expected growth we delivered in both sales and earnings in the second quarter, especially given our challenging multiyear comparison in today’s volatile retail climate. Earnings per share for the period were $0.82, up 15% on top of a 13% increase last year.
Net earnings for the second quarter grew to $317 million compared to $282 million for the same period last year. Sales rose 8% to $3.432 billion with comparable store sales up 4% on top of a 4% gain in the prior year.
Operating margin of 14.9% for the quarter outperformed our projections mainly due to a combination of higher merchandise margins and leverage on our above planned sales. For the first six months of fiscal 2017, earnings per share were $1.64, up 14% on top of a 9% increase in the prior year.
Net earnings were $638 million, up from $573 million in last year’s first half. Sales year-to-date rose 7% to $6.738 billion with comparable store sales up 4% versus a 3% gain in the same period last year.
Sales trends during the quarter were broad-based across all major geographic regions and merchandise categories. The Midwest and Southeast were the strongest regions, while shoes, was the best performing merchandise category at Ross.
dd’s DISCOUNTS also posted strong better-than-expected gains in both sales and operating profits for the quarter. As we ended the second quarter, total consolidated inventories were up 3% compared to the prior year, with average in-store inventories up slightly.
Packaway as a percent of total inventories was 46% compared to 47% at this time last year. Turning to expansion programs, we opened 21 new Ross and 7 dd’s DISCOUNTS locations in the second quarter.
For the 2017 fiscal year, we continue to plan for a total of about 70 new Ross and 20 dd’s DISCOUNTS locations. As usual, these numbers do not reflect our plans to close or relocate a handful of stores.
Now, Michael Hartshorn will provide further color on our second quarter results and details on our second half guidance.
Michael Hartshorn
Thank you, Barbara. Let’s start with our second quarter results.
Our 4% comparable store sales gain was driven by increases in both traffic and the size of the average basket. As mentioned earlier second quarter operating margin outperformed our projections increasing 50 basis points to 14.9% compared to 14.4% last year.
Cost of goods sold for the second quarter improved 25 basis points driven by better than expected 35 basis point increase in merchandise margin, 20 basis points in lower occupancy costs and distribution expenses that were lower by 10 basis points. These gains were partially offset by a 25 basis point increase in freight costs along with 15 basis points of higher buying costs.
Selling, general and administrative expenses during the period were lower by 25 basis points. This improvement includes a non-recurring benefit of approximately 20 basis points from legal related costs.
During the quarter we repurchased 3.6 million shares of common stock for a total purchase price of $215 million. Year-to-date, we have bought back a total of 6.9 million shares for an aggregate price of $430 million.
As planned we expect to buy back a total of $875 million in stock for the year under the 2-year $1.75 billion stock repurchase program approved by our Board of Directors in February of this year. Let’s turn now to our second half guidance.
For the third quarter ending October 28, 2017, same-store sales are forecast to increase 1% to 2% on top of a robust 7% gain last year. With earnings per share projected to be in the range of $0.64 to $0.67 versus $0.62 in last year’s third quarter.
For the fourth quarter ending February 3, 2018, we are also planning same-store sales to be up 1% to 2% on top of a solid 4% gain last year with earnings per share projected to be $0.88 to $0.92 compared to $0.77 last year. This includes an approximate benefit of $0.08 due to the 53rd week.
Now I will provide some additional operating statement assumptions for the third quarter EPS target. Total sales are projected to grow 4% to 5%.
We are planning to add 30 new Ross and 10 dd’s DISCOUNTS locations during the period. Operating margin is projected to be in the range of 12.4% to 12.6% versus 12.6% in the prior year.
Net interest expense is estimated to be about $2.5 million. Our tax rate is planned at approximately 37% to 38% and we expect average diluted shares outstanding to be about 384 million.
As noted in today’s press release based on our results for the first six months as well as our second half forecast, we now are projecting earnings per share for the full year on a 53 week basis to increase 12% to 14% to $3.16 to $3.23 on top of a 13% gain in fiscal 2016. Now I will turn the call back to Barbara for closing comments.
