And then you had some significant cost savings. I would expect, for the fourth quarter, we’ll still get mix benefit, and we’ll still get the cost savings kind of the international side of the pricing mechanic, again, we expect to give back. That should put us at a very healthy improvement year-over-year, but probably not quite as significant as we’ve seen in the last couple of years. Insofar as the domestic Wholesale market is concerned, as I mentioned, this quarter, we were actually up, I think, 0.3%. So we said flat, but we were being a little bit guarded there. Because we haven’t yet seen that trigger of accelerated deliveries coming out of many of the Wholesale accounts, some of whom are still cautiously watching the consumer spending market.
Our view is that our full year perspective hasn’t changed much. It’s up a little, but it’s not distinctly different. And if you remember coming into Q3, we said Q3 and Q4 would both be down. And that’s what we expect for Q4 now on the domestic Wholesale side. I would just caveat that we could see that change pretty quickly. We saw that in Q3. It’s why we were able to get to flat. So we’re not convinced yet that we’re going to be down in Q4, but that’s what we’re modeling because that’s what the bookings tell us at the moment. Again, if the lean inventory, if the good sell-through continues to hold, that’s certainly a distinct possibility. But for now, from a planning perspective, we don’t want to put too much of that into what we expect for the forecast.
Laurent Vasilescu: Very helpful. And then, John, maybe just — there’s always questions around SG&A. Love to hear about the economics of sponsoring key athletes like Harry Kane. Can you just make for the audience, just maybe walk through high level, how it works? And maybe — just maybe, David, if you could talk about the value proposition. Obviously, it’s a crowded field in global football and basketball. What do you think your value proposition will be going forward in these two categories?
John Vandemore: Yes. Insofar as our relationships with ambassadors, everyone is a little bit unique. I mean, clearly, it first has to be a relationship both parties are comfortable with. Just to David’s comments earlier, I mean, we don’t just go out and pay a big amount to get a big name. We’re looking for folks who are going to collaborate with us, particularly when we’re getting into a new category. So every one of the ambassadors that we’ve engaged for football, soccer, and really across the portfolio, is somebody we know is going to work well with the brand and with the team to help build the brand overall. It’s not just about getting the biggest name for the biggest dollar. Clearly, there are economics. Some are shared based on success of the output.
Some are fixed based on appearance levels, et cetera. So I would say the recent ambassadorships that we brought on board are a variety. Most importantly, we feel like they very much augment both our credentials in the categories in which we’re entering, but also they love the brand. They’re engaged with the brand. The economics fit within our overall parameters on sales and marketing. So we fit it within there. The one other thing I’d mention is, because we’re just entering categories, we’re trying to be very thoughtful with our partners but also with just the numbers. We want a good complement of athletes supporting the brand and the category and the products. But we’re not looking to sign everybody everywhere. That’s not going to be our strategy.
I think you’ll see us nurture these entrants more than try to make them instantaneously successful because what we want to do is build a business, not just reward a given quarter. So the economics fit with that structure as well.
David Weinberg: Yes. And as far as the value proposition, I’m not sure if this is a complete value proposition. What we do is we offer a multitude of shoes for a multitude of people as it goes through. And as we move through, we’re starting right now only with a higher price, very competitive topnotch basketball and football shoes. Of course, as we go forward, we know there’s a great marketplace for more moderate price for people that play, still having quality and comfort, then we’ll give more quality and comfort and value at that particular point, not necessarily at the top end, which will then carry down to kids because we have a great kids business as well. So we think as we go out over time, we certainly will expand through all the demographics that we deal with, and we’ll have something for everyone.
But we’re taking most pride now in delivering the best quality, top-notch, and it’s not necessarily a price play. And by the way, just to add another point, everybody has been talking about Wholesale and how Wholesale fits and how it fits into our guidance for the coming year. If you think about it, the difficulty now and the differential in our business is that we have such a big piece of Direct-to-Consumer. So a big part of the quarter will obviously depend on the holiday period, which hasn’t begun yet, so it’s difficult to tell. Singles Day, which also is difficult to tell because we’re just starting the pre-order period. And October is a very difficult month in which to gauge all those items. Also, from a Wholesale perspective, when big pieces come to us is at the end of the quarter, which is too early to tell.
When we move forward to Spring, as the sales for the holidays go through, there’s a significant potential, especially on a worldwide basis, to deliver Spring in late November, early December. All of that is coming towards us. And personally, I feel very positive about it. But it’s really too early in the process, being October, which is a difficult month to make those reads, to make those. So we’re trying to be as honest, transparent, that everybody knows this is where we sit right now. But the potential both for Spring coming early and our Direct-to-Consumers breaking out around the world certainly is a possibility and by no means maximized in our guidance, at least from my perspective.
Operator: Our next question is coming from the line of John Kernan with TD Cowen. Please proceed with your question.
Krista Zuber: Good afternoon. This is Krista Zuber on behalf of John. Just one check on ASPs, just get a bit of a sense of how you foresee additional pricing actions as you head into 2024. I mean, certainly, you’re lapping some more challenging compares, particularly in, I believe, domestic in Q4 versus last year. So if you could just shed some light on that, that would be great.
John Vandemore: Yes. So I think as you look at ASPs, we wouldn’t expect to be making a lot of movement on ASPs in kind of comparable products, so price increases, et cetera. What you’re likely to see and what we’ve seen a little bit this year is, certainly, if you’re looking at after FX, some FX-inflated ASP growth, but also the mix trade, which is customers coming in and consciously choosing the higher price point product because that’s the product that has our Skechers Hands-Free Slip-in technology, has our Skechers Arch Fit technology. So you are seeing customers trade up within the portfolio for some higher-priced product. That’s the type of ASP activity we would expect. A little too early for us to talk specifically about 2024, but that’s, I think, a good reflection of what we expect for the balance of the year.
Krista Zuber: Great. And just one follow-up, if I may. Just on the inventory, kind of how do you see the balance sheet inventory levels finishing at the end of 2023?
John Vandemore: Well, we’ve made — I mean, we made a ton of headway on inventory, which, if you recall, 12 months ago, is exactly what we said we would do when we were swimming in inventory, and we had distribution challenges. So I mean, the fact that we can tell you today that we’re down by 1/3 in both Europe and the Americas, I think, gives you every ounce of proof you need that we’ll do what we say we’re going to do. We feel inventories are very well positioned right now for the holiday. They’re very well positioned for early 2024. They do leave us a little bit of room to move things up if the opportunity permits as David talked about a second ago. But overall, I would tell you, we’re very well positioned from an inventory perspective, and we feel very good about both the inventory we have, but also the orders we have in the early part of 2024.
