Fred Brightbill: I don’t think it will remain at the same level of discounting, but we do expect it to revert to normal aggressive competition. Hopefully, I’m being clear on my answer. I think it’s in a peak of competitiveness currently, I don’t think it will revert anywhere near COVID situations, but I think it will be much more like a pre-COVID period.
Eric Wold: Got it. And then just final question, if I may. I know it’s early and not necessarily looking for fiscal ’25 guidance. But I guess there’s a hope that interest rates do come down to some degree over the next 12 months or so. I guess what are you hearing from dealers now in terms of any indications in terms of as they look into model ’25, what level of inventory they’re willing to hold on their floors given interest rates, the competitive environment, macro uncertainty. If you look at that compared to what you may have seen pre-pandemic. I mean how much lower do you think in the willing to hold inventory versus back then?
Fred Brightbill: I think the dealers, the way we work with dealers is to project retail demand and bounce their inventories accordingly. And so it’s all going to depend on as we enter the year, what the annual business plan is and what our outlook is. And Eric, as you know, we’re right now in a period of limited visibility in terms of what next years are really going to look like. So I can’t opine on next year with any degree of certainty other than to say, we will know as we finish May and June, how we’re set up for the following year and how we progress through the summer. My personal opinion is if we see interest rate reductions that’s going to boost consumer confidence and their level of activity in addition to the other benefits that you described with regard to overall financing costs, et cetera.
But will that happen? And to what extent will we see those, will the initial rate reduction be a signal that encourages consumers to be more active or will it take more significant reductions, and then how will those reductions play out in terms of short-term rates versus longer-term rates in retail financing for consumers.
Operator: The next question comes from Noah Zatzkin with KeyBanc. Your line is open.
Noah Zatzkin: I guess just first, not to beat inventory to debt. And I know there’s obviously a seasonal component to inventory up in the second quarter. But as you’re thinking about it today, would you expect to make progress on inventory exiting the third quarter or is that kind of more of a fourth quarter push? And then relatedly, just in terms of the competitive environment, what I guess is anything changing via incentives or promo to help clean inventory looking forward relative to what kind of took place in the second quarter. Thanks.
Fred Brightbill: I think the third quarter, we’ll see increased competition, and that’s kind of reflected in our outlook for the third quarter in terms of discounting margins, et cetera, competitiveness. With regard to inventory model, it peaks seasonally in the third quarter and then is increasingly worked off. So starts with boat shows and then builds. But as you well know that fourth quarter is 45% to 50% of retail demand, and that’s really what you’re trying to predict and forecast and be ready for, not underestimate, not overestimate. So you see some movement as sales accelerate in the third quarter, but really it’s the fourth quarter when you see the big movement.
Noah Zatzkin: Got it. That’s helpful. And then just on the new Pontoon brand. Any additional color on positioning relative to Crest and just maybe some thoughts around kind of why now would be helpful. Thanks.
Fred Brightbill: Think of it as premium, super premium, if you will. Think of it’s going to be a very stunning and unique style, and we felt like it deserved a specific attention and positioning given its uniqueness and given its differentiation. So the Crest product line is very broad, as you know, covers a wide range of price points, and they still have luxury models, and those models will continue to be enhanced as we roll forward, but there will be a positioning and a styling differentiation between the two brands that significant.
Operator: The next question comes from Michael Swartz with Truist Securities. Your line is open.
Michael Swartz: I think when you gave initial guidance for ’24 back in, I think it was late August, it was based upon a mid-teens decline in retail demand for the fiscal year. I think since then, the industry has been down something more in the range of low single digits. So maybe just give us an update on what’s embedded into your guidance today? And maybe how you’re thinking about the year playing out. I know a lot of contingent on interest rates. But just as far as you have visibility today, how do you see the year playing out from a retail standpoint?
Tim Oxley: Mike, it’s going to vary certainly by brand segment of the market. But our view is a little more optimistic than it was at the start of the fiscal year. We’re just going to really have to work hard and dealers are going to have to work hard for every retail sale.
