So we continue to invest appropriately in SG&A. And the last thing I’ll say is, and David called it out in his comments, we really are pleased with our distribution center and probably were more efficient in the month of March than we had anticipated. So certainly that exceeded our expectations a bit. But all-in-all, I think we still see the first half and the full year as we’ve articulated. And certainly, when we’re back together in July or early August, whenever the call is, we can certainly revisit. But all things positive, again, I’ll leave it at that.
David Maher: Megan, I’ll just — just maybe some historical color in all my time with the company, I don’t know that we’ve ever adjusted guidance after Q1. And it really speaks to a reality of the golf business that everybody’s crystal ball gets a lot clearer in the second quarter as markets open up. I made the comment about the golf season in many respects truly begins with the Masters in April. That’s true. So you need to see how mid-belt and snow-belt markets open up, how markets around the world open up. And again, it’s always been our feeling that you can’t really have a clear, clear sense of the industry and year until you get through Q2. And then maybe just another thought on distribution center progress really related to staffing and training and that’s gone along quite a bit better than we anticipated some six, eight weeks ago. So we are very pleased with the progress being made at our new DC.
Megan Alexander: And then maybe just a follow-up to that point. The gross margin up again. Can you just talk a little bit about how that played out relative to your expectations and particularly how the promotional environment looks out there? I think you talked about perhaps margins and EBITDA growth being a bit more pressured in 1Q just given the promotional environment. So just trying to understand how that played out relative to your expectations as we think about the second quarter?
Sean Sullivan: I think it was inline with expectations. And certainly given the margin profile of both balls and clubs and the performance of those two product segments, I guess, we weren’t surprised by the gross margin trajectory in the quarter.
David Maher: As to the market, Megan, the promotional environment, again, the markets are full, retailers are full as they should be this time of year in anticipation of the peak Q2 and Q3 playing seasons. There are two areas that we would point to drivers, simply because there were a whole lot of competitive launches and with that you get some degree of sell off and discounting of prior generation. Same thing happened in golf balls. I don’t know that I would characterize any of those as out of the ordinary, though. So I don’t see promotional activity as being noteworthy as either high or low or too, too far off from the norms. And just another reality, when you see promotional activity pick up, it tends to be late Q2, early Q3 after the season. So not a lot of new color to add other than what we’re seeing is about what we expected for this time of year.
Operator: The next question is from Randy Konik from Jefferies.
Randy Konik: I guess, David, first for you, you’ve always been very balanced about your view on the industry and never to get too euphoric, yet the industry continues to power ahead. Is this surprising you or how much is this surprising you? And then maybe you could give us some perspective on drivers of long term participation? Anything you can share with us from a data point perspective with your partners in the green grass area as it relates to junior programming levels, female participation and lesson levels? And then just Country Club waiting list would be very helpful to get your perspective on.
David Maher: From an industry standpoint, we’re at a point in time where we’ve seen six years where the number of golfers has increased, right? So obviously, a real positive and the industry is working hard to make good use of that interest in demand. Our focus is obviously on what happens on course. And certainly, there’s a whole another world happening off course that we don’t participate in, but I would say is additive to the on course experience. You look at NGF profile data, they’ll point to women and juniors being some of the fastest growing segments. So what’s the game doing about it? There was a line from, I think it was Seth Watt, the PGA, who said, let’s make sure we don’t just let this great parade go by without doing something about it.
And the game and the industry are working hard to be responsive and welcoming and accommodating to new players. And I think a couple themes that stand out there would be number of lessons. And the game is hard and one of the reasons people leave is because it’s difficult. So one way you can make the game less difficult and more sticky, if you will, is to execute and provide more lessons. So globally, we’re seeing that. Teachers are as busy as they’ve been in a long time, both in the US and around the world. And in terms of how we think about drivers of long term participation, I would call out the reality that what we’ve seen in the last handful of years and it’s sort of an unintended benefit of the game, as the game has done quite well as golf participants, golf clubs, golf retailers have done well in recent years, there’s been an incredible amount of capital investment in facilities to position golf courses, golf clubs, family centers for the needs of tomorrow’s consumer, and we hadn’t seen that for a few decades prior.
So I like the level of investment that the game is making to position itself to meet the needs of tomorrow’s consumers. And then Randy, your final thought on wait lists and such is a good one in the sense that I’m quick to point out that about three quarters of the rounds played are public, not private. So a little bit immune to the the wait list reality. But nonetheless, we continually hear from golfers, it’s just tough to get tea times and and particularly on weekends and peak season in key markets. But the general narrative is most clubs are at capacity and have wait lists maybe not as long as they were two, three years ago during the peak of COVID demands. But I would say the industry is as healthy as it’s been in quite some time. And again, that feeds itself because that allows facilities to reinvest in their value proposition for tomorrow.
So yes, here we are with a nice start to the year, in some markets. I do call out a slower start in other markets. Demand is high and reality is it’s still tough to get tea times in key markets and it’s tough to get to join clubs in key markets. Now does that last forever? Probably not but that’s the current state today.
