Sysco Corporation (SYY) Earnings Call Transcript & Summary

Good afternoon, everyone. It is noon on day 2. So we're pushing into the back half of our conference here. We want to thank everyone for joining us here. Hopefully, people had a chance to grab some lunch or we'll do so afterwards. My name is Jeff Bernstein, and I'm the Rest food service distribution analyst here at Barclays. We are thrilled to introduce our next presenting company, which is Sysco Corporation. With us on stage all the way from Houston, Texas. We have Kevin Hourican to my immediate right, who is the Chairman and CEO; and Brandon Sewell, who is the Interim CFO. By way of background, for those perhaps not familiar, Sysco distributes food and related products to the $380 billion roughly food service industry. The company had 335 or so distribution facilities around the world, serving 730,000 customer locations. . 2027 guidance is for $90 billion in sales, up 6% to 7% year-on-year. And I should say their fiscal '27 began July 1. That's led by local case growth ultimately generating 9% to 11% EPS growth and all was reiterated this morning. So for those who did not see the 8-K that was published this morning, all fiscal '27 guidance was reiterated. In addition, this morning, Sysco noted that momentum to close fiscal '26, again, which ended in June has carried into early fiscal '27, which is very encouraging to hear. And in addition to the fiscal '27 guidance reiteration, management raised their midterm guidance range for sales and EPS and introduced a target of at least $500 million of AI-related efficiencies to be realized by fiscal '29. So lots going on at Sysco. Kevin and team keen to present the greatest latest and greatest update to you. So with that said, I will turn it over to Kevin to kick it off. Thank you.

Okay. Great. Thank you, Jeff. I appreciate it.

Pleasure.

Okay. Good afternoon, everyone. Thank you for joining us during the lunch hour. We appreciate your being here. The highlight of my professional career, my ability to present this slide so we are providing you some forward-looking statements, and you've all read it. So I can now move on from the highlight of my career. So again, we're glad to be here, the 19th Annual Barclays conference. We do have a lot to talk about today in the press release that we put out this morning. Hopefully, you had a chance to read some of it. If not, don't worry, we're going to cover all of that material today, Brandon, myself while we are up here. I'm going to ask your permission in advance, I'm going to go very fast through certain slides that are more about the company that you perhaps have seen before. So we can get to the new news, the important news of the things of the day. So here's an example of a slide you've seen before. We are the largest -- in the industry, from a broadline distribution perspective, we're also #1 in what we call specialty distribution. So that's our produce business, our protein business, our Italian business, Asian Foods business, and we own an equipment supply company called Don. Those things together, we call specialty. It's about a $10 billion business for Sysco. One quick reminder, 60% of what we are is restaurants approximately 40% of what we do is something we call noncommercial. So that's health care, education, travel and hospitality and the we'll go into more of these in detail -- or each of these in more detail. Sysco, we grow consistently. You can see on the chart, our strong track record of consistently growing our business. The other thing we grow every year is our dividend. We've grown our dividend 56 consecutive years, we are a dividend aristocrat. We will consistently continue to grow our dividend. For core Sysco, we have ample opportunities to continue our growth trajectory. We can take additional share in the broadline channel. I remind investors that the big 3 combined in our space have less than 40% total share. It is still a very fragmented industry. And if you get past the top 5, 6, 7 distributors, it drops off significantly into family-owned multi-$100 million per year annual turnover revenue companies. It is a very fragmented space. We can and will take more share in broadline. We define specialty as a $10 billion growth opportunity for the company. We've defined our international business as a $10 billion growth opportunity. And this is before we enter into the Cash & Carry channel through what we have in front of us, the Restaurant Depot acquisition, which we will talk more about today. We are a profitable company. We are the most profitable on a rate basis in our space and we will be and our growth company. So this chart shows just the different customer profiles that we're in. As I mentioned before, we hold the leadership space in each of the businesses that we compete with in, except for one. We're #2 in health care. We are taking share in health care. You can see on the chart, it's growing at a healthy clip, and we are improving our relevance and capabilities within health care. That noncommercial space, which are the 3 on the right-hand side of the page, growing at a very healthy rate. And these are more profitable customers than large national restaurants. It's a very attractive business for Sysco. Again, K-12, university, the office complex that you work in is getting food delivered from a company like Sysco. We're the largest, and we're becoming increasingly more relevant to these customers. Why are national and many of these entities are international. So our national and international scale. Our tech integration, we are creating direct technological connections with these companies for inventory feeds, country of origin, product attributes, sustainability and things of that nature. Our food safety, data