Operator: And our next question today comes from Joe Feldman with Telsey Advisory Group.
Joseph Feldman: I wanted to get a quick thought on why — if you could share more color on back-to-school and what you’re seeing there? It sounds like the August-to-date trend has improved a little from July. But we’re hearing back-to-school is off to a decent start from a lot of other retailers out there. And so I was just wondering what you guys are seeing and what you’re hearing from your customer with some more thought on that?
Mary Dillon: Yes. I would say that we’re looking at our trend date in July and August a little bit weaker than we would have hoped in terms of back-to-school. We promoted more heavily initially to compete for our share of the customers’ wallet to manage inventory levels. I would say back-to-school is a tale of many different kinds of products and categories that consumers participate in. So we know sneakers are a part of that equation as are things like school supplies and sports equipment, right? So we feel like we’re set up well in terms of having the products that our customers want for back-to-school, but it’s a little bit softer for us. And we would add that pressure on our customer skews a little bit more towards pressure on discretionary spend, so people are being a little more price sensitive and a little more choiceful on their selection.
Operator: And our next question today comes from Adrienne Yih with Barclays.
Adrienne Yih: I’m kind of going to go back to the quarterly comments on the merchandise margin. I believe it was 300 basis points on higher promos and elevated shrink and then there was some offset to that. So within that 300 basis points, do you happen to take a write-down or a reserve on any aging product? Anything seasonal of that nature? And then with regard to shrink, just kind of tactically, how do you do that? Do you do it once a year in July? Or do you do it once a year in January? How should we think about the accrual of that going into the next couple of quarters?
Michael Baughn: So thanks for the question. I think from a — again, from a margin standpoint, the pressure within merch margin was the elevated promotion. We look at aged product on a regular basis, and that’s always incorporated into our results. But the vast majority of what we did in the quarter and what we’re doing in Q3 and then ultimately in Q4 is ensuring that we have a clean level of inventory to best operate through holiday and then best transition into 2024. So it’s incorporated within our results.
Adrienne Yih: Great. And then the shrink, if you will?
Michael Baughn: And from a strength standpoint, it’s from an order of magnitude in terms of our year-to-date performance within margin and then what’s embedded within our guidance. The largest driver has been the promotions. The second biggest driver has been the deleverage we’ve seen within occupancy costs, which are embedded within our margin. And then the third shrink is a pressure incorporated into our back half guidance is expected similar shrink levels to what we’ve had year-to-date. So the increase in the guidance is really around the promotional activity.
Adrienne Yih: And then my very last one is freight recapture. Can you comment on that? And are you seeing that get better? If you go into the back half, is that plan to get better in the back half?
Michael Baughn: I apologize, you broke up. I heard recapture, could you…
Adrienne Yih: Freight and/or supply chain, so mark on or the container like the shipping portion of freight, any benefit from kind of the recapture of that from last year?
