Operator: Our next question comes from John Kernan with Cowen.
John Kernan: Congrats on nice quarter. Just on inventory. $3.3 billion on the balance sheet in Q3. Some of that’s obviously just from higher cost, but how should we think about the growth of inventory year-over-year in Q4 where you think you might finish? And what you think inventory levels look like in the spring of ’23?
Navdeep Gupta: John, just let’s deep — go a little bit deeper into the Q3 results in terms of the inventory. And as we called out, it’s much better to look at inventory growth versus 2019 as we were chasing our inventory all of last year, including fourth quarter with plenty of product remaining in transit as we were getting ready for the holiday season. So when you look at the growth in our inventory in third quarter, our sales grew versus 2019, 51% and our inventory grew 31%. And we’ll continue to manage the inventory the same way. We want to make sure that there is right availability and in-stock available for the athletes for the important holiday season. And there are pockets of inventory, like we have said, we will actively work on that in the fourth quarter. Overall, we feel our inventory is healthy and is very well-positioned for the holiday season.
John Kernan: Got it. And then maybe one quick follow-up as it relates to supply chain costs. Obviously everybody can see that some of the inbound freight costs have come down pretty significantly. How do we think about some of the domestic freight and shipping costs as we go into Q4 and next year?
Navdeep Gupta: You meant Q4 of this year?
John Kernan: Yes.
Navdeep Gupta: Okay.
John Kernan: How do we think about — I think.
Navdeep Gupta: No, that’s helpful. No, we agree with you on the international freight side that definitely there is a continued lowering of the costs that we have seen, probably I would call it from third quarter onwards. And However, the domestic side still continues to be volatile, and we are working very closely with our vendor partners as well as our supply chain team works very closely with the domestic partners as well. That still continues to be volatile. We are playing close attention to it. But right now, our focus is to make sure that the inventory is available in stores and available for athlete to buy as they are looking for good opportunities here for the holiday season.
Operator: Our next question comes from Brian Nagel with Oppenheimer.
Unidentified Analyst: This is William Dawson on for Brian Nagel. Congrats on a nice quarter. So our question is actually just on product mix over time, how you’re balancing between your national accounts and your vertical brands? And can you provide an update on the performance in the quarter for your private label brands and how this customer is behaving?
Lauren Hobart: Yes. Our vertical brands continue to do very well and outperformed our this year in Q3. The DSG brand, in particular, has done incredibly well. It’s a high fashion, high-function product at a very attractive price point. It’s perfect for the consumer right now. And at the same time, CALIA and VRST are filling white space in our assortment and really leaning toward that athletic male, athletic female and more of a performance and lifestyle brands. So we’re very, very pleased with the vertical brands. The last time we gave an update that we do it annually, and it was 14% was our vertical brand penetration. So we’ll update that again at the end of this year. Yes.
