Julie Rosen: So I just would add one more or a couple more things. In 2023, we raised a lot of our prices. We raised for all of the forms that we invested in, we raised at least $1. We added all endings on all products $0.95. We took our wallflowers from five for 20 to five for 27. We did so five for 20, five for 27. So when I say we have an agile testing model, every single weekend, we’re testing alternative pricing to figure out where we can garner more AUR. We don’t plan for this business to be more promotional over time. So I want to make sure that we’re all clear on that. We believe that our products are affordable luxuries. We believe that they’re meant to be used daily and replenished often. And we know that our customer loves to celebrate seasons, holidays, fragrances and loves newness.
And we can do this in a way that nobody else can. We can tell these transportive emotional stories. So I believe it’s the celebrations and the newness along with the promo that’s going to drive traffic to our stores. Again, as I keep saying, we use that operating model, right? To increase or decrease promotion. So promotions will be a traffic driver for our business, but we’re hoping by sharpening our approach with the right technology in place. We’re going to leverage some data and analytics, and we’ll deliver more personalized targeted messages, which hopefully will increase trips and spends and engagement while reducing reliance on broad-based promos.
Olivia Tong: Thank you.
Gina Boswell: Next question please.
Operator: Our next question is from Paul Lejuez with Citi. Please proceed with your question.
Paul Lejuez: Hi. Thanks guys. Just wanted to clarify on February, you said that, I think traffic was pressure coming into February. Can you talk about February specifically what you saw and if there’s any change from beginning of the month to the end of the month? And then just separate on the SG&A line in 4Q, what came in above and below plan. What drove that? And can you talk about the opportunity to leverage SG&A and F 2024 if sales perform above your expectations? Thanks.
Eva Boratto: Yes. Thanks for the question. This is Eva. On the SG&A, as I referenced, we had a severance charge of about $10 million associated with our cost reduction initiatives. Also sales outperformed. So we had additional costs related to – related to that. Could you repeat your other question?
Gina Boswell: Sorry, February traffic.
Eva Boratto: February traffic. Thank you. So overall, as I said, we came into February, traffic was pressured. We referenced that our initial floor set didn’t perform to our expectations. We adjusted that performance has improved during the month. It’s reflected in our outlook and the guidance range that we provided.
Paul Lejuez: That performance improved during the month driven by promotions. Is that the message?
Eva Boratto: No, I apologize. That was not my message. Overall, we changed our floor set and a promotion is always part of our strategy, but we’re adapting and adjusting to our customers.
Gina Boswell: With the guidance of flat AUR in the first quarter.
Eva Boratto: In the first quarter. So thank you.
Paul Lejuez: Got it. Thank you.
Gina Boswell: I think we have time for one more question please.
Operator: Thank you. Our last question is from Adrienne Yih with Barclays. Please proceed with your question.
Adrienne Yih: Great. Thank you so much. Very nice end of the year. So congrats on the fourth quarter. Gina and/or Julie, can you talk about the elevation strategy? I’ve seen it coming through, particularly in the candle packaging, which categories are sort of optimal for price elevation or premiumization? And is that through packaging? Is it through innovation, formulations, et cetera? And then the carry on to that is, does that acquire. When you do that, do you see sort of an elevation in age or demographic or any statistics associated with that? Thank you.
Gina Boswell: Thank you. As it relates to the categories, overall, we sort of look at the masstige sort of asset as the pricing sort of segment that we operate in and many of those categories, I mean, if you just think about the beautiful laundry package that we have and what that connotes and even the price value proposition there being sort of in that sweet spot of masstige. But you’re right, there are other things like the beveling of some of the products. And then the reformulations as well, which is an important elevation from the customer’s mindset. In terms of – so I would say overall, the categories and Julie will chime in, I’m sure, but overall, they all have opportunities to elevate not necessarily raise entirely, right, because we want to make sure we always meet the mindset of our customers and increase their usage.
We are a highly replenishable business. So we want to make sure of that and get the trial that we need. But I would say that in terms of what we’re seeing by cohort, which I think was the other part of your question, we are actually not seeing any discernible changes with respect to income or age based on all the things that we’ve seen. And we’re not seeing trade down in our assortment as well.
Julie Rosen: Yes. And I think from an elevation perspective, just to follow-up, we are seeing nice response from our neutral collection, both across soaps and candles, which are very elevated products. My design and merchandising teams do an excellent job scanning the market and the world, looking for trends to sort of see what is going on. I think one of the things that we try to hit on in our store is there are at times multiple mindsets that the customer is having and we try to hit on all of those. So if you look at men’s, we upgraded the packaging on our shower gels, we just relaunched our Champagne Toast in new faceted bottles. So we’re constantly looking, but it is about a balance. We do have some customers that still like some of those more brightly colored fun, but we are seeing elevation as in pretty products and as in neutral, really responding with customers.
And because we have an agile model, we’re able to go out and react and ensure we have enough of that.
Adrienne Yih: Yes. Julie, just feedback-wise, the new tools look very sophisticated and lovely. So, congrats on that. Best of luck. Thank you.
Julie Rosen: Thank you.
Gina Boswell: Thank you. I’ll pass that on to the team. So that concludes our call. I want to thank you for joining today’s call. Over to you, Mike.
Mike McGuire: So a replay will be available for 90 days on our website. Thanks again for your interest in Bath & Body Works. If anybody has any questions, contact us here. Thanks.
Gina Boswell: Thank you.
Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
