So, I think a lot of the areas that we’re talking about are white space, which will only help us as we move through ’23 into ’24, but more color to come on our Q4 call from that perspective.
Matthew Boss: Great. And then, Jill, just maybe a follow-up. Could you elaborate on the structural changes that you’ve made with inventory management, as we think about inventory levels on hand moving forward, just relative to the pre-pandemic, maybe 2019 operating model?
Jill Timm: I think the biggest thing is we have a chase mentality. We’re holding back receipts more from a reserve perspective instead of placing all of our orders upfront. So, it allows us really to be much more agile in reacting. I think in the last two quarters, you saw that our inventory was down more than the mid-single digits that we had told you we were going to run this business with because we saw we had a little bit softer top-line, so we reacted appropriately. We didn’t see the need to go and then run and chase after that inventory. We feel good that we supported all the key initiatives that Tom has outlined, but we’re able to pull back in some of the other areas where we’re not seeing those trends. And that would not have been something we would have been able to do as well pre-pandemic, because we just didn’t have that reserve mentality so that we [could go out] (ph) and chase.
The other thing that Tom has brought to the table is really just leveraging the market brands, and we tried to illustrate that through the Juniors commentary that Tom had explained. But really being able to use those brands, it allows you to bring it in a lot more quickly. So not being so reliant on long lead times, so really taking what’s in the market and getting it into the store. And not having as much depth, but knowing that you have a much broader assortment of goods that the customer can come in for, particularly around fashion because we know that that can be an in and out. And then that just not only raises sales, it also helps your margin structure. So, a lot of really good foundational changes that have been made that we’re starting to take the benefit of, and you’re seeing that through the margin expansion and the tight inventory management and our results today.
Tom Kingsbury: Yeah. Jill just mentioned, we’ve been buying such — so deep in each SKU, and it’s important in basics, but it’s not important in fashion. You want to sell through the product. So, going forward in ’24, you’ll see a reduction in the units per SKU when you walk the stores. And it will give us an opportunity to have more brands, more variety, that will also help the business and help us turn faster.
Matthew Boss: Great. Best of luck.
Tom Kingsbury: Thank you.
Operator: Our final question comes from Dana Telsey with Telsey Group. Please go ahead.
Dana Telsey: Hi. Good morning, everyone. As you think about national…
Tom Kingsbury: Good morning, Dana.
Dana Telsey: Hi, Tom. Hi, Jill.
Tom Kingsbury: Hi.
Jill Timm: Hi.
Dana Telsey: Hi, everyone. As you think about national and private label penetration, what are you seeing and how is it changing especially with what’s going on with the updated chase mentality? And then, Jill, just on the other revenue side on credit revenue, any updates to the health of the consumer? What your — how bad debt or delinquencies are trending? Thank you.
Tom Kingsbury: Well, we’re going to change the mix slightly in terms of having more national brands versus our private label and proprietary product, and a lot is going to come from market buys. Nick and I have been in New York frequently, and really looking for different brands that we can carry. A lot of it has to do with — obviously, we’re proud of our brand portfolio and we want to build upon that, but also we want to leverage the marketplace more often, really looking for really more interesting product to put on our selling floor than we had previously. So that’ll change the mix. We still feel our private and proprietary brands are important, but we also feel that we need to integrate into our assortments on the selling floor, things that are from the marketplace. So, we’re working on that.
Jill Timm: And then, in terms of credit, Dana, I think the other biggest thing is we do know the consumer is under pressure. Particularly, we serve the middle-income customer, which we see is definitely pressured. We did take steps, I think, over a year ago in understanding where the market was moving and really taking on less risk in our portfolio anticipating that we were going to start to see loss rates move up, which we have seen, but they’ve been in-line with our expectations. So, losses are moving up. Payment rates are coming down. The payment rates, though, are still ahead of 2019. So, it does say that the customer is still healthy enough to make their payments and we’re not seeing the loss rates above what we anticipated, but they are definitely deteriorating from what we had seen historically, all of which we’ve embedded into our guidance and our outlook for the rest of the year.
Dana Telsey: Thank you.
Tom Kingsbury: Thank you for everyone that was listening on the call today. Have a great Thanksgiving. Go shopping. Thanks.
Operator: This concludes today’s conference call. You may now disconnect.
