Restaurants, big box stores, and other retail chains have struggled in the past few years, but there are still a few stocks in the sector that have managed to stand out from the competition.
It's Pitch a Stock week on Industry Focus, and in this Consumer Goods segment, Fool.com contributors share their thoughts on Under Armour (NYSE:UA) (NYSE:UAA), Dave & Buster's (NASDAQ:PLAY), and Tractor Supply Company (NASDAQ:TSCO). Listen in to find out how they're handling intense retail competition, major opportunities, and more.
A full transcript follows the video.
This video was recorded on Oct. 17, 2017.
Vincent Shen: Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day. It's Tuesday, Oct. 17, and I'm your host, Vincent Shen. I'm excited to welcome a special guest to the show today, fellow Fool and Financials host, Michael Douglass. Michael, great to have you with us!
Michael Douglass: Thanks, Vince! It's great to be here! This is actually the only Industry Focus show I've never been on until today. So this is a big day for me!
Shen: Well, I'm glad to welcome you to this segment. Michael, you and I are in the Fool HQ studio today to continue with our Pitch A Stock theme week for Industry Focus. We pulled from our brain trust of writers and editors who were recently at Fool HQ for the annual writer's conference. That was just last week. We have three stock pitches from some of our Fool.com contributors to share with listeners today, and three more for each of the other segments of Industry Focus this week. I'll give you a chance for a quick shout-out. Who did you guys talk about yesterday in Financials?
Douglass: We talked about Square, MasterCard, and Berkshire Hathaway.
Shen: We've gotten a lot of emails from listeners wanting more information on those companies. We hope the stocks we cover in Consumer Goods today are just as exciting. In the world of consumer and retail, we'll hear first from Steve Symington, with his take on Under Armour, tickers UA and UAA. Then we have Jeremy Bowman pitching Dave & Buster's, ticker PLAY. Love that. Last but not least, we have Simon Erickson, who will be covering an unconventional retailer with Tractor Supply Company, ticker TSCO. Ready to do this?
Steve Symington: Hi! I'm Steve Symington, and I cover tech and consumer goods, and I'm pitching Under Armour today. Thanks to a slowdown in its corner of the American market and the bankruptcies of some of its largest retail partners, Under Armour has delivered two straight quarters of single-digit revenue growth. That might not sound so bad, but it came after over six years of at least 20% growth. As a result, Under Armour shares were down more than 50% over the past year. But I think the market is ignoring several catalysts that play in Under Armour's favor over the long term.
First, in response to those near-term headwinds, Under Armour has implemented a restructuring last quarter to streamline its business and better align its results toward its most promising growth opportunities. Now, in the near term, that means we should see a pivot toward Under Armour's higher margin direct-to-consumer business, where revenue climbed 20% year over year last quarter. In addition, investors seem to forget that Under Armour only just launched UAS, that's Under Armour Sportswear, late last year. That's a category that represents almost a quarter of total sales for its larger competitors like Nike and Adidas. But it's still only a sliver of Under Armour's total revenue stream. I think most compelling, Under Armour's international revenue climbed 57% year over year last quarter but still represents just a little over 20% of total sales.
Now, that leaves Under Armour with a massive runway for global growth that I think is severely underappreciated by more shortsighted investors today. We should get our first look at the progress Under Armour's made when it reports earnings early next month. But over the longer term, I think patient investors who buy Under Armour now and let these catalysts play out will be more than happy with their decision.
Shen: First, we have Under Armour. Steve mentioned the restructuring for this company as being a focus on the DTC channel, or the direct-to-consumer channel, their sportswear, the international growth. And their latest quarter, their shoe sales, which previously were considered a major growth catalyst for this company, actually declined as their apparel and accessories put up positive numbers. But when it comes down to it, in 2017, profitability is pretty much non-existent so far, and the company is getting a double whammy of declining margins, rising operating expenses. In the past, this is a company that was putting up quarter after quarter of incredible growth, almost like a young tech company. They were in a very favorable position, where they could spend freely to sustain that growth without really having to worry too much. But now, competition has stepped up, they lost some of their wholesale partners. What is your take, coming from the financials side, maybe someone who doesn't look at these companies all the time, what are some things you see here that might concern you or keep you positive?
Douglass: I would say, I feel very mixed about Under Armour. I've actually thought about purchasing the stock several times and I've never pulled the trigger. Certainly, since I thought about purchasing originally about a year ago, that's been great because I missed out on what's been something like a 50% loss. I think, for me, one of the areas that you're still seeing really impressive growth is international. I think it's 57% year-over-year, or something like that. That's really incredible, and it's great to see that there's such potential strength there, particularly given that it's such a small market for them still, there's so much growth ramp there.
