Young Li: All right. Great. Thanks so much for taking our questions. Maybe pivoting a little bit to contact lenses, I wanted to hear a little bit on the health of the US consumer. Is there still a lot more demand than capacity for the industry? All the Daily SiHy adoption trends seem very favourable and very strong growth. But are you seeing any signs of consumers trading down or extending their wear? And any high-level thoughts on that might happen in 2024?
Brent Saunders: Yes. Great question and thank you for that. Across our businesses globally, we don’t see any pullback from the consumer whether that be in lenses or in our consumer business. And in fact, some interesting data perhaps out of the consumer business, not exactly what you asked, was we’re seeing strong drive of consumption in our consumer products. So another datapoint that shows that the consumer in the US, and frankly globally, is still pretty active. In fact, when you look at GDP data, I think we saw consumer drive most of the GDP growth in the US in the third quarter, so a healthy consumer. Our lens business in the US, the market was up around 7%, 8%. Sam can give us the exact number. But I think we’re seeing really healthy trend.
Daily SiHy was about 80% growth in the quarter. So I think our issues there have been just distribution and being able to ship and that is solving itself this quarter, and we’re starting to move into a good spot. But overall, the market I think is robust. It’s big, it’s growing. And we finally have a good product portfolio. We just need to be able to ship to customers on a more consistent basis.
Young Li: All right, great. Very helpful. And I guess for my follow-up, so on the China business, minus 1% due to tough comps, year-to-date 6%. I guess I was wondering if maybe you can comment a little bit about what you’re seeing on the ground currently. It’s high single-digit percent of your business. We read all the macroeconomic and consumer consumption headlines. There’s also some anticorruption campaign color that doesn’t really impact contact lenses as much, but it’s in the background. What’s your view on the health of the Chinese consumer for the contact lens business in the near term? What indicators are you more closely tracking? Are there noticeable differences in the different tiered cities?
Brent Saunders: Yes. It’s a great question. So, first, I’d just talk, take a step back and look at the opportunity in China. It’s a massive market. We have a tremendous opportunity to grow into that market. Unlike perhaps one of our competitors that has more market share, I think our opportunity is to take share in a growing market is pretty strong. And we’re just really getting started there with the Daily SiHy launch. It just happened a quarter ago. So we still have to bring the multifocal and other modalities into China. The other thing is our team in China. I was over there not that long ago. We have a really strong team. I was very impressed by the B+L colleagues in China. And in fact, this quarter, they stood up a DTC model that was quite impressive.
So we’ll see how that works out, but they did a lot of really good work with a strong entrepreneurial spirit. So I’m excited about China. I think when we look at the consumer in China, they’re resilient, perhaps a little less resilient in the Tier 2 or 3 cities versus the 1, but still strong. I think our opportunity is clearly in this Tier 1 and 2 cities. So we’re participating in the market where the consumer is strong. And again I think we’re going to be less focused on the macroenvironment versus the opportunity we have to grow within a massive market. Sam, any color you’d want to add?
Sam Eldessouky: Yes. I think with — when you think about this year, I think that when you look at the year-to-date data, it’s probably more meaningful than looking at any specific quarter. So year-to-date, we’re 6% constant currency. If you remember last year, we had the first half was pretty much shut down, so you’ve seen the comps are sort of not really a good proxy. For example, last quarter we reported 25% constant currency growth in China, so that flows down to a minus 1% this quarter just reflecting the rebound that happened last year with a stronger comp and people just sort of coming out of a shutdown. So for this year, I will encourage you to probably look more of a year-to-date on China data, that probably will be more meaningful.
Young Li: All right. Thank you very much.
Operator: Thank you. [Operator Instructions] Your next question is coming from Craig Bijou of Bank of America. Craig, your line is live.
Craig Bijou: Good morning, guys, and Congrats on a strong quarter and closing the XIIDRA deal. I wanted to start with a follow-up to Larry’s question on XIIDRA EBITDA. So if I look at your implied guidance or your guidance for the year and the EBITDA margin for XIIDRA is about 35%. So given your comments on investment in XIIDRA, what I want to understand is, is that 35% margin a jumping off point? Should we think about you can improve upon that throughout, sequentially throughout ’24? Or how else should we think about that?
Sam Eldessouky: Good morning, Craig. I would think about it as 35% as a baseline. When you think about 35% for Q4 and as you start now progressing into 2024, we should expect that 35% in terms of margin to continue to expand as you go forward. So my commentary was highlighting on the fact of the investment in XIIDRA, we’re starting Q4, we do expect that will take a couple of quarters to be able to get to the level that will meet our expectations. That will be just a phasing as you go into 2024.
Craig Bijou: Got it. That’s helpful, Sam. And then just as a follow-up, I wanted to ask on the Lynchburg facility. It looked like the revenue impact was less in Q3 than it was in Q2. I appreciate your comments that you expect to be back to a more normalization in Q1. But wanted to understand, how should we think about any revenue and EBITDA impact in Q4 and even Q1?
Sam Eldessouky: Year-to-date, we’re having roughly about $20 million impact, and that’s on the EBITDA. And I made that comment as we talked about the guidance showing that the guidance that we have updated to this quarter observed that $20 million year-to-date. We do expect to see some of that coming into Q4, but we will — or more of that coming into Q4, but that’s already factored into our guidance ranges that we provided. When you think about next year, I think, Craig, it’s too early to be able to talk about any impact of Lynchburg for next year. But what I can tell you is we’re making progress, and we are actually looking as we get to Q1 of ’24, we believe this will be getting to a level that reaching our full level of optimization that we will be expecting from that facility with all the upgrades that we put in.
