Joseph Altobello: Thanks. Hey, guys. Good afternoon. I want to talk about Outdoor and the retailer inventory reductions you guys have alluded to throughout the call. Are there any categories in particular that they’re heavy on? Or is it pretty much across the board?
John Walbrecht: Good question, Joe. Good to hear from you. I think that coming out of spring, summer 2022, there was an expectation that some of these new growth categories that have seen explosion during COVID, which can be around family camping, could have been around bike and bike carriers, racks, things like that, it ended up heavy as we went into Q3 and Q4, and we saw a shift in a slowdown. And I think it just manifests itself in too much inventory in the total system, which just limited open-to-buys and made it difficult to chase those categories that we’re continuing to see growth, which, for us, were things like tracking poles, headlamps, gloves, packs, apparel in the mix. Now I think apparel, as a whole, was saturated in the market, specifically in the casual side of the business.
Joseph Altobello: Okay. So it was pretty broad-based. On Precision Sport, you mentioned that the nine millimeter inventory liquidation. Is that done? Or is that continuing here in Q1?
John Walbrecht: No, that’s done, that’s done. And that was that. We took advantage of the popularity of nine millimeter and two to three in 2021, and thought it would carry over some in 2022. In 2022, the demand was really around the centerfire hunt and precision. And that’s where we chased through all of 2023 and are still chasing into 2023.
Joseph Altobello: Got it. Got it. And one last one for me. Vista, as you know, is splitting up into two companies, sporting and outdoor products. Do you anticipate any change in your relationship with the sporting side?
John Walbrecht: No. We believe we have very good relationships with Federal and the team, Jason and all the way down. We are partners on both sides of — we supply bullets both from Sierra and Barnes to Federal, both for commercial loading as well as their OEM contracts, and their generous enough to help us with cases and primers.
Joseph Altobello: Okay. Great. Thank you.
Operator: Thank you. Our next question comes from the line of Ryan Sundby with William Blair. Please Proceed.
Ryan Sundby: Hi. Thanks for the questions, Maybe a follow-up on Joe’s first question there around inventory by category. John, you’ve got a pretty unique portfolio, and that you’ve got warm and cold seasonal offerings. Are you seeing any difference in the way retailers are managing or behaving in kind of an end category and active season category like ski and something that will be in demand later in the year?
John Walbrecht: Yes. I think what we find is that the specialty level where they chase on a weekly basis, they’re able to chase whatever the latest, greatest weather trend is. When you have larger accounts who have a normal seasonal cadence, right, it’s a little more difficult to chase open-to-buys in those categories because they already have prescribed bookings going out, right? And we pull off of those with trims, but they anticipate certain seasonal and activity trends shifting in their business. And we’ve seen that impacted in this space, right? Winter that comes later, but is much bigger, longer, or big in the Rockies, but warm and dry in New England, for example, or whatever, makes that difficult for them to chase.
Ryan Sundby: Got it. That’s helpful. And then John, you cut out a few positives around demand, whether it be passive currency, 15% in Europe or the D2C outdoor growth of 19%. Is that more reflective of kind of the true underlying demand or POS you’re seeing out there? Just help us kind of understand that delta has given some of the dislocation that’s happening from the inventory management.
