YETI Holdings, Inc. (YETI) Earnings Call Transcript & Summary

Good morning, everyone. I'm Robby Ohmes from BofA Global Research. We're very pleased to have several well-known people here with us today. From YETI, for fireside chat, first we got Matt Reintjes, the CEO of YETI; and second, we have Paul Carbone, the SVP & CFO; Tom Shaw from IR is also on the line. YETI has executed incredibly well in a tough environment through last year. So we're real excited to have the team from YETI here with us today.

I'm going to kick it off right away with Q&A for the fireside chat. So Matt, can you give us an overview of how the business has evolved from less than $500 million back in 2015 with, I think, we had less than 10% D2C penetration back then. You're now a $1 billion brand with over 50% D2C penetration. Would love to just get a quick walk through on how you guys made that all happen.

Excellent. And thanks, Robby. And good morning, everyone, or good afternoon. We're excited to be here. We always love a chance to talk about talk about YETI and the story that we continue to build. And a lot of that momentum and story is rooted in the question you just asked, Robby. We were a business -- I joined YETI in 2015, about a little over halfway through 2015. And the businesses that time was building this incredible brand around its predominantly hard cooler business but had evolved -- it was evolving into soft coolers and drinkware. But it was a business that, as you said, the time was 90%-plus wholesale based. It was over-indexing to the south and southeast of the United States, the Texas or to Florida, what we sometimes call kind of our heritage markets. And it was a business that hadn't yet emerged to the East and West Coast and had numbers to much of the northern part of U.S. and was really nowhere on the global radar. And we set about a strategy back in 2015 that we were going to expand the brand, or what we talk about internally, open our brand aperture. And what we mean by that is, we want to keep where we were and that consumer that joined us early on right in the center, but as we open wider, we're allowing more and more consumers in. And we used our brand and marketing and what we talk about is our depth and breadth strategy to do that, and I'm happy to talk, talk further about that. The second thing we said we were going to do is, we needed to really expand the product portfolio, but in a thoughtful way, without just taking our brand momentum and putting in our product. We're going to be thoughtful about how we go from hard coolers to soft coolers and build a more robust cooler business, how we go from hard coolers to soft coolers to drinkware and build a more robust drinkware business. Really anchor into a new product family and then expand. And most recently a few weeks ago, we announced the expansion into bags. And I think that thoughtful, almost waves hitting the shore-type rhythm to how we expanded the product portfolio while expanding the brand. And then the third piece was, we said we're going to really put digital first. And we want to be where the consumer wants to shop. And not at the -- in balance with our wholesale business. We said, we're going to grow our wholesale business, but that we expect via e-commerce and D2C to grow, to grow faster. We invested behind that in people, technology, process and have continued to expand upon that. And as we said in our most recent earnings call, it's a big area of focus to continue that digital investment. And then the fourth piece was, become a global brand. And to get to being a global brand, we had to be a north, south and southeast U.S. brand. We had to be a national domestic brand and then become a global brand. And we've done that, and our business is really, really balanced throughout the U.S. And as you've seen in our recent earnings, we've had some nice early progress in that effort to become a global brand. And so, I'd say it's really keeping those 4 things in balance: expanding the brand, allowing more consumers in; expanding the relevant pursuits and activities; continue to expand the product portfolio in a meaningful way; driving the digital evolution of the business; and then setting ourselves up for the globalization of the business.

That's really helpful. One of your larger or maybe largest customer, DICK's Sporting Goods reported this morning. And I think what they're -- going to be asked about today, and what I want to ask you about is, there were a lot of things that happened last year that were kind of supportive of consumption of YETI. But then, I think you guys have called out, there are a lot of things that didn't happen as much, like backyard barbecues and tailgating. Any thoughts on how you would tell us to think about the sort of COVID comparisons as you're moving through 2021?

