Mitch Kummetz: Yes, thanks for taking my questions. I’ve got a few. I want to start — just on the guide, I want to clarify a couple of things, because I think you guys said that you expect to take share in both Famous and Brand Portfolio. And you’re — as far as kind of a market outlook, you’re basing that on Circana down 1%. So, Jack, you’re saying on Famous same-store sales maybe down a little to up a little, is that correct?
Jack Calandra: Yeah, our guide, Mitch, assumes on the low-end would be down a little bit and on the upper-end would be up a little bit. And again, the market numbers that I shared are total, that would include wholesale and retail. And obviously what we’ve seen is the retail business has been a little bit more — or at least the retail channel that we compete in and measure market share against, which is the Shoe Chain channel, has been a little bit more challenged.
Mitch Kummetz: And so, on Brand Portfolio, what kind of sales growth are you looking for there for the year?
Jack Calandra: Yeah, we’re looking to continue basically the trend that we came out of Q4 with, adjusting for that 53rd week. So, there was a little bit of a benefit for the 53rd weeks, I would say. We’re looking for low-single digit positive numbers from Brand Portfolio in 2024. Obviously, Lead Brands being stronger than that and the other brands being a little bit below that.
Mitch Kummetz: And then, Jack, I think you said that, at Famous, you expect promotions to be aligned with last year. I think you made a comment of flat gross margin. Was that a Famous comment or is the op margin guidance you gave assume flat gross margin on a consolidated basis for the year?
Jack Calandra: Yeah, the comment that I made was Famous specific on the flat gross margin. In terms of the 20 basis points to 40 basis points of operating margin improvement, in 2024, we’re looking for more of that actually to come from gross margin and particularly on Brand Portfolio. As you remember, Mitch, when we talked about our Investor Day model, we talked about all of the different headwinds and tailwinds in gross margin over three years and said that gross margin at the consolidated level would be relatively flat and we would get operating margin improvement from SG&A leverage. In 2024, again, we’re looking for a little bit more on the gross margin side because some of these critical investments we’re making in international in some of our lead brand marketing and in the common platform.
Mitch Kummetz: And then, Jay, you mentioned that March was better than February. I would guess it’s more of a Famous comment. Is that — do you think that’s to do with weather or do you think there’s some change in consumer shopping behavior or strengthening of the consumer? Is there anything you can attribute that to?
Jay Schmidt: Yeah. Well, it’s early in March. I think it’s all of those things. And then, one more, I think the weather, an early spring is always good. And it’s — we’ve had a much better weather pattern than we’ve had last year, particularly when you think about Famous being across the country. And so that’s the first thing. I think the second thing that just really stood out was that we really are in much better position in some of these key demanding items and the key brands at Famous, and that has really propelled it through as the consumers really pointing very specifically. We’ve seen our top brands in Famous come back quite a bit. And then, just to answer your question on the Brand Portfolio, we are seeing some nice trends that are similar to that, and again, focused on just really, I think, some of our brands opening up and reacting to a warmer cycle.
So, some early signs on sandals and some of our brands have been positive. And as you well know, we did not see that last March. So, there’s reason to be optimistic, but it is early still.
Mitch Kummetz: And then, last question for you, Jay. There’s a lot of talk in the back half of last year of the consumer with shopping events, be it back-to-school or holiday, and then kind of disappearing in between. Do you think that continues this year? And how do you see the impact of events in the first half? Is there much going on from an event standpoint before we get back to school? Like, to what extent do you think Easter or Memorial Day, Mother’s/Father’s Day, things like that, could drive the business?
Jay Schmidt: Yeah, I think they’ve been actually not as important as they might have been in past times and we’re really seeing weather as an impact. Spring break and vacations kind of stimulating some things, but not as much as those bigger buildups, but really we are consistently on our best product and our best place. And then, as Jack pointed out, there is some discussion of the tax refund. So, I don’t know if you want to fill in on that.
Jack Calandra: Yeah. We — for the Famous business, we look very carefully at where tax refunds are coming in. And right now, it looks like through data last week, the number of refunds was down about 13%. The average refund was up about 6%. So the total dollars refunded again through the end of last week was down 7%. And we do know that there is some impact of that certainly to our Famous consumer.
Mitch Kummetz: Okay. Thanks, guys.
Jay Schmidt: Thank you.
Operator: Our next question is from Abbie Zvejnieks with Piper Sandler. Please proceed.
