We have long relationships with these customers. We are important to them and they are important to us and I’m really excited I met with many of them during my time here. It’s not the year that any of us anticipated, there are clearly headwinds, but we have our arms around the issues. I’d point to three things. One is the macro issues we’re all familiar with; the second is some value concerns that our customers were talking to us about some of our fits, which we’ve addressed; and then third, we have faced over the course of the year some congestions in our DCs, which are largely behind us. As we’ve addressed the issues, we have seen sequential improvement. I think Chip mentioned that earlier on the call. And so each month across the quarter improved and then even in the early days of this quarter, we are continuing to see improvement there.
I think beyond that, though, so addressing, I call it the fundamentals of the value equation and executing our shipments. It’s about product and it’s about innovation. And we talk about just having this lifestyle expression of our brand in our own stores, that’s unique. And we can do a better job there with our wholesale partners. And so whether that’s head-to-toe denim dressing, bringing more fashion, bringing more innovation and you’re going to see some of that as early as this fall and holiday, where I believe we’re really set up, but I think importantly, as we look into 2024, we have a very deep pipeline we’ve been presenting to customers. We have a new innovation platform that we’ve already started to tease out there. I’ll talk about that at some point in the future.
So – but we’ve got a lot in front of us to believe that we can stabilize and ultimately reinstate growth in this important channel.
Robert Drbul: Thank you. Good luck.
Michelle Gass: Thanks, Bob.
Aida Orphan: Thank you.
Operator: Thank you. Please standby for our next question, which comes from the line of Jay Sole of UBS.
Jay Sole: Great. Thank you so much. Harmit, you mentioned going through an overview of the cost structure, maybe outline a little bit more or elaborate a little bit more on what you mean in terms of quantifying the impact that you see. And maybe if you put it in the context of the adjusted EBIT margin guidance of 15% that was given as part of the long-term management targets of the Investor Day in June ’22 that would be super helpful. Thank you.
Harmit Singh: Sure, Jay. Michelle talked about how we are making this faster pivot to DTC. And we believe that will accelerate our growth. While it’s early, we recognized that this company has a lot of opportunities to be faster, more agile, to be efficient, including shorter go-to-market calendar. So let me give you an example. Before Michelle arrived, we didn’t have dresses and skirts, and [Technical Difficulty] of this year. You’ve got it, right? That is acting more like a vertical retailer versus a wholesaler, who has go-to-market [Technical Difficulty] over 12 to 15 months. We are going to take a hard look at our assortment and drive more productivity. Like a lot of the companies, we also have a lot of tail. But the tail doesn’t move as fast.
So taking a hard look at that, I think, is critical. So we are looking at all processes, we are looking at go-to-market, and we are going to be a lot more consumer-centric. In terms of areas, we think this drives more productivity in our DTC operations and profitability. We think it does drive a better SG&A structure. It improves our supply chain operations, including COGS and clear working capital improvements as we drive higher turns because we are not satisfied. While we get to below inventory level, below last year inventory levels at the end of the year, we think there is a lot more opportunity. And I know I really understand, if I was in your shoes, you want us to quantify this fairly quickly, but what I will tell you is that, give us through the end of quarter four when we release our expectations for next year, we will back [Technical Difficulty] the impact.
