So, we’ve seen some incremental margin increase across the board to cover that. And then, the two things that have impacted it the most is you’ve seen increased productivity. And what we’ve talked about in Multi-Family, some displacement causing the margins to be higher, full stop. And you’ve seen overall a pretty substantial mix shift away from the commodity side of the business, which used to be half of what we did back in the old days to closer to 25 to a third — 25% to a third of our business now and that has allowed that normalized gross margin to really drift further and further up the more our mix swings. So, sort of all of those components are feeding in the productivity, the inflation, the overall mix shift to allow us to see that higher amount.
But again, going from 35%, 34% for the full year is what we’re signaling, right, for the midpoint, down to the 29%-plus that is the Multi-Family. That is the continued normalization. And we’re going to continue to watch that play out, and we’ll dial in that guidance as we get more confident.
Operator: The next question comes from Steven Ramsey with Thompson Research Group.
Steven Ramsey: I wanted to continue the base EBITDA conversation along with the productivity. If I’m connecting the dots, you’re saying this year’s sales and base EBITDA go down $100 million each and then the productivity savings midpoint is $130 million. So, backing out that midpoint of savings, decremental margins look like a low-20% range, if my math is correct. I mean, with the productivity flowing in, is the dollar level of productivity in future years going to be as strong as this year?
Peter Jackson: Well, it’s certainly what we’re shooting for. Internally, we have a lot of projects that we think we can leverage to continue to improve our operations, continue to offset the impact of inflation, whether it be the way we buy, what we buy, how we deliver it, how we process it internally, back office, those are all things that we’re pretty confident that we can continue to improve, and those are the goals we’re setting for ourselves. Will every year be exactly this year or better, well, we’ll see certainly where we’re headed.
Dave Rush: We believe there’s a huge opportunity there given our platform of the 570-plus locations and our ability to take best practices from — we’re a product of multiple acquisitions. And we’ve learned how to take the best practice from one of those acquisitions and leverage it across the platform. We’ve built a continuous improvement culture. We have people dedicated to it in each of our divisions for that very purpose, because we believe that the part — the benefit of our scale is to be able to do it the best way across 570 locations versus just in one area or one market. So, we’re confident that we can achieve at the current levels of continuous improvement that we’ve set for ourselves each year for a long period in the future.
Steven Ramsey: Okay, helpful. And then to make sure on the productivity savings, how much of that is coming from the distribution side of the business? How much of that is more on the manufacturing side? And maybe how much of that is automation driven versus other general improvements?
Dave Rush: Yes. So, it’s probably half and half in terms of what we’re getting on the sort of the inbound versus the operating sides. We’re doing a lot in both with a bunch of individual projects that sort of accumulate to contribute. But directionally, it’s probably right.
Operator: The next question comes from Joe Ahlersmeyer with Deutsche Bank.
Joe Ahlersmeyer: I just wanted to — just based on the visibility you may have into your inventory and your Multi-Family backlogs for this quarter. Just maybe any help on the phasing of the gross margin and even just the overall sales and EBITDA third quarter versus fourth quarter?