I also like the push toward digitization. In financials, this is banks trying to put their apps up, it's fintech companies like Square. Here, there's such an opportunity with getting people's data and their information, and then being able to tailor offers based on that. Oh, hey, we noticed that you're running a lot, here are some running shoes. It's been a certain amount of time since you last bought some, maybe this is a good time to go ahead and give you a special offer to get you in the store and purchase a new one. I think there's a lot of opportunity there. Flip side -- growth is slowing. More intense competition. And frankly, it's still really expensive as a stock.
Shen: Yeah, I want to get to the valuation as a bit of a sticking point for a lot of people. But what you mentioned in terms of some of the things around understanding customers better, the digitization aspect, and I feel like Under Armour is in a unique position in that regard. The company is investing in a system where they can take everything they learn from the customer orders, the direct-to-consumer channel, that includes their online stores, but also, they have their brand house stores and the factory stores, too. Then, they also take their three fitness apps and all the data they get from that and roll it all together into a single system that hopefully, long term, you will hope to see better insights into how consumers shop, what products they want. And that's the kind of thing that I think can be a catalyst, but it'll take a decent amount of time for the results for that to really start coming in and coming to fruition.
Douglass: Yeah. I keep coming back to Starbucks, which initially had this app, and they were beginning with one email that went out to everyone, and they had, I don't know, I'm making this up, 400 emails that they sent. And eventually, they were able to get down to an incredible level of personalization. If Under Armour is able to do something similar, it's obviously going to be hard to get people to spend every day for Under Armour like for a coffee, but it's a much higher ticket item when they're able to do that. So I think that's a really incredible opportunity, if they can crack the code and really use data powerfully to understand how they can best serve people and grow demand.
Shen: Absolutely. Last point, coming to that valuation. The company decreased its growth guidance for 2017. That didn't help them. In terms of the valuation, this is a stock where you have to be willing to pay something like over 40x its forward earnings if you want to establish a position. The Under Armour bulls, optimists that we've spoken to, and we've heard from Steve, for example, they focus on some of the things like the strength of the brand, its very strong momentum in key segments like international. But are you convinced that's enough to justify this kind of premium?
Douglass: I think, for that multiple, I just can't. I don't see enough there to make me personally a buyer. Again, that's why each time, I get interested, because there's such a brand, there's so much growth opportunity. And each time, I end up backing away and saying, I think I can better spend my money elsewhere.
Shen: Sure. The thing for me that I'll say is, I'm very curious to see how they perform in this upcoming holiday season. Last year was not a good one for them. But management has spoken to some new strategies and efforts, they have their tiered pricing strategy, they think they're going to have a better view in terms of making sure their inventory is not going to be affected by weather, sometimes retailers will speak to that, how especially warm weather hurts them in terms of certain accessories and things along those lines. But I like to see if some of that data and some of this restructuring and these various efforts in terms of their retail footprint basically start to show results, even a little bit with this fourth quarter.
Shen: Our next pitch comes from Jeremy Bowman, and it's for Dave & Buster's. Let's hear what he has to say.
Jeremy Bowman: My name is Jeremy Bowman. I'm a consumer goods analyst with The Motley Fool. I cover mostly retail, restaurants, and e-commerce, and some other consumer-facing stocks. The retail and restaurants sector has certainly been tough lately as e-commerce is upending traditional traffic patterns, and malls and shopping centers and restaurants seem to be suffering from overexpansion in recent years. And a number of fast casual concepts IPO-ed. But one stock in the restaurant space that I think has the potential to be a big winner is Dave & Buster's. And now looks like an excellent time to buy. Shares have pulled back recently, losing about a third of their value over the last four months.
Dave & Buster's is unique in the restaurant industry, because in addition to offering food and beverages, the company attracts customers with amusements like arcade games, billiards, and even bowling. This not only gives the company a unique customer proposition but also a competitive advantage, as that entertainment segment provides an additional revenue stream and a more valuable one as amusements are a higher margin business than food and beverage.
The company had 100 locations in North America as of its most recent earnings report, and they see room in the market to double that to at least 200. Comparable sales at the chain have beaten the casual dining benchmark for 21 quarters in a row, which is another sign of its competitive advantage and the attractiveness of its business model. As mall vacancies open up, I also think landlords will look to Dave & Buster's to fill empty spaces as a traffic driver, and the company should be able to get some excellent lease terms as retail dynamics shift.
