John Sznewajs: Yes, Mike, maybe I’ll give you a couple, and then, Keith, feel free to add to supplement my comments. So, Mike, you’re right. We are guiding SG&A as a percent of sales to be up, and a big part of it is what you refer to. Obviously, we’re foreshadowing sales down 10% for the year, which will have an impact on the margin. I think the other thing to point out — two things, I guess, I would point out. One is the reinvestment that we’re making in SG&A and some of that comes in a couple of different forms. Some of it is the PRO investment that Keith referred to some of the headcount, PRO sales reps and things like that, that we’ll be adding some more feet on the street and the job site delivery. Also, like in Q1, for instance, there’s a couple of large trade shows that we historically went to, but we’re really suspended during the pandemic.
So, this is the first time that we are going back to those in several years. And so that will be an expense for us. And then, I’d also point out, like in ’22 for instance, there are certain variable costs that were just lower in the year, and we’re projecting those to come back to more normalized levels in ’23. So, those are two or three things that would be impacting our SG&A for next year. So, Keith, I don’t know if there’s anything else you want to add?
Keith Allman: Yes. Mike, when you think about it, it’s kind of in general areas, the economy is coming back and the way that we approach growth and the way we develop advocacy in the markets, you have to be out in those markets. So, I think you were at KBIS in — out in Las Vegas. That’s an example of a big national Kitchen and Bath Show in the United States. Every two years, there’s a similar, even bigger show, I know you’re aware of this, in ISH, where we have significant investments and big presence there as a matter of — of course, of business. And that hasn’t happened in four years, and that’s coming back this year. And there’s other examples of that across the globe where we’re investing in what I would say is a more normalized way of building advocacy for our brands and launching our new products.
Now, when you look, for example, in Europe, at ISH, we’ve always had our significant competitor in a very big position out there. They’ve made the decision not to reinvest and won’t be there. We don’t think that’s the right thing to do. In fact, we’re leaning into that investment. We’re showing a great new product assortment with Hansgrohe in terms of our showers and our faucet launch. We’re getting into adjacent products with our bath furniture, and we’re continuing to build our brand. When you look at where we’re investing in, continued growth and continued momentum. Look to the PRO, as John mentioned, that’s an investment for us. PRO loyalty has been building over the last three years. We’ve gained significant share, and we intend to continue to outgrow that market.
So, adding more people on the street to continue to get new customers, new painting customers to try our products, we’ve seen that be very successful when they try it. There was a lot of question on our ability to maintain the share gain and the stickiness, we’ve done that. So, we’re focused on continuing to drive those share gains, and it takes an investment to do that. In terms of operations, things like buy online, pick up in store, expanding delivery options, expanding the PRO sales force, as I mentioned, working and expanding our loyalty programs. This is all fundamentally part of our strategy. And at the end of the day, we’re committed to managing our decrementals in the downturn, while at the same time, investing so that we win and exit stronger coming out of this recovery.
And we think that’s the right equation for our business.
Michael Dahl: That’s great. Very comprehensive. Thank you both.
