Nate Olmstead: You asked what causes it to be different. I think we’re transitioning out of, obviously, a unique period globally from shutdowns. And so the diversification that we have, again, I’ll come back to this in the portfolio by product, by category, by geography, are all things that I love having in a time like this, because that transition is obviously different in those categories and in those geographies. We still see places that are doing better, that are growing a little bit. They maybe went into the lockdown at a different time. They’ve come out of it differently. So that diversification continues to be, I think, a really, really important thing. Obviously, this quarter, we’re disappointed with the volumes. But the shape of the P&L held up pretty well.
And I think we continue to manage well in this environment. We continue to do well from a market share standpoint. We continue to invest in our long-term priorities and continue to manage OpEx, I think, very well and do a good job with cash generation. So lots of things haven’t changed. And again, I think the diversification in our business is really key to us being able to deliver a good strong quarter in what’s the challenging macro environment.
Erik Woodring: Okay. That’s super helpful. I was just the last very quick follow-up was when you mentioned enterprise demand weakness, did it spill over into any other segments besides VC, or was it mostly concentrated in VC? Just wanted to touch that clarification. That’s it for me.
Nate Olmstead: Yeah. So we see it also in CNP, mice and keyboards, mice and keyboards and traditional mice and keyboards and Video Collaboration, our two biggest areas in B2B. VC is a good proxy for it, because it’s pretty much all B2B, but we also see it in mice and keyboards.
Erik Woodring: Okay. Thank you.
Bracken Darrell: By the way, I should say, it’s not like people weren’t buying any conference cams. They were. So we didn’t suddenly go terribly negative. It was down mid-single digits. So €“ but that was after being up double digits before.
Erik Woodring: All right. Thank you, guys.
Bracken Darrell: Thank you, Erik.
Nate Melihercik: Thanks, Erik. Next up will be Adam Angelov from Bank of America.
Bracken Darrell: Hey, Adam.
Nate Olmstead: Hey, Adam.
Adam Angelov: Hi, there. So I just wanted to check on the channel inventory situation. So, maybe if we could go by division. I think Gaming was positive sell-through in the quarter. Is that a sign that the inventory levels there are kind of at reasonable levels, and perhaps the sell-in can match the sell-through going forward? And maybe, if there is any other specifics by different division, if you could add that, that would be great? And then second one, so on 2023, the calendar year, are you thinking about further price increases? And maybe if you could just share your thought process on price increases versus potentially prolonged promotion period as we €“ as you mentioned already? Thanks.
Bracken Darrell: Nate, I’ll let you take the first, and I’ll take the second.
Nate Olmstead: Yeah. I think channel is in good shape. It’s down year-over-year, which should be consistent with the overall trends in the business. I mean, I think €“ we continue to see our customers, I think, being pretty cautious and conservative around restocking. Same sorts of visibility challenges that we were talking about a moment ago, I think probably applied to them as well. So being a little cautious on reordering, but the channel is in good shape. As Bracken mentioned, Gaming was one of those areas that was more €“ seemed to be more promotional this holiday period. And so we did make some progress in reducing some of the inventory levels there. I’ll just quickly say on the pricing side, and then I’ll let you jump in there, too, Bracken. It’s really a function of a lot of things, Adam. What happens with currency, what happens with inflation? So lots of elements there for us to consider. But Bracken, something you’d want to add on that?
Bracken Darrell : Yes, I’ll be even more definitive. I mean, if something doesn’t change, I can’t imagine us raising price further. I think those 900 basis points or 800 basis points of headwinds that are going to eventually drop would suggest that we won’t need to. Now, if something radically change again, who knows. But I don’t think as long as currently keeps heading in the direction it is and inflation keeps heading in the direction we all think it’s going to go, I don’t think we would need to raise price again.
Nate Olmstead : Yes. Then on the inventory side, too, you asked about channel. Again, Bracken had mentioned it, I think, in his remarks. Third consecutive quarter where we’ve reduced our distribution center inventory sequentially. And we made good progress I think there this quarter. We’ll be able to reduce that more into the fourth quarter and continue to normalize those levels. Not in a big hurry to do so. It’s all good fresh inventory that I expect we’ll sell, but it continues to be a focus for us.
Adam Angelov : Right. Thank you.
Nate Olmstead : Thanks, Adam
Nate Melihercik : Next on the line will be Joern from UBS. Good afternoon, Joern.
Nate Olmstead : Hey, Joern
Bracken Darrell : Hey, Joern
Joern Iffert : Yes. Hi. Good morning. Thanks for taking my questions. And the first one would be please on your implied Q4 outlook, which is targeting or guiding for sales being down around 25%. Can you really get us a rough indication, is one-third of this destocking, one-third consumer demand weakness and one-third China? Is this how we should think about it? Because it seems when you’re saying sales-through for your key categories, ex Russia was only down mid single-digit in Q3. It seems a quite sharp deceleration. So if you can provide some more color here would be definitely appreciated. And the second question would be, please, just focusing on the freight costs, which they came down to pre-COVID levels for a couple of areas. Do you feel that this will be a very strong contributor to the scenario to your earnings growth in 2024? Maybe to start with these two questions. Thanks.
Bracken Darrell : I’ll take the last question.
