Trina Spear: Brooke, I would love to give it to you, but everyone’s telling me I can’t. So we don’t break that out, but international continues to grow phenomenally well. And I would just take out the duty reclass when you look at that international growth to give you the full picture of that. But we’re really excited about not only what we’re seeing internationally. From a US standpoint, a lot of what we’re seeing in terms of repeat frequency is that engagement around our storytelling and great engagement around big brand moments. And so that’s why we’re continuing to invest. It really is in that US customer.
Brooke Roach: Great. Thanks so much. I’ll pass it on.
Operator: Thank you, Brooke. Our next question comes from John Kernan with the company TD Cowen. John, your line is not open.
John Kernan: Good afternoon. Thanks for taking the question. Trina, you talked a lot about TAM back during the IPO process. I’m wondering how your view of addressable markets evolved and how your share is progressing as we get through 2024.
Trina Spear: John, I knew the TAM question would come from you, but I’m glad to see it. So we feel really good about our ability to continue to penetrate the healthcare apparel market. It’s an $80 billion market globally. It’s $12 billion in the United States. And we’re doing over $0.5 billion in sales. There is a lot of running way ahead of us. And you see that in the international growth, and you see that actually in the teams growth, which we haven’t talked about yet, but it’s really exciting to see that business continue to scale. And then I do think, and we’ve talked about this, we’re creating TAM. Non-Scrubs is essentially mostly TAM creation. So having that be over 20% of our business is a great sign that yes, there’s the Scrubs market, but we are innovating every day.
And I would say a large portion of what we’re doing even within Scrubs is not in that TAM. So we very rarely speak about TAM here because innovation changes TAM, and that’s what we’re looking to do.
John Kernan: Understood, Thanks. Kevin, I think you said the fulfillment investments this year are 220 basis points headwind, how do you recover that margin over time? What type of top line growth does it need and what are the returns that you expect to generate off this investment? Thanks.
Trina Spear: So John, all of that investment is transitory. So those 220 basis points is all the transitory cost of having two facilities open at the same time as we move to our new facility. So that will all go away next year.
John Kernan: Got it. All right. Thank you.
Operator: Yeah. Thank you, John. Our next question comes from Angus Kelleher with the company Barclays. Angus, your line is now open.
Angus Kelleher: Hi, this is Angus on for Adrienne Yee. Thanks for taking my question. What are some of the long-term opportunities on the selling expense line as a result of the fulfillment center shift and change in fulfillment partner? And at what point do you start leveraging those? Is it a function of time or do you need a certain amount of international revenue to get there?
Trina Spear: So we feel really good about moving to our new facility. There are a number of things that this is going to help us do to create a better experience for our customers, higher reliability, and really set us up from, to your point, to as we scale we’re going to gain leverage right from this new facility. It’s really tech-enabled. There’s a ton of robotics. And so as we move beyond our sales today, we’re set up to drive meaningfully much bigger business in this facility. From an international perspective, we’ve talked about our Q1 timing as it relates to opening up a Canadian facility. And so not only is this facility in and of itself something that we’re going to gain leverage from over time, it’s also setting us up to build a global network of distribution.
And so this is an exciting start as we really look to make it very easy to get your package. You shouldn’t have to wait more than two days to three days. So how do we do that on a global level? This is setting us up to really ensure that it’s fast, it’s convenient, it’s reliable, and you get where you need to go to your job and do it well.
Angus Kelleher: Great, thank you. And I guess just secondly, curious if you could talk about the, and this is kind of a follow-up on Brooke’s question, curious if you could talk about the, and this is kind of a follow-up on Brooke’s question, curious if you could talk about the performance spread between rest of world and US in 1Q given the rest of the world growth was outpacing the US pretty meaningfully. So I guess what’s working in those international markets that maybe isn’t resonating as well in the US? Thank you.
Trina Spear: Sure. I mean, so it’s really different strategies, right? The rest of the world we’re really leaning into bringing on new healthcare professionals. There are 140 million healthcare professionals around the world. And many of them, you know, it was similar to the US in that, they had these baggy, boxy, ill-fitting scrubs and it was just awful. And so really first off getting them to know what to exist, entering these markets and localizing. Localizing from a translation, speaking their language from a currency standpoint, from a site experience standpoint, from merchandising the product that makes the most sense for them based on where they live, really understanding their holidays and how they want to engage with things.
