Steve Voskuil: Sure. Yeah. We are pleased with the gross margin performance through the first half and we have had a few things, I think, that have broken our way. We have seen less inflation in things like packaging and logistics and even some material costs. Our productivity progress has been strong. I think we feel really good about where we are at the midyear mark on productivity, and then, of course, we have had pricing drop through. So all of those have worked in our favor and will continue to some degree as we go to the back half. If you look at the back half, taking the volume impact, we are going to have some more fixed cost absorption impact that will be a little bit of a weight. And again, we have got hedging against commodities, but still from a year-over-year and beginning of the year, end of year perspective, we still have a bit more cost for some of the inflationary commodities, cocoa and sugar, smaller weights, and again, smoothed out by hedging, but still some impact.
Those would probably be the two biggest drags as we look to the back half. But again, overall, I still feel confident in taking our guidance up and the team is doing a nice job managing the cost side.
Matt Smith: Thank you for that. And just as a follow-up, if I understood what you were saying about the second half. There should be a nice gross margin benefit in the third quarter as you build inventory with retailers ahead of the cutover in Salty Snacks, is that right?
Steve Voskuil: Yeah. Yeah. We will get some benefit. Again, salty is not the biggest business, but we will get some absorption benefit as we build inventory in salty. Yeah.
Matt Smith: Okay. Thanks for that. I will pass it on.
Steve Voskuil: Thank you.
Operator: Thank you. Our next questions come from the line of Cody Ross with UBS. Please proceed with your questions.
Cody Ross: Good morning. Thank you for taking my questions. A couple of housekeeping ones and then a longer term one in nature. First one, I think, you spoke about inventory headwinds in the quarter. I think they were lapping the inventory replenishment last year and the pull forward of sales into 1Q from 2Q. Is that correct, and if so, can you quantify each one for us?
Steve Voskuil: It is correct. In terms of breaking out the pieces. There’s about 300 basis points we attribute to the last and about 150-basis-point shift relative to Q1 order of magnitude.
Cody Ross: Great. Thank you. Other housekeeping question, just as far as the 4Q, I think, you guys said that, sales should be down double digits in the salty business due to the ERP implementation. Can you just quantify that for us or give us an expectation for magnitude? And then just one last one.
Steve Voskuil: In terms of dollars or…
Cody Ross: Yeah. The dollars that you are expecting from the implementation.
Melissa Poole: Yeah. As we get that…
Michele Buck: Yeah. No. That’s a double-digit decline. So we not going to go any more specific than that.
Cody Ross: Understood. And then last question, just on the competitive environment. There’s been a lot of news in the headlines lately about private label and other branded competitors becoming more competitive. What are you seeing in competitive — in the competitive environment? I know you said you have seen branded players pick up more innovation, besides that, are you seeing any step-up in promotions and what’s kind of your expectation going forward? Thank you.
