We’re not going to have a cash flow problem. So why would we stop building stores that we know are strategic and they’re going to make a lot of money. So that doesn’t make sense to me. Maybe other people have to do it because they have the cash flow problem. We’re not going to let ourselves have a cash flow problem. That’s why we haven’t deployed $2 billion buying our stock back yet, because I don’t know. Does Powell and his team knows to do? Are they just tinkering around? They haven’t seen this before? And is someone going to make some calls here and we go into a ditch? It’s not going to be a sub-prime thing, but it could be something else. Nobody saw — nobody has seen any of these big things coming except for one or two people. The guy in the big short, he got it.
Maybe a few others. The most people don’t get it right. And right now, I’ve never seen more confusion. You read the headlines of the top papers in the world. And I mean who’s saying what. Who thinks — I mean, the KPMG Consulting Group, they think housing prices are going to drop 20% next year. Goldman Sachs thinks housing prices are going to drop 7.5% next year. The Natural Association of Realtors think housing is going to go up 1.2%. Prices are going to go up 1.2% next year. Generally, people speak from a place of self-consideration. Like if you’re a realtor, you need to sell houses to make money. So you’re going to have the rosiest outlook. If you’re a banker, you don’t want transactions to stop. You don’t want the banking industry to slow down, right?
And if you’re a consultant, you don’t mind telling everybody the bad news because people hire you when they’re all screwed up and panicky. So maybe they’re the ones that going to tell you the worst case, I don’t know. But that’s a big spread. Don’t you think? Housing prices are going to go up 20%, go down 20% or they’re going to go up 1%. That sounds like everybody is on the same page. So it’s just a lot of uncertainty right now. But one thing I’m certain of the housing market is collapsing at a level I haven’t seen since 2008. I haven’t seen this kind of drop since 2008. So go look at how far housing dropped in 2008 and 2009, because these numbers look just like that.
Atul Maheswari: That sounds ominous. So thanks for that Gary and happy holidays.
Gary Friedman: Thank you.
Jack Preston: Thank you.
Operator: And we do have one final question from Seth Basham from Wedbush Securities. Please proceed.
Seth Basham: Thanks for taking my question. First, Gary, I’m sorry, I jumped on late but if you already addressed this. But we noticed in some of your work that you’re partially rolling back some price increases on select products. We’ve also seen a higher level of clearance on your website. Can you characterize that relative to your pricing and brand strategy?
Gary Friedman: Sure, sure. Well, the — as Jack mentioned, freight costs are coming down. Raw material costs are coming down. Pricing is coming down. And we’re not going to not want to have a good value in the marketplace. So of course, we’ll adjust pricing as our pricing comes down. And sales are down. So did we plan for sales to be down this far. No. Did we think that housing market was going to collapse this fast? No. Did we think interest rates are going to go up this fast? No. So do we have more inventory than we’d like? Yes. Should we be accelerating the things that we don’t want to have in our assortment long-term that we’re clearing out because we have new product coming in? Of course. Will we have more than normal? Of course, we will.