Yes. It's obviously there's a lot of talk about COVID winners, COVID losers. We look at YETI as a little bit of a third category on that. And what I'll say is, in acknowledgment of DICK'S call this morning. DICK's Sporting Goods is a wonderful partner. It's been a wonderful partner for a long time. They have -- they, along with a number of wholesale, as we have built out our omnichannel business and really focused on merchandising and elevating merchandising and giving reasons for a consumer to engage. And they tend to be -- continue to be progressive in that. And so we appreciate that partnership and all of our partnerships, immensely. I would say from a COVID perspective, when we step back and we look at where this business was and we look at 2018, our growth is 22% in 2019, our growth is 17% and in 2020, our growth at 19%. We look at Q4 of 2020, growing at 26%. We believe what happened for us with COVID, is that we were able to kind of change the conversation with the consumer around what those activities were. So instead of talking broadly about things like, commuting and tailgating and sideline sports, we were able to shift the conversation to outdoor activities, solo pursuits but the beauty about our product portfolio is it flows with that consumer. So whether you're gathering in your backyard with Tundra 45, you're on the sidelines with the Tundra 45, which were 2 things that were highly disrupted during COVID. Or your car camping or you're driving for a nearcation or you're out on a solo pursuit. That product stays with you through those moments. And so we feel really well positioned for not only the trend that happened in 2020. And that active outdoor health benefit of being outside is something we've seen building over the last 5 years, but that more -- kind of acute shift to that, as the world returns to, where that pendulum swings back to, whatever normal looks like. We feel great about where our products, where our brand fits, and it will be less about -- we need to change or make our product relevant than our brand positioning, how we market, how we engage consumers, where we engage them, will be the things that we'll adjust. We're not a pickup and put down product because someone all of a sudden was excited to start having cold drinks or hot beverages. We work across that spectrum.

That's helpful, Matt. And maybe we could get you to talk about digital. When you think about digital for 2021, what are sort of the new initiatives coming on? And how do you think about driving your digital versus some of your partners, like, say, Amazon? Any thoughts you could share with us on that?

Yes. I think when we talk about digital, obviously, the first thing comes to mind is, is yeti.com, and that's had a really incredible progress since 2015. Because we put a focus behind, that being the most fulsome brand statement we have. It's the place where you can see the entire portfolios, it's where you can have the greatest depth of learning, the greatest depth of engagement with the brand. But we look at digital broadly. We look at our wholesale partners in their eTail and what happened in that e-commerce shift in 2020 and how we can help support and make sure that our digital merchandising with our wholesale partners is elevated and is at the level that, not only that fits them, but fits our brand. So as we go into 2021, one of the areas we're focused on is, how we help our wholesale partners, because we think that shift, a certain amount of that shift is going to stay on. I think that, Buy Online, Pick Up in Store, curbside, all those dynamics the consumer has been trained into the convenience of it, and we want to make sure that we're supporting our partners in that way. As it relates to optimizing the Amazon marketplace. As a reminder, that's our -- that's a full price channel for us. We set the pricing. We control the inventory flow to it. And we believe that, that has a consumer group that, that is their preferred shopping channel and where we believe being well represented there is important. From a yeti.com, that's probably the area where we're investing the most from a digital intelligence. And it's understanding our -- more broadly understanding our consumer and across the spectrum as we think about acquisition and retention and then, ultimately, consideration and purchase. And the big focus this year, because we drove a lot of acquisition over the last [ 5 ] years is really around the retention. And when we talk about retention, we don't think about churn, we think about repeat purchase. We think about extending into other product families. How we link together first purchase and second purchase within a product family and purchase to second purchase outside of a product family. So our focus this year from an investment in our technology, kind of our machine learning and our algorithmic support behind our advanced analytics is a big area of focus, and we're putting people behind it, we're putting capital behind it and feel good about where that's going to lead us.

