Nadine Sarwat: I just want to stick with depletions here. I know you gave those explanations in your prepared remarks, but I have two follow-ups. So the first is that the reported depletion still meaningfully lag the trends in the Nielsen track channels, which I would have assumed would reflect a number of the factors that you called out, so could you help us understand this gap? And then the second question is, I know you’ve mentioned that you have confidence that your depletions would return to those normal levels. But we are still seeing weakness in the December Nielsen trends. So could you provide some color as to what gives you that confidence? And what are your quarter-to-date depletions at the moment?
Bill Newlands: Sure. So let’s start with the question of track channels. One of the things that we have historically found is that you’re in the roughly — there’s roughly 3-point delta, we use IRI, I realize you just said Nielsen, we use IRI. There’s roughly a 3-point delta historically between the growth that you see in the tracked channels and the depletion rates. Interestingly, that got massively bigger when you’re in the middle of the pandemic because the percentage of business that went through the off-premise trade increased substantially. That has now come back to somewhat of a more normalized level as you get to a little bit better positioned in the on-premise, not quite back to where it was, but it’s directionally.
So that is some of what you are seeing is you’re back to a more traditional split between those individual things. Relative to — and I quoted to the California, some other states are seeing a bit different. Texas on the other was also a market that was somewhat softer post price increase, and that one has not rebounded just yet. But that, again, is not unusual either. It’s a little bit of a different channel mix than what you see in the state of California where you often see a more faster response to whatever impact pricing increases take. So this, in our judgment is all part of a normal process of when pricing actions are taken. It takes a few months for it to all work its way through the system. Relative to the depletes, we don’t have the final numbers in.
As you would expect, we’re only in day five of the New Year and obviously, it included the New Year, which makes the reporting a little bit behind. What I would say is that we’re comfortable with where we think the summer is going to land. Otherwise, we wouldn’t have raised our guidance.
Operator: Our next question is from Kaumil Gajrawala with Credit Suisse. Please proceed with your question.
Kaumil Gajrawala: Hi, guys. Not to belabor the pricing conversation, but when you mentioned 2024 pricing to be more muted, could you maybe just talk a little bit more about what that means? And then Garth, when we think about the share price, not just the movement today but perhaps more recently and perhaps even the fact that it’s been — the share has been flat for a period of time. Does that change how you’re thinking about share recalls?
Bill Newlands: Sure, I’ll go for it. So relative to 2024 pricing, as we stated in the last quarterly call, we were going to go above what our expectations had been. And that reflects, obviously, in the October increase that has taken us above our traditional 1% to 2% guidelines. What we’re suggesting relative to 2024 is that it’s going to be much more in line with what our historical trend has been, which is 1% to 2%. We would not expect it to go beyond the top end of the range as we did in this particular year and late in this fiscal year.
Garth Hankinson: Yes, Kaumil on the share repurchase, I just want to make sure it’s clear that we haven’t necessarily deprioritized share repurchase activity. As we mentioned, we have $1.2 billion worth of capacity under our current board authorization. In the near term, we think that it’s more important to focus on getting our leverage ratio back down close to 3%. That being said, we do have the flexibility to be able to take advantage of weakness in the marketplace, as we said in our prepared remarks and be opportunistic. So it’s absolutely something that we have the flexibility and optionality to execute against.
Operator: Our next question is from Bonnie Herzog with Goldman Sachs. Please proceed with your question.
Bonnie Herzog: All right, thank you. Hi, everyone. Just maybe first, a quick clarification on your pricing. I’m wondering if you’re still expecting to be in your 2% to 3% pricing guidance range for the full year since I guess that would imply only around 1% pricing in Q4? And then, I guess, a question on your guidance, just in terms of your beer guidance, you raised your full year sales and op income growth, but it does imply shipments will be down maybe as much as high single digits in Q4. So I’m aware you’re lapping the distributor inventory build from last year, but just trying to reconcile this with some of the key initiatives you have out such as the rollout of Modelo Oro that’s shipping now. So maybe if you could touch on that? And then just finally, I wanted to clarify if you expect your full year shipments and depletions to be broadly in line with each other? Thanks.
Bill Newlands: Sure. We do expect to be slightly above our 2% to 3% that we quoted in the last quarter, when all is said and done for the year. We also — you should also recognize that mix is going to be higher and in large part because of the significant increase in the Chelada business, which is mix accretive in the overall portfolio. Garth, do you want to touch on the other piece?
Garth Hankinson: Yes. Just in Q4, right? I mean as a reminder Bonnie, as we said throughout the year, you need to focus on sort of full year performance as that we’re going to — it was going to be sort of uneven or choppy results throughout the year, given the fact that we had the difficult overlaps as we were in the first half of last year dealing with some production-related issues in the second half of the year, we were building back inventories. So Q4 will certainly be muted this year versus what it was last year as last year was sort of artificially high due to that, those rebuilding efforts.
Operator: Our next question is from Dara Mohsenian with Morgan Stanley.
