Laura Champine: Thanks for taking my question. It’s a follow-up, and congratulations on especially the EBITDA performance. It does seem like a lot of the improvements you’ve made on profitability are structural. So if you were to turn to a negative EBITDA in next quarter or some quarter this year, what would be the most likely drivers of that downturn? Would it take sales decline? And what would need to happen for you to get back into EBITDA adjust the EBITDA loss making?
Dave Loretta: Hi, Laura. Thanks for the shout out on the progress on EBITDA. We’re happy with that and we know that it’s kind of a function of executing well across the team on a number of those fronts. So structurally they are really becoming grounded in the business model success. So I’d say the guidance that we’ve given is on adjusted EBITDA low to mid-single digit millions still gives us room to see improvement each quarter. And at this stage with so much balance of the year in front of us, we’re just we’re going to keep working through all of our plans and trying to replicate and execute as fast as we can. So I don’t I think that’s the confidence that we’ve got, but I’ll kind of leave it at that point and have us sort of reflect on that.
Laura Champine: Let me try to rephrase in a way that’s a little less guidance and CFO oriented and get a bigger picture for you. Maybe, Carla, if you think about your business, what are the risks that you’re watching out for right now, especially that might impact your profitability?
Carla Vernon: Hi, Laura. So good to hear you. Well, I’m going to be honest with you that we’ve been on this really consistent path of improving ourselves quarter-by-quarter. And that strength in performance is really based on our team coming together well over the last year. We brought people with great expertise, but intentionally a variety of experiences and expertise. And I’m so proud of how we’ve been executing. And so as we look ahead, I really think we’re even continuing to have the discipline internally to make sure that we understand how to deliver on this plan and how to be nimble in the event of change. However, I would say the things that we don’t control, I really — I can’t kind of even predict or comment on the things we don’t control.
What I do know is that the plan we have articulated and reconfirming our guidance for the year is something we feel strong about because of what we know we have in front of us and what we see as our drivers. So I think we all have to be on the lookout for consumer macroeconomic trends or any kind of unpredictability that would probably not only affect us, but would affect others in our sector and our segment. What is within our control, I think the reason we’re reporting we feel confident is because we really like how we’re executing.
Laura Champine: Understood. Thank you so much.
Operator: Our next question comes from Andrea Teixeira from J. P. Morgan. Your line is now open.
Andrea Teixeira: Thank you, operator, and good afternoon, Carla, Dave and Elizabeth. So I hope I just wanted to well, for a shoutout, hope you’re all well and congrats on the performance. Following up on Dana’s question on distribution, I was wondering if you can give us a phasing of the comps of extra distribution extra — the additional distribution you got last year and into this year? And if at all we should be mindful of the lapping of those gains? Or are you seeing velocity and innovation offset that? And if you can also comment on what you’re making, Dave, you said about being conservative at this point. Are there any reinvestments you may need to make as you get more distribution? Or perhaps incorporating the changes in the likeness agreement with Jessica Alba or incorporating any of these charges?
I understand that it would be positive for margins long term, but if you — is there any short term impact to adjusted EBITDA that offset the strong start of the year? Thank you.
Carla Vernon: Great. I think we have a divide and conquer here. Let me start by talking about how our distribution has been kind of our glide path there. And I know you’re asking about investments. I would love Dave to talk to you about how we’re feeling about investments and what we think we’re going to want to do there. And so what I would say about distribution and I think it’s something we’ve discussed on our previous quarters. We’re very successful. As you guys know the shape of our portfolio is very strongly balanced as a combination of brick and mortar and digital. And we are so pleased with the way we’ve been able to deliver growth. And so we’re very balanced digitally and brick and mortar. But brick and mortar is really the distribution that you see show up when you see these big distribution changes for us.
And it is also where we are less distributed relative to our competition. And so while much of that distribution was actually new in 2022 for us in a big tranche getting into Walmart, As we saw that those gains happen in 2023, there was a little bit more of a uniform glide path. But I would say that distribution when you’re doing it in a brick-and-mortar context across as many categories as we have can have periods where there will be strong one-time gains and then we want to see ourselves settle in and drive velocities from there. So it’s always going to be a mix. It’s not going to be the same rhythm in any given time period. But we know that we’ve got an enormous runway for growth on being in more doors. Remember, we only got some of our inventory at 50% of the Walmart, while some of our inventory was at 100% of the Walmart.
We also know that even on our hero items, some of them have distribution as low as 20% and 30% ACV individually. So we also know that while we are in some retailers, we are looking to get stronger shoulders, if you will, across the board and that that’s going to come at different time periods with the different resets. So it might occasionally be a little bit lumpy. But overall on a year by year basis, we like the outlook.
Andrea Teixeira: And Carla, if I can sneak in just one comment on that. So obviously, you’ve done amazing both clicks and bricks. It says here tracked channel consumption was up 7%. Wondering if you can help us with the non-tracked. And since you grew sales by 3%, so it kind of implies there was a 400 basis points headwind to your revenue. Is that any destocking or and if so is that over?
