Edward Rosenfeld: Sure. Thanks, Corey. I’ll take the first one, then I’ll turn it over to Zine to talk about expenses. So in terms of Almost Famous, as we disclosed, it’s a little over $160 million business in revenue currently. In its most recent fiscal year, it had about a 7% operating margin. But we believe we see a pretty clear path to increasing that over time as we get the benefits of combination of our two companies. And so we can get that into the high singles and over time, most likely into the low doubles in terms of operating margin. In terms of revenue growth, we do think that there are some pretty significant revenue synergies from combining with our company. We mentioned the introduction of Madden Girl Apparel, for instance, as something we want to do.
So not willing to quantify exactly how big I this business can be at this very moment, but we certainly see significant revenue growth and operating margin opportunity in this business. Zine, do you want to address the operating expenses?
Zine Mazouzi: Sure. So for Q3, we came in at negative $0.8 against dollar from the quarter last year. Obviously, as we said before, we continue to try and control the controllables in this choppy environment. And we put a lot of controls around specifically our supply chain, mainly our warehouses to make sure that we control those expenses. So that drove a big portion of the drop versus last year. And we also have variable expenses related specifically to retail and e-com where we didn’t do so well from a sales perspective. And those variable expenses came in favorable and that was partially offset by our continued investment in marketing and innovation and IT. So for Q4, just to give you a little bit of guidance there, we expect operating expenses to be up around 4%.
And that is primarily due to the inclusion of Almost Famous into the base. Without Almost Famous, we expect to be below a 1% increase in Q4. And as far as going forward, any initiatives that we may have, I just want to obviously remind you that we run very lean as a company and we did some big cuts back in the COVID days. And we always try and not run with fat in the company. But going forward, we’re looking at many areas. We’re continuing to invest in our automation in some of our warehouses to reduce costs. And we look basically as we always do, under every rock for any savings. But using technology and automation is a good thing that we’re doing in our supply chain.
Corey Tarlowe: Very helpful. Thanks so much.
Operator: One moment for our next question. Our next question comes from Samuel Poser with Williams Trading. Your line is open.
Samuel Poser: Good morning. Thanks for taking my questions. A lot of them have been answered. But I’d like to know, are you seeing a variance in your, let’s say, sell-through rates or consumer appetite within, with the Steve Madden brand, within your wholesale accounts? How does that compare to what you’re seeing with DTC?
Edward Rosenfeld: Thanks, Sam. No, I really don’t think there’s a big, I don’t think there’s any big distinction to call out at this very moment in terms of consumer demand across channel.
Samuel Poser: And but you did say that you felt like you were sort of out, maybe outperforming, let’s say, your peers or outperforming maybe how people are doing, other brands are doing within, let’s say, on the Macy’s floor. But there’s still a reticence from those wholesale accounts to write fill-ins for the bestselling stuff. Is that a fair statement?
Edward Rosenfeld: That is accurate. Yes, we do feel that for the fall season, if you look at the folks that we compete with most directly, we feel that we’re, that our sell-throughs are better than theirs. That’s the feedback that we’re getting. It’s not resulting in a ton of reorders, given the overall environment. But I do think it bodes well for spring. We’re getting pretty good feedback from our wholesale customers about how they’re thinking about us for spring. I think they’ve got a conservative approach overall. But we’re hearing from all the big folks that they’re going to plan us better than they plan their overall department. And I think that’s a function of, number one, the sell-through we’re seeing right now, relative to the competition. And number two, the strength of the spring product assortments.
Samuel Poser: Two other things. One, do you think they’re actually buying to the trend? Or are they still buying sort of cautiously below it? And secondly, one of your larger accounts is a vendor-managed program. Can you sort of talk to maybe the difference between the vendor-managed program and the non-vendor managed program? And if you’re making any headway in convincing the non-vendor managed programs to become vendor-managed programs.
Edward Rosenfeld: So in terms of the overall approach to orders, it is still cautious. I would say it’s still below what we view as underlying consumer demand. And so we’re working with our wholesale customers to try to get that back in line. You mentioned vendor-managed program with a big wholesale customer. Over the last, if you even zoom out a little bit and look over the last few years, that’s been one of our most successful businesses. And we do think that’s in part because of the influence that we’ve been able to have on what the assortments look like at that account. And so we’re continually on a process of trying to work more closely with our key wholesale customers to make sure that we have the right goods in the right stores at the right time.
Samuel Poser: Well, actually, can you tell me the variance between, let’s say, that vendor-managed programs business from an increase or the variance between that and the non-vendor managed program?
Edward Rosenfeld: No, I cannot.
Samuel Poser: Well, you could, but you won’t. But I appreciate it. Thank you.
Edward Rosenfeld: There you go. I won’t. Good try, as always. Thanks.
Samuel Poser: Thank you.
Operator: One moment for our next question. [Operator Instructions] Our next question comes from Jay Sole with UBS. Your line is open.
Jay Sole: Great. Thank you so much. Can I just ask for an update on the handbag and apparel parts of the business, like the BB Dakota business? How have you seen those trends in the quarter? Are they different from what you’re seeing in footwear? Thanks so much.
Edward Rosenfeld: Yes, thank you, Jay. So I’ll start with handbags, because that’s just a fantastic story. You heard about it in the prepared remarks. But Seabed and Handbags has just been on this incredible growth journey. This is something that goes back years now that we’ve been really investing in this area. And we’ve been seeing strong growth in this business, double-digit growth year after year now for several years. And the business continues to have incredible momentum. I think we called it out, but Seabag [Ph] and Handbags is up over 50% overall in Q3, 46% in wholesale, and 90% in our own direct-to-consumer channels. And so we’re just really excited about the momentum that we have there. For us, it all starts with product.
