Rob Helm: Sure. So I think over time there’s certainly opportunity for us to continue to improve on our operating margin. I think gross margin, John hit the nail on the head. We’re planning 40 stores for next year. We haven’t been at 40 stores for several years now. We’re going to see how that stabilizes from a pricing and customer perspective and then evaluate any movement from there and out years potentially. From a leverage point perspective, you’d expect 10 basis points of leverage on SG&A as we comp above a 2%. So, given the strong closeout environment and where we’re at, we’re planning one to two, which has benefited us over time because we get leverage as we do outsize comps. We’re not going to shut the registers off. So should we deliver a higher comp, we’ll certainly be able to leverage faster and get back to our longer-term operating margin highs.
Operator: And our next question comes from the line of Scot Ciccarelli from Truist. Your question, please.
Scot Ciccarelli: Good morning, guys. If you look at SG&A per store, you guys — hi, guys. If you look at SG&A per store, you’re essentially at 2020 levels and really only up modestly from 2019 even with this year’s increases. That’s a pretty stark contrast on your expense inflation versus what we’ve seen from most other retailers. And, look, you guys have always run a tight ship. But, what would you attribute that minimal SG&A growth to and how should we think about that on a go-forward basis? Thanks.
Eric van der Valk: We don’t necessarily look at it on an average store basis because we are opening boxes that are different size. So the expense leverage kind of moves with that. Our expense dollars, for that matter, moves with that. We are hard at work on expense leverage. We are making the necessary investments we have to make in terms of payroll across all aspects of our business, the distribution center and the stores and the goal of that investment is to get improved efficiency and productivity and that’s what we’re seeing come to bear in our results for this year and coming to bear in our guidance for next year.
Scot Ciccarelli: And is there anything we should be aware of in terms of wage changes for 2024, potentially even 2025, given what you know now?
Eric van der Valk: No changes at this time.
Operator: And our next question comes from the line of Simeon Gutman from Morgan Stanley. Your question, please.
Simeon Gutman: Hey, guys. Sorry for the background noise. I know its practice to not guide any different than the way you did for the comp one to two. I’m asking because the last year or so has been usually good for closeouts. Is there any scenario or is there anything you see out there why this business couldn’t come stronger? Is it lapping a tough closeout environment? But I know John talked about it being pretty strong.
John Swygert: Yes, Simeon, this is John. I would tell you there’s no structural reason we couldn’t come stronger. We feel very good where we’re positioned right now. We build our model on the one to two. We always have that funny saying where we don’t turn the registers off and we hit a number. So we’re going to continue to try to drive. Deal flow remains strong. Our merchants are confident. So there’s really nothing holding us back. We’re going up against some pretty good numbers, so I don’t think you see outsized comps like you did this year, but I think we have opportunity and we can get it, we’ll get it and we’ll give the flow through to the investors.
Simeon Gutman: And then a quick follow-up, thinking about the buying, one of the closeout grocers we follow, they’ve been seeing much higher margins and we’re not clear if that’s on the buying or their markup. Have you seen any big step changes in categories over time? Is that usual and could that happen for you going forward given the scale keeps getting better?
John Swygert: We haven’t seen any step changes in the grocery categories or what we call the food category or candy category. There’s not been a large expansion in that area that we’ve seen at all and that could just be us pushing value through to our consumers for loyalty and repeat business, but nothing real big there, but we do see, Simeon, and we have seen over the last couple years, on certain deals or specific categories, we can have an outsized margin on the buy and still give the customer great value and when we can, we do.
Operator: And our next question comes from the line of Mark Carden from UBS. Your question, please.
Mark Carden: Good morning. Thanks so much for taking the question. So this is building upon a few of the earlier questions and even the last question. But more broadly, across the consumer landscape, we’ve seen a slowdown in food inflation. Does this impact how you think about desired consumables penetration in the year ahead? Just think about the balance between the importance of this category with the potential for more free spending dollars for discretionary.
John Swygert: Mark, a lot of the disinflation has been really around the, I’ll call it the grocery consumable category or the perishable or the cold food. We don’t have any of that. We’re talking packaged goods, canned goods in our stores. So we haven’t seen a ton of disinflation there yet, but if it does come, there will be opportunities for us from that perspective, too. So that doesn’t bother us. The loyalty that we’ve built with the consumer has been very strong on the food and candy category and we expect that to continue in 2024.
Eric van der Valk: Yeah, Mark, disinflation is disruption and that’s good for us.
Mark Carden: Okay. Fantastic. And then for a follow up, just on the real estate environment, are opportunities from shuttered retailers like Bed Bath progressing in line with what you’re anticipating? Just your latest thoughts there.
