Operator: Next question comes from Laurent Vasilescu with BNP Paribas. Please go ahead.
Laurent Vasilescu: Thank you, John. Thank you, David. Thank you very much for taking my question. I was curious to know, John, if you can maybe talk a little bit about what you’re seeing in domestic wholesale. I think 90 days ago, you talked about an inflection. Is that what you’re seeing in your channel in the U.S. wholesale marketplace?
John Vandemore: Well, I’d first point out that as we said last quarter, we expected this to be the toughest quarter for us from a domestic wholesale perspective. It’s actually less challenging than we had thought. We mentioned there were some orders that got pulled up, which we believe reflects the active sell-through that David mentioned on some of our core product that’s out in the marketplace. So in a way, what we’ve seen is a little bit of a shift into Q2 to benefit that, although 25% is not what we aspire to. It is certainly less challenging than what we would have expected. It does rebalance the backend of the year a little bit. Look, we’re optimistic that the continued consumer demand and active sell-through we’re seeing, you’re clearly seeing it in DTC.
You’re seeing it in certain accounts, on the domestic wholesale front will lead to an increased reorder pace. I would still say we believe Q2 was the most challenging and will have been the most challenging. In retrospect, I would only caveat to say that timing is something we’re seeing more movement on lately. So that could create a pocket here or there. But definitely, overall, pleased with how we came out of Q2. And we’re cautiously optimistic that things are starting to turn for the back half of the year, although again timing being what it is, we may see some shifts around, although nothing like that is currently anticipated in our guidance.
Laurent Vasilescu: Very helpful. And maybe can you talk about — the gross margin continues to be very impressive. I think, John, remind me, but I think freight was at least a 300 basis point headwind to last year’s gross margin. Did you start to see a little bit of freight become a benefit? And do you anticipate to recapture all of that freight over the next four quarters? Any color on that would be very helpful. Thank you.
John Vandemore: Well, I’d first reiterate the big benefit to gross margin was we were nearly 50% direct-to-consumer this quarter. So there was a rather significant mix benefit that you saw I think flow through into earnings, which is terrific. But also, the previously discussed changes to the domestic wholesale pricing, in particular, but also some international wholesale pricing that finally got annualized into the system. I’d say we are starting to see clearly in available rates, shipping come down. It didn’t materialize fully this quarter. I do think there was some pickup there. A bit of an offset though, because as we sell more of our comfort technology products, you do see a slightly increased cost per unit. Now we’re able to charge more for that.
We’re able to deliver more value to the consumer, so it offsets. So there’s a little bit of a masking effect in there. But what I would say is we continue to expect year-over-year improvement in the margin for the balance of the year. We’d like nothing better than that to be more about the shipping and the pricing than the mix because we’d love to see the domestic wholesale, in particular, catch back up to where we think it should be on a run rate basis. But we continue to foresee improvement in gross margins quarter-over-quarter, year-over-year so that Q3 will be better than last year, Q4 will be better than last year as well.
Laurent Vasilescu: Very helpful. Thank you very much and best of luck.
John Vandemore: Thanks, Laurent.
Operator: Next question comes from Gaby Carbone with Deutsche Bank. Please go ahead.
