And as we’ve — I think we mentioned in the release, the R&R market is by many industry insiders predicted to be down mid- to possibly high single digits, but our incremental new programs that we’re discussing, our new kitchen opportunities, the continued growth of the Covered Bridge business, our shower expansions, we would fully expect to be able to outpace any negative market momentum in 2024.
Reuben Garner : Okay. And in that kind of backdrop where maybe markets down mid-single digits or more, you guys are maybe down or down less than that? Like what — how do we think about what margins look like for next year? I know it’s early and you’re not giving guidance, but what are kind of the puts and takes we have to think about when we’re trying to put that together?
David Bruce : No, it’s a great question. And we’re pretty excited about it actually. If you go back to when we first went with the IPO a couple of years ago, we talked about our goals to get our margins to — in the near to midterm to in the range of between 25% and 30%. We’re already above 25% now. And a lot of the opportunities we’ve mentioned, not only this quarter but in previous quarters, are focused on the higher-margin businesses, right? So there was a — kitchen is starting to scale itself to a degree that it’s having a larger impact now on our margins. We’re investing, like we spoke about, in technologies and businesses such as our shower and the digital kitchen business, which is higher margin. So at the same time, as some of our pro business may come back in some more mid-priced vanity business, we may see some of that gross profit percentage to have some dips here and there, but that’s going to contribute to larger gross margin dollar growth, which will impact our EBIT targets, which again, we’ve discussed getting our EBIT margins into the mid- to high single digits.
And we would fully expect, with the combination of the higher-margin categories along with the margin dollar growth, that we’re on our way to those goals as we had previously discussed.
Reuben Garner : And just to be clear, I mean those mid- to high single digits — is there a certain revenue level you need to get there, a volume level? Or can you do it kind of in that flattish to down revenue environment potentially next year?
Perry Lin : Well, Reuben, this is Perry. I think it’s a mix to us because we are working on the volume, we are working on the margin in different product categories and channels. But our goal because of our scale, so the more gross margin dollar that we can generate, the higher operating margin that we can see in the bottom.
Operator: [Operator Instructions] The next question is from Greg Gibas from Northland Securities.
Gregory Gibas : It seems like assuming a little bit of a recovery in Q4 implied in guidance, and I just wanted to get a sense of maybe your underlying assumptions there and how destocking trends have continued into Q4.
David Bruce : Well, you can make some inferences based on our guidance and what you saw in the first 3 quarters that we would hope to expect, to your point, a little bit of recovery. We’ve had — I think we’ve mentioned last quarter that we’re going to start — we’ve started to see some new orders come in for some of those new programs we discussed. The majority will come next year. But some have trickled in as we would — as we had mentioned, continued moderation of inventory destocking. I don’t think — I think what we won’t see, which we’ve historically seen, is larger orders in the end of Q4 in preparation for — as you know, we source 75% of our products is outsourced over in Asia and due to the Asian holidays at the beginning of the year, we historically have had a larger spike in December.
We don’t think we’ll see as large a spike as we used to, but that is still remains to be seen depending upon, again, where those inventory levels are and also where end markets go, right, and where the macro levels go. So I think if you just want to — you could make your inferences based on our new guidance and the Q. But as we’ve entered Q4, I could say that we feel pretty good about what we’re seeing, but we still got some time to go.
