Peter Keith: Okay. Helpful. And then, I guess, I am intrigued with this 200 basis points of inventory adjustment that you are referencing with regard to Peter Benedict’s question for FY’23. It seems like a big recovery opportunity, but I’m trying to size it up, if it’s a multi-year. I guess, looking, at Q4 is when we hit the inflection, do you start to see full recovery by Q4 or is this something that, it might take through FY’25 or even longer to fully recoup?
Scott Bowman: Good question. I would say that we can recoup most of that this year. And the reason I say that is, mainly because just like I was saying about having our inventory inside our four walls is the biggest step that we can take in that process. So, we’re not moving product around, we’re not an off-site storage, third-party storage, and just having better control of that inventory goes a long way and avoiding a lot of that cost. There is continued improvements will do on scrap. And so but it was in control before we start this big inventory build, it’s not a ton of work to do, but just further refinement of that. The one-piece that I didn’t really go into a lot, we did have some additional and sellable returns, just returns coming back.
And so, that — those returns were a little bit elevated by a little bit. And so, as we continue to refine our process of going through those returns and making sure that we’re taking all — advantage of all opportunity to sell those products either as new or other outlets, that’s a bit of an opportunity for us. And so, the returns did tick-up a little bit. I don’t know if that’s a long-term thing, or just an anomaly, but that wasn’t the major portion of the spend there. And so, what I would say is, basically, 80% of what we saw over the — this last quarter are fixable in 2024.
Peter Keith: Okay. And just to verify that, Scott, there’s a recoup this year, but you don’t start to recoup it until Q4, and then, I guess, in the following quarters, you’ll recoup the rest on an annualized basis?
Scott Bowman: That’s — yeah, that’s the way to think about it. I mean, predominantly, it was the fourth quarter impact for us. And so, as we lap fourth quarter this year, we should see that benefit.
Peter Keith: Thank you very much, guys. Good luck.
Scott Bowman: Thank you.
Michael Egeck: Thanks.
Operator: Thank you. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.
Dana Telsey: Hi, good afternoon, everyone. On a big picture basis, when you think about the pool season in 2024, are you expecting a positive pool season in the second-half of the year, is that what the guidance infers and how you’re thinking about it? And then, breaking down the components of the sales, even compared to last quarter, you talked about equipment sales and what made it more impactful this quarter than last quarter. How you’re thinking about AOV and how you’re planning AOV going forward? Thank you.
Michael Egeck: Yeah. Thanks, Dana. The — look, we expect the 2024 pool season based on what we know right now to be fairly flat. Like, I’d mentioned earlier, we will see some inflation in equipment, but we think the units might be challenged. Likely to see a little bit of deflation in chemicals, but we think the volumes will be higher. And mixing those together, we think it’s a fairly flat season. We’re showing a big recovery as Scott walked through from first half to second half, that has more to do with our internal decision on the price adjustments and when we made them last year. But overall, for the industry and for ourselves from a demand standpoint, we expect the pool season to be relatively flat. Again, discretionary items in there being down, non-discretionary being positive.
In terms of AOV, at the midpoint, we’re planning AOV down about 4% for the year and transactions up about 3%. With normal weather, which we’ve seen now in the fourth quarter and also into the first quarter, we’re seeing traffic recover, conversions are holding steady. That’s giving us a transaction boost. But the mix out of high-ticket discretionary items and some of the more discretionary equipment categories is challenging AOV.
Dana Telsey: Got it. Thank you. And just following-up on the competitive front, what are you seeing from your competitors? Any change there in terms of whether it’s pricing or store openings, store closings, what are you seeing there?
Michael Egeck: Yeah, there hasn’t been any new scale competitors that have come on the scene, either in the PRO side or on the residential side. On the PRO side, we’ve got two big distributors, that continue to go about their business, running very nice businesses and little bit challenged this year by their own reporting, but still very healthy businesses. And then, on the residential side, the one scaled competitor, Pinch A Penny in Florida seems to be having a fairly flattish year, and we would expect them to be continue to be good competitors for next year, and can’t say how they’re thinking about it, but I’m not sure the situation in Florida is much different than the rest of the country in terms of how we’re thinking about it.
Dana Telsey: Thank you.
Operator: Thank you. This concludes our question-and-answer session. And with that, this will conclude today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation.
