Jim Watkins: Sure. It’s encouraging as we look to this current quarter and while it’s a deceleration on a two-year stack and maybe a couple of other stacks if we go back far enough. In the February and March period, we’re guiding that business in the stores to be minus four or minus five, right? And so that’s an improvement off of what we’ve seen more recently, and so that’s encouraging. I would also say — I think if you go back a couple of quarters, we’ve talked about this time period, where February, March, April, over the last several years has had a lot of macro noise in it between COVID and Omicron and tax stimulus and tax refund payments and different things in there. So it is a little bit harder to read kind of where that business is going, but what I would say is, February and March of last year, so just a year ago, we did see a slowing in the trend of the business that was abnormal for the seasonality of that.
So as we’re planning this year and at least getting through February and March, if there’s any kind of reversion back to what’s been normal, there’s some upside to February and March, and that would be encouraging as well as we look to fiscal ’25. It’s a long way to not answer your question, Jon, but the — as we looked at fiscal ’25, I think we really just have to get through the next three months or so to give you a better read on when that turns positive.
Jonathan Komp: Yes, that’s helpful color. Maybe just a couple of follow-ups quickly. The fourth quarter — Jim, could you just confirm, it looks like maybe the implied product margin is a little lower today than it was previously even after your account for the exclusive brand update you gave. So I just wanted to confirm if that’s the case, if anything is changing on the product margin side. And then just to clarify that the SG&A comments for fiscal ’25, are you implying you still need more than a 4% comp to leverage, similar to how the setup was in 2024? Just trying to read kind of the reason for giving that commentary today on the SG&A.
Jim Watkins: Sure.
Jonathan Komp: Thanks again.
Jim Watkins: Yes, no problem, Jon. So on the — on the product margin for Q4, we’re guiding that plus 20 basis points year-over-year on the product margin, and the freight would be 140 basis points. And so despite flat to maybe a little bit negative exclusive brand penetration, we still expect that to grow from better economies of scale. And then as we look to fiscal ’25 on the SG&A side of things, I guess, I’ll talk to both the buying and occupancy and SG&A. On buying and occupancy, we had talked about kind of that 4% comp needed to leverage buying and occupancy. We’ll update you to see — to let you know if there are any changes to that as we get to next year, assuming that there are not changes to that then the benefits that we called out on supply chain would help lower that leverage point, but it’s too early to kind of say before we’ve done our full buildup of next year’s budget, whether that is 4% precisely for next year or not.
And then on SG&A, the leverage point there, same-store sales required to get leverage at SG&A has historically been a 2.5%, called out the new corporate building, will put some pressure on that. That’s going to be — again, it’s still little early to tell, but similarly, probably $5 million or $6 million hurt on SG&A next year, but again we’re working on things that will help offset some of that hopefully. And we’ll give you an update on kind of what that leverage point looks like as we get into next year on our May call.
Jonathan Komp: Understood. Thanks again.
Jim Watkins: Thanks, Jon.
Jim Conroy: Thanks, Jon.
Operator: Thank you. Our next question comes from the line of Jeremy Hamblin with Craig-Hallum. Please proceed with your question.
Jeremy Hamblin: Thanks for taking the questions. And just wanted to start with the new store openings. I think I caught in the script that you were expecting for F Q4 that all of the openings for the March quarter were going to be in the back half of the quarter. And then just if you could provide a little bit color on that. And then related, as we look ahead to your commentary on FY ’25 unit growth, is there anything notable that you would point out on the expected cadence of those openings?
Jim Watkins: I think you recounted the script comments, we are backloaded into this quarter. In terms of our fiscal ’25 — at the risk of laying out guidance that we’re not prepared to do today, will do in the next call, there is nothing unique to call out that they’re all going to be in the first quarter. We’re going to try to make them relatively spread out throughout the year. So nothing specific to call out.
Jim Conroy: And I would just add, Jeremy, the pipeline is healthy. We’ve got a lot of leases that we’ve signed and so we’re headed into next year with a very healthy pipeline.
Jeremy Hamblin: Got it. And then if I could just dig in a little bit here on the new headquarter, which I guess the move is expected in Q3 or Q4 of fiscal ’25, what is the annual lease cost higher than what you currently are paying? And then what is the expected depreciation on an annualized basis?
