Dave Peacock: Right. So, when you look at our business, obviously, as we described a minute ago, it’s a lot of people and we actually have a lot of transportation as it relates to workforce moving around, if you will, to service the business. And so you look at a couple cost areas. Wage inflation was continued to be persist — was persistent. It was higher than we expected. It wasn’t necessarily higher than past quarters or even maybe last year, but it was higher than we expected. And then you have things like gas prices that we’ve seen more recently to kind of take up in certain markets and a lot of markets. So those are the areas where we see the inflation flow through. And for us, it’s just making sure that we’re managing the business.
One, to be as cost-efficient as possible when those situations arise. And then two, as you said, in the areas where we’re able to realize a price for that. And obviously, in parts of our business, we actually have contract structures where it could be a cost-plus situation or a commission situation where pricing is not really the issue and so there’s kind of a natural price flow through, if you will, depending on the revenues for our clients when it’s a commission situation or the specific cost environment we may be facing.
Chris Growe: If I could just add to that, I would just say that in the first quarter, there were a number of, I’ll call it, regulatory changes that did support increased wages in the quarter. Those all happened in January 1. As I look across our business, the labor inflation was persistent. Not an acceleration or reacceleration, simply persistent. And we looked at the year — we’re looking at the year with a rate of inflation in that, let’s call it, low-to-mid single-digit level and in last year we were definitely in the mid-single digits. I think in the first quarter, it kind of continued into that mid-single-digit area. So I think the point I’d make is just that there’s inflation that was a little higher level than we thought.
We think it’ll level out a bit from here. Now, most important is how we’re attacking that, right? So we’re looking at our costs, obviously, and Dave has mentioned that. We are looking at — we have pricing initiatives in place that we can use to offset some of that. We’re looking at managing our mix. All the things we can do in that suite of tools we have to try to manage that inflation across the year.
Faiza Alwy: Okay. Got it. And then just last one, you mentioned improved results in March, which appear to be continuing in April. So what’s driving that? Is it just that you’re done with sort of the inventory rationalization or is there something else from a macro perspective or something else that’s unique to you?
Dave Peacock: I think you hit the nail on the head. I mean, you — the inventory rationalization, while it may be occurring a bit, as I mentioned earlier, it can be a bit transitory, right? Once you adjust your inventories, you sort of operate from that base going forward. So we’re seeing overall better shipments for our clients collectively. We talked about in the Retailer segment that there was an Easter shift, and so a big part of that business can be affected by the timing of Easter and it moved into first quarter. And the work — some of the work they do in-store, frankly, it reduces pretty significantly right ahead of holidays. And so that we saw a reversal of in the month of April. So that’s another example in a different segment, in the Retailer segment, where we saw that.
And then I mentioned earlier as well that we’ve taken actions on the cost side that really reflect the client exits that we had in the first quarter and so that should flow through as we go forward in the second quarter. We’re starting to see some of that in the early numbers for April.
Faiza Alwy: Excellent. Thank you so much.
Dave Peacock: Thank you.
Operator: Thank you. There are no further questions at this time. I’d like to turn the floor back over to Dave Peacock for closing comments.
Dave Peacock: Thank you, Operator. We appreciate your time this morning and your interest in Advantage Solutions. We are excited about our prospects this year and look forward to updating you on the progress to expand our competitive advantages as a partner of choice with clients and customers. Thanks again for your time today.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