Perhaps most importantly, Dave & Buster's has beaten earnings estimates in every one of its quarterly reports since it went public in 2014. That's a sign that Wall Street continues to underestimate the stock, and that gives it a little bar to jump over, especially as its price to earnings valuation has fall into just 20x, on par with slower-growing peers like Darden, Cracker Barrel, and Buffalo Wild Wings.
Shares plunged after its last earnings report as investors were scared off by modest comparable sales growth of just 1.1% and a decline in food and beverage comparable sales. However, it's likely that that's just a blip, and one quarter's worth of comparable sales is not a good reason to sell, as that figure is usually volatile. Even as the broader restaurant industry struggled, I think Dave & Buster's games give it a special draw that should keep customers coming through the door and profits growing.
The overall business looks solid. The growth path is clear, and the valuation is the lowest that it's ever been for the stock. I think now is a great time to buy.
Shen: I've briefly talked about Dave & Buster's on the show previously, and I'll admit that I'm slightly biased here in that I have an inherent respect for this company, because they've essentially managed to create a Chuck-E-Cheese for adults. And I think there's something kind of awesome about that. Their amusement business is, I feel like, the real power engine behind this company. What are some of your initial thoughts on this one?
Douglass: First off, one of my great regrets is that I've never been to a Dave & Buster's. Maybe we can arrange an office visit or something, purely for research purposes, of course. [laughs]
Shen: That would be awesome. That sounds like a good time.
Douglass: That sounds like a great Friday afternoon. We'll see if we can sell it on up. A couple of things that I saw. Comp sales beating benchmarks for 21 quarters in a row, when you see that sort of consistent outperformance, that's a great sign. And I think it really speaks to the fact that Dave & Buster's is in, frankly, a weird niche. You have your entertainment, you have your game watching, and you have your game playing, and you have your food and your drink. And that's just such an interesting combination and experience, it's hard for me to see folks leaving that, because I think it's such an unique experience. When we talk about restaurants, often talking about TGI Fridays versus Ruby Tuesday versus a Red Robin or whoever, and it's hard to tell a huge difference between them, because they're offering fundamentally similar products in a lot of cases. Dave & Buster's is just different.
Shen: And we see how that has an impact on their financials as well, in that the amusements side of the business, I think it has a slight majority of their top line, around 55% to 57% of their revenue. But the gross margins there are absolutely astounding. I think they're approaching, if not just 1% away or so from 90% margin in that side of the business. That's also driving a lot of their comparable sales gains. You've mentioned how, was it 21 quarters, these comps are very strong. But at the same time, we've seen a deceleration. I think that's why they've been dinged so badly over the summer. The latest quarter, I think it was 1.1% for their comparable sales growth, and investors did not like that.
Douglass: And I'll say, it reminded me, I'm flashing back to Whole Foods a year or two ago when they first started reporting that comp sales were seriously decelerating. And I was, at the time, an unrepentant Whole Foods bull. I said, "Sure, but the new stores are doing really well. And yeah, things are moderating, but they're still positive," and then they just kept going down and turned negative, and that's when I started seeing my thesis really fall apart. I'm not saying Dave & Buster's is there. But I do want to warn people against becoming complacent with, "Well, it's still positive, they're still beating the category." Because of course, the restaurant category as a whole, it's kind of had a tough year so far. So one of the things to consider as well is, whether the overall headwinds for the industry make even what might be one of the better or even the best in class companies in it still worth an investment right now.
Shen: Yeah, I think that's a really good way to look at it. I think there have been some, industry research firms put, for the second quarter, comps across the restaurant industry down something like 1% to 2%. So that 1.1% looking pretty bright, relatively. And we talked a little bit about, who do you compare this company to in terms of its peers? It isn't like those quick service restaurants and traditional operations. Could they even be compared to the gaming industry? But when it comes down to it, just because it's so strong if you put it in that restaurant sector, doesn't mean that it's the best place to put your money. I will say, though, again, ending on a valuation note, when I checked it this morning, they were trading at about 17x their forward earnings estimates.
Douglass: Which really isn't that bad.
Shen: Yes, very reasonable for this sector as well.
Douglass: And that puts you pretty close to the S&P, within a couple of points in either direction.
