Operator: The next question comes from Gerrick Johnson with BMO Capital Markets.
Gerrick Johnson: Two questions here. First, just to clarify on what happened in fourth quarter. You expected fourth quarter retail to be positive. So in or down 6%, I guess. I guess where does that come from? Is that all the recall? What else left retail like short of your expectation?
Michael Speetzen: It was really — it was a combination of the recall holds which were obviously on a substantial number of RZR. And then really, it was the timing around the shipments of the utility vehicles into the channel. We had a couple of specific supplier issues that pushed our shipments much later in the fourth quarter than we would have liked. The good news is those products are moving in January. So customers are not happy about it being late, but at least they’re getting their vehicles now.
Robert Mack: And just from a unit standpoint, a little less impact from margins, but same issue with snow. We had a couple of calls in the quarter. And we’re very conservative in terms of how we look at shipment side revenue, so we don’t recognize revenue. But some of the — a lot of those units, the dealers can’t retail them. We had the fix out. It was pretty simple fix, but the dealers can’t retail them until they can prove that fix is done. So that pushed some snow units that would have retailed ’22 into early ’23.
Gerrick Johnson: Okay. Got it. And a second question here to you, Bob. Maybe give us a bridge to the financial service percent flat retail and more cash buyers, how do we get up 40%?
Robert Mack: Yes. So even on flat retail, we’re seeing 2 things. As promos, we’re seeing continuing higher pen rates because as promo comes back in the market, a lot of our promo is focused on interest rate buy downs. So that makes the percentage of the units that we sell a higher percentage to get financed by our partners, which helps drive that income. And then the other piece is our floor plan financing higher floor plans, higher rates. Our share of that with our JV partner goes up as well.
Gerrick Johnson: Okay. When you buy down and offer promos, does that go against your financial services income? Or is that against gross margin?
Robert Mack: Gross margin.
Gerrick Johnson: Okay. So it doesn’t impact financial services?
Robert Mack: No. But the higher — the more that we finance the rebate that we get from those partners impacts financial.
Michael Speetzen: Yes, we share in the return on their portfolio. So we’ll get money back, but it gets booked as financial.
Operator: The next question comes from Xian Siew with BNP Paribas.
Xian Siew: I wanted to ask a little bit more about retail sales. I was just wondering, is there anything we should think about in terms of cadence within the flat for the year? Is 1H plus 2H different? Anything to think about maybe on a quarterly basis? Any color would be helpful.
Robert Mack: No. I mean, we expect to return to more normal seasonality. So I think we’ve said a couple of times, we think that in general, as inventory improves, consumers’ behavior will return back towards buying in time for the riding season. So spring into summer will be better, and then they’ll — you’ll especially for motorcycles. I think that will be close to normal. Boats is trending back towards its normal seasonality. We had a couple of years where people were buying late in even Q4 in the cold season to make sure that they had their boats for the spring season. And I think as things return to normal, people are kind of moving back towards the put a deposit on it and retail happens really in the spring when they pick the boat up.