That's really helpful. And I just want to pause for a second to remind everybody out there to feel free to raise your hand or submit questions. For Matt and Paul. But now I want to shift to the question I get asked all the time is just, Drinkware growth in Drinkware saturation, can you kind of remind us, what you are typically seeing from your customers? How many pieces of YETI Drinkware can a typical customer -- how do you keep that growing? Just how do we think, about, maybe the Drinkware journey for your customers?

Yes. So I would say a couple of different ways. or maybe a couple different points on that. Obviously, we're entering our seventh year of being in the Drinkware business with really kind of elevated success over those 7 years. And -- but if you go back in time, 7 years ago, we launched 2 sizes of tumblers. We launched a 20-ounce and a 30-ounce tumbler and then we came out with a 10-ounce tumbler. What we have done over the last 6 to 7 years is, thoughtfully built out that portfolio without running too wide and too fast. But bringing -- continue to bring innovation and reasons to engage. And that innovation could be something as simple as color. It could be lids. It was the expansion from tumblers into bottles. And then within each of those families, the ability to continue to expand and give the consumer more and more reasons to reconsider, more and more reasons to engage and also different use cases. So if you look at our portfolio today, we have great solutions for -- all of our solutions today, keep hot things hot and cold things cold, but we have great solutions for water bottles. We have great solutions for drinking coffee. We have wine, tumblers, we have cups that work as cocktail cups or juice cups or water cups. And each of those gives us the opportunity to go back and talk to the consumer about a reason to add to the portfolio. And we think broadly about Drinkware, if properly define Drinkware, Drinkware is a large global category made up of glassware and ceramics and all kinds of items that we think, we can continue to expand opportunity. Our YETI owner studies would say that YETI owners are multiples owners. And not only do they own multiples for themselves, but gifting is a high part, and peer-to-peer referral was a high part of how we've built the brand through word-of-mouth. And so I think that that opportunity for us in Drinkware, now entering our seventh year and continuing to have, what we would consider really strong growth and being on just the precipice of international expansion. We feel great about the product families and the expansion opportunity we have.

And maybe to kind of continue on that, how would you think about that, how would you think about the sort of saturation of the cooler business. I think you guys are expecting this year to come back strong. This is expected bigger cooler year and I'll include some of the solitary, leisure dynamics that we discussed. Kind of shifting back, but -- is Drinkware, what's the correlation with Drinkware penetration? And then does that need people in the coolers or is it kind of different customers? How do you think about the growth in coolers?

Yes. I mean I would say just from an absolute number, obviously we sell a lot more Drinkware units and we do coolers based on the price points, the average price point being about 10x each other. So you have a lot more consumers who come into the brand buy a Drinkware. And we see that as unlock opportunity for expansion further into the product portfolio, whether that's hard cooler, a soft cooler, a lunch bag, dog bowl, a dog bed or more recently in the -- similar to cooler price points, our bags, backpacks, duffle bags, luggage. And so that base of brand impression and brand engagement we've built through the Drinkware, we think is really nice opportunity to expand into the family. Which is also ties back to some of our advanced analytics work, and I've talked about retention or reengagement across family engagement. When we think about penetration, 15 years ago, people said how big -- how many people really want a $300 cooler? We're 15 years into selling coolers, continue to perform really well. We're still being introduced to people. When you look at our earned media from 2020, we had a number of publications that were introducing the YETI Tundra 45, which has been in the market since 2008, as if it was new to the world. And so, every time those things happen, we realize how much further opportunity there is to introduce people to our product, to our value proposition to our differentiation. Domestically, and then with a business that's 6% international right now, the majority of that being in Canada, the early reads were getting out of Europe, the U.K., the strength we're seeing in Australia, the early reads we're getting out of Japan. Again, all those kind of planks upon planks of growth is what we're focused on.

Okay. That makes a lot of sense. I think I'm going to -- Paul, are you ready? I want to shift over to you. I think this is -- I'm going to ask a few that I think are right up your alley. One on the skin, we want you to talk about the flow of inventory in the first half and kind of what you're seeing out there? Factors like port congestion are being mentioned, anything you can help us think about there.

