Bhaskar Rao: Absolutely. So generally the way I thought about the business within certain confines meaning within a certain band as I thought about our incremental or decremental being somewhere around 30% to 35%. So as Scott mentioned, if it comes from the value let’s call it the value price points. It would be let’s call it something lower than the 30% to 35%. If it’s coming from the luxury brands whether it be Stearns & Foster or Tempur, it is going to be something north of that. So let’s call it 40-ish above if it was in the those luxuries and if it was in the same kind of quantum if you get in those value price points.
Scott Thompson: And I think the second part of your question could just squeeze two in one was what will we do in the unfortunate case of the Mattress Firm transaction were not to close. We clearly would be overcapitalized and we always do, which we would look to deploy that capital in a way that has a high return on invested capital, probably because of the size of the amount of money we will have accumulated, the vast majority would end up probably in share repurchase but that would be dependent on opportunities and stock price. But probably if you ask me today that would that’s going to end up in share repurchase would be my guess. It will be a Board decision. And the velocity of that will depend on the price of stock and it will probably depend on the outlook and the uncertainty in the economy.
But under a fairly reasonable period of time we would want back in line with our, what we think is more of our leverage target, which is two to three times. So we would probably be pretty quick, but again it would be dependent on factors like stock price and economic outlook.
Operator: Thank you. And we will take our next question from Brad Thomas with KeyBanc Capital Markets.
Brad Thomas: Thanks. Good morning. I wanted to ask about advertising. And Scott as we’re out talking to retailers, we continue to hear that Tempur is the most successful with its advertising and a share of voice. And so I was just wondering if you could comment number one, do you think there could be any changes on the horizon from a competitive standpoint in terms of your competitors trying to lean in and be more effective advertising this year? And then just as you think about the upcoming election, are there any nuances that we should think about, in terms of your ad plans this year? Thanks.
Scott Thompson: We would be thrilled, with our competition updating their advertising. I would — I think that actually would be a net positive certainly, to the industry and to us, because I think the biggest problem and I’ve talked about it before on open mic, is getting people in the funnel. And I think that’s why, the unit decline is so drastic this time in what is a minor downturn in the US industry — in the US economy. So, I hope so. I would love to see all the manufacturers, do more top of the funnel advertising and pull their weight to help retailers, biggest problem retailers have which is floor traffic. And I think that’s part of our responsibility as manufacturers to help drive traffic into the store. So, I haven’t seen anything, but I think some retailers are putting pressure on other manufacturers to kind of “get in the game.” So, we’re hoping there’s a change there.
As far as the advertising market and the elections, there will be certain markets where it will be a completeness. Pricing at times gets, a little bit weird. We’ve accounted for that in our thinking on our guidance, but it’s always a little weird, when there’s an election. But we – hopefully, we’ve got that covered. Certainly, we’ve been planning for it for more than a year.
Operator: Thank you. And we will take our next question from Keith Hughes with Truist.
Q – Keith Hughes: Thank you. A question is on international. Can you talk about, how the year is shaping up in terms of the guidance, the comps there just to be a bit harder, than what you have in North America?
Scott Thompson: You want to take that Bhaskar?
Bhaskar Rao: Absolutely.
Scott Thompson: Is it harder? I don’t think it’s harder, is it?
Bhaskar Rao: Well, what I would say is — you can answer that two different ways. One way is, I would think about in the first half, we did have four models that we have to comp over. However, when you think about the back half of 2020 – 2023, those four models weren’t there. However, we did see some growth. So, what does all that mean? As I think about the international and let’s call it, outside of Dreams is, the products have resonated with the consumer and we have effectively wrapped up that launch, in the United Kingdom. And our expectation is, is that the growth rate that we saw exiting in 2023, is that would continue as we get into 2024. So call that mid- to high single digit, from a growth rate standpoint. When I just — when I pan across international, just from a geo standpoint, the international market is as from a macro standpoint, is as interesting as the US. And however with all that is that, our business continues to outperform the competitive set.
Scott Thompson: Yes. I think the way, I think the international business, we’ve got some great products in the marketplace that we’ve got a lot better slot velocity, and there’s a lot more white space. So, that feels good. The only call out would be and you mentioned it a little bit, was dreams. Dreams does have tougher comps. And in the UK, retail market is worse than it was last year in the bedding section. So that one’s a little bit choppy, but the traditional Tempur business around the world feels like, it’s got some really good momentum.
Operator: Thank you. And we will take our next question from Phillip Blee with William Blair.
Q – Phillip Blee: Hi. Good morning. Thanks for taking my question. I wanted to I wanted to piggyback on an earlier question here. Can you talk about your sales assumptions for brand beds [ph] for the remainder of the year? Should we expect this mix to remain relatively consistent? And then how did that compare performance in the first quarter? And then how should we think about mix shift impact on gross margin throughout the remainder of the year under those assumptions? Thank you.
Scott Thompson: Okay. I’ll start the top and then detail, so you can have time to think through that.
Bhaskar Rao: Thank you.
Scott Thompson: Look, if you look at the first quarter, the higher ASP beds did better than the lower ASP beds. And the brand that obviously did the best is Tempur and grew and then turns would be in the middle. And then Sealy had some pressure on it and was negative in the first quarter, and that’s been kind of the trend. Going forward, that’s where I’ll look at Bhaskar and let him go. What do you want to talk about?
