Edmond Thomas: Matt, I feel really good about the content of our inventory right now. So there’s a lot more newness in the mix than there was 3 weeks ago, or more current good. So I feel really good. There’s no category, whether it’s men’s, women’s, footwear, accessories, they’re all very current with new goods. And some early reads on sell-throughs — it’s early, have been really good. So I feel really good about that. Mike can talk about the ramp-up of the inventory and what we expect.
Michael Henry: Yes, I think you should expect the normal discipline that you’re used to seeing from us that we will do everything we can to manage inventory as closely to sales trends as possible. We are — we finished the year at minus 8% per square foot on a cost basis. That’s in dollars. We were down 15% in units. So we feel like at least we didn’t have a big overhang of too much inventory ending last year and coming into the first quarter. So we’re certainly expecting better results for the rest of the first quarter. And then leading into the rest of the year, we’re constantly making changes to our inventory plans every single week. So I’ll just say, expect a normal discipline from us of being as tight to sales as we can make it.
Operator: Our next question will come from Mitch Kummetz with Seaport Research.
Mitchel Kummetz: Just got a couple on the margin. Let me start with gross margins for Q1. You didn’t give a number or a range in the press release, but I think you gave us enough to back into something. But I guess my question is more on the puts and takes in Q1. Like if you break out gross margin by kind of your bigger buckets, whether it’s sort of product margin, distribution expense, occupancy, can you give us a better sense as to how you see those playing out for the quarter?
Michael Henry: Sure. The variability from the better end to the worst end of our range is very largely product margins. If our sales are going to be $10 million lower, we’re going to be more aggressive on markdowns to keep inventory clean and we’ve contemplated that. At these sales levels, the dollars of occupancy and distribution and buying really don’t change all that much. Occupancy is relatively fixed. We have 248 stores as we sit here right now. There’ll be a store that will open later this month. But the dollars from the top of our range to the bottom of our range really don’t move that much. So you’ve got about $25 million of occupancy dollars. You’ve got a little under $10 million of distribution costs, and you’ve got a little under $2 million of buying costs, and that’s really not going to move all that much.
A couple of hundred thousand here or there, not by millions. So it really isn’t product margins that the variability would exist to be responsive to keeping inventory clean.
Mitchel Kummetz: Okay, that’s helpful. Thanks, Mike. And then on the SG&A, so the dollar range you gave, $43 million to $44 million, I believe that’s up a little bit year-over-year despite the sales decline. I mean again, I’m sure there’s a lot of fixed expense in that SG&A number. But I guess I’m mostly interested in kind of like what are you seeing in terms of wage trends, especially in store? And are there any other expenses you might want to call out?
Michael Henry: Yes, you’re on it, Mitch. The key thing is store payroll. So far in the first quarter, our average hourly rate is 7% higher than a year ago. Obviously, that’s a problem when your comps are down 19.9%, but your wage rate is up 7%. So we’re trying to be as tight on store payroll hours usage as we can, and we have operated stores with lower average hours than a year ago as we did through all the quarters last year. But minimum wages keep jumping up so much that it’s just been something that still puts pressure on those dollars in a way that — I don’t know what’s normal anymore after the last 3 years. But over many years in retail, as sales move up and down, you’re able to flex your payroll a lot more effectively.
