Chris DiTullio: Hi. It’s Chris. So from an inventory standpoint, we feel good about our quality. Some of the actions that we took in terms of moving up our Black Friday event to start a little bit earlier than it did last year. We are happy with those results and happy with the sell-throughs we are seeing in our holiday product, which is really — that’s what’s maybe the risk opportunity for the quarter, but we feel good about our current position. And from a clearance and a basic standpoint, we are as clean as we were in Q3 and continue to see that being the case for the .
Wade Miquelon: At a level we quoted in Q3 was about 5% earmarked for that. It’s about the same now. That is pretty much for this business as low as we’ve ever been. So we are in very good stead.
Unidentified Analyst: And do you feel like your main competitors are in a similar position? Or might they push more on promotions?
Wade Miquelon: I’m sorry, my competitors push more on promotions
Unidentified Analyst: inventory position? Or do you think that they might get more aggressive?
Chris DiTullio: Yes. I think that we see competitors being aggressive in similar categories as us. And some competitors, it’s a larger percentage of their business than it is of ours. So I think for us, we feel good about the actions we’ve taken and the quality of the inventory.
Wade Miquelon: Yes. I think we are — again, where we’ve seen maybe more of that aggressiveness is a rational place to be, whereas last year there was — the last year product this year, there’s a lot more of that seasonal holiday products. So everybody wants to move that. But again, the vast majority of our product, the basics to day and day out, we are not seeing that.
Unidentified Analyst: And then lastly, any additional color you guys can cite on how like the Christmas season is progressing and how seasonal and 4Q have trended through Black Friday and through now?
Chris DiTullio: Sure. The month, I think, started hard for a lot of folks in retail. As I looked across the spectrum, you saw a number of companies pull their Black Friday events forward starting earlier. We certainly had a competitor do that we did as well. And we’ve seen the customer respond to those promotions, whether it was Black Friday or Cyber Monday. And so far, the momentum has been similar in the month of December.
Operator: Thank you. And our next question will be from David Lantz from Wells Fargo. Please go ahead.
David Lantz: Hey, guys. Thanks for taking our questions. I was just curious if you could talk through some of the gross margin buckets in the quarter outside of the 145 basis point excess freight headwind?
Scott Sekella: Yes. So if you — hi, David, it’s Scott. If you look at Q3 gross margin on an adjusted basis, we were down 80 bps year-over-year. If I break that down from a POS standpoint, we were up 10 bps because our AUR was slightly higher than our AUC. Clearance reserves, though were unfavorable 40 bps. Then from the domestic freight side, we had increased carrier and fuel rates, which were about unfavorable 30 bps, and then increased split ships were unfavorable about 15 bps.
David Lantz: Got it. That’s helpful. And then with the cost savings efforts, curious how you’re thinking about SG&A in Q4 relative to prior expectations for being kind of flat in the second half?
