Dollar Tree, Inc. (DLTR) Earnings Call Transcript & Summary

Good morning, and welcome to the Dollar Tree, Inc. Annual Meeting of Stockholders. I would now like to turn the conference over to Bob Sasser, Executive Chairman of the Board of Directors. Please go ahead.

Thank you, operator. Ladies and gentlemen, I'd like to call this meeting to order. I'm Bob Sasser, Executive Chairman of the Board of Directors. Good morning, and welcome to Dollar Tree's 2020 Annual Meeting of Shareholders. This year, we are hosting a virtual annual meeting in light of the public health impact of the coronavirus disease pandemic. We are committed to protecting the health and well-being of our shareholders and employees, and we thank you for joining us on this live webcast of the annual meeting. Before we turn to the formal items of business, I'd like to introduce members of the Board. In attendance today are Gary M. Philbin, our CEO; Gregory M. Bridgeford, Lead Independent Director and Chair of the Compensation Committee; Stephanie P. Stahl, Chair of Nominating and Corporate Governance Committee; Thomas E. Whiddon, Chair of the Audit Committee; Arnold S. Barron, Director; Thomas W. Dickson, Director; Lemuel E. Lewis, Director; Jeffrey J. Naylor, Director; Thomas A. Saunders III, Director; Carrie A. Wheeler, Director; and Carl P. Zeithaml, Director. I would like to recognize Conrad M. Hall, whose term as Director is expiring at this meeting. Conrad's contributions have been instrumental to Dollar Tree's success over the past decade. On behalf of the entire Board, I want to thank Conrad for his valued service and tireless efforts to best serve the interest of Dollar Tree shareholders. We wish Conrad all the best in his retirement. I would like to recognize and welcome representatives from Williams Mullen, our legal counsel; KPMG, our independent accountants; and Dollar Tree's management and associates. The representatives of KPMG will be available during the question-and-answer session after the meeting to respond to your appropriate questions. In addition, the company has appointed Broadridge Financial Services to act as our Inspector of Election. A representative from Broadridge is available by phone today and has taken the oath of inspector of election on behalf of Broadridge. Please note that today's meeting will be governed by our rules of conduct and procedures, which can be found on the web portal for this meeting. We ask that you review these rules and procedures at this time if you have not already done so. I will now turn to the formal business of this meeting. First, the matters to be voted on at the meeting will be presented, and then shareholders will be given an opportunity to vote or change their vote. Then the voting results will be announced. After the formal business of the meeting, Gary Philbin will give a presentation on Dollar Tree's progress and our new initiatives. As is our custom, we will answer general questions from shareholders unrelated to the formal business of the meeting at the end of that presentation. Shareholders may submit questions during the meeting using the text box on the web portal. Please refer to our rules of conduct and procedures for additional information on submitting questions or comments. The 2020 Annual Meeting has been called by the Board of Directors for the purpose of voting on the 4 proposals included in our proxy statement. An affidavit has been delivered to testing, and a notice of Internet availability of the proxy materials was mailed on or about April 24, 2020, to all shareholders as of the record date. The shareholder list is available on the web portal to shareholders who have logged into the meeting with an authenticated control number. These items and the final voting results will be included in the meeting -- in the minutes of the meeting. As of the record date, there were 237,230,908 shares of common stock outstanding and entitled to vote at the meeting. The Inspector of Election has advised the company that a majority of such shares are present either in person or by proxy. Therefore, a quorum is present and the meeting is authorized to transact business. The polls are now open. The proposal being voted on are as follows: Proposal 1, the election of each of the 12 directors named in our proxy statement; Proposal 2, an advisory vote to approve the compensation of our named executive officers; Proposal 3, the ratification of KPMG as our independent registered public accounting firm; and Proposal 4, a shareholder proposal on greenhouse gas emissions goals. A shareholder proposal was submitted by Ms. Christine Jantz from Jantz Management, who we understand is present today by telephone and will present this proposal and make a brief statement. Operator, please open the line for Ms. Jantz to present the shareholder proposals.

