Operator: Our next question will come from Matt Koranda with ROTH Capital.
Unidentified Analyst : Hey guys, it’s Mike David on for Matt. Maybe just start off putting a finer tune to what exactly is driving gross margins stronger in the quarter? And how repeatable that is going forward?
Andy Fulmer: Yes, Mike, this is Andy. Great question. So during the quarter, we saw overall, we’ve had this decrease in inventory, kind of led by lower purchases over the last six months. As you can imagine, the lower amount of kind of unfavorable freight costs, unfavorable tariffs kind of lead us to not having those costs as much during the quarter. Going forward like I said, in the prepared remarks. Second half of the year, we’re kind of expecting right in line with second half of last year, we’re back into kind of that normal promotional level that we saw a pre pandemic, which we had last year as well, with similar programs that we’re expecting in the second half of the year.
Unidentified Analyst : Okay, so then is the more higher cost inventory that was burdened with elevated inbound shipping costs? Are we fully sold through that? Or so can we normalize that kind of going forward? Or do we still have some to filter through the P&L?
Andy Fulmer: Yes, not yet. Great question, but not yet. So freight costs are definitely way down. We’re seeing them anywhere between probably four and five times lower now than they were even six months ago. But because those freight costs are capitalized into inventory, it’ll take a little while for them to kind of flush through COGS. So I would probably say another couple quarters.
Unidentified Analyst : Got it. Oaky, that’s helpful. And we kind of touched on the traditional channel and restocking a bit earlier, but maybe also putting a finer tune to it. We’ve been comping in the negative 20% to 40% range for the traditional channel for the past like year or so. And retailers are going to start, they are going to have to start taking a more aggressive stance to restocking. Can we expect the traditional channel to approach more of a high single digit negative comp in the back half of the year? Or are we more of leaning on the DTC, E-commerce businesses to get us somewhere around that implied revenue mark for the full year?
Andy Fulmer: Yes, we haven’t really, we can’t dig in that detail. However, Q2 we saw a similar environment that we had in Q1, where we’re kind of, we’re competing against inventory levels of other products at our retailers. So they’re focused on reducing inventories overall, which are limiting those open devices. So as Brian talked about before TBD on when that shakes loose.
Brian Murphy: Yes. Mike, this is Brian. I would also add, let’s not forget that we’re, we introduced a lot of new products each year. And we’ve got a focused stream of new products are coming out, we mention of a few that we have on the call today, the claymore, which is going to be, in my opinion, a huge product for us. We’ve got some additional things coming out under Grilla and Bubba here in the next little bit. So that’s all incremental. We don’t see that as necessarily restocking, right? That’s just incremental, new products play. And so that’s a part of it as well. So we’re very bullish on that.
Unidentified Analyst : Got, it makes a lot of sense. Last one for me. I know we didn’t own Grilla in the prior year period. But pro forma, we’re sales positive in the quarter.
