And some of our most exciting activations come from that market and an ongoing strategy to keep opening new stores. So our unaided brand awareness, we did see good improvements last year. We started the year at 9%, we ended at 14%, but 14% in a market of that size, we have a lot of opportunity to continue to grow, see great momentum in the brand and excited about how that team is activating and growing and optimistic with our potential in that market.
Meghan Frank: And then Brooke, I’d add, though we don’t break out regional outlooks. In terms of China, we believe that growth rate will be significantly above our guide of 10% to 11% for the full year, excluding the 53rd week of coming off of a 78% growth in Q4. And we feel well-positioned as we move into 2024. And then in terms of improving profitability in that region, our near-term priority is really to grow top line and capture, as Calvin mentioned, the unaided brand awareness opportunity we see there and go after new guest acquisition this year. So we’ve looked to continue those investments as we look into 2024, but certainly see opportunity over the longer-term to continue to grow that operating margin profit.
Operator: The next question comes from Mark Altschwager with Baird. Please go ahead.
Mark Altschwager: Good afternoon. Thanks for taking my question. I wanted to ask about inventory. I guess, this is the first time in a while I think I heard you speak to stock-outs in certain sizes and styles perhaps weighing on sales growth. So, how do you feel about the level and the mix of your current inventory? What are your plans for inventory growth this year? And given that things seem to be fairly lean, why wouldn’t there be an opportunity to perhaps drive lower markdowns in 2024? Maybe walk us through some of the puts and takes you’re thinking about there. Thank you.
Meghan Frank: Yeah. Thanks, Mark. And so inventory, we came in negative 9% on a dollar basis and plus 1% on a unit basis. We feel pleased with the level and currency composition of our inventory overall. And Calvin did talk about a few pockets in the US where we feel like we’ve got an opportunity to accelerate what’s working. In terms of inventory, we still feel well-positioned from an overall perspective. I would say from a markdown perspective, we run a very low markdown rate. Generally speaking, 2023 was flat to 2022 and 2019, which is a healthy waterline for us. That’s our expectation for 2024. So at this point in time, given we’re very early in the year, we’re not changing our thinking on markdowns, but we’ll continue to keep you updated there.
Mark Altschwager: Thank you.
Operator: The next question comes from Matthew Boss with JP Morgan. Please go ahead. Please go ahead.
Matthew Boss: Could you speak to multi-year drivers of positive comp growth in the Americas, maybe relative to the high single-digits last year, or just areas that you see to take continued market share regardless of the macro?
Meghan Frank: Hey, Matt. I think you’re at the beginning of your question cut-off. Do you mind just repeating it?
Matthew Boss: Yes, sure, yes. I think the operator held it on. So what I was asking, on the early innings growth story that I know Calvin you — that you speak to, just how the Americas fits into that? And as we think about same-store sales growth in the Americas relative to the high single this year, just how best to think about multi-year drivers or areas to see continued market share regardless of what the Americas macro may look like?
Calvin McDonald: Yes. Thanks, Matt. Definitely, still view across all markets being early innings in our growth story. When we look at Americas, as I mentioned, Canada is continuing its strong momentum into quarter one. And within the US, we’re navigating what we see as a dynamic retail environment and a consumer that’s a little bit softer, but there are a lot of areas that we are focused on and we know can continue to drive our business. That being product innovation and the unaided awareness, which in the US is still very, very low. I think combined, it’s less than 50%, in the 40% range with a lot of exciting initiatives planned to continue to make progress on that awareness metrics. So, when we look across the metric, when we look across our categories, which I’ve always talked to you before in terms of the balanced approach across men’s and women’s and accessories and the pipeline and the ability to grow and where we are from an awareness perspective, no change in US, no change in our strategy.
And with this guidance, not only did we complete 2023 ahead of our Power of Three x2 goal, but with the guidance, 2024, we will still be ahead of our Power of Three x2 goals, and we don’t see a change in that.
Meghan Frank: And Matt, I’ll just add. We shared our long-term target of low double-digit CAGR for North America. We’re tracking ahead of that to date in our plan, and feel comfortable with that long-term target. And then from a sales per square foot perspective, the US is the highest in terms of sales per square foot by store. So — and was continued to grow when we went through 2023, so we still feel like stores are important part of that strategy.
Matthew Boss: That’s great. Meghan, just one follow-up. Could you elaborate this year on SG&A, just efficiencies or flexibility in this year’s P&L to leverage on the low double-digit revenues? I think historically, it’s mid-teens to SG&A and operating margin leverage.
Meghan Frank: Yes. So we guided for the year to 10 basis points operating margin expansion. We were up against a 110 basis point expansion in 2023. So really pleased with the leverage we saw in 2023. When we looked at our 2024 plans, we’ve made some reductions to discretionary spend while continuing to invest behind market expansion, as well as going after unaided guest awareness and new guest acquisition. So we’re really looking at driving into the long-term opportunity there as we also moved through to 2024.
