Michael Binetti: Hey, guys. Thanks for taking my question. Congrats on the comments on Thanksgiving. It’s nice to hear. I guess just as I kind of think back on some of the questions that have been asked here on the Nike reset, when that can become less of a headwind and some of the moving parts here. It seems that at least some of the comp improvement you’ve seen lately is coincidence, you guys driving your promotional levers, the consumers responding, but it didn’t sound like your answer to I think Alex before meant that you want us to believe inventories are necessarily going to be high to suggest promos, only to be elevated until early ’24, but you did lower your expectation for the very last week of the year, the 53rd week in January.
I’m just wondering how do you think about the past positive same-store sales of the consensus models thinking about for next year, if you think that inventories will dictate lower promotions as we get into 2024 and the other moving parts that you’ve spoken about in Q&A?
Mike Baughn: So. Hi, Michael. This is Mike, from our standpoint, I think as we — as we look at Q4 again, we expect things to remain promotional and we’ve accounted for that within our — within our guidance. As you know within the 53rd week specifically, really as we got closer to the fourth quarter, here we finalized our commercial planning and the update there is really a reflection of that. I think what we’re committing to today is that you will see inventory continue to progress down throughout this quarter and will be flat to slightly down, which we feel is in a good position to operate heading into 2024 and then as we think through 2024 expectations and how we’re approaching that, we will come back on that in a couple of months and update you.
Michael Binetti: Okay. If I could ask one just near term on the model in fourth quarter the gross margin, can you speak a little bit to how we should think about the merchant margin versus buying occupancy, any reason occupancy won’t be similar to down 100 basis points on the negative comp in third quarter or maybe a little better with an extra week?
Mike Baughn: So we do get some occupancy benefits within gross margin due to the 53rd week. I think we — I think the year-over-year change of 290 to 300 from a merch margin standpoint, occupancy would be less of a pressure because of the 53rd week is how we model it.
Operator: Thank you. The next question comes from Bob Drbul with Guggenheim. Please go ahead.
Robert Drbul: Hi. I was just wondering if you could share a little bit more on the exclusive the roadmap from 15% to 25% and are there any early wins either this holiday or early next year that you could share with us around just the drivers for that exclusive increase? Thanks.
Mike Baughn: Yeah, Bob. That’s a great question. So a couple of examples. Exiting the third quarter we celebrated the 25th anniversary of the Nike Tuned Air Franchise, which was a global celebration and has long been exclusive position for Foot Locker and some incredible consumer activation, sell-through and ultimately great commercial results out of that franchise. As we head into the fourth quarter, I can note the launch of the Puma Melo 3 which has also been our number one signature athlete for the second season straight here. And then we’re looking very much forward in December to the launch of the adidas Anthony Edwards 1 — AE 1 as it’s called, and so AE has been playing incredibly well and we think it’s going to be a great ambassador and another weapon in the signature arsenal portfolio. So those are some of the examples in the near term as it relates to holiday that we feel very, very strongly about.
Robert Drbul: Great. Thank you very much.
Operator: Thank you. The next question is from Adrienne Yih with Barclays. Please go ahead.
Paul Kearney: Hey. Good morning. Its Paul Kearney on for Adrienne. Thanks for taking our question. Can you speak to the margin performance of the overall business excluding Champs, clearly the occupancy deleverage is more at Champs, but are you seeing merchandise margin pressure evenly across banners? And I guess bottom line, are you seeing an improvement in merchandise margin at core Foot Locker, and then I have quick follow-up. Thanks.
Mike Baughn: I guess, Paul. Good morning. This is Mike. From our standpoint, I mean I would consider that as you look through the promotional activity that we’ve been taking on, we are doing it pretty consistently across banners. I think when we talked to a lot of the wins we’re seeing within full-price selling and a lot of the key items, a lot of that is focused within the Foot Locker banner.
Paul Kearney: Thanks. And a quick follow-up was, just mentioned that you’re seeing increased levels of vendor support, was that increased levels relative to last year and is that both in footwear and apparel? Thank you very much.
Frank Bracken: Yeah, Paul. This is Frank. So the comment I made was in regards to inventory management and some of the relief and support that we’re going to get at the end of the year to help with some of our aging and some of our lesser-performing goods. So, that’s an increase, both to last year as well as a new point of view from 90 days ago. So we continue to flow in new and positive receipts, but also know that our partners are also along for the journey with us here to make sure that we end the year clean.
Operator: Thank you. Our last question today comes from Gabby Carbone with Deutsche Bank. Please go ahead.
Gabriella Carbone: Hi. Good morning. Thanks for taking my question. I just wondering if you can talk to any changes in store expansion plans beyond this year. I understand the shift in Champs, but is there anything else that we should be thinking about beyond ’23?
