Q – Andrew Carter: And then the second question I have, I mean, last year, you got out over your skis on pricing, didn’t make an adjustment until late season. You also had the added factor content with of people had chemical sitting in their garage, you think that’s unwinded. So I mean, regarding kind of getting the messaging out there, how long is the process is that to get the message back to the customers? And if you could help us out, like how often does kind of a core consumer come into Leslie’s, is it twice a season? Is it once a week? Just anything you can help us out with there? Thanks.
Mike Egeck: On average, it’s about three times the season. So we should be — by the time we lap those price changes, we should have seen most all of our account base. And then look, it’s just it needs to be a steady drumbeat of messaging, reinforcing not just our pricing but also our value. I think the most encouraging thing is that we decided to take those price actions on chemicals two reasons. One, based on what we were seeing for competitive pricing, but also and importantly, our Net Promoter Scores started to dip and the driver was price perception. We’ve always been viewed as a premium product, premium quality at a fair price. And we started to get feedback that it was overpriced. That’s not the position we want to be in.
The good news in our minds, is the NPS scores on that specific pricing metric have been improving every month since. So we think we’re in — it’s one of the reasons when we’re talking about pricing earlier and the question from Simeon, one of the reasons we feel we’re in a good spot there. But as we’ve talked about before, we’re constantly scraping across the digital sites. We’ve got shoppers in market. So we’re paying a lot of attention to — definitely intend to use your phrase, not get out of our skis again.
Q – Andrew Carter: Thank you very much. I’ll pass it on.
Mike Egeck: Thanks, Andrew.
Operator: Our next question is from Justin Kleber with Baird. Please proceed.
Q – Justin Kleber: Yes. Good evening, everyone. This is Justin Kleber. Thanks for taking the question. First one, just to clarify, Mike, the traffic comments. You mentioned an improvement to down mid-singles. Can you just help me reconcile that figure versus the transaction number you have in the deck, which showed a slight desell, if traffic is less bad, but actual transactions, I guess, got a bit worse sequentially. Is conversion the missing piece there? Or am I missing something with the numbers and not looking at apples-to-apples.
Mike Egeck: No, you’re looking at it correctly. I’d kind of parse it into the year-over-year comparison and to the sequential comparison. And on a year-over-year basis, you’re right, transactions are down 6%, traffic is down in that same range, conversion was basically flat. On a sequential basis, for September Q4 into Q1, we tend to have a little less conversion rate overall historically. And I think that has to do with — you’re starting to wind down out of the peak pool season. And it’s just a little bit different kind of shopper coming in. So not surprised by that, but what you pointed out is absolutely correct. Higher conversion in Q4, a little higher over — a little lower conversion in Q1, but quarter over quarter — or excuse me, year-over-year for quarter one, conversion was flat.
Justin Kleber: Got it. Okay. Thanks for the clarification. And then, Scott, maybe a question for you on gross margin. Just wanted to walk through that positive 110 basis point inventory adjustment. I thought we really weren’t going to start clawing that divot back until 4Q. So just any additional color there. As we think about 2Q, just any color on how you envision the various margin buckets playing out even if it’s just directional commentary relative to 1Q? That would be very helpful.
Scott Bowman: We’ve just placed a very high focus on inventory adjustments in general. And so I think we’re getting better at it. So I think that’s one reason why it was a little bit better. I think the other thing is we did — we spent a lot of time in Q4 just making sure that we had things cleaned up. And so there was a lot of work done, especially with bringing all of the inventory in-house. And so I think that rigor that we had in Q4 is paying off a little bit for us as well here in the first quarter. Now, when I look at Q2 margin kind of compared to Q1, I still see Q2 slightly better than Q1 in large part just because we’ll have better leverage on DC costs and occupancy costs with more sales. So I think that will help the quarter. We did have some price increases in January of last year that will temper that. But even with that, I still expect Q2 to be a little better sequentially than Q1.
Justin Kleber: Got it. Thank you both. Best of luck.
Operator: This will conclude today’s question-and-answer session. I would like to turn the conference back over to Mike for closing remarks.
Mike Egeck: Thank you, operator, and thank you all for joining us today, and your continued interest in Leslie’s.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.