Yes. So thanks, Robby. So I'll start with inventory. We -- what we talked about at the end of or the beginning of February is, we would expect inventory to be down at the end of the first quarter and then turn positive year-over-year for the balance of the year. Now that being said, we start rolling over the big negatives from last year. So part of it is the comparison that's driving that positive. We expect to end the year about $200 million in inventory, which from the math it would be up about 40%. So a significant increase of where we exited 2020. But with that said, if you go back to the end of 2018, I was in that same area of inventory. So we're going to continue to -- I highlight that because we're going to continue to build inventory throughout the year. And even with a big increase of 40% at the end of the year, it's not significantly [ up ] from the past 2 years in absolute dollars. If I look at -- to your second question, ports and things of that nature, I think there's a few supply chain dynamics going on and that we're keeping our eyes on and monitoring. It's going throughout the industry. That's supplier production, shipping container capacity, and then port navigation. So if I go through those 3, we're working extremely closely with our partners and manufacturing partners and remain confident they are on track with their production levels that will help us meet those inventory levels that I just talked. So that's kind of piece one of production. With shipping containers, while demand has increased broadly of containers coming into the U.S. in shipping space, we've been able to secure ample capacity to get goods over to the U.S., which is great. And then if I look at broad-based port challenges and really driven, I think as you know, Robby, by the COVID impact and not being able to put as many crews as the information we're getting. We have 2 or 3 crews working a ship, where they may have 7 in the past. We're seeing some elongated times coming through the port and the process shipment, just based on the volume coming in. And we're really looking to mitigate those 3 things. We're doing some cross-docking, so right off of ships on to trucks and how we're using some different shipping lanes. And then the third, so we're doing some faster shipping lanes out of Southeast Asia to cut down on the transport time, even though, I have to wait outside of the port longer. And then lastly, we're testing some alternative ports. And that's -- we haven't even -- we've started that. We haven't had a ship docked. But we were a port down in Houston, right down from our Dallas-Fort Worth distribution center. So we're going to send some ships in today. It's a smaller port. We don't want that to get overrun. So we're testing that, so we feel like we're addressing this in a couple of different pieces -- a couple of different ways. And then I'd say, lastly, from a top line and an expense standpoint, so top line, getting the goods expensed standpoint from a freight. We remain very confident in the financial outlook we provided in February. Including as you remember, we said our highest revenue growth will be in Q1. And our most significant gross margin expansion, flat for the year, but we will see expansion in Q1, and we still expect that.

Got you. That's very helpful. I think maybe another one for you would be, the 2021 guidance. I think you guys gave a 15% to 17% target. That's above the 10% to 15% algorithm. I think it's 37% growth on a 2-year stack. So what are the factors driving that growth? Could your long-term algorithm be going to a higher place over the next few years? Any kind of thoughts you can give would be great.

Yes. So I'd say a couple of things. There's a couple of dynamics playing this year. First, and Matt talked about this. We had a really strong 2020. 2020 even coming into the first 11 weeks, we're at plus 21%. So the business has momentum even prior to COVID, and then had a second quarter that was difficult in wholesale, and then a strong third and fourth quarter. As we look to next year, I would say, the easiest way to peg the above the long-term algorithm is really kind of the reloading the wholesale channel, right? So what we've said is, we expect DTC be in that mid-20s, which has always been the long-range algorithm. But we expect wholesale to be slightly above the mid-singles or above the mid-singles for next year as we reload into the whole -- as we reload into the channel. So that's what's driving us above that long-term range.

And another question I get all the time is just your gross margins, how high can they go? And can you just remind us what could make them go higher? And maybe what could keep them from going a lot higher?

