Harmit Singh: Yes. So I think, Dana, you asked about our expectations for wholesale. As you know, or I just want to clarify, if you think of the U.S. wholesale business and the year we’re lapping is important. The first half, I think the U.S. wholesale business was up close a little over 20%, 25% in Q1, 20% in Q2. And so we are lapping strong numbers, and then we have the ERP timing. Our expectation for the year and this is wholesale in total, our expectation for the year is down in the low to mid-single digits, but made up by our direct-to-consumer business. So, I think if you think of the business structurally, this is going to — our direct-to-consumer business, which is about 42%, but for Levi’s, it’s close to 45% continues to get stronger.
And strategically, that’s really what we said in Investor Day. This is a business that should head towards 55%. So it gets stronger, the gross margins are better, et cetera. So, I think ’23 is a good reset here from that perspective. And we’re taking — it’s unfortunate what’s happening in the Western world in terms of the macroeconomics. But if the Company emerges structurally a better company at the end of the year, it’s a good thing.
Chip Bergh: Yes. The only other thing I would add on top of that, Dana, is in talking with our wholesale customers, virtually all of the customers are keeping their open-to-buy budgets pretty tight. Given the uncertainty and then the only other thing I would add is that we are seeing pretty significant softness in our Signature Denizen business. So that value consumer is really being squeezed. There’s definitely a bifurcation happening — where the lower end consumer is making hard choices and either trading down or just not buying denim. And — but that middle-income consumer amount, which is kind of the sweet spot for the Levi’s brand is doing well and is still buying denim, and that is driving the growth of the Levi’s business, the growth of our DTC business and the strength that we are seeing in our direct-to-consumer business.
Operator: Thank you. Our next question comes from the line of Paul Lejuez of Citi. Your question please, Paul.
Tracy Kogan: It’s Tracy Kogan filling in for Paul. I don’t think I heard you talk about 3Q, and I was just wondering, if you’re still expecting high single-digit sales growth there, and if you have anything like order books to support or give you confidence in that growth?
Harmit Singh: Yes. No. Tracy, good to connect. We don’t, as you know, guide quarterly. We talk about the year. But if you do the math, our H2 is up higher than mid-single digits. And so in H2, we’ll close approach probably the low end of our growth algorithm. And so, we’re bringing to progress this. What we’ve said earlier is a tale of two halves, the first half weaker, the second half stronger. It’s also driven by the year we’re lapping. But if you go back and benchmark it to, say, ’19, the difference between the first half and the second half is not that dramatic. It’s just the year that we’re lapping. Plus our expectation really is things get a little better as the year progresses, and we are able to work out all the inventory issues, et cetera, et cetera.
Tracy Kogan: Great. And just on freight, I think you said airfreight was a tailwind, but ocean freight was a headwind this quarter. I guess it netted out as a headwind. I’m just wondering how you’re thinking about those pieces of freight for the remainder of the year?
Harmit Singh: I mean, H2 becomes a tailwind, both pieces of freight, and that’s how we’re thinking through it.
Operator: Thank you. Our next question comes from the line of Laurent Vasilescu of BNP Paribas. Your question please, Laurent.
