Operator: Thank you. Our next question comes from the line of Jay Sole with UBS Equity. Your line is now open.
Jay Sole: Super. Thanks so much. I’m just wondering if we could talk about the first quarter guidance a little bit. Is it possible to give us a little bit of a sense of specifically how you think the gross margin is going to look and sort of what the impact is going to be from, say, cotton versus freight and other factors and how that will impact the year-over-year change. Thank you.
Richard Westenberger: Sure. Well, we’re planning good gross margin expansion in the first quarter, Jay. I think it’s going to be stronger in the second half of the year, given some of the benefits we’re looking forward to in terms of lower transportation costs, lower product costs. That’s a bit more muted here as we enter the year. But we still do have a benefit from spending less on air freight in the first quarter. We were still spending a bit on that. It was kind of carry over first quarter of last year. We’re going to have a better mix of U.S. retail sales in the quarter, which is the gross margin-rich part of the business, less wholesale sales, which tend to be a little lower gross margin and as we’ve been talking about continued progress on pricing.
So the actions that we took late last year are going to continue into this year. I’d say we’re probably going to have a bit more still of a drag from inbound freight. So those higher ocean freight rates will continue as we move into these early months of the year. And hopefully, we’re going to get some relief in the back half.
Michael Casey: And product costs will still stay elevated in the first half will start to moderate in the second.
Jay Sole: Got it. Okay. And then maybe if we can just talk about your assumption for SG&A dollar growth as we go through the year. I guess we can sort of back into what you’re implying for the first quarter. If we think about gross margin up a little bit, but sort of how should SG&A dollars, the growth rate trend as we get into the second quarter and then through the back half of the year?
Richard Westenberger: Well, it’s planned, as we mentioned, comparable for the year. It’s up very slightly, I would say, in the first quarter and then it looks pretty favorable as we get into the second half.
Jay Sole: Okay. So in other words, comparable, you mean in terms of rate or do you mean in terms of dollars?
Richard Westenberger: Now in terms of dollars, I think leverage is going to be a tougher story, just given the decline in the top line that we’re planning. But from a dollar perspective, that’s what we’re controlling. The rate is going to be what it is relative to the top line, but the dollars we’re planning comparable for the full year. So I think the organization has responded well to the challenges that we’re having that the industry is having and our teams have had a good track record historically of raining and spending when we need to, given the environment.
Jay Sole: Okay, got it. That’s helpful. Thanks Richard. Appreciate it.
Richard Westenberger: Sure.
Operator: Thank you. Our next question comes from the line of Ike Boruchow with Wells Fargo Securities. Your line is open. Ike, your line is open. Please check your mute button. Our next question comes from the line of Tom Nikic with Wedbush Securities. Your line is now open.
