Todd Schneider: I’ll start on the outlook and, Mike, if you want to speak to the margins. The uniform direct sale business is strategic business for us. We have some really large strategic accounts, whether it’s national accounts or in the hospitality, gaming area of our business. And so strategic meaning that those customers spend a lot more money with us not just with garment direct sale but also outside of that. So that’s important. That being said, that business certainly can be a little lumpy due to the nature of it with rollouts and purchases. But we like where we’re positioned there. We like the value proposition that we’re — where we are there. So we think the outlook’s very positive there. As far as the fire business, it’s been a great business for us.
The results over the last several years, we’ve seen great revenue growth, we’ve seen great margin improvement, and it’s the only business we’re in where you legally have to have those products and services. So we think it’s — the outlook is really positive because of the prospects that are out there and the runway we see for opportunity. So, Mike, if you want to comment on margin.
Mike Hansen: Sure. So as Todd said, the fire business in particular, the margins have increased quite a bit in the last handful of years, and we’ve seen a lot of the same initiatives and other initiatives specific to that business really take off like we’ve seen in our other businesses. The one thing I might point out there, we did see some increase in SG&A and the fire business year-over-year, and we’re starting to get into that SAP implementation for the fire business. So we might see a little bit of pressure as we move into fiscal ‘25 on the fire margins, the overall margins because of that investment and that move. But as you’ve seen with our rental and first aid and safety businesses, once we understand how to use that and get proficient at it, it can create some really nice opportunities.
So maybe a little bit of — we’ve seen some great improvement, maybe a little bit of next year and the following year pressure on SG&A because of that implementation, but we certainly expect those margins to continue to improve in the longer term. From a uniform direct sale margin perspective, as Todd said, that business is going to go up and down. It’s going to be a little bit bumpy from quarter to quarter. And because of that, the margins will be as well. So I don’t think there’s anything specific to call out other than it isn’t quite as consistent of a business as the other three that we have.
Unidentified Analyst: Thank you.
Operator: Our next question comes from Shlomo Rosenbaum from Stifel Nicolaus. Please go ahead Shlomo.
Shlomo Rosenbaum: Hi, thank you for taking my questions. Hey, Todd, can you talk a little bit about the macro environment with regard to employment? And specifically if you could touch up on some of the areas where they’re looking for more automation to reduce the employment due to raises in minimum wage in areas like California, are you — how exposed are you to those kind of verticals? And then after that, I have a follow up.
Todd Schneider: Good morning, Shlomo. Yeah, from a macro environment, as I mentioned, we haven’t seen much change in our customer behavior. Certainly there is always some puts and takes. And as you mentioned, our employer is under pressure to figure out ways to automate things because wage inflation, that has occurred and will continue to occur, it’s occurred for many, many years. Now there’s also some — the infrastructure bills that are out there, the on-shoring. I can’t speak to specifics of, oh, boy, we’re benefiting from this or this is a headwind here. But generally, we like the spot we’re in. And we think it’s, the macro environment where it’s been reasonably stable and that’s — we find that attractive and we can be really successful in that environment.
Shlomo Rosenbaum: Okay, thank you. Just for a follow-up, you have a competitor there that was spun out, say, six months ago. And I was just wondering, has there been any change in the environment with them competitively in terms, either positively or negatively? I mean, have you seen any changes in the way that they bid? Are you taking more business from them? Maybe you could just comment in general.
Todd Schneider: Yeah, Shlomo, I would characterize it as, it’s pretty well business as usual. They’re a very good competitor, always have been, I’m sure they always will be, and we have a great deal of respect for them. And it’s a very competitive environment, always has been as far as — as long as I’ve been with the company, it has been, and I’m sure it will be in the future and — but we’re focused on putting our employee partners in the best position to be successful in providing our customers the best value proposition. So really none of that has changed.
Operator: And our next question comes from Kartik Mehta from Northcoast Research. Please go ahead, Kartik.
Kartik Mehta: Yeah, thank you. Hey, good morning. Todd, you have been able to execute extremely well this year, beat guidance. And as you look at the business, is that the result of maybe metrics like non-programmers being a little bit better than you thought? Is it sales being better than you thought? Maybe you’re just more cautious about the economy than actually happened. If you look at why you have been able to do better, what would you point to?