Yes. So we gave an outlook of flat. And what I would say flat is, 57.6% is the 2020 number. I'll start with -- there's nothing in the business, Robby, that would say, 57.6% is a ceiling. So there's nothing that we see that would say, that's a ceiling. I think we have a couple of tailwinds of gross margin. The first is channel mix. So we've talked about that. We've grown gross margins 800 basis points over the last 2 years. So we've certainly driven that. So we see channel mix as a tailwind, and that will continue. Although as DTC gets bigger and bigger, we've crossed 50%, every 100 basis points of mix increase gives me a little bit less on the gross margin because of the larger base. And then the second piece, and we continue to expect this is, product cost savings, right? And then we're going to offset that. And it's a couple of the headwinds this year that we've talked about is reinvesting in the product. And then we believe there'll be some or we know there's some FX on the exchange. While we pay in dollars, our product cost negotiation is based on what it costs our manufacturers to build in local dollars. When that's favorable, that helps us negotiate. So that's why we've said it's going to be a flat gross margin year after 800 basis points improvement. But there's no theoretical ceiling that we see. It's just that, as we get to being a bigger and bigger business, that mix gives you smaller impact for every 100 basis points.

That's really helpful. All right. I'm going to shift back to Matt. And Matt, I want to dig in with you a little bit on international. And actually, I want to start with China. YETI is already a great $1 billion brand. There's a lot of great brands that are in China and do really well here and make a lot of money there. Can you give us some color on timing and what you think YETI could do in China?

Yes. It's for all the reasons you said, we think China is an attractive market. We have a historical relationship that we built with Alibaba through some kind of various different points in time as we've tried to look at when the right time for YETI was on through Tmall and others. So I think that, that channel to market is there for us. One of the things that relates to a question you asked Paul is, getting our inventory and getting our capacity built up, to be able to support what we think the opportunity could look like. We have a -- we know that market well from the supply side. I know well from my past from a consumer commercial side. And so we think it's an active opportunity. I think the timing for us will be when we are ready to support it fully from a supply side, so we could support the demand that we think could be possible there. That will dictate timing. And then a little bit of some of the efforts we are putting into our technology infrastructure, to be able to support both the goods flow that we want, but also the -- kind of all the other demand part of the technology. And so we have a lot of partners there that we've had various conversations with. I would say timing is a -- but it's a market that we like and we think is attractive for YETI today and also for where we're going with the portfolio.

That's helpful. And then I want to follow up in one second. [Operator Instructions] But just continuing on international, Matt. Canada, what do you see there in the National Hockey League deal that you guys -- the license to inquire launch, how important is that? What are the opportunities there?

Yes. I would say things like, the National Hockey League licensing deal are important on 2 fronts. And we'll see as we build into that relationship and that awareness in Canada around that. But one of them is from a brand-building and a brand perspective. Obviously, hockey is the national sport in Canada. We had an opportunity to partner with the NHL. We've done some things specifically in Toronto with the Maple Leafs around our entry into Canada as a way of kind of using things that are relevant in the market. So I would say we look at it first and foremost, those kind of deals as a brand-building expansion. I talked about opening the brand aperture. And then the revenue opportunity is a piece that comes behind that. I would say, broadly the Canadian market has been great. We've only been active in Canada since 2017. We have a YETI team and a subsidiary in Canada that runs that business. So it's all one step to wholesale. Our e-commerce business, [ dot CA ] businesses we mentioned on our last call, was a high performer for us through 2020 with all the shutdown that happened in Canadian wholesale. Similarly in our early-stage European business, with wholesale shut down, our web properties and e-commerce business really carried it. And when I think about Canada long-term opportunity, in most of the businesses I've had in the past, there's, call it, 350 million Americans and there's 35 million Canadians. And the ratio tends to kind of work out that way. We today -- and we look at the relevance of the product, we look at the outdoor enthusiasts and activities, we think that there's a really nice continued opportunity in Canada. Today, our wholesale -- excuse me, our international businesses for full year '20 was 6%. Of our overall business, it was 7% in Q3 and Q4. So we think Canada has further opportunity, and we like what we're seeing there. Similarly with Australia, which is on a similar timeline. Started in 2017. And Europe is -- Europe, Continental Europe and the U.K. are in the early days.

