So said a different way, what’s not in is we’re not assuming improvements in macro trends. We’re not assuming weather improvements, and we’re not assuming any change in the normal flow-through from sales.
Lorraine Hutchinson: Thank you. And then…
Joan Hilson: I was just going to add on the low end of guidance. It allows for softening trends, a softer macro economy or slower recovery engagements might occur and modest higher student loan repayment impact. So just a little bit of modest impact related to that in the low end of our guidance. Sorry, Lorraine, go ahead with your next question.
Lorraine Hutchinson: Thank you. Joan, I was just hoping you could talk us through your priorities for cash flow as you enter the back half.
Joan Hilson: So as cash flow in the back half, we’ve talked about the strategic investments that we’re making, and there’s roughly $75 million of those throughout the year, but we’re committed to advancing our strategic priorities. Our intention is to continue with returning capital to shareholders. We announced today our dividend, which is 15% higher than last year this time. And we’ll continue to manage our inventories consistent with the advancements that we’ve made with digital — with our analytics capabilities. And what’s really important about the inventory management is in my remarks, we were 4% down to last year, 8% down, excluding acquisitions, our inventory is healthy, and it’s a true strength for us. And so when we look at this, Lorraine, to previous pre-pandemic levels, we’re 20% down overall, but 50% down in clearance.
Why that’s important to our cash flow is that is enabling us to bring in newness that we’re excited about. Gina mentioned a number of those ideas within her prepared remarks. So continuing to manage inventory diligently, leveraging analytics, inventory right place, right time, and continuing to manage churn effectively.
Lorraine Hutchinson: Thank you.
Operator: Thank you. Your next question comes from the line of Paul Lejuez from Citi. Please go ahead.
Brandon Cheatham: Hey, everyone. It’s Brandon Cheatham on for Paul. I just want to circle back on like the credit question. Are you seeing any difference in approval rates? I understand that you probably have an agreement that a certain FICO score has to get approved. But are you seeing differences in like the customers that are purchasing on credit? Is there any kind of difference in like the FICO score that they have? And then the amount of customers that are using credit to make purchases, can you give us any details where that is now compared to pre-pandemic, I think during the pandemic that came down, but are you seeing that starting to normalize?
Joan Hilson: Thanks, Brandon. With respect to the private label credit card program, as I mentioned, our penetration rate is 39%, and it’s really relatively consistent to the prior year, lower than pre-pandemic, we saw a shift in customer usage. Pre-pandemic, it was above 50%. And so we’ve seen that shift, but that’s been relatively consistent over the last couple of years. What we are seeing is that approval rates are consistent in-store but down related to the ability to apply for credit online. So it’s really just a shift in channel, but our core 80% of our business in store is relatively consistent with respect to approval rates. What we are also seeing is that the average amount financed has increased to last year, which really is in sync with our average transaction value, including our Blue Nile acquisition is up over the prior year.
So amount financed is — continues to be strong for us. So we’re very pleased with the credit portfolio and the work that we’re doing to continue to offer a wide variety of options for our customers.
Gina Drosos: Yeah. The only thing I’d add is that we do have two financing alternatives that are not FICO dependent. That’s progressive leasing and our installment loans kind of pay later split pay with the firm. And those are really catching hold. So I think the way that Joan’s team has built this cascade of financing alternatives is working in our favor.
