Meredith Burns: Thanks Sean. And also thanks to the person who asked that question, who is clearly looking at the detail in our financial and operating metrics that we posted on our website. All right. Next question, Sean, input costs are trending better than expected. Any additional color to share, where are you seeing the biggest benefits?
Sean Quinn: Yes. In general, input cost environment definitely continues to improve. We talked about this back at Investor Day a bit. I would say even since then, it’s improved some. Paper costs have been coming down after what was very sharp increases that we experienced over the last two years. And that’s happening more quickly in Europe. The pace of the decrease is happening more quickly in Europe than in North America, and that’s definitely benefited gross margins. In markets where energy costs have really spiked last year, those are — those costs are down meaningfully just as a point of reference in Italy, which was one of the countries where there was the most intense increase. The cost per kilowatt hour is less than half of what it was in Q1 last year.
So, down quite a bit. Inbound freight costs are down meaningfully as well. So, those are probably the three that I would highlight. But as we noted in the release, the changes have been slightly more favorable than what we had planned for at the beginning of the year, and that’s also now incorporated into our guidance.
Meredith Burns: Great thank you. All right. One quick one here, and then we’ll move into some outlook questions. So, can you provide an update on the cost reduction initiatives, Sean?
Sean Quinn: Yes, we gave quite a bit of detail back in March in our call back then and when we had made those changes. And just for recall, the total benefit that we had expected from the cost reductions was about $100 million. Some of that we got in FY 2023. And there’s another $75 million of that $100 million, which was a year-over-year benefit that we expected to get this fiscal year, which is roughly evenly split between the first three quarters. We’re on track with what we previously outlined. As we entered the year, the changes as related to any headcount impact, those changes had already been made prior to the beginning of the year. And then any decisions on things that were non-compensation reductions, those decisions were also made. So, it’s really just a matter of the passage of time for us to see the remaining benefit over the next two quarters. So, maybe just to put it plainly, we’re on track.
Meredith Burns: Great. Thank you. All right. Sean, a few quarters ago, we talked about how the consumer category remained important for Vista so much so that a dedicated team has been formed to focus on the category. With the all-important holiday season around the quarter, can you please give us an update on the outlook for consumer. We actually did have multiple questions on holiday outlook and that one is representative.
Sean Quinn: Yes, sure. So I’ll give some overall comments here. We’re going to give a specific holiday outlook, but it’s an important part of the year. From a consumer perspective, it has come down overall in the mix, Cimpress overall to less than 10% of our overall revenue. But the December quarter is an important one from a consumer perspective, particularly in Vista, but then also in BuildASign as well. In Vista consumer revenue has declined in the last few years and some of that is just from behavior change that happened through the pandemic, especially in invitations and announcements, that’s probably the most pronounced. And what we’ve said recently is that the profit pool for consumer in Vista is a very important one, and it’s one that we definitely want to protect.
And while there’s opportunity for growth there, first and foremost, we want to protect that profit pool. I think the question referenced to a dedicated team. We’ve always had a team focused on that category. But over the last year, we’ve also added some specific product teams there so that they can continue to make focused improvements in the experience and also drive new product introduction that’s targeted at that customer segment. We’ve talked at our Investor Day about just the pace of new product introduction overall starting to increase. And many of those products are relevant for consumer use cases as well. They just need different content or different merchandising like in drinkware or apparel. So the category will benefit from overall new product introduction will also benefit from overall experience improvements on the site.
And as noted in our prior remarks, we’re seeing that happen, and that will benefit consumers as well. Many of the new products that we’ve launched, especially in the photo products, home decor, some of our apparel gifts are showing nice growth. Although in Q1, our consumer overall was basically flat year-over-year. We do expect that from an overall perspective in the December quarter that consumer will still put some pressure on the Vista growth rate, as we mentioned back in Investor Day. But there’s a lot of improvements that we’ve been able to make over the last year. So, the team has done a really nice job there in the planning, just had a review the other day on all that work and the client for the peak season basically starts now. So, while consumer it’s not our primary focus from a brand perspective, it is still really important.
And frankly, we’re also uniquely equipped to serve customers across both small business categories and consumer categories. And when we look at the customer — our customer value metrics, those hybrid customers, small business and consumer are very valuable for us. There’s a lot of creative that we’ve used in our mid and upper funnel channels that we’re repositioning this time of year to be relevant for consumer again. And that just like we were doing for all of our brand advertising is really trying to demonstrate the breadth of the product offering. And so you should see that over the next few weeks and months here through the holiday season. So, we feel good about our plans. We’ve made a lot of improvements, and we’re excited about the weeks ahead here.
Meredith Burns: Thanks Sean. All right. Robert, a question for you. Have you seen any signs of prices softening in any of your end markets?
Robert Keane: No, nothing broad-based. All of our businesses are constantly testing pricing. So, there are some places where prices decreased there are also areas where they went up. So, I’d say no, this is normal in the course of testing and optimizing at this point. All right.
Meredith Burns: Thank you. All right Sean, to give the market increased confidence in achieving a 2024 EBITDA guidance, are there any KPIs that you’d be willing to share?
Sean Quinn: Yes, sure. Well, I’m not sure what well KPIs would be helpful in that regard. Hopefully, even throughout the call so far, there’s been more granularity provided that is helpful and provides confidence. We don’t normally give such specific guidance like we have in the last quarters. But back in the March quarter, we provided guidance, which we beat and then we raised the expectation for the June quarter, we exceeded that, and we increased our guidance for FY 2024. And we just delivered strong Q1 EBITDA results, also cash flow results and increase our guidance for the full year. So, again, hopefully, you should get confidence from that as well. But I think it’s not KPIs, but here’s the math that I would focus on in terms of confidence in the full year guidance.
