Scott Sekella: Correct. And then the product cost savings will need to flow through the P&L, but I’ll get that cash flow impact this year as we buy those goods and ultimately sell them next year.
Laura Champine: Got it. So in your view, does that alleviate the need for you to raise additional capital this year?
Scott Sekella: Yes. I think the FILO was a proactive measure. So I’m not anticipating any additional capital raises.
Wade Miquelon: With the FILO is as we become more efficient in inventory management and as our in-transit goes down, it allows us to be even more efficient. We can’t avail as much of our ABL at one time. So the FILO really fills that gap. So even as we work to delever this year, that just gives us the availability that we would otherwise have on the inventory.
Laura Champine: And just lastly, can you give us an estimate of what your interest expense is likely to be on the P&L this year?
Scott Sekella: Yes. I mean it’s definitely going to be up because, one, you got the FILO piece in there and where rates are trending. So I’d probably expect it to be up around $100 million which is probably up around $40 million or so.
Laura Champine: Got it.
Wade Miquelon: That would assume that we’ve had that recent raise and maybe one more, but we aren’t assuming any pullback in the back end of the year. But we also have fixed and floating swaps. So we’ll start getting this benefit in the back half of the year that we entered into.
Scott Sekella: Those will more materially impact us in fiscal ’25.
Laura Champine: Got it. Thank you.
Operator: Our next question will come from Joe Feldman with Telsey Advisory Group. You may now go ahead.
Joe Feldman: Hi. Good afternoon, guys. I think you made a statement, Wade, about customer engagement and reactivating. If I heard you right, you said 2 million to 3 million customers. And I just wanted to dig in there, if you could share a little more about how you did that and how you got people back in and how you stimulated them to come back to the store?
Wade Miquelon: I’ll let our Chief Customer Officer, Chris, handle that one here.
Chris DiTullio: Hi, Joe. Yes, we’re pretty excited about the trends we’re seeing. We’re seeing customers reengage in our core sewing, our core craft categories. And I think Wade mentioned in his comments, young sewers, in particular, which is really exciting for us. We’ve been able to use a number of more sophisticated digital marketing tactics to reach these younger customers as we’ve been able to shift our budgets out of traditional print and into more digital and CRM over time. So we’re seeing the benefits of that being able to reach more people with less spend.
Joe Feldman: Got it. That’s helpful. Thanks. And this may be for you as well, but are you seeing any trade down within category like that would reflect the environment like maybe people are reengaging, but they’re reengaging at a lower price point or opting for lower-quality goods?
Christ DiTullio: So we’re not seeing trade down. As we measure the performance of our different categories, we’re seeing a very consistent average unit retail and a very consistent average ticket of a purchase. What impacted our business last year, I would say, was a brief dip in frequency versus a dip in how much people spend when they come in. And we saw that frequency blip begin to turn positive for us later in the quarter and early trends this year are encouraging.
