Daniel Imbro: Discussion around just the shifting was that, and just to clarify on your comments on the January improvement?
David Hult: I’m sorry, Dan, you cut out. All I heard was January improvement.
Daniel Imbro: Sorry. Yes, was there any calendar benefit in there? There’s been some discussion around just the holiday timing this year through 4Q. Was that any part of the improvement you just talked about in January, do you think?
David Hult: No, I wouldn’t say that because we were — we had some negative impact in January and some in lost days with the weather. So I kind of feel like that’s not an issue.
Operator: Our next question comes from John Murphy with Bank of America.
John Murphy: I got on about 5 minutes after the call started, so I hope I’m not covering stuff here that you covered. But I mean if we think about the used business, you had gotten close to 1:1 or actually a little bit above that, but more recently, you’ve been sort of in the just below 0.9:1. I’m just curious if that’s a function of market dynamics, acquisitions or it is just the kind of thing that we could look at recovering 324, David?
David Hult: John, I’ll start. And this is David and Dan can jump in. I would say we’ve had a conservative approach on acquiring inventory and may be too conservative. We’ve been right or wrong, more focused on gross profit than we have volume. We need to take a more aggressive stand at acquiring vehicles. Naturally, when we acquire or purchase a vehicle, our gross profit is lower than when we take it in trade. And as a reminder, when your trades are coming in and the average age of the trade is 12.5 years, sometimes a lot of the trade-ins that you have just aren’t for retail sale. I expect in ’24, it’s still to be challenging because there’s not a lot of fleet vehicles coming off. There’s not a lot of off-lease vehicles. So it’ll still be a tight pool to pick from. But I think it’s time that we take a more aggressive stance on creating more volume.
Daniel Clara: John, I would — I agree with David. The — we’re taking a more aggressive stance. We understand the benefit of the additional volume. You pick up the reconditioning parts and service, you put another unit in operation in the market, and then you pick up F&I as well. So we’re committed to a more aggressive stance as we go into ’24.
John Murphy: And then just a second question on SG&A. It’s a little bit mean and not necessarily fair because you are at 61% and change. You’re doing very well in absolute terms and relative to some of your peers, but that was a little bit of a slippage relative to where you have been. Just curious, David, what you think the drivers of that small slippage, once again, absolutely, it’s good performance. But that slippage relative to where you have been. And was there maybe some distraction as the Koons deal was going on that maybe let things slip a little bit, and we could see some improvement in 2024. I mean what’s going on there?
David Hult: Sure, John. This is David. No, Koons acquisition had nothing to do with it. We’re optimistic about the number because some of it was self-inflicted, trying different things on our end. We took a more aggressive stance on loaner vehicles and depreciation. And quite honestly, we spent a lot more in advertising in the quarter than what we normally spend per car. So those are 2 controllable expenses that we have. So when we think about the personnel costs and other expenses that we have, we were comfortable where we came in and consistent with our past, but those 2 line items that I mentioned really had an impact on overall SG&A. Michael, I don’t know if you want to comment.
Michael Welch: Yes. I mean I think we’re comfortable kind of 59% to 60% range is still a comfort level that we have for next year. The other thing is it fixed ops comes back, that just provides more gross profit to cover some of those fixed expenses. And so the decline in fixed ops also impacted the SG&A number.
Operator: Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.
Ryan Sigdahl: Just want to go over to new vehicle GPU, I guess any notable changes by OEMs thus far in 2024? And then kind of second to that, I guess, what’s your expectation overall for the pace of GPU normalization?
David Hult: Sure, Ryan. As you can imagine, the days supply for us looked low in the quarter. But as Dan stated, it was really the pickup in sales in December that brought down the day supply. We still had Honda and Toyota in the mid-teens for a day supply. So naturally, you can imagine the margin held up there. We had a higher days supply in Nissan, so that certainly impacted the margin. We have a hard day supplying to Lantus. That impacted the margin in with Infinity. But with some other brands like Alexis, Mercedez and our others meeting Porsche, Land Rover, margins we felt really held up well. And as you can obviously see significantly above 2019. So we really think we’re in a pretty good space for our new car business, both on gross profit and volume. But the story varies by brand, certainly.
Michael Welch: And just on your comment on expectations for ’24. This glide path we’ve seen a kind of 300 a quarter. We expect that to kind of continue through ’24 as inventory continues to build.
Ryan Sigdahl: Good. Then just switching over to technology, Tekion’s DMS platform. Can you talk about, I guess, what you’re looking to gain there versus CDK previously?
