Tom Chubb: So with respect to the first question, I mean, Dana, I don’t want to sound like we’re the kind of company that always points the finger at external factors and never looks within, with the first place we always look is what could we do better. And we’ve got a list that’s six pages long of things that we will — lessons that we’ve learned from this year that we’ll incorporate into next year and try to improve things. But I honestly believe the biggest factor is the external market conditions. And I don’t think we’re unique in this at all. I think if you look across the space and the companies that we would really think of as peers, I think that most of them are seeing similar trends. I think the biggest factor really is the more cautious and more judicious consumer.
That said, again, we are looking internally and looking at ways that we can improve. And we do that every year, whether business is good or whether it’s not so good, we’re always looking at the ways that we can improve. And we’ve definitely seen as we commented in response to Ed’s question that newness is selling really well and innovation is selling really well. We think we’re good at that and we will be sure that we continue to do that. And then with regard to wholesale, Dana, we don’t really think we’ve lost any position at all. And where we have good data on it, our performance at retail, our sell through, if you will and our natural gross margin, has been quite good, it’s simply that the retailers have sort of pulled back a bit for spring and we’re feeling the effect of that.
From a brand health standpoint, we don’t really mind that, because we’d rather not have them be over inventoried. But I think what’s going to happen is they’re going to get into spring and they’re going to be chasing inventory. And of course, we’ll do what we can to help. But I’m guessing there’s going to be a little bit of demand left on the table.
Operator: And our next question comes from the line of Mauricio Serna with UBS.
Mauricio Serna: Just wanted to check on the fourth quarter sales outlook. What does it imply for the — just want to double check like what does it imply for the comp sales growth of the business and how much you expect the additional week to contribute to sales growth? And then lastly, on the commentary on the outlook, I think, you mentioned something about — you expect some pressure on margins in fiscal year ’24, because of the investments in store openings. So I don’t know if that means we should assume like on top of where like the 14% margin that you expect for ’23, we could expect another year of operating margin compression?
Tom Chubb: So I’ll start with the first one. I don’t think it necessarily means that we’re going to see compression in the operating margin. It’s just that we’ll have some headwinds to the margin. There will be things that help us in that regard, too, including annualizing all the stores that we’ve opened this year, the Johnny Was Web site. I think back half probably improvement in the wholesale market. So I don’t know that I’d jump to that yet. I’ll let Scott elaborate on that. And then with regard to the fourth quarter outlook that is a good question, because we actually — it’s not just the comp, there’s the 53rd week and there’s the wholesale situation, and I’ll let Scott also sort of try to bridge that gap for you.
Scott Grassmyer: Mauricio, remember, we mentioned we’re going to open six Marlin Bars next year. One of them is going to open at the very beginning of the year. It’s one that we thought we’d get in January, it’s pushing out. But the other five will have significant preopening. You’ve got preopening rents starting about seven months before you actually open, so when you have that many of them. But again, we’re going to have the benefit of the 24 stores that hopefully help neutralize that. As far as the 53rd week, we’re going to be somewhere in that $25 million range in top line for that additional week. In our comps, we’ve got low single digit comps in our fourth quarter plan. And then we’ve got the new units we have this year that hopefully will contribute around 10 million in the fourth quarter.
Operator: Our next question comes from the line of Paul Lejuez with Citi.
Tracy Kogan: It’s Tracy Kogan filling in for Paul. I think you guys were talking about conversion earlier, and I think you had mentioned last call that you had seen a slowdown in August driven by conversion. I was just wondering how your overall trends wound up going through the rest of the quarter? And did conversion decelerate from there from what you were seeing in August or did it kind of stabilized? And then also, what was your AUR for the quarter?
Tom Chubb: So with respect to the conversion, Tracy, I think, it’s a little bit more of a continuation really of what we were seeing in August. If you want to get super granular about it, I’m sure we can parse out some differences. But I think it’s really that same phenomenon that we were seeing in August. And just to be clear, it’s not like conversions dropping through the floor, it’s just lower than last year. And when you look at comp sales that’s really a function of traffic conversion and then how much they’re spending, and trying to give you a good flavor, clear flavor of what’s going on. Among those levers, it’s really the conversion that’s pulling the numbers down a bit. And then on AUR, Brian or…
Brian Smith: Yes, it’s holding pretty flat…
Tracy Kogan: I was just going to ask what your 4Q guidance assumes for the promotional environment. Are you assuming an increase in promotions relative to last year?
Tom Chubb: You mean for us or for the market in general…
Tracy Kogan: I guess both.
