And so that’s a long way of saying, I think that the jury is still out. I think that the unfortunate reality is as much as I think the weight loss drug is such a positive outcome for some part of the population, it’s $10,000, $12,000, $15,000 a year, and it’s not accessible to everybody. And as a result of that, the question is what’s the penetration? And then, if you stay on that, it’s great. But if you go off it, and as we mentioned, you don’t have lifestyle changes, you gain weight back. And so, those are all things that are creating cloudiness. And ultimately, I think we’re going to just need years, not months or weeks to better understand this.
Michael Baker: Yeah. Makes perfect sense. I appreciate the time. Thank you.
Operator: Thank you. One moment for our next question, please. Next question comes from the line of Jeremy Hamblin with Craig-Hallum Capital Markets Group. Your line is now open.
Jeremy Hamblin: Thanks. I wanted to start with just talking about some of the customer behavior. Obviously, retail traffic trends have been tough. You noted that you’ve seen an uptick in the use of the loyalty program certificates. And just in terms of thinking about what you’ve seen so far here in November, do you expect — or what type of insight are you gaining from that increase in use of the loyalty certificates? And on a go-forward basis, how do you think about as you try and have that balance of getting traffic in the stores and staying engaged with this customer so they don’t lapse or anything? How are you thinking about utilizing that program to help kind of balance that drive of foot traffic into the stores, but also not kind of marking down product?
Harvey Kanter: Yeah. It’s a great question. And there’s three or four different elements there that I’ll try to unpack for you. First and foremost, the reality is the loyalty program is something that’s really important to us. We believe that if we can successfully communicate the value of the program, that he will or she will shop more regularly with us because they’ll appreciate that. And the value of the program specifically is performing best with our best customers. It’s probably not a surprise, but they understand that value. They shop more frequently. They are more engaged with their purchases. And they recognize one of the critical elements is literally, our loyalty certificates are like currency. It’s like greenbacks for lack of a better way to say it.
They can come in and use them like dollars, there’s no exclusion, they can buy anything and any brand that we offer. Unlike a coupon, where we are using coupon selectively to manage inventory and the file, which we’ve spoken about before. But any time we do that, it’s to our actual internal file and there are limitations and exclusions such that they can’t use it on most of the national brands because we’re just not discounting those brands. And as a result of that, our best customers utilizing them the most, where they understand the program and the efficacy of the program for them. And in opening kind of price points, if you will, and opening customers, bronze and silver versus gold and platinum, they don’t yet understand that. So the third element, I would say, is that we spoke about in my prepared remarks that our challenge is to evolve the consumers’ understanding of the program and the inherent value in being not just a member but utilizing the certificate.
And unlike a discount for us, if they come in with a certificate, whether it’s $15 or $30 or even $45, our average ticket is well above that. And we know that if they use the certificate, they will end up spending close to our average ticket, and we will win at a lower level of, if you will, discount, which is when the day is done, the actual $15 certificate is a discount from the product price, but it’s not discounted as a pure discount, it’s discounted with the ability to use it as currency. So, we still look at it as a really meaningful opportunity for us, one we continue to work really hard. It’s only a year old and really hard to creating the communication and understanding of the benefits of the program. Over time, we think it will ultimately be a big win for us.
But like anything else, it’s new to the consumer, it’s uniquely different than it was a year ago.
Jeremy Hamblin: That’s helpful color. I wanted to transition to talk about the store opening plan. So, 10 locations for ’24 along with a bunch of free models. In terms of thinking about — two aspects to this. One is the CapEx investment presumably will step up decently from the $16.5 million midpoint that you guided to for this year. But I also wanted to understand, for those 10 locations, roughly the cadence you’re expecting, whether that’s 25% of those, or two, three in the first half of the year and the balance in the back half of the year, just to get a sense on that. And then also as it relates to that, there’s obviously, some increased infrastructure cost that goes along with that, whether that’s members, maybe your real estate team that you’ve needed to add. But just wanted to get a sense for embarking on that program, what the rough annualized cost is from an SG&A standpoint to support the new openings and the remodels?
