Earnings Call Transcript - SPWH Q2 2026

Operator, Operator

Thank you for being here, and welcome to the Sportsman's Warehouse Second Quarter 2025 Earnings Conference Call. As a reminder, this program is being recorded. Now, I would like to introduce your host for today, Riley Trimmer, Vice President of Investor Relations. Please proceed, Riley.

Riley Timmer, Vice President, Investor Relations

Thank you, operator. Participating on our Q2 call today is Paul Stone, our Chief Executive Officer; and Jennifer Fall Jung, our Chief Financial Officer. I will now remind everyone of the company's safe harbor language. The statements we make today contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which includes statements regarding expectations about our future results of operations, demand for our products and growth of our industry. Actual results may differ materially from those suggested in such statements due to a number of risks and uncertainties, including those described in the company's most recent Form 10-K and on the company's other filings made with the SEC. We will also disclose non-GAAP financial measures during today's call. Definitions of such non-GAAP measures as well as reconciliations to the most directly comparable GAAP financial measures are provided as supplemental financial information in our press release included as Exhibit 99.1 to the Form 8-K we furnished with the SEC today, which is also available on the Investor Relations section of our website at sportsmans.com. I will now turn the call over to Paul.

Paul Stone, Chief Executive Officer

Thank you, Riley, and good afternoon, everyone. Before we begin, I want to recognize our team of dedicated outfitters across the country. Each and every day, they deliver on our promise of great gear and exceptional service. I'd also like to welcome our Chief Financial Officer, Jennifer Fall Jung, who brings more than two decades of experience across both large-scale and specialty retail. She's a proven financial leader, and I look forward to partnering with her to further accelerate the transformation of our business. Turning now to our second quarter results. I'm encouraged by the strong progress our team continues to make as we advance our transformation strategy in the second quarter. Despite ongoing consumer macroeconomic headwinds, we delivered our second consecutive quarter of comp store sales growth. Same-store sales were up 2.1% compared to last year, with positive comps achieved each month of the quarter. Importantly, this growth came even as June faced a difficult comparison due to last year's pull forward of sales in California ahead of the new firearm and ammunition taxes that took effect on July 1 last year. Our efforts to localize merchandise assortments and geotarget our marketing are delivering strong early results. For example, in Alaska, sales in the second quarter grew by high single digits, reflecting how well these initiatives are resonating with customers. Aligning our merchandising and marketing to local outdoor pursuits and solution selling is proving to be a critical unlock, not only for driving growth, but also for improving inventory productivity and efficiency. Our firearms business once again outperformed the industry. While adjusted NICS checks declined 4.9% in the quarter, our unit sales increased more than 4% versus last year, further evidence that we are capturing market share. Consistent with broader consumer trends, we did see some trade-down behavior reflected in a 4% decline in average unit retail for firearms again this quarter. However, attachment remains strong as average order value continues to be at all-time highs. In ammunition, our strategic shift to an everyday low price model on core ammo calibers and improved in-stock continues to resonate strongly with our customers. Ammunition sales grew 10% in the quarter with average unit retail up in low single digits. We are also sharpening and investing in our firearm-related merchandise assortment to drive higher basket attachment and greater overall customer value. Looking now at our key categories. Driving our comp increase in the quarter was our hunting and shooting sports and fishing departments. Hunt and shoot increased 4% in Q2, driven by firearms, ammo, and products related to personal protection. Fishing was up nearly 11% over last year and is up 20% on a two-year stack. This is a category with expanding