Eric Tanzberger: Yes. I mean we’re about 7.4%-ish right now on our floating debt. Most of the comparison first of all, the tough comparison is going to be the first half of this year because it was already up about that point as you got to the second half of 2023. When you look forward though the rest of the year I think like everybody else we thought there could have been three or four rate cuts and now we’re probably thinking that it’s more like 2-ish rate cuts in the back half of the year. Obviously, we could be wrong. But the one thing that I would tell you Scott is that’s not very material. Our — it’s — the floating rate debt is about 30% of our total debt and would just take a 25 bp cut and floating rate expected to follow and just happened in the last couple of months of the year it’s not going to be very material with us at all.
So it’s not going to move the needle not going to move any of the guidance or anything like that. But so as you know in the modeling though, we obviously took a little bit of a lighter point of view in terms of cuts like most people have read the market and some of the comments out there.
Scott Schneeberger: Thanks. Appreciate that. And then that last one just cremation mix. The year-over-year a little lighter than historic trend. Is this just a factor of comps or year-over-year comps or anything else we should be considering there? Thanks.
Tom Ryan: Scott, you know I’m thinking Jay Warren [ph] called you maybe I think our belief is that the trends will probably revert to the mean. I think what you’ve seen over a number of years sometimes we’ve experienced 200 basis points. We experienced 50 basis points. And so it can ebb and flow and we still think more likely than not we’re somewhere in the 100 basis point to 150 basis point change a year. We have noticed that in our numbers and we’re excited about it. We think it’s great. I just don’t know if it’s a trend yet to call.
Scott Schneeberger: All right. Thanks, guys. Appreciate it.
Operator: The next question comes from Tobey Sommer of Truist. Go ahead, please.
Tobey Sommer: Thank you. And Debbie, the century mark seems like on apropos time. The – could you comment on your expense inflation, how you see that trending in 2024 versus last year, particularly on the labor and merchandise side.
Tom Ryan: Yes. On the merchandise side again, we’ve got long-term agreements that have inflationary caps on them. So I feel like we have a good handle on knowing what our inflation will be – and generally, I would tell you, it’s been trending lower than general inflation. So I think we’ve been able to hold merchandise costs through those contracts, also I think just kind of proactive transition to different products which are pricing and products team do a great job of flexing in. So really not seeing anything that we’re not happy with there. On the waste front, we’re like everybody else. And I think we have experienced over the last few years wage inflation at above 4%. And what I’d tell you is we’re starting to see in 2024 is that to normalize a little more and reach back into the high 3s.
So I think we’re seeing some wage inflation subsiding. But obviously, since wage inflation was probably closer to 2% over the last 10 years or so. It’s still elevated, as you think the upper history, but we’re definitely seeing it subside a bit, and push back towards the 3s and out of the 4s.
Tobey Sommer: Thanks. And if you were to look at your customer base and your sales experience on a low, mid and sort of high-end customer bases. How – what sort of story would the revenue trends tell us in cemetery and funeral, if looked at through that lens?
Tom Ryan: Yes. I think it’s less an issue on funeral and probably a little more issue on cemetery. And that really gets back to the preneed nature of cemetery versus atneed. So from an atneed perspective, I think people make decisions and spend money and they find a way, right? They pass the hat, they do what they got to do and it’s something that’s important in emotional forum. Buying preneed cemetery property is a lot less emotional. And so I think you – when you get into periods where interest rates go up or things like that happen, you’re going to be a little more price sensitive. I would tell you again at the high end we see a lot of demand and continued success at the mid-end or the mid-level I’d say, we continue to see a lot of interest and good activity.
And even at the low we’re still seeing good activity. I think I would tell you by looking at the data that consumer is a little more challenged than the mid-level consumer that I think you’re seeing other industries talk about. And again, I just think that gets back to inflation. And not our product but their everyday lives and how they’re being impacted by the price of gasoline, the price of groceries. So yes, I think there’s probably a little more difficulty to think about the low-end customer and their willingness to engage in a product that they don’t need exactly right now. So we try to – as you know, we’ve put together some plans and strategy to help them get into those contracts, whether it’s terms or interest rates but keep that consumer active.
And I think we’ve done a pretty good job of it.
Tobey Sommer: Thank you very much.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to SCI management for any closing remarks.
Tom Ryan: We want to thank everybody for being here today. I want to reiterate Debbie Young and what a superstar she’s been to us. We love her very much. We’re going to miss her but we’re so happy for her next chapter. So Debbie, continued success and we’re going to miss you girl. Thank you everybody.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
