Michael Mente: Yeah.I would say it’s a long term offense, you know, in in times like this we really see thatcompetition and, the appetite, it’s like a lot ofyour intuition, I think is quite common and I think that’s kind ofhow a lot of people approach the situation, but I think it’s when people are zagging, being opportunistic when people are conservative, especially when the core business is strong and especially when we have a long termmindset.So we do see opportunities, coming up and we’ll continue to invest.
Operator: We have time for one more question, and it will come from Tom Nikic from Wedbush Securities. Please go ahead. Your line is open.
Tom Nikic: Hey guys thanks for squeezing me in. Jesse, I think, obviously your margins have come under pressure the last couple of years.Is there any way we should or could think about what is recoverable and what may be, structural, relative to I guess, margins that we’re seeing a couple of years ago?
Jesse Timmermans: Yeah. Great question Tom. Yeah, I think a large portion of it is recoverable. I think if you start at the gross margin level, we are coming off of an inventory rebalancing period. We’re still being pressured by forward. Something that Mike mentioned in his prepared remarks that I think is important in that, we’re roughly in the same zone on gross margin for Revolve now as we were in 3Q of 2019, despite the fact that owned brands is half the mix that it was back then.So I think that shows;one, the great success we’ve made on both own brand and third party gross margin standalone and then second, the opportunity we have looking ahead is we increase that own brand mix.So that’s number one. And I would say largely recoverable and not just recoverable, but, getting in excess of where we were in a pre-COVID levels.Fulfillment, we are at a point now where we’re getting pressured by, again, the return rate, the AOV, also capacity, where we expanded our fulfillment footprint, last year around this time we haven’t fully optimized, fully grown into that.
So there is opportunity there.So that is maybe not 100%, but largely recoverable. Selling and distribution is tougher, given the return rate pressure that we have experienced, the increase in rates over the past several years, fuel in particular.So, we do think there is a lot of opportunity there, and we have a lot of initiatives that play internally. We’re already starting to see the savings there, but that is, I would say, recoverable, but not to the extent of those other two.If we can’t get return rate, right to which we think there’s a lot of opportunity there. Marketing is a lever we can pull. If I’ve been called out a recoverable or unrecoverable, that’s, kind of an opportunity and a lever we can pull and then G&A is very recoverable, and has a lot of leverage as we look ahead and get back into growth territory and get some, get some scale leverage there.So and if you look at that line item, a couple points over the last three years, we think that is achievable over the next few years as well.
Tom Nikic: Understood. Thanks, Jesse. Best of luck for the rest of the year.
Jesse Timmermans: Thank you.
Operator: This concludes today’s Q and A session. I would like to turn the call back over to management for closing remarks.
Mike Karanikolas: Hey, guys. Thanks for joining us for another quarter. We will continue to stay focused, our team is working on a lot of exciting things as they are now so excited to share the positive exciting results of the hard work and the foundation that we’re letting you know.Thanks, guys.
Operator: This concludes today’s conference call. Thank you for your participation.
