We spoke last quarter around how that backlog that is normalizing slightly higher than it was pre-pandemic, right? As we think about how do we buy into newness and can we make sure that we’re getting a really solid read on the business before making meaningful purchases into that product. And we know that clients are willing to wait a little bit longer lead times for that newness because it’s exciting, it’s different, it’s unique. So I feel good about where we’ll be positioned in the next quarter and the buy plan for the year.
Phillip Blee: Great. Thank you. Best of luck.
Dawn Phillipson: Thank you.
Operator: Thank you. Our next question is from the line of Cristina Fernandez with Telsey Advisory Group. Please go ahead.
Cristina Fernandez: Good morning and congratulations on a good quarter. I wanted to ask about the special dividend and the decision to pay that. Should we think of this as one-time? And then going forward, how would you consider dividends, perhaps a regular dividend or share buyback?
John Reed: Sure, I can start. This is a one-time thing. We have no plans to continue on a consistent basis. We’ve done lot of — we’ve done great the last couple of years. We are very well planned out how much cash we’re going to need this year, next year, the year after, and we felt we could do this in the future very happy to be able to do it on time. Dawn, I don’t know if you have anything to add to that.
Dawn Phillipson: Yes. I would just reiterate that the Board was really pleased to be able to return capital to shareholders. And we just — we have a really strong balance sheet. We have a great cash position, the special dividend, which we are considering to be one-time in nature. We don’t have plans to do anything additional in the future at this point in time. But we — interestingly enough, we’re in the very fortunate position to be able to do a dividend, a special dividend, and still continue to invest very heavily in the business when it comes to new showroom expansion and some of these other strategic investments in the back office function. So really, really pleased with the performance that we’ve seen within the company and our ability to return this value to shareholders.
Cristina Fernandez: Thank you. And then my other question was on the price action SKUs. I know you can comment on the timing of the deliveries, but where are you as far as like taking the orders from those SKUs? Have you kind of gotten through most of what you wanted to do or there’s still more to go here in 2024.
Dawn Phillipson: We’ve cleared through the majority of it from the demand perspective, the order taking perspective. So there’s still a little bit left. And it’s not — I wouldn’t say it’s meaningful. So we’re excited to get these kind of products delivered in clients homes and then start to see some nice product cost and gross margin expansion sequentially in the back half.
Cristina Fernandez: Thank you and best of luck for this year.
Dawn Phillipson: Thank you.
Operator: Thank you. Ladies and gentlemen, as there are no further questions, I would now hand the conference over to Wendy Watson for her closing comments. Wendy?
Wendy Watson: Thank you, everybody, for participating in our call today, and we look forward to talking to you again next quarter.
John Reed: Thanks, everybody.
Operator: Thank you. The conference of Arhaus has now concluded. Thank you for your participation. You may now disconnect your line.
Dawn Phillipson: Goodbye.