Barbara Rentler
Thank you, Michael. Once again we are pleased with the better than expected sales and earnings gains we delivered for both the second quarter and the first half of the year.
These results were driven by our ongoing ability to offer compelling bargains for today’s value oriented consumer. Looking ahead to the second half, we realize that we face our most challenging prior year comparisons and a volatile retail backdrop.
So while we hope to do better, we believe it is prudent to maintain a somewhat cautious outlook for the balance of this year which is reflected in our guidance. Nevertheless over the longer term we are very confident in our ability to offer customers outstanding value throughout our stores.
This will always be our top priority as it has proven to be the most crucial driver in consistently delivering solid results in both sales and earnings. At this point, we would like to open up the call and respond to any questions you may have.
Operator
[Operator Instructions] The first question is from Ike Boruchow from Wells Fargo.
Ike Boruchow
Hi, good afternoon everyone. Congrats on a really strong quarter.
Michael, I want to ask you about the merch margin line, you guided it flat to start the year for the first time in a long time, but it’s come in well above that for the first half of the year. Just kind of curious if you could talk about what’s driven that upside?
Any specifics you can give and then how you are thinking about merch margin into the back half [Indiscernible] year?
Michael Hartshorn
Sure, Ike. For the second quarter, as we mentioned merchandise margin was up 35 basis points.
It was really driven by a combination of better buying, but also when we are able to exceed our initial sales plan, there is markdown leverage and it helps us move to drive the business with closeout. So, that was beneficial in the second quarter.
As we think about the third quarter, our current guidance assumes that merchandise margins are slightly lower, but that’s because we are up against a 50 basis point increase from Q3 of last year.
Ike Boruchow
Got it. Thank you.
Congrats.
Operator
Your next question is from Mike Baker from Deutsche Bank.
Mike Baker
Thank you. I want to ask about when you are seeing Hispanic markets, I know you talked about some of your regional trends, but there has been some concern that some Hispanic markets might not be performing as well, anything to call out there in terms of your same-store sales?
Thanks.
Michael Hartshorn
Mike, we track and analyze the performance in our stores based upon various different demographic factors and obviously that includes looking at Hispanic markets and the answer is no. We have not seen an issue in those markets.
Mike Baker
Okay, that’s helpful. If I could ask one more, I was curious about the promotional environment, some of the department stores lowered their inventories, their gross margins were lower though, which would speak to being promotional, obviously you guys did well, but I am wondering if you had any comments on the promotional environment from some of your competitors?
Barbara Rentler
Sure. Although the inventory levels were down, the promotional environment continued to be very aggressive.
And actually we just consider that, that is the way to do business now, but that’s going to continue as we go forward through back-to-school and through holiday.
Mike Baker
Okay, understood. Thank you for the color.
Operator
Your next question is from Omar Saad from Evercore ISI.
Omar Saad
Great quarter. Thanks for taking my question.
I wanted to ask about marketing, how you guys are evolving your marketing strategies in this digital era are using new techniques, because the traffic in the comp trends are obviously quite excellent counter to what’s happening out there in the rest of the retail and wondering if you can point to some new media strategies that might be working for you? Thanks.
Michael O'Sullivan
So, Omar, it’s Michael O'Sullivan. I would say that our marketing strategy, marketing message, marketing programs remains fairly consistent.
The message in those marketing programs is that we offer great values and it’s really the great values that I think have driven our trend and we will continue to drive our trend rather than the marketing programs. Now, within your question you mentioned sort of new marketing techniques, it is true we are absolutely experimenting and expanding nontraditional forms of marketing.
But I would stop short at saying that those are really making a significant contribution to our trend. They are helpful, but they are not really what’s driving our business.
Omar Saad
Thanks for the information. Good luck.
