Belinda Wong: Great. Thank you for your question, Andrew. First of all, I want to say that there’s no noticeable impact to our sales performance in Q3. In fact, we’re very — I’m very happy with our Q3 performance and the sequential improvement that we achieved. We have been and will continue to stay focused and disciplined in our discount investment to optimize and deliver incremental return. On the competition topic, we welcome competition. They actually expand the coffee market and accelerate adoption and vacancy of coffee consumption. Different brands bring in different value propositions and occasions, and I just want to talk about our value propositions. We’re in the human connection business. Since day one 24 years ago, when we entered China, we have been focusing on delivering a premium experience defined by the quality of our coffee and the emotional experience we’ve built with our customers and our partners that can’t be replicated anywhere else.
And our China business has strategically built to serve a diverse range of customer needs and occasions, physical and digital, fast and slow. And the unique business model and capabilities we have built that Lex has mentioned gives us distinctive competitive advantages. So we’ll double down on our investment in our product innovation store experience, digitalization in our people to create even more distinctive advantages to capture the limitless opportunities in China in the future. Thank you. We’re playing the long game.
Laxman Narasimhan: Rachel?
Rachel Ruggeri: Yeah. And Andrew, I would just follow that up with as we look at the performance in China, we’re encouraged by the healthy margins that we’re seeing today. And even as we see a shift more towards digital, which does have a lower margin percentage overall, it’s driving more revenue. And that’s no better way to drive margin expansion than through sales leverage, so we’re encouraged by what we’re seeing today. In addition to that, the team has been very judicious about creating operational efficiencies so the margin opportunity in China continues to be healthy. That said, if we do see that there are challenges in the future, we’ve structured our guidance such that it allows us room, which is one of the reasons why we’re very intentional and being more directive around qualitative language on margins, saying this year would be solid margin expansion and the future would be progressive, which will allow us to continue to navigate the business and continue to invest where needed so that we can deliver on that 15% to 20% earnings growth that we’ve guided to.
Laxman Narasimhan: Well, let me just close with a couple of observations. I was in the China market for an extended period in this quarter. And I got to actually work with our partners and stores. I got to spend time in our supply chain. I got to spend time in our support centers, including looking at our teams that are leading what we do in digital. And I have to tell you, I’ve been going to China, studying China, advising on China, running business with China for 20 years. And this is a very unique business. It’s been a business that’s been built with love, and it’s remarkable in terms of the passion our partners have. I was very impressed. I think it is still early days. I mean, when you start looking at the headroom you have, and as Belinda said, the headroom is large.
So as people come into the market, they’re essentially driving a conversion of tea to coffee, which of course, remember, for 20 years, we’ve been doing and we’ve got to 12 cups per capita. The numbers, by the way, significantly higher in Shanghai, but it’s still much lower than a tea drinking country like Japan, which has had a history of coffee house culture over time. So the headroom is really large. If you look at what we also do with our brand, don’t forget, we have these — we proudly serve a Starbucks points of customer connection. In addition, our ready-to-drink partnership with is also growing significantly. And we’re also available for coffee at home, so our brand is being built across multiple channels and the investments we’re making in digital are very strong.
