John Reed: Sure. Yes. I mean, as we’ve more than doubled our business in the last couple of years, we just haven’t kept up with the outlet growth. So this is really just balancing out what we needed to keep up with the outlet product. The outlet product is sold at a substantial discount. So certainly, the economics are not as strong as a traditional store. But if you look at it as a percent of sales, we’re actually not adding anywhere near what we need to add compared to how much our sales growth has happened, which means we’re actually doing a better job delivering things, less people are returning things and so forth. So we think we’re in good shape. Once we get these three open, it’ll just steady things out, so we can move on. And then as far as locations, I believe ones in Colorado, ones in Pittsburgh, and ones in Kentucky. And all three are opening, I think second quarter I believe.
Unidentified Analyst: Thank you. Thank you. That’s really helpful.
John Reed: You’re welcome.
Unidentified Analyst: And my last question is about maybe promotions. You dialed back on promotions, which helped margins in November. What are some of your assumptions for the promotional environment in 1Q and the rest of the year maybe just high level?
John Reed: Yes. I mean, high level, we haven’t really changed our strategy from what it has been. We certainly run some of promotions at certain times of the year. We’re not looking to change that dramatically at this point. We have plenty of levers to turn on if we need to. But right now it’s going to be as is — as it has been the last year or so. And we do some promotions; we’ll do whatever’s coming up next memorial weekend, things like that. Well, that’s already happened, hasn’t it? Yes. So, or no, it’s coming up. But anyway, so on and off, we’ll do some promotions. But everything is typical of what we have been doing. Is that about right, Jen?
Jen Porter: Yes. No, I would agree with that. And Maddie, hi, good morning. What I would add, and this is something that we spoke to on the last call as well. To John’s point, our strategy to promotions hasn’t changed what we have been doing those really focusing on the messaging of promotions. So we spoke about really focusing in on how we assort our sales section on our website, for example, how we speak to promotions, really paying close attention to those elements. But echo John’s point about the overall promotional approach has not changed.
Unidentified Analyst: That’s super helpful. Thank you.
Operator: Thank you. Our next question is from the line of Phillip Blee with William Blair. Please go ahead.
Phillip Blee: Hi, good morning. Thanks for taking my question. You guys have done a lot of remodels and relocations over the past few years and plan to continue in 2024. And you’ve elevated your store experience, which is clearly having a nice tailwind on demand. Can you talk about how many of your showrooms are still in maybe a legacy format and what kind of lift you see following a remodel or reload? Thank you.
John Reed: Yes. Dawn, I don’t have specific numbers, but I think we’re about halfway through where we want to be. Does that sound about right, Dawn?
Dawn Phillipson: Yes, I think it does.
John Reed: Yes. So we’re trying to do — again, we don’t have a set schedule because a lot of stuff to do with leases, landlords. Do we want to move the store? Do we want to renovate it? When we move it down the Street, across the hall, whatever. So we don’t have a set thing. But we are absolutely committed to remodel existing stores that are doing well in good areas that we know we want to stay at. And it definitely helps. We do see a lift in sales. It’s a long-term investment. The last thing we want to do is get stale, like you’ve all seen many retailers gotten, and to a point where it’s too late to remodel because there’s too many of them to remodel and you just can’t do them. So we’re staying ahead of that curve big time.
We think better than anybody, certainly any of our competitors that I see in remodeling, staying fresh, staying appropriate. And it really, really helps I mean, our clients come in. Again, we’re driven by a female client, and they get so inspired, both females and males, they get so inspired when they walk into our stores, they say, oh my Gosh, what did you do this store? This is how I want my home to look. And that’s very refreshing. And it sets us up for the future. I mean, that’s the biggest thing, sets us up for a great, great, great future for many years to come.
Phillip Blee: Okay. Great. That’s very helpful. And then Dawn, maybe a question on inventory is down 11% at the end of the year on a dollar basis. Can you maybe talk about how much is freight and price action versus unit driven and then how you feel about your positioning heading into 2024, particularly around some the newness. And then should we expect more muted inventory growth through the first half of the year? Thank you.
Dawn Phillipson: Yes. So we feel great that the price actions that we took in June of 2023 really positioned us pretty well as we exited 2023. There’s still a little bit to clear through and have delivered in the first half, which we talked about. So I think we feel good freight has largely, container costs have largely normalized in the inventory relative to kind of the spikes that we saw in 2021 and 2022. So feeling good about kind of where the inventory is sitting as we continue to clear through those price action SKUs in the first half of this year and then really excited for the newness that is going to be launched or that was launched earlier this year and that we have a fall launch as well. And I would say that the team is taking a very responsible approach with buying into that newness.
