The Kroger Co. (KR) Earnings Call Transcript & Summary

We're going to get started with Kroger. I'm Robby Ohmes from BofA Securities. Kendall Toscano and I are just very pleased to have Rodney McMullen, Chairman and CEO of Kroger here with us today. Rob Quast is here as well, Senior Director of IR. Rodney joined Kroger in 1978 as a part-time stock clerk. I think that came up when you were in front of the Senate. He served in just so many different roles at Kroger, I decided not to list them. Rodney has been...

I appreciate that.

You've been extremely busy. You've been successfully leading Kroger during this very dynamic time while also navigating a pending acquisition with Albertsons. So we really appreciate you making time for us today. It's really great that you -- you're doing that for us.

So I'm going to kick it off with maybe a general business question.

Sure.

Maybe just -- everybody wants to know, the U.S. consumer. What are Kroger's customers feeling in this environment? I think you've highlighted higher income households, but maybe walk us through most recently what you're seeing from customers.

Yes. Sure, Robby, and thanks for the invite. And Kendall, good seeing you. The -- if you look at the customer, it's a little more than even had been in terms of some customers are really under a lot of strain. And when you look at on a budget, when you talk to them and ask them, they're making significant purchase decision changes because of the budget -- their budgets. Now so far, fortunately, they still prioritize food. Now they are switching from some branded product to own brands. And as you know, our own brand business had grown double digits the last few quarters. So you see a lot of people tell you they're under a strain. They're more engaged in using coupons, downloading coupons, things that are stretching their budget. You are seeing them switch from eating out to eating at home because you can eat at home for somewhere between 1/4 and 1/3 the cost of going out. Now with that said, when you look at Starbucks, we operate over 1,000 Starbucks. When you look at upscale wine or Murray's cheese and some of those things, that continue to grow. And the customer that's important to are continuing to spend. And for us, our customer base would typically have a little higher than average income. And obviously, that's helpful for us as that customer -- we're having good growth with that higher income shopper.

And is there anything you're doing take advantage of that right now? Is Smart Way part of that or...

Well, if you look at Smart Way, it would certainly for a customer on a budget, and it's 2 things. We're adding categories that we offer the brand and it's being clear about the entry price point brand. But you're going to do everything you can to help people stretch a budget. And that would be one example of the comment I made about coupons. As you know, we personalized coupons for the household. So what -- the 3 of us, what we would get would be completely different based on our behavior. And the customer that's on a budget, they're going to get personalized experience for things that they care about to try to help them stretch their budget. But you're always looking at how to help. We'll be more aggressive on like the meat department on items where it's a price point where you can feed a family of 4 for a certain amount. So you're making sure that pork chops are the size where you can have four people to eat in the family and understand what that fixed price is. But you're always using the data for every household, trying to make it as personalized as you possibly can for that customer. And we'll use that data also when we remodel a store on what things do we add in the store, what experiences do we have in the store as well. So you're using the data for like every -- almost every decision you make.

Got you.

Yes. So another thing I want to see if we could talk about was just the inflationary environment. So obviously, with the new numbers that came out yesterday, we've seen grocery inflation continue to moderate, but we're still at plus 10%. What's kind of the outlook for 2023? To what extent do you expect that number to continue to come down based on what you're hearing from your suppliers?

Well, on inflation, Rob and I were talking about it earlier that I'm happy to share what we're assuming, but I wouldn't put a lot of faith in what we assume. We do expect inflation to be higher in the front half of the year than the back half of the year. And one of the reasons that I always like to remind people, part of that is because we're cycling high inflation from high inflation. So just because the change isn't as much, it's off of a higher base. So it's -- we -- it's not something where we're expecting deflation. The -- if you look at some of the raw materials in some places, you're starting to see some moderation. So if you think about eggs, eggs inflation was driven because of shortage of hens because the avian flu. Those flocks are starting to be replenished, and you're starting to have more eggs in the market. So you are starting to see some moderation there. If you look at corn and soybeans and wheat, really not much change in the raw ingredient price at this point. And that's -- at this point, what happens there is going to be more driven by the growing season and what happens in Ukraine.

Got it. That's helpful. And then, I guess, based on the commentary we've heard quarter-to-quarter, it seems like Kroger has done a pretty good job at passing through the inflation -- the cost inflation on at retail. And what do you think has helped Kroger in its ability to kind of manage this effectively?

