Marlo Cormier: Thanks, Denise. Yes, in terms of our store optimization, just as a reminder, we spent the good part of a year really piloting and studying our closure model. And so as we analyze customer behavior, monitored recapture rates, we are pretty confident as we went into this closure plan. And so we did do our significant closures in the early part of December. So it is early days, but so far, it’s tracking. According to plan, we are recapturing at rates consistent with what we planned. It’s early days. But we are pleased with those initial results and very pleased with the smooth execution of the program. That was really limited disruption and a good delivering everything that we expected so far.
Oliver Chen: Great hearing about all the innovation. Best regards.
Operator: And next, we can go to the line of Olivia Tong with Raymond James.
Olivia Tong: First, I wanted to ask you on your long-term growth outlook. If you could remind us what gets you from close single-digit comp to low to mid-single-digit sales, particularly — and sort of timing around that, particularly after part and parcel with that, the store closures. Could you just talk a little bit about some of the timing and cadence of store closures for the year where you think you need to go to longer term?
Denise Paulonis: Sure. Let me start there. So when we think about the store closures for this year, they are largely complete. As Marlo indicated, 350 stores were in the closure plan and the vast majority of those were completed late in December. So that is, for the most part, behind us, and we’re moving forward and excited about the recapture rate that we’re seeing with our customers there. When we think about the broader path and what we’re working on with our newer initiatives, and as we’re going to build to our long-term algorithm, let me talk a little bit about it broken out into the years and how we see it evolving. So when we’re talking about 2023, we’ve been focused on growing our own brands, which includes Ion, Strawberry Leopard, and bondbar, our newest launch, just to name a few of those, rebuilding our nail category and our care category, driving growth there as well.
Doubling our Regis business, we were very excited to pick up that business last year. It is fully onboarded at this point. And as we wrap around from last year, the opportunity we have there to double the business as well as take us as a learning to see where we have opportunity with additional chain customers. Finally, with the store organization and DC consolidation complete, that’s going to improve our operating profit performance. As we move later into 2023, we’ve talked about our stylist platform with SalonHQ and our virtual color expert experience. Both of those, we expect late in the year to start to ramp in terms of impact. And the stylist platform right now is in pilot in only one region today. So early on, but we’re encouraged by our stylist response and continuing to grow that out.
When you look into 2024, we do anticipate acceleration on a number of fronts. That includes own brands. It includes the stylist platform, which we hope will be in the process of expanding in the U.S. and then tailwinds from our e-commerce channel and the virtual color expert. Our Studio by Sally initiative, we’re excited that we’re on track to get about updated this year to that new format, including a store here in the Dallas area later in Q2. And that — but that’s really going to impact us longer term. So we expect that to be a pilot this year into next year. And the hope would be if it’s looking positive, we’d expand that to support later in 2024 and into 2025. So hopefully, that gives you a shape of what we’re working on. It all comes back to customer centricity, driving the business through innovation as well as own brands to really respond to what our customers want and need.
