Richard McPhail: Well, as I shared just a few questions ago we do anticipate that comps in the first half will be slightly lower than the second half and our performance to-date reflects that guidance.
Karen Short: Okay. Thanks very much.
Operator: Our next question comes from the line of Zach Fadem with Wells Fargo. Please proceed with your question.
Zach Fadem: Hey, good morning. Richard it sounds like most of the margin pressure in 2023 is expected to land at the operating expense line. And I’m curious if you could talk to the puts and takes to gross margin specifically. And is it fair to assume the inflection we saw in Q4 to slightly positive is a fair year-over-year run rate from here just given the bulk of your supply chain investments are running their course and then freighted commodities could be a tailwind?
Richard McPhail: There are a lot of ins and outs. There are a lot of ins and outs in 2022. We basically delivered gross margin precisely where we anticipated to at the beginning of the year. And underlying that was a lot of product costs and transportation costs offset by actions and within that continued supply chain investment in our downstream or delivery operations. For 2023, we’re targeting gross margin that’s roughly flat year-over-year. Again, it will be a year of several ins and outs. Product cost inflation has decreased but does persist above historical levels. Transportation costs should actually be a tailwind. But we still have investment in our supply chain. And look we did see some increased pressure from shrink in the back half, right? So, we’ve got a lot of ins and outs. But roughly speaking we’re targeting essentially flat gross margin for the year.
Zach Fadem: Got it. That’s helpful. And then following up on the $1 billion in wage investment. Can you talk about where this puts you competitively versus your peers? And then if for whatever reason if your comp appears to be falling short of that flattish expectation range, would you still make the planned investments in 2023, or could you spread them out over a couple of years?
Richard McPhail: We’re committed to our investment. That’s done. With respect to how we manage our P&L, we always operate with a degree of financial flexibility. And so, in any environment, we’re going to assess, what that environment means for us, and how we should manage the P&L.
Zach Fadem: Got it. Thanks for the time.
A €“ Isabel Janci: Christine, we have time for one more question.
Operator: Thank you. Our final question will come from the line of Steven Zaccone with Citi. Please proceed with your question.
Steven Zaccone: Good morning, all. Thanks for filling me in here. I wanted to circle back to the duration part of Michael’s, first question. Ted, when you think about home improvement demand seeing a moderation this year, when you take a little bit of a more medium-term outlook over the next couple of years, just since you’ve seen strength in the business for the last three, what are you focused on with the health of the homeowner that may be this moderation could last couple of years in nature?
Ted Decker: Well, as we’ve said, we’re thrilled with the share, we captured and the sales we drove. And while we don’t love the moderation, you can’t fight the tide, if you will with PCE spend going back to services, people traveling and whatnot. But the two main things, that we’re going to stay focused on, to take share, one, I say the consumer, the consumer rights to check for all projects, even if the Pro is doing the work. But for the consumer, we are laser-focused on delivering the best interconnected frictionless, shopping experience. I mean, retail as we know, is all about interconnection, physical world in the digital world. And we are laser-focused. Matt Carey and his team is focused on taking out all friction in that.
And as we continue to delight customers, with that frictionless experience, we’ll look to gain more share. And then, we haven’t talked much about the Pro in this call, but we are still 100% focused on building out all the capabilities that Pro ecosystem, that is going to allow us to capture more share of wallet with the Pro and move up to larger plan purchases. And extremely pleased with the results, we’re seeing as we continue to put those capabilities, in the marketplace. So that’s what we’re going to do to keep taking share regardless of the environment, or the duration of the environment.
