When you think about the inventory, as we planned Q1 and guided, we expected some inventory reduction to be there. It turned out to be a little more than we expected, but it was only it’s about $10 million to $15 million lower than we expected. We don’t think this is a business model shift. There’s always some changes and adjustments that are made. But we don’t anticipate this being an ongoing challenge of a movement in inventory. Will it be a restocking? Look, we’re always trying to find opportunities for inventory out there. We work very closely with our partners to find opportunities where there’s gaps in assortment or gaps in inventory all the way down to the store level. We’ve built a lot of data analytics to help us do that and really partner with them.
And we have a really good working relationship on that front. But overall, we have not put a restock into our guide going forward.
Scott Lewis: And just maybe one more point on the earlier comment about cotton, because you may be asking about from a pricing standpoint. Like we said, our last year, we did not fully price for the inflationary peak. So that’s stabilizing off. We do not anticipate again pricing pressure on that side of it.
Unidentified Analyst: Got it. Thanks for your time.
Operator: Our next question comes from the line of Ike Boruchow with Wells Fargo.
Ike Boruchow: Hey, everyone. Good morning. Maybe Steve, can you talk a little bit to maybe a little bit more granular on some of the categories that are key to you guys? There have been some kind of reads from some of your competitors, I think, on the underwear category being under the most pressure. I’m kind of curious if you can kind of parse out the different pieces of underwear and if you’re seeing kind of varying degrees of demand and just any other color would be kind of helpful when you think about that into 2Q and beyond.
Stephen Bratspies: Sure, Ike. As you think about the categories, at the most macro level, it’s pretty consistent performance when you look at POS. And if you look at our share gains, pretty consistent across the business, which add up to that 50 basis points. You will see that men’s underwear is outperforming more than other businesses and it’s always been probably the strongest category for this company. And we’re going to continue, obviously, to lean into that. We’ve got all the innovation in that space with SuperSoft, which is doing extremely well. I’m encouraged about what’s happening with Maidenform and with the launch of M and Valley with Breathe coming at the end of the year. So we’re looking for some impact in the back half on that. But the categories overall, there’s not major differences across the board. There’s puts and takes in one month over another, but it’s relatively consistent.
Scott Lewis: And maybe add a little bit to that from a guide standpoint. I know we don’t guide by segments, but let me give you some directions on the U.S. underwear business. We had the 8% decline in Q1, but as you look at Q2, again, we expect that moderating trend to continue. And also, we’re going to continue to outperform the category for all the things that Steve was talking about. We’ve got brand investment supporting the innovations that are coming. So as you think about the U.S. underwear, we’re guiding, again, directionally to a 3% to 4% year-over-year decline, factoring all that in. And then just to touch on while we’re talking about segments, just real quick, on the international side, as you think about modeling for Q2, I would say that would be down mid-single digits on a reported basis and essentially flat on a constant currency basis.
And then on active wear in the U.S., I would guide you down to mid-to-high single digits. And that compares to down 14% in the first quarter on that adjusted basis when you factor and take out the timing odds that we talked about in our earlier remarks.
Ike Boruchow: Got it. Thanks so much.
Operator: Our next question comes from the line of David Swartz with Morningstar.
David Swartz: Good morning. Thanks for taking my question. Firstly, can you let us know if you’re seeing any differences in trends in Australia and if it seems like that business is getting better or is it remaining under pressure? Secondly, are you confirming that you have decided to maintain control of Champion and will not be selling the business? Thanks.
Stephen Bratspies: So in terms of Australia, we’re starting to see some improvement. And it really depends on the business over there. Like the bonds business over there has continued to do particularly strong. It’s been particularly strong, particularly in the wholesale business and the grocery channel. The DTC business with bras and things has remained a little bit softer, but we’re starting to see a little bit of improvement. We are expecting some tax relief in the back half of this year and anticipating a little bit of interest rate improvement, although there is some uncertainty right there. But the comps and compares get easier as we go into the second half. So we anticipate that business starting to rebound. I would tell you I’m really pleased with the work team is doing over there.
I’m excited about the innovation in Baby and the Bonds Chafe Off product. So we’re leaning in. We have some aggressive advertising campaigns that are going on right now that are that are resonating. So I feel good about that business as we go forward. In terms of Champions, we’re not saying making any announcement today in terms of keeping the business as you ask the question or selling it. The process is continuing. We’re going to continue to evaluate the right path forward. The process is progressing as we expected. And in parallel with that, we’re going to continue to implement the long term growth strategy like we said we always have. And we will follow the same protocol as we have in the past. And we will update you as appropriate when there’s news for us.
