Operating income is expected to be in the low double digit range as a percent of sales, also remaining above the pre-pandemic levels. Diluted earnings per share are anticipated to be in the range of $9.75 to $10.50 using an estimated full year tax rate of approximately ‘24.5% and an estimated weighted average diluted share count of $13.3 million. We continue to project capital expenditures in the range of $60 million to $70 million with a focus on new store growth, remodels and additional technology and infrastructure investments. That concludes our prepared remarks. Operator, please open the line for questions.
Operator: Thank you . Our first questions come from the line of Alex Perry with Bank of America.
Alex Perry: Just first, could you maybe just talk through what gives you confidence to reiterate the guidance? I think it implies an acceleration in same store sales versus the 3Q and a lot less sort of year over year gross margin compression versus the 200 bps you saw in 3Q. Is that based on trends you were sort of seeing to date or is it based on did you work through a lot of the sort of elevated apparel inventory that required clearance, sort of what gives you confidence to sort of reaccelerate here into the fourth quarter?
Bob Volke: We do have confidence in Q4. And I think that we’ve got a couple of different ways of looking at it. We’ll start with the customer and then we’ll go to inventory. So Bill, if you’ll lead us all?
Bill Quinn: So first part of that is we’ve asked our customers and they do anticipate spending more during this holiday season. The biggest category that’s going to get that gain is footwear. On top of that, as I stated, we’re in a record position as far as our member base. We’ve got a ton of active members also record position as far as our ability to communicate with customers in terms of email, text, push, social media, et cetera. So we’re in great condition, great shape there. On top of that, we’re seeing good sell throughs in particular high yield product. I’ll turn it over to Jared to talk about inventory.
Jared Briskin: So just a couple things. First and foremost, as a reminder, last year in Q4 was heavily pressured by a lack of inventory, in particular a lack of footwear inventory. It was essentially flat to the third quarter, which was a little bit surprising. As a reminder, we’ve talked about it, our inventory is extremely well positioned right now, very fresh, very new and highly concentrated in key footwear franchises. So we’re very confident as we head into the fourth quarter around the composition of inventory, in particular as it relates to footwear. Historically, the fourth quarter improves in the low to mid teens from a revenue standpoint when compared to the third quarter. So that gives us some confidence. We didn’t see that last year due to the inventory problems.
But when you go back and look at historicals, that’s typically the Q4 versus Q3 split. And then lastly, if you look at the second quarter and third quarter compare back to fiscal €˜20, that’s pretty consistent in the 50s from a growth perspective, which gives us, again, a lot of confidence as we go into fourth quarter based off that trend.
Alex Perry: And then just as a follow-up, the sort of implied 4Q gross margin guide implies less year over year compression. Is that based on, have you worked through a lot of the apparel, is it still expected to be as promotional? And then any color you can give on how November is shaping up would be helpful?