That's really helpful. And maybe just last on international, which you brought up. Is Europe, do you think that's going to be a tougher market for YETI? Or can you kind of approach it the same way as you have, say, Australia?

Yes. I would say, we are approaching it today the same way. Where Europe is tougher is it's not a single market. So there are -- we're looking at the major countries in Europe and then what I would call kind of the secondary focus. Obviously, success in Europe and the U.K. is -- success in the U.K. and success in Germany traditionally set the tone for the rest of the business. What we're seeing in the early days is broad-based support throughout Europe and broad-based interest. And we're seeing that both through our own e-commerce channels, but also interest we're seeing from wholesale partners. So I think as you -- as we round 2021, you're going to see us make further investment into that region. We just hired a Head of International, who is an incredibly talented individual, who's going to run that business with an initial focus primarily on Europe, the U.K. and Australia. And then help build out our Asia strategy, while we have our North American business, kind of well in its maturation and development. And we're going to continue to focus on really driving digital first, much like in the U.S., and brand building is going to be a big part of it. We're starting to sign international and patent on U.S.-based ambassadors. You'll start to see more content from us that has more global flare to it. We have a quick example, which did the Natural Selection, snowboarding event, Travis Rice, who is a global, very global figure in the snowboarding world. Ran in Jackson Hole, just a few weeks ago. Red Bull media broadcast that event. Just from that event alone, and we were the title sponsor of that first event. From that event alone, we're getting feedback and inquiry from potential dealer partners in Europe who watched it on Red Bell Media and now understand what the brand is, get its association to snowboarding that world that starts the discovery. So we're going to look for more and more of those marketing dollars we can stretch that have global implications and global kind of reputational build.

That is helpful. A question has actually come in. I'm excited. So this is actually, can you talk about the opportunity more in bags in luggage? You mentioned the addressable market could be larger than Drinkware. I'd love to know, I mean what -- how should we think about this -- should we thinking TUMI here? Or what have we got?

Yes. Yes, I think there's a couple of things. We got to bags, much like we built out our product portfolio which is, we looked at the environment in which our consumer operates. And we looked at where our products from our product portfolio today are. And we look at what other products surround that life. And one of the things, it's how we went from hard coolers to soft coolers, and how we went from hard coolers to soft coolers to Drinkware. It's how even small things like blankets came about or chairs. Chairs came about because people were buying cushions to sit on our coolers. And so why not create a better solution for that? Bags were omnipresent in all those environments, backpack, duffels and wheeled luggage. And so we started to really look at that market. We listened to our 130-plus ambassadors and looked at our consumers. And we landed on bags, because it is a large, global, highly fragmented category with price points all over the place. And then we said, what's our relevance in that? And we kind of drew -- we drew up a little bit of a box. And we said, in one corner, you have very high-end luxury. Luxury price points, they trade on quality but really trade on brand name at a very kind of high-end price. In the other corner, you have, what I would call the serious business traveler, ballistic nylon-type brands. You mentioned one in TUMI. Then you have in the other corner, kind of bottom left corner, you have, what I would call adventure packs. Bags that are meant for going up the mountain, that are full of straps and harness systems and things that work on the mountain but aren't as relevant in other aspects of life. And then you have the bags in the fourth quadrant or fourth corner, which I would consider more lower price but more fashion oriented. So almost in a fast fashion style. In the middle of all of that, we saw an immense opportunity for our brand premium pricing, premium design, technical but not a technical pack. And a chance to create a product that you could take from the streets of New York to Big Sky, Montana. And it would still work in both those environments. It would not only from a design, but from a functionality and from a look. We're not designing bags for climbing up the mountain. And we're not designing a bag that is solely optimized for organizing your work life. But we want a bag that can move between those kind of environments. And when we looked at it globally, it was like there wasn't a brand that was well positioned in there. And we can bring the ethos we have from all our other designs and come into it. But we're excited about it -- we're excited about the opportunity. We have a big category, a big family in coolers. We have a big family in Drinkware. We think bags has really nice unlock potential.

