Will Gardner: Great. I’ll pass it on. Thank you.
Scott Baxter: Thanks, Will.
Operator: Thank you. Our next question is from Brooke Roach with Goldman Sachs. Please proceed with your question.
Brooke Roach: Good morning and thank you so much for taking our question. I was wondering if you could unpack your expectations from China reopening and what you’ve embedded in the guide. What proportion of sales in 2022 were from China and what’s the reopening opportunity for Kontoor Brands maybe from like a dollar and margin basis as you get back to normalized operating levels in the country?
Chris Waldeck: Hey Brooke, it’s Chris. I’ll kick this off. Clearly, there was mandatory COVID restrictions in Q4 and that was a headwind for us, specifically the Lee brand. What I’m encouraged by is that we exited 2022 with our inventories clean and consumer demand for our brand is strong, and we’re seeing that come through in the digital channels where there wasn’t the restrictions like we had in the brick-and-mortar stores. The issue we’re dealing was just our retail inventories remain elevated. That’s why we think the first half could be a bit more challenged, but we expect most of that really to be in the first quarter. As Rustin said earlier, we’re playing the long game here. We’re working really closely with our partners.
Our team was with them, just this last week going through business plans and really laying out the assortment for the back half of the year. And we’re going to continue to invest in the brand and really monitor the geopolitical conditions that are out there. But we believe the long-term growth in this really highly accretive region is there for us. So we’re excited about the opportunities ahead. Thanks.
Brooke Roach: Thanks so much. And if I could just ask one follow-up on the US business. Given the strength of market share capture that you’re realizing in the US right now, particularly in Wrangler, can you square that growth with the deceleration that you have embedded in the back half of the year? How does that fit with your long-term targets that underpin your Investor Day outlook? Thank you.
Tom Waldron: Well, from a macro standpoint, Brooke, we did our business and the strength in Wrangler has continued from the fourth quarter into the first quarter. And then you think about what we’re doing to go ahead and make sure that that continues. Incremental investments in brand advertising, incremental investments in some of the things that we’ve done from a Wrangler co-lab standpoint, you think about our 75th anniversary, Yellowstone, Buffalo Trace, Luke KC . And then you think about the value that our brands bring to the marketplace. So in times of uncertain times, Wrangler is a trusted brand, incredible value employees in multiple channels and multiple geographies, and it’s at a price point that our consumers still can afford very easily. So we think we’ve positioned ourselves very well, but we are being and looking at the broad marketplace and the macro conditions in a really specific way to make sure that we set our plans accordingly.
Brooke Roach: Thank you very much. I’ll pass it on.
Operator: Thank you. Our next question is from Sam Poser with Williams Trading. Please proceed with your question.
Sam Poser: Good morning. Thanks for taking my question. I have handful. The guidance that you’re providing is a non-GAAP guidance, just to confirm?
Scott Baxter: No, it is on a GAAP basis, Sam.
Sam Poser: So are there adjustments that you’re foreseeing into the numbers right now?
Scott Baxter: No. That’s why we’re guiding on a GAAP basis.
Sam Poser: Okay. With the inventory levels, what would be your normalized forward weeks of supply? You were running around 15% at the end of 2018, which is probably the best €“ the best thing to look at, given €“ sorry €“ sorry about that. It’s probably the best thing to look given the €“ given what happened in 2020. So — what would be that normalized forward weeks of supply like around 15% because right now, on my numbers, it’s around 18%, which is an improvement from the last quarter?
