Prepared remarks
Thank you. Welcome to KinderCare's second quarter earnings conference call. Operator provided instructions. It is now my pleasure to introduce Jason Terry, KinderCare's Director of Investor Relations. Mr. Terry, you may begin the conference.
Thank you, and good afternoon, everyone. Welcome to KinderCare's second quarter 2026 earnings call. Joining me from the company are Chief Executive Officer, Tom Wyatt, and Chief Financial Officer, Anthony Amandi. Following Tom and Anthony's comments today, we will have a question-and-answer session. During this call, we will be discussing non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and within the supplemental earnings presentation, both of which are posted on our Investor Relations website at investors.kindercare.com. A reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's current expectations and beliefs concerning future events impacting the company and involve a number of uncertainties and risks, which are explained in detail in the Risk Factors section of our most recent Annual Report on Form 10-K and other filings with the SEC. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. The actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. All forward-looking statements are made as of today, and except as required by law, KinderCare undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise. I'll now turn the call over to our Chief Executive Officer, Tom Wyatt.
Thank you, Jason, and good afternoon, everyone. I'm pleased to share updates on our second quarter performance with you today. We delivered results largely in line with expectations, along with a few bright spots that reinforce the progress we are making. During the quarter, we remained focused on the priorities we outlined earlier this year: strengthening execution across our centers, simplifying day-to-day responsibilities of our center leaders, and positioning the business for long-term growth. Revenue was down slightly compared to last year as we began optimizing our footprint during the quarter. This was partially offset by continued growth in Champions and KinderCare for Employers. Our premium brand, the Creme School, continued building on the progress we've seen this year. Same-center occupancy for the quarter was just under 69% and benefited from our optimization work. We're encouraged by the progress we're continuing to make, and we know there's more work ahead. I'll begin with our flagship brand, KinderCare. Improving our enrollment trend within our largest brand is going to be the result of more consistent performance over time. The actions we took to enhance our targeted marketing are helping us connect with more prospective families. At the same time, we are simplifying the responsibilities of our center directors to give them more time to lead their centers, support their teachers and engage with families in meaningful ways. Those day-to-day interactions are the heart of great family experiences and, over time, they help convert interest into enrollment and retain families longer. That's how operational improvements translate into better results. We put a renewed emphasis on our small group enrichment programs called Learning Adventures. These incremental programs expand learning in our classrooms in areas like phonics, STEM, and Spanish. Family response continues to exceed our expectations, as revenue from these programs has almost doubled from a year ago. We're expanding these offerings across more centers and into additional seasonal programming, giving families even more opportunities to extend their child's learning experience beyond our core curriculum, which we believe is a key differentiator. We're also investing thoughtfully to expand our geographic footprint where we see attractive long-term potential and strong demand for high-quality early education. During the quarter, we entered our 42nd state with a new center in Bentonville, Arkansas. We also opened a center in Ridgefield, Washington, a thriving community often described as a childcare desert. Both centers expand access to childcare where it's needed most. We're applying that same disciplined approach to Creme Schools, our premium brand, expanding into markets where we see growing demand. Just after the quarter ended, we opened the Creme School at Great Park in Irvine, our first Creme location in California. The school features modern learning environments, elevated amenities, and personalized educational experiences. This is an important milestone and expands Creme into a large and very attractive market. We are pleased with enrollment in our summer camp programs at Creme, where enrollment increased approximately 26% compared to last year. It's another encouraging sign that our repositioning efforts are gaining traction. As we grow this brand, we're focused on delivering differentiated educational experiences that families value. Turning to Champions, we delivered another strong quarter of double-digit revenue growth, extending our streak to four consecutive quarters. That growth reflects both the addition of 85 net new sites since Q2 of last year and improved productivity across our existing sites. Summer programming at Champions is going well and reinforces our relationships with families and our school district partners. We're expanding into additional schools within our existing districts while bringing our before- and after-school programs to new districts. Within KinderCare for Employers, we're continuing to see organizations look to partner with us to meet their employees' childcare needs. During the quarter, we welcomed several new partners across a range of industries, reflecting continued demand for our employer-sponsored childcare solutions. That's an