Seth Sigman: Hey, everybody. Good morning. My first question is just around the improvement in transactions or ticket count. I guess that coincides with less average ticket growth. But, Bill, to your point, there really shouldn’t be a lot of elasticity in this business since it’s more need based, right? So is there something else that you would point to that’s driving that acceleration in transactions? Thank you.
Bill Rhodes: It’s a great question. Frankly, I don’t have a great answer for you. As you know, you have been following this industry for a long time, one of the dirty little secrets of the industry is that for decades and basically for the 28 years that I have been in this business, there has been transaction count declines and they have gone down over time, because the technology that has gone into the parts and products that we sell have increased, and therefore, the price of those products have increased. I often used the example of spark plugs. When I got in this business, we only sold copper clad spark bugs and they were $0.59 and they would last 30,000 miles. Today we sell Iridium spark plugs, it costs $11.99 and they will last 100,000 miles.
There’s many, many, many examples like that, 2.2% decline in retail transaction counts is historically very good. I just — I would caution everybody, as I have mentioned in my prepared remarks, Q2 is our most volatile quarter every year and it is really driven by weather patterns. And so I don’t want to read too much into an improvement in Q2, we were very excited to see it. Let’s see how we do in Q2 and Q3. We are also still going up against the massive surge in growth that we had since 2019 as a result of COVID. So what we are focused on is, we thought for a period of time, that some of the sales growth that we experienced during COVID, we would give back. We are sitting here and have been for the last year saying, I don’t think we are going to give it back, and now we are saying, look, we think we can grow from here and maybe have normalized growth rates and maybe even accelerated slightly growth rates to what we experienced historically, because of our growth initiatives.
That’s the way we are thinking about it. Does that make sense?
Seth Sigman: Yeah. That’s helpful. I appreciate that. Maybe just one follow-up is on the cost side. You did discuss some external cost pressures. I think you are probably referring to wages and some of your competitors have also talked about wage investments. I guess when we look at your SG&A growth up high-single digits, is it fair to assume that, that already reflects AutoZone investing in its people, investing in its infrastructure, does that already reflect some of those cost pressures that you are referring to?
Jamere Jackson: Certainly does. I mean one of the things that we have been really clear about is that we are going to grow SG&A in a disciplined way as we create a faster growing business and the two ways that we have done that. One, is investing in labor to maintain high levels of customer service. You saw us do that throughout the pandemic and it paid great dividends for us during that timeframe. The other thing we have talked about is investing in a disciplined way in IT, which is enabling growth in both our DIY and our commercial business. Every one of our growth initiatives, whether it’s on the retail side of the business or the commercial side of the business, includes some element of improving the customer experience and those things have required us to accelerate some of our investments in IT.
We like those investments. They are improving the customer experience. They are also improving the experience for our AutoZoners, and quite frankly, we think we will get benefits in terms of productivity in the future.
Seth Sigman: Okay. Great. Thanks very much.
Bill Rhodes: Thank you.
Operator: Your next question is coming from Zach Fadem at Wells Fargo.
