One is certainly getting access and ordering a greater percentage of our inventory in these great brands. And that is happening. The second piece, as we talked about coming out of last quarter is, clearing through the less productive inventory we have. And as I’m sure you know, Rack is part of our total ecosystem. And we’ve coming out of Q2, as we revised our guidance, we saw that it would take through half two to clear out and open up the inventory dollars to get us in the balance that we want going forward. So, for Rack, we need to certainly get more of these great brands in, but we also have to, through the rest of Q4, clear out the inventory that hasn’t been as productive, and that sets us up well for 2023 to have continued improvement.
Matthew Boss: Best of luck in holiday.
Erik Nordstrom: Thanks.
Operator: Next is Chuck Grom with Gordon Haskett. Please proceed with your question.
Chuck Grom: Hey. Just to follow-up on Matt’s question a little bit. Just on the Rack. If you look at it on a three-year basis, it really decelerated and all of your off-price peers have reported over the past week or so and really haven’t shown that level of softness. So I was just wondering, if you could, maybe, just go a layer deeper to the factors of the underperformance. And then, as we look to 2023, how are you planning the entire enterprise business from a category perspective? Are you expecting some of the recent areas of strength to continue, or are you expecting a shift back to some of the pandemic areas to resume their strength?
Anne Bramman: So Eric, do you want to talk a little bit about the Rack?
Erik Nordstrom: Sure. Yes, I’ll take a start with that, Chuck. Yes. Not sure I have a lot more to add there. It’s — as we talked about coming out of Q2, we did see a pullback in our customer cohorts or lower income segments for us, and that is most pronounced in our Rack business. And we certainly see signs of customers being restrained from economic conditions. And we’ve seen evidence of some pullback across all customer cohorts, but most pronounced at lower customer — lower income customer cohorts. And, again, that hits us more in the Rack business. And then — so there’s some macro issues, but internally, again, I’d pull you back to getting our mix right. We’re very confident in that of how why customers respond strongly to the Rack, why they choose us and getting that mix right. Again, we have some cleanup to do still here in Q4, but we see that entering 2023 in a real healthy and clean inventory position to where we’ll get the mix that we want.
Anne Bramman: So Chuck, this is Anne. I would add a couple of things to that. Just to remind you, when we talk about the change in Rack.com store fulfill program for the last quarter, that was worth about 200 basis points top line impact to the Rack banner itself. So when you adjust for that, it’s actually a pretty — it’s a flat business overall for the quarter. Having said that, just to remind you, if you look at the history of the Rack, we typically have not had a big category in home and certainly not a lot in athletic apparel, which was certainly high COVID pandemic categories. As we’ve come through, we’ve also reshifted the focus on the best brands at the best prices. And that has also been a piece of getting out of some of the older inventory that’s a lower price inventory and moving into the categories and the brands that people really seem to respond to, and we’re seeing — the result of that was positive increases in those areas, and we’ll continue to drive that, both balancing getting out of the current inventory that’s not working, but also really leaning heavy into next year as far as these better brands.
