Eric Des Lauriers: Okay. Great. Yeah. I mean, it sounds like, I would think Michigan and California are probably two markets where you’re seeing some more consolidation, so I think that, that should help improve even further, obviously, if same-store sales going forward. And then just a quick follow-up, a point of clarification for me. Was the guide for positive same-store sales — was that referring to just fiscal ‘24 as a whole or was that Q1 or both? If you could just clarify that for me, that would be great. Thank you.
Greg Sanders: Yeah. We’re confident that that metric will change in the year of 2024. We’re not ready to call out the period in which that will convert, but we are optimistic around what we’re seeing so far year-to-date and how that will progress throughout the rest of our results that we report this year.
Eric Des Lauriers: Thank you.
Darren Lampert: Yeah, Eric. Just also for reporting, with our segments as we put MMI into its own segment, we’ve also put HRG, which is our distribution company will be reporting in our source segment. So you may see a little weakness in our HRG for the first six months of this year, which will also be included with our stores, but we will break that out so you get an understanding of the stores on its own through the first six months.
Eric Des Lauriers: Okay. Thank you for that clarification.
Operator: Thank you. Your next question is from Brian Nagel from Oppenheimer. Please ask your question.
Brian Nagel: Hi. Good afternoon.
Darren Lampert: Good afternoon, Brian.
Brian Nagel: The first question I have, Darren, in your prepared comments early, you talked about the business in, I think you said January. So I give you, the question I was, maybe just repeat that, the trends you talked about early here in 24. And then, as a follow up to that question, you outlined the guidance for Q1. I mean, to what extent is that strength you’ve seen clearly in ‘24 reflected in that guidance?
Darren Lampert: Brian, as you’ve known, we’ve closed, we’ve gone from 55 stores down to 47. So what you’re pretty much seeing is pretty similar guidance to what we guided to last year. I think we did $49 million in the first quarter last year. So, guidance is particularly, we believe pretty strong right now. We’re up to a good January where we store our consumable business very strong. We do believe durable business will become strong at the end of the year, probably the back half of the year with build-outs resuming. But the consumable part of our business is much more important to us right now. So what you’re seeing right now is, from guidance for the first quarter, we’re conservative as always. But we do believe you will see a steady rise to the second and third quarters, which are usually our strongest two periods of the year with the outdoor growing season coming up on us.
Brian Nagel: Okay. And this may not be a fair question, but you spent a lot of time talking about just some of the, maybe the potential improving legislation backdrop for GrowGen and for the industry. So we laid the guidance out, the sales guidance for the year. If some of these things were to start to happen, rescheduling and other things, how quickly would that lead to, in your view, how quickly would you start — we start to see that in GrowGen results?
Darren Lampert: It’s hard to say Brian. It’s hard to get a feel of when the MSO’s and single-state operators and the commercial customers that would go and go back into the market and start building again and also start taking a hard look at their facilities and starting the refresh cycle with lights and the dehumidification. There may be a lag, there may not be. What’s going on right now, as you’ve seen from GrowGen, we’ve been very, very careful with our balance sheet over the last couple of years during very difficult times in the industry. And that kind of equates out to the MSOs also. They’ve been protecting their balance sheets. And I believe that once they get the go ahead and with 280E and the reschedule and cash going back onto the balance sheets without paying the penalty to the government.
I do believe you’ll see a lot of movement in the industry, a lot of rebuilding, and companies starting to build for the future. But the last couple of years, I think, have been unprecedented. Andrew Carter calls it, the great hydroponic depression. And it’s hurt everybody. But I think we come out much stronger. We’ve built our private label division from next to nothing to 19% last year. And we do believe you’ll see that number in the mid-20s this year. So we’re excited about a lot of new product launches and our consumable brands are becoming stronger by the week and it’s something that excites us about GrowGen right now.
Brian Nagel: Okay. I appreciate it. Thanks, Darren.
Operator: Thank you. Your next question is from Andrew Carter from Stifel. Please ask your question.
Andrew Carter: Hey. Good evening. So thanks for the shout out. First thing, I wanted to ask though is in your kind of guidance for the year, I know you referred to the store closures, but can you give us a sense of how much lost revenue there is from those stores? Is that — are you purely assuming that that revenue is gone for the year in your kind of initial cut of guidance, or are you assuming some kind of retention rate, therefore a boost to your same-store sales.
