David MacGregor: Yes, thanks for squeezing me in. Congratulations on the consistently strong execution. It’s very impressive. I wanted to ask you to go back to the non-res and just talk about to what extent you’re seeing any change in vendor incentives and anything that may be emerging there, particularly on the non-res side. I’m guessing on the res side, you’ve had allocation, probably not a lot there, but non-res, so that. Frank, you talked about smaller size of your average transactions in non-res. Can you also talk about just growth in the number of transactions you’re seeing what that might look like? Thank you.
Julian Francis: So I’ll start, then pass it over to Frank for additional comment. No, I don’t think we’re seeing any different behavior than we’ve seen over the last couple of years. I think as supply has normalized, I think the manufacturers have taken a prudent approach of making sure that their operations are in good shape obviously during COVID. And the — I mean, it was really initially caused by the Texas freeze that we had that shut down the chemical manufacturing that caused all the supply chain challenges. That was really a stressful time and put a lot of stress on the supply chain and particularly on the manufacturing side. I think they’ve done a really nice job working through that. I think that the manufacturers continue to believe that there’s a tremendous amount of value, and there’s a lot of demand in the marketplace for commercial buildings.
Ultimately, as we’ve said, the bidding and the quoting has been strong. It’s just the execution of those buildings and those quoting’s it’s — that hasn’t come through, as quickly as we hoped. And then obviously, we’ve been challenged with lots of inventory that was in places in the channel that was not usual. Now whether it was literally sitting on job sites in contractor warehouses, contractors taking out short-term leases on warehouses to bring in as much inventory, as they could. So we’re not seeing any particular change in the manufacturer behavior to drive it. I think we’ve seen very rational behavior in a marketplace that’s obviously been tricky to manage.
Frank Lonegro: Yes. David, on the sizing, you might remember that the mix of new construction in non-res sort of ticked up pretty significantly in the late ’21, early ’22 time period and product began to flow that way and probably not enough flow to the repair and remodel segment. We’ve obviously seen as the supply chain has become more fluid, we’ve seen that come back the other way and get to kind of a more normalized maybe 70% to 80% R&R versus maybe 20% to 30%, knew we got a little bit more heavily levered toward new in the last couple of years. But we think it’s back to roughly, where it was before as product has slowed that way. As the bidding and quoting activity is a bit of a proxy for the future couple of quarters, again, we’ve seen the actual activity, the bidding and quoting activity in the low double digits.
And in order for that to be low singles on a dollar basis, then the order size has got to be down kind of high singles, low double. So that will give you some order of magnitude. But we see it being very consistent with the destocking coming to an end and more product flowing into the R&R spot.
David MacGregor: Thanks very much.
Operator: Thank you for your question. The final question is from the line of Stanley Elliott with Stifel. Your line is now open.
Stanley Elliott: Hey, everybody. Thank you, guys for fitting me in. A quick question on the private label side. I mean, is there a way any metrics you guys can share along the same lines of the digital? Just curious there. And then, as it relates to the growth that we’ve seen in the supply chain constraints, I guess, combined, I guess, with what you guys are doing from an organic space. Just curious kind of how all that blends together, where you are relative to those ’25 targets? Thanks.
Frank Lonegro: So on the private label, we had a good quarter. It was up year-over-year, ballpark kind of $250 million or so as a Q3 number for the current year. That will give you kind of a sense of where we are. Adoption rate is relatively stable. We’re introducing new products. There’s some inflation in there that’s consistent with inflation in the branded products. So that’s important to us. But we’re continuing to push the adoption. As you know, this is more of a margin play than it is a revenue play, and it’s a differentiator for our contractors. So continuing to introduce new products in the space becomes really important on a go-forward basis in many of the categories that are more mature in the private label space. We’re already selling kind of one out of two that are private label versus branded. But we’ve got a really good team up against this and got a good pipeline of new products to begin to introduce into that space.
Operator: Thank you for your question. That concludes the questions. Now, I would like to turn the call back over to Mr. Francis for his closing comments.
Julian Francis: Thank you, Matt. First of all, I appreciate everyone attending the call this evening. And I want to go back to the things that we’ve really said at the beginning of our Ambition 2025 plan that was, we’ve got multiple paths to growing the top line and multiple paths to ensuring we’re delivering higher and higher EBITDA margins. I think in a year that everyone thought coming in would be very much down, we projected that we would continue to grow, and we’ve demonstrated our ability to do that. Despite some obvious headwinds, I mean, interest rate increases, contractor inventory levels, inflation, labor availability and number of headwinds that we’ve seen. Obviously, we’ve had some tailwinds. Storms have certainly been there.
But as I said at the outset, our ability to execute in multiple different environments is coming through. That’s because we have a resilient business model and a great marketplace with non-discretionary products that people are going to need. They are going to replace roofs. They’re going to replace their waterproofing when they need to. And I think that, that’s a critical element of our overall plan. Obviously, we are executing very, very well. I want to thank almost 8,000 team members for their continued work and dedication to the cause, and it’s been a dynamic environment and a tricky one to manage. And I wish all of them and all of you on the call today, the best for the remainder of the year and also the holiday season. So again, thank you for attending.
Operator: That concludes the conference call. Thank you for your participation. You may now disconnect your lines.
