I would say as we approach this year 2023 I feel like we are focused on driving higher operating margins. The best way to do that is sell what you got to the customers you got. And that is where our biggest focus is around share of wallet. As we get comfortable with the operating environment, we will then turn on the acquisition machine in a more intense manner. But we know that there are tens of thousands of integrators to attract to our business platform and our product offering.
Chris Snyder: Appreciate that John. Sorry.
John Heyman: A big piece of that is continuing to open local branches. Again, we couldn’t fulfill inventory in all those local branches so those were delayed to the end of last year. And we’ll continue to open local branches this year to serve all our partners in the different verticals we do business with.
Chris Snyder: Thank you, John.
John Heyman: Thank you.
Operator: Thank you. Our next question comes from Adam Tindle with Raymond James. Your may proceed.
Adam Tindle: Okay. Thanks. Good afternoon. Maybe John and for Mike as well. I just wanted to start with the 2023 guidance which I appreciate more about the cadence of the year. I’m sure we’ll get questions on this tomorrow. So I think you’ve mentioned a mid to high-teens decline in Q1 with an expectation to return to year-over-year growth in the back half of the year. So sort of this kind of hockey stick type of shape to the year. Just wondered, if you could maybe cover the levers to that. Any time you’ve got that acceleration as the year progresses, investors tend to get a little bit nervous about that expectation moving forward. So, maybe you could cover the levers to that improvement as the year progresses. Thank you.
Mike Carlet: Yes. No great question, Adam. Definitely there — we’re not going to guide the quarter specifically, but let me give you some directional numbers. I think, clearly the biggest number we’re using to predict here is this inventory in the channel and the year-over-year impacts. How did inventory come in last year? And how is it going to come out this year, as we think about that year-over-year? And so, the way we’re looking at it right now, our best guess is going to be about a 20% headwind in Q1, somewhere around the 20% headwind in Q2, a slight headwind, a couple of points in Q3 because again, once we get to Q3, it was coming out in 2022 and it’s going to come out at ’23. So, on a year-over-year comp basis, it’s a less significant issue.
And then by the time we get to Q4, if our model is right and all of it comes out in the first three quarters, then by the time we get to Q4 it will be about 6% positive on a year-over-year change basis as we lap the inventory that came out this year. And our model says that, it should be pretty much fully wound through by the end of Q3. Now, there’s a bunch of regression analysis and science in that and it’s a forecast, so I don’t want to get too tied to exactly those numbers. But that’s at least the way the model is and as we think about the quarterly moves. That’s by far the biggest number that’s out there. The other thing that impacts obviously the pricing changes we did last year were done in February and done in June and they’re going to impact much more in the first half of the year.
So, 3%, 4%, 5%, 6% in Q1, Q2 and much more flat impact from pricing in the back half of the year. We’ll only get the benefit of this year’s pricing activity. And then everything else is pretty much standard across the board as you think about it, but there’s not a lot of variability on the other numbers. New stores ramp up pretty evenly throughout the year. The volume assumptions, there’s a couple of points of difference in each quarter, depending upon how we think what happened last year, what was going on with stocking levels. But generally, the rest of the numbers are pretty equivalent throughout the year.