Yes, it's something that Stuart and the merchandising teams worry about it every single day. But in some categories, you'll pass it through, others you won't. And the other thing I think is always important to remember, for us, our Fresh business continues to be growing, and Fresh has a higher margin. And then Our Brands continues to grow as well, which has a higher margin. So some of the things that you would see externally is because of the way that the business is being managed is what's helping on the overall mix. And for us, that's just as important. And you're trying to minimize the amount of cost increases we have that you have to pass to the customer. And when an -- if a customer switched their whole basket to Our Brands, they would be able to save somewhere between 8% and 10%. In some categories, it's more than that. A lot of people are doing that, and that's how they're managing their budget. But we make 600 to 700 basis points more on Our Brands than we would a national brand.

Rodney, you mentioned earlier about the idea that it's about 1/3 or maybe 1/4 of the cost to go into a restaurant. Are you -- do you -- are you seeing trends of favoring food at home versus food away from home?

We're definitely seeing trends. And one of the things, COVID was awful and awful that it happened. But one of the things that I think happened from COVID was people learned how to cook again, and a lot of people learned how to cook. And the other thing that our customers are telling us, they found that they really enjoyed eating together as a family because they've gotten so busy they felt like they were able to reconnect. So part of it is that they enjoyed doing it. Part of it was because you had to, and so you learned. What people are telling us is they're continuing to leverage that, and they're more aggressive now inviting people over to show off some of their skills as well. So it's as much that. Now one of the things that we work hard on is how do you keep inspiring people because no one likes to do the same thing over and over. And how do you inspire somebody and help them get insights and try something new? And they're much more willing to take some risk or try something than what they would have been beforehand. So everything we can see for a customer on a budget, they're doing it because they feel like they need to stretch their budget. Others are doing it because of the relationship aspects of it, both of which are obviously beneficial for our industry.

That's interesting.

Robby, this is a little more than you asked. I don't know if you want me to stop. But several years ago, we merged with Home Chef.

Oh, yes.

And one of the things from a Kroger strategy standpoint, we want customers when they think food, they think Kroger. We have a lot of customers that do that when they think about buying their weekly shopping or daily shopping. But when they think about what's for dinner when they're driving home, we would weigh under index in that consideration set. And our market share is less than 1% in that space. We believe it's a huge growth opportunity for us and an important area. That was one of the reasons that we merged with Home Chef. Obviously, COVID was -- ended up being a huge tailwind, and that brand now is over $1 billion brand for us. But it really is how to help somebody have a restaurant-quality meal at home. And with -- if you look at Home Chef, you can do anything from something to heat up or something that all the ingredients are there. My wife and I use it probably 1.5, 2 times a week where all the ingredients are there, and you just have to do to finish the work and you have no leftovers. But that was the reason -- one of the reasons behind merging with Home Chef. And we still believe when you look at that, they call it food away from home, but I always remind people, food away from home, over half of it is eaten at home. They just buy it somewhere else. That's a huge opportunity for us.

Shifting gears a little bit. In 2022, you recently shared with us that Kroger achieved over $1 billion in cost savings for the fifth consecutive year. Could you just remind us where all that is coming from, and then what the expectation is for 2023, where do you see kind of continued opportunities to achieve those cost savings?

Yes. If you look at -- there's a reasonably elaborate process, as you can imagine, on how to achieve it. And there would be over -- there would probably be 1,600, 1,800 projects that make it up. So it's across the organization. If you look at the big buckets, the big buckets would be like process change where it's fascinating, but if you think about how do you get something from this spot to this spot and if you think about our pickup orders, we used to have where somebody would pick one order at a time. Well, now the system is sophisticated enough to know that I'm going to pick these 6 orders at the same time. Here's how you help the [ picker ] to make sure that each customer gets the right basket bag. And they shop 1 or 2 aisles, so they're not walking the whole store. So it's -- for us, you got to remember every second we can save is about $14 million a year. And it's literally finding where every one of those seconds. The other 2 big areas would be when you look at goods not for resell, continuing to understand how to leverage and buy more effectively and efficiently there. And then regular goods for resale would be part of it, too. But literally, there's anywhere between 1,600 and 1,800 different projects to achieve the result. And one of the things I'm really proud of our teams is -- I believe a lot of people are learning how to identify those opportunities, how to save money. And they're just starting to make that part of their normal work processes and how do you leverage technology and how do you leverage data. So our supply chain teams did a great job in minimizing the effect of some of the diesel cost pressures and some of the other costs. And it really was understanding having in a database every delivery, every product we receive from CB cheese, understanding all those routes and how do you maximize those to minimize the number of empty miles. And that's just using your data and technology.

