Mary Fox: I think, Keith, just to add, I think, Mike, what we also see, I mean, within our marketing and advertising spend, there’s a short-term working media that drives growth. And that’s in the quarter and beyond because it’s never always just that real time. I think the second piece in our spend is all the research and development work around the innovations to come. So, there’s that also built in as well as brand equity building. One of the things that we’ve always talked about is, we continue to test and learn all the time around advertising and marketing. So, for example, the team are running a test right now, really looking at opportunities outside of big promotional windows, temporal moments that you would typically see, to see in terms of the traffic that we can drive and then convert through the funnel.
So, the team is very energized around that. Lots of debates and great outlook in terms of testing. And that will continue and is one of the reasons that we have been successful is that agility. And I think as Keith shared, we feel very good in terms of the runway for the rest of the year because obviously touchpoints are a key leader as well for us as we think about the growth and the formula of success that we’ve had for so many years.
Mike Baker: Okay. Fair enough. One quick just housekeeping. As part of the analysis shown in the back half, the variables we need are how much the extra week helped in terms of sales and EBITDA? Excuse me. I have my estimates, but is that something you’re willing to share?
Keith Siegner: Yeah. There was nothing unusual about it that would make it a non-standard week for us. So, it’s pretty consistent across most of the metrics with a typical Q4 week. Nothing really unusual on that front. So…
Mike Baker: That’s both in terms of sales and profitability or EBITDA dollars?
Keith Siegner: Yeah. There’s a number of moving pieces across the things, but it’s a relatively representative Q4 week.
Mike Baker: Understood. Thank you.
Operator: Thank you. Our next question comes from the line of Thomas Forte with Maxim Group. Please proceed with your question.
Thomas Forte: Great. So, for the sake of time, three quick questions and three quick answers are more than acceptable. The inventory management, was that a one-off or is that a permanent change? And then, on the services revenue, I like that you’re talking more about it, but how should we think about the relative profitability? Your gross margin on your goods is quite high. And then lastly, when thinking about your full year outlook, how do you think about the notion that there may be fewer rate cuts, but it seems like there’s a greater likelihood of a soft landing? So, I know home category can be highly sensitive to interest rates, but it seems like the good news is that there’s a greater chance of a soft landing. And I’d love your high-level thoughts on that. Thanks.
Mary Fox: Yeah. Keith, should I take the inventory management one?
Keith Siegner: Sure. Sounds good.
Mary Fox: Yeah. Tom, so, yeah, for us, it was a result of a lot of the investments we’ve made in the past in supply chain. So, for us, we will continue to drive efficiencies in our inventory and even just kind of the speed to market as we move goods from factory through to our DC. So, continue — you’ll expect to see some benefits continuing. And the team honestly has done an amazing job. So, we’re just very grateful. And I think back to the point Keith touched on before, the ability for us to drive up, as the demand will swing back at the point where the category does go back into some momentum, we’re also really able to be very agile and be able to build up inventory. So, feel good on that one. I think service revenue is — we’ll share more through the year as we think in terms of the model.
It’s still very early days as we start to build out those capabilities. So, we’ll give you some more color to that later in the year. And I think, Keith, maybe you want to go to the outlook.
Keith Siegner: Sure thing. So look, it’s — the macro discussion could get really complicated really quickly. Do we not get the rate cuts which result in greater housing turnover which typically results in more desire for the furnishings, but do we also get a soft landing? What happens with the elections? There’s a lot of these moving pieces. And I think really what we’re trying to say was because we are in this enviable position of not having to make a call on exactly when that balance is going to come, we’re going to take a conservative approach and manage our expenses against that, setting us up for the position where should that work out, should we get more housing turnover, should we get more home furnishing demands, rates go lower, elections not a big deal, whatever, we can participate and ride that demand curve in real time, and that’s the plan.
