Peter Arvan: No doubt, margin is a very important focus area for us. It can be hard to predict when you have a dynamic market that you are playing in, right, with mix — customer mix, new pool construction, weather, all of those things factor into the overall product mix and the overall customer mix. But rest assured that the drivers behind that, which is a very effective supply chain, a customer product offering that is very desirable, focus on the — our private label and exclusive brands. a dynamic pricing environment, leaning very heavily into our vertically integrated chemical packaging facility. All of those things help and they are all factored into our long-term plan and our long-term guide. Certainly, as we mentioned, the vendor incentives this year is a — it’s different this year and a year where you are drawing down inventory, then a year when you are increasing inventory.
So a lot of factors go into gross margin. I can tell you that it is a big focus area for the entire business and we believe that will continue to pay dividends for us.
Noah Merkousko: Got it. That’s helpful. And then for my follow-on, just a clarifying question. The language in the press release noted the low end of the revised EPS guidance range $13.15 would be a solid result. Should we read into that to mean that you are pointing to the low end of the guidance?
Melanie Hart: Yeah. That really wasn’t intended to guide one way or the other. I think it was more of just taking a big step back and acknowledging where we are ending up for this year. So, again, as we sit here today, we don’t want to be telling you that sales are down 10%. But it’s really just putting in context of taking out the last two years of extraordinary growth and seeing that from an incremental standpoint, we have certainly accomplished a lot from where we were when we reported 2019 results and so we are proud of the results that we will be presenting to you for this year.
Peter Arvan: Yeah. The fourth quarters are seasonally…
Noah Merkousko: Got it. That make sense.
Peter Arvan: Yeah. The fourth quarters are seasonally least significant quarter. It also is the quarter that has affected the most in terms of a percentage of the quarter by things like weather. So if the season shuts down early and construction drops off sooner, because it gets cold, it magnifies itself because of the size of the quarter. So I think all we were pointing to is the potential variability.
Noah Merkousko: Yeah. Yeah. Okay. That all makes sense. And if I could just squeeze in one other quick one. What was the expected inflation next year from price increases, was it 3 to 4 or 2 to 3?
Melanie Hart: So we had 3 to 4 from an equipment vendor standpoint. We are expecting on the — based on the current run rate on trichlor, we still will have a first quarter and second quarter that we will be lapping some year-over-year pricing. So it could blend kind of within that. We are also still waiting to get kind of final pricing on Horizon. The current look is that, that will probably be something less than what we are seeing on the blue side on the equipment. So we will have a better definitive answer for that when we talk again in February.
Noah Merkousko: Got it. That make sense. Well, thanks for taking my questions and good luck going forward.
Peter Arvan: Thank you.
Operator: Our next question comes from Andrew Carter with Stifel. Please go ahead.
Andrew Carter: Yeah. Hey. Thanks. Good morning.
Peter Arvan: Hi.
Andrew Carter: I think you said this is more of a weather neutral quarter, but I kind of wanted to understand the jump in chemicals, because I would assume had to be volume related, because I think the pricing was steady. So was there any weather impact in that? And then regarding, I know that you called out product mix as a headwind, but would chemicals be accretive or dilutive to gross margin overall? So I will stop there.
