So you should expect that to be the same, and that will exhaust in 2025. The difficult one, as you pointed out is LIFO. And if you take a step back, last year, we started LIFO, and we thought it could be roughly in line with 2021, which is $120 million roughly and we were nearly 3x that. So we’re not giving any guide around LIFO. What we did say is we expect product cost inflation, which is a big driver, there’s other components. But we expect that to moderate throughout the year. So what I can tell you is we don’t expect LIFO to be another $300 million headwind, but we’re not going to provide any guidance beyond that.
Zach Fadem: Maybe similar in Q1?
Jeff Shepherd: I’d like to add Zach. Go ahead, Zach. You asked your question.
Zach Fadem: I just wanted to clarify, would Q1 be similar to Q4. And then – sorry, go ahead, sorry to interrupt.
Jeff Shepherd: Yes. Again, we’re not going to break out the LIFO on a quarterly basis. It will be dependent on what those supply chain and product costs come in at.
Zach Fadem: Got it.
Tom Greco: Yeah. Zach, I wanted to add that you’ll see on our website, we’ve broken out and we’ve had so many questions over the years on this GAAP to non-GAAP comparison. We’ve broken out the last 5 years, you can clearly see the relative performance GAAP versus non-GAAP. If you look at our adjusted EPS growth over the last five years, it’s basically 2.4 times. It’s more than double what it was in 2017. It’s got about a 19% CAGR. And this year, at the mid-point of our 2023 guide on a GAAP basis, you see a similar number. So it’s all there. We want to make sure that it’s clear to everyone. And back to the transformation costs, we’re excited about the fact that they’re coming down over the next couple of years. And that will enable us to expand margins through that alone.
Zach Fadem: Got it. Appreciate the time, guys.
Tom Greco: Thank you.
Operator: Thank you. (Operator Instructions) Our next question for today comes from Scot Ciccarelli from Truist. Scot, your line is now open. Please go ahead.
Scot Ciccarelli: Good morning, guys. Scot Ciccarelli. So how should we be thinking about the pricing investments that you guys mentioned last quarter relative to, let’s call it, the price optimization efforts you implemented over the last few years. Like how are we supposed to kind of reconcile, if you will, kind of the price investment versus, let’s call it, raising prices over the last couple of years, which I think has been a pretty big gross margin driver.
Jeff Shepherd: Yeah. So a couple of things there. We talked about the unprofitable discounts. We’ve worked through the vast majority of that. That’s going to be an ongoing process. It’s really something that doesn’t go away. It did not have a significant impact in the fourth quarter. In fact, we saw a very slight benefit, meaning that we didn’t lose those customers, and we were still getting the sales and the – an improved margin because we weren’t giving it away through an unprofitable discount. More broadly, in terms of the competitive set, Tom mentioned this earlier, but we’re going to be very surgical in the pricing investments that we made to close the competitive gap and we use the word surgical for a reason. We look at CPI and peak last summer, and as we were into the fourth quarter, we’re back to where we want to be.
And we’re testing in different markets. We’re monitoring this on a daily and a weekly basis, and we’re clearly seeing results. So we’re going to make sure we’re competitive. We’re not going to lose on price, and we’re going to improve our availability. And we think that sets us up for a very strong year.
Scot Ciccarelli: That’s helpful. And then Jeff, any more color on the first quarter outlook, given your comments in your prepared remarks about 1Q being more challenging?
