John Hanson : Just to pile on to J.D. remarks, we had a soft first quarter in Wild Bird, and then when we got the Arctic freeze in January, we saw the POS pick up right away. And so you saw the snow on the ground and the consumer run in to buy that Wild Bird food.
William Reuter : Got it. That’s helpful. And then, in terms of — it wasn’t entirely clear to me if there is any destocking that continues to happen in lawn and garden or pet in the categories in which you participate, are there, is there any more destocking that continues to go on or are inventories in good shape across all channels?
J.D. Walker : Well, speaking for Garden, I’d say that overall we’re in good shape. Are there pockets, where there will be some continued destocking pockets? It’s a little bit lumpy, they can’t get it perfect in all stores across the country, but I’d say by and large, we feel good about where the inventory levels are now.
John Hanson : Yes. And on the Pet side, very similar, we feel the retailer inventories are in very good shape. There may be some pockets, but it’s very — it’s small scale.
J.D. Walker : Kind of took our medicine about a year ago, right, John?
John Hanson: Yes, we did. We took our medicine last year.
William Reuter : And then just lastly for me, I think given where public equities in the pet space have traded, I’ve heard that most private companies believe their valuations are hoping to achieve valuations in the sale of their businesses that are in excess of the public markets. Do you think that continues to be the case, or are those expectations returning to reality?
John Hanson: It’s a mixed bag. It depends on the categories. It’s like almost any business where you, if you’ve got a lot more IP proprietary type of technology, higher barriers, entry, you’re going to pay a higher premium on those. But yes, I mean, typically what we’ve seen is the private market does follow the public. You always have that going on and, and then when the public markets come down, you typically see the, the private markets follow. We’ve seen no slowdown in terms of higher multiples on the pet side. That said, I think, we did a nice job on our last acquisition. In terms of valuation, we feel great about that. But yes, I think the pet multiples, particularly in the consumer space, dog and cat, I think you can expect those to be pretty high.
Operator: Our next question is from Andrea Teixeira with JPMorgan.
Andrea Teixeira : Thank you, operator, and good afternoon, everyone. I was hoping if you can elaborate a little bit more on the cost out initiatives. I understand that you don’t want to give precise numbers, but just to get some sense of what are the sources or buckets of those expenses, and if those who accelerate through the year or you’re budgeting some reinvestment as they go through, I’m just thinking of your 80 basis points improvement in margin. I was trying to think if that’s related to TDBBS acquisition. And then on that, just as a fine print here, I believe if I did the math correctly on that division, the acquisition contributed to about 3%. If we bridge organic, I guess total sales, is that correct?
J.D. Walker : Well first, let me start at the beginning. So, we’ve got the cost and simplicity program. We’ve got five primary drill sites, so it’s procurement, manufacturing, logistics, portfolio optimization, and then admin costs. Last year, we kind of kicked that off. We talked about it. You’ve seen several initiatives happen over last year. And then we’re going to continue with that here into to ‘24 and ‘25. Again, we’re going to give quarterly updates in terms of what we’re doing. We talked this quarter about a greenhouse that we’d shut down as well as a Garden distribution facility that was sort of on the tail end of last year’s sale of the independent Garden distribution business. So more to come there. In terms of the margin, accretion or expansion this last quarter largely driven by our cost initiatives as well as moderating inflation.
I’ll tell you, TDBBS was actually a drag on margin because we have to go through the purchase accounting there. When we inherit that inventory we have to market up. So it actually did not help us much or at all. In fact, it was a drag, so on margin. As far as top line, it had a de minimis effect on the top line as well. So it was so far not a huge impact by the acquisition.
Operator: Our next question is from Hale Holden with Barclays.
Hale Holden : I had two. You mentioned that you gained distribution share in the Garden segment for the upcoming spring season, and that’s actually what your primary public competitor said this morning. So I was wondering if you think, it’s just different categories or potentially that your retail partners are expanding the category sets this spring or somebody who’s losing share, I guess is the other alternative.
