David Allemann: Thank you for the questions, Olivia. So I’m quickly going to elaborate. On July and the first days of August and then Martin will give you or try to give you an answer on the inventory question. So July and the first day of August have been very positive for us. I think what’s important is not just the number, it’s how we get to the number. So which consumers are we reaching? What’s the product mix that we’re selling? Is it selling at full price? What’s the D2C share and so on? And how balanced is it across the regions? It also comps to a strong second half of 2022 where we’re still comping now in the first half of 2023 versus a relatively weak first half of 2022 that was very much supply constraint. So kind of keeping all of that in mind, we’re very, very happy with how the first few weeks in Q3 have unfolded and how consumers are continuing to adopt On and the products that are very much rooted in performance.
Martin Hoffman: And then to the inventory question. So as I said, we have a very high share of inline inventory, in line with what we have seen in the past. For us, it was always important since the beginning to build a company also from a product lifecycle perspective that can maintain full price sales for a long time and as such protect the premium position of the brand. And so, our products have a relatively long life cycle and therefore the share of — expected out-of-line inventory is relatively low. When it comes to ethics, there is no ethics impact in the inventory in itself. So it’s based on the historical values, but of course, then when it comes into our cost of goods sold, that’s where you see the impact.
Olivia Townsend: Thank you. And maybe if I could just ask a quick follow-up, just how many stores are you in now, both for JD, Sport and Footlocker, please?
David Allemann: Yeah. So Footlocker, by the end of Q2, we were in 175 doors in the US and 46 in EMEA. We’re expecting to add an additional 50 in fall-winter 2023. With JD, we were in 166 doors in the US, 60 in EMEA. We’re also expecting to add 50 in fall-winter 2023. Those are mainly conversions from finish line into JD, so most of it is in the US.
Olivia Townsend: Thank you.
Operator: And your next question comes from a line of Aubrey Tianello from BNP Paribas. Your line is open.
Aubrey Tianello: Hey, thanks so much for taking the questions. I wanted to ask on gross margin, and within the 59.5% gross margin of the second quarter, maybe you could break that down a bit in terms of some of the components like storage cost, mixed FX. I think last quarter, there were several transitory headwinds, just curious how that looked in the second quarter?
Martin Hoffman: I’m happy to do so. So, I think as we also said on the call earlier, the 59.5% gross profit margin in the second quarter is the strongest since the IPO. So it really shows that the business that we have built is able to deliver the long-term margin that we always communicated of 60%. So we have seen, again, a more normalization of the supply chain environment. So clearly, shipping rates came down. At the same time, we were using a very low share of air freight since we basically had the inventory in our warehouses already. Last year, we spent about CHF13 million on air freight in comparison. So this is the key driver for the increase compared to last year. And we have a bit of a headwind from the currency environment, but not significant.
So for the second half of the year, as we said, we continue to expect a similar environment. And if the US dollar in relation to the Swiss franc stays at a low level, we expect that we can for the full year drive gross profit margin above the 58.5% that we communicated. And so, we — currently there’s a lot of confidence that we can show that.
