Andrew Yoon  

Hello. I'm Andrew Yoon, Director of Finance and Investor Relations. And I'll review our sales results for the 4-week retail month of May, which started on Monday, May 5, and ended Sunday, June 1. This period is compared to the 4 weeks that began last year on Monday, May 6, and ended Sunday, June 2.

This call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause actual events, results and/or performance to differ materially from those indicated by such statements. The risks and uncertainties include, but are not limited to, those outlined in today's call and sales release as well as other risks identified from time to time in the company's public statements and reports filed with the SEC. Forward-looking statements speak only as of the date they are made, and the company does not undertake to update them, except as required by law.

Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP.

As reported in our release, net sales for the month came in at $20.97 billion, an increase of 6.8% from $19.64 billion last year. Reported comparable sales for the month were as follows: U.S., 4.1%; Canada, 3.3%; Other International, 6.6%; total company, 4.3%; e-com, 11.6%. Comparable sales for the month, excluding impacts from changes in gasoline prices and foreign exchange, were as follows: U.S., 5.5%; Canada, 6.3%; Other International, 8.4%; total company, 6.0%; e-com, 12.0%.

Our comp traffic or frequency for the month was up 3.4% worldwide and 2.8% in the U.S. Foreign currencies year-over-year relative to the U.S. dollar negatively impacted total and comparable sales as follows: Canada by approximately minus 1.6%, Other International by approximately minus 1.0% and total company by approximately minus 0.4%.

Gas price deflation negatively impacted total reported comp sales by approximately minus 1.3%. The average worldwide selling price per gallon was down approximately minus 10.4% versus last year. Worldwide, the average transaction was up about 0.9%, which includes the impacts from gas deflation and FX. Ex gas deflation and FX, average transaction was up about 2.5%.

In terms of regional and merchandising categories, the general highlights were as follows. U.S. regions with the strongest comparable sales were the Northwest, Midwest and Los Angeles. Other International and local currencies, we saw the strongest results in Mexico, Taiwan and Korea. The negative impact of cannibalization was approximately minus 70 bps for the company in the month of May.

Moving to merchandising highlights. The following comparable sales results by category for the month exclude the impact of foreign exchange. Foods and sundries were positive mid- to high single digits. Better-performing departments included cooler, candy and frozen foods. Fresh foods were up high single digits. Better-performing departments include meat and bakery. Nonfoods were positive mid-single digits. Better-performing departments include jewelry, majors and gift cards. Ancillary business sales were down low to mid-single digits. Pharmacy, optical and hearing aid were the top performers. Gas was down low double digits driven by price per gallon changes year-over-year.

Looking ahead, the June reporting period will include 5 weeks beginning June 2 and ending July 6 compared to the 5 weeks beginning June 3 and ending July 7, 2024.

If you have any Investor Relations questions, please call Josh Dahmen at (425) 313-8254 or myself at (425) 313-6305. This recording will be available until 4:00 p.m. Pacific Time, Wednesday, June 11.