Shen: Sure. And the long-term growth estimates from analysts are not too far from that. So looking at it from that kind of perspective, I don't want to say this is one that I've really disagreed with Jeremy on the thesis. Like I said, I do think this is one of the best in class, and I love this business. But investors, you do need to consider, is the restaurant sector where you want to be putting your money right now? Any other thoughts?
Douglass: I think that's about it for that one.
Shen: Our last pitch here from Simon Erickson, awesome guy. His pitch is for Tractor Supply Company. I don't think that name has ever been uttered on Industry Focus on this show on Tuesday.
Douglass: Certainly not on Financials or Healthcare, either. [laughs]
Shen: Let's hear what he has to say, because this is a really cool company, and I'm really excited to talk about it.
Simon Erickson: Hi, everyone. I'm Simon Erickson, the lead advisor of Motley Fool Explorer, covering some of the market's largest tech stocks. But today, I'm going to be talking about a consumer and retail play called Tractor Supply. Ticker is TSCO. This is the largest rural lifestyle retail store in America. They sell things like supplies for pets and horses and fencing and tools and equipment. Basically, anything you might need if you're living off of the beaten path or off of the paved road. There's 1,630 Tractor Supply locations across the U.S. They have 160 more that are Petsense locations for pets. But one of the big things I like about Tractor Supply is, it's shielded from larger retail competitors. I think this is important for any retail company out there. There's general bricks-and-mortar retailers like Wal-Mart, or do-it-yourself retailers like Lowe's or Home Depot that, really, it doesn't make sense for them to compete on the same turf that Tractor Supply is competing in. They're built in rural locations that are a little bit away from city centers, and it simply doesn't make economical sense for a Lowe's to put another location out there. They're already established, they have a brand with the local populace, and they've already established that power of habit with consumers. And I think that's very important for Tractor Supply, especially for those consumable recurring revenue purchases that they're always making there.
In terms of retail, we can't go on a retail show without talking about Amazon.com. I think that Tractor Supply is really a business that Amazon doesn't want to compete against when you're shipping 50-pound bags of deer corn and pig feed around, it just doesn't make sense for Amazon to be shipping that with the infrastructure they already have on an e-commerce business model. This is something that really works to Tractor Supply's advantage. They have those recurring consumable revenues that they're picking up from consumers that are out in rural locations that just don't make sense to be shipping around in e-commerce.
So in addition to being shielded from larger competitors, there's something else that I want to talk about that's very good for shareholders of Tractor Supply, and that's this company's capital allocation. Because they have this recurring revenue stream that comes in, they're converting about 6% of sales into free cash flow, which is something we love to see as investors because that can be used to our benefit. Two of the things they're actually doing with the free cash right now is paying an increasing dividend, and they're buying back shares of the company. Their dividend has more than doubled in the last five years, and it now yields 1.8%. The company has bought back more than 10% of its outstanding share count in the last five years, as well. So that gives us a bigger piece of the pie as existing shareholders for Tractor Supply.
Again, this is a company that has a recurring model, they're shielded from larger competitors in retail out there right now, and they have some really great capital allocation chops. I really want all of our listeners and viewers to consider Tractor Supply, TSCO, as an attractive retail purchase right now.
Shen: So Simon's made a pretty compelling pitch there, I think. It reminds me of a lot of different companies. One of the first things he talks about is how the location of the stores, and the target market, in terms of rural consumers in regions where it may not be as profitable for major competitors to open their own shops, offers a pretty solid moat. It reminds me a little bit of how dollar store retailers have been able to carve out a niche for themselves by often locating stores in underserved areas. I think this is an example of that. Tractor Supply's value proposition, it's a one-stop shop offering convenience and a wide enough product selection in these areas for their core customers. At the same time, these aren't huge stores. From what I can find, they're about 15,000 to 20,000 square feet. For some perspective, that's smaller than even a very modest modern grocery store. So customers, in terms of convenience, can also get in and get out with whatever they need.
In the 10-K, management summarizes the way they approach this selection and convenience. They just say, "We cater to the rural lifestyle, and often serve a market by being a trip consolidator for many basic needs for farm, ranch and rural customers." What are your thoughts?
