Kenneth Goldman: Hi, thanks. Just to build on your answer to Jason’s question there. Historically, your gross margin has gone up or down, a little more, I think, than most companies that we cover. And part of that, I think, is because of the underlying movements in non-fat dry and in whey. And I guess my question is, as you look ahead, is there any reason to think that as those prices remain lower, if they remain lower, that you’ll have to discount your products more heavily, you have such — you’re still capacity constrained, the industry is still capacity constrained. I guess my question is, should we assume for modeling purposes that as these costs come down, your gross margin should increase and you won’t have to give back a significant amount of that pricing? That’s, I guess, the way to ask it.
Paul Rode: Yes. So I’ll start and then Darcy, if you want to touch on just discounting. But there’s a couple of pieces of this in play that you have to consider. So yes, as we go into 2024, we’d expect to see some headwinds on protein. We are seeing inflation in other places, especially starting in the second half, which is around packaging and some of our other manufacturing costs. But keep in mind that we’re also in a year where we’re doing very little promotional spend. So as we go into 2024, you have the dynamic of protein costs going down, but the thinking is that we are going to invest in brand building and more into the promotional side of it. And so net-net, I think gross margins ought to bounce up a bit next year, but those are the two primary things that are in play.
On whey protein, because of the magnitude of the change is so dramatic, we should see gross margins for powders come up quite nicely from where they are right now. But on shakes, it’s really a trade-off between protein costs coming down and obviously, restarting the promotional activity. But net-net, I would expect that to be unfavorable. The other thing I want to mention, I think, Jason asked this and maybe I didn’t get to, which is we’re covered on our proteins about 75% to 80% at this point for fiscal 2023.
Kenneth Goldman: Thank you for that. And then in e-commerce, I’m just curious for an update there. It doesn’t seem like it’s quite as strong as for other channels in Premier. Just curious for your strategy there and for the outlook for the year, if that’s changed at all?
Darcy H. Davenport: Yes, we are — you’re right. It was the only channel that was down a little bit for the quarter. Just a reminder that for our e-com business, about 50% is Premier and about 50% is Dymatize and Dymatize is actually up quite nicely. But on the Premier side, yes, our issues are still stemming from our — the bottle co-man constraints that we talked about last quarter. We’ve had kind of continued challenges getting our flavors — all flavors back in stock at one of the key retailers. They are tight on warehouse space and prioritizing promoted items, especially during the holiday time and we see this firsthand because Dymatize is promoting and they are fully in stock online at this key retailer. So we are actively working on Premier, getting it back.
I do believe we have the inventory. They need the inventory. So I believe that this will be solved kind of in the next several months, hopefully sooner than later. But one thing I would just remind you that e-commerce in total for our business is only about 10%. So it’s an important channel. We want to get it on track because it is one of the areas — it’s one of the channels that we build households, we get trial, but it is still a fairly small part of our business.
Kenneth Goldman: Thank you so much.
Operator: Thank you. Our next question will come from Pamela Kaufman with Morgan Stanley. Your line is open.
