To remind you, normally, margins expand as we go into the second quarter. We think that will expand a little more this year because of seasonally stronger volume and mix. In both our Flooring Rest of the World and North American segments, we’re expecting the margins to improve as the cost and pricing better align from this inventory flow-through. We believe that European demand will also improve. In Europe, their wages are increasing at a higher rate than they are in the United States. And then over the winter, their energy costs were so high that it really impacted their discretionary spending. So we see that changing as the new gas prices flow through the economy. With all that, we see the input being a tailwind. Production levels should increase from where they are in the second — first quarter to the second quarter.
We see restructuring should start benefiting us more as we go through. And then — so I guess last as we go through — and we go into the fall of the year, the fall comparison should be weaker and we think that the category could improve with inflation declining, wages being higher and potentially housing starts improving from the bottom.
Susan Maklari: Okay. That’s very helpful color, Jeff. And then my second question is how do you think about the longer-term trajectory for your Flooring North America margins? You obviously made up a lot of ground in the last couple of years relative to where we were before the pandemic. How much of that do you think you can hold on to as things normalize? And how should we be thinking about what that new rate of profitability could look like?
Jeff Lorberbaum: First, where we are today, you have those peak costs that we didn’t — we weren’t able to cover. So the cost peaked in the third quarter. It’s still flowing through our inventory. The pricing never got aligned with it as the inventories were falling off. So that impacted the margins. As we go through, the cost and prices should more align helping the margins. And then overtime, we expect them to continue increasing. But in this environment, there’s pressure on everything. So we’ll have to get through this year, and they should improve significantly as we go into next year.
James Brunk: Just to remind you, this cycle is a little bit different. It’s not typical like other cycles. The employment remains strong with wages increasing. Housing remains in short supply and low mortgages will kind of limit people moving as much, aging homes, higher home values should support future remodeling and strengthen the rebound or the pent-up demand. Commercial projects continue to be initiated, that’s holding at this point. And inflation is slowing and interest rates may actually be near peak.
Susan Maklari: Okay. So is it reasonable to assume then that you can sustainably operate at a higher level than you were at, say, in 2019 or so, but maybe still holding a bit below the peaks that we’ve seen earlier — in the earlier years?
Jeff Lorberbaum: I don’t have the numbers in my head to compare them like you’re asking. I think that in this year, what you have is all the lack of visibility, and we don’t exactly know what the volumes are going to be and the competition is going to be. So we’ll have to adjust as we go forward.
Susan Maklari: Okay. All right. Thank you, Jeff. Good luck.