market participation and clear opportunities for us to capture additional share. We are well positioned with our late season fishing inventory to sell down and end the season strong with clean inventory. We were disappointed with camping's performance this quarter as sales were down 10% compared to last year. As part of our ongoing transformation, we made a deliberate decision late last year to eliminate certain slow-moving categories that were tying up working capital, but we have not yet seen the level of offsetting growth we anticipated in other areas of the department. To address this, we recently implemented an EDLP strategy on core consumables, similar to what has been effective in ammunition, and we are confident this will strengthen the business over time. Additionally, we invested in compelling new assortments, most notably with YETI, and early results indicate that these additions are resonating with our customers. Our e-commerce business grew 3% over last year and continues to be a strength of our omnichannel retail strategy. Importantly, over 70% of online transactions were fulfilled through our buy online, pick up in store (BOPUS) program, underscoring how e-commerce drives significant traffic and sales into our brick-and-mortar location. At the same time, our ship-to-home business remains strong, reflecting our ability to capture consumer demand well beyond our physical store footprint. With these dual strengths, we are uniquely positioned to gain market share as e-commerce continues to outpace traditional retail channels. The improvements we're seeing across the business are directly tied to our strategic focus, which remains centered on our four key priorities: One, inventory precision. Inventory readiness for the critical fall hunting season was foundational in Q2. In prior years, we were often late to the season. This year, we are ahead. Our inventory is healthier, our in-stock levels are stronger, and we have depth in our core products. With Q2 representing our peak inventory build, we are now well positioned to sell through as we move into the key fall hunting and holiday season. Two, local relevance. We continue to strengthen our role as a trusted local destination. This quarter, we launched our partnership with the United States Concealed Carry Association (USCCA) to provide in-store training and education. Their robust market-specific programs are a natural complement to our localization strategy. In addition, we are expanding in-store events that leverage the expertise of our outfitters, further strengthening our role as a trusted resource and deepening our connection to the communities we serve. Three, personal protection. This category continues to outpace our total company performance. We've expanded the number of stores that carry the Byrna product line where we offer the customer a chance to try before you buy, leveraging our archery lanes and enclosed shooting pods. We also launched TASER, a well-known less lethal brand, earlier this week in our top-performing personal protection stores. We will continue to lean into this category as we establish Sportsman's Warehouse as the authority in personal protection. Four, brand awareness. As a differentiated omnichannel retailer, we are strengthening brand recognition and trust. Our new 'adventure like a local' campaign underscores the expertise and authenticity that set Sportsman's apart, while our refined digital strategy is accelerating customer acquisition and positioning us for sustained long-term growth. Despite ongoing consumer macroeconomic challenges, I remain confident in both our strategic plan and our team's ability to deliver against it. Our competitive advantage is clear: we outlocal the big box retailers and out assort the smaller specialty shops, providing customers with a differentiated combination of value, quality, breadth of selection, and personalized service rooted in the communities we serve. We remain disciplined in managing the levers within our control: variable cost, inventory productivity, and merchandise margins. As we advance our strategic initiatives, we are confident these efforts will drive sustainable sales growth, operating margin improvement, and debt reduction in the back half of 2025. Finally, we continue to anticipate ending the year with lower total inventory than last year and generating positive free cash flow. I'll now turn the call over to Jennifer.

