Thomas Hartnett: Yes, beautiful item. So our AOVs, and again, we’re just kind of getting started there because when we acquired the IP, it has taken us some time to build up the inventory and their best sellers. So we got to a portion of that this holiday season. But the average ticket is 175 basis points higher, or 175 times the Personalization Mall AOV. So it’s a good price point. Great gifts dealing and addressing a different cohort of customers, whether it be weddings or retirements or special moments in people’s lives, so.
James McCann: But all leveraging off the same fixed cost, same fixed facility that we have there at Personalization Mall, Michael.
Michael Kupinski: Got you. One last question, if you don’t mind. In terms of your revenue guidance for the year, what expectations are baked into your guidance in terms of like the general economy? Are you — can you kind of give us some sense of what those expectations are?
James McCann: Bill?
William Shea: Michael, we revised our revenue guidance to be down 7% to 9%, with the first half of the year being down around 9%. So applying a slightly better trend into the second half of the year. I think we’ve modified our guidance. I think, at the beginning of the year, we were hopeful that the improvements that we’re seeing would be even be more accelerated both through the second quarter and into the second half of the year. So it is improving at a slower pace than what we originally anticipated and that is tied to the macro environment not being as robust as we had hoped it would be.
James McCann: So baked into that is the trend continues to improve, just not at the pace we were hoping for.
Michael Kupinski: Got you. Okay. That’s all I have. Thank you.
James McCann: Thank you, Michael.
Operator: And our next question today comes from Linda Bolton Weiser with D.A. Davidson. Please go ahead.
Linda Bolton-Weiser: Yes, hello.
James McCann: Hi, Linda.
Linda Bolton-Weiser: Hi. So I was wondering just your comments about the consumer environment. I mean, consumer sentiment, Michigan consumer sentiment has been below 70 now for like two years. So it just seems like we’re stuck in this low consumer sentiment thing, which is not good for your business, obviously. But if it does persists, let’s say for another year, what would you do different in your business? Is there anything additional you could do in terms of cost structure or like how would you think about things if this just continued on like this, with revenue declines like this for another? How would you think — what would you think about doing differently?
James McCann: Thanks for your question, Linda. We missed you in the last quarter. Really good question. And one we talked a lot about over the last month or two. And the answer is a couple of things. One is we’re still recovering from the COVID bounce as so many of our ecommerce kinds of companies like us experience. So we’re still in that back end of the wave of that. The second thing is that I think the consumer sentiment generally is pretty good, but it’s bifurcated. And categories like ours are seeing it. We look very hard at the competitive data that we have that we buy. And the good news, bad news. Bad news is everyone in our categories has gotten hit with the back end of this COVID wave. The good news is that we’re holding share or gaining share.
So good and bad. And what we think would — if this trend didn’t continue on the pace that it is for recovery and it went the other way, we have several levers that we could pull to make sure that we continued on the profitability trend that we’re on, which is quite healthy, but we think could be. If the consumer trend continues on this pace and maybe improves a little bit, then it’s really good. If it declines from the trend we’re on and gets worse, then we have quite a bit of leverage in our operating model to make that — to make up for that and to make sure our bottom line continues to be strong. Bill, what else would you add to that?
William Shea: Yes, just from a top-line perspective, we continuously evaluate our offerings, our pricing, our bundling opportunities to ensure we have the appropriate price points for each of our consumer segments. And we have some pricing elasticity in that. So we are very consumer-focused, trying to improve the consumer experience on that, ultimately to buff against some of those macro trends.
James McCann: So when you talk about elasticity, you mean price points both at the higher end and the lower end.
William Shea: From a costing perspective, our trend lines on our gross margin are moving as — at an accelerated pace back towards the mean of the kind of the low 40s. So we continue to expect that gross margins will improve. And our expense optimization, you’ve seen that for the last year and a half and we’re going to continue those efforts to offset any softness in the top line.
James McCann: So in summary, we hope it doesn’t happen, but we do have capability and plans that if the trend were to turn negative, that we’d be — we’d have the ability to respond to it appropriately.
Linda Bolton-Weiser: Thanks. Can I ask one more about the Google? I think they’ve made some additional changes with regard to their blast e-mail marketing that some of my consumer companies have mentioned. They’re trying to figure out what that means for them. Have you analyzed what those changes mean for your marketing processes?