quality, data integrity, our sustainability and cybersecurity capabilities, these are the things that these large customers are looking for and ever increasingly they're reaching out to Sysco. But let's talk about our local business. We view it as the most important business in the company. The why is because of its profitability rate. Local restaurant customers, we are meaningfully more profitable. What is local for those that might be newer to the space, these are mom-and-pop restaurants. They own 1, 2, 3, 4, 5 restaurants, some of them are a little bit bigger than that. But the vast majority of these customers are small entrepreneurs, mom-and-pop owners. We have been underperforming in our local segment. You can see on the left-hand side of the chart for about 1 year to 1.5 years, not meeting our own internal expectations. I've been very open on this stage in prior years by about the why behind that. We implemented a new compensation system 2 summers ago. It was the right comp program. We rolled it out less effectively than we could have. We ended up losing a few more people than we would have liked in the subsequent year, and that hurts in this space. We are in a relationship-based business where a sales rep has a direct relationship with their customer. And if they leave the company, they tend to bring some customers with them, and that's what happened during that duration. Here's the main punch line. That's the problem is done. It is behind us. Our colleague retention is at all-time highs. Our productivity is steadily improving. We have selling tools out in the market, one of them called AI 360, which is a sales agent in the palm of the hand of our sales reps through an app that we have co-developed that gives them suggestions on what to sell to that specific customer on that specific day. We have selling initiatives like Sysco your-way and perks that are resonating in the market and Sysco brand is building momentum. When I put all of these things together, Brandon and I can measure them through selling productivity and job satisfaction, both of which are up into the right. And then the punchline outcome of that is we have meaningfully improved our local business. We just exited our Q4 above our goal of 2.5% case growth. And we have guided fiscal '27, the year we're now 2 months into at 2.5% volume growth in local for the full year, and that is a step-up from prior year on a 2-year stack basis each quarter as the year progresses. And we're on track to deliver against our Q1 commitment quarter-to-date. Let's talk in more detail about the net new news for the day. Jeff just mentioned this. We're only 2 months into the year, but we are reaffirming our guidance for fiscal 2027. Just a reminder on what that guidance is, it is a step up versus our last couple of years' performance. On the revenue side, 6% to 7% growth on the profit side, earnings per share growth, 9% to 11%. Let's anchor on the midpoint on the profit for a second. That's a 10% earnings growth on a 53-week basis. We're crystal clear about this. It's a footnote. We've said it over and over and over again. This includes the 53rd week. So if you want to take 2 points off the right-hand side, that's about what the 53rd week is worth. We're talking in percent earnings per share growth for fiscal year 2027, which is at the high end of the long-term guidance range that we put out a full a few years ago. We are confident in our ability to deliver against these performance data in spite of what's going on in the end market. And yes, we know about $100 fuel. We know about consumers feeling pinched. We know about the overall kind of feeling of things. But I would tell you is the following: for independent restaurant customers, in particular, the end consumer is holding in there. We are seeing some pressure on the national restaurant business. And as I've said before, that's the least profitable business. So we think about the 40% noncommercial holding in there doing strong, doing well. Local restaurants performing better than national restaurants. Brandon and I have a plan to deliver these numbers in spite of the end macro being choppier. What I really wanted to talk about is this slide right here, and Jeff just mentioned this a moment ago. On our Q4 earnings call, we introduced for fiscal year 2027, a $100 million profit improvement driven by AI and modern technology to transform the way we do work. On that call, we promised that we would communicate to investors and updates to that figure over time as we had even more clarity on to the drivers behind the multiyear positive impact and projects that are now live that we can directly see flowing into the P&L. So again, to be crystal clear, actually, let me go back a page, $100 million AI-powered profit improvement is embedded within our fiscal 2027 guide that is this chart, and we are communicating that number is $500 million for the 3-year out target. So '27, '28, '29. The $100 million is in the '27 guidance. It is included in what we see as a $500 million operating margin expansion in fiscal 2029, which I'm going to talk about the impact that, that will have on our guidance in just a moment -- excuse me, I'm worried that will show up and how that will come through in just a moment. So we are communicating the $500 million today driven by these 4 topics that are on this page. I want to impress 2 things upon you. There are 30 initiatives that ladder up to reach and achieve the total of $500 million. That may sound like a lot, so I want to make it even more clear. Four topics are going to drive 70% of the value from this program. So we can be all over those topics, managing them every single day, ensuring that they're delivering their outcomes. And these are the projects that are