Jennifer Fall Jung, Chief Financial Officer

Thank you, Paul, and good afternoon, everyone. It's great to be on the call and to be part of a very exciting transformation happening at Sportsman's Warehouse. We delivered our second consecutive quarter of same-store sales growth in Q2 with comps up 2.1% year-over-year, representing an improvement from the first quarter trend. Net sales for the quarter were $393.9 million, an increase of 1.8% compared to the prior year. Our sales momentum from Q1 carried into the second quarter, led by strength in our hunting and shooting sports department, which grew 4%, and fishing, which increased 10.9% versus last year. These gains were partially offset by softer performance in other departments. Gross margin for the quarter was 32%, an 80 basis point improvement versus Q2 last year. The increase was largely driven by improved overall product margins from healthier inventory and a higher penetration of sales from our fishing department. This increase was partially offset by a mix shift to firearms and ammo, which has a lower gross margin; a lower penetration in camping, which carries a higher margin rate; and increased freight tied to our strategic pull forward of inventory to be store ready for our key hunting season. The freight expense due to the inventory pull forward resulted in an estimated 40 basis point drag on margin in the quarter. SG&A expenses were $97.2 million or 33.1% of net sales versus 32.7% in the prior year. The increase was driven by a reinvestment in our customer-facing areas of the business, including store labor and digital marketing to drive sales and omnichannel traffic. We will continue to closely manage our variable operating expenses to align with sales trends. Net loss for the second quarter of fiscal 2025 was $7.1 million or negative $0.18 per diluted share compared with a net loss of $5.9 million or negative $0.16 per diluted share in the second quarter of last year. Adjusted net loss in the quarter was $4.7 million or negative $0.12 per diluted share compared with adjusted net loss of $5.3 million or negative $0.14 per diluted share in the second quarter of last year. Adjusted EBITDA for the second quarter improved to $8.3 million compared with adjusted EBITDA of $7.4 million in the second quarter of last year, an improvement of 20 basis points as a percentage of net sales. Now turning to inventory. As anticipated, total inventory at the end of Q2 was $443.5 million compared to $363.4 million in the same period last year. As Paul noted earlier, this increase was a deliberate and strategic decision to ensure our stores are well prepared and set on time for the key late summer and early fall hunting seasons. Our focus has been on building depth in core items that are seasonally and regionally relevant, faster turning, and supported by predictable customer demand. We believe our inventory remains healthy and of high quality as evidenced by cleaner sell-through during the spring and summer seasons. Importantly, Q2 represents our peak inventory position for 2025. We expect a slight sell-down in our inventory in Q3 and remain confident in our ability to finish the year with total inventory below last year's level. Looking ahead, we are continuing to simplify our product assortment to drive efficiency in working capital and support margin improvement over time. With new systems, processes, and enhanced buying discipline, our goal is to be in season earlier, exit earlier, and achieve clean sell-throughs across categories, which will drive down the working capital investment needed for inventory. In regards to liquidity, during the second quarter, we exercised our $20 million deferred draw feature on our term loan to strengthen the balance sheet. We ended the second quarter with total debt balance of $195.1 million and total liquidity of $109.5 million. We expect that Q2 will be our peak for reported debt balance as we sell down our inventory, generate improved EBITDA, and begin to pay down our debt. Inventory efficiency and tight control of variable expenses will remain top priorities. Finally, let me speak to our update on full year guidance. Our priorities for the back half of 2025 remain focused on the execution of our strategic priorities to profitably grow sales, improve margins, and closely manage our variable operating expenses. We have confidence in our second half strategy to drive profitable sales despite the macroeconomic headwinds and potential margin pressure from higher tariffs. For the full fiscal year 2025, we are raising the lower end of our net sales outlook to reflect flat growth versus our prior guide of down 1%, while maintaining the top end of our range at up 3.5%. Reiterating our adjusted EBITDA guide to be between $33 million and $45 million, driven by modest gross margin improvement and disciplined expense management. Reiterating our capital expenditures target to be between $20 million and $25 million, primarily related to technology investments to improve store service and merchandising productivity as well as our normal store maintenance. We remain focused on growing sales, generating positive free cash flow for the year, paying down debt, and returning value to all of our stakeholders. I will now turn the call back to the operator to facilitate any questions.

Operator, Operator

Our first question comes from the line of Anna Glaessgen from B. Riley Securities.

Anna Glaessgen, Analyst

First, I'd like to talk or start with the comp performance. Really nice to see another quarter of positive comps. Can you talk about the drivers of that? I know lapping out of stocks has been a really key driver of outperforming the industry. As we think about that easing benefit into 2026, how should we think about the durability of that growth? Yes.

Paul Stone, Chief Executive Officer

And I'll take it. I think just overall, the strategy that we put in place to start the year really aligned around hunting and shooting, fish, and personal protection. And that's really where we've seen all of our strengths and at the same time, continue to invest in our inventory dollars to be able to continue to see the momentum as we've seen it from Q1 to Q2 and even as we start Q3, good strong momentum, in particular, in firearms. So I look at it and think we've positioned ourselves extremely well with the strategy. We have opportunities as we continue to work on our attached categories as we pulled small sub-categories out of the business that didn't have the traction that we wanted and reinvested the working capital back into our strategic focus. Our key will be, as we think about it and the merchant is really in place and the team humming at this point is putting themselves in a position where we'll continue to refine what our inventory mix, the long tail that we have in our categories and be able to reinvest that back into the strong and our top-performing items, which I still think we have opportunity there as we work through multiple seasons of buys as we go on. And I'll reiterate that I think as we look at fish and our performance overall in fish and our two-year stack, we're not in a position where we're lackadaisical there. We think that we have even more room to grow in fish. We comped last year a lot of high-end merchandise that we got out of, and we were able to see it pick up and the performance really be driven through units, and we think we even have more upside as we think about that. So I would just wrap it up to say the entire strategy, we love where we're at with hunt and shoot, in particular, where we are starting the month of August compared to last year and where our inventory position was for the hunting season. We feel really good with where fish will be. We think we'll have another strong quarter of fish due to weather and what's happening there. And then the newness of personal protection that we continue to add into the business, that's really outperforming all of our other parts of the business today. But we have, I think, continued upside in that as we think about the back half of the year and starting next year.

