Kiley Rawlins: Thank Michael. John, I think we have time for one more question, please.
Operator: And the final question comes from the line of Michael Binetti with Credit Suisse. Please proceed with your question.
Michael Binetti: Maybe since you mentioned it a few times now, how much is shrink versus 2019 as a percent of sales? I’m wondering if that’s becoming a meaningful number? And maybe you could just help us orient how much incentive comp influences the margin this year. I don’t know if I heard that. And I guess, just maybe touching on Michael’s question, you seem to be getting the higher margins the right way here with all the extra sales and gross profit dollars from driving the business and leveraging the fixed costs. You’ll be at a revenue level this year, we didn’t expect to see until 2024, and you’re still seeing the algo next year. I know you gave the long list to Ike in the middle of the P&L, but it feels like you earn some upside to the framework at that 13% to 14%.
I’m just wondering if you can give us color on what you think relative to the framework you laid out remain structurally higher or what you think needs more investment than what you thought at the Analyst Day framework to bring all those extra dollars down to that 13 and 14?
Scott Settersten: Yes, Michael. So working backwards. So the shrink part of your question, I mean shrink like when you think about our category, we are especially susceptible to some of the trends that you see across retail. But that’s not new to us. We’ve been dealing with this since the very early days. because of the category we operated in. So I want to make sure I say thank you to our teams, to our LP teams, our store operations teams and all the support personnel that have been working hard to try to mitigate the losses that we’ve seen step up here, accelerate over the last couple of years. Again, when times get tough, shrink goes up. We’ve seen that in retail over a long period of time. On the incentive compensation, I would say, we — for the year, it’s going to be flattish versus 2021.
Again, our performance has been super strong this year. And then back to the operating margin question, which everyone has, again — we really can’t provide any more quantitative detail at this point in time. I would just point back to the long laundry list of different variables that I described earlier in the call. And just that we’re a pragmatic team. We’re trying to optimize with all the things that we have, the challenges and the opportunities, we’re going to do our best to lean in where we can and try to optimize and deliver the best overall financial performance that we’re capable of, whether it’s the fourth quarter or 2023. You can rely on us for that.
A – Dave Kimbell: All right. With that, I’m going to wrap it up. But I want to first thank you. Thank you for your interest and engagement in Ulta Beauty. And I want to close by thanking our more than 40,000 Ulta Beauty associates for delivering another excellent quarter, while also executing against our strategic priorities. Our teams have been working hard to get our stores, digital channels and DCs ready for this holiday season, and I sincerely appreciate their focus and commitment to delivering meaningful guest experiences across every single touch point. We hope you all have a happy and healthy holiday season, and we look forward to speaking to all of you again in early March when we report results for fiscal 2022 and share our plans for fiscal 2023. Have a great evening, everybody. Thanks again.
Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