area of the business we're excited about, and we expect it to remain an important part of our growth strategy. We're also encouraged by the opportunity we see in tuition benefit. Our large national footprint gives us a clear advantage in offering childcare benefits to employers across 42 states. We are able to connect more families with high-quality care in the communities where they live and work. We believe that combination positions us well as employer demand for childcare solutions continues to grow. Our breadth and flexible platform allow us to partner with employers in a variety of ways. For example, we have supported public safety employees in Dallas by providing 24-hour childcare during the World Cup this past quarter. Just another example of how we can tailor our childcare solutions to meet the needs of employers and communities. Quickly touching on the policy environment, the overall direction has been encouraging. We continue to see steady bipartisan support at all levels as federal policy has remained supportive, and many states are expanding childcare access. For instance, New York recently announced a massive investment of $1.7 billion into early childhood education programs. California announced it will add another $220 million toward 20,000 new mixed-delivery childcare spaces, and New Hampshire is creating a childcare tax credit, incentivizing employers to be a part of childcare solutions. We applaud these leaders for listening to the needs of working parents. As a national provider serving working families across the country, we're continually evaluating how we best serve them. That means expanding into growing communities like Bentonville, Ridgefield, and Irvine. It also means thoughtfully consolidating centers where demand has shifted. This is an important part of how we manage our presence across the country. As part of the ongoing evaluation of our center footprint, we've identified several consolidation opportunities that we believe will better align our centers with the communities we serve as families' needs and local demand for childcare have evolved over time. While the majority of our centers continue to perform well, some are no longer in the best locations to serve communities. As a result, we're consolidating those centers, and as of today, we are approximately two-thirds of the way through this work, including 49 center closures completed during the second quarter. Those centers represented about 3% of our total center footprint and were primarily from our fourth and fifth quintile, and on average, were below 37% occupied. These decisions are never easy, and we evaluate every center individually. Our priority is minimizing disruption for families, teachers, and the communities we serve. And wherever possible, we help families and employees transition to nearby locations. We're encouraged that both family and employee retention have exceeded our expectations through this process. We believe that the result will be a center footprint that's better aligned with where our families live and work today, and it will allow us to focus our people, our resources, and investments where they can have the greatest impact for families. As we complete the remaining consolidations this year, you should expect some quarter-to-quarter variability in our financial results. We believe that's a responsible tradeoff because these actions will strengthen KinderCare and better position us to serve families, continue investing in high-quality early education, and support long-term access to high-quality childcare. Looking ahead, our priorities remain the same. We'll continue improving execution across the business. We will continue to invest where we see the greatest opportunities and we will continue supporting our center teams so they can deliver the best possible experiences for our families. We're encouraged by the progress we're making, confident in the actions we're taking, and excited about the opportunities ahead. Anthony will now provide more details on our financial results.
Thank you, Tom. I'll start with our Q2 results and then discuss our outlook for the remainder of the year. Second quarter revenue was $698 million, down slightly from $700 million the prior year. Enrollment pressure was partially offset by strong performance in Champions and contributions from KinderCare for Employers, Learning Adventures, and our newer centers. While current performance remains below prior year levels, the year-over-year gap has narrowed significantly, and the underlying trend continues to improve. Overall, same-center revenue decreased by $14 million or 2%. This was mainly driven by lower enrollment and an $11 million impact from closures, $5 million of which was our footprint optimization work. Higher tuition rates and strong performance from centers newly included in the same-center cohort helped offset a portion of the enrollment headwind. Total enrollment declined by 4% year-over-year, reflecting both ongoing pressure and impact from our center consolidation action. Pricing contributed approximately 2.6% to ECE revenue during the quarter. While we see positive developments overall in subsidy reimbursement rates, we expect the benefits to remain modest through the current state budget cycle. The consolidations provided a 70 basis point benefit to same-center occupancy for the quarter, which was 68.6%, down 240 basis points from last year. Champions revenue in the second quarter increased 13% year-over-year, driven by a mixture of new site openings and higher average revenue per site. Along with KinderCare for Employers, these B2B businesses are broadening our revenue mix and supporting our overall growth strategy. We opened five new centers and acquired five new centers