And the things that are worse this year but may improve next year, I’m thinking maybe the pool construction economics impacts there. And then things that are worse than expected that likely won’t recover. So are in structural impairments to your business, like share loss or pricing, which I think both of which you said you’re not experiencing. And if you’re not going to bucket it, maybe just the way to think about the question is if you’re still investing behind growth, the question that I’m getting from investors is thinking about earnings next year, is there really any impairment to next year’s earnings power between the beginning of the year and now? And so maybe just if you could take the opportunity to explicitly say that from February to July, actually very little has changed in your mind about what your earnings power is next year.
Melanie Hart: From a top line, if you kind of walk through – so our initial guidance was flat to negative 3%. So we did have some expectation that we could see some negative impacts. The biggest thing that changed since that point in time the biggest single indicator is going to be the weather. So when you look at the cumulative weather impact that is around $90 million as we talked about. The other things that we called out that are – it’s not – there’s nothing else kind of significant in an individual standpoint, but the things that were kind of new for this quarter was the impact on the trichlor pricing. And so that was about 1% for the quarter. We do think that that’ll continue for the rest of the year. So overall not that significant.
The other thing the deferred sales activities, so we don’t think the consumer sentiment, we don’t see that that will continue as we get into next year. But that is something that was not considered in our initial guide as part of that. And then we also – when you look at the change in our early buy activity, which from our customer standpoint, which we equate to channel inventory that did come in higher this year, then we had originally anticipated as well as part of our initial guide.
Joe Ahlersmeyer: Understood. Thank you very much.
Operator: The next question comes from Andrew Carter from Stifel. Go ahead.
Andrew Carter: Thanks. Going into the guidance, looking at it here, did you say SG&A would be modestly up this year and that would be a change from minus 2%? And within that given the kind of guidance reductions this year, is incentive comp meaningfully lower, therefore, there’ll be a reset next year?
Melanie Hart: Yes. Incentive comp in the current guide is less than what we originally at the beginning of the year we had kind of talked about $10 million to $15 million. So it’s a little bit too early to call the final number because when we look at the balance of the year, we are continuing to aggressively pursue various different sales actions and programs. And so, there’s still quite a bit left to the year to determine what that final number will be. But we will expect that to be a little bit higher than kind of our original $15 million estimate. And so as we go into next year, we would expect that that to revert back and come back into the expense base, but that the gross profit dollars that will generate from the revenue will more than offset the incremental expense on the incentive comp side.
Andrew Carter: And then back to like – I’m sorry, did I catch that SG&A is going to be up this year, and that might be just because of new branches and acquisitions?
Melanie Hart: Yes. So the guide for the full year is that it’ll be up no more than 1%. So the original we had talked about that it could be kind of negative 2% to plus 2% depending upon where the top line fell out. So we’ve – as we’ve gotten further through the year we can more confidently say that it’ll – it won’t exceed a 1% increase.
Andrew Carter: Okay. Thank you. And then kind of thinking about like kind of harp on the kind of the share perspective. I know you wait for the markets, but if you look out there and think about like unique customers that have come in, in 2021, 2022. If you look at that activity, do you have a firm sense that you know you’re at least holding market share or that they’re not going elsewhere? Anything more granular that you have real time that tells you that, hey, you’re still outperforming the market, holding your market share gain or maybe not – maybe you’re receiving some market share? Thanks.
Peter Arvan: Yes. Andrew, market share is a – it’s a bit elusive in an industry like ours. So we have to triangulate it on market share, but we also – one of the beauties of this business is that we operate now 432 individual PNLs and we track customers at the local level. So we have a pretty good view of what’s going on from a – at the individual customer level. And then we also get some information from the manufacturers as what’s going on in the channel in total. And then we look at things like, if the permit data and new pool construction is going to be down 30%, we have the ability to kind of back into what is our new pool construction number look like given, we do an analysis, we look at certain items that are sold only on a new pool to triangulate it on that.
And we know that we’re trending better than the minus 30% that the industry is likely going to see on new pool construction. So unfortunately, it’s not an exact science, but given industry information that we can see and that we get from our supplier partners, I think we’re very confident in our ability to continue to grow and take share.
Andrew Carter: One last question on the deferrals that you talked about, you mentioned that’s been pretty steady. Something breaks, it gets fixed. I guess when we go into these later months and something breaks in August and you have the option to winterize or whatever. Do you think there could be an added risk that you see deferrals pick up this season and that might be something that could cut you off guard? Or is that just something that as I say that it’s just too small, it doesn’t even matter. Thanks.