Rodney, I get a lot of questions. We both get a lot of questions about Express Scripts. And is it -- is the -- is ending that relationship, is that going as you expected, number one? And I think should we expect other partnerships like that to potentially go away?

Well, for us, we just couldn't see providing a great, amazing service and losing money and losing money where the money we lost went to their profits. That for us just didn't [ ceases ]. It's just not a sustainable business model for us. And I know there's different things that are being reviewed in that industry in a broader way. So for us, that was the decision. So far, I think our teams have done an amazing job of minimizing the effect of that. One of the things that we discovered for a lot of patients is that with our discount cards for some of the drugs, they could actually use a discount card and save money from even what it was. And in that situation, we're able to retain that patient. They're able to save money so it works out well. But our teams are doing a great job managing it. It's not what you would want to do because you're affecting customers. But at some point, we just couldn't see our ability to have to charge people more for groceries in order to subsidize somebody else's profit margin.

And is the headwind to sales similar to what you would have expected?

So far, it's where we thought it would be. Now over time, we -- our teams are going to work really hard, but you don't make a decision like that lightly. And you do what you think is right for the next 10 years.

So Rodney, another thing I wanted to touch on was just how should we be thinking about wage investments for Kroger in 2023 compared to the year you just finished? And then, I guess, how would you kind of characterize the overall labor environment right now overall? And when -- have you seen pressure ease at all? Would you expect it to ease as we move through this year?

Yes. If you look at from a wage investment standpoint, as part of Restock Kroger several years ago, we made a strategic decision to invest incrementally in wages. And we felt like that was important to do. And at the time, we committed to invest an incremental $500 million in wages. We've actually are well north of $1 billion of incremental investments in wages. What we're finding is if you look at -- our turnover continues to improve. Also with that improvement in turnover is obviously a better experience, better customer experience, and some of those things help offset some of the costs. We've made the commitment in 2023 to invest an incremental $770 million. And that would be in wages, in benefits and also training and other things. We continue to incrementally invest in training. One of the things that we find for Kroger is if we can get somebody to stay with us for a year, they really do discover a career. And the turnover for somebody that's been with us for longer than a year is completely different than somebody that's less than a year. So all those things that you see us do, what we're investing in somebody because what we find is somebody stays with us for a year, they fall in love with the company. And then they start discovering their career because they expand their skills, so they ended up getting promoted to full-time or department head. [ 70% ] of our store managers started out as hourly associates. And then it just gets into a cycle that's positive. And for us, we really look at that as we purposely call it a wage investment. We don't look at it as an expense, but it's an investment in our associates. And we've always paid very well relative to the market. We're going to continue to focus on doing that.

Okay. I had a question about -- so sometimes on these quarterly calls, I feel like you talk about total households, which I think total households, I think you said, were -- are increasing.

Yes. Yes.

And then you talk a lot about loyal households.

Right. Which were up more.

They're up even more. So they're both going up. Sometimes they're not both going up. Is that right or...

Yes. Sometimes that would be true.

And so can you maybe walk us through the difference between a loyal household and a nonloyal household? And then why the trends are improving at both right now?

Well, in terms of loyal shoppers, we believe the reason that are improving is if you look at how customers tell us we're doing on Fresh, how customers feel like the total value they're getting and the experience itself in terms of friendliness, in stock, those things, we're making progress in all those things. So our insight would be that because we're doing these things right, the customer appreciates it, and we're winning more. The reason that I think it's really a big deal is what we find is when a customer first becomes a loyal shopper, they may be spending this much with us. But then the next quarter, they spend more. In the next quarter, they spend more. We call it the loyalty ladder, but they continue to move up the loyalty ladder, and we gain more of their household spend. And that, for us, is the -- we really work hard on focusing on loyal shoppers. Rob probably remembers the exact number, but loyal shopper is worth, what, 10x that a non -- versus a nonloyal when you look at it over time. So if you lose a loyal shopper, it's painful. Nonloyals, it's not nearly as much. Now you don't -- you want to have everybody shopping with you. So I don't want to...

