So what we’ve said before and we continue to evaluate is how best to deploy that cash to obtain the ultimate objective of driving total shareholder returns. More to come on that as time progresses I would imagine, but nothing more to say at this point on that other than that is our objective.
Ryan Meyers: Okay, that makes sense. And then obviously you kind of talked about that for Q4 margin, a lot of that’s going to be coming from the promotional environment. Obviously we’ve kind of had one month here of this running promotions in this environment. Have you seen some increased spend from the customers as you’ve ran some of these promotions, or how has this push of this more promotional environment Q4? How have you seen customers respond to that so far?
Claire Spofford: Yes, thanks, Ryan. As we mentioned, reflected in our guide is the room to promote appropriately in order to achieve our objectives of driving sales, moving through our inventory and coming out of the year in the position we want to from an inventory perspective. Obviously we are a brand and a business that tries to not promote more than we have to. And so we try to toe the line as much as we can, but recognize that the fourth quarter is a very promotional quarter. As I mentioned in my remarks, it is also our smallest quarter from a top line and EBITDA standpoint. So we’re navigating, we’re staying close, and we’re pulling the levers that we need to pull to achieve those objectives of the sales and the clean inventory position, while maintaining our margin profile to the extent possible.
But all of that is rolled into our guide for the fourth quarter and we, as always, feel great about our brand, feel great about our product, and feel great about our customer, and we’re just navigating. But consistent with the way we’ve been managing the business all year.
Ryan Meyers: Okay, great. Thank you for taking my questions.
Mark Webb: Thanks Ryan.
Claire Spofford: Thank you.
Operator: Your next question comes from the line of Dana Telsey from Telsey Group. Please go ahead.
Dana Telsey: Hi. Good morning, everyone, and nice to see the progress. As you think about on the gross margin side, the AUC opportunity going forward, where are we in that path of AUC and how does that look? And then you mentioned, Claire, about some of the categories. Anything you saw on the pure Jill or whatever collection is compared to the core categories and what you saw the customer responding to? Or how the return rates differing by category? And lastly, you’ve talked about capturing the younger customer. Anything that you saw this quarter from the young customer and their buying preferences compared to the core? Thank you.
Claire Spofford: Sure, I’ll answer the latter two, Dana, and then I’ll hand it over to Mark to address the AUC question. So from a category standpoint in Q3, we really saw nice strength in our core assortment, we saw growth there. I think a couple of things in particular. We had a robust refresh in August, which performed very well. And we had a really nice transition into fall and saw nice response to our transitional product, which we feel like we got right from a silhouette standpoint, from a color palette change standpoint and saw a nice response to all of that. In the core assortment in particular, we saw strength in sweaters and in woven, particularly woven tops where print and pattern were very strong, and we saw some strength in denim as well.
From a sub-brand standpoint, this was a quarter where wherever was really the shining star from a sub-brand standpoint. As you know, we’ve been leaning into wherever for the work usage occasion for our customers and we’ve been seeing nice traction there in attracting new, younger, as I say, younger, but still consistent with our target demographic customers. Post Labor Day we had a capsule called Wherever Works, which was kind of the ultimate expression of that. Slightly higher price points, a little bit more kind of waste interest, and a little bit more sophistication and refinement, which we really aimed at the where to work usage occasion and we saw really nice response to that as well. So that’s a concept and a capsule that we will continue to lean into over the course of the coming months and quarters.
And that work where edit as well as our size inclusivity initiative were both continued to be great avenues for us in terms of new-to-brand customer acquisition and new-to-brand customers that were a little bit on the younger side of our target and also from a size inclusivity initiative that we lacked in Q3 versus the launch last year and we continue to see the acquisition of really valuable customers onto the file. So all of that we felt some nice traction in Q3 and our initiatives that we will continue to lean into as we go forward.
Mark Webb: And Dana with respect to the AUCs as I mentioned previously it’s really the go-forward tailwind that I would point to as related to raw materials and cotton. And I would expect that tailwind to continue. It started a little bit last quarter, so probably continue forward for, you know, maybe through the first-half of next year. There are some on-the-horizon pressures coming from other crops that are out there, flax and linen, et cetera. So we’re always watching the crop reports that can have tugs and pulls on AUC for us. But overall, expect that cotton-based benefit to continue. We’ve said before that the margin rates that we’re achieving are very healthy for us as a business. We don’t necessarily need to expand them anymore for our business model.
And so view those tailwinds, why it’s good to have them as an opportunity for us to feel within our disciplined operating model comfortable making the investments that we’ve talked about which inherently do carry in their inception a little bit more risk and allow us to go into those with a bit more comfort. So that’s how we’re thinking about the underlying AUCs right now.
Dana Telsey: Got it. Any thoughts that were breaking down by channel stores and online? What the drivers were this quarter? And lastly, any thoughts on store openings for next year as you’re beginning to dip your toe in the water a little bit? Thank you.
Mark Webb: Sure. We’ve said, Dana, that we expect next year to be a year where we would return to some level of store growth. That’s of course dependent upon successful negotiations with our landlords and getting the right deals. But we’ve worked through much of the fleet and feel like we’re at a place where we can start to think about returning to some net store growth. As far as in the quarter channels, that the channels and the drivers, we were pleased to see direct improve sequentially. The channel has had some investments, Claire mentioned in her remarks that have helped to drive that channel and it’s one that we feel good about. The stores, there wasn’t a lot of geographical difference in the drivers through the quarter. The lifestyle centers continue to perform better from a traffic perspective than malls and then no real differentials on a large scale across the rest of the geographies.
Dana Telsey: Thank you.
Operator: And we have no further questions in our queue at this time. And with that, that concludes today’s conference call. Thank you for your participation and you may now disconnect.
