Tiffany Smith: I’ll take the first part with regard to the benefits of our test-and-learn approach. It’s particularly impactful in an environment that we’re in right now. So in a difficult environment like this, we lean heavily into our ability to flex up and flex down. We’ve proven this over the years. We’ve had to do it in terms of COVID — the COVID year, and then the year ending after COVID when demand return, we’re able to really lean into our nimble approach. But the other thing that I think is really critical is with regard to the — our reorder pipeline in terms of how we build that out. It really gives us a low-risk way to move into new products that she is voting for by buying those and we introduce those new styles.
We’re able to use our data-driven approach to essentially decide on what we want to enter into the reorder funnel. So we think that, that — having that ability to do that and the fact that our whole merchandise model is based on this, really sets us up nicely to have lower risk all around our inventory and then lower gross margin risk in the future just because we don’t expect to see the same levels of markdowns as inventory becomes obsolete that you may see with other retail models.
Crystal Landsem: As it relates to our inventory positioning, I say we’re pleased with how we ended the year. And as we signaled on previous calls, we have been trying to strategically slow our inventory turns to better meet customer demand, have better size and stock ratios and generally just navigate the challenges in China and the supply chain risk that we feel we’re maybe disproportionately exposed to. And candidly, we’re not that concerned about it. We don’t lose a lot of sleep at night over our inventory. Most of it was strategic. We are heavy in some areas, but those areas are reorder products that are tested and tried and true. So in that sense, we feel pretty good about our inventory levels. Candidly, we might be 1 or 2 weeks of supply heavier than we would normally be in what we feel is an optimized environment, but that’s not something that really concerns us in terms of obsolescence or markdown risk just based on the inventory model that just reviewed.
Operator: Our next question comes from the line of Randy Konik with Jefferies.
Randal Konik: Yes, maybe with all the different pieces this year in 2023 as it relates to impacting your margin structure. Maybe just give us a reminder on how you think about what sustainable long-term kind of normalized gross margin and EBITDA margins would look like. That would be super helpful in this time of just some volatility here with the margin structure. So if you could do that, would be great.
Crystal Landsem: Yes, I think as for the question, Randy. So we haven’t actually invested in 1 of — a lot of our cost of goods and management over pricing, where we’ve not pushed our vendors to optimize our own margin flow-through, which has been such a dynamic environment over these last 3 years. So what we can say is we started hiring internally for teams to do just that. So longer term, we feel there’s a meaningful benefit to our margin profile as we start to invest in taking more control over our supply chain. So we’re looking forward to updating you all over the next few quarters as that progresses.
Randal Konik: And is there any kind of levels you want to point out to that you think that the gross margin should kind of be normalizing that or the EBITDA margins?
Crystal Landsem: I would say we should be able to perform better than our pre-COVID levels and continue to grow based on that as a baseline. I think Tiffany have spoke about our markdowns being at historical lows for the first half of last year, and I think there’s a lot of noise between 2020 through 2022. So I would look at improvements for pre-pandemic years, yes.
