Operator: [Operator Instructions] Your next question comes from the line of Budd Bugatch from Water Tower Research. Please go ahead. Your line is open.
Budd Bugatch: Thank you for my — thank you. Happy holidays to all, and congratulations on the quarter.
Dave Sylvester: Thank you.
Sara Armbruster: Thanks, Budd.
Budd Bugatch: Let me try and get out of the noise here. Let me ask just a couple of questions. Dave, on the guidance, you’re at 31.5% for the upcoming quarter and you reported 32.4%, I think for the third. Is there a way to get from the gross margin guidance from what you reported in third quarter to what you’re looking for, for fourth?
Dave Sylvester: Yeah, a little bit of it has to do with the inefficiencies that we tend to see in January and February when our production slows down and we leverage that opportunity to enhance or increase our maintenance — equipment maintenance in the facilities. That’s really the biggest driver that we see between the two quarters. And that’s really a global situation. In Asia, we have Chinese New Year, where we shut down for a week or 10 days. And we also go through kind of our annual maintenance work in January and February in Europe.
Budd Bugatch: Okay. That makes good sense. Congratulations on International. Obviously, a lot of work has been going in there. Is that persistent? You can see the persistent lower expenses? And do we see — do we look for operating profits going forward quarterly from International, maybe with the exception of the vacation quarter?
Dave Sylvester: Yeah, we are projecting profitability in both EMEA and Asia Pacific for Q4. And we’ll see what next year looks like, but I like how the activity levels have been trending. The opportunity creation in Europe is actually not bad, it’s actually decent. There are a number of relatively large project opportunities that have surfaced in the last 90 to 120 days that we’re working on and will compete for. And we — it just — it feels like activity level there is just a degree or two higher than it is in the Americas and certainly then you might traditionally expect based on the macroeconomic environment. And I think a lot of that has to do with the fact that they are in fact more back in the office, and they recognize that they need to change their office environments.
So yeah, we feel good. The teams are working very hard, driving a lot of cost reduction, continuing to realize pricing benefits. And we saw a little nice uptick in our win rate in Europe and in Asia as well. So, I think we have the right applications, the right sales teams, and we’re competing effectively.
Budd Bugatch: Okay. And last for me before my holiday wish is the large corporate customers that seem to be — you seem to be gaining either share with them — maybe both share and win rates and the behavior that we’re seeing out of those large corporate customers. We’ve heard CEOs all over the State say they want their people back in the office and we’ve seen pushback being notably written about and talked about. Sara, what are you seeing, and how are they successfully getting people back into the office, and what’s happening on that front? Can you give us a feel of how that looks going forward and what you’ve seen most recently?
Sara Armbruster: Sure. So, we’ve certainly seen many companies working hard to encourage their employees to be back in the office for some period of time. And I think many leading organizations that we work with are doing that, first, by being clear about their expectations, but more importantly by making sure that they’re really highlighting what is it about the office that can make that a really terrific place to help people do their best work. So, what are the amenities? What are the tools? What are the ways in which the office can support better work? And I think companies that we work with are trying to put their investments behind that in terms of spaces that really support those behaviors like I talked about a minute ago.
So, thinking about how do we create great environments for people to focus? How do we create great places for people to connect with one another in like deeply human and personal ways? How do we support well-being? How do we support collaboration to foster innovation? How are those organizations looking at their sustainability goals and thinking about spaces that support those goals? So, I think those are the kinds of things we continue to hear from the organizations that we work with, and they believe and I think they’re seeing some evidence that when you create a really terrific space that can support people in these critical ways, it becomes a draw. And people find that kind of environment energizing and supportive and they’ll spend time there.
So, I think that’s broadly what I would say we’re seeing across our client base, especially with large organizations.
Budd Bugatch: Thank you. And, well, congratulations on the progress so far this year, and happy holidays and best wishes to everybody for a happy holiday season and certainly for a healthy and happy and hopefully peaceful New Year.
Dave Sylvester: Thank you. You too.
Sara Armbruster: Thanks.
Operator: There are no further questions at this time. Ms. Armbruster, I turn the call back over to you.
Sara Armbruster: Well, thank you all for joining us today. We appreciate, as always, your interest in Steelcase, and I want to wish everyone a happy holiday. Thanks.
Operator: This concludes today’s conference call. You may now disconnect.
