Piral Dadhania: So could I maybe start with the gross margin? Are you able to share in a bit more detail on the moving parts in Q1? I think Bjorn mentioned that the 2 biggest factors were markdown and inventory write-downs, but just curious if you could share with us the quantification of the other factors, which are obviously FX, channel mix, regional mix and so forth? And then my second question is just on the U.S. Obviously, the well-flagged pressures in the U.S. market for various reasons. Could you maybe just share a little bit more in terms of detail around how your inventory clearance process is going there? How you see inventories at your — some of your key distribution partners, whether those are full price or off-price? And how you expect the business to evolve for the remainder of the year and whether you believe you can get to a clean inventory position in the U.S. by the middle of the year as you’re expecting for the other regions?
Bjorn Gulden: I’ll do the U.S. and then Harm can take you deeper into gross margin. The answer to U.S. inventory midyear, no. The inventory issues in U.S. is bigger than that we can have that normalized the midyear. And the reason being that the inventory level, we are now channeling most of the excess inventory through our D2C. That means that our factory outlets, for example, which normally should have fresh merchandise also coming directly out of factories is now being only serviced by clearance, which again takes your margin down. And there isn’t any way right now to clear excess merchandise through channels that you normally do. The value channel with the TJ Maxx’s and the Ross’ and stuff are also full. So that’s why our approach is to do this over 3, 4 quarters and not try to flush it in 1 quarter because it won’t help because it will come back again.
So I would say that all other areas the inventory should be, what should I say, normalized during Q3. I think the U.S. inventory will still be there for a while. And again, it will be there for a while in the sense that instead of buying new merchandise for outlets, we will actually fill them with excess inventory. So it will have an impact on the U.S. business for a longer period of time both on the top line and the gross margin line. I think that’s the honest answer.
Harm Ohlmeyer: Yes. Piral, on the gross margin, more details without giving you the decimal number because there’s a lot of mix effect within the mix effect, right? So we can talk about channel mix, but then there’s an Yeezy impact on the channel mix as well. So I just want to keep it simple. I assume there’s not a big channel mix impact. There surprisingly is not a huge currency impact as well in the first quarter. The biggest impacts are actually FOBs and supply chain costs. Especially on the supply chain cost, that’s the freight because the freight was peaking in October — in September, October times last year. And of course, we are realizing the freight cost in the margin when we are selling the product. So Q1 is definitely the biggest impact from a freight point of view.
Then, of course, significant was inventory allowance, given our calculation that we had the first impact of fall/winter ’22 inventory being partly allowed for in Q1. And again, clearing the inventory discount. So the significant headwind is supply chain cost, especially freight, inventory allowance and discounts. And of course, to some degree, Yeezy. And then you have a positive, and that’s the only positive is pricing that has been carried forward from last year as well. So the prices are still — they’re holding up for the fresh products that we have. That’s the first quarter and largely the first half as well. What’s going to change for the second half? First, freight is definitely almost normalized to where it used to be 2 years ago. That will be less negative in the second half.
