There’s e-com fees that hit the SG&A line. So those are kind of the big areas. And of course, new stores hit the SG&A line as well. It’s going to be kind of the same battle going into 2023. We’re going to continue to work through those supply lines. We’re going to continue to €“ we’re going to have more stores next year than we had this year that we grew. So as you accelerate the number of stores that you open, that puts a little bit of pressure on the SG&A line. And then cost for labor hours can something that we’re continuing to battle. But I do think that it’s starting to €“ tide is getting to where it’s obviously labor wages don’t come down, but the rate of growth has slowed. And we still have other opportunities within the SG&A line to try to manage through that.
But net-net it’s a challenging environment there and we’re working it really hard. We do expect to slight some slightly leverage this year, but ongoing, our goal is always to try to keep it in line with sales. And the broader labor environment that you touched on in your question. It’s an interesting kind of dynamic as we’ve, again, playing out from the pandemic. We’re finding it. We’re getting more applications than we’ve ever had. We’re getting better quality applications than we’ve ever had. And that’s something that’s changed fairly substantially over the last six months or so. And that kind of supports Chip’s point that the pace at which a wage inflation has gone up, it’s likely to €“it’s not going to go back down and nor would we want it to, but it’s likely to slow down in terms of what is going to affect going forward.
And we are very focused on retention in our business and working hard to make sure that the good people that we have in our stores. We can retain them and get to a better level in that. And that’ll help our SG&A as well going forward. But it’s a very volatile labor environment, and we, our teams are working very hard to make sure we get the right quality people in our stores. And as I said, in fact that applications are going up is something that I think sends us, is a bit of a message that that’s not just for us, that’s across the marketplace. So, I think the wage pressure from labor is probably going to dilute a little bit going forward.
Operator: Thank you. Our next question comes from Kendall Toscano with Bank of America. You may proceed.
Kendall Toscano: Hi, thanks for taking my question, and congrats on that great quarter. So the first thing I wanted to ask was just more of a clarification on the €“ around the 11 store closures. So you mentioned that these are in larger formats versus the new format you’re going with. Can you just remind us now that you’ve been opening stores in this smaller format for a few years now, what the kind of breakdown in the portfolio is between the smaller format and the larger format stores? And then I guess the clarification kind of is just around how should we think about the 11 store closures this year versus you guys potentially reevaluating the portfolio going forward and maybe deciding to close additional on underperforming stores? Or is this kind of just really a one-time thing?
