George Doumet: Okay. That’s helpful. And maybe on the 380 basis points of contraction on the gross margin, can you talk a little bit about how much of that was cotton? And just how should we think of maybe Rhod, how should we think of the second half that recovery in the margins driven by lower price cotton? Anything you can maybe help us out there just to model that out. Thanks.
Rhodri Harries: Okay, George. So if you look at the margins, what happened in the second quarter, margin actually, our performance was better than we anticipated, right? We had said last quarter that for the second quarter, we would be up 100 basis points to 150 basis points over the first quarter, and we actually came in a bit stronger. So I think I would say we’re very pleased with that overall. And if you look at what happened with our margin, actually, mix, as we said, drove a weaker margin overall, probably about 170 basis points of headwind in those numbers. But because of our performance on our cost structure, performance on SG&A and other areas, effectively, we were able to achieve a good operating margin of 16.5%. If you look at the fiber impact, we had a headwind in the first half, and then as we go into the second half, that abates and it turns into a tailwind.
So if you look at the second quarter, basically, if you look at cotton or fiber on our cost of sales, we had a — we still had — or sorry, if you go into the third quarter, if you look at what’s going to go on there we’re still going to have a little bit of a headwind. But it’s — as we move through the quarter, basically, you’re flat. And then as you go into the fourth quarter, it turns into a tailwind for us. So if you look at our margins overall, good performance in the second quarter. We’re very pleased with the way it unfolded. And then if you look at the third quarter, effectively you get a sequential improvement in our margins. So if you look overall, we’re probably going to be just below the low end of our target range in the third quarter from an operating margin perspective.
And then as you push into the fourth quarter, we’re going to get to the high end of our target range. And again, our cost structure is really well under control. And that really will drive us as we move into the back part of the year. And obviously that sets us up very well as we move into 2024. So I would say we feel very good about our overall cotton position and our overall cost position as we go forward.
George Doumet: Great. Thanks for the color.
Operator: Your next question comes from the line of Stephen MacLeod of BMO Capital Markets. Your line is open.
Stephen MacLeod: Great. Thank you. Good morning, guys. Good morning, everyone. Just circling back on that last question about the color you gave on the margins. Can you — I know you were talking specifically around the operating margin. Do you have any incremental color you can provide around the gross margin and how the balance between gross and SG&A gets you into that — those consolidated margins you’re talking about?
Rhodri Harries: Yes. Look, if you look at effectively what’s going to go on, it’s all really going to flow through for the gross margin, right, as we go into the back half because all of that cost structure, improvement in cost structure will be reflected in gross margin. We will have the weaker mix, right, that effectively will continue in the third quarter and the fourth quarter, as we called out for the second quarter. And really, if you look at our full year outlook, our total outlook and you look at our sales outlook and the way we’ve moved it, it’s all being driven by weaker mix. So the real move from our prior guidance to where our current guidance is flat to down low single-digits. If you go to the midpoint, it’s all being driven by weaker mix.
