John Merris: Yes, for sure. And just as a reminder, Q4 tends to be the highest DTC mix. So we’ll see how it plays out. Obviously, a lot of the quarter is still in front of us and the most important part of the quarter, generally Q4 is where we see the highest direct-to-consumer mix in that channel mix between wholesale and direct-to-consumer. In terms of the marketing initiatives, you may have seen, we actually did a press release. So we have three particularly significant marketing campaigns, two of which we have not released color on yet. One of them is coming up, which is the Macy’s Day Parade and overall Macy’s Day promotion that we’re running. So we’re super excited about that, coming in right ahead of our biggest selling day of the year, Black Friday.
But here in the next week, you’re going to hear and see something significant from us on the marketing front that we’re excited about. Again, we haven’t launched that yet. And then the following couple of weeks after that, again, another marketing campaign that we’re pretty excited about. So we’ve been saying all year, the back half of the year, particularly Q4 was where you were going to see us taking some of the EBITDA preservation that we had. The discipline that we had exhibited throughout the beginning of the year, the first three quarters, and we were going to lean into investments in Q4 and that is playing out. We’ve actually gotten our hands on even some the marketing initiatives that we were not initially anticipating, which is allowing us to lean in maybe even a little bit more than we were.
So we’re very excited about the quarter. We’ve been in this position before and you guys have heard this that have been following us for the last several years. And this is not an uncommon thing. At the beginning of November, we wish that we can — we could give pure line of sight to the quarter based on what we’ve seen, but so much of the quarter is still out in front of us. And those last five weeks of the year are so critical for this quarter for us.
Sabrina Baxamusa: Thank you. That’s helpful. And then following up to that, could you provide some color on what your team has been doing to ignite more crossover demand between the portfolio brands?
John Merris: Yes. We announced last quarter that we were going to be doing inserts in every package across the different brands cross marketing. We have seen slight lift across the brands, not as significant as we had hoped, but we’re continuing to introduce the brands to the different cohorts of customers within the individual brands. So that’s an ongoing initiative. We’ll continue to execute on. Again, it’s having slight positive impact, but nothing meaningful enough to really report on.
Sabrina Baxamusa: Got it. Thanks. That’s helpful.
Operator: [Operator Instructions] Our next question comes from Ryan Sigdahl from Craig-Hallum Capital Group. Please go ahead, Ryan. Your line is now open.
Ryan Sigdahl: Good morning. Congrats on all the positive business updates. I want to start with Target. So is this a trial? Or is this an ongoing relationship where you’re going to continue to have permanent shelf space beyond the holiday selling season, I guess, dependent on performance, obviously. But is this a trial or permanent?
John Merris: Yes, it’s a bit of a hybrid. You kind of nailed it, right? I mean they are anxious to lean into the relationship. They’re excited for what we can do with them going into next year. Obviously, all eyes right now are on this first campaign. And the success of this Q4 campaign that we’re running with in is going to be a critical driver to how we think about and look at the 2024 relationship. So it’s not being called a test or a trial, but any new relationship is always in test or trial from our perspective. So we’re focused on execution right now and excited to see that play out.
Ryan Sigdahl: And then are you able to share which Solo Stove product you’ll be selling or which products you’ll be selling? And then 2,000 stores appears to be all their U.S. stores. Is that correct?
John Merris: I don’t know if I can say all of their stores. That was just the number that I heard. So I’ll just stick with the 2,000 stores. That’s what I’m familiar with. I’m pretty sure it’s domestic only, but I’m not 100% sure on that. The product is — I won’t speak to — it is a Target exclusive. So it’s something we’re excited about. It is the Mesa product, but it’s something unique for Target, that’s only going to be found in the Target stores. So you’ll have to go check it out on Black Friday to see what it looks like.
Ryan Sigdahl: Good. Then one question for Somer. Just can you update us on the free cash flow expectations, puts, takes in the quarter, how do you think about the year? And then do you still expect to pay off the revolver debt by year-end?
Somer Webb: Yes. Thanks for the question. So as we move into the fourth quarter, the fourth quarter is obviously where we generate a lot of cash. It’s our biggest quarter. So we typically going in, we are going to lean into marketing spend. So I’d tell you from what we’ve guided kind of earlier over EBITDA, it’s probably going to be slightly less than EBITDA that would come in from a free cash flow perspective. But still a very healthy cash flow generation. And our expectation is to pay down the revolver or the majority of the revolver by the end of the year. Again, we’re seeing the opportunity to lean into marketing spend, and we’re going to take advantage of that. But we also — we expect to pay down the majority of the revolver by the end of the year, if not early in the first year — or first of 2024.