And is it just specialized promotions that drives them up the ladder or...

What we find is it's the experience. So you get people into the reward cycle, we're able to better personalize the experience. So we're making an offer or supporting you based on something that we know is important to you. So you -- we are able to much more connect with people one on one. And you also get to earn more discounts, and you understand that when you buy the produce, it does last 2 or 3 days longer at home. When you buy milk, you don't have to check the dates on the milk because it's guaranteed to have at least 10 days of freshness when you buy it and those kind of things. So what we find is the customer appreciates the things that we do right. And when you look at the total value, it's -- you don't have to compromise relative to the other things that are important to you. And we also are incredibly involved. Some customers, not all customers, but some customers are very focused on Zero Hunger | Zero Waste as an example. And when customers spend more time with you, they start learning more in terms of what are some of the things you do for the community, and that also helps on loyalty as well. So for us, it's getting somebody into our ecosystem. And then hopefully, what we find is then they start engaging with one of the Kroger Personal Finance products that will start getting a delivery or a subtype or a pickup. And then that's when -- that's the reason why you get growth over time.

Got it. That's helpful.

So you said that loyal households are -- they spend 10x more around at Kroger than a nonloyal household. I was wondering if you could kind of give us a sense of how that looks when a customer engages digitally? How much more do they spend with Kroger? And are there any other ways that they behave differently than a store-only shopper?

Yes. Well, it's always fascinating. After somebody becomes a digital shopper, after a year, they actually come into the store more often than they did before they became a digital shopper. Now they only come into the store when they want to, and they actually have a higher satisfaction because they're doing it on their terms, not being forced to. So they're doing the things that are special for them. And what's special for one person might be meeting up with a couple of friends and having a cup of coffee in a shop. Somebody else, it might be getting something out of the meat department or the deli or something like that. If you think about each one of those things, every time a customer engages with us in one more aspect, it's worth incremental -- not just a straight line, but incremental volume to us. So when a customer engages with Kroger Personal Finance or the rewards program or fuel rewards or online pickup or delivery, all of those things just get the customer more in terms of engaged with Kroger at a deeper level. And that's the reason why you hear us talk about Seamless. And you hear us talk about our vision is when somebody thinks food, they think Kroger because if we can get where we can do an amazing job every single time for the customer, you're going to get a higher share of their household. When we get a higher share of their household, it gives us the capacity to actually lower prices for the customer. It allows us to personalize the experience a lot more, and it also -- the things that we're good at, the customer learns those things.

Got it. That's helpful. And then just a quick follow-up on that. But do you have a sense of what Kroger's overall penetration is in terms of the percent of customers that are engaging with you digitally?

Yes. I mean, we measure it all the time. And if you look, the customers get engaged with us digitally. It doesn't mean they're shopping digitally. So they can engage with us for coupons, recipe ideas. We have now the ability where if you see a recipe you like, you can just put it on your shopping list. A lot of people go into the store. And internally, I always like to say, I'm so proud of our team and what our teams have done in the last several years. And they've done amazing on supporting people during COVID and all that. But we worked hard. We've done good, and we'll do better because we still have a huge headwind to increase the digital engagement even more. And I don't know that we've ever shared specific percentages, but it still has a lot of headwind.

Well, we can't talk about digital without the question on profitability of digital.

Yes.

So can you help us think about what the margin headwind looks like today versus a few years ago, how you're thinking about last-mile economics, how we should think about Boost, how we should think about Ocado and maybe just as much as you're able to share on how to think about the profitability of digital progressing from here?

