In that case, we’ll bring in radio, as well as traditional streaming radio. So we’re kind of doing almost a different mix depending on the task at hand. But what’s exciting is we’re rebuilding market share thus far in our test from that local community. So we’re waking up some last customers and they’re coming back and we’re enticing new customers to come back in. And through our testing so far, remember we started in August of ‘23 and have done many up and through literally yesterday and we’ve started a new one today in five more markets. We’re seeing really healthy lifts. I would tell you akin to sort of our remodel lifts that we’ve quoted in that kind of mid to high single digits. So we’re excited about the potential of it. We will be very choosy and very targeted.
I want to be clear, we won’t advertise the entire chain. That’s not what we’re talking about. We’re talking much more about targeted efforts in markets where we believe we can capture more wallet share. And so far, so good.
Operator: Our next question comes from Jeremy Hamblin with Craig-Hallum Capital Group. Please proceed.
Jeremy Hamblin: Thanks for taking the question. So, I want to come back to the quarter-to-date trends. There’s quite a bit of noise here in Q1 for the reasons you mentioned. We’ve got leap year. We’ve got the lapping of the reductions in SNAP benefits in March. And I was hoping to get maybe a little bit more granular, on just understanding the impact of, again, as you noted, tax refund season started a week later this year, which probably put you behind a little bit at the beginning of February. But just in terms of what you’re seeing here as we’ve gotten into March, you’ve seen that normalization as you noted, tax refunds up a little bit. Have you started to see a bit more improvement? In other words, are we building a little bit of momentum here on comp trends?
David Makuen: Hey, Jeremy, thanks for the question. I’ll say it really simply, you’re spot on. The six-day delay and the delay in amount of refunds dispersed has been a little wonky, but it has caught up. There’s still some catching up to do as you know, but our trend from a kind of a [cadence] (ph) perspective through the quarter to date has definitely improved in March versus Feb. And I want to re-highlight that being ready for that, even though we didn’t predict it, is really paying off. And setting up our inventory levels in a healthy manner at the end of January, early Feb, really has positioned us well, as it turns out to capture sort of a more elongated tax refund selling season. So you’re spot on. Earlier Easter, we believe, will only help March, and then as we roll into April, really well positioned thanks to the early setup to deliver the quarter. So we’re liking what we’re seeing based on your observations for sure.
Jeremy Hamblin: Great. And then I wanted to come around to a gross margin guide here, which I think the implied is about 38.9% to 39.1% for the year. Just in terms of what was the overall drag in 2023 from shrink, which I think you said is still a bit elevated? And then Heather, what is implied on the guidance for the year regarding shrink? Is it — are we expecting that to be flat? Are we expecting some improvement? Maybe a little bit more color around the gross margin guide would be helpful.
Heather Plutino: Yeah. Hey, Jeremy. Thanks for the question. So a couple of things to remind you about with shrink. First, this is not a new story for Citi Trends. Shrink is something that we have been dealing with for decades. It just happened to have reared its ugly head in Q3. And remember that conversation. It was a handful of stores based on their physical inventory counts causing our accrual, which we test on a regular basis throughout the year. We are not a one time per year account scenario. Those results came back worse than we had expected, right? So we’ll continue to see some of that. I can’t tell you, Jeremy, that all of our stores are just fine, thank you. We continue to see some of it, but we’re focused on it, we’re swarmed on it, and pulling every lever as we always do to make sure that we’re controlling the impact.
On a full-year basis — well, one more thing, sorry, before I get into full year. Shrink as part of our gross margin calculation is a small component. It’s a frustrating component, don’t get me wrong, but it is a small component. Okay, so it’s not — we’re not talking meaningful amounts here. We saw an increase in the ‘23 versus ‘22 to the tune of, call it, 25 to 30 basis points. As we turn the corner into 2024, the guide implies that some of that headwind continues, but it’s really minor because remember the back half of the year was impacted by those unfavorable results. So we’ll see some headwind in the first half of the year and then kind of flat in the second half of the year. So in total, it’s really pretty immaterial for the full year.
Operator: Our next question comes from John Lawrence with Benchmark. Please proceed.
John Lawrence: Very good morning. Thanks, guys. Heather, can you — have you been able to quantify, obviously, the last half of January? I mean, we’re sitting in the weather zone where I’m sure you were closed for a better part of a week. And obviously, that flowthrough was a slow period of time. I assume stores will close for multiple days. Any chance you can quantify what you think that might have cost you?
