We will look to identify further efficiencies through execution of our working capital initiatives. Lastly, we will continue to prudently manage expenses and focus on aligning our cost structure with our current rate of sales. In terms of capital expenditures, we’re lowering our spend to approximately $13 million in 2024, primarily to support our strategic investments, including our carpet rollout. With that, I’ll turn the call back to Charles.
Operator: [Operator instructions] We will now begin the question and answer session. Today’s question comes from Laura Champine from Loop Capital. Please go ahead. Your line is now open.
Laura Champine: Thank you for taking my question. It’s on the SG&A expense line. I know that a few months ago you’re expecting to grow that this year. How much can you reasonably pull it back in terms of either dollars or percentage spend year-on-year?
Charles Tyson: Yeah, Laura, thanks for that question. This quarter we reduced SG&A expenses by over $2 million net versus same period last year and had another sequential reduction, as you compare SG &A spend against Q4. Also in the quarter, we realized just under $5 million of savings from a number of our different activities and initiatives and we feel like we’ve got an additional runway, probably a very similar rate of reduction that I just communicated that we achieved in the quarter.
Laura Champine: Okay. So at that rate, it’s tough for me to get to a profitability level, certainly on the sales pace. What sales level do you think LL Flooring needs to be profitable?
Charles Tyson: Yeah, I believe anywhere between $930 million and $1 billion with our infrastructure rate as it exists today. But as I mentioned, we’ve got additional activities and initiatives that we’ve not only completed a number of in Q1 that drove that $5 million of savings, but it will continue for Q2, Q3, Q4 at a somewhat similar reduction rate.
Bob Madore: Yeah. Let me add Laura, too, I think. Laura, while we’re talking about the excellent environment, we really do have a low share, which gives us a good opportunity to grow our top line sales. Obviously, we got our carpet initiative, which will be in over 200 stores by the end of Q2. We continue to be pleased with the performance in CRM in terms of Pro relationship building and what we’re beginning to see in those opportunities. So while we’re very focused on the cost side of our business is we see plenty of opportunities, even in a softer market to us, to expand the business, whether it’s the successes we’re seeing with Bellawood and our wood business, our category expansions, our new product category expansions, or new channels like our national account. So we’re attacking our business very aggressively, both on our cost side, but just as equally on the sales side.
Operator: Thank you. This will conclude today’s question-and-answer session. So I’d like to pass it back over to Charles Tyson for any closing remarks.
Charles Tyson: Thank you, operator. Thank you for joining our Q1 2024 earnings call today. Again, I want to thank all of our team members for their hard work, delighting our customers during the quarter and we look forward to talking to you next quarter. Thank you.
Operator: This concludes today’s conference call. Thank you all for your participation. You may now disconnect your lines.
