Max Gumport : Hey, thanks for the question. Just one for me, and it’s on gross margin. So you expect gross margins to be up 40 to 50 basis points year-over-year in 2023, given net price realization and higher levels of productivity, which are expected to offset inflation. But it sounds like 1Q ’23 gross margins will be pressured due to lack of a timing benefit related to inventory valuation last year. I’m trying to get a sense if you could close frame the magnitude of that 1Q, ’23 impact. Thanks.
Steve Voskuil : Yeah, so you’re exactly right. For quarter one that will be our most pressured gross margin quarter. In fact, I expect we will be still down year-over-year for the first quarter because of those laps. And I don’t know if that I’ll dimension — get specific as the guidance for that. But you’re exactly right. That’ll be our most pressured gross margin quarter.
Max Gumport : Right, I’ll leave it there. Thanks very much.
Steve Voskuil : Thank you.
Operator: Thank you. Our next question comes from line John Baumgartner with Mizuho Securities. Please proceed with your question.
John Baumgartner : Good morning. Thanks for the question. First off, Michele, in confection, you’re bringing more capacity online, increasing brand spending as well. But how are you thinking about in store activation at this point? I think going back pre-COVID, there was an increased focus in the aisle with the king size and some different shelf sets. Then you move to the checkout lines, and then you would take in some shelf space for magazine and non-consumable. So as we think about 2023, and I guess even beyond at this point, where the levers you see as most impactful from here? Where do you can you still benefit from activation going forward?
Michele Buck : So we are always looking to optimize across the entire mix of levers that we have to drive activation. Managing the shelf distribution, shelf space is always a priority. There were some areas as we were lighter on capacity, where we were unable to fill some of those distribution needs. So we see some of that ahead of us as an opportunity as we have improved service. We talked a little bit earlier about the marketing spending where we had pulled back again, because we were lighter on capacity, so reinstating, that. We know that there’s a very strong return on that, reinvesting the front end. Retailers are always looking at how they optimize front end space. And so we partner with them. And we continue to see opportunity there.
And as we look at our in store promotional spending, we do believe that getting visibility and display in store is important to our business. That said, our promotional spending is below COVID levels. And we’ve seen that we’ve continued to be able to drive the business, where those promotion levels are today. So that’s not a key priority to reinstate back to the past.
John Baumgartner : Okay, thanks for that. And then Steve, on the salty snacks margin. There was a lot of noise this year, you mentioned the catch up on pricing. You had the warehousing in Q4. You had some reduced promo and advertising spending. As we think about the sequential increase in margin from Q3 to Q4, is it possible to bucket those tailwinds across the different elements? Or maybe what do you think the underlying run rate is for segment margin exiting ’22? Is mid-teens, high teens, just trying to think about the moving pieces versus the structural improvements there, just far. Thank you.
