Unidentified Company Participant: No, I think you said it well, Jim. It’s really the growth is built on three foundational pillars of what we would say. It’s incremental listings, it’s incremental promotions, and then incremental merchandising space within the stores, and then that elasticity factor that’s the smallest part of it. So when we look at it in the early results, the team has a ton of confidence in it, and our retailer partners are doing the same. They’re forecasting the growth as well. So…
James Hagedorn: But we all, as we prep for this call, said what’s the big risk? Consumers don’t show. I don’t know how big that risk is coming forward. I think that a lot of people are writing about how people have spent sort of their COVID excess savings, where that’s at, what that people will be travelling, a little less and spending more time at home. We think that’s true, and we think there was a significant reduction in footsteps last year. Do we think it’s going to get worse? Look, this is probably where there are some really great people who could say, yeah, it could be worse. And we’re not saying there’s no risk, but we’re saying that we think it’s a thoughtful approach to volume.
Matthew Garth: Yeah, starting off with POS being flat, assumptions there, and then going absolutely where Josh went into drives that high single-digit movement and top line. The broader question, which Jim brought up, that honestly I think we’re going to leave to you, which is to mention what that downside could be beyond flat POS. Because the other components of this, what we are driving out as you move through the rest of the financial statements in terms of margin accretion driven through cost outs, improvements on the operating side, more intelligence in how we’re going to market, which Nate can talk about here shortly, everything that we are doing is around those three items that we have on the table, re-establishing higher margins to drive EBITDA, the balance of a billion dollars in free cash-flow, and a strategic solution for Hawthorne.
That all starts with the top-line. And so to have this level of insight, confidence, and connection with our retail partners who allowed us to work with them on these improvements is a good start to the year.
John Anderson: Sure. That’s helpful. One quick follow-up. The EBIT or operating income kind of outlook that you gave for ’24, it was a little, at least on my end, a little muddled. Did you mention 10.5% to 11%? And if that’s right, that would suggest, I guess, a 250 to 300 or close to 300 basis point level of improvement in operating margin in ’24. Could you help dimension that a little bit across gross margin and SG&A ratio?
Matthew Garth: Yeah. Thank you, John. I appreciate the question because I was going to drive it to there at some point. So you’re right. When you back into it, gross margin will be north of 250 bps. I think what we have talked about on getting there previously has been driven through Project SpringBoard, additional savings that will come through higher volumes that we are expecting with these additional listings. And by the way, just working through our over-inventory position and getting back to a more normal production rate in the second half of the year, all of that will accrue to margin. When you move down into SG&A, what we had said previously, the long-term remodeling for the Company should be between 15% and 16%. For 2024, what we’re telling you is to be between 14.5% and 15%.
We will be narrower on SG&A in 2024. That doesn’t necessarily mean dollars down in the important areas. We are repositioning dollars into marketing, into the sales force, and into innovation. That is the net result of all the activities we are dRIVing to focus on those three areas.
Operator: [Operator Instructions]. Our next question comes from Eric with Cleveland Research. Eric, are you there?
Next. Our next question comes from Bill Chappell with Truist Securities.
Bill Chappell: Good morning. Can you hear me?
Matthew Garth: We can, Bill.
