Mark Altschwager: Thank you. Then with respect to the store opening plans, a bit lower than you had signaled previously. How quickly do you think you can ramp new stores as availability increases, and are you seeing or hearing any indications that availability could increase more than you’re currently expecting through 2023? Thank you.
Michael O’Sullivan: Sure. Our real estate process is fairly rigorous. We have a very strong real estate team and we have, like I say, a fairly rigorous process for identifying and evaluating new store locations. We look at hundreds of potential sites to build up our pipeline for the year ahead, and as we look to the sites that are available to open in the next 12 months, we believe that there are 70 to 80 net new store locations that meet or beat our hurdles, and our hurdles in terms of being EBIT accretive and having a strong return on investment are pretty high. As I said in the remarks, that 70 to 70 net new stores is a little lower than we would like, but obviously we’re not going to compromise our hurdles to hit a number.
Ideally, we’d like to open another 20 or 30, or even more if we had the locations, but I would say that’s the outlook for the next 12 months. But with new store openings, it’s important to look further out, and that’s where we see significant opportunity. As I mentioned in my remarks, we think that over the next few years, there could be a wave of retail consolidation among bricks and mortar retailers. That wave was kind of happening pre-pandemic and then I think in the last three years, it’s been slightly dampened by the rollercoaster that’s happened in terms of retailer sales and margins going up and then down. I think as things normalize, we may get back to additional retail consolidation. Now, the reason why I’m focusing on retail consolidation, and I think most investors probably realize this, but for us, the biggest source of new store locations comes from other retailers closing stores.
Many of our most productive locations were formerly Circuit City or Toys R Us or Sports Authority or Linens and Things; in other words, if there’s an increase in retail bankruptcies, then that’s going to drive real estate opportunities and new store opening opportunities for us.
Mark Altschwager: Thanks for all the color.
Michael O’Sullivan: Thank you.
Operator: Our next question comes from the line of Adrienne Yih from Barclays. Please proceed.
Adrienne Yih: Great. Let me add my congratulations. It’s great to see the progress. Michael, most of my questions have been asked, but I did notice a return to pretty aggressive prime time television in January and then February quarter-to-date. I’m wondering what the advertising strategy is within the outlook for 2023, and clearly it seems like it is converting and driving traffic to the stores, so just a quick thought there. Then for Kristin on the reserve inventory, is that more short stay that can be deployed intra-season – Q1, Q2, or is that more long stay winter-to-winter? Thank you so much.
Michael O’Sullivan: Adrienne, on the marketing question, we’re very excited about our marketing programs. In the last few years, I would say, we’ve been moving to a much harder hitting value message with our advertising, and we think that that value message is going to really resonate in 2023. If we’re right that the economy is going to slow down and that the consumer is going to be more value conscious, then I think our marketing is really going to speak to them and is really going to help to further enhance the traffic coming into our stores. Now, I do think that the most important thing in our business is when the customer comes into the store, we can’t disappoint them. We have to have the value in the store, and if you asked me last summer, I would have said I’m less confident about that.
