John Swygert: Yes. Ed, I think there’s still a lot of opportunity that’s left out there in the marketplace. I don’t know when there’s going to be a step change. But I can tell you, we’ve been — and it’s hard for people to get their hands on it. We’ve been doing this for a long, long time. And with our size and scale, and we’re becoming very, very meaningful to the vendor community, I don’t foresee us having a huge problem lapping the deals that we’re dealing with. We work hard each and every day to continue to foster those relationships. So that’s what we do. This is how we operate. This is the model we work in, and our merchants strive each and every day to beat their numbers year-over-year. So next year, do I expect to have an outsized comp?
No. I expect to have a more normalized comp number that we’ll be able to go up against. And we’ll be able to deliver the numbers, and we’ll continue to execute. And it’s what we’ve done. We’ve done that for over 40 years. So we had two rough years here in the past with the COVID issues that were out there, but where we believe the model is very, very sustainable. The deals aren’t going to just dry up tomorrow. In terms of visibility, you know we don’t have a ton of visibility out there in terms of the next 90 to 120 days, but the momentum we’re seeing right now is very strong. We feel pretty confident where we’re sitting. We didn’t change the Q4 guidance for that reason because we want to make sure we clear Q3. And then if we’re running hot in Q4, we’ll let you know.
But there’s very, very few people that are doing this in the world today at the scale we’re doing it. So it’s — we’re in the right position. And as Eric said, we’re built for this. This is what we do, and this is what our merchant team and our supply chain team deal with each and every day, and it is inconvenience business. And a lot of traditional retailers don’t want to be in this, and it’s not for the faint of heart.
Edward Kelly: Okay. And just a quick follow-up on shrink. shrink has been problematic for most retailers. I don’t think you mentioned it. Can you talk about what you’re seeing there? [technical difficulty].
Rob Helm: This is Rob. We did not mention the call, there are a couple of things on shrink. First shrink for us is a relatively lower percentage than some other retailers. We’re just a low shrink model, and I think that’s important to say. The second piece is we count throughout the course of the year. So we got a good read on this growing shrink trend at the end of last year. And we were pretty sober when we thought about coming into the year in terms of our guidance as well as mobilizing our efforts. To date, shrink has leveled off for us a little bit. It’s not any worse, but it’s not significantly better. And we’ll continue to work at it on a local and regional basis in those stores that are impacted.
Eric van der Valk: Yes, this is Eric. Just to add, it is a hyper local issue for us. The relatively small percentage of our stores, say, under 10% of our stores that contribute over half our shrink. So that makes it a little bit more manageable for us. We can direct a lot more attention and resource and have direct a lot more retention and resources into the 10% of the stores that are causing the problem, which helps us to get our arms around it.
Edward Kelly: Great. Thanks guys.
John Swygert: Thanks Ed.
Eric van der Valk: Thanks Ed.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Randy Konik from Jefferies. Your question, please.
Randy Konik: Yes. Thanks guys and good morning. Maybe, Eric, let’s go back to a commentary around the real estate landscape. And maybe give us some perspective on how we should be thinking about unit growth next year? And maybe give a little bit of color on what you’re seeing around construction costs, around just costs – are they starting to come down? Is be to build starting to pick up a little bit? Or are things getting easier out there? I just want to get a sense of where things are on that front? Thanks.
Eric van der Valk: Sure, Randy. Let me take the real estate question first. It is a tight real estate market. But we do like what we’re seeing in terms of distressed retailers, store closings, bankruptcy filings. This should open up opportunities. We’ve been very active in pursuing real estate that’s coming out of this opportunity with bankruptcies in particular, participating in bankruptcy processes and auctions. To-date, not many locations have materialized out of this, but we feel very good about the pipeline and where we’re sitting. Typically, it takes a bit of time for locations to be vacant before Ollie’s becomes the tenant of choice. But we have a very strong balance sheet and a very high-traffic model that’s great for co-tenants in any center.
So, we feel very good about where we’re positioned. We’re not giving guidance for 2024 at this time. We do think 50 is realistic, but we’re not giving that as the official guidance until we guide the whole year. And then in terms of construction, it continues to be a challenging environment in construction. Elevated cost lead times are a challenge, whether it’s HVAC, or local inspection-related issues, or bandwidth contractors. It’s all still a challenge, but we’re pushing hard. We control what we can control. We have a better handle on lead times now than we did a year ago. So, we feel confident that we can deliver the 45 stores, we’ve committed to in 2023.
Randy Konik: Got you. Okay. Super helpful. And then I guess, John, in the past, you talked about some labor costs being a pain point, particularly around the DCs with competitors, with other DCs kind of taking some of that labor away in some respects. Maybe can you give us maybe your perspective on where we are in the labor cost front? And then just maybe – also maybe, Rob, you could remind us, when DCs have opened up in the past, I think there’s been a little bit of deleverage, because of them ramping up. I think you said that the DC in Illinois is going to open up next year. Just maybe give us maybe frame out – again, we don’t need next year’s guidance. Obviously, but it would just be helpful to understand different things to be thinking about around labor, and then the DC opening up next year as I think, the market pretty much feels like this year is locked in, and just thinking through how we should be thinking about high level for next year? Thanks guys.
Eric van der Valk: Sure, Randy, it’s Eric. I’ll take the first part of the question, and Rob can take the second. We have made meaningful investments in wages over the past couple of years. In our DCs, we actually recently made investments in all three DCs in wages. Our candidate flow is very strong. Our turnover in the first 90 days of employment remains high. So, we still do churn people. So yes, Rob, do you want to take the second part?
