Ron Coughlin: I mean if you go back to the Great Recession, you look at what happened to supplies, as Brian said earlier, it was very similar. But a year later, it was back to being a robust category and back to where it was in the mix. So I have €“ I’ve looked at the top €“ growth rates for each of those businesses, I’ve looked at the growth €“ gross margin back then, but I would anticipate it would look pretty similarly with what happened in the Great Recession when supplies took a kind of 1-year softness due to the recessionary discretionary impact.
Simeon Gutman: And a quick follow-up, the percentage of the business that you would define or classify as discretionary and is the underlying run-rate stable or is €“ are those products decelerating?
Brian LaRose: Let me get into the mix first. If you look at the presentation that we posted online, you can see that combined between the services and the consumables categories, that’s about 60% of our mix. And within that, those are largely non-discretionary. If you look at the growth rates this quarter, 12% consumables, double digits in services, those remain very strong. Within the remaining 40%, not all of it is discretionary and what we believe is that a lot of the purchases today are being delayed. And some of those purchases are going to come back. So not entirely, that 40% category is discretionary. A portion of it is and we fully expect that growth to return.
Ron Coughlin: And with regards to the stable, I would call it stable with hopeful signs with green shoots, meaning we launched a supplies perks program. We have €“ we’re very happy with the sign-ups on the Supplies perks program. It takes a little while on our perks program. We know that from food and grooming for those customers to come back and redeem, but we’re very happy with the sign-ups there. And then secondly, we’ve taken some actions on companion animals that are showing early signs. So it’s stable with green shoots.
Operator: Our next question comes from Peter Benedict from Baird. Please go ahead.
Peter Benedict: Hi, guys. Thanks for taking the question. One kind of model question, just on the interest expense, Brian, you said you put some caps in place here. $32 million, I think, is the implied fourth quarter interest expense. Is that a good base rate to assume as we run through next year? Do we lock that in, to $125 million, $130 million for next year? Is that how we should think about this?
Brian LaRose: Let me try and help, Peter. I would remind you that we based our interest expense guidance on the forward yield curve, which is expected to continue to increase through the first half of 2023. So I’d say you factor that into the current run rate that yield curve is expected to increase. On the cap, yes, we’re looking at all ways to sort of mitigate risk here. We put some financial instruments in place and caps to protect a variable part of our debt. And then we’re going to remain, as I said on the call, a relentless on cash flow. We made good improvements this quarter, 55% improvement in free cash flow year-over-year. We made meaningful €“ got meaningful progress in our ability to get leverage on the balance sheet, and we feel confident in our ability to continue to incrementally drive free cash flow in €˜23 to both reinvest in the business and manage overall debt.
