Jonathan Komp: If I can just ask one follow-up on the margin outlook. I know that lower half of the guidance this year embeds lower EBIT margin year-over-year for the full year. Is there any way, as we look forward, you can give a better sense of what SG&A growth might look like. And just any more context around the multi-year margin recovery potential?
Jonathan Sinclair: We remain very clear that there are three things that will drive overall margin recovery. One is comp growth. And clearly, that’s a pressure point right now. The second is successful opening of stores doing the expected levels of productivity. And the third is the transformation program where we’re already making headway. And you’re hearing today that not only have we got run rate savings, we’ve got in-year savings. And the best way I can manifest that operational execution to you is if you look at the upper end of the guidance now and look at the level of profitability that’s in-built into it, it’s the same level of profitability that we were expecting when we got to a higher level of revenue previously. So, we’ve been able to bring into the mix a significant first step.
That’s important because that gives us some of the momentum we need to start building that third leg of our growth where we focus on building comp growth and continuing the retail network development alongside.
Operator: Our next question comes from Mark Petrie from CIBC.
Mark Petrie: I just wanted to follow-up on the US specifically, and if you could give any more color with regards to sort of the detail on sales patterns, particularly by regions and then also store cohorts, and appreciate any comments about the ramp up of stores opened in the last year or so.
Carrie Baker: So the US, yeah, we talked about under some pressure. Obviously, revenue is down year-over-year 11%. But the good news is, we’ve talked about a lot and this is what are our opportunity to win is traffic substantially higher. So, obviously, we doubled our store count, we opened three new stores in Bev Center, in Phipps Plaza and in King of Prussia. So traffic is there, they’re coming. They’re engaging with the brand. As we said, I think there’s a bit of a hit to that aspirational customer. Generally, people are just maybe waiting to see. The urgency isn’t the same as we’ve seen in years previous. In terms of regional [indiscernible], we continue to succeed with – similar to Canada where tourism is happening. So, you see that in the West Coast, you see that in New York area.
That’s not a new phenomenon for us, but continue to see that. New stores are opening well. I would say because we’re opening it in this environment where it’s a little bit more challenged, we’re not seeing the same types of instant lineups that we would before. Again, still very happy with the traffic and the engagement and the brand buzz around that. But a little bit more tempered, I would say, than maybe definitely pre-pandemic, but maybe in the last three years. So it hasn’t changed our strategy. Again, we build stores for the long term success. We know that those are the right locations. We know that that’s where the traffic will eventually and that they will convert. So, we’re just [indiscernible] to start happening.
Jonathan Sinclair: We’re seeing a good contribution from the store expansion to the overall business in the US to the point where, as you’d expect and hope, but nevertheless, it’s important we reaffirm, we’re actually seeing significant top line growth in our total stores cohort in the US, even if we’re negative on the comps.
Operator: Our next question comes from Michael Vu from Barclays.
