David Makuen: Sure. Hi, Chuck. Thanks for joining. The drill down a little bit on the current sales trend is the following. We’re seeing pretty good traffic trends, kind of in the neighborhood of what we’d expect. We’re also seeing good conversion trends where we’re seeing weaknesses in our basket. And that’s primarily driven by some UPT softness, less about AUR. So, it’s clear to us that macro forces are causing the customer to kind of buy a little less per trip. So, that’s part one of your question. And then, from a trend standpoint, we started to see some of this economic pressure churn a little bit more tougher on our customer in late January and into early Feb. So, your facts are correct. Our January stack was a little softer than we expected, and then, that continued a little bit into early Feb.
So, we were watching it pretty keenly. And to your earliest point, the state of the consumer was, I think, yielding a slightly different story than we first anticipated, let’s say, in late December, early Jan. So, we did notice what you were picking up on.
Chuck Grom: And then when you’re – obviously, the guidance is really back-half weighted. And I know there are some things in your control, but you talked about just general consumer relief. And I was just wondering if you could just dive a little bit deeper. Exactly what are you referring to when you guys say that?
David Makuen: Well, we’re – I think we’re combining a couple of things, Chuck. First, we believe that the – I’ll call it the shock of a lower tax refund and the elimination of the SNAP benefits is just that. It’s a bit of a shock to the system. That’s definitely impacting the quarter that we’re in. And then, we parlay third-party information to suggest that the economy should continue to improve the beginning sort of post first half and expecting some relief for those low-income customers with slight wage growth and a lessening of inflation, hopefully, causing a good point of view for them to think about returning more and more to more discretionary behavior. But I will underline, you noted it, I’ll underline our priorities.
We’ve analyzed this pretty thoroughly, and we know we have opportunity to improve our assortments. As I noted, I called it refining our assortments. We have opportunity to build better inventory levels in target areas of the store. I mentioned that. We have some opportunities to improve our sharp price point strategies, particularly at the entry price point level for the low-income family. So, the reason we wanted to articulate those priorities is that we’re taking them very seriously, and we believe that they are going to be very helpful toward just controlling our own trends, so to speak. And coupled with what we hope is some relief gave us confidence in guiding a little back-heavy improved second half.
Chuck Grom: Okay. That’s helpful. And then, just the delay of the ERP system is obviously pretty disappointing. Can you just talk about when you expect to implement that? And is it fair to assume that any gains you were anticipating are likely a ’24 event at this point?
David Makuen: Yes, So, we’re disappointed by that delay, but I will tell you, the teams are all over it, and we would intend on launching it before our holiday season, well before it, which is kind of typically the last time we could do something. So, think of it as kind of late launch. And then, as we’ve spoken before to the group here, most of that benefit will yield its rear, it’s head, I should say, in 2024. We’ll get a little bit of pick up in ’23. But you’re right, most of it will be ’24 and beyond, and we’ll certainly factor that in as we think about the future.
