And so, I do think some of the way our numbers are falling out are an impact of pricing, and it’s sort of another — I’ve talked about it before, when you sell a new account and you lose an account, those accounts could be of similar profile. Often they don’t have the same pricing. An account you’ve had for longer likely has higher pricing, particularly in this period that we’ve been going through with inflation. So I think price has been somewhat a part of it. And look, not to overestimate it, the competitive environment is always part of it, but I’m not sure that there’s a significant difference in that regard. I think it’s a little bit more of the pricing environment and people working through inflation, more likely maybe to say, hey, I want to go out to bid or put my account out to bid, and that’s had some impact.
We have seen some customers not being able to pay by terms and some things like that. I think we’ve seen an increase in most of the metrics we track as part of our retention. So hopefully that helps a little bit.
Andrew Wittmann: Appreciate the color on that. I guess next I wanted to just dig into merchandise costs. I feel like I’ve been asking this one almost every quarter, but we’re going to ask it again this quarter. I guess it’s — given that it compares on merchandise costs now, it’s been a headwind to your margins for a while. I guess it seems reasonable to be thinking about merchandise costs maybe flipping positive in the few upcoming quarters. It wasn’t this quarter, but maybe can you quantify the impact that merchandise costs were year-for-year here and talk about when you think that could flip positively.
Shane O’Connor: Yeah, I can do that. So when we talk about our merchandise costs coming into the year, we had sort of said our expectations were that merchandise was going to be like a 10 to 20 basis point headwind, right. Obviously, that headwind was greatly reduced from what we had been seeing for the previous couple of years as our merchandise levels adjusted coming out of the pandemic. We still expect that that’s going to be the headwind that we’re going to see. It’s relatively moderate in the quarter. It was a headwind. It was only 20 basis points. At this point in time, given a 10 to 20 basis point headwind, we would characterize that as merchandise flattening. That’s sort of where we’re at from the maturity of our merchandise.
We don’t have any expectation or we haven’t included in our guidance an assumption that merchandise is going to flip and become a benefit throughout the remainder of 2024. At this point in time, our expectation is that, it’s going to be relatively flat with just a little bit of a headwind.
Andrew Wittmann: Okay. That’s helpful. And then — yes, go ahead, Steve.
Steven Sintros: I was going to add one thing there. And it’s not a major item, but I did mention that we added a large account in the quarter, a big infusion of merchandise with that account as well. And given we’re talking about merchandise being relatively flat, that is an item that will cause a headwind over this course of this year until it kind of falls off and is amortized kind of next year at this time. So that’s a factor in there as well.
Andrew Wittmann: Yes, that makes sense. Okay, just a couple of technical questions here, I guess. Just — was there any change? Is there any change to the amount of key initiatives costs or some of the other factors this quarter in your press release talking about your outlook, you didn’t have the same level of detail as you did last quarter when you gave your initial guidance. So I was just wondering if there was any changes to any of the other assumptions here, maybe the margin rates, key initiative costs, other things that you detailed previously, but were not reiterated specifically this quarter?
Steven Sintros: Yes, largely we’re maintaining that guidance, which is one of the reasons why we didn’t include the additional detail, because it would have been somewhat redundant. My expectation or what’s included in my model at this point in time, it continues to be about $16 million worth of initiative cost. Tax rate for the year continues to be 25%. Largely, we’re maintaining the expectations from the guidance as it relates to the lower half of the range, the commentary there. 20 to 30 basis points of organic growth within my core Laundry is probably at risk based on some of the things we had seen in the latter half. That revenue impact would pressure my margins, but at this point in time, we have some things that are going in the opposite direction, most notably in the form of energy.
Right? Previously when I had guided or provided guidance, my expectation was that, energy was going to be about 4.3% of revenues for the year at this point in time based on recent fluctuations in fuel prices. I now expect that to be about 4.1%. So our expectation is, that’s going to be able to offset maybe some of the pressure related to the revenue trends.
Andrew Wittmann: All right. This is all super helpful. I’m going to just sneak in one other one. Sorry. Just on the comment on the $2.1 million on the interest expense line, you had a tax dispute that was settled. Was there like interest on the cash taxes that was like implicit and that caused you to recognize that as income this quarter? Is that what it is, Shane? Or I don’t know, I’m just falling here. You tell us.
Shane O’Connor: No, that’s exactly right. There was an ongoing tax dispute and as a result of the favorable resolution, we received certain interest related to that. So we were able to recognize that in the quarter.
Steven Sintros: It’s been going on for a long time.
Andrew Wittmann: Yes, this is the one that’s been disclosed in your filings, presumably with the Mexican government, I think it was?