Operator
Your next question is from Lorraine Hutchinson from Bank of America/Merrill Lynch.
Lorraine Hutchinson
Thank you. Good afternoon.
Can you provide some information around comp metrics, was traffic positive, what did you see in ticket and anything else that you could share to help us to get a feel for how you drove that plus 4%?
Michael Hartshorn
Sure, Lorraine. As we mentioned in our prepared remarks, the 4% comp was driven by higher traffic and an increase in the size of the average basket.
Proportionally, traffic contributed more than the basket. The higher basket was driven by an increase in more units.
AUR was down just slightly due to the mix of business.
Lorraine Hutchinson
Thank you.
Operator
Your next question is from Paul Lejuez from Citi.
Paul Lejuez
Thanks. The home business, could you just comment on how home performed during the quarter?
And also curious what percent of your business is home right now in Ross versus dd’s and where do you see that going over time?
Barbara Rentler
Sure. Home outperformed the company.
It continues to be a strong business for us as it is for many people. In terms of our total percent to company…
Michael Hartshorn
Yes, we wouldn’t – Paul on the breakout between Ross and dd’s we wouldn’t break that out separately. On a total basis, it’s upper 20% of the business is home for us, 25%.
[Indiscernible] quarter.
Paul Lejuez
Got it. I am curious have you guys started thinking about store growth for Ross versus dd’s next year?
I am just curious how far away are we from maybe seeing the growth start to skew more towards dd’s versus Ross or is that very far off into the future? Thanks.
Michael Hartshorn
Yes, we will comment more at the end of the year on our specific plans for 2018, but I think for planning purposes, you can assume that our store openings will be much pretty much in line with where they have been the last couple of years, 80 to 90 new stores, approximately 20 to 25 of those being dd’s and the rest being Ross. I wouldn’t expect a significant change in that over the next couple of years.
Paul Lejuez
Thanks, guys. Good luck.
Operator
Your next question is from Laura Champine from Roe Equity Research.
Laura Champine
Good afternoon and congratulations on a good number today. You just put up a very strong comp on a 2-year basis and the guidance for next quarter’s comp is perhaps even better, implies that you could do even better an 8% to 9% comp on a 2-year basis.
Is your confidence in continuing to grow the comp next quarter, the one we are currently in, is that driven by trends you are seeing today or what else may you be factoring into that assumption?
Michael Hartshorn
Sure, Laura. While we do face our most challenging prior year comparisons in Q3, it’s clear to us that the consumer continues to favor retailers that offer compelling value.
And we think that bodes well for us going into the third quarter.
Laura Champine
Got it. Thank you.
Operator
Your next question is from Oliver Chen from Cowen & Company.
Oliver Chen
Hi, good afternoon. Great quarter.
We had a question related to inventory. It’s been extremely well managed throughout the years.
What are your thoughts for what’s next and it feels like your stores could even have more stuff and there is nice opportunities in new categories, so just a question about different priorities of the inventory management and what you can do to potentially even maximize the existing space you have? And then longer term, I was just curious about what’s in your mindset in terms of your corporate strategies and what you are thinking about with digital at large over the next 5 years?
Michael Hartshorn
Oliver, on the inventory question, so we have gone through a period of 7, 8 years of inventory reduction, the total inventory is down over 40% over the last number of years. So, as we look at it going forward, we are comfortable operating at our current levels that those reductions obviously have contributed to significant margin improvements, but we are in the very late innings of those reductions and are comfortable at the current levels.
Michael O'Sullivan
And then on your question about digital, Oliver, if I break it into [Indiscernible] a marketing, over the last 5 to 8 years, we have gone from spending really nothing on sort of nontraditional digital marketing so to speak to a significant chunk of our marketing budget now goes into those media. And we are pretty happy with the results.
A lot of that space is still evolving. So, I think we have additional things to learn, but I would be surprised if we didn’t further increase our marketing mix in that direction over time.
