The first target is to get back to where that business was pre-pandemic, and then from there continue to improve the margins, but we are always going to push to improve margins and grow that business going forward.
Operator: The next question is from Nik Modi with RBC Capital Markets. Please go ahead.
Nik Modi: Thank you. Good morning, everyone. Good morning. I was hoping you can just give some more clarity perspective on some of the international distribution losses that you cited. Is that just a competitor getting hyper-promotional or any perspective around that would be helpful and then just as you think about the first quarter, obviously the holiday season to some degree is very important for at least the battery business given device trends, etcetera. What are you baking in terms of your assumptions on how the holiday season progresses in your guidance? Thanks.
Mark LaVigne: Yeah. So on the international distribution, again, our priority last year and this year is restore margins to our business, which requires pushing pricing. In some international markets, we were aggressive on our pricing and that caused some lost distribution. It wasn’t overly promotional. It was simply just a pricing discussion where we were very disciplined and that caused some distribution losses. We still believe that’s absolutely the right approach to take. We would do exactly what we did from a pricing standpoint if we had to do it all over again because we needed to restore our margins, which allow us to invest back in the business and then ultimately regain that distribution through healthy category management, which we’re always focused on and then the second question, Nik?
Nik Modi: On holiday.
Mark LaVigne: On holiday. Okay. On holiday, right now, we have great support from our retailers going into holiday. We’re planning for success. I think there’s going to be some caution both from us and from retailers in terms of how does the early holiday season play out? How does consumption look and that’s going to drive replenishment discussions as you get further into holidays. So I would say there was some caution as we planned for Q1 and we’ve heard a little bit of caution from retailers as they head into holiday because they want to see how it plays out, but that will play itself out as you get closer towards Christmas.
Nik Modi: Excellent. Super helpful and disclosure and guidance and the release on the presentation was also very helpful. Just wanted to pass along that feedback.
Operator: The next question is from Andrea Teixeira with JPMorgan. Please go ahead.
Andrea Teixeira: Yeah. Good morning, Mark, John. You mentioned that half of the 6% to 8% declining sales in the first quarter is actually attributed to the shift in the holiday sales, like the pull forward. Is the other part more of a consumption impact? Can you bridge the other half if it’s the loss of distribution you mentioned now for international or it’s really consumption at this point that moved to your point in the non-track channels? And I was wondering if you can also bridge that from an e-commerce perspective, if you’re seeing that kind of tracking to more promo at your key partner in commerce. Thank you.
Mark LaVigne: Start from a digital standpoint and then John can break down some of the sales differentials. I would say as you’re seeing consumers shift online, there’s a natural share shift from us from brick and mortar from online. We don’t have as high of a share in online as we do in some of our brick and mortar retailers. So that’s causing some of the shifting dynamics. I would say right now you’re seeing promotional levels that are a little bit higher than last year, but they’re lower than what we had seen in 2019. I think you’ll continue to see promotional levels be around those levels, and to the earlier questions, I don’t think you’ll see it exceed 2019. I think the importance for promotion right now is bridging consumers to those higher price points and continue to sort of train them up the value scale as you work your way through what is a tougher macro environment for them and John, on the breakdown.
John Drabik: Yeah, Andre, you’re right. Half of the decline is related to that shift in holiday volume into the fourth quarter. The other parts are kind of equal measure for the rest of the difference, but I’d say half of that difference is consumption and it’s really in the non-track channels that we talked about and that’s foot traffic and things like that. And then as Mark just mentioned, we have seen a shift to when we talk about those channels favouring value offerings, that does have that share impact on us as well as some of the trade down, which hits the top line.
Andrea Teixeira: No, that’s super helpful. And then if I can just like squeeze one clarification. So if we put in the first quarter, right, the 6% to 8% decline, so midpoint minus 7%, and then the balance of the fiscal, I’m assuming when you said flat volumes, right? So that implies, I’m assuming flat volumes in batteries for next year. So that implies a bit of a, well, first of all, that those volumes will inflect to the remainder of the year, of the fiscal year. And then second, that you have some pricing, is that fair that you’re going to see organic sales inflecting as well as volumes inflecting in your embedded outlook for the nine months remaining of the year?
Mark LaVigne: Yeah, so volume should be relatively steady, we think, for the category over the rest of the year. We do expect our own performance to still be probably challenged in the second quarter even, but really, as you get into the third and fourth quarters, we think we should see some improvement from there on the top line.
Andrea Teixeira: And on pricing, do you think that pricing will, because you’ve been firm and disciplined with the promos, you don’t think pricing will be turning negative into next year?