Yes. Well, there's about 15 questions within that, Robby. So I'll try to answer it in a way that's helpful. The -- if you look at our overall strategy on the Seamless, we really do believe that you need a combination of physical stores, the ability to have -- for people can do pickup and delivery. And in fact, we can do 30-minute deliveries if somebody needs it. We also fundamentally believe that the price other than the 30-minute delivery, that the price needs to be consistent across the channels. Everything that we would be doing behind the scenes is trying to support that. So if you think about it in Ocado shed, we know a store can only handle so much pickup business or delivery business on its own before you [ affect ] the experience for the customers that physically come into a store. So the shed allows you to move some of that volume out of a store environment to a shed environment. If you look at the profitability, every decision we make, we look at what we think is most appropriate in 10 years. Some things would be 5 years, but something like Seamless is a 10-year decision. And the biggest question is, is Seamless going to be more important in 10 years than today? And is it going to be meaningfully more important to where you invest a lot of resources, both talent and capital and other things? And the answer to all those things are, yes. And it's the ecosystem together that's so critical. If you look at the profitability, the -- we price our product at what we think is -- will be a sustainable model once you're at scale. We're not trying to price it such that we get everybody to use it, and then you start trying to raise prices afterwards because we just don't think that, that's a sustainable model. So the pricing that we offer on the things are really what we think it will be sustainable once it's at scale. When you look the Boost, Boost is just one more thing to be able to give a customer a little bit better deal if they give you -- give loyalty back to you. So you're not going to make money on Boost. But if you look at that customer's ecosystem when they engage with Boost, their volume goes up enough that it works for both. If you look at our online business, the store business incrementally now is profitable barely. And if you look at the delivery, that still has a lot of work to do. But I feel very confident that we'll get there, and we'll figure it out. Now obviously, retail media and alternative profit is an important component of that because our retail media income is significantly higher online commerce than what it is. And we make some media money in a store, but it's a fraction of what we do online. So long term, we still believe the margins on our online business will be the same or better than historical supermarket. And I always -- job 1 is to make sure you don't lose that customer. Job 2 is to figure out how to get a good ROIC. I mean, we have a responsibility to our shareholders to make sure that we're delivering growth and our 8% to 11% TSR commitment, I mean, we're not doing it for a hobby.

Let me pause here and see if there are any questions from the audience.

Thanks, Rodney. I was wondering if you could talk a little bit about the promotional cadence. We've seen promotional depths be pretty low from a lot of the national brands. And just where things stand today maybe relative to last year and maybe with a particular focus around just big merchandising holidays, like Memorial Day, Labor Day and the Fourth, just what are you expecting, I guess, around those kind of key merchandising periods from a promotional standpoint?

Yes. Well, we always -- our go-to-market strategy is to do promotions and offer value that way. So that's just the way we go to market. When you look at it overall, we really don't see much change. And Robby was bragging about Kendall earlier about all the price surveys that she does and the work she does there. Now that unfortunately for her, a lot of our offers are specific to that household, and it can either be electronically or...

We put that in the footnotes in our report.

Yes, yes, you do. But you don't know the specifics.

You're right.

And it's different for every household. When we look at just the overall cadence, we don't really see much of a change. But we always assume that the business -- we're looking at longer-term horizons. We assume that in 5 years, the business is going to be more competitive than it is today. We build a business model around investing in price every year. And we've been doing that for almost 20 years now, 15 years, where every year we invest in pricing. And we finance and pay for that by figuring out ways to get costs out of the business to process change and other things, and we balance the 2. And we would expect to still do that. Now some of that, you're going to invest it in promotional items. Some of that will be things that you can see publicly. Some of it will be on things directly to that particular household. And some of it will be everyday shelf prices. And different customers behave different in terms of promotions and related pricing. Sorry.

What are you seeing in terms of changes in private label penetration? And which categories are you seeing the biggest changes?

Yes. Well, first of all, we always call it Our Brands as opposed to private label. And the reason why we call it Our Brands is we look at it as a brand, and our customers look at it as a brand. We invest behind Our Brands. If you look at the talent in that organization, probably half of them came out of either some type of marketing company or CPG. So -- and we have product innovation people to come up with new ideas for product. If you go back 20 years ago, it would have been waiting for national brand to introduce something, and then you'd introduce a product. And over half of our product introductions now are things that are unique to the marketplace. They're not even something that's available. Our Brands are growing at double digits. And what we find is the customers, they do it the first time to stretch a budget. But they find that they like the product and quality so much. When they don't have to worry about as much on a budget, they just stay with Our Brands. And if you look at for 30- or 40-year time frames, Our Brands have gained share almost every year. The only exception to that was a couple of years during COVID, a lot of people are just buying whatever they can find in some categories. We believe it's -- Our Brands is incredibly important to our future success. We also believe that we're responsible for making sure -- we make sure that we stay innovative and create new ideas. And we're trying to earn customers' loyalty. Some -- if you shop Our Brands versus national brands, you'll save 8% to 10% for the overall basket. So some of it is trying to help people save money, but others are trying to come up with something new. If you look at Simple Truth, it's trying to make sure for natural and organic shoppers, they don't have to look at a label. If you look at private selection, it's introducing items that you haven't even thought of before. And the team would be literally getting inspiration from across the world on flavors and every -- once a year, we'll do a press release, some predicted flavored changes and things and trends. And you'll see us introducing our brand products that are consistent with those predicted trends.

