Mauricio Serna: Got it. Thank you very much.
Operator: The next question comes from Will Gaertner with Wells Fargo. Please proceed.
Will Gaertner: Hey, guys, thanks for taking my question. First, just on China, I mean, it’s been strong this quarter. How do you see the growth going forward and what are you seeing on the ground there? And can you just remind us how big China is now for you guys?
Chris Waldeck: Hey, Will, it’s Chris. I’ll take that one for you. The Chinese economy is as well documented all across. It’s been opened. It’s been closed. It’s been opened – and, I think, well, everyone was optimistic about the opening in 2023, we saw that it’s still pretty choppy for that Chinese consumer and the challenges are there. Again, we’re really bullish about that market. I think what’s super encouraging is just the investment that we’re making in that market behind our retail stores over the next 2 years is really going to be impactful. There’s a lot of those stores that we frankly haven’t touched for a few years. And to get in to refresh those stores and to really excite the consumer and also to give us a really a solid platform for these innovations that we have coming to the market and bringing those to life for the consumer in a really powerful way, I think it’s going to be a huge unlock for us.
So excited about the long-term proposition with China and our business will continue to grow there as that economy gains momentum, which we all know that it will.
Will Gaertner: That’s great. And, Joe, maybe for you, inventory. So sounds like you guys are going to continue to cut inventory. Is that going to be, I guess, what is your expectation of when you’re going to be in a clean inventory position? And the cuts that you’re talking about in the first quarter, is that going to pressure gross margin?
Joe Alkire: Yeah, so everything we have contemplated from an inventory standpoint is captured in the gross margin outlook we gave for 2024. We’ve clearly made a lot of progress on the inventory over the last year. The teams have worked really, really hard. But exiting 2024, we still have about 130 days of forward inventory. And we would say, normal for us is plus or minus 100 days. So we’re not there yet, we still have work to do. We’re really confident in the glide path, but as we continue to optimize, the inventory and work that down to what would be more steady state, that’s going to continue to contribute to the cash generation of the business along with the profitability improvement.
Will Gaertner: Great. I’ll pass it on. Thank you.
Operator: Thank you. At this time, I would like to turn the floor back over to Scott Baxter for closing comments.
Scott Baxter: Just a quick thank you to everyone for participating on the call today. We’ll look forward to reaching out and speaking with you again here upcoming after the first quarter. Have a great day and a great week. Thanks again, everyone. Take care.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation. Have a great day.