I want a bag like that. So I'm looking forward to the launch.

It will work in Charleston, too.

Exactly. What do I -- get in a question on just store growth, and when you could go back to opening flagship stores, and how many? And what kind of places do you see those stores opening up?

Yes. So I can take that one. As we said in February, 2020, we opened couple of stores that were in the pipeline, stopped for -- with COVID. We still believe in retail stores. We believe that they are the way to show the breadth of the product line, and they're an important part of our omnichannel approach. What we're looking for and what we are observing is, let's see how traffic comes back to retail. So it's still broader. So brick and mortar overall, we were really happy with the way our stores performed. They actually comp-ed positive. We have 8 stores. The stores that were comp-ed throughout the year, comp-ed positive in 2020, comp-ed positive in Q4. So we're happy with what we're seeing. But we want to see how does traffic come back, how does shopping normalize, in-person shopping. And then we're balancing that with -- we think there's a lot of real estate opportunities that are going to come up. So there's cautious or let's wait to see what traffic is. And then there's the -- on the other side of -- let's take advantage if we see some great real estate. Just on the pure process of opening stores, it's now March. We're not expecting many stores to open this year, but it's really setting up in what does 2022 look like.

That's helpful. And we did get another question from the audience. And so I want to make sure I get this in. Do steel, resins and other commodities impact your margins this year? If not, why not?

Yes. So they don't directly affect our margins in the sense of -- we don't have pass-throughs. We don't have certain volume guaranteed contracts with our manufacturers. Now that said, a lot of our cost negotiations is, we have -- should cost models, and we assign a certain margin to the manufacturing. And that's what we negotiate on. So certainly with those inputs going up, that limits some of my negotiating power because I know their input costs are going up. So it doesn't directly impact in the sense vis-à-vis it flows through or my prices automatically, but there is this negotiation. It's kind of like the FX piece that we talked about earlier. It goes into those conversations. And this really is a partnership with our manufacturing partners, and those are ongoing conversations we have with them.

And then maybe, in the last 2 minutes here, Matt and Paul, Lowe's just as a wholesale partner, and remind us what we should be looking for there, this year and over let's say, the next 3 years?

Yes. I'll take kind of the high-level sort of rollout and relationship, and then Paul can add any additional color. What I would say is, we continue to build a great relationship with Lowe's. When we brought them on board, we brought them on board for a very kind of set number of reasons, which was, we thought, it was a different buying occasion that we were seeing in the rest of our channel. We thought we were going to get access, or believed we'd get access to, a consumer that we weren't directly accessing in other places, both the consumer and the pro. And then it helps support the rest in rounding out rest of our wholesale. And I think it's continued to do that wholesale partners and Lowe's has been great with that. When we first started the rollout, we indicated that we thought the rollout would roll through the first half of 2021 obviously, with last year being where it was, we pushed that timeline out a little bit. And so I think that as we go through the rest of this year, we indicated we don't have any plans for additional store openings in the first half of the year. As we go into the back half of the year, we get our inventory flows the way we want them to. We'll look at that resumption of a paced rollout. So strategy hasn't changed. Timeline has been stretched a little bit. But we feel good about what that relationship still has to hold for us.

Terrific. Matt, Paul, we're out of time. I want to thank you guys. Great presentation and a great fireside chat. And wish you guys best of luck in the upcoming year here.

Absolutely. Thanks, Robby. Appreciate it.

Thanks, Robby.

Thanks, everyone.

Thank you.