Reade Fahs: So in terms of trade down, the majority of that relates to our growth in managed care. Those are generally better off consumers. So that’s the biggest factor there. And in terms of the pricing actions, we did a lot of study work to make sure that we are still providing really great value and still very, very competitive in the markets in which we compete. And these are still really great prices, $69 for an eye exam is really a great price. And so we feel pretty good about those decisions.
Zachary Fadem: Got it. And then circling back on the March, April acceleration. Was this more about tax refund catch ups? Or did you start to see any incremental traction on dark to dim stores or doctor availability. And then as you think about the current low single-digit run rate, is this the right way to think about Q2 as a whole as well as the rest of the year? Or is there anything else we should keep in mind?
Reade Fahs: So we all know that the tax refunds were delayed. And again, we find consistent positive low single-digit comps in March and April. We are hoping for a more robust tax season, and we know the category really saw that, which we think relates primarily to consumer sentiment. And – but we are hopeful that some of the initiatives that we can put in place and some of the things that we’ve referenced like Texas remote and other pieces that we can get some acceleration for their rest of the year, but it’s a very uncertain time. And our crystal balls are not – are cloudier than they normally are in this strange macro environment.
Zachary Fadem: Got it. Thanks for the time.
Operator: Thank you. One moment for our next question. Our next question comes from Dylan Carden from William Blair. Please go ahead.
Dylan Carden: Hi. Thank you. Just to simplify this a little bit, looking at your 10-K disclosures, you’ve added years. You’ve added around 1,000 doctors in the last two years, you’ve added about 120 stores over that same period. So capacity has increased rather meaningfully. And if you’re kind of looking at stack trends, I know the sort of inclination here is to blame some of the macro. But just relative to yourself, why – what would be the answer to why you’re not seeing that flow through to more demand generation at this point?
Reade Fahs: So where we have coverage and demand, we are strong and healthy, where we have coverage and low demand, we are still positive, where we are lacking coverage, things are tough. We have remote that is helping us and is going to help us ever more. And we are – we continue to work on recruitment and retention, which, again, is progressing fine. But we do think that we are getting ever better at having the coverage we need, and now we are looking for macro demand.
Patrick Moore: Dylan, it’s Patrick. The other thing I would just add to that is whereas in 2019, a doctor was a doctor was a doctor, and they were all working kind of five days a week on certain hours, it’s a very different world now. And we have 3-day doctors and 4-doctors and 5-day doctors. We have part-time doctors. We have casual part-time doctors. We have a lot more doctors, but they’re working a far more varied kind of work scheduled than say they were in 2019, and that also contributes to that.
Reade Fahs: Just when I talk to people in other aspects of healthcare, sort of they glibly say things like, yes, if you have a doctor in front of your name, you are working less days than you were in 2019. And that’s truly a lot of healthcare and certainly true for…
Dylan Carden: Yes. And that makes sense that you’re seeing that’s part of the answer. But then I guess the question that sense from that is so what’s the ramification for the model at that point, right? If you’re seeing that less efficiency in your doctor base and cost of doctors going up how does that flow through if you’re not seeing the demand?
Reade Fahs: This is why we are emphasizing the successes that we had with remote in the first quarter because, a, it’s very flexible. A remote doctor never has a no show they appear. Where they’re needed, they appear where a patient is. But these advances in remote where we are able to recruit, where there are ever more doctors who want to this is the piece that really we think is going to be the big sold for this and allows us to deliver our model in ways that we can if we don’t have a live doctor in our store historically.
Dylan Carden: Okay. Thanks, guys.
Operator: Thank you. One moment for our next question. Our next question comes from Paul Lejuez from Citi. Please go ahead.
Brandon Cheatham: Hi, everyone. It’s Brandon Cheatham on for Paul. You mentioned that remote doctors see the same number of patients as live ones. I guess I do find that a little surprising. As you just mentioned, I would have thought they’d have better throughput because they don’t have no missed appointments as a factor. So do you expect that to increase over time? And how much of a factor, if any, is that in achieving your mid-single-digit EBIT margin target in 2025?
Patrick Moore: It’s Patrick. I’ll take the first part of that question. So our remote doctors as we were ramping up this startup – there were long ramps of learning and training, and we were trading out some equipment and software optimizing. And frankly, it took us a while to get to a point that we were comfortable with the overall machine, those doctors are now doing right at the same amount of exams per day that an in-line doctor is doing. We still believe that, that can exceed that of in line for the reasons you said. We’re not quite there yet. But I would tell you in the last six months, we have made a ton of progress on doing the right things, balancing supply and demand of the doctors and giving them as frictionless and it’s easy of a process to conduct a remote exam.
So I have every intention, hope in the world that we’re going to be at a point near term, medium term, where I get to say, our remote doctors are performing even more exams than our in lane for exactly the reasons you say. We’re not there yet, but while we made some great progress in the last two quarters.
Brandon Cheatham: Got it. And I mean how much of a factor is that in achieving the mid-single-digit EBIT margin in 2025?
Melissa Rasmussen: Yes. So remote is certainly a factor in achieving the mid-single-digit operating margin in 2025. When we laid out our plan, we had a multitude of scenarios built into that. Remote has really become embedded into our overall business, and the benefits of remote has been factored into our guidance as a whole. One thing that we do see some benefits – that we’re expecting some incremental benefit from is the remote rollout in Texas. While that was not built into our guide necessarily from the start of the year because at the beginning of the year, we were expecting to go into Texas. We do expect to be able to make up some revenue ground from the beginning of the year starting slower than expected. So we do have line of sight to the 2025 mid-single-digit adjusted operating margin goal, and we plan to continue to pull the levers that we’ve talked about and do tightly disciplined expense management and expect to be able to get there.