Thank you. Good morning. My name is Christine Jantz, CEO of Jantz Management in Boston, Massachusetts. Jantz Management is the beneficial owner of Dollar Tree common stock, and I am here to represent Proposal #4, a request to the company to prepare a report on our company's greenhouse gas emission goals. Jantz Management believes that the instability of climate conditions as a result of climate change poses financial stability risks for our company and others. While Dollar Tree engages in some energy efficiency enhancement measures, Jantz Management is not aware of company calculations or disclosures of estimated greenhouse gas emissions from its operations. Contrary to the company's statement that our Board and the company have now implemented the substance of the resolution of the shareholder proposal, we are not aware that the company has made a commitment to setting long-term GHG emissions reduction goals with quantitative targets. The company is merely proposed to "discuss long-term goals." Dollar Tree is a member of the Retail Industry Leadership Association, which has publicized other company's leadership strategies, entirely consistent with the request of this proposal. Competitors have adopted strategies consistent with the proposal. And so Jantz Management believes that Dollar Tree can and should adopt aggressive GHG reduction goals. Dollar Tree has the leadership and resources to create an effective and sustainable plan. Thus, we urge shareholders to vote for proxy item #4. That concludes my statement.

Thank you, Ms. Jantz. The Board of Directors has recommended that the shareholders vote for proposals 1, 2 and 3 and against proposal 4 of the shareholder proposal. The Board's reasons for recommending a vote against Proposal 4 can be found on Page 109 of the company's proxy statement, which is available on the web portal for the meeting. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions. Shareholders who have sent in proxies or voted by telephone or Internet and do not want to change their vote do not need to take further action. We will pause for a moment to permit shareholders to vote. [Voting]

Now that everyone has had the opportunity to vote, the polls are now closed. Since all the votes have been cast, Will Old, our Corporate Secretary and Chief Legal Officer, will now deliver the inspector of election's preliminary report on the voting results.

Thank you, Mr. Chairman. Regarding Proposal 1, the election of directors, each nominee for director received the majority of the votes cast at this meeting. Accordingly, all nominees have been duly elected. Regarding Proposal 2, to approve on an advisory basis the compensation of the company's named executive officers, the proposal passed and received the majority of the votes cast at this meeting. Regarding Proposal 3, to ratify the selection of KPMG as the company's independent registered public accounting firm, the proposal passed and received the majority of the votes cast. Regarding Proposal 4, the shareholder proposal on greenhouse gas emission goals, the proposal passed and received the majority of the votes cast.

Thank you. If there are no other matters before the annual meeting, we have concluded the formal business, and I hereby declare this annual meeting of shareholders adjourned. I will now turn the floor over to Randy Guiler, our Vice President of Investor Relations, for an introductory remarks; and to Gary Philbin, our CEO, for his presentation.

Remarks made in today's presentation about expectations, plans or prospects for the company may contain forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated in these forward-looking statements as a result of various important factors, including those detailed in the risk factors portion of our Form 10-K filed with the Securities and Exchange Commission on March 20, 2020. We caution against reliance on these forward-looking statements made today. We disclaim any obligation to update or revise these statements, except as maybe required by law. I will now turn the presentation over to Gary Philbin, Dollar Tree's Chief Executive Officer.

