Steven Forbes: Good morning. I have a two-part question on capital spending. So first, given the reduction in spending plans, year-to-date, you know, from the start of the year, can you help us better understand what the team has pulled back on? And then the second part is, as we think about sort of more normalized capital spending, ratios looking out, and any initial thoughts on what the go forward spend rate should be.
Tony Iskander: Yeah. Thanks again. Good morning, Steven. This is Tony. As you’ll recall in the first quarter, we had a higher number of new store openings, and we brought that down in our guide after the first quarter. And that’s primarily driving the reduction in capital spend. On a go forward basis, that’s what the strategic review is going to help us identify.
Steven Forbes: Thank you.
Operator: Thanks, Steven. Our next question comes from Kate McShane from Goldman Sachs. Kate, your line is now open. Please go ahead.
Kate McShane: Hi, thanks. Good morning. Thank you for taking our question. We just had a simple question about your view on current inventory levels and in stocks. And if there are any categories where you still think your inventory is not where you want it to be and when you can expect to maybe be more in line there?
Tom Greco: Yeah. So, we feel pretty good, Kate, about the inventory levels. We’ve done, as Gene mentioned the real intense focus on their highest velocity SKUs and making sure that we’re in stock on those items. We’ve added some depth to the highest velocity SKUs in the stores and the distribution centers. That’s paying dividends. And we’ve also added coverage or breadth. which is also helping. We measure that by virtue of our on hand rates and our close rates, which are both growing significantly. So, we feel very good, and the categories themselves that are benefiting the most are the ones that we were weak on last year. So, the transition that was made. We had a lot of different suppliers that we’re involved with. Those suppliers have really stepped up, and we’re grateful for that.
Our suppliers are really important to us we’re starting to really make some gains in those categories, and there’s still a lot of room for us to grow from there. So there’s nothing uniformly good or uniformly negative at this point. We’ve grown in aggregate and each of those categories are moving up nicely.
Kate McShane: Thank you.
Operator: Thanks, Kate. Our next question comes from Brian Nagel from Oppenheimer. Brian, your line is now open. Please go ahead.
Brian Nagel: Hi. Good morning. So, my first question, bit of a follow-up to prior question, but if you look at the improving business you’ve seen lately, improving sales you’ve seen lately. How you step back, it’s how much of that is internal efforts on the part of Advance versus maybe a solidifying backdrop within the sector.
Tom Greco: Yeah. I mean, it’s that’s difficult to say, Brian. Obviously, we don’t we don’t really get to see that until our peers will report more comparable time frame. I mean, we see DIY, which we feel really good about comparatively, but the pro channel is the one I’m referencing. So, we really need to see how everybody else performs. It’s been extremely hot this summer. So, we are seeing strength in those categories, you’d expect heating and cooling, obviously. But overall, as we talk to our suppliers, particularly the ones in our parts categories, we are doing much better. So, we feel we feel good about the actions we’re taking, and we’re going to continue to execute against them.
Gene Lee: Hey, Brian. It’s Gene. I just want to — I wanted to say that, what I have seen is that the team is taking a specific action, and we’re seeing a specific result because of that action. So, I think Tom is correct. We need to see the backdrop. But what I can see from when I say is tell me we’re going to do something, we do it and then we get a reaction from that. That’s positive in my mind.
Brian Nagel: That’s helpful. I appreciate it. And then my follow-up question, in your prepared comments, you talked about I guess, a shift you made in a debt covenant if I said that correctly. So, I guess the question is maybe you can articulate what you did there. To what extent that affords you more flexibility? And could there be other similar type adjustments being made here to the debt structure of the company?
Tony Iskander: Hi, Brian. This is Tony. I’ll take that. As I mentioned in the prepared remarks, we’ve adjusted our interest coverage ratio, that provides a little bit of relief, primarily due to the higher interest expense that we carried earlier in the year. We did not adjust the leverage ratio. Those are our two primary covenants. We’re confident in that, and it gives us a further financial flexibility should we need it.
Brian Nagel: Got it. Thanks, Tony. I appreciate it.
Tony Iskander: Thanks, Brian.
Gene Lee: Thanks, Brian.
Operator: Thanks, Brian. Our next question comes from Scot Ciccarelli from Truist. Scot, your line is now open. Please go ahead.
Scot Ciccarelli : Good morning, guys. I know you talked about, improving sales trends the last call 6, 8 weeks, but you posted negative comps in the first half. Can you help us understand why you would slightly raise the full year comp estimate? Is it just a matter of kind of the latest momentum, or is there something else you’re expecting that play out in the back half?
Tom Greco: It really is, the momentum we’ve seen in in recent weeks, Scot, obviously the fourth quarter is always volatile. So, we have to keep that in mind, and we did finish the year strong on DIY in the fourth quarter last year. But based on everything we’ve seen, we track as you guys do the multi-year comps, the multi-year sales, everything that we’re doing, we feel very good about our guidance on sales.
