Matt Friend: Sure, John. Well, let me start – I’ll start with the back and I’ll come to the front in terms of the way you asked the question. We’re making substantial progress towards the long-term goals that we had highlighted a couple of years ago. Our Consumer Direct Acceleration strategy has been a consumer-led strategy. And when we look at the mix of our business in Digital and in Direct relative to where we were in fiscal year 2019, we’ve made significant progress against it. And we continue to invest to grow based on the fact that consumer continues to choose to shop in our stores and in our digital channels or at least to engage in our digital channels before they go try to find the product that they want in the wholesale marketplace.
And so, we’re very pleased with where we are today. We finished fiscal year 2023 at a 44% mix in total Direct and a 26% mix in Digital. And the consumer will decide the ultimate endpoint. And what I mean by that is, whether we land exactly at 60% or not, it doesn’t really matter. But what we are confident long-term is that we’re going to be a more Direct and a more profitable company. And so, when I look at our guidance for fiscal year 2024 and the gross margin expansion that we’re planning for on an operational basis, we’re making significant progress to come back to where we were prior to the transitory impacts. And then we still see the benefits of structural opportunities to drive our margin long-term. We’ve talked about those before. Those include the price value that we create in our products and the opportunity that creates for us to raise prices to the impact of having an increasing channel mix to some of the cost – product cost opportunities we see through simplification of our SKU line and end-to-end efficiency.
But the time line to predict when we’re going to get there, as we’ve been talking about for a couple of quarters is, is difficult to predict. And a point on that in cases, we’ve got 150 basis points of foreign exchange headwinds between last year and this year. But we are confident that we’re on the path towards achieving these long-term goals, even though it’s a little bit more difficult to predict the exact time that we’re going to get there, but we think that we’re on a path to the high-40s long-term gross margin goal. And at this point, we’re continuing to do within our control in order to move us in that direction.
John Donahoe: And Matt, John, I’ll just build on one of the things that Matt says, the key to the whole thing is having the best innovation in the industry. That’s what brings people to our Direct channels that brings people to our Digital channels. And the momentum Heidi has had her team together offsite earlier this week and seeing the design, product creation, men’s, women’s, kids, storytelling and brand teams, really accelerating the pace of innovation, accelerating our ability to connect with the consumer is ultimately what’s going to fuel not only our top line, but also our bottom line. And so, the feeling of momentum and confidence is really growing as we move into this more streamlined structure.
Operator: And everyone, that does conclude our question-and-answer session. It also concludes our conference for today. We would like to thank you all for your participation. You may now disconnect.