listed on this page. I'm going to cover it with them. Brandon will cover more of them when he comes up on stage. So real fast. Supply chain. This is about routing. We drive 4.5 million miles per week in the United States alone. We can route more intelligently, we can route more effectively bringing miles off the road reducing fuel costs, reducing wear and tear in tires, reducing the overtime that we spend with our drivers. On the top right box, merchandising. We have a dual stated goal here. One is to improve our fill rates to our customers, by approximately 50 to 100 basis points. The second is to reduce the amount of inventory we have on our system as an overall working capital objective. Brandon can talk more about that on how that positively impacts the Restaurant Depot deal in a moment. Indirect sourcing and customer experience back office, Brandon will cover. What excites me as the CEO is the following. These strategies will help us improve the customer experience. We call making a better Sysco, a faster Sysco, a more efficient Sysco. An example of better is the routing project that I just -- project that I just mentioned. Not only can we reduce the number of miles that we drive, our ability to show up on time to the customer goes up because of the routing tool upgrade that we are putting forth. The fill rate improvement objective that I talked about a moment ago is purely going to improve customer experience because the customers are going to get what they order when they order it. These are examples of better. More efficient as we can do that work with fewer resources with less inventory, driving fewer miles. These are efficiency plays. Brandon and I have a strong line of sight to this program. We have taken one of our top leaders at -- within the company and created an AI transformation office. That individual works directly for our Chief Information Officer and meets weekly with Brandon, myself, and the office of the CIO, to talk about these programs to ensure that they are on track. Several are live already, and we can see the goodness flowing in the P&L. Several of them are going to ramp throughout the year, which is why the value of the $500 million stair steps up over time, dedicated AI transformation office. You may have seen a couple of weeks ago, we also announced some updates to our Board. I'm the Chair of the Board. We updated our board in 2 ways. We added 2 very capable members to our Board. One comes from the industry, former CFO of Earmark Compass and a competitor. Awesome add to quality of knowledge of our industry to our board. The second though comes from an AI tech company in the supply chain space, Jason Murray. And Jason can add value to our AI program, hitting the ground running. And we have changed our tech committee to our AI transformation and technology committee, and that committee is now meeting with our management team monthly to ensure that we are moving the ball down the field with pace with urgency delivering our required outcomes. So the net all culminates into this chart. We are raising what we are calling our midterm guidance. Specifically 2028 and 2029. And why we're calling that midterm guidance as we do expect the Restaurant Depot deal to close in our Q3, which is January through March of the upcoming calendar year, and we're going to provide you updated longer-term guidance inclusive of Restaurant Depot after the deal is closed. So everything in this page is Cisco core specific for the midterm. '27 guidance we're clear about. We put it out. We're reiterating today, '28, '29 guidance is what is on this page. We're increasing our sales nominally. We're keeping the low end of the range at 4%, it was at 4%. We've taken what was 4 to 6 moving it up to 4 to 7. And the why is 2 of our AI initiatives are sales driving capabilities. One at the local level, which is the AI selling tool I mentioned earlier, AI 360 and the other is we're going to improve what we call a bid center of excellence on how we bid for large corporate contract business. That's on the revenue side. The more significant move is on earnings per share. We had a 6 to 8 guidance previously. It is now 9% to 11%. I like to focus on midpoint. That's moving the midpoint 300 basis points or 3% fueled by the $500 million of profit expansion that I mentioned a moment ago through our AI efficiency efforts. This 3-point raise is something that we are confident in. We've been asked this morning. Are you sure you can do this given the overall backdrop in economic conditions? Yes, we are sure. Brandon and I are confident in this guide. We have appropriate levels of conservatism to the flow-through of the $500 million. We believe when we do our job as well that this is a performance outcome that we can deliver and we desire to actually be in the beaten raises club on a permanent basis to actually do better than what is shown here. But this is what we're signing up for, and this is what we are committing to. To the degree that we produce incremental cash flow from this guidance, which we will, we're going to delever faster than our original plan. Brandon will talk more about that in a moment. So speaking of delevering -- we are excited about the opportunity to bring the Jetro Restaurant Depot business into the Sysco family. We call it a bold new chapter for growth. The why is it a clear and separate channel from delivery. Customers choose what channel they shop with first, and they choose who they do business with, within that channel second. The restaurant that's choosing Cash & Carry is typically a smaller operator. They're seeking value, they're seeking value, they're seeking value. On average, restaurant -- prices are 15% to 20% cheaper than delivery options that are able to be brought to