Douglass: When I first heard Tractor Supply Company, my immediate thought was, oh god, this is a company that invests in agriculture. Frankly, agriculture as a whole is not a great business to be in. You have a commodity, and you're so beholden to other prices, and you're usually a price taker as opposed to a price maker. Farming is tough. Anyone who farms will, I think, agree that it's a tough thing. Warren Buffett and Charlie Munger got a question at Berkshire Hathaway a couple of years ago about cattle ranching and what they thought of it as a business, and Munger's response was, and I'm paraphrasing, "I can't imagine a worse business for us to be in." And Buffett softened it and said, "Well, it's not quite that bad, but most of the successful cattle ranchers owned a few banks on the side," or something like that. It's a tough business to be in. What's interesting about Tractor Supply is, first off, they're diversified -- 46% of sales are in livestock and pet, 22% hardware, they have gifts and toys, clothing and footwear, agricultural products making up the balance for their 2016.
Shen: A very small balance for that agriculture, too.
Douglass: Right, yeah, I think it's 5% for 2016 sales. And what's been crazy to me is the margins they've been able to maintain. They're at 9.9% operating margins so far in 2017, and over the last year, their gross margins have been about 34%. I do not know how they have pricing power, but it appears that they have some kind of pricing power, and that is, frankly, very attractive.
Shen: To put that into perspective, a Wal-Mart, for example, will claim a gross margin level of about 25%. So, this is 10 percentage points ahead of that. And management doesn't try and do a high-low pricing strategy, getting you in on staple items and charging a premium on others. They just want to offer their customers consistent, solid values across the board, feel like they're getting a good, fair deal when they make their visit to Tractor Supply stores. I think an important part of that is keeping the customer coming back. Simon spoke to this, it's the recurring revenues from the consumables that Tractor Supply customers tend to purchase, and how that offers some stability. The company refers to these products as consumable, usable, and edible, and they are key to driving traffic to stores. There are other growth initiatives in the store that you'll see on the shop floor, that are focused on, for example, introducing new products. To keep the shopping experience exciting, they're starting to offer more localized products, as that trend really grows across the retail industry. We've talked about that on the show previously. They're also offering some exclusive brands that can help foster some customer loyalty. Some of the big box stores are venturing into that, hoping that exclusive brands will give them a little bit of loyalty, too. And those brands at Tractor Supply make up 30% of revenue already.
I know this company comes up all the time, especially in my segment, just by the fact of how much they've influenced --
Douglass: Everything. [laughs]
Shen: -- the competition, which is Amazon. Simon brings them up specifically, basically speaking to how the company's insulated a little bit from Amazon and also e-commerce competition in general, due to the nature of their business and the products that they sell. What do you think? Do you think that's something that's sustainable? Do you think that's something as true as he pitches it as?
Douglass: I have to say, I think a lot of the benefit that Tractor Supply has right now appears to be the fact that they have the store in this underserved location, something like that. In a lot of ways, it's a supply chain issue that I think Amazon might struggle to overcome. Does that mean Amazon can never overcome it? I'm not sure. I would actually even say, I would think probably not, I think they ultimately could if they really put in the time and the effort. The question is, is this a market they're going to go after? I don't think it's going to be one they'll go after for a while, because there's so many other markets that Amazon is trying to disrupt right now. I think Tractor Supply has time to get its ducks in a row. And perhaps, over that time, it can build that moat to really protect itself. I mean, one of the things that really jumped out to me is, they have about 1,620 stores, something like that. They're planning to expand to 2,500. So when you look at the western region, think Colorado and points west, they have 172 out of the 424 stores that they have planned. So that speaks to me about how much opportunity they have in a lot of these states where there's a lot of ranching, there's a lot of rural agriculture, to really build more of these in these relatively underserved areas, really build up that brand and that customer loyalty, and perhaps build something that's fairly impenetrable for Amazon.
Shen: Yeah. I look at this in terms of the Amazon threat on two sides. I completely agree that if there's any company out there that's going to innovate away some of the logistical issues of shipping the kind of things that they do, I think Simon mentioned the 50 pound bag of livestock feed, for example. But at the same time, the nature of Tractor Supply's customers and where they're located adds a little even more of an insular effect in, last mile fulfillment and logistics is often by far the most expensive part of that journey. Your package might travel thousands of miles, hundreds or thousands of miles, but those last few miles are often the most expensive part of the process. So here, you have customers in very rural areas, that adds to that complexity there.
Then, I also think there's something unique in terms of the way that customers shop at Tractor Supply. Their average transaction value is just around $45, with almost half of the revenue of this company coming from that livestock and pet category. I think that also adds a complication where, that's not a very large ticket size. You're trying to ship some water container or something like that, that might not be very expensive to justify the free shipping and offers that Amazon is known for that really attracts those customers. So there's another added complexity. At the same time, I think, on the other side of that, this isn't a company that's not thinking about their omnichannel strategy, either. They've launched buy online pickup in-store recently.