Good morning, everyone. Thank you for joining us at Dollar Tree's 25th Annual Meeting of Shareholders. I will be making some comments momentarily on our company's response to the environment we are currently operating in, but I first want to say that I hope you and your families are safe and doing well. My thoughts and prayers are with each and every individual, family and community affected by the COVID-19 pandemic, including our associates, medical professionals, first responders and other heroes serving on the front lines. I look forward to the day when we can all meet in person again once things get back to a new normal. Our team is also incredibly saddened by the tragic death of George Floyd in Minneapolis. The current social crisis and demonstrations reflect not just the incident in Minneapolis, but also the clear impact of communities under duress. We stand together with the communities we serve in the face of this tragic event. Our company has more stores in the affected communities than any other, and our associates live and work in these same neighborhoods. We are working with associates impacted by the closures to retain their employment at neighboring stores, and we'll continue to pay associates affected by store closures. We are committed to serving our customers in these communities and will work to rebuild and reopen impacted stores. We have always thought of our combined efforts at Dollar Tree and Family Dollar as the power of one, 2 brands focused on serving our neighborhoods. The trust our customers reward our teams with gives us the confidence that, together, we can share resolve and neighborly empathy in our communities and our country. We have come a long way since going public in 1995. Fiscal 2019 was an important year for our company as we further strengthened our foundation and fundamentals to grow and improve our business. We have a unique, resilient and diversified business model, which provides us financial flexibility and compelling growth opportunities. I am extremely proud of our Dollar Tree and Family Dollar teams in what we have accomplished as one company, and I am especially proud of our people and the management team who makes all this possible. I would like to thank a few key members of our leadership team, especially those whose efforts have been incredible during these unprecedented times: Mike Witynski, our Enterprise President; Tom O'Boyle, Chief Operating Officer; Rick McNeely, Chief Merchandising Officer; and Betty Click, Chief Human Resource Officer. I'm honored to lead this very talented leadership team. I also want to recognize our unsung heroes. This year, more than ever, I want to thank our more than 193,000 associates across our network of 24 distribution centers, store support center and 15,300-plus stores. In this time of uncertainty, our associates are going above and beyond to serve their communities and neighbors with essential products at great values. Our associates are the heart of our company, and I'm overwhelmed by their ongoing commitment to the communities we serve. Our internal communications team compiled a full list of the hundreds of thank you notes and compliments we have received from our customers since the beginning of the pandemic. Our teams have enjoyed reading these cards and comments from people all across North America. It's a great reminder of why we do what we do and how much our stores give back to their communities. Our associates' dedication and commitment is truly inspirational, and I am extremely proud of the strength and perseverance of our store and distribution center teams in what they show on a daily basis. By serving our current and future customers with home and essential products at great values during their times of need, I'm confident that we will emerge from the current situation with a stronger company and brand. Our company is committed to doing all the things that we can do to protect our associates and customers while continuing to meet the needs of the communities we serve with essential products, including food, water, cleaning supply, sanitizers, paper products, home goods and over-the-counter cold and flu medicines. We are committed to keeping our more than 15,300 stores open, and our teams are working tirelessly to provide clean and safe shopping environments with stocked shelves. We take our role in the communities we serve very seriously, and we want to earn their trust as an essential retailer. To serve our customers even better in these extraordinary times, we've installed plexiglass guards at cash registers in all stores to help shield shoppers and cashiers from the spread of germs and virus; implemented an associate health screening program that includes a self-assessment process for associates to monitor their health 2 hours before every shift as well as a health questionnaire to be used upon arrival at work. We continue to provide our store teams with hand sanitizer and cleaning supplies to clean throughout the store daily with high frequency. Our stores also continue to close daily at 8 p.m. currently at local time or earlier to allow for CDC-recommended cleaning protocols, including wiping down common areas and surfaces, such as our door handles, shopping carts, baskets, key pads and counters. Our registers are now equipped with contactless payment through tap-to-pay with Visa, Mastercard, Apple and Google Pay. Our associates are practicing social distancing, as recommended by the CDC. And we continue to ask that our customers also follow social distancing measures, especially in the checkout lines, where the spacing has been marked. We are providing face masks and gloves for associates to wear during their shifts, and we continue to dedicate the first shopping hour to our at-risk customers, including senior citizens and individuals with pre-existing health conditions. The company has proudly invested more than $100 million in our hourly paid store and distribution center associates, with wage premiums in recognition of and appreciation for their dedication and efforts to serving our customers. The communities we serve are at the center of everything we do. In April of this year, we proudly launched our partnership with United Way of South Hampton Roads to help support the neighborhoods where we shop, work and live. To assist in the efforts to combat the effects of COVID-19, the company made a $250,000 corporate gift for the United Way's