The looks are different. It’s incredible quality, and it’s an incredible value. And if our competitors cut prices, it’s still going to be an incredible value. So we’re focusing on what we do best. And we have great product that are truly, truly has a great value and an incredible quality. So it’s hard to beat — I think it’s hard to beat our product.
Max Rakhlenko: That’s great color. Go ahead.
John Reed: Go ahead. Yeah, we’re just taking the question.
Max Rakhlenko: No, that’s great color. I appreciate it. And then as a follow-up, so we’ve now seen luxury home sales increased for six consecutive months. So curious, do you think that we should start — if that should start to show up in your demand comps potentially as early as the next few months?
Wendy Watson: Max, this is Wendy. I’ll play in on this. I’d like to look at some of those market stats, and obviously, that’s a positive sign. And the other thing I saw recently, which I’m sure you’re aware of, is that listings are up even more than — home sales are up in that market. So that’s a nice trend. But I would just remind you that most of our sales are driven by light refreshes, so repainting the room, other things, remodeling. Home sales are a driver, but they’re much smaller than those other two factors.
Operator: Your next question comes from the line of Peter Keith with Piper Sandler.
Peter Keith: Hi, good morning, everyone. Nice results. Tariffs are becoming a bigger topic as we go through the year here. And I was wondering if you could just address how you’re thinking about that. I know you don’t have a ton of China exposure, but maybe if you quantify it, and also how did you adjust to the tariffs that went into place and furniture back in 2018.
John Reed: Sure. Back in 2018, we were pissed because we didn’t like 25% tariffs. But we had to take price increases and our clients accepted them and we moved on. What we did was immediately start working on getting product out of China if we did have it in China. And just to remind you, we had very little product in China to begin with. Certainly, far less than our competitors. So most of the big guys now have moved on to other countries. If not, they’re moving on quickly. And we’re in a great position that if tariffs go to 150% which we heard. Someone say the other day that we won’t miss a beat. We’ll be good, good shape. And again, we’re working hard to adjust things, move things if we need to. Quite a fair amount has been moved back to North America, and then countries like Indonesia, Vietnam, Cambodia, and so forth, for some of the Asian products.
And our vendors that we’re incredibly loyal to, they’re incredibly loyal to us. Now that they’ve been in China, they need to get out. They want to do business with us, and they’ve worked very hard at doing that.
Peter Keith: Okay. And maybe secondarily, the question directed towards Dawn and the guidance. With the comp guidance, I guess the one thing I’m having a hard time understanding is the very heavy pressure in the first half, some of which I know is from the new warehouse management system. But that heavy pressure in the first half in leading to what’s implied to be flat to positive comps in the back half, and yet at the same time, I think the backlog comparisons are a bit heavier in the back half, so can you just help us walk through what’s helping this really nice comp acceleration or comp improvement as we go through the year.
Dawn Sparks: Yeah. So we ended last year with a nice normalized rate of backlog, with January being one of our bigger months of the year from a demand perspective, coming in [Technical Difficulty]. It just impacts the first quarter and a little bit into the second quarter in a more meaningful way. So as we look at our demand within the hopper to be delivered, we feel — both on the comp side and on the new showroom side, what we’re able to deliver more in the back half of the year just based off of that and how the demand is flowing in, with January being a little bit soft due to weather and then the new showrooms opening. So it’s mostly just driven by that top line, Peter.
Operator: That concludes our Q&A session. I will now turn the conference back to the speakers for closing remarks.
Wendy Watson: Thank you, everybody, for participating today, and we look forward to talking to you again next quarter.
John Reed: Thanks, everyone. Have a good day.
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
