Bryan Langley: This is Bryan. So I’ll kind of start and let Tom or Trevor jump in if you need to. Yes. I mean, look, it was kind of broad-based across. We still have positive comps to the class of ’22. So the new stores coming in the base were positive in Q3. Albeit kind of low single digits where they were. So when you think about it, we comp to 9 3, still keep that same kind of waterfall that’s always there in that 3 to 4-point range. And so if you think about our most mature stores, they were comping down in that low double-digit range. And so that’s kind of held true across the board. So again, just we’ve seen it across. It’s not that our most mature stores are deviating from that trend at all.
Seth Sigman: Got it. Okay. And then just one follow-up question around the fourth quarter, thinking about the margins here. Just trying to go through the math. I mean you said gross margin should be similar, maybe up sequentially. I mean does that imply more deleverage you typically would see? I mean, is there any other reason why you would see that impact? Is that just weighted store openings in the fourth quarter or anything else that you would highlight there?
Bryan Langley: Yes, this is Bryan again on I’ll jump in. So yes, I mean, look, it’s all around the sales decline. So when comps go from 9.3 to down 12, your most mature stores are going to see a little bit more deleverage. That’s really what’s driving it. So you’re right, we should be at, if not modestly above sequentially in gross margin. So we will delever a little bit more. That’s kind of where Tom and Trevor alluded to is there are things we’re going to action. It’s just hard to change your business over 30 days. So we’re taking a hard look at it. We’re taking those actions today in November and into December. . But again, we’re halfway through the quarter. So that’s going to cause a little bit more deleverage. But again, we feel confident that not’s the proxy for next year in each quarter.
Trevor Lang: The other — just one other thing I would call out is we’re opening 15 of our 30-plus stores and our new store’s SG&A is materially higher than our mature stores. So we’re opening almost not quite half of our stores in 1 quarter and Q4 is a little bit lower volume on a relative basis because of the holidays of Thanksgiving and Christmas. And so it’s both what Bryan is saying, plus we have a disproportionate amount of new stores opening in Q4 this year, even relative to last year.
Operator: Our next question is from the line of Steve Forbes with Guggenheim.
Steven Forbes: Tom, maybe just a follow-up on a comment you made about the new class of stores performing at the low end of pro forma or maybe for Bryan as well. Can you guys just reframe the cost to build year 1 sales and EBITDA for us and then comment on how the 2024 class of stores is currently being planned relative to those metrics given the 4Q-to-date earnings?
Trevor Lang: Yes. This is Trevor. I’ll jump in and Bryan and Tom may as well. I mean we said for years that we think new stores do somewhere between $14 million to $16 million in sales and around $3 million in 4 wall EBITDA. We’re probably going to be slightly below that $14 million in sales. So there’s obviously a little bit of profitability. But fortunately, our gross margin rate has gone up. And so our profitability is not going to be down that much because our gross margin rate is performing nicely. And so overall profitability is not going to be that far. I think today, we’re spending — it depends on whether it’s a build-to-suit or a second use facility, but call it $10 million in CapEx. We don’t have to spend much on working capital because of our base payable.
We put inventory in the stores, but we have a pretty long base payable. So it’s not much above that $10 million. And our pro formas, we feel very confident, again, after opening 200-plus stores over the last 12 years we’ve been here, we’re going to get above a 12% return on invested capital when you measure it over a 20-year period of time. And we’ve done much better than that in most of our history, but there’s been inflation, sales are a little bit lower right now. So I hope that answers your question, but I think the sales will be lower than that $14 million for a year or so. but the profitability will not be that much off the $3 million because our gross margin rate is higher.
Bryan Langley: And what we’ve seen historically for the stores that opened a little bit below that pro forma, for them to get to that $28 million to $30 million, obviously, that’s going to a comp tailwind. Kind of, it’s going to put wind in our sales throughout the next couple of years. You guys think about that, too.
Steven Forbes: And then just a quick follow-up on the Pro. You mentioned comps for Pro above DIY where the company averaged. Any specificity there on how the Pro comp is trending in the quarter?
Trevor Lang: It was slightly negative — it’s closer to a mid-single-digit negative. I apologize, I was looking at the wrong number.
Thomas Taylor: Yes. Q3 from Q2, we did see a little bit more deceleration in our Pro because it was down about — I think we quoted it was down 1% in Q2. And in Q3, it’s down roughly about 5.5%. .
Operator: [Operator Instructions]. Our next question is from the line of Jonathan Matuszewski with Jefferies.
Jonathan Matuszewski: Great. One question with 2 parts. The first part is on 2024 units. So 2023 has been an odd year in terms of warehouse opening cadence. I think we have around half of them opening in 4Q. And I know it’s early, but could you give us a ballpark view of the cadence for 2024 and how you’re thinking about the split between new and existing? That’s the first part.
Trevor Lang: This is Trevor. Our cadence will be moderately better. We’ll do more in the first half of the year. But we’re still probably going to have a decent amount of stores to open in September and December. So the cadence will be better. We’ll give you more details on that in the February call as we finalize those. But we still have — we’ll have a little bit more in the back half of the year. What was the second part of the question?
Jonathan Matuszewski: Yes. Second part was on the comments about 2024 gross margin being up, and it sounds like supplier concessions may be a primary driver. Just curious whether we need to see flat behavior from the consumer in terms of mix. Basically, is gross margin expansion possible if we do see a potential trade down from better and best products.