Douglass: Which is huge.
Shen: Yeah. Management was very excited about that. And that makes up 55% of their online business, which is pretty incredible. And it's boosting traffic where, conveniently enough, management says that customers buy online, pickup in-store, and while they're at the store, they'll add another 15% or so to their ticket. So it's pretty powerful. The buy online pickup in-store orders and their other online orders enjoy ticket sizes that are twice as big as their average ticket. I think this is a case where customers, in a lot of these cases, in these areas, they're traveling pretty far even to get to Tractor Supply. This is an instance where, they might think to themselves, you know what? I might order extra to have just in case since I'm already going to the store and I know it's going to be there waiting for me. And there's convenience in that that I think their target market really appreciates.
Douglass: Yeah, and let's face it, when we look at Amazon's penetration, a lot of the opportunity there is particularly in urban areas, where you have such dense compact groups of people that it's relatively easy to get delivery. Out in rural Montana, that gets a lot tougher. And somebody like a Tractor Supply can provide a lot more to those folks a lot sooner for a lot longer. I think Amazon is in a place to disrupt a lot of things. Obviously, it's already disrupted a lot of things. But it still commands a relatively small percentage of the market. And it seems to me like it's going to be a very long time, if ever, before they will be able to actually properly go after this particular segment of the market, unless Jeff Bezos just decides, meh, we're going to go after it because I feel like it, which really hasn't been his modus. Usually, he goes after things based on size and potential opportunity. So think of it as low effort, high value opportunities. Trying to disrupt Tractor Supply does not seem to be one of those.
Shen: So closing out here on our discussion for this very unique retailer, in terms of big picture, we talked a little bit about what they see as their runway for store development, approximately 1,600 to 2,500 stores, they recently acquired pet-focused Petsense chain as well, and they see a lot of potential there. What do you think, is there anything that does worry you in what otherwise seems to be a really strong business model?
Douglass: Truly, when I look at it, there's not much. There's going to be some seasonality. That's just part of the deal. That's fine. They had a miss last year, because of some issues around that. But that's really ... welcome to retail, that's just part of the deal.
Douglass: When I look at it, I think across the board, the only real concern I have is that someone big comes in and disrupts things. But again, I don't see a compelling value prop for somebody else to try and do that. These folks are driving a great gross margin, good operating margins, it's very clear that they have their ducks in a row, they have aggressive expansion planned, and it looks like they're really trying to protect themselves against potential e-commerce disruption by going ahead and building off some of those buy online and pick-up in store capabilities. Just across the board, this is a stock that I'm going to be digging deeper into, personally.
Shen: Same for me as well. The things I'll watch, similar to Dave & Buster's, we're seeing a trend here that's not so promising in that their comparable sales growth is starting to trend downward a little bit. It was as high as 5% in 2013, and it fell to just 1.6% in 2016, and that has bumped to 2.2% in the first half of 2017. We're seeing it fluctuate a little bit there. The only other thing I think you have to think about if you're really looking out long-term is this idea that, in terms of demographics for the country, the percentage of people in the United States living in urban areas is only growing. That share is only growing. Now, during a recent conference, an analyst posed this question to management, do you see this as being a long-term threat as your target market essentially starts migrating? They say, in their core markets, they shouldn't be impacted. They're not too worried about it, they're still seeing population growth, they're still seeing promising metrics there, essentially. They don't seem too concerned. But that's something that you have to think about, as well. Otherwise, any last thoughts from you, Michael?
Douglass: Again, I think this is a very interesting stock, particularly since it yields a 2% dividend, and it looks likely to continue repurchasing shares. There's a lot of reasons to be pretty interested in this company. And frankly, for what it's worth, I think there are a lot of interesting things about all of these companies. Dave & Buster's operates in a really unique niche. Under Armour is the No. 3 sports brand in the world. And then you have Tractor Supply Company, which is its own special beast. I think all three of these are really interesting pitches. So, thanks to Vince for having me on, and to Steve and Jeremy and Simon for pitching these really fascinating companies.
Shen: Absolutely. Thanks for joining me, Michael! Those are just the three for today. If you haven't heard yesterday's episode, there's three more from Michael, and we have three more for each day of the week for the various sectors. So make sure you tune in as each of the hosts and the Fool.com contributors pitch their stocks this week on Industry Focus. As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against any stocks mentioned, so don't buy or sell anything based solely on what you hear during the program. Fool on!