Operator: Thank you. Our next question is from Keith Hughes with Truist Securities. Please proceed with your question.
Keith Hughes: Thank you. With the launch of the new line, are you changing historical advertising co-op or kind of readout your salesperson incentives? Is it going to be different than what has historically been at Purple on the new products?
Rob DeMartini: Yes, I’m sorry. Will you give me that question again? I’m sorry I missed half of it.
Keith Hughes: Yes. Sure. With the launch of the new products, are you changing your advertising co-op agreement with the retailers or some of the retail floor incentive payment, things like that? Is it different than it’s been historically?
Rob DeMartini: No, we have sharpened the margins. I don’t know if this language is used in this industry, but what I’d call front margin, basically what they buy it for, what they sell it for. We’ve sharpened those in the restore line to try to get at some of the historical drag that was on the wholesale business. In most cases or I can’t think of a case where we’ve changed the backend at all. Yes, there are not cases where we’ve changed any of the backend. It’s, we have sharpened the front end a bit and then as Lux gets into the line that margin dramatically helps the vendor margin as they look at how much Purple contributes because those are very rich sales for the retailers that sell Purple Lux.
Keith Hughes: Okay, thank you very much.
Rob DeMartini: Thank you.
Operator: Our next question is from Atul Maheswari with UBS. Please proceed with your question.
Atul Maheswari: Good evening. Thanks a lot for taking my question. Rob, I’m going to apologize in advance, but I also have a back half question. So a lot of exciting stuff clearly going on with the product launches and the incremental slots. But what have you assumed for industry growth in the back half that like what’s embedded in the guidance?
Rob DeMartini: We have not assumed industry growth. We’ve assumed share growth in the industry, and if you can tell me what the plan, I’ll do that, but we didn’t.
Atul Maheswari: All right.
Rob DeMartini: I will also say we also, we didn’t improve €“ we didn’t include further decay either.
Atul Maheswari: Got it. And then my follow up is on the gross margin, I think you mentioned a few hundred basis points, Jack from promotions €“ high promotions in the fourth quarter. Please correct me there if I’m not if I’m wrong?
Jack Roddy: No, that’s correct.
Atul Maheswari: But what have you assumed for promotions for 2023 and related to that what is the risk that all this increased promotions could condition your customer to expect these offers even as you launch the higher quality new beds?
Jack Roddy: We do have planned in the year some improvements in discount levels and in most cases we’ve already began to see some of that. It’s a little hard to read in wholesale right now because of the destocking noise that’s in there. But we have assumed modest improvement in discount levels across all three channels. Yes, so a decrease in promotion, make sure I’m saying that clearly.
Atul Maheswari: Right. Awesome. Thank you very much and good luck with this year.
Rob DeMartini: Thank you, Atul.