during the quarter. Cash consideration for the acquisitions in Q2 was about $0.5 million, funded completely out of the $45 million in free cash flow generated in the quarter. New and acquired centers this year have contributed approximately $2.6 million in revenue year-to-date. As Tom mentioned, we closed 49 centers during the quarter and expect that number to reach 80 to 85 by the end of the year, with the majority of the remaining happening in the fourth quarter. On an estimated annualized basis, the optimization work would represent approximately a $57 million revenue headwind and an $8 million benefit to adjusted EBITDA. We estimate annual rent expense would decline by approximately $7 million, and occupancy would improve by roughly 150 basis points once the work is fully completed. As we discussed earlier, you'll see some quarter-to-quarter variability in our financial results as we complete the remaining consolidations, and we've reflected those expected impacts in our updated outlook for the remainder of the year. To help investors better understand the optimization work, we've included a supplemental slide summarizing the impacts of consolidations completed to date and our expectations for the remaining work this year. Continuing down the income statement, we reported a net loss of $8.8 million and reported a loss of $0.07 per share for the second quarter. Adjusted EBITDA was $63 million for the quarter, down from $82 million a year ago, reflecting the impact of lower occupancy on operating leverage. About $5 million of the decline was driven by adjustments to our insurance and legal reserves. Adjusted net income was $9.9 million and adjusted EPS was $0.08, compared to $26 million and $0.22 respectively in the prior year period. The quarter also included footprint optimization-related impacts, primarily impairment expense and accelerated depreciation, along with other transition costs, including about $0.5 million in severance expense. While our optimization work has near-term financial impacts, we expect it to better align our center footprint and support stronger returns on capital over time. SG&A was 10.5% of revenue, down 76 basis points from last year. We remain focused on managing expenses while investing in the highest priorities. Interest expense was $18 million for the quarter, down from $20 million in the prior year, driven by a repricing last year. We expect to see favorable comparisons for the remainder of this year as well. Turning to the balance sheet, we ended this quarter with $174 million in cash and $188 million of available capacity under our revolving credit facility. Net debt to adjusted EBITDA is approximately 3x. We expect a modest increase in that ratio over the balance of the year as we complete the remaining consolidations and fund costs associated with exiting leases. Our balance sheet provides the flexibility to complete the remaining optimization work. Today, we have line of sight to approximately 36 lease exits, representing approximately $20 million to $25 million of expected lease exit payments. Those payments are reflected in our updated free cash flow outlook. The remaining leases are at varying states of negotiation, and their timing and ultimate resolution will vary by location. We'll continue to update investors as we gain additional visibility into the associated cash impacts, some of which may extend into 2027. Looking ahead, we are updating our full-year outlook to reflect the expected impact of our footprint optimization work. For the full year, we now expect revenue between $2.66 billion and $2.7 billion, adjusted EBITDA between $200 million and $220 million, and adjusted EPS between $0.05 and $0.15. Included in our updated outlook is approximately $8 million of incremental insurance related to our actuarial analysis on our workers' comp and general liability self-insurance. For our revenue growth assumptions, we are maintaining our occupancy to be down approximately 3% as reduced capacity from the optimization work partially offsets enrollment pressure. We now expect tuition contribution to revenue growth of approximately 2.5% for the year, primarily reflecting the slower pace of state subsidy reimbursement rate increases than we previously expected. We expect the revenue growth contributions from Champions and B2B to be 1%, with new centers and acquisitions to both remain consistent at about 50 basis points each. Consolidations are now expected to represent about a 1.5% headwind to revenue growth this year. We expect CapEx this year to be between $120 million and $130 million. Free cash flow is expected to be less than $10 million, primarily reflecting elevated cash costs associated with the footprint optimization work. For modeling purposes, assume our effective tax rate to be 27% for the year. To provide better transparency as we move into the second half, we're providing an outlook for the third quarter. We expect revenue to be between $660 million and $680 million and adjusted EBITDA to come in between $44 million and $48 million. Occupancy for Q3 is expected to be in the mid-60s. We'll continue to provide updates on the financial impact of the remaining consolidations throughout the balance of this year. By completing this work in 2026, we expect to enter 2027 with a better-aligned center footprint, improved occupancy trends and a cost structure that better supports sustainable long-term growth. To wrap things up, our priorities for the second half are straightforward. We remain focused on disciplined execution, completing our footprint optimization work and investing in the opportunities that matter most. We believe those actions will position us well as we enter 2027. Now let's go ahead and open up the line for questions.
