Omar Saad: I wanted to follow up on kind of the e-com stores mix. You guys alluded to e-com, obviously, giving back some of the gains and — but keeping so many things well above pre-COVID levels of where stores are coming back. How do you think that plays out in the fourth quarter? I’m not sure if I quite discern what exactly your kind of e-com versus stores mix will be. But in terms of that this year in the holiday season, do you expect stores to be kind of continue that trend? And then what does that mean for margins for you guys as the e-com business has a lot of shipping costs during the holiday quarter typically? And then maybe quickly, what your third quarter comp would have looked like? Is that mid-October slowdown didn’t happen? That would be helpful for us too.
Jeff Gennette: Omar, first off, we’re very focused on omnichannel, and that’s the headline here. What I’d say on the digital versus the same within the omnichannel stack is that digital is reverting back to kind of a mix between where we were pre-pandemic and where we were during the pandemic. So when you look at our digital penetration of the business in ’19, it was 25%. During the pandemic, it was 40%. And as you heard from our call, we’re now calling the 2022 at 33%, down from our initial estimation that it was going to be in the 37% range. So that has downshifted. We do expect that we’re going to have a strong performance to 2019 across every quarter, and we’re mapping on that. When you see what our trend was in digital in the third quarter versus 2019, we were up 35%.
And — so that is a similar — when you kind of think about that when you embed that into kind of our modeling for the fourth quarter on the high end of our guidance, that’s where we see it. All shipping costs on any scenario that we have, have been contemplated. So that is a — where you might have higher shipping costs if you’re on the higher digital model. If you’re on the lower digital model, you might have higher SG&A costs because it’s that traffic might be shifting to stores. So those are the ways that we’re looking at it in terms of how we’re modelling it. But — when I look at — when you think about GMROI or you think about what we’re doing with turnover, all of that is in our models on both ends of the guidance about which way it’s going to go.
What we’ve done is — when you look at the inventory allocation, we’ve got a lot of our inventory that is forward deployed. These 35 mini DCs that Adrian spoke of, it’s about 1 million square feet of supply chain we didn’t have last year. We are looking at all of our ship alone categories to get those closer to the customer to increase speed of delivery and also mitigate shipping costs. We’ve got great automation that’s going on in our mega centers to make sure that we’re hitting the customer expectations on time of delivery and reducing package cost. So all that kind of modernized supply chain applies to whatever comes our way with digital business in the fourth quarter.
Operator: We will take the next question from Oliver Chen. Your line is open. Please go ahead.
