Scott Bowman: I think there is, just because as we gain volume, you get a direct impact on leverage with occupancy. And our margin miss for this past quarter was – that was the biggest contributor, was just the deleverage on occupancy. So, as we add volume, as we get past the chemical price actions, and with some of the promos that we have run, we have learned some things of what’s working really well and some things that are not working so well. So, I think we will be a little bit more efficient on the use of promos and discounting, both on the types of promos we run, the magnitude of the discounts. And so I think we have gotten a little sharper there, which would help us out as we get into peak pool season.
Garik Shmois: Okay. It sounds good. Thank you.
Operator: Next question, Andrew Carter with Stifel. Please go ahead.
Andrew Carter: Hey. Thank you very much. The first question I wanted to ask, and just to put a fine tune on pricing, first one, just kind of a housekeeping. How much of a headwind is in the comp, because you don’t anniversary until June 1st? And then the second point about your ability to potentially take further pricing, how fast can you see it? Last year was a little bit of a waiting game, waiting for people to take pricing. This year, you would actually be looking for direct action. And then I would also ask to that question, and I will finish this one off. How much autonomy do kind of local managers have to do their own pricing and move, or do they have to follow kind of the national? Thanks.
Mike Egeck: Yes. Andrew, so couple of questions in there. I will start and I may need you to remind me at a couple of them. But first of all, on the impact of the price actions on total sales is 260 basis points. And there is only $1.5 million of non-comp in the quarter. So, it’s basically a 260 basis point for comp headwind as well. I think the second question was on when would we decide to do price actions, we look at our competitive pricing report every week. It’s a combination of third-party services and regular checking of local competitors by our district managers. We also do web scraping. So, we are going to – we will react quickly if we see ourselves getting out of our historical and what is also our current price positioning.
And in terms of price actions from individual stores, we have national pricing. We also have and have had for a number of years, a price match guarantee. And the price match guarantee, you go on our website, you can see kind of what the guidelines are around it. But our store managers and store associates have the authority to price match if a consumer can show us a competitive price that’s lower for a comparable product.
Andrew Carter: Thank you for that. Second question, just kind of bigger picture, Home Depot obviously made – signed an agreement to acquire SRS, which owns Heritage, the number two pool distributor in the category. Could you give any perspective on whether you kind of see that as a threat, particularly Home Depot’s ability for kind of a deeper integration between the two to go after DIY or cash-carry PRO business as well as just kind of what that can mean, putting those together with online and remind us how much the home centers really kind of compete in the category as it stands today against you specifically?
Mike Egeck: Yes. Thanks for this question. You know what, in our view, we think Home Depot has made it pretty clear that the acquisition of SRS, Heritage, it’s really about growing their PRO builder business as opposed to a new focus on pool. They said those businesses would run as separate businesses, current management. Heritage is only about 15% of the SRS business. So, that seems clear to us. And we haven’t seen any evidence to suggest that Home Depot would increase aisle space to pool SKUs at the expense of existing SKUs. That’s a pretty high opportunity cost. So, given those two dynamics, we don’t really think it changes the competitive landscape for Leslie’s. We have competed against the home centers. They do, Andrew, about 15% or 16% of the pool business, have for a number of years.
I think that share is held pretty steady. So, current competitors, we definitely keep an eye on them. We don’t think this particular acquisition really changes the competitive landscape for us.
Andrew Carter: Thanks. I will pass it on.
Operator: Thank you. I would like to turn the floor over to Mike Egeck for closing remarks.
Mike Egeck: Thanks Stacy. And thank you all for joining us this afternoon and for your continued interest in Leslie’s.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.
