Simeon Siegel: Great. Thanks a lot. Best luck for the year.
Barbara Rentler: Thank you.
Operator: And our next question comes from the line of Jay Sole with UBS. Please proceed with your question.
Jay Sole: Great. Thank you so much. I’m wondering if you can elaborate a little bit on some of the higher wages that you mentioned as a driver of the EBIT margin in the first quarter this year. Can you just talk about the impact on what you’re seeing at the store level versus like, say, a warehousing level versus at a corporate level, that would be helpful? Thank you.
Michael Hartshorn: Sure. I mean it’s been a competitive market across all three of those for some time. What we saw during COVID is the biggest pressure we had was in the distribution center line item and that we’ve seen the pressure there slow down considerably. And for the stores, we continue to take a market-by-market approach to staffing them and increasing wages where appropriate. In addition, as you know, there’s growing statutory minimum wages for us in almost half of our store base, and that includes both state wide and local municipality minimum wages. But overall, it’s really driven at this point by those minimum wage increases. I would say we feel good about the workforce in totality and are confident about what we have in place for the year.
Jay Sole: Okay. Thank you so much.
Operator: And our next question comes from the line of Laura Champine with Loop Capital. Please proceed with your question.
Laura Champine: Crossing my fingers, you’ll answer this one, but are you currently trending in line with your first quarter guide?
Michael Hartshorn: We wouldn’t, our practices, Laura, to not comment on inter-quarter trends.
Laura Champine: Understood. Is the guidance for the full year comp to be flat, would that assume that traffic is roughly flat this year?
Michael Hartshorn: We – again, we don’t plan the business around traffic or transaction. Our view has always been if we provide the great branded bargains to the customer, that will be a combination of, one, bringing more customers to the store and two, when they’re in the store, increasing the size of the average basket. What’s happened over the last several years is that basket has grown and even into last year, on top of the stimulus year the customer is buying more when they’re coming to the store.
Laura Champine: Let me see if I can get this one. The gross margin, and this is last – the gross margin commentary that you’ve made, is that consistent with taking more markdowns this year for the year as a whole compared to last year?
Michael Hartshorn: Laura, we don’t guide really at that component level of merchandise margin, but obviously, our markdown levels will be highly dependent on if we deliver our sales plan and by the right goods. The biggest moving part as we said, in merchandise margin will be the ocean freight cost reductions that we’re seeing in the marketplace.
Laura Champine: Understood. Thank you.
Operator: And our next question comes from the line of Aneesha Sherman with Bernstein. Please proceed with your question.
