Brad Thomas: Quite that far. Going through the great financial crisis, but not quite that far. Yes.
Farooq Kathwari: Okay, you’re still young. All right.
Brad Thomas: That’s right.
Farooq Kathwari: All right, Darryl, please go ahead.
Operator: Thank you. Our next questions come from the line of Cristina Fernández with Telsey Advisory Group. Please proceed with your question.
Farooq Kathwari: Hello Cristina, how are you?
Cristina Fernández: Hi, I’m doing good. Good afternoon. I wanted to follow up on Brad’s question around demand. Can you comment on, I guess, how volatile are these trends? Are you seeing like similar trends from week-to-week or month-to-month? Or is there a lot of volatility in the market? And I was also curious what you’re seeing in ticket versus traffic, are — is ticket outpacing traffic?
Farooq Kathwari: Yes, it’s a good question. It’s an interesting time we are living in, that this past — this summer, we have seen the impact of people going on vacations, not staying in their home, quite different than a year back. So, I think what we’re seeing — I think if we look at it, we have seen more of an impact this summer of people doing other things. And also the fact remains that a lot of people did buy products for their home. So, I would say that our perspective is that as this summer time ends that people will — we expect people to go back to the normal levels of coming into our design centers, perhaps not as high as we saw in the last three years. But I would say that our expectation is we should do better in traffic than we did in the pre-COVID area.
Cristina Fernández: And then I had another question on the — also on the gross margin, how much of a benefit are you seeing from input costs, whether it’s transportation, freight and raw materials year-over-year?
Farooq Kathwari: Yes, I mean, the — our gross margins and operating margins are both — two important areas, which are impacted both by the impact of freight coming in, our — and also the delivery of our products. Keep in mind, as I mentioned, that we deliver our products at one price throughout the United States and also throughout Canada. So, in the last three years, the transportation cost of delivery in the United States was extremely high. The cost of delivery of a container, let us say, from Indonesia or East Asia to the United States had gone from $3,000 to $30,000. It’s come back. Our costs in the United States were also very high at the retail level because of the domestic transportation. Our cost of sending a trailer from east to the west had tripled, it’s coming back to the normal levels.
To answer your question, I think that we are having a positive impact on our margins both as a retail and at the manufacturing level due to reduction of costs. Also, our — we are a manufacturer. Lumber costs have gone up very, very high. Then I’ll come back to the pre-COVID levels. So, on one hand, we are going to be impacted with the impact of somewhat lower deliveries. But on the other hand, we are benefiting from the lowering of the costs, whether it is of raw materials or freight. Both to our manufacturing and to our retail because as you — part — a lot of our freight goes into our operating expenses; some it goes to our cost of goods that portion that goes into our manufacturing side.
Cristina Fernández: That’s helpful color. Thank you. And then the last question I had was on the store refreshes, how many have you done so far? I know you did the Danbury store at your headquarters. And those that have been completed, how are they performing relative to the rest of the chain and the ones that have not been touched?
