So it’s a combination of human management of technology and of how we reward and incentivize people on how we lead. And that’s, again, to go back to our operating system and the momentum that’s been created from a decade of applying that.
Stephen Kim: Yeah. That’s really great. Appreciate it. I appreciate all the color. Thanks.
Operator: Your next question comes from the line of Eric Bosshard from Cleveland Research. Your line is open.
Eric Bosshard: Thanks. Two things, if I could. Keith, I appreciate the strategic thinking on pricing and getting value for your brands. I’m curious what you’re observing with the consumer regarding price elasticity in an environment where the consumer seems like it’s a bit more disciplined?
Keith Allman: It’s really hard to get hand on that, frankly. When you look at a year or two years ago when we have such significant inflation, the elasticity data really didn’t apply, and it wasn’t nearly as consistent. And it varies by technology, it varies by price point, it certainly varies by in some cases, countries. So for example, a little bit more price elasticity that we’re seeing in China, a little bit more sensitivity, that’s a little bit more volatile in other areas with new products and new designs that we launched that are particularly attractive to the consumer. We have a little bit more price elasticity at some price points. In the lower price point part of our Plumbing assortment for example, we are seeing a little bit more elasticity, a little more challenging, not atypical in environments like this.
But we’ve worked hard to reduce the gap of our margins between the higher end of the assortment and the lower end of the assortment. We have geographic diversity in terms of where we sell. So all in, when you look at how the consumer is performing or behaving rather relative to price elasticity and you look at our mix, as Rick mentioned earlier, mix really hasn’t been so much of a material impact on us, nor do we expect it to be as we look forward. And that’s, I think, indicative of our portfolio and our ability to manage those pricing dynamics. But specifically to your question on elasticity, it’s been tough to really understand that, particularly given some of the dramatic and rapid inflationary behaviors that we saw over the last couple of years.
Eric Bosshard: Okay. And then secondly, you called out Delta growing, I think, 2% or 3% in what looks like a down market. Is that sustainable for that business to continue to grow in the market that is down? And is there anything that was 1Q specific that contributed to the growth of that business?
Rick Westenberg: Yes. I don’t know if we cited a specific number. We did say that there was growth in revenue in Delta, really aided by our sales performance in the wholesale channel. What I would say is from an overall standpoint, it’s — our guidance for the year from a Plumbing perspective is up or down low single-digits. North America, perhaps performing a bit stronger than International given the lag and recovery in the International markets. So we haven’t called specific outlook with regards to North America Plumbing but we’re seeing some stabilization as evidenced in Q4 of last year and Q1 of this year and we remain cautiously optimistic. But as we’ve talked about before, it’s — we’re early in the year. We’re monitoring the situation. And what I would say is our North America or Delta Plumbing business is kind of in line with our guidance for the year at this point.
Eric Bosshard: Thank you.
Operator: And our last question comes from the line of Rafe Jadrosich from Bank of America. Your line is open.
Rafe Jadrosich: Hi, good morning. Thanks for taking my question. The first I wanted to ask just — you’ve had really strong margin performance with volumes declining over the last year or so. If you start to see volumes turn positive, how should we think about your incremental margins versus historical levels?
Keith Allman: I think pretty consistent, Rafe. I think in that 30% to 35% for plumbing, a little bit lower than that for decorative, that’s been consistent with how we’ve performed, and I wouldn’t anticipate any change in that. So, — and then, of course, on the downside, we managed the decrementals, and we’ve had some really strong performance in terms of having those decrementals be less than those incrementals, which is indicative of how the teams are managing the volatility, but no real change from what we’ve seen historically as it relates to the drop down on incremental volume.
