Peter Grom: So I wanted to ask about the pricing cadence and the commentary that you’re going to be monitoring the health of the consumer. And you provided a lot of color in the response to both Andrea and Nik’s question. But I guess if you don’t plan to roll back prices, can you maybe just talk about what actions you would be willing to take if the environment were to deteriorate, would that just be pricing at the lower end? And I guess what I’m really trying to understand is if the pricing outlook were to really change at all, how would that impact your ability to achieve your margin targets? Could you lean in more elsewhere, or would it be more difficult to achieve?
Bill Newlands: Well, there’s a lot of negative what ifs in the question, which, frankly, we don’t see coming to pass. If you look historically what our beer business has been able to accomplish, we have maintained a very consistent approach to pricing over time, 1% to 2% year after year after year. The last couple of years, as you know, we’ve significantly gone beyond that in an effort to hedge against some of the strong inflationary pressures that all consumer companies have faced. Our belief is we are in a very good position to do our historical 1% to 2% pricing increase. That’s based on a lot of analytics and a lot of elasticity assessments that we do on an ongoing basis. We are very comfortable with that, and we feel like that’s going to be an appropriate play for the course of this fiscal year, which should allow us to do everything we said.
I would also note, just as an adjunct to that, one of the things that I said at CAGNY was how strong the Modelo share was in its two strongest markets, which was California and Nevada, where we were double digit. I’m pleased to report that at this point that actually is now in four states, which includes both New Jersey and Texas, which again just continues to show that our growth profile outside of the state of California, it remains a tremendous growth opportunity for our business over the long term and also helps to support what we just talked about relative to our ability to price within our 1% to 2% algorithm.
Operator: Our next question comes from the line of Chris Carey with Wells Fargo.
Chris Carey: So just two quick ones for me. On the — Garth, on the beer margin outlook, you gave a lot of great detail. I guess, you’re looking for flat operating margins for the year. Is there any way — or flattish. Is there any way to frame expectations for gross margin relative to operating margin? And I say that in the context of productivity initiatives, which I suppose can play out in both line items. So I was just curious if you have any comment there. The second observation is Wine and Spirits just delivered what I think is the best operating margin in a few years. And yet the outlook would imply that you’re giving a lot of that back. So is that just conservatism, or is there something just missing in the bridge about some of this nice premiumization, which has really helped the margin structure there?
And I sort of asked that in the context of prior margin targets for the Wine and Spirits business in general. So, thanks for those two on Beer margins and Wine and Spirits margins.
