Lauren Lieberman: Okay. So, I’m just saying, but guess what I’m getting at is that second half gross margins? Given the guidance I think is implied to be lower than first half gross margin. And I don’t believe that there’s seasonality in the business that would support that. So, I’m just kind of the way the second half gross margin guidance looked or implied, looks a bit conservative. And I just was wondering if you’re building in or for maybe some, you know, greater promotional activity leaving wiggle room for weakness in the consumer or if there’s just something I’m missing in terms of timing on inflation?
Lori Beaudoin: Yes. So, we won’t see the same level of gain in Q3 as we saw in Q2 because Q2 had a bigger €“ a much bigger Kosta Browne Appalachian €“ I’m sorry, Single Vineyard Series offering and it’s a smaller offering in Q3. So that will have some impact in margin, but we do anticipate having strong margins in the back half and our forecasting is the best look that we have today, right? So, it may have some €“ little bit of conservative in it, conservative is in it just to give us a flexibility in a dynamic market, if we’re desired to take advantage of that, but we’ll see. Our margin €“ remember, our gross profit margin has a lot to do with mix and so €“ but ultimately, at the end of the day, when we get down to earnings, the gross profit margin fluctuation isn’t always impactful to our earnings line because if we were €“ if it’s because we’re selling into California, versus direct to distributor, that will impact our gross profit margin, but it doesn’t impact our earnings margin.
Lauren Lieberman: Okay. All right. Thanks a lot.
Operator: Thank you. Our next question comes from Noah Erni with Jefferies. You may proceed.
Noah Erni: Great. Thank you for taking my question. Two for me if possible. On the revenue guidance, your upwardly revised guide implies about 10% to 13% growth . And you provided some context earlier from Greg’s question on the high-end assumptions. Could you also provide some background on the low-end assumptions and any big risks that could potentially affect the headings in the back half of the year? And then second, sort of looking at the weakness in consumption we have seen in the wine category more broadly. Can you comment on overall weakness in wine consumption compared to beer and spirits and what the industry should be doing collectively to attract more consumers to the category? Thanks.
Alex Ryan: All right. Good series of questions there for you. To start is, we’re pretty optimistic. We’re pretty confident, optimistic on our guidance as you would expect. I don’t think I could sit here and isolate any materials and identifiable concerns that we have, right, to the dynamic market, some might call it challenging. And we seem to be doing extremely well in it for a whole host of regions, kind of our long-term plan of how we’re supposed to be executing and we are executing on that area. So, I need to give you my prudent comments, but the reality is, we are comfortable with the guidance range we gave in both ends given that we got 5.5 more months of execution into the summer to take place. So
Lori Beaudoin: As you pointed out, guidance is just a range, right? So, how we think things will come out, it’s kind of our best estimate at this time. There’s nothing that’s causing us undue concern in the bottom range of that guidance. It’s just we take into account the information we obtained from our distributors, what we’re seeing out there in the market. What we’re seeing in just basic overall economic dynamics and we put that all in together and create our forecast. And so there’s nothing that gives us undue concern in the bottom range versus ?
Sean Sullivan: I’d just note to Lori’s point about range. You’ll note that not only did we take up guidance, but we also tightened those ranges both on the net sales and adjusted EBITDA guidelines. So, that gives you probably a sense of where we as a management team see that risk profile?
Alex Ryan: What was the second part of your question? Sorry, I think we missed it as we were processing the first part of your question.
Noah Erni: No, no worries. It’s a long one. The second was, sort of with the overall weakness in consumption in the category, sort of what industry participants should be doing together collectively to attract more consumers?
Alex Ryan: We’ve been asked that a lot. Let me start by just taking a quick victory lap for our particular plans, right. We’ve been executing a very focused, very exclusive luxury based wine strategy. We’ve talked about it now for months and years in some cases. And I think it really shows that focus on concentrating and really the accessible part of luxury continues to pay-off and we understand what our trade, our distributors and certainly what our consumers desire from us and it’s working really, really well. The broader category and the broader wine market, as you’ve noticed, we’ve all seen the data has some challenges, it’s got to work through. I don’t know if taking a play out of big beer or big spirits is the right approach, but I think we are touching our consumers largely in DTC ways.
It’s a form of marketing. In the ways they want to be contacted and engaged with. And we as an industry are going to have to continue to do that. We seem to doing it very well. Industry probably has a little more work to doing it. And I think that DTC to us is sometimes viewed as really successful marketing efforts on our part. And so, maybe the industry has to look at how they engage customers better, whether it be more traditional advertising or ways that luxury wine does it in more experiential ways is probably up for some debate. But I’ll leave that comment. We’re just saying that we do have the knowledge in that area as the customers of price points really want to be engaged. And I think it’s demonstrated in our continued results and certainly this wonderful quarter.
So, I hope that gives you a little bit of color.
Noah Erni: Yes, great. I appreciate all that.
Operator: Thank you. There are no other questions registered at this time. There are no other questions. I will now pass it back to the management team for any closing remarks.
Sean Sullivan: Wonderful. Well, thank you all. I want to thank you again for joining us today to review our second quarter performance and our improved outlook for the remainder of the fiscal year. Look forward again to speaking with you in early June when we report our third quarter 2023 results, until then, take care and thank you.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect your line.
