We know last year was — the fourth quarter was the start of the significant impact of product costs, both in ocean freight and air freight rates, incurring that air freight in the fourth quarter to get our goods here, everything we’ve talked about for a year now. As we look forward now, it’s with our case capabilities back in place, I think freight costs look like they could be a tailwind into next year. Product costs in general, looking beneficial. We think we can get back to almost pre-pandemic types of IMUs, which would be a benefit to gross margin next year. Michael, I don’t know if you have — anything you want to add to that?
Michael Rempell: No, you said it well. I think merch margin should be better next year. We have IMU benefit. Supply chains are much tighter, so we could run the business leaner and chase into demand. And we’re up against a year, Matt, that was really unprecedented. It had very long lead times. We are going against stimulus fueled demand. And next year, we’re up against a much more normalized environment. So between IMU benefits and ending this quarter in a very good inventory position and being able to react to the business next year, which is something we couldn’t do this year, I absolutely believe that we’re going to have higher merch margins next year.
Operator: Our next question is from Jay Sole with UBS.
Jay Sole: I have two questions. Jen, my first question is that you made some comments about Aerie in the opening prepared remarks. It sounded really bullish. Just talk about what gives you conviction behind that bullishness given the comp was negative in the quarter. And then secondly, for Michael, can you talk about the logistics platform a little bit? And maybe give us an idea what has developed over the last 90 days and kind of the path to profitability as you see it if it’s next year or beyond. Thank you.
Jen Foyle: Yes. And Mike said it well, Jay, I think we believe that when we start to anniversary these new store openings, we’re going to gain market share in those particular markets. And then, we’re just — we believe that that’s going to be something that we’re going to annualize next year, and we really feel good about that. Second of all, there’s been a lot of commentary about slowdown on casual wear, but we’re definitely not seeing it in Aerie. Look, we have this OFFLINE brand that is really it’s amazing. The early-on results here for a business that we launched during COVID, I’ve never seen anything like it, to be perfectly honest. I feel really good about that product offering, our leggings. It is a cult following. I said that in my opening remarks.
I mean, it’s true. These leggings are best in show. And that team is innovating year-over-year. I feel so good about the innovation there. And it’s something new to talk about to our Aerie customer. So, we feel strong about these categories. We’re not seeing a softness in some of these more casual type businesses. And I think Aerie really has a cornerstone there. So, not only a cult like following on our leggings, but just the brand and what we stand for. So, we’re just going to continue to deliver and innovate and we’re doing that in both brands, honestly, Jay. Some of the newness in AE, I’m so proud about. We’re pivoting into the right new bottoms categories. And just some of those qualities and new ideas, I think are like no other. And I also feel really good about a new launch that we’re going to have early spring, spring one.
I can’t say what it is, but pretty excited around that as well, so.
