Julio Romero: Really helpful there. And then I guess in the second quarter, you had a very tough year-over-year comparable on the volume side. Just how would you have us think about third quarter and the fourth quarter as the year-over-year comps get a little bit easier from a volume perspective?
Scott Culbreth: Yes. I think Q3 is unfortunately going to be fairly similar to Q2. We’ve now got a softer demand environment that you’re obviously seeing in the marketplace. We will put a couple of extra down days in around the holidays as well. But as we push into Q4, we think the comps do start to improve. At this time, I still think they’re likely negative but not nearly to the rate we’ve seen in Q2 and Q3.
Operator: Our next question comes from Tim Wojs from Baird. Please go ahead with your question.
Tim Wojs: Good afternoon. Maybe just the first one, Scott, just how — when you look — when you talk to your builder customers, where do you feel like in terms of affordability, they are in kind of adjusting kind of square footage and home sizes. And if it trends lower to try to create a more affordable product, I mean, how does that kind of impact Woodmark, if at all?
Scott Culbreth: Yes. So, the first thing I’ll remark on is what are we seeing hearing from the builder customers around price points and then let’s bring interest rates into that discussion. The pricing has not really been the bigger challenge. The interest rates have been the higher priority. So many builders have done body on strategies to keep those rates in sub-5 or just north of 5% rate to keep folks interested in going into the home. I do think there will be a rotation down in-home size and folks are starting to model that. We experienced that a couple of years ago. That was part of our strategy, as you recall, when we did the acquisition that allowed us to bring origins to bear and be a product offering of taking those homes from a price point standpoint.
I guess when I step back and think about homes, though, as they do get spec smaller, the most important space typically defined in those homes is the kitchen. And usually, those spaces are protected. So, I don’t — I’m not alarmed or worried that trends would be unfavorable for the amount of cabinetry we would sell into a kitchen space. Where you may have some impacts is perhaps a mud room gets dropped off as space has taken out but there’s certainly still going to be a space. There’s still an opportunity to bring product into those areas.
Tim Wojs: That’s really helpful. And then on the kind of the wallet share opportunity, — where do you — I know you’re not going to tell us like what exactly it is. But I mean maybe just how much runway could there be from a wallet share perspective with some of your top kind of national and regional builders?
Scott Culbreth: Yes. So, it’s a difficult question to answer because it is very much regional and market specific. So, there’s going to be some markets where we’re pretty mature with our partners and have a very high share position. So, it’s definitely going to be maintain and maybe target some regionals in that space. And then we’ve got some markets where we think there’s a much more sizable opportunity to go get share with players. So, we target those particular markets and go after those particular accounts. Sorry, I can’t add a lot more detail on that.
Tim Wojs: Yes. No, but there still are opportunities. I mean, it’s kind of the point for wallet share to improve.
Paul Joachimczyk: Absolutely.
Tim Wojs: Yes. Okay. And then maybe just the last one. Kind of first half, you guys did about 15% EBITDA margins. there’s a little bit of variability here. But in the back half, it’s going to be something that’s maybe closer to 12%. I know that you get $8 million from the start-ups, that’s about 100 basis points. January seasonally weaker. Like is there anything else just to call out why there would be that kind of maybe step down first half to second half outside of those kinds of discrete items?
Scott Culbreth: Yes. The three things we talked about last quarter and be the same items that we’d hit this quarter, you hit on two of them. So MontornHamlet, we’ve already discussed the $8 million in the back half. Certainly, a softer demand environment as we think about back half — and then miracycle was the other we mentioned. So, some of our fixed costs do move our timeline on that is the August-September time frame. So we’ll roll through some incremental costs for that. But nothing substantial outside of those three areas.
Operator: [Operator Instructions]. Our next question comes from Collin Verron from Jefferies. Please go ahead with your question.
Collin Verron : Thank you, for taking my question. I guess, just building off of that last question on the incremental costs that you’re going to see in the back half of this year. I guess, any color as to how long you expect those start-up costs to linger into bigger fiscal year ’25. Should we be expecting to see some margin impression, I guess, in the first half of the year from these strong 15% margins? — going forward because of those costs staying in the business?
Scott Culbreth: We’re not yet ready to start providing an outlook specifically on our fiscal year ’25. But I think you’ve hit the key point there. We are going to have a ramp period we’re not going to open those factories and they’re all of a sudden going to be full overnight. So, there’s going to be a ramp period. I can’t disclose necessarily how long it will take us to fill that, but there will be some continued pressure as we go into the early part.
