Stephen Laszczyk: Hey, great. Thanks for taking the questions. Maybe just to follow-up on the marketing strategy, Chris, you talked about some success that you’re seeing in the first quarter. Perhaps you can talk a little bit more about what you’re doing differently and then if that success does continue, how should we thinking about the upside drivers throughout the year, do you think it’s more of a top line growth driver or perhaps something on the cost side?
Chris Cocks: Well, I think it’s a pretty simple rubric that we’re using, which is spend where we can measure, which is primarily digital. We have traditionally been a little traditional in our media planning. It’s worked, but we haven’t been able to really refine it down to the SKU level and down to the partner level. So we’re spending a lot more in digital. We’re spending a lot more with our retail partners near the point of sale or near the point of decision. And we’re seeing a significant multiple effect in terms of the effectiveness of the spend. Still early in the year, and we still have to scale it, but it is certainly positive for us. I would say the majority of that will go to topline inside of CP if it continues to work like what we’re hoping.
And I think that’s part of the thesis that we have for our Q3 and Q4 projections. And then that top line, particularly given the cost structure efficiencies we’re driving and supply chain efficiencies we’re driving, that will have a nice flow through to bottom line results, which again, I think kind of goes to the margin comments that Gina made earlier.
Stephen Laszczyk: Got it, thanks for that. And then maybe one more, just on freight. Gina, can you update us on what you’re seeing in the freight market at the moment, just given the disruptions in the Middle East and perhaps how we should monitor that from our side as you think about any margin pressure that could come in 2024 or 2025?
Gina Goetter: Yes. Good question. For us, every [indiscernible] kind of hold the Red Sea, all that is really been immaterial on our business. I think in the P&L in Q1, it was less than a couple of hundred thousand dollars of impact and even since then, our team has been doing a good job navigating around and finding productivity to offset. So it is not a factor that I would call out as impacting our business right now. Overall, what we’re seeing across freight is some moderation, capacity is opening up. We’re seeing rates come down. So that is absolutely benefiting the P&L part of our guidance. We said that there was going to be two points of inflation in the year. So it’s playing within that but the environment is much more rational for us this year. And our team has done a really nice job renegotiating rates, renegotiating our contracts, and then getting after our network in a way that benefits the P&L.
Chris Cocks: Yes. And I think an important thing to keep in mind about us, when you think about things like the Red Sea and exposure, maybe toy dominant companies would have is most of our profit pools are nearshore. Magic, Board Games, PLAY-DOH almost all of our licensing business has very little — has very little sea freight dependencies associated with it because they’re either made in market or they’re made in markets that really aren’t affected by kind of like a traditional Southeast Asian or Chinese freight lanes. So I think that’s a competitive advantage of us — for us in a world that has a little bit of tumult on the freight lines.
Stephen Laszczyk: Got it, thanks Chris, thanks Gina.
Operator: Thank you. Our next question comes from the line of Alex Perry with Bank of America. Please proceed with your question.
Alexander Perry: Hi, thanks for taking my questions here. You gave really good color on sort of the 2Q expectations for the CP segment and op margin. But could we get sort of how you’re thinking about Wizards in 2Q from a revenue and op margin perspective? Thank you.
Gina Goetter: For Wizards in Q2 is going to be probably pretty favorable from a top line standpoint and a bottom line, so it’s going to look pretty consistent, just given the release schedule that we have on the top line. So we expect there to be another kind of growing quarter. And then on the bottom line, again, just given the mix that we’re seeing within the business and the shift towards digital, we’ll see consistent trends there. I would say, for both businesses, for both CP and Whatsee [ph], we’ve got the benefit from operating expenses that will continue to flow in as well throughout the quarter.
Chris Cocks: And then there should be a nice royalty benefit in Q2 as well for Magic, Modern Horizon 3 is not royalty bearing. Lord of the Rings did fantastically, but there wasn’t royalty associated with it.
Alexander Perry: Perfect. And then just my follow-up is on Magic, actually. So can you talk about any timing shifts that may have supported the quarter and how we should think about sort of phasing of growth there as we move through the year?
Chris Cocks: I think in Q1, you saw a bit of Outlaws of Thunder Junction, which is the colorful name for our first major Q2 release, a bit of that shift in Q1, and I think that helped. For the balance of the year, I don’t think there are any huge quarter-over-quarter shifts. You’ll probably see a bit lighter release schedule in Q4 which I think might affect that quarter as you think about things. But Q2 should be reasonable for Magic, Q3 should also be reasonable and then Q4 will probably be the light one.
Alexander Perry: Perfect, that’s really helpful. Best of luck going forward.
Gina Goetter: Thanks Alex, nice to hear your voice.
Operator: Thank you. Our next question comes from the line of James Hardiman with Citi. Please proceed with your question.