Anna Glaessgen, Analyst

Great. And then turning to the implied back half guide. it seems to be implying some escalating margin improvement while facing a little bit of more difficult comps in the back half. Can you talk a little bit about the margin drivers or puts and takes in the back half of the year?

Jennifer Fall Jung, Chief Financial Officer

Yes. Anna, this is Jennifer. Nice to meet you. If you think about the margin in the back half of the year, there's a couple of things you need to keep in mind. As Paul was just mentioning, hunt continues to be a focus in the back half, and it does have lower margins than the rest of our business based on the firearms and the ammo, and those have been drivers. So those will be putting a mix component into margin in the back half. And then also echoing where fish has actually been a beneficiary to margin in Q2 based on its rate and its penetration, as that category falls off as we get more into the quarter, that will also have a mix shift on the margin. So as you think about margin and also keep in mind, as a retailer, Q4 is a very promotional time. Those are just things to contemplate as you're thinking about it.

Operator, Operator

And our next question comes from the line of Matt Koranda from ROTH Capital Partners.

Matt Koranda, Analyst

Welcome, Jeff. I guess maybe just taking a crack at the comp guide for the back half. I guess it implies we're up against a little bit of tougher comp, so maybe a little bit of deceleration, but still positive for the back half. Any color on how demand trended through August and just sort of how we feel about the setup into the back half in terms of comps?

Paul Stone, Chief Executive Officer

Yes. Matt, we like how August looked. We really liked our NICS performance that we got back yesterday in August. So we saw an acceleration compared to what our Q2 performance looked like. So good position there, good start to Q3. We like the way it looks. I think we've shared with you before, as we come into Q4, we're clearly going to be in a position of comping apples-to-apples. And from a marketing standpoint, will be digital to digital. So I think Q3, we still have a little bit of a tailwind as we go through Q3 just based on the, I think, more productive ROAS measurement that we're going to have as we close out Q3, but Q4, we're going to be an apples-to-apples comparison with digital to digital is the way I would think about it. So we like the way August started out and I think momentum as we think about Q3 right now.

Matt Koranda, Analyst

Could you provide a deeper analysis of the average order value trend? I believe it would be beneficial. The strategy has been to encourage larger purchases associated with firearms, typically focusing on increasing accessories sales. You mentioned a decrease in average unit retail for firearms, but it seems that average order values have increased. Could you clarify this further? How much potential improvement is left in this strategy? Have we reached our limit regarding average order values, or is there still potential for growth? Is there an expected improvement in average order values included in the guidance for the latter half of the year? I apologize for the multitude of questions, but breaking it down would be helpful.

Paul Stone, Chief Executive Officer

I think we're just really getting started around what we can do about attachment and, in particular, in the firearms and getting loaded in with the inventory that we need and part of this working capital reinvestment out of some of these other sub-categories in our attached categories to put back into attaching to firearms or into our ammo basket as we get those customers in that we're in kind of mid-stages of getting that build out, Matt, is the way that I would see it. I will tell you we're extremely bullish on what we were able to do from an inventory position and be able to get our inventory aligned to start the queue and in comparison to where really, we would have peaked last year in October or closer to the end of October, missed a good portion of hunt, in particular, the Western Hunt and just left sales on the table. So I think, to your first question, there's huge opportunity from an AOV standpoint and a UPT. Craig and the team have done a fantastic job running the stores, converting and being able to increase the basket size. And I think as we look at last month, we continue to be above COVID marks there and at all-time highs, both on UPT and AOV with an opportunity to be able to be sharper in inventory to continue to grow that. So I think that's part of the business that we continue to put a spotlight on and how do we invest more into it to be able to grow and to help our overall mix as we're growing firearms at the rate we are, Matt.

Operator, Operator

And our next question comes from the line of Ryan Sigdahl from Craig-Hallum Capital Markets.

Ryan Sigdahl, Analyst

I wanted to focus on firearms and non-lethal products. It's impressive that you mentioned an accelerating mix outperformance in August, and it seems that trend has continued. At the same time, you're also increasing your focus on non-lethal TASERs, Byrna, and similar products. Are these two aspects connected, with foot traffic coming from a similar customer base? Or is it more about the mix of products, store layout, and other factors driving growth in both areas?

