Alex Fuhrman: Hi guys. Thanks very much for taking my question. I wanted to ask about StealthTech. That was a very impressive number you gave about the initial purchase price being about 3x what you see for a typical first time Sactional purchase. Can you give us a little bit more insight as to how those transactions are stacking up? Are they typically more pieces than you would see bought in initial Sactional purchase or more premium covers? And then just as you’re, kind of looking at what you’ve seen in the last couple of months and the overall category slowing down, I’m curious if you’ve seen any sort of resistance to StealthTech as well, or if that’s been more immune given the high price points?
Mary Fox: Great. Thank you, Alex, and a good question. You know our passion for StealthTech, and obviously, you heard earlier just the continued momentum. So, I think in terms of your first question around the average order value, and obviously, being so much higher to transactions without StealthTech. We see that both in terms of €“ consumers just love the experience. I mean, you know. You’ve been to a showroom. You’ve sat and experienced and heard of StealthTech. It’s amazing. So, the showrooms are doing an incredible job of demoing it, and that’s one of the great successes of our business model, and consumers are loving and buying into it. And actually, as I shared, we continue to see StealthTech build month-over-month and are very happy to see the performance.
And even, for example, Best Buy, we are significantly advantaged with StealthTech performance there, more than double what we see for the rest of the fleet. So, it just shows us the potential as well from that side. In terms of what else are we seeing in the dynamics of the purchase, we’re seeing big setup purchases. Not really seeing any shift in terms of what people are buying around covers. We are seeing a bit of a trend up in terms of the more premium sale. As you know, Lovesoft, which was contrary to where we were early in the year where we saw a bit more of a shift to standard. So, everything really continues to show us with our affluent customer base, they come to Lovesac to buy our product because they love it. Not generally, 4 in 10 are not even cross-shopping because they just buy into the Designed for Life product platform and the ability to flex and change to your life.
So, we continue to feel very good about how StealthTech will build, and it’s only a year. We should have actually sung happy birthday to it. It’s a year for the build, a lot of campaigns success, and we will continue to build, as Shawn always talks about, for many years, in what we see as a market-leading innovation.
Alex Fuhrman: Great. That’s really helpful. Thank you very much.
Mary Fox: My pleasure. Thank you, Alex.
Operator: Thank you. Our final question this morning comes from the line of Lamont Williams with Stifel. Please proceed with your question.
Lamont Williams: Hi, good morning. Just, kind of in general, how are you thinking about the promotional cadence that you’re going to basically employ going forward as we’ve seen the promotional landscape get more intense with inventory levels coming back? How do you anticipate offering promotions? You looked like you picked up a little bit in terms of the level of discount, but how do you, kind of view that going forward at a high level? And secondly, how are you thinking about, kind of the number of distribution openings for next fiscal year? Thank you.
Mary Fox: Yes, Lamont. I’ll take the first question on promo cadence, and then we can talk a bit about your question for next year. So, obviously, as everybody has reported, there has been an uptick in promotions, but obviously, that was up against last year where it was incredibly benign. And even for this year, it is very benign to pre-pandemic levels, so we feel good in terms of what we have seen. And as we have been testing with the , sometimes our customers are responding as much to financing as they are to of promotions. So, everything that we’re seeing is that we won’t need to be more aggressive with everything we know today. We’ve got strong promotional campaigns, but also coupled with the marketing campaigns that we are driving, I talked about SMS as an example, just a great conversion tactic that really enables us to be top of mind for our customers.
So, it plans in. We’ve planned it into our guidance, and obviously feel good to adjust if we need to, but everything we see today, we think that we have the right plan to close out the quarter and have a very strong year. I don’t know, Donna, if you want to talk about FY 2024?
Donna Dellomo: As far as promotional cadence, we’re not planning to be any more promotional or have any more promotional activity, any specific promotional activity. And what we’re looking at next year, again, we’re not providing any type of formal guidance for next year. I can just tell you on the plans that we’re building internally, we have a lot of opportunity next year, which will not require us to be any more promotional between the add-on of additional showrooms, the expansion of Best Buy shop-in-shops, the expansion of Costco in-person, pop-up shops, and some other really exciting things we have next €“ going on next year that I believe Shawn briefly alluded to, but not really in his script earlier today. So, a lot of opportunity next year, which will €“ we don’t plan to have to be any more promotional to still drive some very strong top line growth next year.
Lamont Williams: Okay, great. Thank you.
Operator: Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I’ll turn the floor back to Mr. Nelson for any final comments.
Shawn Nelson: Yes. Just want to say thank you so much to the amazing Lovesac team that has built a company, putting up some of the highest growth in the category for the year as we round out the year in this critical fourth quarter. I appreciate all of the hard work and effort. I appreciate our investors for continuing to support us. And looking forward to a bright New Year as we get through the fourth quarter.
Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.
