Jason Haas: Got it. That’s great to hear. And can you just remind us how the business performed through the last recession in ’08, ’09 period? And just curious going forward assuming your — the low income customer remains under some pressure. To what extent do you expect to see some trade down and could that be potentially a greater benefit going forward?
John Swygert: Yes, going back to the 2008, 2009 period, obviously, it’s a long time ago, I think was very different than it is today. But we obviously experienced about an 8% comp store sales in 2009, which was very strong. But customers responded to the deals we had in the pipeline and what we offered to the customer. And they were under significant financial pressure. This one I think is a little different, people have had a lot of time at home. They’ve not spent as much money as they had previously and also they didn’t — we haven’t had a real shock to the financial system like we had in 2008, 2009, but there’s obviously the inflationary pressures are going to put continued pressure on folks at the lower income and middle income ranges. And I think the — this the annualization of the heating bills and whatnot are going to create pressure there. So we should see some favorableness come back to us.
Eric van der Valk: Jason? It’s Eric, I’ll just jump in on trade down. We’re seeing a similar trend in Q3, similar to Q2. We’re encouraged that the customer, the higher income customer is trading down. we’re continuing to see the lower income, fixed income consumers trade out. It’s still a marginal benefit to us, similar to Q2, so slightly favorable. So hopefully that trend continues, we see stabilization of that fixed lower income consumer and the continued trade down of the higher income consumer moving forward.
Jason Haas: Sounds good. Thank you.
John Swygert: Thanks, Jason.
Operator: Our next question comes from Edward Kelly with Wells Fargo. Your line is open.
Edward Kelly: Yes. Hi guys. Good morning.
John Swygert: Hey Ed.
Edward Kelly: John, you mentioned — a couple of things for you. Q4 gross margin guidance came down. Can you maybe just provide a bit more color on that? And then you mentioned in response to another question that the 2023 gross margin people lower and you’d like it to be. Could you provide more color there as well and sort of how we should be thinking about it? I guess the whole thing right is that and you’re buying product, what I would expect to be at a very good rate, but yet there is still margin pressure. So maybe could you just wrap it all together for us as you sort of think about those two items in Q4 and 23?
John Swygert: Yes, Ed. Obviously, we’re coming off of Q2, which was probably the lowest margin we’ve ever delivered to the street at a 31% in change, which was severely disappointing. So we obviously had said we expected to be at close to 39.4% for this quarter and we delivered that number. So we’ve done a lot of work to get back to where we think we should be. The Q4 slight change on the margins really related to deleveraging with the pull back on the sales from our last guide from a 3% to 5% down to 0% to 2%. So that’s just leverage — the deleveraging of supply chain costs that we have to deal with for that quarter, which is temporary, it will come back to us. With regards to 2023, we are seeing great deal flow. I do think we have some opportunity in the margin, but I don’t want to get ahead of ourselves and set ourselves up for disappointment we’re going some nice improvement in the margin for ’23 versus ’22.
I don’t think we’re going to see — I’d love to see a 40% then if I can get it, I’m going to get it and deliver it, but I’m probably closer to let’s call it a 39% right now with regards to full-year 2023. I want to get a little more time under our belt to see how the supply chain costs shake out here in Q4. And if we think we can do better than the 39%, we will definitely give you a better guide in the upcoming call in March, but I don’t think you’re looking at a 36%, 37%, I think we’ll be closer to 40% than not.
Edward Kelly: Okay. And then just another bigger picture question for you, you’re getting great deals today, your flyer is robust. The question is though is that consumers don’t really seem to be responding in a way that historically, we would have expected, I guess. Why do you think that is the case? And what does that mean even for next year?
John Swygert: Yes, I think the consumers are responding Ed, obviously the number one department we have lawn & garden, so that’s a total discretionary department and consumers responded pretty well to that hardware, as well as discretionary and they responded pretty well to that. So I think they’re responding, I just think that we’re operating in a highly inflationary environment as we continue to say it’s an uncertain environment. It’s a very promotional environment, so everyone’s fighting for everyone’s dollars. So I think that am I disappointing that we didn’t keep our 3.5% comp going in the quarter?
Edward Kelly: Yes.
John Swygert: But we had some weather that impacted us that we know was not something structurally wrong with the business. And the cold weather is going to come. We’ll get those sales back. So we feel like we’re well positioned and we’re continuing to move forward. And I think we’re getting back to a more stable operating environment and the companies on the right track and continuing to deliver increased earnings to the shareholders.
Edward Kelly: Okay. Thanks, guys.
John Swygert: Thanks, Ed.
Operator: Our next question comes from Jeremy Hamblin with Craig-Hallum. Your line is open.
