Laura Champine: Got it. Thank you.
Anne Mehlman : Thanks Laura.
Operator: Next question comes from Rick Patel with Raymond James. Please go ahead.
Rick Patel: Thank you. Good morning everyone. Guidance for operating margins was maintained at 25% for the year despite plans for the first half to shake out a little bit ahead of that. Can you just provide color on what you think could weigh on margins as we think about the back half in terms of perhaps the timing of investments or SG&A deleverage just given your updated sales guidance for the next few quarters?
Anne Mehlman: Yes. I think I’m really pleased with our operating margins. Obviously, they well outperformed in Q1. So we are maintaining approximately 25% but obviously that implies a little bit higher approximately 25% if you look at our EPS guidance. I feel very good about the factors there, which are really supported by hard gross margins allows us to invest in our business. We’re anticipating quite a bit of investment. So I feel very confident in that approximately 25% operating margin.
Rick Patel: And can you also talk about what’s implied in guidance for the Crocs brand, as we think about ASPs versus units going forward? I’m just curious how we should extrapolate the very strong performance in 1Q.
Anne Mehlman: Yes. Thank you. I think from a Crocs brand perspective, obviously we don’t guide based on that. We saw nice unit and ASP growth in Q1. We don’t have any more planned price increases currently for this year. We had a little bit of international price increases flowing through in Q1 and which will flow through to Q2. That should actually abate a little bit in Q3 and Q4. So I think I feel confident in the guidance that we provided. That’s kind of all the color where we need to give at this point.
Rick Patel: Thanks very much.
Operator: And the next question comes from Jim Chartier with Monness, Crespi, Hardt. Please go ahead.
Jim Chartier: Goo morning. I was wondering if you could talk about HEYDUDE performance on your own e-commerce site versus the marketplace business, if there is any meaningful difference between the two? And if so, what drove the divergence?
Andrew Rees: Yes. We don’t obviously give — we obviously don’t break that out. But just a little bit of color, we are happy to provide. Because we are able to introduce a lot of new products more quickly and our own.com we give you some limited drops on our own.com. I think we had Corona running last week, which was a collaboration that we did for HEYDUDE. We did the Lebowski earlier, and we’ve also had some new product introductions and testing that we do pull forward styles that we think is going to be exciting to the continue and contest in that environment for releasing them more broadly. Yes, our own.com has been performing better than the marketplace, and we anticipate that trend will continue.
Jim Chartier: Great. Thanks. And then — and I think you mentioned fourth quarter could benefit for HEYDUDE from sell-in ahead of some international markets. Are those just the UK and Germany? Or — are there additional markets that you are planning for next year?
Anne Mehlman: Yes, that’s a great question. So we do have some select distributors that we sell to and that we will be selling to. So the UK and Germany are direct — more direct markets for us. So it’s really — that’s really a comment around the distributor revenue for HEYDUDE.
Jim Chartier: All right. Great thank you.
Operator: And the next question comes from Mitch Kummetz with Seaport Research. Please go ahead.
Mitch Kummetz: Hi, yes. Thanks for taking my questions. On had, the change in the outlook there, is it fair to say that you’ve taken expectations down for both DTC and wholesale, but more so on the wholesale side?
Anne Mehlman: Yes, yes, hi Mitch, I think wholesale definitely, that’s been kind of the biggest gap with where we’ve seen our expectations originally versus the performance in March and April. I will say for Q3, we also HEYDUDE overall revenue as planned to be down year-over-year, which is a big change driven largely by negative wholesale. We do expect it to be sequentially better than Q2 but we do expect that kind of negative wholesale in Q3. So I think that’s a fair assumption.
Mitch Kummetz: That’s helpful. And then as far as the back half goes for HEYDUDE, I think the revised guide does assume kind of flattish sales, which would be a pretty big step up from the first half. Does that reflect better sellout rates in wholesale? Or is that primarily just DTC kicking in with the outlet stores, maybe some sell-in the fourth quarter for spring. Can you maybe just kind of walk through that, the assumptions around that?
Anne Mehlman: Absolutely. I think there’s kind of three things really driving that. we lap easier wholesale comparisons in the back half from a sell-in perspective. The contribution from retail really builds and then the third piece as I just mentioned to Jim starting to realize sell in ahead of select international market launches. Those are international distributors that take place in Q4. So those are the three big pieces that really drive that change. If you look at it, I need to say this, but if you look at it on a two-year basis, just because we had a little bit of lumpiness the year before. You can see that it’s a little bit smoother than what it looks like on a year-over-year basis.
Mitch Kummetz: Okay, thanks team and good luck.
Anne Mehlman: Thank you.
Operator: The next question comes from Sam Poser with Williams Trading. Please go ahead.
Sam Poser: Good morning everybody. Thank you guys for taking my questions. Andrew, I’ve got a question. You said in regard to the change in the guidance on HEYDUDE that you were concerned about the robustness of the consumer. Can you discuss that on how that relates to both HEYDUDE and to Crocs.