And separately I don’t think this is what you were getting at, but separately digital sort of e-commerce, we have no plans to pursue – we haven’t changed our view. We have no plans to pursue e-commerce at this point.
Oliver Chen
Okay. And are your inventories too lean because they are so tight, I am just curious where you will reach a point and where you can do more with more?
Michael O'Sullivan
Obviously, we watch very closely how inventory turns in the stores. And given our ability to continue to drive comp with a 4% comp in this past quarter on top of the 4% last year, we feel pretty good that we are capturing the business that’s out there.
Obviously, there is always – we always look at the mix of businesses and that some businesses are growing more rapidly and we might be more aggressive on inventory but that’s really a business by business thing rather than overall.
Oliver Chen
Thank you. Best regards.
Operator
Your next question is from Michael Binetti from UBS.
Michael Binetti
Hey guys. Thanks for taking my question.
So just on your comments that the consumer is choosing value is the answer to the focus for third quarter and how we get to the comp with the difficult comparison, maybe you could help us with some of the dimensionality on a couple of things, first off, can I assume that the plan is to deliver a value and that the comp assumes strong traffic and maybe some more AUR pressure than we saw last quarter. And then maybe some help on how to think about gross margin versus SG&A, are you willing to take some more merchandise margin pressure than we see in the recent quarters to help you anniversary that big Tom?
Michael O'Sullivan
Yes. Michael on the comp, if we think about the components between first and second quarter and our current trends in the second quarter, performance was fairly broad based across merchandise divisions and regions.
So we feel confident that the consumer is responding to value and we feel good about our inventory entering the third quarter.
Michael Binetti
And then maybe I can ask you just a follow-up on Lorraine’s question earlier, a little bit on the AUR what is driving AUR in your business today, is it a mix function and then same question on what’s – you have had some nice comments on the units per transaction to what other categories that are helping you guys drive that the consumer to pickup a couple of extra items from the basket?
Michael O'Sullivan
Yes. I mean on AUR, AURs have been relatively flat over the last several years, they are down slightly.
Again that’s mix related based on what’s driving the business. I would answer your question on the basket if I go through the merchandising areas.
All major merchandising areas were positive during the quarter as well as merchandise region. We did call out shoes during the quarter.
Overall non-apparel during the second quarter outperformed apparel. So we feel really good about the trends and I believe we are set up well for a strong back half.
Michael Binetti
Thanks.
Barbara Rentler
Michael I think that the merchants have been able to deliver value to the customers. So in this promotional environment where value moves a lot, one of the critical things is for a merchant to understand the value as they move and to respond appropriately.
And so with that comes potentially mix issues based on what’s available, based on what the customer wants. But really understanding that movement of value as you move along and not really recognizing how promotional it is and how it’s going to remain that way, I think it’s a critical part of what the merchants do every day and that’s added to our broad based success in merchandise categories in Q2.
Michael Binetti
I guess my question was more you are seeing that the Bogeyman at seven comp coming for a long time about a year ago, so is it look that the strategy here is value is working and the strategy for longtime has been to buy up for units so we will see the traffic component of the comp is what accelerates in the 2 year to help you guys lap that, is that what we should expect today?
Michael O'Sullivan
A couple of things Michael, our outlook for the back half has not changed from the beginning of the year. So again why we feel really good that’s the way we plan the business.
If you looked at our – the way we guided the back half it hasn’t changed the upside to the year was based on the out-performance in the second quarter. So the $0.06 that we added to be at the high end of the range for the year was all based on second quarter performance.
Michael Binetti
Thanks a lot guys. Congrats a nice quarter.
Operator
Your next question is from Simeon Siegel from Nomura Instinet.
Simeon Siegel
Thanks. Good afternoon and congrats on the strong results.
I think you spoke to merch margins, any color you could share on the 3Q and 4Q gross margins embedded within your guides and then could you quantify the concentration of your top vendors within revenues at this time and has that changed at all? Thanks.
