Also our partners at Disney had just an amazing slate of content both in streaming and in theaters. That’s not going to be lapped as completely. So we’re taking a little bit of a cautious tone and wanting to monitor our performance. I think the thing that helps to negate may be the impact of the entertainment-related headwinds is our marketing effectiveness. We’re seeing a significant improvement in our overall return on advertising spend. We’ve retooled our marketing team. And so that tailwind we have to look at and monitor. And we’ll get back to you guys at the end of Q2, on a potential revision to guidance if we continue to see positive trends play out.
Gina Goetter: And the only other thing I would add on your closeout comment, so you’re right, it is typically heavy in Q1. But given what we were going through last year and trying to clear out all of the inventory, it was a factor in all four of our quarters. And so that is — that will be the huge reduction that we took in inventory last year, the fact that we don’t have that overhang that will be a positive contributor every quarter that we go. We’ll continue to see that close up volume being down. So I should say a positive contributor on the margin side and negative contributor on the revenue side in every quarter.
Megan Alexander: Great, thank you both.
Operator: Thank you. Our next question comes from the line of Drew Crum with Stifel. Please proceed with your question.
Drew Crum: Okay, thanks guys. Good morning. So Gina, just going back to Consumer Products, you discussed improved underlying performance and benefits from operational excellence, but you still saw adjusted OI down and some margin compression. If the volume decline headwind is moderating as you progress through the year, when should we start to see positive bottom line comps for that business?
Gina Goetter: Yes. Drew, good question. If you think about our — how we’ve kind of talked about our top line flow for CP, so we’ll be down similarly in Q2. And we start to rebound in Q3 and we’re back to growth in Q4. So I would expect our margin to follow suit. So I think we’re still going to see that same kind of material delev headwind in Q2. It starts to stabilize in Q3 and then our margins. Our margins are growing absent even the huge comp that we have on inventory but then that’s kind of onetime margin pickup that we have will further expand our margins in Q4. So it’s going to kind of follow with the top line.
Drew Crum: Got it. Okay. And then Chris, you had some comments on the universe beyond sets. Can you address the performance of Fallout Commander, I know it’s still early, but has that changed your view on Magic revenue for the year, does it have any impact on segment margin? And then just wanted to get a sense as to how you’re sizing up or thinking about Final Fantasy and Marvel sets next year, how those compare to Lord of the Rings? Thanks.
Chris Cocks: Yeah. So I would say Fallout has been great set. I’m a little bit of a fan boy so I will try not to playing it a little bit too much. I’ve been playing it since the ’90s. But it’s probably our best-performing Commander set ever. Whether it’s a Universe at the Onset or not. However, Commander sets tend to be quite a bit smaller than our overall premier sets. So you have to weight that accordingly. I would say our view on Magic is pretty healthy. Engagement is — has reached pre-pandemic levels. Our stores are all healthy. Fallout is doing well. Outlaws and Thunder Junction, which is our first major release of Q2, it’s early, but it’s off to a promising start. So I think our caution in Magic is just Q2 as a big quarter.
We’ve got modern horizons at the end of the quarter, and we want to monitor how those do. But I think signs are pointing in the right direction for us. In terms of the long-term view on Universes Beyond, man, I think Final Fantasy and Marvel are going to be pretty significant sets. I would put them in the same league at least as what we saw with Lord of the Rings. Marvel is just a huge IP. We’re going to be doing multiple sets with the Walt Disney Company on that, which we’re pretty excited about. And then Final Fantasy, it’s huge inside of North America and Europe. But our sales in Japan will probably to do with what we did with Lord of the Rings because of the resonance that it has in that market which you should remember is the number two market for Magic and the number two market overall for trading card games.
Drew Crum: Super helpful. Thanks guys.
Operator: Thank you. Our next question comes from the line of Arpiné Kocharyan with UBS. Please proceed with your question.
Arpiné Kocharyan: Hi, good morning. Thank you for taking my question. Just to clarify on POS, you mentioned down for the quarter. Have your expectations changed at all regarding full year industry retail trends? And then I have a quick follow-up.
Chris Cocks: Yes. I mean, Q1 for the industry is usually around 14% to 15%. So it’s still in terms of the total volume that Q1 represents. So I think it was a positive quarter. Certainly, we saw momentum exiting the quarter that’s been continuing into Q2. But it’s just super early. And the toy industry has been a difficult one to predict for the last 18 months or so. So we’re going to continue to monitor it this quarter, particularly in light of the relative pause in entertainment that helps to drive toy sales. That said, I think it was a good start to the year for us and for the industry as a whole. And my hope is it continues.
Arpiné Kocharyan: Thank you. And then margin is clearly the highlight for your results today, and I think it’s going to be the theme for the year as well. Could you maybe talk about cadence for margins for the rest of the year, I mean Q2, will obviously have strong Wizard, I think, so that helps flow through and you have closeout sales sort of easing or the impact of that easing. What are other big input you would highlight for Q2 and as we think about the back half as far as margins go?
