Scott Baxter: And I’d reiterate what Joe said here. I think there’s one really important point that we’ve talked a lot about as a team. We went through a spin. Obviously, everybody knows that. Then a very difficult ERP. As everyone knows, when you do an ERP, it takes up a lot of mind space for your entire organization. Now, you’ve got a lot of bright people, a really talented team that are going to focus their energies on this back-end supply chain that Joe has now talked about a couple of times, and we’re going to put a lot of effort and energy into that. One of the things that’s great about here is that we already do it really well, and we’re going to enhance that going forward. So we see opportunity there, as Joe has mentioned, and we’ve got a lot of people that are going to be focused on that now that we’ve freed up some of their time.
Peter McGoldrick : Thank you.
Operator: Thank you. The next question is coming from Paul Kearney of Barclays. Please go ahead.
Paul Kearney : Hey, good morning. Thanks for taking my question. And Joe, good to hear from you again. First, can you talk about the margin performance by brand? It looks like the operating margin fell almost 350 basis points versus Wrangler down 25. What was the driver of the differential between the two? And then I have a follow-up.
Joe Alkire: Yes, Paul, if you’re looking at the reported numbers, you’ve got the duty charge embedded in there. So there’s some noise in there related to that.
Paul Kearney : Is that primarily pulling on lead?
Joe Alkire: No, it would be both brands.
Paul Kearney : Okay. Second, I guess, as we look into next year and we think about SG&A, how should we think about SG&A growth relative to the low single digits this year, especially given the investments that you’re making into the business? Thanks.
Joe Alkire: Yes, I think we’ll hold on any specific guidance for next year. But I would say just from a construct standpoint, we’ll continue to look to distort investment toward the areas we talked about, DTC, demand creation and innovation, while we hold the line on discretionary expenses and look to leverage those pretty aggressively. We do continue to have opportunities to drive further efficiency in the business. I talked about that a little bit in my prepared remarks. And we’ll talk about where and how that’s going to come to life in the context of our plan for next year.
Paul Kearney : All right. Thank you.
Operator: Thank you. The next question is coming from Bob Drbul of Guggenheim. Please go ahead.
Bob Drbul : I wanted to jump back in just and follow up on, I mean, the SG&A and the spend, but the demand creation, you’re talking about just the brand doing as much as it’s ever done sort of this current quarter. The Cowboys and Laney Wilson. Can you just talk about sort of the level sort of where you are today? And as you think about that dollar spend or percentage spend, how that might proceed into next year and beyond? Thanks.
Joe Alkire: Yes, yes. Thanks, Bob. I’ll start on the numbers and Scott may want to jump in here. So, so for the quarter, as an example, we increased our demand creation spend at a double digit rate in the quarter. Right. And you’ve seen the impact that that’s had and some of the things we’re doing, which we’re really excited about. That’s something we’ll continue to do over time. So I would expect, demand creation as a percent total to continue to increase and we’ll look to grow that investment at a rate slightly above our overall revenue growth.
Scott Baxter: And Bob, I’m going to jump in here because I really want to, because I would be remiss if I didn’t give a big shout out to Holly and Bridget globally from Wrangler and Lee, the two folks that lead our demand creation platforms across the globe for our brands. And that, in my point of view is that you can spend any amount of money you want, but if you don’t spend it intelligently, it really doesn’t matter. And we used to spend a lot of money and not get a lot of return from that investment. And like anything in life, you want to increase that investment return in our teams. And those leaders have done an outstanding job. And I won’t go through all the things that we talked about like the Laney Wilson, the Cowboys and all their, collabs and everything again.
But it’s a real tribute to how the teams are thinking about our brands, how we’re culturally right in the center of everything that’s going on around the globe. And every day I’m astounded when I hear about the things that we’re working on. And I shared this one other time, we used to make outbound calls for people to partner with us. We got a lot of calls that come in now, everybody wants to partner with us. So it’s a really fun position to be in and we’re really driving forward. And I think that we’re doing some things that I think, people would think about us from the standpoint of our size as a company and our spend. I think people would think that we’re much larger than we are and spend a lot more than we do because we’re having such an impact on the things that we’re doing culturally.
And you can see it, the brands are really, really, benefiting from it greatly. So I just wanted to make sure that, that was stated. So thanks, Bob.
Will Gaertner : Thanks, Scott.
Operator: Thank you. The next question is a follow-up coming from Mauricio Serna of UBS. Please go ahead.
Mauricio Serna: Great. Thanks for taking the follow up. I just want to follow-up on two things. First, on DTC, maybe you could talk a little bit more about the momentum you’re seeing there on the own.com business. How much actually does that represent of your sales at the point? And then another follow up on inventory. Do you have any exposure to the PFAs chemicals? Just wondering if that increases any risk on the inventory age as some retailers with a national footprint would likely try to reduce that exposure starting the spring of 24, as other brands have commented recently. Just wondering how that could affect your approach to discounting, too. Thank you.
Scott Baxter: Yes, so let me start with the dotcom. And yes, we’re really pleased with our dotcom business right now. I think the thing that I’m most pleased with from the standpoint of certainly the growth, but we put a lot of investment behind our dotcom and we’re actually seeing the benefit of that. Now, we built out a team. We’ve done some really good advertising and marketing within their capabilities. And now you’re marrying our new ERP system that we’ve put in globally and you’re matching that up and marrying that up to our dotcom business. And the teams are working really exceptionally well together and we see a pretty bright future. So I guess I want to make sure everyone knows that we’re still focused on that digital aspect.
It’s super important to us. It’s still front and center, of course, going forward and really like, what Chris and team are doing there. So, so really pleased. And on the other one, let us get back to you and we’ll look into that. We’ll make sure that we have the exactly correct information. So we’ll get back to you.
Mauricio Serna: Thank you.
Scott Baxter: Thanks. You bet. Thank you.
Operator: Thank you. The next question is coming from Will Gaertner of Wells Fargo. Please go ahead with your follow up.
Will Gaertner: Hey, hey, guys, thanks for let me come back in here. Just a question on the US wholesale. You have a big, you’re lapping a big number next quarter. Just how are you thinking about that? As far as growth in the next quarter as you’re lapping this sort of big spike last year?
Scott Baxter: Yes, I think will the most important thing is a freshness of your product, making sure that you’re enhancing your core product at all times, which we’ve done, making sure you’ve heard us talk a lot about our category extension. So we’ve done a really nice job in our T-shirt business done a really nice job in our, for instance, our ATG business, our Wrangler for Angler business. So all of those ancillary lines and also categories are helping us grow that business. We’re gaining real estate because of our strong POS. We’re gaining share because of our strong POS. And then you enhance that with all the demand creation that I talked about. We feel really confident in the next quarter and we really like our big customers.