coronavirus recovery fund, which provides direct service to individuals needing assistance, media support to agencies on the front lines and long-term recovery planning. We are very excited about this new partnership and look forward to providing more details later this year. Now turning to last year's accomplishments. In 2019, we achieved record net sales of $23.61 billion; increased same-store sales 1.8% on top of the prior year's 1.7% increase; opened 518 new stores; expanded or relocated 62 stores; and increased selling square footage by 1% to 121.3 million square feet. We renovated more than 1,100 Family Dollar stores into our H2 model, which are averaging double-digit same-store sales increases in their first year. We introduced the Dollar Tree Plus! multi-price point initiative in 2 test stores and revamped the program based on initial learnings. We processed more than 2.4 billion customer transactions, which is an average of more than 6.7 million per day. And we announced organizational leadership changes in December to enhance our speed and agility to market while flattening our organization structure. At fiscal year-end, we employed more than 193,000 dedicated associates while operating 15,288 stores across North America. Another milestone was achieved in July 2019. We completed the consolidation of our store support centers into our new campus and tower in Chesapeake, Virginia. The benefits of having our brands together in one location are immeasurable. This important step in the integration of Family Dollar has greatly enhanced the communication, collaboration and teamwork within our organization and has improved our ability to support the ongoing growth and development of both brands. In December of 2019, we announced changes to our organizational structure and senior leadership team designed to enhance the company's execution of its strategy and improve operational performance at both brands. These and other actions we have taken are designed to increase enterprise-wide focus and accountability with one voice. Our senior, most talented individuals are working together across the platform with more urgency to move the needle on metrics that will help us deliver greater value for our shareholders and customers. Since joining Dollar Tree in 2010, Mike Witynski has been a key executive in driving performance across the organization. In particular, Mike has had the store excellence, operational initiatives and merchandising programs to drive sales and margin and has been hands on in managing our tariff mitigation efforts. Mike's promotion to Enterprise President has continued our progression of elevating customer-facing initiatives. By leveraging the power of one, the reorganization has enhanced our ability to accelerate the timetable for implementing initiatives designed to improve margins and reduce costs for both the Dollar Tree and Family Dollar segments. At Dollar Tree, everything has been $1 or less for 33 years now, and our values have never been better. Especially now, more customers are looking to Dollar Tree to help balance their household budgets. When customers are in our stores buying their household supplies, food or health and beauty products, they always find a surprising and unexpected value. The concept is unique, differentiated and defensible and has resonated well with our customers, enabling us to break through as a leader in the competitive retail landscape. Our merchandising team continues to develop and evolve our product assortment, providing tremendous values at the dollar price point while generating an acceptable margin at the same time. We are continuing our Dollar Tree Plus! 2.0 initiative. We are testing the concept in high-, moderate- and low-volume stores as well as urban, suburban and rural settings to understand how our customers respond in varying markets. With the learnings from the launch of Dollar Tree Plus!, we have tweaked, modified and improved the store design elements, along with exciting product. By leveraging the merchandising strength and purchasing power of Family Dollar, we are introducing more discretionary margin-enhancing product mix and focusing on $5 and below price points. We are receiving positive feedback about the extreme value on an array of exciting items. We will continue to closely monitor the results, including the impacts of traffic, sales and margins. Our focus for success is to enlarge the customer base we serve and to enhance margin and, as always, to strengthen our brand. Additionally, we will continue to expand our traffic-driving initiatives. We are in the process of rolling out Snack Zone 2.0 format for a smaller footprint of stores. The section targets the on-the-go customer with immediate consumption items and consistently outperforms the budgets assigned to them. Our expanded selection of arts and craft supplies, called Crafter's Square has received fantastic reviews from customers, especially as parents are finding new ways to educate and entertain their children at home. The section is now available in more than 3,000 Dollar Trees, and we will continue to expand this traffic-driving initiative to more stores going forward. Family Dollar has always been known to customers as the neighborhood discount store, offering great values on everyday items and a convenient shopping experience. In addition to providing everyday low prices, generally from $1 to $10, Family Dollar stores offer a broad assortment of products, including frozen and refrigerated food, beauty essentials, household products, pet food, diapers, electronics, hardware, automotive supplies, apparel and seasonal items. The offerings include popular name brands and quality private label merchandise, typically priced lower than grocery, drug and convenience stores, which is critical more than ever to our customers right now. We continue to be enthusiastic about the opportunities ahead for us at Family Dollar. In 2019, we accelerated our efforts to optimize our real estate portfolio through renovations, rebanners and store closures. The H2 format is driving greater loyalty, earning repeat visits and increasing value perception, especially due to the expanded dollar merchandise sections throughout the store. H2s are comping at greater than 10% in year 1, and we are pleased with the sales lift in store cycling their second year. To drive performance across the base, we continue to focus on our private brands with