Olivia Tong: Got it, thank you. Then just zeroing in a little bit more on the margin, nice to see the narrowing towards the high end. Could you just talk a little bit more about the current promotional environment, any trends that you’re seeing, whether towards the upper end of the market versus the more value-oriented consumer products, any particular trends that you’re seeing, whether it’s in color or other hair care related categories? Then just lastly, your views on why you think that ecomm was lagging, whether it’s just a particular point in time or something more systemic there. Thank you.
Denise Paulonis: Lots to unpack there. Let me start off a little bit, just reiterating a bit of the thoughts that we have around the promotional environment. We saw a little bit of an uptick in BSG, remained very consistent within Sally, but our margin strength really comes in our partnerships with our vendors and really being able to leverage investment from their perspective to maintain our gross margin rate, but be able to see the increases in units that we get when we do lean into promotions. We don’t anticipate promotion going to any outsized levels, but I would expect that Sally will maintain where we sit today and BSG will maintain the bit of uptick that we saw in this last quarter. But before getting to the ecomm question, I think it might be helpful if Marlo just provides a little bit more color around what else is driving the strength in the operating margin and taking us to the high end of the guide.
Marlo Cormier: Yes, I think what gives us confidence in the high end of the guide is our strength of our gross margins, being able to maintain above that 50%. Where we are year to date, it’s pretty much what we see for our full year. On the Sally side, strength is coming from our increasing owned brand penetration, and we did call out pricing and leverage. We have been able to overcome vendor cost increases with our pricing actions in recent quarters. We don’t see further outsized vendor cost increases going forward – we believe that moderates, but we will continue to monitor that. On the BSG side, gross margins have stabilized. They do reflect the structural shift that we’ve been talking about with our expanded Regis business, as well as the relocation of the North Texas DC costs that are now up in margin, that had moved up from SG&A, so really good performance on our gross margin front and believe we have stability there going forward.
When you look at SG&A, we’re really pleased to see SG&A dollars down from last year, and looking at it as we finish the year, we expect that to be the case for Q4 as well. We’re getting really good benefits out of really strict cost control as well as the planned benefits that we’re getting out of our DC consolidation and store optimization efforts. Those things are offsetting some really important investments that we made in wages, as well as our continued investments in our strategic initiatives. With our optimization efforts delivering the $50 million that we expected in SG&A savings this year and the lift on operating earnings of $10 million to this fiscal year, and then building off the strength of the gross margins, we believe we have–we’re in great position to deliver on the higher end of our operating margin guidance range.
Denise Paulonis: Then I guess coming back to your comment on ecommerce and what we think about the ecommerce business today at Sally, what I would say is I think we see a bit of a channel shift underway. The industry ecommerce data that we have shows softness overall in our key categories, and that same data suggests that we’re outperforming what the total mass beauty market is doing in color, care and nails from an ecomm perspective. But when we see the same idea that we have customers and consumers who are trending back to experiences, they’re trending to travel, they’re trending to restaurants, you see that a bit in people trending back to an in-store shopping behavior as well, and we feel like that’s what we saw in the quarter more so than anything.
But to be clear, our performance is below our expectations in this space and we’re working very hard to turn that dial, and when the customer is ready to be shopping ecommerce, we’re going to be ready for them as well. We’re really focused on the offering that we have with the expansion of marketplaces underway, the launch of our licensed colorist on demand coming online later in this month, but we round it out with a really healthy ecommerce business in the spirit that the profitability of our ecommerce channel is quite strong, which is largely fueled by the fact that our stores actually support the fulfillment of about 50% of sales in this past quarter, which should boost the Buy Online Pick-up In-store as well as our two-hour delivery from our stores.
Right now, it feels like it’s a little bit more market, but we’re not satisfied with our performance and lots more that we can do there to continue to accelerate growth.
Olivia Tong: Great, thank you. Best of luck.
