And women’s OTM for us is an exciting opportunity to expand that relationship share of wallet and continue to drive market share. So market share gains, one through unaided awareness and improving that to continue to drive our new guest acquisition, innovating within our core activities as we’ve identified. As I mentioned before, we’re still early innings on the unmet needs and the potential that we see to continue to bring to market and then the option and the opportunity we have around women’s OTM is a really exciting one for us, for her as well, so a lot of opportunities that we have to continue to drive market share.
Operator: The next question is from Lorraine Hutchinson with Bank of America. Please go ahead.
Lorraine Hutchinson: Just wanted to ask a few more follow-ups on gross margin. Do you still expect air freight to be a 10 basis point benefit to the full year? And have you changed your view at all on markdowns for the fourth quarter given the more promotional environment?
Meghan Frank: Lorraine, so we are expecting airfreight to be slightly better for the full year. So we had said 10 basis points last time, and it’s come up to 50. That is being offset by a negative impact from FX both for Q3 and Q4. And then in terms of markdowns, we’ve been expecting markdowns to be in line with 2019 levels. We did see that in Q3, and that remains our expectation in Q4. And we view that as a more normalized level for us as we compare to 2019. And still, as Calvin mentioned, very healthy full price sell-throughs and no changes in plans for markdown cadence.
Operator: The next question is from Rick Patel with Raymond James. Please go ahead.
Rick Patel: Can you help us think about profitability by region? I’m just curious how that’s tracking given your strong demand globally versus strategic investments that you’re also making and where you see the most opportunity as you look out to the next year.
Meghan Frank: Thanks, Rick. So we are profitable across both our international and North America regions. We were pleased that Europe hit profitability last year. We continue to see opportunity across both North America and international over the longer term. We’re obviously in earlier stages in our international business. So we’d expect to see more expansion there as we scale, but the opportunities with scale across both regions.
Operator: The next question is from Abbie Zvejnieks with Piper Sandler. Please go ahead.
Abbie Zvejnieks: I was wondering if you had any category commentary. I know that last year, you were significantly under inventory in some categories like outerwear, but any shifts you’re seeing there and then maybe commentary on belt bag as well as well?
Meghan Frank: Yes. I would say in terms of categories, we are seeing pretty balanced growth across our men’s women’s and accessories business, all in the double-digit range. We did have pockets of inventory where we were under last year, notably, I call it outerwear where we’ve seen more positive performance and believe we’re in a strong inventory position as we enter Q4. In terms of the everywhere belt bag, it’s been a great style for us. Accessories growth, obviously, very strong, it’s our number one cell. We continue to innovate across all of our assortments as we move into Q4 and then into 2023 as well.
Operator: The next question is from John Kernan with Cowen. Please go ahead.
John Kernan: Congrats on navigating a tricky environment. Thanks for all the commentary on gross margin and inventory. I guess when we look at the level of units but also the cost on the balance sheet, is there anything lingering in the cost of goods sold into next year from some of the higher sourcing costs earlier this year that might be a source of pressure on gross margin? Or do you — are there offsets to that as we — from supply chain as we go into next year?
