So it’s super authentic. It’s been very effective for the brand. So it’s a combination of that as well as communicating the amazing taste. So I don’t expect us to change from that overall strategy, but the teams are working hard to figure out what the right angle is to — for the Q4 campaign.
Operator: [Operator Instructions] Our next question comes from Matt McGinley with Needham. You may proceed.
Matt McGinley: So for the higher marketing spend this year, I think you were targeting something like 3% or 4% this year versus the 2.5% of sales you spent last year. Is that 3% to 4% in marketing still the right range? Or do you have that tighter than that now? And is the critical decision point, you made a couple of comments around how you would spend it. Is the critical decision point more around the production? Or is it more around the effectiveness of the 2Q advertising campaign that you would then kind of ramp the spend into the fourth quarter, if you really got good results from what happens earlier in the year?
Paul Rode: Yes. Darcy, I’ll take the first question. You can take the second part of the question. Yes, we are modeling our marketing spend being kind of the 3% to 3.5% range. We don’t think we’ll get to 4%, that is more likely as we go forward with our full production capacity going, but we’ll be in that 3%, 3.5% range is our expectation for ’24.
Darcy Davenport: Yes. Your second part of the question, I just want to be clear. So, we are supporting — fully supporting in marketing the parts of the business where we have capacity. So think of we are fully supporting Dymatize, Premier Protein Powder, our Premier bottles. What we are waiting on until from a marketing perspective until Q4 is really the Tetra side of the business on Premier Protein. And that is purely a reflection of capacity. We just need to make sure that we have the capacity and we have the right level of inventory that we can — that we can support it from a marketing perspective and see the lift.
Matt McGinley: Got it. That makes sense. And with the debt repayments that you made on your revolver last year and into this one, you have a zero balance, and I don’t believe you can call your senior notes until a couple of years out. I think in the prepared remarks, it sounds like working capital would be more of an investment this year, but you’d still probably be building cash over the course of this year. Do you expect share repurchase to become more of a priority this year? Or does it make sense to sit on larger cash balances this year to, I guess, to have some dry powder if you see opportunities that present themselves?
Paul Rode: Yes. In ’24, we expect to continue to look at share repurchases as the primary use of our capital. I would say that in ’23, we actually — we bought back 125 million of shares. So I wouldn’t say it was light in ’23 as well. But as we go into ’24, to your point, the — we could build cash, but share repurchases and being opportunistic there is the more likely use of our capital.
Operator: [Operator Instructions] Our next question comes from Bryan Spillane with Bank of America. You may proceed.
Bryan Spillane: So I guess two kind of follow-ups. One, I think, Matt asked earlier about are promotion level this year kind of normalized. What about — can you comment also on just marketing, Darcy? I guess I was thinking back, you’ve had capacity spend on limitation for a while, on and off. And so, you — I think my impression has maybe restrained marketing spend a bit. So, now that you have more capacity and we’re looking at this year, is this a normal year? Or would you expect that you have more capacity, again, assuming demand continues to increase that marketing, whether it’s in absolute dollars or percentage of sales, how would that evolve with having more production?
Darcy Davenport: Yes. From a marketing perspective, it is not a normal year. So we would — because we’re really starting — like I said, we are supporting the size of the business that we have capacity. So normal year for Dymatize, Premier Protein Powder, bottles, but on the Tetra side of the business, which is really the bulk of the Premier Protein business, we are only marketing — we were planning to only market in Q4. So getting into ’25, we would absolutely be spending — and probably our biggest spend would be — the reason why we’re not doing Q2 this year is capacity, and we don’t — and the last thing we want to do, and we’re pushing promotion first and then marketing in the back half. So I think ’25 will be more of a normal marketing year for the entire business because we’ll have all of our greenfields up to — fully scaled up, and we’ll be able to really drive the business.
Bryan Spillane: Okay. And then my second — my follow — other follow-up is just to Pam’s question around GLP-1s. And I guess I was hearing it and listening to the prepared remarks. One question is just in terms of research, it sounds like what you’re doing with a lot of consumer research, but will you do any like product formulation research or anything that might be able to connect the efficacy of Premier to patients on GLP-1 and tied to that? Kind of like what we see in infant formula? Is there the potential to market to doctors and nutritionists, right, to sort of promote the efficacy of the product and helping people on that weight loss journey?