Compare and Save programs, Smart Coupons that offer loyal customers the latest values, our Hallmark Card rollout and improving the consistency of store execution. As an essential retailer, we believe we are seeing both new and former customers discovering and rediscovering Family Dollar, and we are working hard to retain their business by offering an improved shopping experience in a safe and clean environment with great values during their times of need. The brand's recent results bolster our confidence that Family Dollar will have material, sustainable performance improvements in 2020 and beyond. We rely on our distribution network of 24 distribution centers in the U.S. and 2 in Canada to continue to support the needs of our more than 15,300 stores we are investing in our supply chain. Last year, we opened our 24th U.S. DC in Morrow County, Ohio, and our 25th DC is scheduled to open in Rosenberg, Texas this summer. Additionally, we recently broke ground on our 26th DC in Marion County, Florida. Along with the stores' needs that the new DCs will help fulfill, we are probably adding hundreds of new jobs in these markets. In 2019, we shipped and received more than 1.8 billion cases of merchandise, and we are a top 10 importer, bringing merchandise in through 8 U.S. and 2 Canadian ports of entry. With the company record net sales of $23.61 billion in 2019, increasing strength of our Dollar Tree business and accelerating Family Dollar renovations to improve the brand, we believe we are well positioned as a leader in the most attractive sector of retail at a critical time for customers. The leadership team across both banners is aligned, energized and focused on executing our strategy to deliver results that grow the bottom line and benefit our shareholders with sustainable value creation. Over the past decade, we have built a solid and scalable infrastructure, which provides a strong foundation for our future growth. We are committed to growing our combined business to take advantage of significant white space opportunities that we believe exist for both the Dollar Tree and Family Dollar store concepts. Using our proven real estate strategy, we intend to drive future store openings by capitalizing on data-driven insights regarding location, target customer profiles, competitive dynamics and cost structure. Dollar Tree is committed to responsible corporate governance that delivers sustainable long-term value to our shareholders. Our Board of Directors, led by our Executive Chairman and Lead Independent Director, is active and engaged in seeing the strategic direction of our business. Currently, 10 out of 12 highly qualified Board members are independent directors. As part of our ongoing process to ensure our Board has the appropriate perspective, capabilities and diversity to guide our company, we have added 5 new independent directors since May of 2016. Additionally, all standing committees consist entirely of independent directors. And in 2019, we rotated the leadership of the committees to ensure our company benefits from fresh perspectives. We maintain an open dialogue with our shareholders on governance-related matters and continue to pursue governance practices, which reflect the input and best interest of our shareholders. We value honesty, integrity and transparency in all aspects of our business. These values are reflected in the strength of our financial controls and in the relationships with our customers, vendor partners, associates and shareholders. For 2019, we, again, achieved a clean bill of health from our external auditors with no material control weaknesses noted in the assessment, underscoring that our accounting and reporting processes are compliant with the intentions and requirements of Sarbanes-Oxley legislation. We have consistently generated significant cash flow from operations, and the Board has been a prudent steward of capital. The best use of capital, in the Board's view, is to support the continued growth of our business at a sustainable pace. In light of current market conditions, we have temporarily suspended share repurchases, but we will continue to evaluate opportunities to return capital to shareholders. Our Board and management recognize the importance of assessing, planning for and disclosing the potential impact of environmental, social and governance risks to our business. The Board's nominating and corporate governance committee has the lead role in overseeing the company's risks and reporting related to ESG matters and sustainability. Among other initiatives, it has directed the creation of the new corporate policies to provide enhanced ESG transparency and guidance to our stakeholders, which include our environmental policy, human rights policy, occupational health and safety policy, vendor code of conduct and political contribution and expenditure policy statement. In addition, the company has formed a cross-functional management sustainability committee that includes leaders from various key departments in the organization who will assist senior leadership and the Board in focusing our efforts on the sustainability issues that affect the company. In 2019, the company founded Women of One, Power of One, a resource group to help lead efforts to broaden diversity and awareness in the workplace. The group's Board is focused on development, diversity, inclusion and community. More of this group's initiatives will be announced later this year. Across our stores, districts and regions, there is no higher form of recognition to honor their accomplishments than to win the Top Gun and Great Race awards. These awards go to the best of the best, the highest achievers in the company. To be a Top Gun or Great Race champion is to be the winner. Every year, there is tremendous competition. It's been a tradition to honor the winners at our annual meeting of shareholders. We look forward to celebrating their success in person once it is safe to do so. For Top Gun, the 2019 winner was Dollar Tree Region 7 led by Regional Director, Nick Rasler. They delivered same-store sales of over 4.5%. And for Family Dollar, our winners of the Family Dollar Great Race were Region 58 led by our Regional Director, Walter Maldonado, who was a top performer for our Family Dollar banner, achieving comps of over 6% in 2019. Congratulations to Walter and team. Thank you, and now we will take questions that have been electronically submitted.

