James Jaye: Thank you, Jeff.
Operator: Your next question for today is coming from Mike Sison with Wells Fargo.
Michael Sison: Hey, good morning. Nice end of the year. Heidi, I think you noted that resi repaint would be up or is tracking mid-single-digit volume growth in ’24. And at this point, I suspect that’s what you’re looking at for the first quarter. I just wanted to be clear, so the market for resi repaint, would that imply it would be flat or maybe slightly up and that mid-single-digits is your outperformance? And then what are you looking for in terms of any indicators that would help you — would suggest that the market growth could be better or worse than ’24?
Heidi Petz: So just to clarify, the mid-single-digit reference was relative to ’23. So I think, yes, we would expect it to be flat. Now having said that, I’ll go back to my earlier comments that the investments that we placed in, we’re not waiting for the market and we don’t think the market is going to help us this year. So the team was very diligent. We were very clear on putting those investments in long enough ago last year so that we were in a position to take advantage of this. So in this environment, while I would characterize the demand as flat, you can absolutely count on our ability to take share. We’ve got the right positioning in the market. We’ve got a model that allows us to absolutely understand largely not just through our stores and our reps, through our data, our ability to follow these customers to partner with these customers and helping them not just to get by with their current projects, helping them travel, helping them grow and really helping partner with them as they’re looking to grow their business.
So the characterization would be flat, but I would expect us absolutely to outpace the market there.
Allen Mistysyn: Yes. Mike, the only thing I would add to that is, you talk about indicators that might help drive the market, existing home turnover would be one of those. As interest rates moderate, and we do expect that to happen as we progress through the year, existing home turnover does have an impact; as well as home price appreciation, which is still up; the aging housing stock in the U.S.; baby boomers staying in place. All of those are driving Res Repaint. But your comment about the market being flat, we believe that could be true. But if existing home turnover would pick up, that would be a tailwind for us and likely second half view of that.
James Jaye: Thank you, Mike.
Operator: Your next question is coming from Ghansham Panjabi with Baird.
Ghansham Panjabi: Hi, everyone. Good morning. I guess, first off, on the Paint Stores Group pricing, maybe you can give us a sense as to how to think about the time line, the price realization specific to the segment. And I’m just asking because historically, it took a couple of quarters to realize increases. And then during the COVID supply chain chaos, it was of course, much faster just given the extent of inflation. And then also related to that, what do you expect productivity to be in 2024 in context of the non-commodity inflation, such as wages and also with all the investments you have been making? Thank you.
Allen Mistysyn: Yes, Ghansham. The 5% effective February 1, I do think there is a lay-in that will be similar to past price increases. I do expect to get to a similar effectiveness. Mind you, at a consolidated basis, we talk about price being up low-single digits. There’s some headwind for customers that are on contracts with index pricing, small amount but a headwind. And I do expect our — and Heidi mentioned this, the raw basket is down low-single digits. Still highly elevated over the three year period that we’re looking at. We didn’t go out with a price increase in 2023. And if you look at wage inflation, the health care, energy, transportation cost on that two-year stack is mid- to high-single digits. So to continue to offer the services and — that we do and the convenience and the differentiated solutions, we need to recover some of — recoup some of these costs.
James Jaye: Thanks, Ghansham.
Operator: Your next question for today is coming from Aleksey Yefremov with KeyBanc Capital Markets.
Aleksey Yefremov: Thank you. Good morning everyone. I just wanted to ask you about the Property Maintenance subsegment. You’re showing negative low-single digit number there, down from double-digit growth earlier in first half ’23. Can you just address what’s going on in this segment?
Heidi Petz: Yes, property management right now, I would characterize this similar to how we look at New Residential. So this is going to be a segment, that’s going to be extremely exciting to watch. We’re growing share through some additional agreements with customers that at all sizes, all the way through. So it’s been I think clear out in the market there’s been some incremental capacity that’s been entering the market, which we benefit from during construction. And then these turns become an annuity for us which is a significant part of our business. So we’re looking at this on both sides. There’s another piece of this. And I think if you look at the dynamics between what’s happening with kind of new commercial property management, we’re also benefiting from the upgrading of properties that are competing with these new units and investing in keeping their properties current and fresh.
So our teams are touching certainly both the CapEx projects and maintenance as well as color and design support, trying to make our customers successful. So we’re going to catch them on either side. They’re — people are going to live somewhere. So we’re going to make sure that we’re meeting our customers where they’re at regardless of what’s going on with the economy. And you can expect that we’ll take share in this current environment.
James Jaye: Yes. Aleksey, you mentioned the fourth quarter. So property maintenance was down low-single digits in the quarter, but that was against a really strong fourth quarter a year ago, where we were north of 20%. If you look at property management for the year, I mean, it was up mid-to-high single digits. So we continue to feel good there. And the investments that Al and Heidi are talking about, many of those are aimed at growing our position there and continuing to add to what we’re doing in that property maintenance segment. Thanks, Aleksey.
Operator: Your next question for today is coming from Mike Leithead with Barclays.
