Ryan Merkel: Got it. That’s helpful. Appreciate that. And then it was good to hear that the inventory is rightsized. Can you just talk about the early buy, would you call that normal, are you being aggressive and how does that impact gross margins in the first half of next year?
Peter Arvan: I would say that our early buys, Ryan, we are going to participate in early buys as is normal, because now we have created the headroom in the inventory where we can participate. So that certainly helps, and as does the price increases, that will be rolling out effectively next month. So for the first half of the year, I mean, remember, our gross margin, as Melanie said, our gross margins are not consistent quarter-to-quarter. They vary from quarter-to-quarter. So they are generally higher peak in the — towards the middle of the season and then they come down. What I would also say is, I would draw your attention to the comment Melanie made about gross margins and the inventory drawdown. When you draw down inventory like we did and you are buying less product like we are that’s also going to impact volume related incentives.
So we don’t anticipate inventories dropping significantly from where we are, therefore we would expect volume incentives to be more in line with what we would see traditionally. But again, very early. I can tell you, from a macro perspective, we will be participating in early buys, but we will give you guidance on how that should flow through the P&L when we initiate guidance next year.
Ryan Merkel: Got it. Thanks, Pete. I will pass it on.
Operator: Our next question comes from Susan Maklari with Goldman Sachs. Please go ahead.
Susan Maklari: Thank you. Good morning, everyone. My first question…
Melanie Hart: Good morning.
Peter Arvan: Good morning.
Susan Maklari: Good morning. Can you talk a bit about the competitive landscape now that we are sort of through the bulk of the pool season? How you are thinking about the different dynamics on the ground, your ability to react to those and any thoughts on the setup as we think about next year?
Peter Arvan: Yeah. Thanks, Susan. Good question. The competitive environment today is really no different than it would have been in a similar year in the past. Meaning that it is a — volumes are down this year. So when we have competitors that and we believe that we have taken share this year, so we have competitors that are probably in rougher shape than we are. But that’s nothing new. We have taken share virtually every year that we have been in existence. We will continue to do that going forward. Now what does that mean for competitive actions? There’s times when we have competitors that do some things that are pretty desperate and when that happens, we have to react. The good news is, is that none of those things have really any staying power.
So might we have to react to a certain inventory position that somebody has that they are trying to liquidate, yes. Is there any material amount that makes that sustainable? No. So it’s — the competitive dynamics today really are in terms of what competitors do in this environment are no different than they have been. I would tell you that we are stronger today than we have ever been. We have more locations. We are opening up more locations. We have more locations already. We are opening more locations than anybody else too and really it comes down to our relentless focus on the customer experience that I think allows us to win.
Susan Maklari: Okay. That’s helpful. And then any thoughts on capital allocation, perhaps, your willingness to step up on the buybacks, just given the improvement you made in the inventories and the cash flows that we saw during the quarter as we think about the full year here and any other sort of thoughts around some of the strategic initiatives and investments there?
