Rob Helm: I’ll take the first part of the question, then I’ll hand it off to John on the second part of the question in terms of the longer term outlook on gross margin. From a Q4 perspective, we’d expect for Q4 gross margin to expand from last year. We are expecting benefits in supply chain costs, probably in the range of what we saw this quarter. So, as a reminder, the fourth quarter is always a little bit lower than the third quarter in terms of gross margin because the promotional cadence and how the Ollies Army night indexes into the quarter. But we’d expect a similar type gross margin, strong gross margin performance in the fourth quarter.
John Swygert: Yeah, and Matt, with regards to the overall, I’ll call it the long-term margin, we do view the value as key and value as paramount, and we’ve always focused on giving back to the consumer once we hit 40%. We’re going to continue to focus on that at this point in time, but I do understand there are incremental fixed costs in the SG&A line that we do have to take into consideration from our overall operating perspective. So we will continue to look at that, revisit it, but number one, I got to give the value to the customer. If I have the opportunity to get a little bit more on the margin, I will, but we need to be very careful with that. We got to make sure we stay relevant with the customer and keep the loyalty.
Matthew Boss: It’s great color, best of luck.
John Swygert: Thanks Matt.
Operator: One moment for our next question. Our next question will come from Scot Ciccarelli of Truist. Your line is open.
Scot Ciccarelli: Good morning, guys. Scot Ciccarelli. I have a derivative on one of the earlier questions. You guys used to talk about turning down, I think about 90% of the offers that you would receive from vendors. Can you just update us on where that is today, especially as you hit the 500 store mark?
John Swygert: Yeah. Scott, I think we say about 80% would turn down. I would tell you it’s probably very similar today. The deal flow is very, very strong. Our merchants are being very selective in what they’re buying from the vendor community. So that’s not change. We’re seeing a big increase in flow from the community. So we’re not struggling to get product into the pipeline at all.
Scot Ciccarelli: All right, so you’re still accepting about the same proportion, got it. Thank you. And you also talked about seeing, obviously the strong deal flow. Can you help us understand where is it coming from? Meaning, is it coming from certain subsets in the vendor community, whether it’s CPG or other categories, verticals, et cetera? And alternatively, are there any areas where you might expect to see better deal flow as we kind of roll into 2024? Thanks.
John Swygert: Yeah, Scott, I would tell you that this year at least, I can tell you it’s been very, very broad-based. Almost every category we carry, we’ve seen a very significant amount of deal flow. I talked last year that we were starting to see some slowdown in the offerings of candy. Well, that flipped in 2023 and candy was very strong. So the overall, if I look at deal flow, we’ve been seeing great deals in HBA housewares, clothing, lawn and garden, electric, auto. So it’s just been all over the board. There’s not really a shortfall in any category, that would tell you we’re missing any business. And it’s broad-based from either the CPGs are out there, major manufacturers are out there, there’s wholesalers that are out there, but we’re continuing to knock on the doors of the major manufacturers to go direct with them, and that’s working very well.
Scot Ciccarelli: Got it. Thank you very much.
John Swygert: Thanks, Scott.
Operator: One moment for our next question. Our next question will come from Mark Carden of UBS. Your line is open.
Mark Carden: Good morning. Thanks so much for taking the questions. So it sounds like you’re continuing to see strength in customers with greater than $100,000 in household income. How are repeat trips to this demographic comparing now to some of your more traditional demographics and then how are these shoppers impacting your sales mix from a category standpoint? Are they buying higher ticket items or are they more consistent with what you’re used to?
Eric van der Valk: Sure, Mark. I’ll take the question. It’s Eric. We are seeing strength, as you mentioned, household incomes of $100,000 or greater. We’re seeing actually a particular strength over $150,000 in household income. We are seeing an increased frequency from these customers as well, which is great to see, and basket size consistent or greater to the overall basket size of all these Army. I don’t know the makeup of the ticket question, so that’s something I’d have to study. You’re asking about average, or AUR for that customer base, I don’t have the answer to that.
Mark Carden: Okay, that’s so helpful. And then just on the labor front, what are you seeing there as we look ahead to 2024 and any thoughts on potential incremental pressure there?
Eric van der Valk: We — it’s hard to forecast, but in this moment we’re more stable than we were a year ago in terms of overall turnover. So it feels like that will continue into 2024. We’re expecting some pressure, but not as much pressure as we felt the last couple years. We still do have some challenges with, I’ll call it the churn of people that are with us for less than 90 days. But overall, it is improving. I’ll ask Rob maybe to add some color on wage investments.
