Vishal Shreedhar: Okay. And with respect to the mix shift, is that something that you deem to be more of a base that we should reflect permanently in our earnings forecast? Or is this more of a transient thing, and next year, that mix might come back a little bit? Or have to lap that in Q1 and Q2 kind of thing, and we should build our earnings off this new guidance provided.
Glenn Chamandy: Look, look, it’s not — I think it’s not structural. I think it’s going to come back. It’s just — it’s a risk-off type environment where people have to make a decision to buy something, they’re going to buy the thing that probably is the least risk for them and also looking at potentially margin impact in terms of what the end use would be or the end selling price. So there’s — in our case, you got to remember that, we sell T-shirts, we sell to distributors, they sell them to a printer, we sells them to somebody else, and they go down. So the average shirt that we sell for $2.50 ends up at $25, right? So it’s going down the pipeline. So people are looking not to be stuck with inventory. It could be a souvenir stuff, for example, where they had tank tops or pockets or long sleeves or hoodies, for example.
So they don’t want to take that risk. So they’re taking the risk off themselves in terms of their purchase habits today because of the macro environment. So — but that’s all going to work itself out. I think that that’s part of what we’re seeing. I think it’s all driven by really the uncertainty in the environment. And ultimately, I think people will revert back to normal behavior as we see things subside.
Vishal Shreedhar: Thank you.
Operator: Your next question comes from the line of Brian Morrison of TD Securities. Your line is open.
Brian Morrison: Thanks very much. Question for Glenn or for Chuck, the dichotomy here of your market share gains relative to the decline of low double-digits for the industry. How is the channel inventory looking for both your products and maybe the industry in general, is there more destock that has to take place or are we now in a pretty lean position?
Glenn Chamandy: Well, look, the inventory at the end of Q2 was flat to Q1. It was slightly higher than we anticipated. And we believe there will be some destock in the back half of the year in our plan.
Brian Morrison: Okay. And then I guess two small questions. The sub-10% SG&A margin, is this achievable on an annual basis? And if so, is that sustainable? And then, Rhod, maybe free cash flow, what’s your working capital assumption with your free cash flow guidance? Will this be positive for the year?
Rhodri Harries: Yes. I mean, look, if you look at SG&A, right now — out there we have a target of around 10%. We did 10% last year. This year, effectively, it’s going to be around that level, right, as we finish the year. This quarter, we did 9%. And as we go forward, I mean we’re going to try and drive those levels. But I think given what’s going on from an overall sales perspective, you get a bit of a deleverage. But I would say, longer-term, we really are trying to drive down below that 10% level, Brian, when you think about SG&A. And we think we can do that. We think as we continue to grow and given what our business model is, we can get operating leverage off SG&A, and that’s a real competitive advantage for us. So again, we’re very focused on it, and we see it as an area that we can manage well as we go forward.