Paul Stone, Chief Executive Officer

Yes, I believe it is. We think we have a new customer interested in non-lethal products. After analyzing the mix, we see it's bringing more traffic to the store. We’re pleased with this trend as we’ve structured our site to facilitate the process and attract customers, particularly through Byrna's effective messaging with influencers. We see significant potential in this area. We've expanded our network of stores to add inventory across a large number of locations as we move into the latter half of the year, which presents an opportunity for continued growth. I appreciate the introduction of new partners, like TASER, who are effectively managing product presentation, including packaging and point of sale, making everything ready for store setup in a professional manner. I’m encouraged by how this is developing. Furthermore, as I mentioned to Matt, I see potential in personal protection that not only encompasses non-lethal products but also lethal ones, particularly in how we can engage customers interested in handguns and ammunition. Handguns and ammunition have shown strong performance, significantly impacting our results. The growth in the accessory or non-lethal personal protection segment can be attributed to the novelty of new offerings. Overall, I’m glad to see the diverse mix we have in those categories.

Ryan Sigdahl, Analyst

As we discuss the store count, I'm sorry. We've added one store in Q3, as you've mentioned before. How do you view the portfolio of stores you have? Some have been near breakeven, and you've previously referred to them as being on life support. What are your thoughts on adding new stores and optimizing the existing ones? An update on that would be helpful.

Paul Stone, Chief Executive Officer

Our focus in real estate will remain on paying down our debt before we pursue growth with new stores. This is the commitment we've made as a company. We believe there is still significant potential within our existing asset base that we can leverage to improve performance and continue our growth. Our unaided awareness in our operational 30-mile radius is low, indicating much upside in our current markets. Regarding our nonproductive stores, we will keep evaluating them, and if we find that a store is unlikely to meet our expectations as we approach the end of its lease, we may decide to exit that location. This has been our approach over the last couple of years: we will monitor our 4-wall performance closely and make cash flow-driven decisions as necessary, especially for stores we feel are underperforming as their leases expire.

Operator, Operator

And our next question comes from the line of Justin Kleber from Baird.

Justin Kleber, Analyst

Jennifer, welcome to the team. I was hoping if you could break down the comp in terms of transactions versus average ticket. Paul, you mentioned UPT; it seems like that's higher, at least in the firearms category. But I'm curious if your comp transactions are also now tracking positive.

Paul Stone, Chief Executive Officer

I think there's a couple of ways we can look at it as we think of it from overall and based on how 70% of our purchases start online and then end up in the stores that we feel good from a transactional count where that true BOPUS is living today and the performance of that. And we continue to get strength there. And as we look at the overall position of the company from a sales performance and where we actually track with e-com-driven sales, we outperformed there. So I think from a transactional count, we like the position we're in and from a growth standpoint, and then what it's able to do for the overall performance is kind of how I would share that as we break it down. But I would say both AOV and UPT are up. And that's really saying the team is working from a unit standpoint and being able to add the basket as we get there.

Justin Kleber, Analyst

Okay. That makes sense and good to hear. You mentioned, Jennifer, the potential for some tariff-related margin pressure in the back half of the year. I'm curious if you could share what's happening with pricing real-time in the stores as tariff impacts start to build. Maybe how much you think retails might go up in the back half of the year? And what sort of unit elasticity you're embedding into your outlook?

Jennifer Fall Jung, Chief Financial Officer

Yes. So thank you for the greetings. So kind of how we're thinking about this is the merchants have really done a great job of getting ahead of this and working with our vendors so that we have visibility into cost increases that might be coming our way. We are fairly heavily reliant on MAP pricing. So we do have flexibility to offset some of those tariffs as they come in. I'm sure as you saw the notifications today, there's still so much uncertainty out there on tariffs that we wanted to make sure that we are mindful of them and that we've considered them in our back half guide, but the cat is still out on what's actually going to happen with those.

