Warren Cheng: Thanks, Mike. Good luck.
Michael Casey: Thanks, Warren.
Operator: Thank you. Our next question comes from the line of Jim Chartier with Monness, Crespi, Hardt & Co. Your line is now open.
Jim Chartier: Good morning. Thanks for taking my question. Just curious, in terms of your wholesale guidance for this year down 10%, what’s your assumption for sell-through at wholesale? And how much of the decline is related to just inventory destocking?
Brian Lynch: Jim, I would say, overall, we’re calling wholesale down about 10%. I want to accentuate what Mike said about inventories. Inventory is in really good shape in wholesale. We’ve got a lot less carryover. Spring has shipped earlier. There’s a better mix of inventory and we’ve got about two-thirds of the orders in hand for wholesale for the year. About 5% of what’s left to go is seasonal. We’ve got some winter bookings to get and then the replenishment business. So these folks are planning very cautiously though. I’d say given inflation impact on the consumer. They’re planning very cautiously. They’re planning for high sell-throughs. First half, we’ve got planned down mid-teens. Second half, we’ve got planned down just mid-single digits and say, first half is impacted by lower bookings and timing.
And we did ship some spring price out, I think, as Richard noted in December. So but most of them expected about our fall bookings are slightly better in fall, but folks are still being conservative. One of the underlying good guys, I think we’ve got is a much improved supply chain performance, which should have a good impact on the wholesale business. We’re expecting less cancels in the back half, better replacement businesses because some of the folks shut that off last year. So overall, I think we’re planning good sell-through. The sell-through has been good so far. They’re really off to a good start. And I think we’re in a really good place right now. We’re just €“ we’re calling it down because of the forward bookings. EBIT is stronger than the others.
I’m planning EBIT down low single digits. We’ve removed that Buy Buy Baby business, which was about 3% of wholesale from our planning assumptions. And then department stores are the most challenging part at this point.
Jim Chartier: Okay. Thanks. And so what did sell-through look like in fourth quarter and then you mentioned exclusive brands. What percentage of wholesale did your exclusive brands account for in 2022?
Brian Lynch: 2022 is about 49% of wholesale sales. This year, we’re planning it to be over 50%. I think 52%, 53% is a number for this year.
Jim Chartier: Okay. And then what did wholesale sell-through look like in fourth quarter for you?
Brian Lynch: Is very good. Again, as Mike pointed out, based on several factors, demand that people were seeing and then the supply chain challenges that were in the industry and that we had inventory was curtailed. And so we worked with our accounts and chose to pack and hold a good amount of inventory into this year. They slowed their replenishment businesses. And I think everybody’s goal was to get as lean as they could going into this year. And we do not have an inventory problem at all in the wholesale business. It’s very clean and the sell-throughs have been really good through fall and early spring has been very positive.
Richard Westenberger: And Jim, I think we saw a similar trend at wholesale as we saw in our own retail business. There was a trend change kind of a surge in demand that happened right around cross the consumer clearly shopped closer to the holiday this year. A year ago, they probably shopped earlier in the quarter because they were hearing stories about inventory and product not being available given the delays in transit from Asia, but very good results, particularly near the holiday this year.
Jim Chartier: Great. Thank you.