Good morning, everyone. This is Gary Philbin. We'd now like to take question from shareholders. As mentioned previously, shareholders can submit their questions using the text box on the web portal. We can begin with a few questions that have already been submitted. I'll ask Randy to read the questions, and we'll give you the answers in the order they come in.

Thank you, Gary. The first question, the Carpenter Union Pension funds have a collective ownership of more than 217,000 shares of Dollar Tree stock. As long-term shareholders, we do appreciate the efforts of the company to prioritize employee and customer safety issues while maintaining a high level of operations. We commend the Board's and senior management's prudent management of the balance sheet. What factors would the Board or senior management consider in making a decision to resume share repurchases that were wisely suspended?

Thank you for the question. It certainly was an unprecedented time as we started our efforts in first protecting our associates and customers within our 4 walls of our stores and our distribution centers. I think our model has always been one that's been resilient. I think that shows up that, that was appropriate at the time when there was more maybe unknowns to suspend our share buyback program. Our balance sheet currently has $1.8 billion of cash, which speaks to the strength of our model and balance sheet. That includes $750 million of a drawdown on our revolver. I think as we take a look forward and consider what's going to be our new normal and get back to expectations of how we see business operating, our first step would be to pay down the revolver and then consider the share buyback program again in that order.

Our second question, we did receive a number of questions related to chemical policies, including the following: When will Dollar Tree post its safer chemical policy? Will the company publish Chemical Footprint Project results in 2020 and beyond? Regarding the company's list of 17 chemicals of high concern, please speak to your progress, and will this list be expanded? And lastly, is the company willing to have dialogue with the Campaign for Healthier Solutions?

Okay. There's a lot there, and we're proud of our efforts in this space. And for many of you, this is a high priority. I would also suggest you go to our corporate website, where, in particular, we talk about our sustainability report, but also our chemical policy report as well. Some of you may know that we participated with the efforts for our chemical policy this year, our Chemical Footprint Project specifically, and we expect -- this being the first year, we laid down a baseline. So as we go into year 2, we will see our efforts there and the progress we've made. We're proud of that, and we expect to release that next year. We also have the 17 chemicals out there now. Everything that we have exceeds regulatory guidelines in terms of the chemicals that are on our list. We will also consider that as we continue to work with the Chemical Footprint Project and see our efforts. We are always working with our suppliers, so national brands -- and national brands to find ways, to find alternative solutions and sustainable efforts into their products. And the question around meeting, we've had dialogue with our teams from -- on our side and Campaign for Healthier Solutions. We'll continue that dialogue, we think there's a place here for us to drive to the right efforts on both sides of this. And I would just say we are committed to this, and this is -- starts with senior management, working with all of our suppliers. This is something that we think that we've made positive impact on in the last several years. And as we report our progress next year, I think we've always been transparent, and we'll see those results next year.

Next question is Johnson & Johnson baby powder has talc in the product. Does the company currently sell talc-based baby powder? And will the company continue to do so in the future?

Well, the most recent headlines have been that Johnson & Johnson has withdrawn their baby powder from the market because of lower sales and the headlines around. In advance of that, 2 years ago, we stopped selling Johnson & Johnson talc products in our stores. And at that point, we really thought it was a way for us to get ahead of the curve on what was becoming a customer issue as we continue to see customers respond in a way that really affected sales as much as anything else. The alternatives out there are items that have corn starch in them. That's on our shelves of both Dollar Tree and Family Dollar to give folks an alternative to the talc-based products.

The final question, Gary, comes -- thank you for extending the premium pay to your frontline associates in your stores and in your distribution centers. Many of your customers are African-American, as am I, and I would like to know about minority representation both on your Board and on your senior leadership team.

Well, thank you for the question. Obviously, it's always important and especially relevant with our latest headlines across our country. Our Board has always been about diversity and inclusion. I'll just throw a couple of numbers out there. On our Board, we have 1 African-American, along with 2 female directors. Our Board has always thought that the diversity perspective is one that helps our Board and helps senior management along with us developing strategy as we go forward, and the diversity of opinion and inclusiveness has been part of that. Within our company, as you know, we have more stores inside many of these communities than any other retailer. It's the communities we serve. I tell our folks we serve the underserved oftentimes, and that speaks to our higher calling as a company. Within our management team, I'm also proud that we have folks that also bring a diverse background as well as -- not just in ethnicity, but gender as well. But to answer your question specifically, 26% of our build leadership is of African-American or Hispanic ethnicity in the field. And within our corporate SSC, store support center, we have 13% of our directors and above are African-American or Hispanic background. And as we continue to work forward here on how we can best serve our customers and communities, this is something that's going to -- obviously, we talk about on how we create the efforts to make sure that we find talent, and we find talent from every background within our company. That's all the questions we have. Thank you for your participation today. And now I'd like to turn it back over to our Executive Chairman, Bob Sasser.

Thank you, Gary. Since the time of our meeting has now expired, this will conclude our webcast. Thank you for attending this year's annual meeting.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.