We also plan to drive growth through those product adjacencies, including building greater awareness, as Julie mentioned on our men’s line, doing a lot of marketing work there as well, and extending the rollout of our fragrant hair care, laundry, and lip collection. So, we’re quite encouraged by the early benefits we’re seeing in tests and early-stage deployment, and that gives us confidence in the opportunity ahead. So, once those capabilities are fully implemented and we see those benefits build, we see a path to positive sales growth in the second half of 2024. And then over to you, Eva.
Eva Boratto: Great. Thanks, Gina. So, we’ve remained very focused on driving toward that 20% OI target operating income ratio, with gross profits at 45% and SG&A at 25% leverage. Ultimately, the capabilities that Gina spoke about and the product adjacencies, are expected to drive both top and bottom-line growth. As you think about our cost reduction initiatives, we remain on track to deliver our $200 million annually, and we remain focused on finding additional efficiencies in the business to both drive those improvements, as well as fuel investments for growth. So, we will continue to focus on all of the levers we can to get to those targets.
Alex Straton: Thank you.
Heather Hollander: Thanks, Alex. Next question, please.
Operator: Thank you. Our next question is from Paul Lejuez with Citi. Please proceed with your question.
Paul Lejuez: Hey, thanks, guys. I’m sure you have a range of outcomes as you think about 2024 topline. You mentioned potential inflection in the second half. I’m curious how confident you are in achieving EBIT margin expansion in 2024 across those range of topline outcomes. And if you could, if there’s anything we should keep in mind in terms of the major tailwinds in terms of basis points, would love to hear that from you. And I’m curious also if you could just comment on what you’re seeing quarter-to-date, if you could share that. Thanks.
Gina Boswell: Okay, thank you. Thanks, Paul, for the question. First, we’ll go to Eva around the margin and then come back to your question on the quarter.
Eva Boratto: Yes. As you can appreciate, we have a pretty significant quarter ahead of us, and we’re really focused on driving performance in the fourth quarter and delivering on the expectations. So, we’ll have more to say on specific as it relates to 2024 on our earnings call. A couple of things I will highlight, one I just mentioned, but I’ll mention it again. We’re really confident in our ability to deliver our cost savings initiatives of $200 million as we wrap into next year. And from a technology perspective, you’ve heard us continuously say this, we expect that the spend will remain elevated to support the initiatives in the growth capabilities, but we’ll certainly have more to provide as we hit our year-end earnings call.
Gina Boswell: Thank you. I think you covered both.
Heather Hollander: Thanks, Paul. Next question, please.
Operator: Thank you. Our next question is from Kate McShane with Goldman Sachs. Please proceed with your question.
Kate McShane: Hi, good morning. Thanks for taking our question. I wanted to ask about the investment in product formulations in the quarter. Was that for any specific product? And should the product formulation and packaging innovation investment just be considered as ongoing, or is it at a higher level this year than maybe what we can expect for next year?
Gina Boswell: Thank you, Kate, for the question. I’ll be happy to take that and ask maybe Julie to chime in a bit. The product formulations that we’ve been doing really throughout, the notable one, of course, that we’ve spoken about earlier this year, is around our soaps, which are now free of parabens, sulfates, dyes, et cetera. This is an ongoing aspect to our overall strategy about elevating the brand and the product and packaging, and even some of the packaging that you saw with our most recent single fragrance launch on Luminous, which I think depicts the fact that we’re investing in the product as we need to, to make sure that we elevate and meet the customer for the innovation component of that. Anything further, I’ll ask Julie to speak about because this is an important part of our strategy going forward.
Julie Rosen: Yes, I think from an investment perspective, we also have invested in some other formulas. We’re in the process now of finishing the rollout of our shower gel, which is also in a cleaned-up formula. I will say that we also believe that we have the ability to grow our AURs over time. The brand has a very strong track record of low single-digit AUR growth, and we believe we will get back to that.
Kate McShane: Thank you.
Heather Hollander: Okay, thanks, Kate. Next question, please.
Operator: Thank you. Our next question is from Matthew Boss with J.P. Morgan. Please proceed with your question.
