Zac Coughlin: Yes, the year continues to shape up nearly exactly as we had planned really across all dimensions from there. So the small sort of puts and takes on the business. But — so that’s leading us with significant confidence. And I think if we take a look at the second half, really gaining confidence in our ability to drive the continued profitability improvements that we’ve got committed. On the increase side of things, two important impacts. One is on the share buybacks. And I think it’s really important to comment on the value of that inventory improvement we’re seeing that frees up working capital to turn around and invest in either other elements of the PVH+ Plan to drive growth or as we saw with the announcement we made on the share buybacks, a significant increase from $200 million to $400 million full year, including $200 million of share buybacks in the second quarter alone.
And so as you mentioned, some of that work around inventory and of the plans, what that does is it frees up capital there to return back to shareholders. And the other half of that is the tax improvement from 24% to 22%. That increasing as well representing the rest of the increase as we continue to work a tax rate down as we committed to over the prior year. So I think overall, we feel great about where the operating business is coming in and what that sort of certainty is allowing us is to free up the capacity to return cash back to shareholders via the share buyback and that’s what’s leading to the increase.
Stefan Larsson: Operator, we have time for one more question.
Operator: Thank you, sir. That question will come from Brooke Roach with Goldman Sachs.
Brooke Roach: Good morning and thank you very much for taking our question. Stefan, I was hoping that you could elaborate a bit more on the outlook that you see for AUR and pricing opportunity as you balance the brand and product investments you’re making as you develop a PVH+ Plan? And then secondly, Zac, can you remind us the opportunities that you see ahead to recapture some of the outsized promotions that you saw last holiday as you move into this holiday season? Thank you.
Stefan Larsson: Thanks, Brooke. So on the AUR side, it’s exciting to see because I spend a lot of my time in product category, work and product category reviews and looking at product development and the pricing opportunity. So we have a significant AUR opportunity over time leaning into the category offense. And every time we lean into a category, every time we develop the best hero products in the market better than our competition, we see an opportunity to sell through at a higher AUR. So very encouraged early days still. And that is something that over time, we just continue to create better product value for the consumer.
Zac Coughlin: Yes and I think on the promotion side, Brooke, we, of course, will continue to participate actively competing to win in the marketplace of where this is. But one of the reasons why we’re so excited about where the inventory levels are today and will continue to improve throughout the back half of the year is that, that’s going to allow us to make sure that we’re able to, ourselves practically make those choices. And I think we can think about annualizing what last year holiday season was. There was a lot of things in the industry on the other side of this. We will have the chance to choose where to participate or not. And so we would expect to see gross margin improvement versus last year because of that strength of getting our inventories into the spot. We feel great about them heading into the back half of the year.
Stefan Larsson: Thanks, Zac, and just to —
Brooke Roach: Thank you very much.
Stefan Larsson: Thank you, Brooke, and just to wrap up. So what we have is Tommy and Calvin, two unique absolutely unique and globally iconic brands. And what the PVH+ Plan is all about is us leaning into the DNA of each of these brands and drive brand desirability in product, marketing, marketplace and then at the same time, build out that underlying growth engine business engine that enabled us to build the brand and drive growth in an increasingly systematic repeatable way. So the real strength and the real value will come from the compounded effect of us doing this quarter after quarter, month after month, week after week like consistent in direction, consistent in focus and just relentless in step by step by step. So thank you for being on this journey with us and have a great week everyone.
Operator: This concludes the PVH Second Quarter 2023 Earnings Conference Call. You may disconnect your line at this time and have a wonderful day.