their restaurant. They're choosing to go to the store and do the work themselves because they're choosing to save money, and Restaurant Depot does a great job in that space. I'll hurry you up here to get on to some of those key stats that Brandon is going to cover in a moment. On the left-hand side of this page is why we're doing this deal. Our local business becomes 1.5x bigger with this effort. The middle side talks about the financial impact of Restaurant Depot on the Sysco P&L, 20% more revenue, 45% more EBITDA, 55% more free cash flow. And after we have successfully delevered the ability for Sysco to leverage that free cash flow to return value to our shareholders is significant. The deal is day 1 accretive. It is year one top quartile accretive when measured by comparison to other large deals, and it is a significant value accretion over time, especially after we have successfully delevered integration risks are small relative to other deals because Restaurant Depot will be managed as a standalone company, and we're not doing rip and replace of their enterprise technology. The work we'll do in a minute when I talk about Better Together synergies, does not wire deep systems integration. As I mentioned a moment ago, we expect the transaction to close in that roughly Q3 time frame. This chart says what we know to be true, which is Restaurant Depot is a great business. It consistently grows its revenue and they have grown their profit 30 consecutive years. Savings selection in service 7 days a week. That is the mission of this business, and Richard Kirschner and his team do a phenomenal job of running it. Today, we're going to give you some new disclosures about Restaurant Depot that we think are going to find interesting. So I'm going to turn it over to Brandon, who's going to first come up and talk about Core Sysco, and then I'll share a little more detail on JRD. Brandon, over to you.

Thank you, Kevin. Thank you all for your time today. It's great to see you. Really, today revolves around 3 key themes: number one is Sysco's restaurant, Sysco being the leading food distributor in restaurant and commercial space. Number two, our short-term growth. So we announced in Q4 that our FY '27 to Kevin's point, is 9% to 11% EPS growth, including the 53rd week. And today, we came out with more news on the medium term for FY '28 and '29, that we'll continue that trend of 9% to 11%, and we'll talk a little bit more about that. If you look at our CAGRs on top line and bottom line over the past 5 years, you'll see it was about 4% in top line and about 6% on the bottom line. FY '27 will be the highest growth of each of those 5 years on both metrics. It's something we're really proud. It accentuates the momentum that we have in our business. And for Q1, we are on track to our $1.18 to $2.20 EPS guidance that we gave with $1.19 being the midpoint. With these returns that we see and the momentum we feel for '27 combined with the industry-leading rates on the P&L. Return on invested capital at the top of the industry and the highest free cash flow. We feel it's a very positive return for our investors and something we're very excited about, not to mention we're the only food distributor with an investment-grade balance sheet. As we look at the future to '28 and '29, both Jeff and Kevin referenced this, and this morning, we put out a press release. The way I would ask you to think about it is this, we talked about $100 million of technology savings for FY '27. We're on track for that. We're building those programs. Kevin stated there are 30 projects, but really 4 projects make up 70% of the value. We spent months researching software, technology, our own internal processes across these areas, which gives us the confidence to go out with what we did today in the press release. These savings will give us $500 million. And I want to go into detail on them that I'm very passionate about for 2 reasons. One, it's in my own space, but also two, this will save us tens of millions of dollars, and it doesn't impact the customer at all. Cisco spends annually more than $1 billion per year on indirect expense. Think of tires, truck parts. Janitorial in our 350-plus warehouses throughout the globe. Think of refrigeration repairs. I could go on and on and on. Through those opportunities today, we RFP many of them, but not all of them. There are 2 places where we're going to save money, OpEx and one is doing what we do today, but doing it more efficiently and getting greater cost savings. The second place is there is a medium and a long tail where we just don't get to all of those RFPs today. The reverse auction software that we've researched and we've tested will enable us to RFP all of them and will get us tens of millions of dollars in savings on an annualized basis. It's fantastic software. It's things that we haven't used historically in order to give us significant efficiency in this space as one example. As we look to pivot to Restaurant Depot, we have talked about with investors 4 specific places where they have made inquiries One is in the margin profile. I'm going to go into a little bit more detail today than we have historically. Two is our deleveraging plan. Three is our future store growth. We have said there are 125 plus stores of capacity in the United States, not to mention some in Canada. And then, of course, the last one, which we did not include in the deal model, our better together top line synergies. So let's jump in a bit to the margin profile. And again, this is a little more color than we have shown historically. What you'll see on the page is we've received some questions as it relates to club stores. How does Restaurant Depot compare to club stores. And I want to say right upfront, that