Scott Rowe: Yes. And, Michael, I guess, adding on to what may be our longest question of the morning, you asked me what inflection points you catalyst could be for upside in the second half. And I’d just point you back to — or remind you how we’ve approached from initial guidance all the way through now halfway through the year, is we are taking the trends that we see, and we are projecting them forward, right? So whether it’s North America down low-single-digits, it’s — I think, now have spend a lot of time on what our assumptions are in China. From a top line standpoint, obviously, that could be better. Could China get open up and come back faster, it could. Could it be slower? It could. I think we’ve got reasonable estimates, same with North America, right?
Our business has been very consistent. We haven’t predicted a big up or down. And so as that dynamic continues to evolve, we know our brands are strong. We are running for the long-term, and we are going to adapt to whatever demand environment we see. We are not trying to force it or push it, and we are maintaining those strong gross margins. So any upside we do see, will come through on the bottom line. On the other side, investments are largely in our control. And I hope you’ve seen that we’ve been disciplined at trying to both be prudent in light of a very dynamic environment, while at the same time, maintaining investments on what we think are going to drive us in the long-term, whether it’s a little more than 8% from a marketing standpoint, even a little higher than that in the second quarter.
And continuing to invest in our capabilities around digital, data analytics, et cetera. Those are obviously within our control, but we think this quarter is a great testament to the fact that those are paying off. So we will continue to be prudent, managing our expenses as carefully as we can while not sacrificing the long-term. And as Todd and Joanne said, one of the biggest things that gives me confidence in the future is that gross margin as we continue to manage the price increases and being diligent on the discounting. We see those gross margins coming in and we see that for the quarter, and we see that for the full year.
Michael Binetti: Thanks a lot. Got it. Appreciate it.
Scott Rowe: Yes.
Operator: Our next question is from Brooke Roach of Goldman Sachs.
Brooke Roach: Good morning and thank you so much for taking our question. A lot of ground covered, but my question today is for Scott. Can you comment on your inventory position by brand and geography given the slower rate of recovery in China? As you think about the cadencing of inventory rebalancing, where do you expect that to trend for the remainder of the calendar year? Thank you.
Scott Rowe: Yes, Brooke, I would love to answer that question. I would say the big picture here is no new news, right? We’ve talked about the quality and the quantity of inventory being well-positioned and coming into our peak holiday season, we felt good about it. And the answer is, we still do. We are up about 30%. We said by the end of the year, we’d be up single digits. If you can expect sequential improvement as you move through the third, and I told you where we expect to end for the fourth quarter. And it’s funny, on China, a quarter ago, we were talking about do we have too much inventory in China and now is at reopen do we have enough inventory in China. Again, I would say this points to the diversity of our — and flexibility of our model.