Paul Stone, Chief Executive Officer

Yes, we are closely monitoring the situation. I want to emphasize that we've observed some of our inventory pull-forward ahead of Q3, which allowed us to make strategic decisions regarding inventory management. This helped us bring in stock ahead of the peak season, ensuring we positioned ourselves advantageously relative to potential tariffs. I’m pleased with the team’s actions in this regard. Additionally, our current low penetration in private label at around 3% and the significant portion of MAP pricing, as Jennifer mentioned, positions us well for the second half of the year, especially as we head into 2026.

Justin Kleber, Analyst

Okay. If I could sneak just one more in, that was helpful. Just one more on gross margin. You mentioned the 40 basis point of freight headwind; how did the mix pressure compare to that freight headwind?

Jennifer Fall Jung, Chief Financial Officer

Yes. So if you look at our margin by category, all categories were up in margin with the exception of Hunt on a rate basis. Hunt is one of our lower-margin categories. And due to firearms and ammunition, it did impact margin in a negative way from a mix perspective. So really, rates across the board were up. Mix was negatively affected just simply because of Hunt as well as camping being down on the quarter, and that's one of our higher-margin businesses. So the mix did not offset the higher rates. Really, all the improvement was driven by rate.

Operator, Operator

And our next question comes from the line of Mark Smith from Lake Street.

Mark Smith, Analyst

First off, Jennifer, welcome. I apologize if you've already covered some of these points as I've been moving between calls. I wanted to address inventory levels and ask if you could quantify or elaborate on how much inventory was purchased in anticipation of tariffs. It seems like you feel well-stocked this year moving into the hunting season and fall compared to previous years.

Jennifer Fall Jung, Chief Financial Officer

Yes. So the elevated level of inventory was a distinct strategic decision. The company had discovered that previously we had been entering into the market after the seasons had already really kicked off and customers already had their gears. So this year, we're bringing it in earlier, and that's what you saw in the big bump, especially around fish and hunt. But then also that we're going to clear out of it earlier. When the season starts to wind down, the customer has all their gear. So it makes sense for us to kind of just shift the inventory up closer. And since we did invest heavily in hunt and fish, it paid off. Paul mentioned the comps on the call on how those performed. So feeling it was the right strategy to move. As we move forward to the rest of the year, we will continue to kind of move through the inventory and still expect to be below last year's level by the end of the year.

Mark Smith, Analyst

Perfect. And then I did want to ask, you just called out kind of margin in that hunt category being the only one kind of down percentage-wise. I'm curious just if you can give some insight into consumer behavior within hunt or within primarily firearms and ammo. Are you seeing better sales momentum on promotion or lower-priced items? In other words, do you have to be promotional to drive people? Or is the consumer continuing to come out even at, we'll call it, regular price levels?

Jennifer Fall Jung, Chief Financial Officer

Yes. Both firearms and ammunition have lower margins in the hunting category, and ammunition performed better than the category overall this year. This put pressure on the overall mix. We have implemented some strategic pricing on ammunition that seems to be driving sales positively. We're optimistic about that. As for firearms, we've mentioned previously that we offer a selection, but we are experiencing some pressure on average unit retail there.

Paul Stone, Chief Executive Officer

I just want to add that the Average Unit Retail is down about 4%, while units are up around 4.2%, which are offsetting each other. However, AUR is under pressure, as we mentioned earlier.

Mark Smith, Analyst

Okay. And the last question I just wanted to ask, I know that it's a very small segment, I think, for you guys. But just as we look at potentially increased demand for suppressors or even short barrel rifles with new tax laws and tax stamp going away in January, is there an opportunity as we look at next calendar year to maybe increase sales or inventory in those products?

Paul Stone, Chief Executive Officer

Yes, we're definitely going to lean into both of the categories that you just mentioned there, but we think huge opportunity and even as we work through the back half of the year from the suppressors and working with our partners on how we look at that. But I think we want to get in a position back half of the year where we're able to get it shipped and take a little bit of that noise kind of waiting until the beginning of next year, but we think we have an opportunity in Q4 to be able to get it shipped directly to the home, not carry the working capital as we work with our partners in doing that and take advantage of what I think will be a hockey stick next year as we think of suppressor sales in particular.

Operator, Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Paul Stone for any further remarks.

Paul Stone, Chief Executive Officer

Thank you for joining the call today, and thank you to all our passionate outfitters around the country for their commitment to Sportsman's Warehouse. Together, we look forward to providing our customers with great gear and exceptional service. Thank you.

Operator, Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.