Rick Olson: We’re returning to a more normal situation. And I would say the programs that we run do have an impact. So they — it is helpful in demand generation, et cetera. And — but it’s really returning to more normal kind of pre-pandemic type of response. We just hadn’t been running those kind of promotions during the pandemic due to lack of availability of product. So, we’re back to a more normal situation where we use those throughout the season to help drive or stimulate demand just on a normal basis and they have been working…
David Macgregor: Thanks very much — and they have been working, okay.
Rick Olson: Yes.
David Macgregor: Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Joshua Wilson from Raymond James.
Joshua Wilson: Good morning, and thanks for fitting me in.
Rick Olson: Good morning, Josh.
Joshua Wilson: Just one clarification on the backlog before I get to some other questions. You said it was down slightly versus three months ago. Is that right?
Angie Drake: That’s correct. Yes. We’re down slightly from year-end.
Joshua Wilson: Okay. And then as it relates to the new relationship with Lowe’s, are there going to be any product exclusives or anything like that in the relationship? And then separately, do you have a sense of who you’re displacing at Lowe’s?
Rick Olson: With regard to specific SKUs, that becomes part of the discussions with each of our channel partners. So, you would expect there would be some at any of our partners, including Lowe’s. And with regard to displacement, we really can’t speak to that. That’s really within the — with another discussion of the Lowe’s with their other suppliers, but we are extraordinarily excited about the opportunity that Lowe’s presents for us here as we go forward.
Joshua Wilson: And do you have any sense of the net gain or loss in like shelf space between Lowe’s and Home Depot?
Rick Olson: We don’t at this point. As you can imagine, we’re pretty early in the relationship, and those — all of those details are being worked out right now. And we’re not really guiding to what’s going to happen in ’24. We’ll be much more specific in December.
Joshua Wilson: Got it. Thank you very much.
Rick Olson: Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Ted Jackson from Northland Securities.
Ted Jackson: Thanks. Down to the wire for me.
Angie Drake: Hi, Ted.
Rick Olson: Hi, Ted.
Ted Jackson: How are you? I just have a couple of follow-up questions. All the main ones I wanted have been asked. So first, just quickly on Lowe’s. Is it fair to assume, I know you’re not giving guidance, but we would see the impact of Lowe’s in the second quarter of the next fiscal year just in terms of their — how it would impact your business and they’re getting stock in place with regards to the season and such?
Angie Drake: Yeah. I think, Ted, you’ll begin to see that in the spring 2024 selling season.
Ted Jackson: Again since — and given that your second quarter is April, second quarter is where we would be looking for that impact to start showing up?
Angie Drake: Yeah. Although we’re not really — we don’t really know what the guidance will be at this point, but that’s a good assumption.
Ted Jackson: Yeah. I’m just talking about timing. And then, the other question on inventory, you made a commentary that inventories are higher because of the weakness on the homeowner side of lawn care and that you felt that, that would be normalized by the time you got — or I mean, I think you basically kind of said second quarter of ’24 also. Can you give a little definition of what the term normal means? Is that like on a turns basis, the days of inventory basis? Is it on a dollar basis? Just kind of what’s the bogey there?
Rick Olson: Yeah. I think it would be really on all those basis. But we mentioned in the second quarter, we — just in general, we believe it will take time into fiscal 2024 to normalize, to use that term again. And the biggest opportunity is in the second quarter just because of the traditional scale of sales as a percentage of the year for those types of products. So, that’s when the volume becomes large enough to really impact the field. In the meantime, we’re working with our channel partners to make sure that we’ve got the right stock levels, and they’re making decisions based on their own business metrics. So, that’s really what we refer to. But normal to us would be back to the more historical days inventory on hands and those kinds of metrics that we typically look at, and we’re beyond those…
Ted Jackson: The new kid on the block, which is me, who doesn’t have the history with the company, like what is the historical norm in terms of like days of inventory? I mean, in [indiscernible].
Rick Olson: Yeah, it depends on both the channel and the specific brand and the flow of the product. So, I can’t say that specifically in general.
Ted Jackson: If I were to look back at a year, could you give me a year I can calculate out like what you’d say would be a typical year that I would want to go look at for a reference point?
Angie Drake: Yeah. We might be able to cover some of that a little bit later. I think that we are still trying to figure out what some of that normal means post COVID as well. But just to give you some comfort, we are seeing something good. We’re making good progress in WIP, and we have seen the inventory come down two quarters in a row. So, we do believe to be in a better position in F ’24.
Rick Olson: And I was referring to field inventory there. So there are probably two different matters, yeah.
