The signal is — or given our purchasing capability and the scale of it. We tend to see that first. We tend to try to move first, and we have to be sensitive of how we price not getting ahead of the competitive environment of raising price, we become uncompetitive but able to do that in a prudent way where we’re passing along our incremental cost as we see them in our business. That’s how we’ve always done this. There won’t be any difference in this cycle. You are correct. I anticipate a cost increase cycle in the future. I’m not good enough to tell you what day that’s going to occur. I can tell you our reach and understanding into the supply base is really good, and those signals will be measured — or pushed all the way through into our prices, and we will understand that.
Yvonne…?
Yvonne McGill : No, no. I think you covered it.
Operator: We’ll take our next question from Steven Fox with Fox Advisors.
Steven Fox : Just on the pricing discipline that you’re exhibiting here. For the quarter, you had better-than-expected sales and sort of as expected gross margins. Can you sort of explain how that flowed through? It seemed a little different than I would have expected. And then when you think about pricing discipline for the rest of the fiscal year, where would we see it the most sort of come through the income statement?
Jeff Clarke: Well, from a macro point of view and then Yvonne will certainly weigh in here, when we think about pricing in Q2 in the second half, in many ways, it’s business as usual. When you see a slowing market and you see excess inventory you tend to see pockets of aggressiveness to move inventory to try to generate demand. We don’t think the market is very elastic. As a result, we’re very disciplined. And we are very disciplined in the profit pools. There were — as I mentioned, and I think the previous question several back, there were units in the marketplace to go get, which tend to be in less profitable pools, near zero. And that’s just not attractive for us. We’re very disciplined in that regard. When you look at big deals, as Yvonne and I have said several times now, given the conservative nature, cautious nature, probably more accurately stated of enterprise-class customers and not as many large deals, they tend to be pockets of aggressiveness.
But the market is generally stable outside of the areas that I just described. We see that in Q2. As we go into the second half of the year, we’ll see consumer — it’s consumer promotion time. We think consumer promos will be aggressive in the second half of the year, getting inventories back to historical levels, moving some of the old product that we know that’s in inventory out there today, which isn’t our issue. We’re not exposed with any inventory because we run a very lean inventory model. We think those big deals will continue to be aggressive when they come about. They always have been. So there’s really nothing new there. Just it’s business as usual. Or if you prefer a similar pattern that we’ve seen before. And we’ll just be disciplined.
There are places where it makes sense for us to acquire new customers. There’s places where in a customer that we want to expand our portfolio. We call it cross-selling. We’ll be very judicious and very disciplined in acquiring new customers and making sure that we can address as much of a customer’s estate with our portfolio as we possibly can. I want to…
Yvonne McGill : Yes. No, no, I’d echo that and say, we continue to be focused on very price disciplined and focused on those core profit pools across the market. So feel good about that. And we always make investments where we feel like there’s the proper return, future return, but very balanced, very disciplined.
Robert Williams : Cynthia, if we can take one more question and then we’ll turn it back over to — if you can turn it back over to Jeff for closing remarks.
Operator: We will now take our final question from Krish Sankar with TD Cowen.
Krish Sankar : A quick one for Yvonne. Based on your full year revenue guide, it looks like your fiscal 4Q revenue should be up low single digits Q-over-Q, Kind of curious what’s driving the strength in 4Q relative to 3Q? Is it ISG, CSG seasonality? Any kind of color there would be helpful.
Yvonne McGill: So thanks for your question, Krish. In the fourth quarter, we do have a seasonally strong storage performance. And so we’re expecting that again this year. So that’s really what would be driving the differential in the fourth quarter.
Jeff Clarke: Well, perfect. Well, thank you, everyone. We executed well in Q2 and delivered extraordinary results. Our model is driven by a unique set of competitive advantages starting from our position of strength with a broad portfolio of #1 positions, technology’s largest go-to-market engine, the industry’s leading supply chain and our world-class service organization. We remain focused on extending our leadership positions across PCs, compute, storage and applying our model to new opportunities. Michael, Yvonne and I will go into more detail of our strategy and other topics at our Securities Analyst Meeting on October 5. We hope to see you all there. Thank you.
Operator: This concludes today’s conference call. We appreciate your participation. You may disconnect at this time.
