And we were to see meaningful movement there. There’s definitely stuff to get excited about in the future. In terms of new partners, we’re going to continue to be very strategic and very selective with the retail partners that we bring on. There’s definitely interest outside of our current base of retailers. And just, it’s just important to us that we don’t overextend here, or bring on the wrong partners that aren’t going to be brand lifting to us. So you can expect us to be disciplined here, we’re not just going to go kind of all out all at once, but be strategic and thoughtful about it. And, like I’ve said before, we really liked the partnership base that we have right now and their willingness so far and our early conversations to go deeper.
Ryan Sundby: Got it. It’s good to hear. Thanks.
Operator: Our next question is from Peter Keith from Piper Sandler. Peter, your line is now open. Please go ahead.
Matt Edgar: Good morning. This is Matt Edgar on for Peter. Thanks for taking our question. First off from us, we’re just curious on the gross margin what’s implied in your outlook? Maybe you can speak to how ocean freight has negatively impacted that line? And how much ocean freight callback you have kind of embedded in the outlook. And then can maybe just speak to the mix the wholesale and kind of the impacts there? Thanks.
Somer Webb: Yeah, absolutely. So when I think about gross margins for the year, we are still targeting 60% plus. It will be impacted by the percentage of wholesale mix. I want to continue to note though, that although it puts pressure on gross margin. From an EBITDA standpoint, it has similar contribution as our direct-to-consumer channel. As I mentioned that wholesale can be up to 25% of our overall mix this year. As far as ocean freight, I mentioned, just from where we are from an inventory level. I think it’s 100 to 150 basis points still as a headwind in the first half and then you can see that be a tailwind kind of in the second half on gross margin, so we bought 100 to 150 basis points. But overall, we’re still targeting 60% plus on gross margin.
It may vary by quarter. Just to note, typically, from a wholesale standpoint, Q1 and Q3 are going to be our higher wholesale quarters, because as they stock for the holiday season, so for instance, for the summer season, they’re stocking in Q1. For the winter season, they’re typically stocking at the end of Q3 early Q4. But overall, again, still targeting a 60% plus for the year.
Matt Edgar: Great, that’s really helpful. Thank you. And second from us we’re kind of curious on the cash flow statement and the inventory outlook, given the mix to wholesale and this year. I guess, what’s the projected inventory balance by year-end? And are you expecting what maybe if you can provide any details around what you’re expecting for cash flow from operations within kind of the guidance outlook? Thanks.
Somer Webb: Yeah, we typically haven’t given those metrics. We are obviously — we said in our Q3 call that we expected our inventory levels to come down in Q4 also in Q1. As I expect from an inventory standpoint, as we work through both from a wholesale and from a direct-to-consumer to have about 120 days of inventory on hand going forward. That’s our target. So as we look to get to the end of the year, that’s what I expect to end of the year is around 120 days of inventory on hand. As far as cash standpoint, obviously with our inventory position, we do believe this will be a healthy cash generating year. We always expect to have free cash flow. This year won’t be any different. But where we are starting from an inventory position, I think that this will be a strong cashier as we work through this inventory levels.
