Frank Conforti: Hey, Mark. This is Frank. I’ll take that. So you are correct in that. Overall, we are still targeting. 10% operating profit rate as a company. I think we are feeling confident that we have the ability to do so and certainly our performance this year only increased our confidence. It’s not just UO. I think each of the brands still have continued IMU improvement opportunity as you look into next year as well as the horizon. You are correct. Obviously, once we do turn the shift the way that we want to at Urban Outfitters, that can incrementally benefit our operating profitability as well. Lastly, I don’t want to exclude Nuuly, one of our big growth initiatives and businesses that’s performing well. We still remain committed to turning a profitable quarter over the back half of this year.
And once Nuuly turns that quarter, I think that also can add to our overall operating profitability. So I think there are a lot of different drivers across the business between IMU, between improved markdown rates, between turning Urban around as well as Nuuly continuing to show their progress that that can help to contribute and leave us pretty confident that we can get to 10% and can continue to run at 10% operating profit.
Operator: Thank you. Please standby. And our last question comes from the line of Ike Boruchow with Wells Fargo. Your line is open.
Ike Boruchow: Hey, guys. I was going to ask about the gross margin. So I guess is it — relative to the 400 basis points in Q2 and the guide for Q3, can you maybe just contextualize like high level, how much of that is freight recapture, how much of that is better markdown? And then I just wanted to clarify, Frank, I think it was your comment about sustainability of that gross margin improvement through the end of the year. Should we believe that gross margins can continue to increase several hundred basis points into 4Q as well? Any color there would be great.
Frank Conforti: Yeah, happy to take that, Ike. For the second quarter, IMU and markdown improvement was relatively even, maybe a little more shaded towards IMU. You asked about within IMU, how much is inbound transportation versus our initiatives? I would say inbound transportation cost savings right now are about two-thirds, and our cross-functional initiatives are driving about a-third of the benefit. And we think that those can continue for the back half of the year as well as into next year. As we’re thinking about Q3 and Q4, we think about that opportunity in IMU could be fairly consistent with what we’ve seen in the first half of the year, so about half of that 200 basis points of improvement. And we think there’s roughly about that same type of improvement opportunity for, again, on a URBN basis, into Q3 as well as into Q4.
Again, better inventory control. If you remember, there was a lot of inventory overhang at this time last year heading into the back half of the year that all three brands are now in a much better position on as well as the businesses at Anthropologie, Free People and FP Movement performing at exceptional levels and Urban is starting to show improvement as well leaves us optimistic that we can drive that — those increased benefits to markdown rates as well.
Ike Boruchow: Thank you.
Richard Hayne: Okay. I think that concludes the call. Thank you very much for participating, and we hope to see you in a few months.
Operator: Thank you. Ladies and gentlemen, that concludes today’s conference call. Thank you for your participation. You may now disconnect.