Questions and answers
Operator provided instructions. Your first question comes from the line of Jeff Silber with BMO Capital Markets.
I'm just trying to get a little bit more color on the impact of the center closures. And forgive me, I came on the call late. If you hadn't, I guess, done all these center closures, what would have been the impact in terms of guidance going forward? Would it have been maintained, changed in any way? Any color you could give would be great.
So we shared some information in the online presentation. So hopefully, that will be helpful for you all, but I can go over a few things. In the quarter, it was about 70 basis points of impact to revenue. We anticipate because you're asking more about guidance, 150 basis points of impact to occupancy. And so obviously, that's having a positive impact of departing those centers. And we anticipate about $30 million of revenue decrease because of those closure of centers. So that's definitely weighing into our guidance, and that's the amount that kind of made the changes.
Were there any other impacts in terms of your guidance change, whether it's tuition or subsidy impact?
Yes. So right, in our guide, we did reduce, Jeff. The one thing that we did change was going down to 2.5% on pricing. So we're just not seeing some of the rate impact we thought we would start seeing from subsidy come through. And so that's why we brought that down from 3% to 2.5% for the back half of this year.
And is that something that you think will be delayed into next year? Or is that kind of, I guess, a recurring item?
No. At this point, it's something that we're monitoring, and we do think it could impact the first half of next year. And so it's definitely something we're monitoring on the potential impact into the first half.
Your next question comes from the line of Jeff Meuler with Baird.
Just a similar question to Jeff. But on the slide, I guess, 10 in the deck, it says there's an adjusted EBITDA impact, negative $2 million in Q2 and negative $3 million in 2026. I thought that you said there was like $8 million of benefit from these closures. So can you just help square that? And then on the EBITDA guidance, just any adjustments beyond kind of the closures, the $8 million of insurance headwinds? And then I don't know if there's any sort of like flow-through impact to EBITDA, presumably there is on the lower price yield.
Yes, that's right, Jeff. So on the $3 million that's on that slide, that is the direct impact we saw from closing those centers. So that is some severance that will come, on centers where we weren't able to move a center director or a teacher. We obviously would provide severance in that situation. And then as we turn keys back over outside of the leases, there's occasionally some maintenance type fix-up things we need to do. And obviously, they're relatively minimal, but that's factored into that $3 million as well.
Was there an $8 million benefit that was referenced?
So that will be the annualized benefit. So that's something we see into the future of seeing those centers depart our fleet and the EBITDA that they were pulling us down by going forward.
So there's only a partial benefit from that this year?
That's right, Jeff. Yes, that's right.
Okay. Got it. Got it. And then can you just comment on the marketing initiatives and the enrollment growth in the opportunity region and just to what extent that progress is continuing?
Yes, Jeff, it is continuing. The opportunity region is still performing well. I would tell you that the marketing that we began in the first quarter and it continues through the third quarter now, we actually added a few more million dollars to it going into back-to-school because all of the targeted marketing we've done on paid search has put us in a position to increase year-over-year inquiry every single week. So we're really pleased with that. It's all about execution now, Jeff. We're waiting to see and are starting to see, as we've mentioned in the last call, we're starting to see some traction in partial centers where the clarity of the job, the lack of distractions, all the work that we did to simplify the role of center director is starting to pay off a bit.
Your next question comes from the line of Faiza Alwy with Deutsche Bank.
So just a follow up on the closures. I think you said that there's maybe more costs in 2027, and that might be related to some of the cash costs. So can you just help us appreciate some of the impacts into 2027? Should we expect that $8 million benefit to come through in 2027? Or would there be some lingering costs that's going to flow through the P&L?
Good question, Faiza. So as far as direct impact to adjusted EBITDA, we would expect the benefits to start flowing through in 2027 and, as it relates to Jeff's question earlier, even start to see that partially in the back half of this year. So we'll start to see those benefits. We did call out a $20 million to $25 million number for continued cash costs for closures; that's right now our best estimate on cash costs as we look to buy out of the right leases that we can buy out that are a great ROI for us to buy out of. So those would be onetime cash costs. Based on the general accounting principles on that, we would see those not hit EBITDA, but they would potentially, a portion of that, hit net income as we go through. So we're working on those as we speak today. We'd like to get those finished up as soon as possible, but I did allude to the fact that we just know with negotiations that some of that might flow into 2027, but we're hoping to get it done as soon as we possibly can.
