Matthew Mishan : Hi. Thank you. Could you guys walk through the R&D pipeline and then sort of what’s driving like the increased investments? I mean it’s just — it’s one of those lines that’s up a lot year-over-year.
Albert White : Yes, Matt, I mean I won’t get too detailed on projects, but I will say within CooperVision, certainly, we’ve got higher R&D associated with myopia management. A lot of our MiSight activity is in there. So that’s definitely occurring. Within our CooperSurgical business, there’s increased R&D for a couple of different products actually, that we’re seeing in our — which would include in our fertility space also. But it’s definitely tied to product development within both businesses.
Matthew Mishan : Okay. And then with, unfortunately, the Cook not being able to go through, how are you thinking about the investments that might need to be made to kind of push fertility into more of a global business? And how does that fit into the context of kind of leveraging the P&L moving forward?
Albert White : Yes. Well, I would say that right now, Fertility is a global business, no question, right? We have a very big European presence, and we have an Asia Pac presence in some countries, much stronger than others. But no, we’re investing in that business right now to drive international growth. We did it here in Q3. We’re going to in Q4. We’re going to do definitely more investing next fiscal year to support the long-term growth of the fertility franchise that’s all embedded within the numbers Brian gave you of 11% this year, constant currency OI growth, and within the objective next year to deliver low double-digit constant currency OI growth. So yes, I mean we’re continuing to invest. There’s no question about that, and fertility is definitely one of the areas we’re investing in.
Operator: Your next question comes from the line of Jason Bednar from Piper Sandler. Please go ahead. Your line is open.
Jason Bednar: Good afternoon. Thanks for taking the questions. I’d echo the congrats here on the good quarter. Al and Brian, on contact lenses that performance is really good versus the market. As you called out in the calendar quarter, your fiscal quarter, you had the benefit of trading in April for July, which was definitely a good trade. But it also seems like just based on the fourth quarter guidance, you’re seeing good results for your core business. Can you elaborate what’s changed in your guidance for the fourth quarter? I think you’re going to have street numbers that are moving up a little bit. Is it a certain product category or geography where you’re more comfortable or confident today?
Albert White : Yes. I would probably end up saying that where we are today versus where we started the year, we were looking at the possibility, remember, like a little bit of a recession or an economic slowdown. We haven’t seen that. And if you look at our sales of our products, the — some of the higher priced products are actually selling better and even accelerating when I look at like MyDay, Energys as an example, MyDay, multifocal some of those kind of products. So, it just feels like as we sit here today, we’re in a better environment. And that’s — somebody asked about that earlier when you look at fiscal ’24 for us. I just feel like we’re in a better, more stable environment right now. with a lot of good products that have a lot of good momentum.
Jason Bednar: Okay. And then maybe as a follow-up because I wanted to ask on your key account strategy that’s actually — it seems like a maybe a little bit of a recession hedge, but as you said, your higher value lens are doing better here. I don’t think I caught an update on the key account strategy, but maybe just talk about what you’re seeing there with respect to share gains and then any shift in terms of emphasis higher or lower on that strategy maybe as we look ahead to fiscal ’24.
Albert White : Yes. You would think that some of the store brands or private label activity, if you will, would be driving more of the growth, right, because that would be a hedge, if you will, against an inflationary environment. And I’ve actually seen that or I’ve read that, I should say, from some companies talking about increases and those types of sales. That’s not what we’ve seen. So, if there isn’t an inflationary issue or an economic pullback, maybe you do see that, and we would see an increase in our store brand activity. But right now, it’s being driven more by — as I was mentioning some of those — some of the other products that we are doing some store brands for, but certainly a lot of it is on a branded basis, and those being some of the higher-priced products we have.
Jason Bednar: Okay, helpful. Thank you, so much.
Operator: Your next question comes from the line of Joanne Wuensch from Citi. Please go ahead. Your line is open.
Joanne Wuensch : Thank you. It’s Joanne Wuensch. Very nice quarter. I’m trying to peel through your commentary about operating margins next year. And I want to make sure I understand that. When you talk about low double-digit operating margin expansion, is that the margin? Is it the dollar? And is that FX? Just peel that away, so to make sure we set expectations appropriately.
Brian Andrews : Yes. When I mentioned low double-digit constant currency OI growth, operating income growth, it’s OI. So, it’s just operating on a constant currency basis.
Joanne Wuensch : Okay. Are you in a position to be able to give us a guidance number for revenue for next year? a range? Should we go back to thinking about how you entered this year at 6% to 7%? Or is that not even the right way to think about things?
Albert White : We’ll see in December. I mean my gut right now would tell me we would have a hard time giving that level of conservative guidance, but we’ll update that in three months.
Operator: Your next question comes from the line of Anthony Petrone from Mizuho Securities. Please go ahead. Your line is open.
Bradley Bowers : Hi. Thank you for taking my question. You have Brad Bowers here on for Anthony today. So, using some of the math on the GM headwind, it looks like it was about a 50 basis point headwind. This would imply a little bit of a step-up into 4Q. But if we assume that reverses that’s a tailwind to 2024 and then the OI comments imply about 100 basis points of op margin expansion. So, it seems like that would imply that there would be some more opportunity on the cost leverage side as well as on the organic GM expansion side. So, I wanted to make sure that, that math is kind of checking out into how you’re thinking.
Albert White : Yes. I think that math all checks out, and I’ll let Brian confirm that, but that makes sense to me. And I do agree with your comment about potentially being able to get incremental leverage, if you will, I think one of the issues that we’re running into here, and I think we’ll continue to have a challenge with next year is that we do have very strong demand right now. And logically, you might think, hey, that’s great, right? You get those incremental revenues and all that flows through to OI. But in order to support that growth right now with the infrastructure investments we’re doing, combined with the geographic expansion and everything else that’s going on, you’re not seeing that right now. So what history would tell you based on Cooper?
