And obviously, we believe that we’re going to execute effectively that we’re going to find ways to kind of offset some of the pressures that we saw in 4Q. And when we do that, I think that in a mid-single-digit growth environment that we can defend or improve the margin. But I think there’s some — there’s probably more variables or questions on the gross margin going into 2023 than we have answers to right now.
Operator: Our next questions come from the line of David Manthey with Baird.
David Manthey: I have one 2-part question on OpEx. The first part is related to labor. The initiatives that you put in place have clearly driven better labor efficiency overall. But I’m wondering, in general, is the Fastenal cost structure more or less variable today than it had been in the past because of some of those structural changes? And then the second question is related to branch rationalization. By the chart you show here, where you’re extending it out to 2025, it appears that you’re materially complete with that transition. And I’m just wondering, are there any costs related to that transition that you’ve eaten over the past many years that will go away in 2023? And what I’m referring to is any sort of rationalization costs that a less conservative company might have flagged as nonrecurring or restructuring?
Holden Lewis : Maybe moving backwards and to your first question. I do think that we will have additional closures this year as we move towards that target. And I think beyond this year, you’ll begin to see those closures begin to moderate, right? And so I think part of your question is how long does this — the sort of this closure process go? And I think we have another year of it before it becomes a little bit less part of the story. But one of the things that we’ve done in closing the branches is, on top of that, we’ve sort of shifted the priorities of the branches, which ultimately make those branches more scalable in the future than I think they have been in the past. And so as we grow as a business, I expect that we will — even if we’re not closing branches, I think that as our average branch size grows, we’re going to get good leverage out of that.
To your point of, are there some expenses that were in there regarding closing? Sure. There’s branches that we may have closed where the lease wasn’t up and there’s a buyout. We haven’t scrutinized that spend meaningfully. It’s been within the overall results for the last 5 or 6 years that we’ve been doing this. But there’d probably be some of that, that would also taper out of the model as we move from a branch closing mode to sort of a branch sustaining and leveraging mode 12 to 18 months from now. So there’ll be something in there. But again, I don’t — it’s not a massive number. If we were prone to breaking things out, which we’re not, I don’t know that necessarily would have been that big a number to begin with. So I wouldn’t make too much out of that.
As it relates to the underlying leverage — yes, go ahead, Dan.
