Michael Binetti: Congrats on a nice quarter. Can you help us think about what flow-through will look like on the SG&A side as we think about potential for comp upside in the fourth quarter and maybe some thoughts on SG&A growth or leverage for next year? I know this year is largely defined by some structural labor issues that you’ve spoken about and then restoring incentive comp. But maybe you could help with some thoughts on the go-forward leverage point on SG&A as we kind of transition off of that kind of year this year into next year? And then, I have a follow-up.
John Klinger: I mean, so SG&A for the fourth quarter is primarily due to incremental store wage and payroll costs and higher incentive accruals. When we look out next year, while we haven’t completed our planning process, we would expect that we would not see the increases that we saw this year. And again, we’re not giving guidance, but that’s what we would expect. And I would say that as far as the leverage point, I would say that that’s unchanged from what we’ve said.
Michael Binetti: And as you look at — I guess, thinking about Alex’s question, as you look at where HomeGoods margins are today, still below 2019 levels. I know there’s a lot of freight impacting that business, and you told us that’s still behind versus 2019 now, you don’t expect to get it all back. But if you take out freight in that business, do you still see opportunities to kind of get back to where you were in 2019, like you have at Marmaxx or maybe some thoughts on some of the differences in the structural I guess, the cost structure for that business as we kind of come out of some of these moving parts?
John Klinger: I mean, look, the cost structure, as we’ve said before is — it has a higher freight rate. So, when we talk about getting back only two-thirds of the freight, HomeGoods is going to be a little bit more impacted on the freight line. But again, it’s similar — the headwinds are similar when we talk about store wage and payroll costs and supply chain investments. So look, we’re really pleased with the improvements we’ve made to HomeGoods bottom line throughout the year. And looking out, we’re focused on continuing to drive that bottom line.
Operator: Next, we’ll go to the line of Dana from Telsey Advisory Group. Please go ahead.
Dana Telsey: Congratulations on the nice results. As we continue to hear about department stores ordering spring down even in some instances, down high single digits. How do you see your merchandising opportunity to take on better brands going forward? And do you see this reduction in orders from other wholesale accounts as a market share tailwind for you to gain share? Thank you.
Ernie Herrman: Yes. Dana, that was a classic — right in the sweet spot of a merchant question right there. Strategically, I would say, yes and yes. The reduction and their ordering just — it’s a little similar to what we spoke about earlier, where we’re becoming a little more important to most of the brands. And I think with a lot of them talking about cutting back, I think they’re going to look to us as a way to kind of even off that up and down roller coaster ride, which they don’t want to typically see in their business. So, we buy in a lot of different ways. And our teams right now and many of those pockets of businesses are in talks with some of these vendors to figure out how to do what’s a mutually beneficial, as we actually said in the script, what’s been really neat to see, ever since — it was true prior to COVID, but I think even more so post-COVID, that our buyers are great at figuring out the mutually beneficial way to work with a vendor.
And the vendors love our buyers for that reason because we figure out opportunities that are good for them and good for us. And that’s — this is a classic case where this is happening to many pockets of business around it. We think it better positions us. And it also — we’re allowed to kind of more tailor it to the brands that we think work to balance off our good, better, best, which I think is also what you’re touching on there, indirectly.
Dana Telsey: Do you see new category opportunities too, Ernie?
Ernie Herrman: Yes. I think — well, probably a couple new or more of expanding ones that have been not nearly as big as they could have been. So, what we see probably — yes, we always see new ones. But Dana, what we’re seeing now is we’ve had some — again, we don’t talk publicly — we don’t announce to competition what are really helped driving our comps because obviously, they’re very healthy. But what we’re seeing is there’s a few categories that have been so good. We are just looking at now in terms of moving even more staff into them, how to even explode them to a much larger degree. And that’s how we’re — so I would say that is more of what’s going on right now. It’s a little what you’re talking about, but it’s more about these big families of business that we are really driving increases with.
