John Walker: JD again here. So, inventory from a dollar standpoint, this is at retail, retailer dollar inventory is up low-double digits. And unit inventory is flat to slightly down. Obviously, inflation driving the dollars up pretty significantly. And that varies across our businesses and across customers. I’d say that, overall €“ by the way, those numbers we’re comping against a period a year ago where we had supply chain challenges, so there were holes on the shelf. We don’t believe we’re in a bad inventory position right now. As Tim said earlier, though, to some degree, the reorders were impacting us. The retailer replenishment strategy impacted us because they were, in some cases, heavier in inventory in other categories.
It may have been endurable. In the lawn and garden department, it certainly was in things like patio furniture and outdoor power equipment. That impacted our business as well in the second half of the year. But they did take an aggressive position to being ready for the year. So put a lot of inventories in the store. And then the sell through rate vary by category. We don’t feel like we’re in a bad position going into next year. And I do think that the retailers will probably take a more measured approach to loading the stores before the season. But once consumption kicks in, I expect replenishment will be a tailwind for us.
Operator: Our next question comes from the line of Jim Chartier with Monness Crespi Hardt.
Jim Chartier: First, I just want to clarify that you’re also forecasting pet sales up low single digits this year.
Timothy Cofer: Yeah, we are.
Jim Chartier: Niko, I noticed corporate expenses fourth quarter was up like $6 million. Just curious if there’s anything to call out there.
Nicholas Lahanas: Our headcount was really up would be the biggest call out there in corporate expense overall. And we added to IT as well as to some marketing headcount in our centers of excellence there.
Timothy Cofer: It was a continued headcount increase to support €“ the investment support for our Central-to-home strategy.
Jim Chartier: You mentioned you’re focusing on kind of optimizing the network and taking costs out. I know you completed some big projects this year. But any kind of big opportunities that will be put in place this year. I’d love any details there.
Timothy Cofer: Jim, as you said, we’ve had a couple and we’ve shared some of those. We’ve got one on the garden side in a key multi category facility across many of the categories that we’re participating in garden. That’s been a combination of expanding that particular campus, repatriating co-manufacturer volume into that campus, and then also scaling up both distribution and manufacturing there with a level of automation investment, and that campus now is going to throw off some significant cost savings and improve the gross margin of the products there. That’s one example on the Garden side. What I also said in my prepared remarks is we’re working on a pipeline of ideas over the next few years, including a potential to streamline and rationalize our distribution logistics network.
This is stuff that requires a little bit more time and detail of study, but does offer, I think, some compelling savings that will likely manifest in 2024 and beyond. So some good projects underway, including the one I mentioned, and some more to come. And we believe, as we progress through fiscal 2023, we’ll be able to share more details on those projects.
Jim Chartier: Just in terms of price increases, any sense of how the price increases this year in both Garden and Pet compared to last year in terms of magnitude.
Timothy Cofer: If you look at last year, we were kind of high-single digits, overall, in terms of price increases. And going into 2023, it’s going to be more kind of in the mid-single digit area in terms of pricing. As we mentioned before, we still have about a third of it to be approved. So the vast majority is kind of carried over. But we still need a little bit more to get.