Got it. Understood. And then, Tom, I just wanted to ask more about all of your efforts around strengthening the execution in the business. Where would you say — I know it's early days, but where would you say you are? And what are some of the focus areas been for you right now? Is there sort of Stage 1? Is there a second stage that's to follow? And how should we think about the impact of all of your efforts and when that sort of starts helping enrollment in a more meaningful way?
Good question, Faiza. Obviously, to turn 1,600 centers is going to take some time, although I can tell you that we have seen good progress in some of our centers that have eliminated a lot of that extracurricular distraction more quickly than others. We see that in some of our centers. I would tell you that we're hoping to see some of that during back-to-school. We don't know how much yet, obviously, because we're literally two or three weeks into back-to-school. But our hope is between back-to-school and the rest of the year, which, as you know, we continue to grow enrollment all the way through the fourth quarter and into the first half of next year. So our hope is it continues to crescendo, continues to improve over that period of time. At the same time, we will continue to invest where it makes sense in additional paid search, targeted marketing to continue that year-over-year increase in inquiry.
Your next call comes from the line of Manav Patnaik with Barclays.
This is Ronan Kennedy on for Manav. Previously discussed the quintiles, the opportunity regions, remediation efforts and now obviously, an acceleration of center consolidations. Can you just walk through again the specific criteria used to evaluate a center and determine whether it receives investment, is remediated, consolidated or closed? I know I think you talked about 37% occupancy level. Is there anything else from enrollment trends, local supply-demand dynamics, labor availability, pricing, anything else? If you could just walk us through that thought process.
Of course. As we looked at the fleet, we went through and looked at every single center. The biggest one that we're really looking at is we have a pretty good feel on when we're building a new center, when we're acquiring a center, what we expect to have success with as far as demographics go. There's a number of demographics that go into there. We qualified our portfolio against those same ones. That got a much smaller subset of the centers that we needed to take a deeper dive on. At that point, we looked at each center's inquiry levels, demographics, engagement level of the center, historical performance and financial trends. Labor is not a significant issue preventing growth; it's a day-to-day battle but not something preventing us from operating. We also looked at drive-time maps, usually 10 to 15 minutes, and whether there are sister centers within that radius that might make sense as a magnet center to serve families. That was definitely a consideration as well.
Got it. And then you had indicated roughly two-thirds of the optimization effort is done. Is there a possibility for more to be done post fiscal 2026 because, say, there are centers with similar characteristics, but you think they could potentially improve, etc.? Is there any risk of further remediation or consolidation next year?
Yes. We've historically always looked to close centers. Every year, we constantly evaluate the portfolio. I would anticipate we're still going to close more centers next year. We'll keep our pulse on that and continue to see closures much like we have in the past.
And can I just reconfirm if there's a clean enrollment trend? If you can comment to that and the inquiry conversion, anything of note from an enrollment standpoint for the retained portfolio?
Yes. We talked about that the quarter was down 240 basis points and the closures had about a 70 basis point impact, so we're still right around that down 3% kind of as clean as you can get it.
Your next question comes from the line of Toni Kaplan with Morgan Stanley.
I wanted to ask about the tuition reduction in the guide. I think you talked about it being related to state subsidies. Is that a timing issue? Or could you just maybe explain what's going on there?
Is it timing, Toni? I don't think I would necessarily classify it as timing. As we went into the year and discussed our expectations in May, we had certain expectations where state budgets were going to land and what they were going to do. It's still not 100% clear what all the states will do as far as tuition increases related to subsidy. Based on what we know today, we believe it's not going to come in quite as high as we were expecting in the first half of the year. There is a potential that states make different decisions and allocate more funds later in the year, and we'll update as we go. But based on what we know today, that's why we chose to reduce that related to subsidy revenues.
Toni, the only thing I would add is we've reversed the trend in Indiana, which penalized us last year, and we're seeing solid growth in Indiana at this point. Also, you heard us talk on the prepared remarks about New York's $1.7 billion infusion and the $220 million in California for mixed delivery as well as tax incentives in New Hampshire. So we may gain in one place and lose in another. But overall, this year has been a lot more stable than it was last year.
