You know, web performance, you know, customers often choose to then, you know, convert at home and close the sale. So again, just back to the reinforcement of the omni-Chanel model, but nothing that we see in terms of any profitability impact. It was as we planned.
Alex Fuhrman: Okay, that’s really helpful. Thank you, Mary.
Mary Fox: Thank you, Alex. Operator The next question is from Thomas Forte. Please proceed with your question.
Thomas Forte: Great, thanks. So, Shawn, Mary, and Keith, congrats on the quarter and strong start to the fourth quarter. So two questions, the first one is, can you give your updated thoughts on your ability to generate free cash flow and your thoughts on what you intend to do with the free cash flow as you advance the model?
Keith Siegner: Absolutely. So and I appreciate the question, thanks. So we’re looking to provide more details about this with Q4 earnings when we get into the outlook for next year. But I think little bits and pieces of everything we’ve been talking about are sort of starting to lay the foundations for how we’re going to approach this on a go-forward basis, which is as we transition into generating more substantial free cash flow off of seats and sides and sacks, it’s how do we appropriately balance the reinvestment in the future sales growth drivers with other options for that cash flow. So we fully anticipate ending this year having been in a cash generative position. New systems and other tools and optimization programs are being put in place all the time.
We are going to balance that, as Shawn has said, as Mary has said, and I have said, against those future sales drivers. Our goal is to translate more of the top line growth to bottom line growth going forward and that should create more cash flow out of the business, which we can use strategically along those balance lines I was just talking about.
Thomas Forte: Great. Thanks, Keith. And then you’ve pretty consistently generated a lot of market share gains. Shawn, you’ve talked in the past about your ability to consistently outperform the market at high-teens, perhaps low-20 percentage point rate. I wanted to talk about the source of the market share. Do you feel like you’re getting market share from the same players or do you think it’s changed over time?
Shawn Nelson: Yes, that’s a great question. It’s hard for us to know for sure, but our observation from the category, and we try very hard to stay abreast of every player who sells couches. You know, that’s our core business. And therefore, any firm that sells couches, we consider a competitor. And we track them all. I think that, I think there’s, kind of, in our world, there are two main buckets of competition. And remember, of course, we are operating at a certain price point, but this brand, Lovesac stretches across, I think fairly broad demographics, because we can sell to the very high-end customer, who has a massive home and is excited to put a 20 seat Sactionals with Stealth Tech in their basement or entertainment room.
And we can sell to Middle America where this is their main piece of furniture and we pull them up to our price point through the real value that Sactionals create. And so we compete with all of the established brands in home that we maybe be in the mall with or otherwise, we compete with brand new startups to kind of copycat the Sactionals format, modularity, et cetera, and try to mimic that value prop. And so I think that in this environment, we’re taking market share from all of them. And as you can see with most of our competitors, negative growth and obviously our positive growth, we are certainly taking market share. So I think that it ebbs and flows based on the health of that marketplace. And for instance, I think that in startup land, capital is much more dear than it was over the last number of years.
And so they’re not spending in necessarily the same ways across the board, just chasing growth. And I think the incumbents have some of their own problems to deal with in this environment where there is still a massive hangover in the home category. Meanwhile, we have very low, within the category that is, this category is known for very low aided awareness and it’s very fragmented. And so, we are taking market share based on the competitor’s unaided awareness. It’s hard for furniture brands to gain real brand awareness, because consumers buy from furniture brands and home brands sporadically and sometimes with years in between. And therefore, as you observed Lovesac’s strategy of building a brand in between, leveraging pop culture, being in the zeitgeist through celebrity, influencer, of course, our very sticky brand name, all of these things give us strength where I think many of our competitors can’t mimic that aspect of what we do and how we do things.