some of these club stores are some of the best-run retailers in the entire world, and we have a ton of respect for them. Restaurant Depot is a slightly different business model, and I'll share with you why. The question really revolves around the 13% EBITDA margins at 12% operating income margins. Are they sustainable? How are they that high when you have some of the best-run retailers in the world who have margins that are significantly lower. That variance of roughly 8% is split fairly evenly between both margin and OpEx. As you look at this bridge that we have created, it starts to spell out the details as to how they are different. If you just start with the retail -- or the retail location itself Restaurant Depot is in more of an industrial type space, whereas club stores are generally more prime real estate. It's cheaper. If you go inside the store, it is in a more industrial fill inside of a Restaurant Depot meaning the lighting is not quite as good, the flooring, the merchandising aspect of the store is not quite to the level of the club store and therefore, it's significantly cheaper. If you move over and you look at operating hours, it operates fewer hours, which simply means less cost. From a lean operating perspective, employees actually in the stores. I'll go into detail on the next slide, so let me save it for then. But just think about product mix as the next bar. If you go into a club store and I'm sure you do at times, you start in the parking lot. And generally speaking, there might be a fuel station. You might go inside and you might service your car or get new tires, you might stop by the pharmacy, maybe you get a pair of glasses. As you go through it, you pass some samples and then eventually, you work your way up to buying a hot dog or two. All of those things are amazing things, but the products that I just named don't exist in a Restaurant Depot and many of them are lower margin than Restaurant Depot products. Now on the flip side, what that means is shrink is a little bit higher in Restaurant Depot because it's all food. They are great products, but that product mix provides a significant difference between Restaurant Depot and a club store. The point here is the margins are durable, they are sustainable. They have been in place for 2 decades and they will be in place for another 2 decades. The other places that exist as the differences between the 2 are things like marketing. It's cheaper at Restaurant Depot. Credit card fees are actually slightly less. The flip one is there are no membership fees Restaurant Depot and that is a source of income for the club stores. Let me dive in a little bit deeper into the lean operating model of a Restaurant Depot. I started when I talked about product mix. But think of the associates within a club store that are related to that product mix, again, you might have a pharmacist. You might have an optician. You might have an attendant at a membership desk. Those roles don't exist within Restaurant Depot and go in a little journey with me, a supplier in a restaurant Depot store delivers a full truckload to the back dock of the store. An employee who is Restaurant Depot employee goes in with a pallet jack or a forklift and takes that pallet off of that truck, off of that trailer. They immediately loaded into a pick slot or a reserve on the reserve rack. And then that customer picks that product takes it to the front of the store, it checks out through a cashier and drives away. That's pretty much the model of a Restaurant Depot. So you have some people in the warehouse, you have some people in the dock. You have some cashiers and then you have some store leadership. What you don't have are all of the other ancillary roles, which means it's a significantly leaner operating model in a Restaurant Depot, which accounts for somewhere around 2% to 4% of reduced expense. As we've compared these 2, again, I want to reiterate, we have a ton of respect. It's just a -- for these club stores, it's just a different business model. We have very high confidence in that 12% operating income percent and 13% EBITDA. Speaking of Restaurant Depot, we are on track. So we would say that we expect it to close in Q3, we are currently ramping up our financing. We will do $1 billion in con equity and we will do the remainder in debt. All of that is in full speed ahead. We are in process. On day 1, we will be at 4.5 turns net leverage within 24 months, we will reduce that to 3.5 turns net leverage. Now one thing I want to add is, this does not take into account some of the initiatives that Kevin talked about. So we expect through those initiatives to reduce our working capital by 2 days a day of working capital is a couple of hundred million dollars. Those things would accelerate this. I personally -- and Kevin and I together and our management team are fully committed to deleveraging within this time frame to be at 3.5 turns by 24 months. The beauty of Restaurant Depot is it has a significant free cash flow, and it's very, very efficient. And within 4 years, our free cash flow Sysco will double through Restaurant Depot's acquisition. This is my last slide, and I'll pass it back to Kevin. We have delivered over the last 13 years, including '27 roughly the value of half of our market cap. It's something we're very proud of. Through the deleveraging process, we will continue our dividend. We have paused our share repurchase. We're excited about this picture, but we're even more excited about what the cost efficiencies will bring not to mention the added benefit and accretion that Restaurant Depot will bring, and we're excited to move forward with that perspective. I will pass it back to Kevin to talk about the last 2 items. And appreciate your time today.

