We believe that’s a resetting of the expense structure as we shift to a more digital business, as we layer in more wholesale, which, as I commented earlier, comes with less SG&A expense. And I think it’s also important to note, within that SG&A expense, as we’ve talked on numerous occasions, we’re also investing in marketing. So we’re able to achieve SG&A expense reductions despite the fact that we’re making investments in marketing to drive our digital business, which are extremely important to our growth initiatives, but we’re, in essence, able to self-fund those marketing investments with the restructuring of our business and the expense reductions that we see across the business. And some of that hits in SG&A expense. Some of it is also coming through occupancy cost reductions, as Meagan talked about in her comments, where we’re shifting from billboards or nameplates on brick-and-mortar locations to more digital marketing initiatives.
That digital marketing ends up in SG&A expense, where some of that occupancy cost was actually in our margin structure. So I think we’re certainly getting more efficient, more effective with our expense structure, and that’s not a temporary benefit. That’s an ongoing benefit that will cascade into 2024 and beyond, enabling us to have more sustainable growth and more sustainable increases in terms of operating profits.
Operator: We will take our next question from Jay Sole with UBS.
Jay Sole : Great. Jane, I want to ask just about third quarter versus fourth quarter and just how the business has evolved because the guidance for third quarter sales looks like it’s implying sales for third quarter to be a lot bigger than they will be for fourth quarter. Although if you go pre-pandemic in the past, fourth quarter was always bigger than third quarter given it’s holiday. Is the change just around the wholesale business and its growth? Or is there something else going on that would really make structurally third quarter bigger now? And then if you kind of maybe just talk about Gymboree, and as that business grows, how that should impact fourth quarter, that would be super helpful.
Jane Elfers: Yes. I’ll turn it over to Sheamus for the first part, and then I’ll take it back for Gymboree.
Sheamus Toal: Yes. I think as Jane said earlier, in terms of the importance of back-to-school, it is a critically important time period for us where we do see a significant amount of revenue uptick in Q3. So that has definitely driven more revenue and a disproportionate amount of revenue into Q3. So it’s a critically important quarter for us because of that. I think that, that’s what you’re seeing in our expectations in terms of the performance split between the quarter.
Jane Elfers: And then from a Gymboree perspective, I can take that part of the question. Gymboree, we’re planning when we think about Q3 into Q4, Gymboree, we’ve talked about before, is a very holiday-centric business. So we’re going to continue to see really exciting growth from the Gymboree brand as we head into Q4. And a lot of that is going to be surrounded by an incredible marketing campaign. We had announced Mandy Moore. We’ve continued to see really positive success with her throughout the year. And really where it kicks into gear as the tail end of Q3 heading into Q4 as we bring in our expanded holiday assortment. This is where we had a lot of opportunity last year where we saw very early selling. We oversold our inventory so when we head into December, we have a lot of opportunity in the November, December time period. So we’re very optimistic about the continued growth of Gymboree, especially as we kick into the key holiday selling time period.
Sheamus Toal: I think the last thing I would just add to the first part of that, as stores have become less penetration for us, I think that in earlier years, when stores were a higher penetration, I think they do have a slightly better performance relative between Q3 and Q4 because of some of the events and a longer, a longer time period. But as we’ve shifted to more digital, we do see a little bit more volume in Q3 versus Q4.
Operator: Thank you for joining us today. If you have further questions, please contact investor relations at (201) 558-2400, extension 14500. You may now disconnect your lines.
