Mark Mizicko : I think as a percent of business, the marketing spend is fairly similar to where it has been slightly increased. And the spend that is — the additional spend as we continue to test in digital, the model surge, et cetera, that is all being funded within that slight increase as a percent of revenues that marketing spend will be.
Lisa Harper : As we learn more through the A/B testing, that would — we would only invest if we see an incremental EBITDA contribution based on that investment. So we — more to comment the next time we talk with you guys, because we’ll have more definitive kind of results based on that that might change the number slightly, but it all is predicated on incremental EBITDA contribution based on that investment.
Corey Tarlowe: Great. Thanks so much.
Lisa Harper : Thank you.
Operator: [Operator Instructions] Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.
Dana Telsey : Hi. Good afternoon everyone. Interesting to hear about the labor cost and nice to see the progress everywhere. How do you think about labor expenses? Are they coming down because of hours that are being reduced? Is it wage expense — wage rates — you’re shifting wage rates? What do you expect to see going forward? And are there other — any other elements of the expense structure either changes up or changes down that we should account for in the margin outlook? Thank you.
Paula Dempsey : Hi, Dana, it’s Paula. So what we’re doing with our labor expenses, it’s truly — a couple of things. One is creating efficiency and higher productivity in the stores. That’s the work and we’re seeing the results right now. We started doing this in the second half of last year, and we’re finally collecting some of those positive results right now. So what we have done is definitely shifted some of the wages around. So we’re seeing the benefit from that. And in addition to that, we’re just becoming a lot more effective with our — with how we spend our time in the stores really from a labor hours. So those are the two items in which we’re highly focused.
Lisa Harper : I would add that we changed the leadership structure in the stores to rationalize kind of the right balance of leadership to hourly associates, and that’s having a result in — we also have had a new Chief Stores Officer, join us and with really a focus on sales culture. And I think we were more oriented toward a task culture, even though our Net Promoter Scores and our CSAT scores are in the high 80s, mid-90s. So the customer is having a great experience, we felt like we could improve that even more. And so there is — it’s not a rate issue. We’ve managed it really through structural shifts and what we’re asking the stores to do and then the leadership structures in the stores.
Dana Telsey: Got it. And then when you’re thinking about new store openings this year, locations off-mall mall any changes in sizes of store and regions?
Lisa Harper: Yes, it’s a very small number of stores and it will all be stripped for Canada.
Dana Telsey: Got it. And then Lisa, just the competitive environment with the core customer base, how is it changing the competitive environment, whether online or physical? And how do you see your pricing given the better product costs that you’re getting?
Lisa Harper: Yes. I would still say, it’s a very highly fragmented space, a lot of small players and it comes. And so it’s I don’t think it’s changed appreciably. I think you know the self-inflicted elevated retail the ticket — sticker shock has been mitigated somewhat by better with the efforts that we put into better mix of product both casual, as well as initial tickets and rationalizing those tickets through the value of the product and we are seeing some because of that. And I also think because of our inventory positioning, improvement in regular price sales that was not just an initial markup, but through what but in regular price sell through that is benefiting that. So I think that, no always starting to reevaluate the appropriate value pricing of our product is critical.
And I think we made some and a big shifts we’re seeing. As I mentioned earlier, our core programs are working well, particularly in the store environment. We think we have some opportunity in how we market them online to improve that, but beating the beating our forecast in both on both categories opening price point core items as well as what we’ve done in the Sally programs which are part of the opening price point strategy. So I think we’re making progress there and shifting toward more casual product has also brought the average retail down in the store, but it’s not really and it’s not really impacting the average unit value going out the door. But still that’s still positive. So that I think one of the concerns people had was if you’re going more to opening price point or changing those initial tickets, you’d have a challenge on your average ticket price out the door and that we’re actually not we’re not seeing an impact to that.
Dana Telsey: Thank you.
Lisa Harper: Thanks Dana.
Operator: There are no further questions at this time. I would like to turn the floor back over to Lisa Harper for any closing comments.
Lisa Harper: Thank you. Thanks everyone for joining us today. We really appreciate your focus on the business and looking forward to talking with you in the interim, as well as when we release first quarter later this year. Talk to you soon.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
