Stephen Olsen: Hi, Anthony. It’s Steve. Thanks for the question. So just to remind you, we opened the store at the end of September last year. And so, we’re about six, seven months into it. And the store continues to ramp. And we’re really excited about the market and the feedback we’re getting from the customer both on the in-store experience, as well as the brand promise with great pricing and broad assortment. And we continue to train our team to improve their selling skills. So, we’re ramping where we thought, and we just continue to push our way through this challenging demand environment.
Douglas Lindsay: Hi Anthony, one of the things that I’m encouraging about Augusta is we were able to, relative to our underwriting on that deal, we were able to sort of come in better than what we thought, on our build out. And it was our first store, so we’re still learning about kind of how these stores ramp. I think net-net, our OpEx is coming in more favorable. We are seeing pressure in that store from the macro environment that’s out there. But we feel good about where it’s trending and the return on our capital there. And we continued to sort of, find ways to sort of market to that market, if you will. And sort of break into our core customer base there. So, it’s a really great learning ground. I think what’s encouraging to me is that this is a smaller format store.
And it has lighter CapEx than what we’ve spent at BrandsMart historically. And when we look at that, it’s really informed how we do Kennesaw and how we potentially open stores in the future, which is really encouraging.
Anthony Chukumba: Got it. And then, I guess that second new store will be also in Georgia. Should we read into that? I mean, do you see Georgia as a better opportunity in terms of new stores relative to Florida, or is it just kind of happenstance?
Stephen Olsen: It’s Steve again. Now, Florida is a primary key market for us. As we look at our real estate strategy, it really comes down to availability of real estate sites. And then, what’s the associated occupancy and development costs to build that out. So, we are working hard to look across Florida, all the key major markets, and hopefully we’ll find a site that works for us in the coming quarters.
Anthony Chukumba: Got it. Thanks for taking my question.
Stephen Olsen: Thank you.
Operator: Thank you. The next question is from Hoang Nguyen with TD Cowen. Your line is open.
Hoang Nguyen: Hi, team. And congrats on the quarter. And I just want to ask about average ticket. Can you give some comments around that? I mean, 1Q and maybe into April and May, and I guess as a color, really maybe talk about – dollar originations. Because I think, I mean, if you are up in deliveries by 90%, right, it’s hard to imagine that, you’re not growing in gross dollar volume. Maybe can you talk a little bit more about that too? Thank you.
Douglas Lindsay: Yes, I’ll just mention it. As we said, in the quarter we were up 6.8% deliveries, but only up I would say only it was a very strong quarter, but at 2.3% our recurring revenue written. The delta between those two numbers is ticket. And so, we’ve seen ticket down sort of 4% to 5% year-over-year. And we continue to see that we’re working on ways to, and Steve, you talk about this a little bit more. To position our product offerings, to look at term and look at product mix in order to drive ticket. But also we were optimizing for recurring revenue written. And so, we are doing certain things at certain price points, to drive volumes. And we’re always looking at that trade off.
Kelly Wall: Yes, just to add to it, Douglas mentioned a little pressure on ticket at Aaron business in Q1. So we did see some trade down in some of our categories, especially appliances and consumer electronics. But with that, with a lot of that growth we’re seeing in deliveries, at least merchandise deliveries, and the growth in our strategies around our marketing campaign, we’re definitely focusing on putting strong price messages out there. At really our key value items in those low price points and strong promotional offers to drive those particular products. So some of that obviously is trade down, but also some of it is our desire to drive new customers.
Stephen Olsen: Yes, the last thing I want to mention is not only trying to attract new customers, we’re also trying to get more share wallet from our existing customers. So with our new H&L lease decisioning engine that provides leasing power to all of our customers, not only are we making that first lease agreement, but we’re getting add-on lease agreements, as a second deal within the customer’s leasing power, and many of those new agreements are lower price points. And so, there is sort of while we’re getting more agreements per customer, the average ticket is down because of that add-on agreement. That’s putting some pressure on ticket as well. But we say that is a very good thing, more share wallet.
Hoang Nguyen: Got you. I think you mentioned about your private label provider is slightly tightening. Could you remind us maybe how much penetration do they have in your sales?
Stephen Olsen: Yes, hi, this is Steve. Glad to answer that. So yes, so as just a recall, we saw tightening in Q4 and again in Q1 from a private label credit card standpoint mix of our business. It’s a little more than 25% of overall sales. So a considerable amount. They’ve been a great partner for many years, and we work closely with them to drive marketing and our promotional activities around key holidays.
Hoang Nguyen: Got it. And my last one is on expenses. I mean, how should we think about personnel and other operating expenses going forward? Thank you.
Kelly Wall: Yes, it’s Kelly. I’d say that, again, we’re reaffirmed that we didn’t change our guidance. So our margin expectations continue to be the same for remainder of ’24. And I believe what I may have mentioned in the last call was that, from a personnel perspective, we are expecting kind of call it a 50 to 100 basis point improvement as a percentage of revenue, as well as on the OpEx side, we’re seeing a bit of the opposite about a 50 basis point increase. The improvements that we’re seeing in personnel, as well as improvements that we’re seeing on the OpEx side, is driven by the cost savings initiatives that, we outlined on the prior call as well, where we expect to deliver $40 million to $45 million sorry $30 million to $35 million of cost savings this year.