Okay, Brandon, thank you. We've just got a few minutes left. So we'll move with pace. Again, we're trying to be crystal clear on Core Sysco's strengthening performance and our excitement about the Restaurant Depot transaction. I'd like to give 2 incremental pieces of color. Brandon just established. This is a very profitable business. You may remember back in the month of May, we talked about Restaurant Depot's profitability relative to our mom-and-pop local distributor business, roughly at parity. We have a high profit local business. We got a lot of questions about, yes, but how does it compare against the club stores? How is it so much more profitable? I think you've just definitively answered that question. Lower occupancy cost, lower construction build, lower payroll as a percent of sales equals higher profit, and it's 100% food. They're not selling pharmacy a business that I know well, which is a very, very low profit, just as an example. We are excited about this box. The box is a fit for purpose for a specific customer, a restaurant. And everything that restaurant needs is in one roof. And to be clear, the club stores offer some large packages. But if you want to outfit your restaurant with every single thing that you need at the best prices in town, Restaurant Depot is second to none, which is why we are so excited about it. With Sysco's inbound supply chain, we believe we can take the brand to 125 net new communities. That truckload movement that Brandon referenced is what is so important being able to go a truckload from a supplier straight to a store to be able to efficiently bring the product to the store in the lowest net landed cost. And where they have a store that is too far away from their existing stores, we can leverage the Sysco inbound supply chain to nearby one of our warehouses to bring that product to this store in a cost-effective way, 125 net new stores. Canada is an upside opportunity beyond these numbers in the out years, we see a real opportunity up north in Canada. We call it the Better Together thesis. $250 million has been underwritten in the deal model, but the 2 blue circles that are on the top of the page. The first is procurement synergies. We buy many of the same products from common suppliers. We can get better rates from those suppliers. And that includes trucking costs. We know we can get better rates because of our combined leverage. Opening approximately 5 to 6 net new stores per year is the top right blue box. The 4 that are on the bottom are not yet included in our deal model. Post the deal getting approved we will talk in more detail about sizing the prize of these revenue synergies. We have communicated on balance, they could be worth more than the procurement synergies that we have already told you about. Broader assortments. We each have products that the other business can sell, and we're going to do that post close. I'm super excited about the opportunity to better service select customers think a delivery primary customer who runs out of something and needs it now. We can leverage a Restaurant Depot store that oftentimes will be closer to that customer for something we would call same-day delivery. We can provide digital capabilities to Restaurant Depot to help them better harness that membership data that Brandon talked about from a loyalty perspective. We can sell more to more customers by being the first truly nationwide multichannel foodservice distribution entity. These revenue synergies are significant and not yet included in our math. So I'll wrap up my very last slide, I appreciate your patience. Three things to remember, core, Sysco, meaningfully strengthening driven by local business health, including Sysco brand improvement. Thing two, front-footed AI transformation of our business model to be in a more efficient version of ourselves, creating $500 million of operating margin expansion, which moves the midpoint of our guidance by 300 basis points. all sit in the stage for a bolder new chapter for Sysco, a Restaurant Depot transaction that is truly financially accretive to our shareholders over time. And as Brandon has said, when we can be ahead of schedule on delevering. On cash flow generation, we will delever faster. By delevering faster, we can get back into shareholder friendly actions like share buyback sooner than the commitments that Brandon you have already made. So we thank you for your time. If you have questions on the new incremental guidance and information we've put out today, please see Kevin Kim from our Investor Relations team. Jeff, thank you for having us. Everyone, have a great rest of your day. Thank you very much.