[indiscernible]?

If you look at center store -- the question is what categories you see the biggest growth. And the center store categories would continue to be growing, especially if there's not a product that has a lot of technology behind it or somebody is not continue to come up with new ideas for their product. And new ideas doesn't mean you add a flavor because you see a lot of flavor proliferation in some items.

If there's no more questions from the audience right now, I do have another one. And it was just on something you touched on before, which is retail media. And I was just curious, how is Kroger thinking about its opportunity in that business versus what it's doing there today? And what's kind of Kroger doing now to help realize that opportunity?

For us, it's a massive opportunity. If you look at CPGs, they're spending $100 billion to $120 billion a year on media. We -- our share of that is just a fraction of what we think we should get or can get. Now we have to earn our right to get that. And our biggest competitors in that space is really more Google and Facebook and people like that of the world. It's not a traditional supermarket. One of the things that we commit to CPGs when they partner with us, it will be totally transparent. And there's times where we tell them, you shouldn't advertise this way with us because we're not -- it's not accomplishing your objectives. They'll tell us in advance. We'll ask, what are your objectives from a campaign? Is it for brand building? Is it for just trying to move share, those kind of things. So to us, we think we're just getting started. And the thing that I'm so proud of our media team is there's a third party called Path to Purchase. And every year, we're always the top or among the top in terms of providing the best insights in some of those things. So to me, those are an independent example and that the CPGs are getting good value for their money because they have to get a return. If they're not getting a return for it, then it's going to be money that they're just going to move from some other pot to Kroger. And we have to earn our right there. So I think we have a huge opportunity. And we're just now learning the space. And I'm more excited about it now than I was 3 or 4 years ago when we started. And obviously, when you look at overall alternative profit last year was worth over $1.2 billion, and we would expect to continue to grow that.

Are there any other questions out here? Because if there's not, I have one last one I want to sneak in. Okay. So for the last question, how should we think about Ocado? Like what do you want to -- when someone says the word Ocado, what should we think? Because a lot of things jump on my head. You're using it in new markets like Florida. It was initially sort of a next-day delivery model, but you're -- now you're using it to support same-day delivery. Like what -- maybe help us. What should we -- when someone says Ocado and Kroger, what should we think?

The -- I guess I'm trying to figure out a way to answer this in a way that's helpful. The -- don't -- first of all, don't assume Ocado is just what it is when you -- somebody says the word. And one of the things that Tim Steiner is one of the co-founders. Before we signed the agreement, I tell Tim, I said we're going to sign, but we're signing this in terms of what we believe you can become, not what you are because it doesn't do us any good for what you are. But if I look where you are at the time today versus where you were 5 years ago, I expect you to improve more than that 5 years into the future because you've learned a lot. And technology always gets incrementally better. So when you look at Kroger overall, it really does get to be how do we serve the customer for food whenever, how they want. And it's one way of doing it and doing it in a way that's efficient and you can make money. And it's one piece of that overall ecosystem. And the real key for Kroger is, what's the overall ecosystem and what's the profitability of the overall ecosystem, just not Ocado by itself. And so many people think Ocado is all it is, but it's part of the overall ecosystem. Now with all -- so all of that said, we are using it to say, can we use that as a way to go into new markets? And like Florida, we have one store in Florida, and that's it. So we are looking at the shed. Is that a way of going into Florida because if you start building physical stores, it'd be incredibly capital-intensive. And in Florida would be something that's different experiment than it would be for most of the markets that we operate in. And it's -- you shouldn't think of Florida any different than if we came and built 10 stores in the market. We just think we're more -- it's more unique coming to Florida with a white-glove experience on delivery than it is to come with 10 stores because that really wouldn't, and the shed volume is an equivalent of about 10 or 12 stores.

Got you. Thanks. We've run out of time. I want to thank Rodney for a great presentation and for a very busy time for you guys. And I really appreciate you being here.

Yes. Thanks for the invite, and really appreciate spending the time together.

Thanks, Rodney.

Thanks, Robby.