Lorraine Hutchinson: Thank you. And Jeff, best of luck.
Adrian Mitchell: Thanks, Lorraine.
Operator: Thank you. The next question is coming from Janet Joseph of JJK Research. Please go ahead.
Janet Joseph: Good morning, everyone. And congratulations to you, Jeff. I’m wishing you all the best. I was wondering if you guys could talk a little bit about the private label push. I really like On 34th and excited about the evolution of I.N.C. And I was just wondering what the margin impact of that could be here in late fiscal ’23 and as we look forward to fiscal ’24. And if it’s too early to be asking that, I understand, but I’m just wondering if there’s some positive influence coming on the gross margin side from outperformance in private label. And Adrian, on the cost efficiencies you’ve achieved this year, which have been better than I expected. I know how you just answered Lorraine’s question. I’m just wondering how they influence those savings. How those influence fiscal ’24 in that? Was there some pull forward of savings in ’23 that might impact the opportunity for better-than-expected SG&A next year? Thank you all so much.
Tony Spring: Thank you, Janet. Appreciate the question. First, I’m a huge believer in private brands. Private brands have a wonderful heritage in the Macy’s brand. Macy’s brand has been known over the years for having some of the best private brands and we’re excited certainly about the performance of On 34th and the refresh of I.N.C and what’s to come over the next couple of years. I think the commitment of the team to refresh the entirety of our private brand portfolio with exclusive design, customer influence product, and true focus on white space opportunities gives me confidence in our private brand strategy. Private brands are important to Bloomingdale’s too with success in both Aqua and Hudson Park. And I think you’re right, there is margin opportunity when we scale this particular growth vector.
Again, you trade a little liquidity for margin opportunity, and you’re going to expect us to watch that carefully because we love the exclusivity and the natural margin that comes from private brands, but we want to make sure we’re always buying the best brands that are available. We want to leave ourselves that flexibility to make sure that we’re adding the appropriate market brands as well. That’s what makes Macy’s and Bloomingdale’s more compelling is when we have the right balance of both private brands and market brands.
Adrian Mitchell: Janet, good morning, and thanks again for your question. When we think about profitable growth over time that requires SG&A leverage. And so, when we think about the cost efficiencies, they have to be sustainable and they have to be recurring over time. The thesis that we talk a lot about within our business is around simplification and automation. So, we’re looking at our processes all over the business to really take out complexity, put in new ways of working, placing in automation where it makes sense. The strength of our foundation is based on the simplification of our core. And so, what we are continuing to lean into is simplify the business, which will remove the headwinds for growth. So that’s how we’re approaching our cost efficiencies over time with the ambition over time of achieving SG&A leverage.
Janet Joseph: Thank you so much. Happy Thanksgiving.
Adrian Mitchell: Same to you, Janet. Thank you.
Operator: Thank you. That brings us to the end of the question-and-answer session. I would like to turn the floor back over to Mr. Tony Spring for closing comments.
Tony Spring: Thanks, everybody, for joining us on the third quarter call today. We want to take this opportunity to wish you and your families a very happy Thanksgiving. And we hope you’ll join us all in watching or joining us in-person at the Thanksgiving Day Parade next week. Happy holidays everyone.
Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or walk off the webcast at this time, and enjoy the rest of your day.
