Morris Goldfarb: So, as far as promotions, there are fewer promotions in retail today than they were pre-COVID, quite honestly. Everybody has found that the right product is accepted by our consumer. If you design it appropriately, put the right quality into it, present it appropriately, the consumer is willing to pay. There are less promotions around, whether it’d be Macy’s or Dillard’s or Belk. The belief — the common belief is, if you’re sitting with an aggressive amount of inventory, you’re going to have to take monstrous markdowns to move it. As we proved out, our inventory is down 23% and our gross margins are up and that’s a testament to we’re not giving it away where our inventory has got great value, our retailers are appreciating it and the consumer is buying it.
So as it relates to — I can’t speak for the future. The political environment, the economic environment is something that we’re not in control of. But as it sits today, we don’t have a concern for an aggressive markdown cadence that would be unexpected. And our order book as it sits, is in line with our guidance. We sit with our order book similar to what it’s been historically as a percentage of our budget. And the holiday expectation is actually a good one in our categories and in our product mix. We’re seeing everything all of you are seeing. As far as guidance coming down, we are comfortable with where we are today. We are adjusting guidance. We’ve got appropriate inventory. We’ve got great partners that support our needs and we’re looking at what we believe is a really good year and a good future.
Thank you for your question, Ashley.
Unidentified Analyst: Thanks so much. Yeah, thank you.
Operator: Please standby for the next question. The last question comes from Dana Telsey with Telsey Advisory Group. Your line is open.
Dana Telsey: Hi. Good morning, Marcus — good morning, Morris, Neal and Priya. Congratulations on the nice progress. As you think about the portfolio that is continuing to evolve and grow, are there categories that you want to focus on in adopting new licensing deals that we should be thinking about? And then as you think about the current wholesale environment with the improved order book, what’s changed? Is — how’s AURs? What’s happening with the promotional environment? And how do you envision holiday? And then I have one last follow-up.
Morris Goldfarb: Thank you, Dana. Thanks for your question. We don’t have a need for new licenses or new acquisitions. As you listened to our story, we have sufficient tools to build a huge business. We’ve got not just classification licenses where the company sat in the ’90s and the early 2000s. We have brands that afford us the ability of producing all categories and they are major brands that are recognized globally that we have an audience that is hungry for the launch of these brands as well as the brands that we continue with. The — I guess the elephant in the room is PVH. We’re not concerned. We might not be happy but we’re not concerned about the future of this company. I think we have the tools to do better than we have done historically with the licenses.
Owning is far better than renting. And we are in control of our own destiny, which is an amazing luxury. And on top of it, we’re getting the expected support from our business partners, our trading partners with the knowledge that we don’t have to produce product and it’s not necessarily the brand that drives it. It’s a talent pool underneath it. It’s the culture of the company and we’re transitioning to where we need to bring prosperity to ourselves as well as our stakeholders. So we’re quite happy with where we are and it’s amazing that our margins are increasing. Our staff — an easy way to get Wall Street excited is to make an announcement that we’re eliminating 20% of our staff and saving money. With this transition of PVH and all the new brands, it’s amazing to me that we have stable SG&A.
