Scot Ciccarelli

Bert clarified the $50 million relates to the AR factoring program under capital-structure review, not a change to supply chain financing; direct.

Will and Bert quantified the Iran conflict as almost entirely an Automotive impact, a $16 million EBITDA hit, all but $1 million in Auto; direct.

Will described positive and optimistic tone from recent meeting with 20 largest U.S. owners. Alain Masse driving good alignment on business priorities. Exploring creative ways to support independent inventory investments. Partnership described as best in recent years. Independent sales outperformance encouraging.

Will declined specific profitability disclosure but confirmed compelling entitlement case from 2025 strategic review. Best-in-class company-owned stores already at entitlement level, need to get all stores there. Noted B2B business has different benchmarks than traditional retail. More detail at Investor Day.

Bert deferred detailed breakdown to future Investor Day. Confirmed 65/35 store split with sales more 50/50. Both contributing to profit. Will highlighted operational improvements in company-owned stores with payroll efficiency at best-ever levels in Q4.

Bert attributed North America auto margin pressure to wage cost inflation, U.S. healthcare up $32M for the year ($20M above plan, high single-digit growth), rent, freight, and disproportionate IT investment flowing through SG&A as cloud migration shifts CapEx to OpEx. Core cost growth of 1.7% in Q4 excluding acquisitions and FX.

Will pushed back on share loss premise, noting independents are managing inventory mindfully rather than destocking. Partnership with independent owners described as good as it has been in some time. Inventory positions never healthier in aggregate.

Will acknowledged room for independents to carry more inventory. Bert anchored potential acceleration catalyst on interest rate relief, noting independent owners managing working capital tightly in current rate environment.

Bert detailed inflation assumptions weighted slightly more to NAPA than industrial and more U.S. than international. SG&A inflation running 3-3.5%, creating approximately 100bp gap versus top-line benefit across all geographies. Emphasized declining profitability is not the objective and restructuring actions aim to bend the curve.

Will acknowledged improving internal metrics but did not directly address the gap versus competitors, pivoting to forward-looking progress narrative.

Jackson said newer stores comp higher near term but, at 236 domestic adds on a ~6,500-store base, they don't move the needle much; mature stores are still progressing.

Daniele confirmed the domestic ~300-store target holds; the FY2028 cut (500 to 430) came from slowing Brazil to focus on the US and Mexico.

Jamere did not share a specific number but confirmed outsized comp contribution from accelerated new stores moving from 150 to 200+ domestically per year.

Jamere said the step-down is driven by lapping, not market change. Commercial transaction growth, share gains, and improving traffic trends provide comp support beyond inflation.

Management declined to quantify but confirmed MegaHubs continue to exceed expectations. Four-wall performance still improving. Halo effect lifts entire satellite network. Target raised multiple times over years, now 300+ at full build-out.

Management explained middle four-week cold snap last year drove DIY batteries and cold weather product, creating tough DIY comp. Last four weeks' ice/snow closed commercial shops but helped DIY. Two-year comp basis was consistent.

Management declined to quantify but confirmed broad-based growth across national accounts, regional accounts, and local shops.

Management dismissed mass retail threat as limited to batteries/oil categories, not the core hard parts business.

Management cited easier comps plus growth initiatives, inventory deployment, and speed/service improvements as drivers.

Richard framed the refund/cost dynamic as a Q2-Q3 timing item with Q4 gross margin about flat, and said housing turnover at historic lows shows little volatility from recent rate moves.

Ted acknowledged they track transactions by ticket size and basket composition but declined to disclose the specific dollar exposure to large projects.

Ted declined to update the $1B incremental figure but confirmed momentum building. Trade credit still early days with small single-digit thousands of accounts. On-time and complete delivery saw step change improvement.

Ted confirmed still at 17 markets with maturing sales teams, pricing, and delivery. Final IT build for order management and account management to be completed throughout 2025.

Richard explained SRS will enter total company comp mid-Q2 but not US comp. SRS delivered $2.6B in Q1 exceeding expectations and on track for mid-single-digit annual growth.

Ann-Marie emphasized complexity of rolling out all capabilities in concert, delivery, sales force, order management, at the right speed to avoid failure points with new pro relationships.

Ann-Marie explained measurement as incremental outperformance of 17 initiative markets vs top 40 markets, with three more FPCs under construction.

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Gary framed current membership-growth rates as the new normal as younger digital members mature, citing executive penetration and Asia as future catalysts rather than a near-term reversal.

Ron said Costco is satisfied with third-party same-day partners (sub-45-minute US delivery) for now, citing the 2020 big-and-bulky acquisition, and will revisit if needed.

Gary said capital priorities remain invest-in-business first, grow the regular dividend and buy back to offset dilution, acknowledged special dividend is the most efficient excess-cash return given valuation, but cautioned that matching the prior yield would require a larger payout and no plan can be shared today.

Gary said the 30+ new-warehouse annual goal holds over a 5-10 year planning horizon with roughly a 50/50 US vs international split, and Kirkland Signature is where they typically find the deepest price investment opportunities through supplier partnerships.

Gary said the sharing-crackdown change has been flowing through for some time and nothing in the data points to renewed impact, while new executive benefits are driving upgrades and increased shopping frequency.

Gary declined to extrapolate quarter-by-quarter but said over the long term COST still expects modest margin expansion as part of its member-value reinvestment philosophy.

Ron said it will be a bit of both strategies and emphasized the SKU flexibility and strong supplier partnerships.

Jason said emerging categories (cards/collectibles, AI glasses, health rings) aggregate to about one point of comp and the team keeps leaning into vendor innovation like Meta spaces.

Jason said TV softness was industry-wide but BBY's positioning was good. Excited about RGB technology mid-year across all major suppliers as a driver. On glasses, AI glasses is a significant growth trend with strong Meta relationship; more products expected from new partners after CES buzz. Corie framed AI glasses as part of broader consumer AI hardware opportunity.

Corie reiterated: US+Mexico ~25% (zero tariffs), China 30-35% (half at 30%, half at 20%), remaining ~40% from other countries at varying rates. Blended effective rate about 16% vs 12-13% last quarter, but actual cost increases flowing through are materially less than 16%.

Corie broke down COGS sourcing: China 30-35% (half at 30%, half at 20%), US+Mexico ~25% (zero tariffs under USMCA), remaining ~40% from Vietnam/India/South Korea/Taiwan at 10%. Key mitigations: vendor manufacturing flexibility, country diversification, volume consolidation, and assortment adjustments.

Matt confirmed the indirect tax settlement was at least $13 million, as it was the sole driver of the year-over-year domestic SG&A decrease.

Corie explained the team strategically started earlier with doorbusters and exciting offers targeting premium and innovative technology, acknowledging the promotional landscape.

Stewart described a conscious 12-month effort to reduce inventory and improve turns, quantifying the benefit at roughly $425 million.

Mike said substandard stores fell from 42% at Investor Day to less than one-third today, with progress accelerating as fewer stores remain.

Creedon compared favorably to break-the-dollar period, noting more strategic pricing approach this time but acknowledged uncertainty on traffic recovery timing. Glendinning pointed to Investor Day strategy organized to enhance both traffic and ticket.

Creedon characterized caution as prudent given cumulative inflation impact on families and tariff uncertainty through November. Glendinning explained TSA shortfall from buyer needing fewer services, offset by other SG&A savings.

Glendinning gave nuanced response distinguishing temporary costs (store labor bubble) from ongoing tariff mitigation that provides enduring benefit. Honest framing of mix of both dynamics.