Tarang Amin: Susan, this is Tarang. We’re not ready yet to give FY ’24 guidance on marketing, but what I would tell you is, we’re highly comfortable with the 17% to 19% range we have this year. And what gives us comfort there is, we recently got our Nielsen annual marketing ROI analysis back and it shows exceptionally high marketing ROI. I’ve been in the consumer space for 30 years. Typically, when you increase your marketing levels, you see a diminished returns. In our case, we’ve now had 3 consecutive years where we’ve taken our marketing levels up and have actually seen the marketing ROI go up. And I think it really speaks to the strength of the marketing engine that we do have. The support we have does €“ is not only effective, but it allows us to broaden the audiences by which we go after and test on new platforms and new things like the collaboration we talked about between the weather channel, Megan Trainer and us.
So I feel really great about where we’re marketing, and it’s definitely driving profitable sales for us from our own analysis and what gives us confidence for this year.
Susan Anderson: Great. And then if I can maybe just ask about the inventory. It looks pretty lean at the end of the quarter, down 5%. I guess how are you thinking about just replenishing as we go throughout the quarter? And then, would you expect that to be up higher at the end of the year?
Mandy Fields: Yes, Susan. So, inventory for this quarter, a little bit lighter than we probably would have wanted just given the outperformance that we saw, but we feel great about our ability to service our customers. So we talked about having over 95% in-stock levels even with that inventory. And as we get towards year-end, we do expect that inventory level to go up and be higher as we seek to support the growth that we’re seeing. So, feeling great about where we are right now. To Tarang’s point, we may have onesie-twosie out of stocks on those items that really take off on innovation. But also, on the other hand, lead times have improved, and we’re able to get behind and get products here faster than we have previously. So again, feeling great about where we are on an inventory standpoint.
Susan Anderson: Great. That sounds good. Thanks for the color.
Mandy Fields: Yes.
Operator: Our next question comes from Jon Andersen with William Blair. Please go ahead.
Jon Andersen: Hi, good afternoon, everybody and congrats on the terrific quarter.
Mandy Fields: Thank you.
Jon Andersen: Couple quick ones. The guidance, I think, implies somewhat of a sequential decline in gross margin in the fourth quarter to 300 basis points. Perhaps, is that €“ am I thinking about that the right way? And what might be some of the drivers of that?
Mandy Fields: Yes. So, I am really pleased with how our gross margin is positioned overall. We are outlooking gross margin up 200 basis points year-over-year in a rising cost environment, which is really fantastic to see. As we lookout to Q4, what you’re observing is a little bit of natural seasonality that we see from Q3 into Q4 of a lower gross margin. And then I would say, the other thing layered on there are cost related €“ one-time costs really related to space gains that will flow through in Q4 as well. We picked up a little bit of that in Q3, but we’ll have some in Q4 as well. And so that also is impacting gross margin, but overall, I feel great about where gross margin is positioned. Even in Q4, still above last year is what’s implied in our outlook and again, 200 basis points higher on the year.
