Unidentified Analyst: Three questions for you today. First to just follow-up on a prior question on gross margins. Of course, there’s been a lot of discounting industry-wide right now, especially on the bicycle side and have been seeing even current year product seems to be heavily discounted, especially in Europe. I’m sure there must be a balance between supporting dealers in a tough sales environment while also maintaining long-term integrity of the brand. I’m just curious, broadly speaking, how do you think about pricing discipline in this environment?
Sean MacDonald: Absolutely. So Leatt has tried to balance all of that out very, very carefully, which is the reason. I mean, we certainly could have pushed a lot more inventory on to dealers than what we have. But we feel that brand equity is really important moving forward. And although there is some congestion in the marketplace now, that is going to carry out and ordering is going to return to the kind of levels that we’ve seen previously. And when we do get there, we want to be in a position where we’ve put the so much hard work into building the Leatt brand into a globally recognized consumer brand that is respected for quality that we do not want to be seen as having discounted heavily in the market. So we’re trying to balance that out as much as possible. It’s something which is extremely important to us.
Unidentified Analyst: Okay. I appreciate that. And secondly, as we move through this period of high inventory levels, I’m wondering if you could comment a bit on what you’re seeing in terms of sell-in versus sell-through? For example, I see that the consumer direct revenues, which I believe to be mostly your U.S. e-commerce sales, were up pretty strong for the year and even in this otherwise soft fourth quarter. I know you commented that consumer demand has moderated a bit, but I’m curious how much of the current revenue softness you’d attribute to moderating demand versus simply inventory drawdowns in the channel?
Sean MacDonald: That’s a great question. And I think a lot of it has got to do with the inventory. And it’s not specifically Leatt inventory. This is industry-wide inventory. And as you said, if you look at on actual bicycle sales on the bicycle side and you look at bicycle inventory levels, I mean, there’s a huge overstocking position. As I was referring to earlier, dealers have got a certain working capital level that they can manage. And of course, they’ve got to respect their bicycle brands and they’ve got to invest in certain areas. And the feedback that we’ve been getting from distributors and dealers is an actual fact. The Leatt brand has been selling well through their channel. And which means that hopefully, because the brand is strong because we’ve got a much better market position than we have pre-COVID, it means, hopefully, that we will be able to return to an ordering position from a lot of our dealers, a significant ordering position as soon as possible.
But a large amount of the constraint is more on the supply side, being able to supply into a congested inventory environment has been very challenging. In terms of demand, we are getting positive feedback from our e-comm dealers and , it’s the U.S. e-comm site that you see has been consumer direct. And I mean we’ve had really good growth there and a lot of interest from end consumers. So on the demand side, I think the demand is still there. And the participation is certainly also still there. So it’s — I think it’s less consumer demand and kind of an adjustment in consumer spending and it’s more about the supply through the channels. And of course, for a business like Leatt, who — we sell through dealers and we sell through distributors, which is also part of our working capital strategy globally.
It takes some time for it to clear through the pipeline before we get to the end consumer. But it’s very encouraging to see, as you correctly pointed out, that where we do sell to the end consumer like in the U.S., we are still seeing healthy levels of growth.
