Brian LaRose: The last thing I would add is just the point of sale underscores what an asset our pet care center partners are, to give them that capability at point of sale and give them the ability to connect with the customer is such an advantage for us.
Julio Marquez: Great. Thank you. Appreciate the color.
Ron Coughlin: Thank you.
Operator: The next question comes from Corey Grady from Jefferies. Please go ahead.
Corey Grady: Hey. Thank you very much for taking my questions. I wanted to follow-up on your comment on in-stock rates turning favorable. Can you give us an update on where your petco care centers are in terms of in-stock rates and when you expect to be back to grades?
Brian LaRose: I won’t give a specific percentage there, but I would tell you we are in the best shape we have been in a while. We are up year-over-year. We are up quarter-over-quarter. We continue to see improvements across the portfolio, and we are really happy with our in-stock levels today.
Corey Grady: Okay. Great. And then for my follow-up, I just wanted to get more color on your priorities for cash or capital going forward. Can you talk about like the balance between thinking about like store upgrades that rollout and then the neighborhood farm and pet supply rollout?
Brian LaRose: Great question. First, I would tell you that we are focused on generating cash in multiple ways through driving the P&L and also through can we get leverage out of our balance sheet. We made good progress this quarter, up 55% free cash flow on a year-over-year basis and near breakeven in a year where we are investing in our long-term growth initiatives. So, you mentioned a couple of different things. I would tell you those growth areas are not binary investments for us. So, we will continue to invest in that. We are excited about to be and we think there is an incremental opportunity there for us. I would tell you that we have retired a bunch of the technical debt that we had on the IT side, which historically had sort of dogged us a little bit.
We are investing primarily in innovation in IT, and we have gotten rid of some of that technical debt. So, it’s across all of those areas that you mentioned. I would tell you that if you think about CapEx in €˜23, well I am not going to give a specific number, I would not expect €˜23 CapEx to be above €˜22 levels in total, while we continue to invest in those areas.
Operator: Our next question comes from Anna Andreeva from Needham. Please go ahead.
Anna Andreeva: Great. Thank you and good morning guys. And Ron, our condolences on Yummy as well.
Ron Coughlin: Thanks Anna.
Anna Andreeva: Two questions. So, first, I guess to Ron, on net adds, pretty strong results. Nice to see that consistency sequentially. And I know Vital Care is a really big part of that. Just curious, can you talk about where you are seeing those customers come from? And secondly, I guess this is to Brian. Good to see the company make progress on inventories. Can you talk about where we should expect inventories to end the year? And at which point should inventories be more in line with sales in €˜23? And thank you so much.
Ron Coughlin: Thanks Anna. Yes, we were very pleased with the net adds. And I should say that we continue to add customers into Q4. So, the momentum, we continue to see momentum into Q4. In terms of where we are sourcing them, we have consistently been able to source customers from the independent channel as we have a broader offering as our service offering comes. We are sourcing customers who are new coming for veterinary services. That’s part of the power of that where they are coming because they want to consolidate their purchases with us. They were going to another veterinary provider before. We are sourcing customers from e-com customers who are looking for things like same-day delivery, things like BOPUS, that the online €“ pure online players can’t provide. So, those are the main two sources of it. It would be three independent veterinary customers and e-com customers looking for fulfillment options that aren’t available to €“ from other online players.