Michael Hartshorn
In terms of the specific guidance in Q3 and Q4, the only guidance that we gave was my comment on merch margins and the comparison versus last year, so we wouldn’t get any further detail in that back half margin.
Michael O'Sullivan
And then on the vendor base no real changes to that. As you know we have a very large diverse and fragmented vendor base with lots of vendors.
And from time to time different vendors become more or less important, but no single vendor is particularly important in the overall mix.
Simeon Siegel
Okay. Thanks a lot.
Best of luck for the rest of the year.
Operator
Your next question is from Kimberly Greenberger from Morgan Stanley.
Kimberly Greenberger
Thank you so much. I wanted to ask the third quarter comp guidance of plus 1% to 2%, is it fair to assume or could we assume that the business is running in that range so far here in the third quarter.
And then secondarily it looks like there were a number of going out of business sales during the second quarter particularly among department stores, I know the environment is tough and seems to be just getting tougher every year, but Ross seem to sail right on through that undisrupted, I just wanted to know if there was any disruption at all in stores that were near those store closings or did you really just not see it at all, obviously we are not seeing any impact in the total company comp, but you obviously have more granular insight?
Michael O'Sullivan
Hi Kimberly, we wouldn’t comment on third quarter trends. On the store closures what we are seeing is stores that are located close to the stores during liquidation has a slight negative impact and then post closures slight positive impact.
That said the impact to the chain is not material giving on a base of close to 1,600 stores.
Kimberly Greenberger
Thank you, Michael.
Operator
Your next question is from Bob Drbul from Guggenheim.
Bob Drbul
Hi, good afternoon. Two questions, I was wondering if you could comment on how your business performed in California, I think there was a bit of a drag in the first quarter I think largely weather and I was also wondering if you might just comment on the women’s business and how that’s been performing for you?
Thank you.
Michael O'Sullivan
On regional performance of all of our major markets California, Texas, Florida were relatively in line with the chain average in the second quarter.
Barbara Rentler
And in terms of related business ladies once again posted positive gain in the quarter.
Bob Drbul
Okay. Thank you very much.
Operator
Your next question is from Dana Telsey from Telsey Group.
Dana Telsey
Good afternoon everyone and congratulations. As you think about wages and shrink any update on those two components in the game plan for the second half of the year.
And then on dd’s and that strong performance on sales and operating income what are the key drivers there and has anything changed in that business? Thank you.
Michael O'Sullivan
Sure Dana, on shrink and wage question, no changes are expected in shrink trends. We continue to operate at very low levels, record levels for us.
And we typically take our physical inventory in the third quarter. So we will have an update if any change to that trend in Q3.
On wages we do expect the wage pressure to abate somewhat in the second half as we are now anniversarying the most recent companywide wage increases that took place in last year’s second quarter. As a reminder, guidance for SG&A the leverage point remains at about 3% for the year.
Michael Hartshorn
And Dana on your question about these dd’s, as Barbara mentioned in her remarks we were pleased with dd’s strong performance in terms of sales and operating profit in the second quarter. dd’s sort of basically continued as it has over the last several quarters its good results.
In terms of what’s driving that, frankly it’s similar to many of the other things that we talked about on this call so far, in particular, for dd’s customer is responding well to the values that we are offering.
Dana Telsey
Thank you.
Operator
Your next question is from Lindsay Drucker Mann from Goldman Sachs.
Lindsay Drucker Mann
Good afternoon. I was hoping could you tell us what proportion of your sales come from credit cards?
And secondly on the SG&A piece, while the leverage point on a 4% comp, you leveraged operating margins pretty nicely. SG&A growth was slower than what we had seen in 1Q and sorry if I missed this, but can you talk about the rate of SG&A increase in 2Q being lower versus 1Q and what we should be thinking about for the back half?
Michael Hartshorn
Sure. On your question on credit, it’s about a third of our business Lindsay.
