Jim Swanson: Yes. Trying to go back to fourth quarter and comparing it to a prior period like that, I would have difficulty doing it. What I would say, Jon, though, is certainly being at a 10%-ish operating margin this year, that’s a disappointment from our perspective. We’ve got much higher expectations in terms of driving the right profitability and expanding operating margins over time. I think bear in mind, as Tim touched on, certainly, the most significant item that’s impacting, and having a deleveraging effect on our operating profits, is the elevated inventories that we’re carrying. We’re not ready to provide an outlook as we think out to 2024 here today. Having said that, if you look at the pressure that that’s putting on P&L and ’23 across SG&A that we’ve touched on as well as the clearance type activity and lower margins as we move through certain of this inventory through our outlets, it’s north of 200 basis points.
So as we get that inventory back down into a more tolerable level and think about the potential to expand operating margin, all subject to how the top line plays out next year that should be a tailwind for us.
Operator: Thank you. The next question is coming from Jim Duffy from Stifel. Jim, your line is live.
Jim Duffy: I want to ask pricing in general, just given the pressures to consumer spending, what do you feel about your MSRP in the marketplace? Are you revisiting pricing at all, looking at making adjustments there? I recognize you have promotion as a tool, but how do you feel about your go in pricing and the price value equation?
Tim Boyle: Yes, Jim, I think we’re in good shape actually. I don’t believe that the reduction in our guidance is a function of our products being overpriced. I think we’re in the right spot. And frankly, as the business normalizes from an inventory perspective, we intend to increase our marketing spend over time to give us a larger voice to the consumers. So no, I think we’re in great shape. We’ve had a very efficient sourcing operation, and we expect to be able to continue to use that as a lever together with our balance sheet to make a better organized approach to the marketplace.
Jim Duffy: Okay. And I also thought I’d ask just about inventory composition. And in the past, you’ve spoken about footwear versus apparel. How does that split? Are you heavier in footwear than you are in apparel? Or is it relatively balanced?
Tim Boyle: Yes, we’re slightly heavier in footwear than we are in apparel. But we’re pretty good at estimating the values we’re going to be garnering a lot of this inventory. So, we’re generally pretty accurate on the inventory — on gross margin guidance. So, I think we’ve built in the right approach to how we plan to liquidate this ourselves.
Jim Swanson: Yes. And then just looking at the composition of the inventory, Jim, at a high level, call it, around 50% of the inventories current season, 20% of it’s aged and then the balance would be the carryover of the evergreen-type styles. That 20% that’s aged, that’s not too far off. It’s more elevated than what we would like. But in light of the outlet stores that we have the leverage, we’ve opened up some temporary stores, we feel perfectly comfortable working that inventory down in the latter part of this year.
Operator: Thank you. The next question is coming from Abbie Zvejnieks from Piper Sandler. Abbie, your line is live.
Abigail Zvejnieks: I know it’s a smaller piece of business, but can you just talk about kind of how you’re thinking about the go-forward growth trajectory of both prAna and Mountain Hard Wear?
