Greg Sanders: Yeah, Andrew. Thanks for the question. On the guidance itself in terms of revenue, we are forecasting that we will retain some of the revenue from the closures. Of course, we closed or consolidated 14 locations in 2023 and three more this year. So it’s a handful of locations that we’ve closed where we do believe we can generally retain the revenue from the larger customers, certainly, when we go through a consolidation. Our aim is to retain the top 50 customers of that location. And you can imagine we’re not closing the best-in-breed locations in our portfolio. We’re usually consolidating the smaller ones into a larger footprint store. So within that, we do believe that at some point this year we will turn positive on the same store sales comps. And we feel very comfortable with guidance, coming in at that 205 to 215 range as we look at 2024.
Andrew Carter: And just to be clear, does guidance include MMI, number one, I assume it does. And then the second part of it is, I guess I want to better understand the rationale of getting, of kind of selling this business. Is it, does it just not fit with the rest of the portfolio? Are there inventory requirements above and beyond? Is it just getting a nice mark? I believe you bought it for $9 million, if I’m not mistaken, and it’s tripled. Anything you can help us out with there?
Darren Lampert: Andrew, I think there’s many different reasons right now. And the one thing you have to understand is, we’re seeking to monetize the asset, doesn’t mean that we’re going to. A large majority of the sales from MMI is in typical retail, not the agricultural side of it. As the agricultural side for benching and racking has been extremely weak during the last couple of years because it’s a build out product. So right now, we’re trying to maximize value on this asset. And if we can, we’re a seller. If not, we will keep it. So right now, we have other alternatives where we can use other companies that we do business with for their vertical racking and benching. So we do believe that MMI is a wonderful company. It’s got many years of growth to it, but it’s not in the gardening and hydroponic space.
So it was bought for the hydroponic and gardening space, and we built up the other side of the business, but it’s probably 90% of our business is into typical retail, rebuilding, back of warehouses. And again, for the right price we’re a seller and if not we will keep it.
Andrew Carter: Thanks, I’ll pass it on.
Operator: Thank you. Your next question is from Aaron Grey from Allianz Global Partners. Please ask your question.
Aaron Grey: Hi. Good evening, and thank you for the questions here. Just one from a couple of mine have already been answered. I think it’s been touched on more specifically, but in terms of the broader market, you talked about your own consolidation of some of your stores. I can speak to what you’re seeing more in the broader marketplace. I know it’s tough for a lot of people have you seen an acceleration in terms of folks closing? Are people still trying to hang on in hopes of rescheduling, driving illegal in terms of CapEx spend by some of the operators? So, just in terms of what you’re seeing in terms of broader environment, will be helpful? Thanks.
Darren Lampert: I think, Aaron, you’re still seeing the wild west out there. You’re seeing manufacturers, distributors selling to whoever they can sell to. You’re seeing stores discounting right and left. You’re seeing people closing. So, , the industry still isn’t disarrayed. You’re still seeing tremendous amount of discounting people selling for under wholesale trying to hang on. But you’re also on the other side of seeing, stores closing around the country, also the smaller stores, they can’t service the larger customers. But like anything else, when business is slow and people aren’t making money, they do whatever they can to try to make a buck. But we still are the leader in the space that we’re in. We believe that our private label brands are growing.
They are growing and people are shopping at GrowGen every day. And even with the 17 store closures that you store out at GrowGen right now, we still believe that we will have enough revenue, hopefully a strong year to build on and to start really regaining the 2020 to 2023 mantra that we want to add. We do believe that you’ll see state and store sales positive this year. We’re seeing some strengths in some stores around the country, but even more exciting, we’re seeing much more quoting coming out of our commercial team right now. We believe commercial sales will be up tremendously this year. So we’re pretty positive right now. And I know you haven’t heard it from some of our peers, but GrowGen is certainly seeing business coming back to the stores.
We’re seeing quoting go to sale. And we do believe that you will see a great second half from GrowGen as we start going into a seasonal stronger period.
Aaron Grey: Okay. Great. Thanks for the color. Then I’m going to jump back in queue.
Operator: Thank you. [Operator Instructions] Your next question is from Mark Smith from Lake Street Capital Market. Please ask your question.
Mark Smith: Hi, guys. First looking at a gross margin, any inflationary pressure or cost easing to call out, especially, as we look even at labor in California or anything that’s really moving the needle one way or the other on gross profit margin?
