Annie Mitchell: We anticipate that both the U.S. and our international business, for the ones that we continue to operate directly, will be roughly in line with each other, so no major differentiation between the two growth rates. When we look at the impact from the exit of Canada and Korea in terms of a direct model, that is worth 3 points on the top line. So, our guidance of down 22 to down 15, within there is 3 points from moving Canada and South Korea from the direct model to the distributor model. But in terms of the overall trend, both the U.S. and international are moving in the same direction.
Mark Altschwager: That’s really helpful. Thank you. And then, switching gears, I was hoping you could give us some additional context on what you’re planning from a promotional standpoint over holiday. I guess, you’ve done a great job cleaning up the inventory. At least it looks that way on the balance sheet. So, are these promotions meant to still clean up some older product? Or is this more about staying top of mind during this transition period? And I guess, do you worry that the promotional plans might curb the ability to return to full price selling as the new product starts to roll in, in 2024? Thank you.
Joey Zwillinger: Yes. It’s a good question, Mark. So, I think you shouldn’t see anything too wild from us over the promotional cadence here. I think we’re trying to line up. What we’re seeing in the market is that people are starting to promote pretty early, maybe even earlier than what we saw last year from when the start of this cadence comes in industry-wide. And we found that if you’re not competitive in that moment, then you’re leaving opportunity on the table. And it’s really our objective to get to a really healthy place by the start of next year. We still have a little bit of work to do, as Annie guided you all, to trying to end the year around 40% down year-over-year in terms of inventory on the balance sheet. So, still a little bit of work to do there, and that includes a pretty big event, as you well know, Black Friday, Cyber Monday, and around that, we’ll do some other select discounting.
And that will be to trim the tail of any remaining styles or colors that we don’t expect to support in the future, and maybe over some of the big events, offering a broader assortment that includes some of our core styles. So, I do think the way we’ve handled this, this year has allowed us to maintain that full price brand integrity. Predominantly, our promotional opportunities for consumers have been around styles that we no longer intend to support, and particularly on a colorway basis. Even in styles that we support, there are colors that move really slow, we don’t expect to bring back. And so, that’s a helpful aspect to how we’ve managed the promotional cadence. I feel like we’ve been fairly surgical, despite the fact that we’ve had to increase the depth of promotion, as well as to some degree, their frequency.
And as we get into next year, that’s going to be a helpful foundation for us to wean people back. The approach that we’re taking is essentially based on two factors. One is that we’ll have a much better assortment and new innovation coming to market. That’s generally the best way to get a consumer back to full price. And then secondarily, we left some room this year by going fairly deep on our markdowns to work through the inventory that we can lighten the discount intensity. And so, we may have the same frequency, but the depth will be much shallower. And that’s going to give us an opportunity to build some brand momentum, as well as inflect on gross margin in a fairly material way, when you compound that with the cost savings we got from manufacturing changes.
Mark Altschwager: It’s really helpful. Thank you, and best of luck.
Joey Zwillinger: Thanks Mark.
Operator: One moment for our next question. Our next question comes from Tom Nikic with Wedbush Securities. Your line is now open.
Tom Nikic: Hi, everybody, thanks. Thanks for taking my question. Obviously, there’s been a big pullback in marketing this year, given the transition of the product assortment. But how should we think about the need to reinvest in marketing, I guess, in 2024 and beyond when you have the new products that you’re developing in place and using marketing to reignite the top line?
