Unidentified Analyst: Got it. And on the Public Lands, Moosejaw plan, can you just give us an update on how many Public Lands stores you have? And whether your plan for these businesses includes more stores? What’s sort of the go-forward plan for that outdoor category outside of the core DICK’S store? Thanks.
Navdeep Gupta: Yes. This is — let me start on that. First, let’s talk a little bit about our overall excitement about the outdoor category. Like we have talked about, Moosejaw and Public Lands collectively serve the outdoor athlete, and that industry is a $40 billion highly-fragmented industry, but not a clear leader. So as we see the collective capability that we have between the Moosejaw brand as well as the Public Lands brand, we are extremely excited about that opportunity to continue to differentiate and provide a much more synergistic way of serving that athlete as we look forward. So, what we talked about in Q3 was we were — as you can imagine, after the acquisition, we are integrating the back-office operations of the Moosejaw and Public Lands team and bringing one team together to serve these athletes.
In terms of the number of Public Lands stores that we have, we have seven Public Lands locations right now, and we are excited about the ongoing business that we see here collectively between both these brands.
Unidentified Analyst: Any plans to open more?
Navdeep Gupta: We’ll share more details in 2024. But yes, our plans are to continue testing and learning into this brand and opening more stores as we go look into the future.
Operator: We go next now to John Kernan at TD Cowen.
John Kernan: Keeping on the House of Sport theme, how should we think about the contribution to unit growth and top line into next year? And then also, how should we think about the four-wall margin on these stores versus the existing chain?
Navdeep Gupta: Yes. John, I would say, first of all, as we have talked about, most of the 12 stores that we have opened are either a conversion or a relocation of an existing store. So, what you’re looking here is not a significant expansion in the square footage of the overall company. But what we are seeing is a very-differentiated experience that we are able to provide in these stores. We’ll share more specifics in fourth quarter, but I can give you this that from a sales productivity perspective as well as the contribution perspective, we are very happy with the financial returns that we are delivering on these investments.
John Kernan: Got it. And then maybe just a quick follow-up on SG&A and some of the cost savings that you’re looking at from some of the business optimization initiatives, how should we think about the net savings that you see into 2024 and beyond?
Navdeep Gupta: So, in our prepared comments, what we shared was that we expect our SG&A growth to significantly moderate, especially considering the growth that we have seen in our SG&A this year. But as you can imagine, it’s a combination of multiple things, what do we expect the sales growth to be next year. But — so we’ll share more, but the framework that I would use is, first of all, the business optimization work that we are doing, especially with bringing the Moosejaw and the Public Lands business together will have continued benefit, actually bigger benefits into 2024 as well as the productivity and the efficiency conversation that we talked out about in Q3 and Q4, those actions will continue to kind of help us mitigate the growth in SG&A as we look to the future.
Operator: We’ll go next now to Joe Feldman at Telsey Advisory Group.
Joe Feldman: Congrats on the quarter. I wanted to go back to the comments you made about weather. And how much of a factor does weather have for you guys in the fourth quarter? Like, will apparel be an issue if weather doesn’t really get cold here and — because it seems like it did — it was softer for everybody, not just you, in October because weather was a little more warmer than normal. So, just wondering how to think about the fourth quarter in apparel.
Lauren Hobart: Yes. Thanks, Joe. Certainly, Q4 is the most weather-dependent category. We’ve over time mitigated some of the volatility of that factor because we can’t control the weather but just making sure we have all sorts of lightweight — fleece is a big driver for us and things that don’t depend on super extreme cold. That said, we like cold. So, I’m hoping for a snowy Thanksgiving and Christmas.
Joe Feldman: Got it. Okay. And then, another question just — I know inventory is in good shape, but how are you guys planning it to end — get through the fourth quarter? And then, your initial thoughts on ‘24, like how you’ll plan? Will it be up? Will it still be down a little bit, like we’ve been seeing this year? How should we think about it?
Navdeep Gupta: Yes. I would say that we haven’t given the guidance for Q4 on inventory. But I would start to say by the fact that if you look at our sales were up 3% almost in Q3 and our inventory was down 2%. So that kind of indicates how well we are managing the overall inventory position, and I would say a similar sentiment as we look to Q4 as well. We are right now in the middle of our budget season for 2024, and we are planning through the top line, the bottom line expectations and the inventory. So, we’ll share more about exact 2024 working capital investment as we share the guidance in next quarter.
