Brian Mariotti: Yes. We’re still definitely seeing great trends on the sell-through on POS. So we’re definitely — the brand continues to do extremely well. It’s just a slower amount of orders coming in from some of the bigger customers. But that, again, like I said on the last question by Linda, starting to thaw a little bit, and it’s looking a lot better for us, but we’re very encouraged by the strong POS.
Megan Alexander: Okay. And then maybe a separate question. Are there more investments in capacity needed after this? I think you mentioned you were running additional 3PLs and last I heard you hadn’t moved Lounge lie into the new DC. So if that warehouse is kind of already at 100% capacity. How should we be thinking about additional investments beyond this needed to achieve the growth you expect? And related to that, how much of the $180 million of savings actually flows through to the bottom line?
Steve Nave: Sure. So the first thing that I’ll say is we’re leaving no stone unturned on the supply chain side. So we’re looking at every possible option to enhance the network in a way that’s more financially efficient than what we’re delivering today. Specifically on things like Loungefly, we’ve moved the Loungefly direct-to-consumer business into Buckeye that hasn’t happened already. It’s like happening this week or next. So we’re going to start fulfilling that product out of the Buckeye, Arizona facility here very soon. We are looking at all of the third-party logistics partners that we have, not just the Loungefly partners, but all of them to understand if there are some synergies we can get by collapsing those into one or two larger facilities, etcetera.
As it relates to Buckeye specifically, the inventory reduction initiative is going to allow that building to handle the capacity that we needed to handle for the next couple of years for sure. But we are also still looking at potential long-term 3PL solutions as we grow into more and more volume.
Brian Mariotti: Yes. I’ll add just one more thing on to what Steve said, which is a real hyperfocus on FOB pickups from some of our bigger customers that we finally had a chance to set up direct ship. So we’re also pushing a lot more volume out of Asia in 2023 than we ever have before. So another encouraging trend for us as we put in the WMS for mid-summer and really think that the efficiencies in the warehouse in terms of just getting product out the door and cost to fulfill will be on their way down starting to third quarter.
Megan Alexander: Okay. That’s helpful. Maybe if I could sneak in one more, just as a follow-up to the previous question. Is there any way you can share what DDC looks like through the first two months of the year relative to the 37% you talked about in the fourth quarter?
Brian Mariotti: Yes. I mean, look, it just continues to grow for us. I mean it is our strongest growth category is the fact that we have control of the iterative on that. It makes it a little bit easier with some of the difficulties in the last 1 quarter, 1.5 quarters of some of the bigger retail partners. We continue to just broaden the ability to fulfill quicker out of those direct-to-consumer orders. And we have great content coming out of the D2C channel. So we do expect again, significant growth for direct-to-consumer throughout the entire year. Obviously, the content slate gets a little bit better toward the middle and end of the year as compared to the content slate in 2022, which was about as poor as I’ve seen it in years.
So again, Loungefly and Funko continue to do really great things in direct-to-consumer and Mondo’s business, which is going to grow significantly this year since we acquired it, is pretty much all direct-to-consumer. So we will continue to see a lot of heat on that channel for us, and we’re really happy about that.
