Operator: The next question is from Paul Lejuez with Citi.
Paul Lejuez : Can you talk about store comps? How it shook out from a traffic versus ticket perspective? And I guess the same question for e-com. And then I’m curious if you can share any early thoughts on store growth for ’24 specifically, how are you thinking about China?
Meghan Frank: Paul, so in terms of KPIs in stores and e-com, we saw similar to the start of the year, very strong traffic performance, so up 20% plus in both channels. With that traffic, we’re still pleased with the absolute conversion but seeing a little bit of a comp decrease in terms of conversion and then relatively stable basket size. We haven’t shared any specifics. Obviously, we’ll do that at the end of the quarter in terms of store growth for ’24, but we remain committed overall to our store growth target in the low double digits.
Paul Lejuez : Can you talk about the in-store productivity in China in this year across?
Calvin McDonald: The stores in China continue to exceed their pro forma and plan as we open. So we’re pleased with both the new stores we’re opening. They are beating pro forma, both on a total revenue perspective, obviously, on a dollar per square foot, and that’s across Tier 1, Tier 2, Tier 3 cities, which we continue to test into. We went back and optimized and continue to see opportunity, as Meghan alluded to, predominantly in Shanghai and Beijing to go back in and start optimizing and collating some of our locations. We did our Kerry Center store in Shanghai, and the results have been very, very strong. So we know that our business there is growing. And in a lot of these locations, we’ve hit that productivity level where it’s time to go back and invest and expand the assortment and continue to drive the overall results in those stores.
But the openings of these new stores continue to sort of exceed and beat plan, which is very encouraging and excited to see the ability to go back and optimize some of the locations.
Operator: The next question is from Michael Binetti with Evercore ISI.
Michael Binetti: Congrats on a great quarter. I just want to go back, I know you spoke to North America high single digits in the fourth quarter. I know you said that — Calvin, you later mentioned that trends are accelerating nicely with some newness in October. I guess you did tell us that the fourth quarter deceleration baked into the guidance is maybe just being prudent against the macro you’re seeing here. But it’s a little bit below the Power of Three algorithm that you gave us. Is there any reason that North America wouldn’t be at that low double-digit algorithm you gave us in 2024. Is it conservative and contained to the fourth quarter? And then I’m curious if there’s anything you’re seeing in the business today on the competitive set to inform you as to whether you may or may not see the consumer break towards some of those value purchases that you saw right before the holiday last year.
Meghan Frank: Thanks. So right at this point in time, we’re guiding to 13% to 14% for Q4. I’m just being mindful of the proportion of the quarter that’s in front of us. We were really pleased with our Q3 performance in North America despite some macro challenges in North American market, still picking up share, still growing at 12%, so in line with Power of Three target. We remain committed to that, I would say, for the year and as we move forward and managing from a portfolio approach perspective, any near-term pressures, but I think appropriate and prudent, given where we are in the quarter at this point.
Calvin McDonald: And Michael, I’ll just chat a little bit about the competitiveness and the guest behavior. We have not seen a dramatic shift as it relates to our product and our assortment. I’ve mentioned the men’s behavior from a macro perspective within the category within North America. But within our assortment, our guests, we continue to see very healthy full price, continue to see very healthy reaction to newness and innovation. I think those are both very positive signs that indicate if the guest is trading down to value, they are equally trading up or holding onto purchases that I think play to the strength of our product, which is versatility, quality and innovation. When you purchase our product, you get multiple wear occasions, multiple uses out of it.
That’s the versatility and the quality and the innovation behind it still is resonating. And he and she is still responding very well to the newness that we drop, be it the new franchises and men’s, which we’re chasing into far exceeded our expectations, launch of new initiatives like Wundermost or just how we are assembling and bringing product of our core, be it through our winter whites or other initiatives, responding very well. So encouraged, we’ll continue to monitor and be an agile, but not seeing a behavioral shift within our assortment mix with our guests.
Operator: Next question is from Dana Telsey with Telsey Group.
Dana Telsey : When you think about the market share and obviously, your market share opportunities, Calvin and you’re continuing to gain market share, are there new players who you see that you’re taking market share from and that you see opportunity moving forward? And then is there a different market share opportunities in different areas of the world that you see? And then just lastly, when you think about categories and outerwear, which has been a focus — how is that category performing? And how is it contributing to AUR?
Calvin McDonald: All right. Thanks, Dana. In terms of market share gains, by the very nature of where we are in our product innovation and creation and unneeded awareness, we really do continue to grow across both men’s and women’s across all categories in all markets, including North America and especially internationally. Now market share data internationally in certain markets, it’s harder to get than in North America, but our growth when we compare it to other peers that report, we know is definitely above and therefore, putting on both through our guest acquisition market share gains. So feel very encouraged by that continuation, the balanced nature of where we’re growing market share. A couple of call-outs. I don’t see any shift in change within men’s and women’s and the core strengths that the brand has, be it bottoms and in our performance activities.
And there are a lot of categories, as you mentioned, where we have below market share when I compare some of those strengths to us. Accessories is one good example. It’s a $110 billion global category. We have less than 1% share. And what we’re proving and continuing to see through newness and innovation is it’s more than just the everywhere Belt Bag. That is a core item that is resonated has and continues to perform incredibly well for us. But we’re building out a very solid bag business with a lot of opportunity of growth moving forward. And we think other players have 2% to 3% in that category. So we see that as being a nice contributor and driver of growth. And our other categories, be it lounge. And you mentioned outerwear, we have a very sizable outerwear business as we look across all, not just cold weather, but activity based, rain.
