Stefan Larsson: Thanks, Michael. So before I let Zac unpack more detailed financials in the outlook for Q4, so what excites us with Q3 is that we were able to compete to win in a difficult macro backdrop. And we continue the outlook for Q4. It’s based on that we will continue to do that in Q4. And we had an on planned start of the holiday. And then we continue to compete to win through Q4, and that’s the underlying driver of the Q4 outlook. But, Zac, feel free to give more.
Zac Coughlin: I think as we saw as we looked through the third quarter, overall August and September strong and then some of that macroeconomic backdrop as Stefan mentioned, we began to see some softening consumer sentiment in October. We fought hard and we believe competed for our fair share there. As we look forward, we’ve incorporated that sort of outlook as we sort of worked through the third quarter into the fourth quarter results or into the fourth quarter outlook and expect that to sort of be the underlying dynamic that we’re competing in. More broadly from a gross margin perspective, we expect our gross margin impact versus last year to be approximately the same as the third quarter. The composition of that obviously a little bit different as we do expect that higher level of promotional environment to continue through the fourth quarter we saw at the end, but we get the lift there from a much heavier DTC retail focus quarter, but the overall margin impact from there.
And then I think from a SG&A perspective, we expect to see continued efficiency as we work our way through being really disciplined and focused on the spending from an outlook for the fourth quarter heading into there. So that’s all incorporated into the guidance that we’ve provided.
Stefan Larsson: And, Michael, to your question about North America, the green shoots we are seeing in DTC stores, yes, it’s exciting because we’ve worked really hard to double down on the execution, starting with our hero products and making sure we have those best essentials that we are known for in both brands that we have them in stock. So what we saw in Q3 was that we were able to navigate through most of the supply chain issues. So we had better in stock levels in more of our hero products. And then we were really focused on the channel execution. And we saw that drive this double digit growth in our store. So we saw the comps coming up with the domestic consumer. So still early days, but very encouraging. If we take Tommy as an example where we increasingly connect our products to the global design center of the brand and have those bestsellers, even for the North America market, we see that the category is like men’s knits, which is our number one category for Tommy, we were up 42% versus last year.
So Polo’s iconic essential bestsellers are driving significant growth and led by global bestseller. So we’re able to get more of the hero products in stock, better product execution, leveraging the global brand design, higher AURs on that, and then we see that we’re starting to come up and climb up against 2019. So early days in North America, but very encouraging.
Michael Binetti: Very helpful. Thanks a lot, guys. Congrats.
Stefan Larsson: Thanks, Mike.
Operator: Thank you. Our next question will come from Jay Sole with UBS. Your line is now open.
Jay Sole: Great. Thank you so much. I wanted to follow up on some of the comments made about SG&A. SG&A controls part of the PVH+ Plan. But can you help us understand how much of the really strong SG&A control in the quarter was sort of a response to the consumer environment versus how much is sort of identifying opportunities to streamline costs and get more efficient, which will sort of continue into next year and really beyond? Thank you.
