Tom Nikic: Hey, good morning guys. Thanks for taking my question. I just want to ask, I know that inventory management and price realization has been very important to you. Obviously, you’re operating in a very, very promotional environment and this kind of discounts all over the place out there. Like how do you think about balancing being competitive in the marketplace while also maintaining your pricing discipline? And do you see market share risk from not participating in some of the promo activity that many other brands are undertaking.
Michael Casey: Tom, I would actually say Carter’s is very competitive. And we have teams that look at our pricing relative to the market daily, and we feel as though we are competitive I think our advantage is we’ve got 1,000 beautiful stores in North America. So that when we back up on inventory, we can clear that product through those stores. A significant decrease in the wholesale. A component of the decrease in wholesale this year will be the off-price retailers. So they’re a good source of moving excess goods. But this year, we’re we are going to move some of the pack & hold inventory through more than half of the pack & hold inventory through our own stores as opposed to moving it through the discount channel. So you shouldn’t view our progress on price realization is that we’re trying to get paid more for our products relative to the market.
I think we’re competitive. That’s our job. Every day, we need to be competitive, and we believe we are. So I don’t think we you should assume that what we’re seeing in the forecast that we have for this year is that we’re focused only on price realization. Improving price realization. Pricing is a function of how the product is selling, how you buy it, whether you put it conservatively and given the nature of what we do for a living, we sell essential core products, that consumers purchase frequently. And so we have a handle each year on what we expect the demand will be last year was thrown out of balance because there the unexpected surge in inflation. But we are competitive. We are participating in the promotional environment but historically, if you look at our business over many, many years, this has always been a margin-rich business given the nature of what we do and the quality of the wholesale customers that we have and the productivity and profitability of our retail business.
Tom Nikic: Understood. Thanks. If I could follow up quickly on the wholesale channel. It sounds like you’re fairly happy with the sell-through that you’ve been seeing. I’m just curious, in the inflationary environment, which is kind of pressuring the budgets for young parents. Do you think there’s any impact that you’re seeing from customers maybe trading down to private label or anything like that?
Michael Casey: I’d say it’s a bet. Private label makes up around 21% of the nearly $30 billion market. Our share of the largest private label brand is about twice of the largest private label brands. So we’ve seen a bit of that. But with the more consumers going to Target, Walmart and Amazon, particularly for the grocery part of their businesses, we benefit from that. We benefit from that traffic. So that’s why our exclusive brands had the performance. Our exclusive brand sales were up 6% last year. So even in a down market. We benefit from more people going to those major retailers. So I would say there’s been a bit of a trade down yes.
Tom Nikic: Understood. Thanks and best of luck this year.
Michael Casey: Thank you, Tom.
Operator: Thank you. Our next question comes from the line of Will Gartner with Wells Fargo. Your line is now open.
Unidentified Analyst: Hey guys. How are you? Thanks for taking my question. Can you guys just unpack just the cadence of retail in the U.S. retail? We talked about wholesale, but just the retail business, how you’re thinking about it. Sorry, 1H versus 2H?
Michael Casey: In what way, Will?
