And so that gets into the type of extreme closeout that we used to be known for. And so, we want to get that penetration growing. When I joined the company, that penetration was less than 10% back in late 2018. During the pandemic, it dropped to mid-single-digits. And it was only in food and consumables because the CPG companies just couldn’t provide that type of closeout during those times. So now, we have grown that. We believe it is back up to and above where we were and we want to double, if not more than that, and continue to expand our competitiveness in those areas as well. So, we are excited about it. We are now curating it better in their store on end caps and the drive aisles, on the furniture pad putting those types of items right out front and center.
Our customer value index continues to improve as we do this. It is giving us more content to message to our customer segmentation that has been much refined by our great marketing team, and so we feel like we will just keep building on this. And it is one of the reasons why our margin is improving too. As we have these comp value items and a gross penetration in our box, back to Jonathan’s earlier answer to your question, it gives us less reason to have to mark down, and so we are becoming well known to be a place she can trust for extreme value all the time.
Brad Thomas: That’s very helpful. Thank you, Bruce, and good luck this holiday season.
Operator: Our next questions are from the line of Kate McShane with Goldman Sachs.
Kate McShane: Hi, thank you. Good morning, and thanks, for taking my questions. We wondered if you could talk a little bit about the cadence of the quarter, what the comps were by month, how you saw traffic progress, and how you’re thinking about traffic specifically for the fourth quarter.
Bruce Thorn: Yes, hi Kate. This is Bruce, and I’m sure Jonathan will add a lot more color, but we’re pleased to see the comps in Q3, get sequentially better from August through October. And what’s more is through November that continue to sequentially improve and traffic as well. So, we’re pleased with the things we’re doing. Where momentum is going in the right direction. Our five key actions are working. The team’s rowing together very nicely, and the customer’s responding to the value assortment we’re providing.
Jonathan Ramsden: Yes, I think you covered it, Bruce.
Kate McShane : And then we wanted to follow up with the second question with regards to furniture. You mentioned you’re lapping the closure of the furniture manufacturer, but we were wondering if furniture inventories are back to normalized levels and if not, when will they return to normalized levels? And can you talk to that big-ticket discretionary demand, and if you have seen any kind of stabilization within furniture for the bigger ticket.
Jonathan Ramsden : Okay. Maybe I’ll take the first piece, and then I think, Bruce will come in. So, in terms of furniture, yes, both in terms of the level of furniture inventory and the assortment, we feel much better than we felt for a long time. We’re already pretty much back to where we would like to be, and that’s important coming into the fourth quarter, because as we just laid the closure of United, furniture and that didn’t have an immediate impact, but by the time we got into January of last fiscal year, we’re starting to have a pretty significant impact, which then continued certainly into Q1 and Q2 and really only now have we kind of fully mitigated that. So that will be a tailwind for us, particularly as we get to January.
But even prior to that, we feel much better about our furniture assortment than we have for a while, and the level of inventory is appropriate. And we started to see some good momentum improvement in furniture as we referenced in the prepared remarks.
Bruce Thorn : And I’ll just add that having Broyhill back is great. Going into fourth quarter, 75% of Broyhill upholstery was new. We had strong promotional support for the new Broyhill campaign in Q3 that resonated well, gave us strength into Q4 to just state it. We had seven core collections and six modern collections and new styles coming in late in the fall. It’s just been a great thing to have it come back. And like I said earlier, just having the opening price points in a strong good position and a better — and strong, better and best position in furniture is starting to resonate with our customers. We’re starting to see some nice upticks in that regard.
Operator: Our next questions come from the line of Peter Keith with Piper Sandler. Please proceed with your question.
Peter Keith : Hi, good morning, everyone. Just looking at Project Springboard, you’ve got the a $100 million of cost takeouts and SG&A that are complete. I guess I was hoping you could talk a bit more about the additional cost takeouts that are more cogs and gross margin-focused. Are there any early signs of success there, because those seem a bit more operational in nature?
Jonathan Ramsden : Yes. Hey Peter, I’ll jump in on that one. So, there are really two separate things. There’s the hundred million dollars plus of SG&A savings we generated in 2023, which as you noted is complete. We’ve come in above that number, are going to come in above that number. And we’re really pleased with the results of those efforts. You’ve seen now showing up in our SG&A which was, down mid-single digits in each of Q2 and Q3, we guided to down, low single digits in Q4, but don’t forget there’s an extra week of expense in there as well as, full quarter of the sale-leaseback expense. So, on an underlying basis in Q4, SG&A is going to be down, and more like high single digits. So, we feel really good about that, the progress we’ve made.
And the important point is Project Springboard is then completely on top of all of that. So, we are expecting a further $200 million of benefit from Project Springboard. We have got some of that in Q3 and Q4, probably about $20 million between the two quarters. Mainly factor into SG&A but some of it getting into gross margin. And then as we talked about in the script, the $200 million is about 40% cogs, 40% other gross margin impacts, and about 20% SG&A. And we expect to realize a majority of that in fiscal 2024. There’s a couple hundred different initiatives. It’s, there are many individual work streams there, I won’t go into detail on them, but there are many different initiatives. We’ve worked closely with an external partner as and we’re really happy about the progress we’re making.
Still a lot of work to do, but we’ve already approved a significant number of projects that, go a long way towards hitting that goal of a majority of the 200 million, hitting 2024.
