Mark Smith: Hi guys. Just wanted to jump back to Black Friday just a little bit. As we look at the mix data, this Friday being kind of a top 10 firearm sales day, do you guys feel like you have got your fair share and you had the right mix and promotions in the firearm counter on Black Friday?
Jon Barker: Hey Mark, it’s Jon. And I am going to answer with one word, absolutely. I was so proud of what the team pulled together for this year’s Black Friday on the firearms demand. When I look at the number of units that we sold on Black Friday compared to the total numbers that were shared from NSSF a mix. It’s clear we continue to take significant market share in the firearms category in this country. So, we absolutely executed in a way that I couldn’t be any prouder of this Black Friday.
Mark Smith: Prefect. And then just as we look at new stores, can you talk about looking rearview mirror first, kind of the performance of your new stores and would love to hear any breakdown that you have on some of the spike camp versus kind of full-size stores? And then if this performance is what really gives you the confidence to add kind of up and accelerate the growth here in 2023?
Jeff White: Yes. Mark, this is Jeff. Thanks for the question. If you look at what we published in our investor deck back in September, the new stores that we opened, I think it showed €˜19, €˜20 and €˜21. We are very happy with the performance of those from both in EBITDA and in ROIC. Those stores far exceed our expectations that we put out publicly. So, we are very happy with what we have done from the new store front. To your point, that gives us confidence in putting a number of 13 stores to 18 stores out there for next year as well as putting a number of 190 stores to 200 new stores out there for the end of fiscal year 2025. I think we have proven with a very successful track record that we can open very profitable stores. We know how to pick the market and we still see a lot of opportunity out there as we sit here today.
Jon Barker: Hey Mark, it’s Jon. I will add that we opened stores in brand-new geographies this year, which stretched our regional assortment quite a bit, but the team did a fantastic job of preparing for those new markets and executing on the assortment. The Southern Florida market of Seminole was new for us this year. The team did a fantastic job on that store. It’s performing very, very nicely. We just opened in Jacksonville, Florida a few weeks ago. And the assortment adjustments we made for Seminole, we were able to take some of those and more into Jacksonville. That store is, again, really, really proud of the team. And then going all the way to San Diego in Southern California is our first endeavor with the Santee store this year.
I think the team again hit it out of the park and that real estate choice, but also in the assortment to meet the needs. So, again, a lot of preparation goes into each of those new markets, boots on the ground, a lot of data being analyzed to ensure that we open. We have hit that assortment correctly for the regional differences and how people participate in outdoor activities.
Mark Smith: Prefect. And then last one for me. Any update just as we think about loyalty programs, credit cards, in particular, I would love to hear trends that you are seeing in some of these new geographies. Does it take time to kind of build up this loyalty program or do you see people kind of adopting and opting in early on in new geographies?
Jon Barker: Yes. It’s interesting, Mark, we have always had a really, really strong databases on our loyalty program with almost 50% of sales coming through that customer base, and that continues today at roughly 50%. What we are seeing is the response to our credit card has a greater return for the company and lifetime value. That program is a few years old, a couple of years now, and it’s making great trends, and that continues to be our focus, is trading those customers or existing loyalty customers into the credit card and new customers coming into the store, starting with the credit card and then offering the loyalty program if the credit card doesn’t meet the needs. So, I am really proud of what the team has done there.
Our database is on loyalty, firearm, consumers and overall e-mail databases continue to grow at a very, very nice trajectory, providing us the opportunity to expand our reach segment, our communication, our assortment and really personalize the retention elements within the tools we have today to ensure that we are serving the consumer in the season in which they are in, but also in which the categories they have shown indicators are being interested in.
Mark Smith: Maybe I will sneak in one more. Just as we look at maybe or again and what’s happening there with some firearm legislation, are you seeing anything geographically that’s kind of driving the sales for your stores primarily at the firearm counter?
Jon Barker: Yes. Certainly, Mark, as you are aware, in our industry, political rhetoric, events, regulatory changes can drive short-term demand. As we think about how we forecast the business, we do not include those elements in our forecast and guidance because they are just so hard to predict. So, as we navigate the Oregon Measure 114, which I believe will have feedback from the court systems as early as tomorrow €“ today or tomorrow, we believe that the courts will side on what’s right on a constitutional right to own firearms under the Second Amendment in the State of Oregon. If for some reason in Oregon or any other state there becomes new regulations we feel like that can be a long-term advantage for us. Our compliance and regulatory team, the technology we have invested in over the years has provided us with the opportunity that when changes happen in local, State or Federal requirements, we can adjust quickly where our competition sometimes can’t or doesn’t decide to do so.
So, while we are certainly disappointed with Measure 114, we believe that through the court system, we have a good outcome that will happen. And if not, we are certainly prepared with technology and compliance to meet the legal requirements of any State, local or Federal law changes.
Mark Smith: Great. Thank you, guys.
Jon Barker: Thanks Mark.
Operator: And our next question is a follow-up from Eric Wold with B. Riley Securities. Please proceed with your question.
Eric Wold: Thanks for letting me back on. I have just a couple of follow-ups, but really just one topic on the 13 to 18 store outlook for next year. I guess what is the biggest delta between the 13 and the 18? If you only do €“ I don’t want to say only if you just insert 13 next year, is the 5 stores then just shifting to €˜24 or is it more than just a timing issue? Are you still in the go or no-go decision process on all of those stores so that they may not open at all or is that merely how many you can actually get open in the next year? And then if we do assume just the low end of that in our model and the normal cadence you would have in a given year, assuming it is normal cadence, if you go anywhere above that 13, is it only in kind of Q4 or is there a chance you actually be heavier earlier in the year?
Jon Barker: Yes. Great question, Eric. I will take first question, and that was the timing. So, clearly, we have a funnel of in excess of 100 locations that we are looking in today. Our flexible store format, the regional growth, we have seen new states like Wisconsin and Florida, provide us with greater confidence to hit our long-term €“ our short-term 2025 goals of 190 to 210, but also long-term, a clear path of 300-plus stores in the out years. So, as I sit here and provide a range, it’s basically timing based. I have got dozens of properties right now that are in LOI review. I have got quite a few properties in negotiations. And whether we have 13, 14, 15, 16, 17 or 18 next year is the timing of those lease negotiations.
