Sean Sullivan: So again, as David said, it’s really about hiring, it’s about training and it’s about getting the throughput and the efficiency up to where we want it to be. So the primary products there are FootJoy and Titleist gear. When we think longer term, I think it’s much about efficiency as is ownership and control and customization. So a big part of the strategic benefit of this distribution center, it’s also a customization center of excellence. So it’s much — this is much about quality product and serving our customers well as it is about doing it efficiently. So we’re still in the early stages of ramp up. We feel very good about where we’re at. Certainly, hope that there’s more opportunity to further leverage that facility across the portfolio. So that’s a little bit of the color of what transpired in Q1. Again, we went live on January 1 from that location. So we’re pleased where we are after four months of operation.
David Maher: I’ll just add some historical context on that, Noah. We felt some pressure points with customization and distribution for FootJoy and gear throughout the COVID years, and that led to the decision that Sean outlined to take greater control of golf bag embroidery, apparel embroidery and distribution of those products. So really the origins were some pressure points of a few years back and the team’s done a nice job mobilizing. And we like the control we have, because we — again, I’ll echo Sean’s comments. We just think it allows us to deliver better service to our trade partners and to golfers.
Operator: We have a question from JP Wollam from Roth MKM.
JP Wollam: Maybe first in terms of kind of the investments in IT and infrastructure and understanding kind of usual protocol about forward guidance. But putting together kind of Q1 EBITDA and just the investments that have been made so far. I’m curious, if there’s anything to read through in terms of maybe more than expected investment costs going forward, particularly in the back half of the year? And then you alluded to kind of maybe some investments for that FJ FitLab. Are those new or how that’s always been contemplated and will that be impacting kind of SG&A in the back half of the year?
Sean Sullivan: JP, I’ll start. So I think that, at the end of the year, we did talked about growth in OpEx in ’24, right, outpacing sales, if I recall correctly. So this is expected. I think we’re still in the early stages of this and you’ll see this flow through throughout the year. But again, important to recognize that some of these things are enterprise investments, some of these are specific to product segments around fitting networks, about fitting apps and technology. So we do intend to continue to invest and you’ll see that flow through in SG&A in 2024 and it’s embedded in our full year guidance. So we think these are all certainly appropriate, necessary to better serve and create the operating leverage that we expect to deliver here in outer years.
David Maher: And then JP, just a quick follow-on to your question about for FootJoy’s FitLab, that has been contemplated and planned for in our out year plans. I think more of it to follow in 2025 than late ’24, but we’re enthused about getting that program running.
JP Wollam: And then maybe just on FootJoy, and thinking about kind of international markets. I think you maybe touched on being optimistic about the product portfolio. But could you maybe just give a little bit more color. In your prepared remarks, you said that you’re kind of optimistic about things stabilizing in the back half of the year. So what gives you confidence there? And then just maybe anything you are seeing with broader customer behavior specifically on the international side?
David Maher: So to part one of your question, what gives us comfort is the correcting footwear inventory landscape. As I noted, it’s all but corrected and normalized in the US. We think that process takes another quarter or two outside the US. And when we think — when that happens, we just feel confident that our products will be better positioned to succeed. I will call out, as you think about markets around the world, and we’ve spoken this before. Korea has a very unique super premium golf apparel market and we pursue that with both the FootJoy brand and a Korea specific Titleist apparel brand. That region has seen some outsized growth in the last couple of years. And more recently, we’re seeing a bit of a correction. Strong demand followed by a whole lot of new entrants resulted in excess inventory and promotional activities.
So we feel as though we’re in the midst of a correction within the Korea golf apparel market space. We’ve planned for it. And while we like our positioning over the long term and we like our ability to withstand the effects of this correction in 2024, we have factored in market softness. That’s the only real unique call out that I think is worth noting. The others, I think I hit on particularly EMEA, which is just a slow start. But one area we’re seeing it does affect, it shows up in our other segment. On the Titleist side, it shows up in FootJoy. On the FootJoy side is just a softness after a period of outsized growth in Korea. And we think that market is going to correct throughout the year and will probably correct for the full year and we anticipate again — we like our positioning over the long term and we think we’re in a good shape to withstand the effects of the public correction.
But that’s the only market that I think warrants a unique call out at this stage.
JP Wollam: Great. I appreciate the color. Best of luck moving forward.
Sean Sullivan: JP, thanks. And thanks to all for your questions and interest. Hopefully, you take advantage of some nice weather here in the few months and go play some golf. And we look forward to speaking with you on our next call. Thanks again.
Operator: This concludes today’s call. Thank you for joining. You may now disconnect your lines.