Understood. And I wanted to ask about when you think about the back-to-school environment right now and the strategies that you're deploying, we've talked in the past about the opportunity regions and marketing changes. Anything else we should be thinking about that you're doing differently in the back-to-school market push this year?
No. It's the focus on the marketing, and that is a two-pronged approach. We have an amount of marketing that's going throughout our 42 states now. Along with that, we have targeted marketing in a number of states. We've actually increased that from the first half of the year. The other thing that we are testing and it's new for us: we adopted and executed an AI program that's helping us with the quality of the tour and the quality of the interaction with the center director and new parents as they inquire for enrollment, which is showing us, in real time, the quality of the call, the quality of the follow-up all the way through to enrollment. We are very encouraged as is the field management team about what that can do for us. That literally started just weeks ago. So more to come on that in the next call, but it's something we are increasing exposure to right now.
Terrific. Really quickly, Tony, you mentioned the third quarter revenue range. I think we didn't catch it and it differs in the transcript. So just wondering if you could just repeat that range for Q3.
Yes. So we're at $660 million to $680 million for revenue, $44 million to $48 million for adjusted EBITDA and occupancy in the mid-60s.
Your next question comes from the line of George Tong with Goldman Sachs.
You discussed the qualitative criteria that you use to select centers for consolidation. Can you quantify or estimate how many centers in your current retained portfolio have occupancy or profitability comparable to the centers that are being closed?
I don't have an exact figure for you. Out of the closures we've done so far, about nine out of ten of them are from quintile five. A strong portion of the remaining ones that we'll do this year are also coming out of quintile five. So we're definitely exiting some of our lowest performers. Any ones that we have left with similar occupancy are typically being retained because of demographic reasons or because a center director change or other local factor suggests the ability to grow. Those centers are on the top of our watch list where some of the actions Tom is talking about could allow them to turn around.
Got it. That's helpful. And going back to a point that you just mentioned for centers that you're looking to retain even if they're in the lower quintiles, what improvement do you need to see and over what time frame before you decide whether to continue remediation or pursue a closure?
It's really a center-by-center determination. We consider lease life, how long we've had the center, the quantitative financials, center director tenure and drive-time to other centers. Generally, getting to about 45% to 50% occupancy is around breakeven for a center. If centers show trajectory toward that level, they can buy more time. We're also looking at engagement levels as a leading indicator. When engagement increases, that's often a leading sign of improving enrollment.
One more point on that: we look a lot at density. Some centers are 30, 40, even 50 years old and families have migrated out of those areas. If we have high density and low performance, then it's on us. But if a center is in a low-density area with low inquiry and low future enrollment, it's time to let them go and focus on areas where families live today.
Your next question comes from the line of Josh Chan with UBS.
I guess on the centers that you decided to close in terms of how they got to the occupancy levels that they were, would that primarily be COVID? Like is that the main reason you would think?
I don't think it's necessarily COVID. These were centers that historically were successful for us, and demographics have changed. Some may attribute that to COVID-related migration, but it's more broadly demographic changes and families just not being where those centers are anymore.
Okay. That makes a lot of sense. And then maybe on guidance, I know that it's been asked a little bit earlier, but could you just bridge for us why as you close these unprofitable centers that instead of EBITDA going up by a portion of that $8 million it goes down by about $15 million? I know there's some insurance in there and some costs, but can you just bridge us that difference, please?
Of course. We called out insurance impacts that are affecting results. We also called out about $3 million of onetime costs related to closures, such as severance and maintenance. The reduction of tuition contribution from 3% to 2.5% is also impacting EBITDA. We're factoring a portion of that $8 million run rate into the back half, but Q1 and Q2 are generally our highest EBITDA quarters, so we're not getting as much benefit in the back half. There are a few other factors working against us in the near term.
There are no further questions at this time. I will now turn the call back to Tom Wyatt for closing remarks.
Ben, thank you very much. And to all of you, thank you for your questions. Thank you for your support, and we wish you a very good night. We are really proud of the progress we've made. I hope you see it. I hope you see the traction we have. I hope you look hard at the businesses like Creme and our At Work business, which are both performing very nicely, and the new shoots, the green shoots within KinderCare. Have a great night. We appreciate your interest, and we look forward to talking to you next quarter.
This concludes today's call. Thank you for attending. You may now disconnect.