And then on the SG&A leverage as we mentioned in the call, we had 25 basis points of leverage on a 4% comp, 20 of that 25 was related to a non-recurring legal matter. So, baseline 5 basis points of leverage.
As I mentioned on wages in the back half, we should expect less leverage so at a 1% to 2% comp, there maybe some de-leverage, but at 3% we should get leverage.
Lindsay Drucker Mann
Okay, got it. Thanks for that.
And then can you comment on how your new stores are performing, new store productivity – productivity of new openings for Ross and dd’s relative to what you have seen in last year or years past?
Michael Hartshorn
Sure. So as we have mentioned it in the past, the new store productivity has come down since we entered the Midwest in 2011.
And also, our growth of the dd’s change has impacted overall productivity. I would say though in the last couple of years, it’s been very steady at or above our expectations.
Overall, Ross new stores about 60% to 65% on the chain average and then tends to comp faster in the first couple of years.
Lindsay Drucker Mann
Great. Thank you very much.
Operator
Your next question is from Brian Tunick from RBC.
Brian Tunick
Thanks and good afternoon. I guess two or three questions.
Number one, I know you guys don’t manage to a packaway number per se, but obviously there has been a lot of concern given what the vendors have been talking about. So just curious if you can maybe talk about the buying staff what you have been doing there, maybe turnover in your top, I think Simeon asked 10 vendors, but just curious more about how packaway could continue to run at these levels given what the vendors seem to be saying?
Second question would be maybe from a store growth runway and the returns you are seeing on the new stores, at what point would you guys consider a new concept like home, which seems to be something people are moving into? And then thirdly on freight contracts, Mike, just curious what’s the length of the contracts and how is your best viewpoint going into next year?
Thanks very much.
Michael Hartshorn
I will start with the last one, because that’s probably the easiest, Brian. On freight, we expect there to be a headwind for the rest the year.
Contracts vary, we have pretty good viewpoint for the rest of the year and we expect it to continue to be a headwind and then going into next year we will talk more about that on the year end conference call.
Michael O'Sullivan
I will take the second question and maybe Barbara will take the first and we will work in reverse order. So, on the store growth runway, we have put out there a store potential number of 2,500 stores, so that’s 2,000 Ross, 500 dd’s.
We are only at 1,600, so we have got many years to go before we hit that number. You had mentioned home specifically and moving into I guess, the separate home concept, we are very excited about home and our home business has been one of our strongest performing businesses for a number of years, but we feel very happy with our ability to really go after that within our existing concepts and really us sort of continue to grow that business within Ross and dd’s rather than through a separate concept.
Barbara Rentler
And as it pertains to packaway, the packaway number fluctuates based on the availability in the market and the ways the merchants see it. And there have been – there has been plenty of branded bargains in the marketplace.
So, there is availability. I know there is a lot of talk about different vendors having different strategies, strategies fluctuate over time and net-net is that there are lot of goods in the marketplace and a lot of branded goods.
And so we feel pretty good about the position that we are in and the conference that we have.
Brian Tunick
Great, thanks very much and good luck.
Operator
The next question is from Mike Baker from Deutsche Bank.
Mike Baker
Hi. Just two quick follow-ups if I missed them I apologize, but I don’t think you talked about this how about trend through the quarter by month, anything to call out there.
And then secondly you said your buying costs were up, I am just curious as to what happened there? Thanks.
Michael O'Sullivan
Sure Michael, so trends were steady during the quarter maybe were slightly stronger than June and July, but which were similar. In terms of buying cost, buying costs increased as we mentioned 15 basis points quarter-to-quarter which mainly reflects higher incentive costs given our performance but also ongoing investments that we continue to make in our most important asset or buying organization.
Mike Baker
Okay, that makes sense. Thank you.
Operator
There are no further questions at this time. I will turn the call back over to Barbara Rentler for closing remarks.
Barbara Rentler
Thank you for joining us today and for your interest in Ross Stores. Have a great day.
Operator
This concludes today’s conference call. You may now disconnect.