Simply put, we think consumers are highly engaged in the category but still passionate about the category, but will continue to be thoughtful in all of their spending. But fortunately, we know that beauty is an important one. And as a reminder, Ulta Beauty is well positioned to manage through really any kind of economic disruption or challenge given our unique portfolio, all price points, all categories that allow us to meet our consumers’ needs if there is a time that they feel more pressured or have other changes. But overall, category healthy. Paula, as it relates to any potential margin changes?
Paula Oyibo : Yes, hi. What I would say is our merchandise margin, I would remind, we are meaningful and hopefully higher and better our merchandise margin since 2019. And really, that has a lot to do with we are a much healthier business now, and we have — our mix in our business between our categories as well as prestige and mass through category performance efforts over the years has really helped us be able to be flexible as the consumer shifts between various categories as well as between mass and prestige. And so, we believe that we are able to manage that dynamic.
Operator: Our next question comes from the line of Susan Anderson with Canaccord Genuity.
Susan Anderson: Hi. Good evening. Thanks for taking my question. I wanted to maybe ask about the store expansion. It looks like it picks up a lot this year. I guess, how should we think about timing throughout the year? And then also, should we expect these to be the full-size stores, or are you going to roll out any of the smaller test stores that you’ve been looking at? And then also, just how do you think this helps to maybe win back some of the share from other competition? Thanks.
Scott Settersten : Thanks Susan. We are planning to open between 60 and 65 net new stores in fiscal 2024. That puts our growth between the two year period at 90 and 95 which is generally in line with the 100 that we had communicated, and so our thinking hasn’t materially changed there. We remain confident in our ability to open and operate between 1, 500 and 1, 700 traditional Ulta Beauty freestanding locations in the U.S. and we’re optimistic the small format store prototype could give us an opportunity for additional growth, as does the partnership with Target, and then similarly, as we’re excited about the additional opportunity with our international expansion into Mexico. Related to the small geographies, we are planning to open 10 small store formats in 2024.
Operator: Our next question comes from the line of Ashley Helgans with Jeffries.
Ashley Helgans: Hi, thanks for taking our questions. So we just wanted to ask for an update on UB Media, anything you can share about the number of brands that are currently on the platform, maybe demand for the platform, and then any color to help us model at UB success scale? Thanks.
Dave Kimbell : Yes, we’re really pleased with the progress that we’ve made as a reminder for those on the call. This really does represent a way for us to generate positive impact on our business by leveraging the first-party data and insights that we have in partnering with our brands. We’re not sharing, we haven’t shared, and we don’t plan to share specific on number of brands or even specific financial impact at this time. But what I will say is we’re really pleased with the progress that we’ve made in 2023 and are confident that we’ll continue to grow this part of the business. The network that we have offers advertising access via off-site display, video, social influencers, as well as on-site sponsored products. Our on-site display inventory is one of the actually new core offerings that we activated just in 2023.
So we’ve got a full suite of ad inventory experiences, value-added services, and as I said, we’re confident in its impact going forward. And the support engagement reaction from brands has been very positive. As you know, the advertising world continues to evolve. So the value that we can bring through first-party data with 43 million beauty enthusiasts is very meaningful, and we continue to work with our brand partners, and they have demonstrated to us that they see a positive return and we’re continuing to grow that business.
Operator: Our next question comes from the line of Olivia Tong with Raymond James.
Olivia Tong: Great. Thanks. Good afternoon and congrats Scott and looking forward to working with you Paula. I want to ask you a little bit about your thoughts on new product contribution this year because it does seem like certainly starting off with some momentum with Charlotte Tilbury and Sol de Janeiro, we did in store, Tarter in New York recently and the team is very energized around these brands. So I was wondering if you could talk about contribution this year versus previous years and then helping us understand, sort of, I think you might think you mentioned Sol de Janeiro that a portion of the doors maybe, can you give the same statistics for Charlotte Tilbury. And then on the margin, I would just love a little bit more detail in terms of what’s driving the margin outlook to 14%, 14.3% end of the longer term range Whether there’s anything sort of higher investment or what have you that sort of dragging that to that end of the range. Thank you.
