Brandon Sink: Yeah. Hey, Peter. This is Brandon. Just in terms of as we’re looking at 2024, we’re in the later stages of our planning process at the moment across the organization. We’re going to hold off on providing any in-depth guidance until our Q4 call, but what I will tell you just in terms of top line macro home improvement, there’s continued uncertainty on interest rates, when we’re going to see relief, when existing home sales are going to turn the corner and begin to improve and obviously the ongoing impact of inflation, higher rates on consumer wallets. So, we’re watching all that. I think, to your specific question on margins, we’re managing several puts and takes as we look at next year. We are cycling one-time legal settlements, normalization of incentive comp, wage growth, the pacing of our PPI initiatives.
So we’re looking at all that, we’re going to take all those factors under consideration as we develop our guide and hold off on providing that until we get to February.
Marvin Ellison: Peter, this is Marvin, and the only thing I’ll add is, you heard in some of the prepared comments, was talking about an old operating system and we talked a lot about this 30 year old operating system that’s really been a significant impediment to some of the technology advancements and we’re going to be sunsetting that system at the end of this year and it’s going to just unlock a little bit of acceleration in some of the technology advancements that we have on the project list that we just, candidly — we couldn’t get to because of this system. And so the good news is, we’re going to continue to work, to Brandon’s point, on all the elements of running an improved business from a merchandising, store operations, supply chain, but also the technology project list over the next three to five years is robust and it’s going to allow us to continue to find ways to drive profitability, irrespective of the macroenvironment that we’re in.
We’re hoping the macroenvironment gets better. But to Brandon’s point, we’re going to wait until our Q4 call to talk about ’24 and give a much more educated perspective at that time.
Peter Benedict: All right. Fair enough. Appreciate that perspective. I guess my follow-up would be just around maybe the cost environment that you’re seeing out there, a lot of talk of obviously, disinflation and some outright deflation in certain areas. What are you seeing right now in terms of the cost you’re receiving from your suppliers and how do you kind of view that as we look out over the next few quarters? Thank you.
Brandon Sink: Yeah, Peter. This is Brandon. I would say just in terms of costs coming into the organization at this point, just from an inflation price action in response to that, it’s leveled off pretty dramatically here as we move through the year. We’ve had targets in terms of claw back for this year, we laid those expectations out back in December, I would say, very much pacing in line with those targets. We laid out about $500 million over the course of three years. We’re leveraging cost management teams working closely with the merchants, the tech-enabled tools that we’ve invested in. We have very detailed product cost breakdowns that are informing those negotiations with our suppliers. So we’re continuing to be balanced. We’re taking a portfolio approach. We’re investing in price strategically where needed, but also looking through the lens of protecting our margins.
Peter Benedict: Understood. Thanks so much, guys. Happy Thanksgiving.
Brandon Sink: Thank you, Peter.
Marvin Ellison: Yeah. Thanks, Peter.
Operator: Our next question is from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.
Simeon Gutman: Hey. Good morning, everyone. I want to try to take another stab at this margin question for next year. I know there’s not a whole lot you can provide. If you think about the leverage that you have, do you lose any for next year? I realize you’re going to lap the legal settlement in the first part of the year. And then connected to it, as you manage your selling expenses, do you think that’s having an impact on sales at all? Meaning, is that not something you press on, it’s hard for next year?
Brandon Sink: Yeah, Simeon. This is Brandon. I wouldn’t say when we look at next year, we’re losing the benefit of any of those levers. In fact, I think we’re looking at where we have opportunities to accelerate. We’ve talked about PPI, talked about where we were in that journey in terms of middle innings. Marvin mentioned the conversion of the store technology to a modern omnichannel platform. And we got a lot of initiatives stacked up where we expect to see those benefits as that gets delivered next year. Earlier question on transforming the front-end, really expanding assisted checkout, expanding the BOPIS experience and then Bill talked in his prepared comments about multiple other kind of merchandising PPI initiatives, whether it’s cost claw back, inventory productivity, pricing, promotional strategies, expansion of private brands.
