So there is some mix impact, but it is modest. It is not determinative. And then finally, to your point on cost moderating, there are kind of — there are some obvious post-pandemic costs, which have changed, steel, containers, etcetera. And it’s worth kind of calling out containers as an example because now we’re dealing with obviously the Red Sea challenges. So container costs that were about $3,000 per container can now rise as much as $6,000 per container. With that in context, at the peak those were in the $20,000 per container kind of rate. So that gives you an idea of kind of where those differences are. And so we have a plan to deal with those higher container costs for the remainder of the year. So when I summarize those three things together; one is, as I said remarks, our products are being recognized for their value in the marketplace.
That’s fundamental, that’s key, that’s number one. Two is the strategy has produced a more consistent result across our portfolio so mix is less impactful than it may have been in the past. And then the third is we’ve moved aggressively to get to a more consistent cost basis on materials.
Christopher Snyder: I appreciate that. And if I could just maybe follow up more thematically, it sounds like a lot of it say, we want to get price for the value we’re bringing to the market. But the company has always been, particularly I know, Neil have only been there for a few years, but over your time, I think the company has always been a leader on technology and a leader on product quality. So what’s kind of flipped there to get the gross margin from 41%, 42% now to 45% plus because it feels like a lot of the — you’ve always kind of leading on the product technology side? Thank you.
Neil M. Ashe: Yes. Thanks, Chris. These things take time. I wish I was not as old as I am, but I’ve been around the barn more than once. And you just realize that like kind of all of these changes are cumulative and it takes time for them to all kind of line up. And obviously, and this is a conversation that we have with our team here, which is that we’re taking the company to levels of performance that it’s never seen before. That’s true in the market — broader market where the competence of our product quality cascades through our sales team, through our independent sales agents, etcetera, through distributors, through the service levels and the programs that we’ve put in place. So those things cumulatively add up to the performance that you’re seeing today.
Christopher Snyder: Thank you.
Operator: Thank you. Our next question comes from the line of Ryan Merkel with William Blair. Your line is now open.
Ryan Merkel: Hey, good morning. Can you guys hear me.
Neil M. Ashe: Hey Ryan, good morning.
Ryan Merkel: Great, so my first question, Neil, can you talk about large projects back market, how is activity, are you seeing delays, cancellations, or is that sort of improving, just what’s the latest update?
Neil M. Ashe: Yes, Ryan, thanks. I mean we called out the order rate to kind of demonstrate that we’re finding a new kind of normal. I think anecdotally, there’s a lot of talk around big projects in kind of calendar 2025, that sort of period, whether it’s infrastructure or other things. I think that’s just kind of the general kind of on the street sentiment about kind of what’s going on out there. So other than that, we’re in a relatively, I think we’re in a kind of a new normal from a consistency perspective.
Ryan Merkel: Okay. So you’re not seeing large projects be particularly weak?
Neil M. Ashe: I mean, anecdotally, there’s some discussion about kind of that. I don’t know what weak means. And I think that’s a — it’s worth us all kind of taking a step back and saying, okay, if we had an industry-wide pull forward over kind of, call it, 2022 and 2023, which is what we’re talking about on our comparables, that has manifested in net sales higher than order rates for some period as we were very clear about that in 2023. Now with order rates and shipments more equilibrated and a normal relationship in a period, this is kind of the normal run rate of the market. And so yes, there are some good days and some bad days within that, obviously. So — but it’s not — we don’t — we’re not viewing a cliff on the horizon anywhere.
Ryan Merkel: Okay. And then I had a question on gross margin as well. Obviously, first quarter was really strong. Normal seasonality would put you at about 45% for the year. I’m just curious, is there any reason that we should be below that, is the biggest risk just sales and fixed cost deleverage at this point?
Neil M. Ashe: Karen, do you want to take that?
