Dana Telsey: Just making sure you can hear me OK. As you think about the levels of strength that are out there and obviously was incorporated into the results, how are you looking at that for 2023? And what are you baking in? And then just on pricing, where the expectation to go to a more normalized pricing cadence, what do you see in that more normalized pricing cadence of increases? And does it differ by category? Thank you.
Kecia Steelman: Maybe I’ll start, Dana. Like you’re hearing from the broader retail industry, organized retail crime and shrink is a real issue out there, and we’re not immune to what’s happening. The concern is really twofold. Firstly, it’s about safety and well-being of our associates and our guests. The newsgroups are coming into the stores. It’s really upsetting and can take an emotional toll on everyone that’s involved. And secondly, as you mentioned, it’s clearly a financial impact to our bottom line. We’re continuing to invest in measures to not only deter but catch those who are conducting these activities. So, the investments are around increasing our talent level, targeting our payroll in both our store and our loss prevention team, testing new technology, and then also installing new fixtures that can protect some of our key categories.
Fragrance is the one we’re really leaning into right now. What we’re seeing is when we’re investing in these locked cases in fragrance, we’re seeing sales go up and shrink goes down. And our associates are very, very thankful for this because it’s really deterring these bad actors from coming into our stores. We’re going to be at 75% of the chain by the end of the year with these new fixtures. And then in regards to what the shrink impact is, it’s about 70 basis points of headwinds that we had in 2022 to gross margin, and we’re proactively taking these steps, as I mentioned before, to make sure that we understand these macro factors are going to continue to persist, but we’re looking at only a modest benefit and shrink improvement in 2023.
Dave Kimbell: And on the pricing side, we don’t see any real differences by category. What we saw in 2022 was really broad-based across categories because the inflationary pressures for brands was — really impacted all segments. So, as we look forward, by normalize, we mean every year in beauty over time, there’s a percentage of brands that go through just more standard price increases, and we anticipate kind of going back into that. And we think it will be across categories.
Operator: Our next question would be from Mark Altschwager with Baird.
Mark Altschwager: So it sounds like things are going great with Target. Just any color you can provide on the incrementality of that new Target customer that may be returning to Ulta? And then separately, I know there’s been some supply chain delays impacting your store openings, but just wondering if you could provide a broader update on how you view the store runway and perhaps how any of the learnings from the Target relationship are impacting the pace of openings over the next few years.
Kecia Steelman: Well, I’ll go ahead and start. And what I would say is that we’ve got three areas of really concentrated efforts in our partnership with the Ulta Beauty and Target partnership. First is about deepening the guest engagement. It’s really focusing on new guest acquisition, increasing the spend of the existing linked Circle and Ulta Beauty reward members in engaging that lapsed member. When we see the Ulta Beauty at Target member coming in and engaging with Ulta Beauty itself, what we’re seeing is we like what their spend patterns look like. They’re at our average spend, if not, even higher. So, we like what we’re seeing from the ecosystem. In regards to new store growth, I mean, listen, we’ve got competition out there always on in regards to where we’re opening up new stores.
