Jonathan Komp: Jim, I just want to follow up a question on the updated guidance. It sounded like at least through June, the message was you really weren’t assuming any improvement in the sales environment or the promotional cadence for the year. So I’m just wondering, should we assume that the environment has shifted pretty meaningfully over the last couple of months or any other color just going back to the change in the full year guidance and the drivers?
Jim Swanson: I think that’s fair, Jon. When we had our earnings call in April, up to about that time, we were continuing to see the same trends that we saw in Q1, in which we reiterated the top line guidance we provided earlier in the year. The month of May was, I would describe it, exceptionally challenging. And things improved a little bit in June, and they’ve been better here in July. But in light of what we saw during the quarter, and particularly as we got into the mid- to latter part of the quarter, things were a bit more challenging, and that’s led to the revision we made both on the wholesale side in terms of how we’re thinking about reorder replenishment and then also in terms of e-commerce. And you’ll recall, e-commerce was a channel of our business that we thought would be the highest rate of growth business coming into the year.
And as we sit here through the first half, it’s been the slowest growing part of our business at a low single digit. So we thought it was appropriate, prudent, to realign our outlook and derisk some of the trends that we’re seeing in the business through the quarter.
Jonathan Komp: And do you have any ability to tell if those risks or the adjustments to the business will be concentrated in the second half of ’23? Or any perspective on when you might get some color on how wholesale trends and any destocking might carry into 2024?
Tim Boyle: Yes. The biggest variable for the back half of the year is going to be the weather globally. So our retailers will be — they have relatively low inventory levels of which are merchandise carried over to the prior period. So, they’ll be starting the year with brand-new merchandise and full stocks really the balance of the year in terms of whether it will be much more a factor, frankly, than the economy.
Jim Swanson: I think Jon retailers are generally being more cautious. As we sit here today with where spring sell-through and Tim touched on it, spring sell-through has been a bit slower. I described inventory levels in the marketplace as being moderately elevated. So when you look at some slowdown in higher inventories, naturally, they’re going to be a bit more cautious. So that’s what we’re reflecting in terms of the change in how we’re seeing the revenue forecast for the balance of the year. And then I think in terms of getting a better read on that, the third quarter is typically the point in time where we’re shipping an initial floor set, so it doesn’t become until we get into the early fall where we start to see that sell-through through back-to-school and some of the early fall sales to get a better read on how things are progressing.
Jonathan Komp: Okay. Great. And just last one for me, Jim. It looks like the guidance is assuming operating profit below 2019 levels through the third quarter followed by a pretty significant shift to positive in the teens in the fourth quarter comparing against the 2019 base. I don’t know if that’s the right comparison to think about, but just any more color on factors that would drive that profitability flip by the fourth quarter.
