Pat Maciariello: Yes, just I’ll answer real quickly on your sort of inventory level question. It varies geography-by-geography. So in Asia, for example, there is inventory at retailers as people have been locked up – locked up excuse me. As people have been in their homes and not out and about quite as much – due to COVID I think it’s probably less at the retailers in North America and my guess would be somewhere in between in Europe. So I’ll just answer that and then I’ll let Elias answer your other question, Matt.
Elias Sabo: Yes and your other question about what gives us confidence, Matt, going into the back half of the year that things are going to improve. I mean, if we look at where the consumer at least, again, if we go back to our DTC businesses, right, where we have a big presence, Lugano’s all direct to consumer and then 5.11, and we look at the sales that both of those companies are generating and then we look at a company like Marucci and how well their sell through is doing. We look at our industrial businesses, which had a great 2022 and frankly have come out in January even stronger than where they finished in 2022. And so, that encompasses right there five of our businesses and they are incredibly strong. And outside of that Ergo is doing fine right now and we could go through some of the other businesses.
Principally where we’re seeing some weakening demand is kind of at Velocity. And Velocity had a pandemic run-up that more than doubled earnings. And as you know, when companies go through cycles that have sort of a boom and bust characteristic to them, the down cycle, unfortunately, it’s like a pendulum of a clock. They don’t ever stop right in the middle. So we had a boom cycle, and now the bust cycle is kind of taking it past where mid-cycle is. That’s the one company that we have right now where we would look and say, end market demand does not feel good. Outside of that, we have nine businesses where end market demand feels good. Now we have to trust our customers, and we have to trust our customers know their customers, in some cases, like at BOA and at PrimaLoft.
But given how robust everything feels outside of really velocity and then kind of BOA with kind of the inventory destocking, it just leads us to believe that there’s more strength in the economy, and there’s more strength in the consumer than what we had forecasted. And so if anything, I would say we may be a little bit conservative in the back half as we stand right now and incorporate it into our guidance based on how things are running. How things are running right now, Matt, would imply a better back half than what we’ve built in, and so that inherently suggests that we have built in some economic softness into the back half from where we stand today. So we do feel that when we get through this, things are going to revert to feeling pretty good in the back half.
And generally, as you know, economies, unless there’s some extraneous events, don’t really turn on a dime. And so it’s — I don’t think we’re looking at the economy just falling off a cliff next month or the month after. And so where we sit today, it feels like ’23 from a GDP standpoint could be better than what we anticipated a month ago.
Matt Koranda: Okay. Super helpful detail. Thanks Elias. And then on — just more specifically on Lugano. I’m curious how you guys are contemplating growth in Lugano in 2023 within the framework of your guidance that you’ve given. I mean it just looks like it continues to grow pretty aggressively and the margins are coming in well ahead of at least our expectations. It seems like – and based on your commentary – during the call so far, it sounds like that consumer is just super healthy. So just curious how you’re thinking about the growth of that segment in 2023?
