Shelly Ibach: Thanks. I meant to touch on the financing. We dug deep into financing to try to understand, was that having any of the changes we’ve made? Was that having a negative impact on our demand and conversion? And we do not believe that our financing strategy had a disproportionate negative impact. It was very clear that our biggest opportunity is perceived price value of our smart beds. So the financing actions we have taken have helped mitigate significant financing cost pressures that we’ve faced all year. But during this time and during Labor Day in particular, we had consistent year-over-year financing offers. So, we did not see that as a factor here. And the relationship hasn’t changed. We’ve actually made adjustments to make sure that we’re neutralizing this and that it — to rule it out as a factor.
Bobby Griffin: And then, Francis, welcome to the team, and nice to meet you over the phone. I guess, my question is just on the OpEx reductions and the store closures. Are the 40 to 50 store closures that we’re targeting, are they negative four wall EBIT or EBITDA stores? And if not, can we talk about a little bit of, like, what’s implied in the recapture rate? Because then, they are generating EBIT and EBITDA in that scenario, so we’d have to have some type of recapture to make it net out and be a positive impact?
Francis Lee: Hi, Bobby. Thanks for the question. It’s nice to meet you too. So, as we thought about which stores we’re looking to close, we’re definitely looking at stores that are lower profitability within the portfolio, and also ones that have naturally expiring leases, so that we’re minimizing additional, lease buyout purchase costs. The recapture rate for these stores we’re also looking at are ones that we can effectively transfer, and have performance within the DMA that could basically be absorbed within the market effectively. So, again, we’re looking to, in this abrupt change of this demand environment, reduce some of our fixed costs, adjust our store base to align with the demand environment out there. And when we do come out of this position, off of a lower fixed cost position, be able to accelerate in a more profitable way off of our store base?
Dave Schwantes: Hi, Bobby. Just to add to that, Bobby, this is Dave. So, if you look at collectively at the stores we’re closing, they do on average have positive four wall profit. Where we pick up incremental profit is as we transfer those sales to other stores and eliminate the fixed cost of the stores we’re closing that is absolutely going to be a net positive. So we’re not looking at a situation where we’re necessarily closing a significant number of stores that are four wall negative.
Bobby Griffin: So when I look at the $50 million for next year, is the largest portion of that $50 million the corresponding lease and employee expense of those closed stores or are there other areas inside the operation that are getting cut as well?
Francis Lee: The $50 million of operating expense reductions for next year, is that the $50 million that you’re referring to?
Bobby Griffin: Yes. So the large portion of that the corresponding lease expense and store and employee cost that comes with those store closures or are there other areas in the operations that are getting cut as well or getting rationalized, I guess, is the better way to say it?
Francis Lee: It’ll be a holistic view of our overall costs, but certainly the stores action is a piece of it.
Shelly Ibach: Yes, it’s broad based, Bobby, from G&A, R&D, headquarters, stores, changes in manufacturing and also our logistics network.
Operator: Your next question comes from the line of Peter Keith with Piper Sandler. Please go ahead.
Peter Keith: So, Shelly, I just want to come back to Bobby’s first question, because we’re really trying to understand this drop off of demand in August and September. And I’m not sure if it’s coincidental, but it does align with when you relaunched a large amount of your new product line. And I’m wondering if there was issues that you ran across with pricing of that line? Maybe some of the new features didn’t resonate. Did the marketing not resonate? And then, as you’ve pivoted the sales strategy here in October, I guess, are you now reducing prices or is it just as a lower ticket that’s going to maybe reduce the ARU sequentially?
