Bryan Spillane : Hi. So I had – I guess I had just two questions. First one, just a clarification. I think we talked about margins in the prepared remarks that fourth quarter margins will be higher than the third quarter. I just want to clarify, was that a comment on gross margin or EBITDA margin?
Miguel Patricio: Andre?
Andre Maciel: It ends up being both, but it’s driven by the gross margin.
Bryan Spillane : Okay.
Andre Maciel: And it’s mostly, it’s a seasonal factor, because in Q4 we typically sell-through. We’re over-investing products in higher margins. If you look just for generality, aside [inaudible] Q2 is higher than Q3, because we ship a lot of greeting [ph] season, which has higher margin, we ship for summer. And then in Q4, we have items like cream cheese, gravies, and other items like that have very high margin, desserts. So that’s why it’s just mixed related.
Bryan Spillane : Okay. And then second question, and I guess maybe this is related to what John Baumgartner was just asking, but maybe just more simplistically, I think coming out of the first quarter, you talked – and this, we’re talking about North American retail, that one of the issues or one of the drivers of share losses was just price gaps, right? That competitors, whether it’s private label or branded in certain categories hadn’t followed your pricing. And so I guess I have two questions. One is, have price gaps narrowed or your share gains that you’ve seen sequentially over the last couple of months happened without the price gaps closing? And then when we think about your – the comments about the expectations for volume growth in ‘24, right, is that dependent also on kind of normalized price gaps?
I guess what I’m trying to understand is like, can you drive volume without those price gaps closing, because you really can’t control what your competitors do.
Andre Maciel: Yes, I think there’s a couple of things. If we look versus the bottom, the last two, three months we have seen the price gaps narrowly moving favorably to us, so getting closer. So there is certain contribution coming from that. And also, all the other actions that we outlined in the remarks, right. So we had to do some pockets of challenges in service that is now getting behind us. I think the only big remaining item is cold cuts. That as we said is going to be recovered by end of Q3 or the Q4. We have innovations starting to ramp up, and I think Carlos can give more color on that.
Carlos Abrams-Rivera: Yes Brian, what I would add is that, first of all on the comment on private label. Private label shares trends actually have been flat since you looked at it. In fact since second half of 2022, even with increasing price gaps that we had after our price impact in February. So we have taken that pricing to protect our margins, and some branded competitors have not followed, but at the same time, we continue to stay diligent on the way we think about the business. Now, in the points that Andrew just mentioned, in terms of – as we think about going forward, why is it that we see the moderation of our improvement? I’ll give you three reasons on the way kind of I look at it as we go into the second half of the year into 2024 in the U.S. retails.
You know number one, we’re investing more in marketing, we’re launching more innovation, and we are lapping the pricing actions as we go into second half of the year. And just to unpack it one more level, if you think about the innovation that we are seeing right now, we are actually building momentum as we go into the year, as we are following this kind of two-pronged strategy innovation. First, you’re going to see us continue to launch more disruptive innovation platforms, and that includes things like our NotCo line of plan-based offerings, the new Crisp from the Microwave, which delivers great taste and all the convenience, and the restaurant-to-retail platform, and you see that already with things like the IHOP® Coffee line. The second part of the innovation is also how do we take our existing brands into new spaces.
Already, we introduced a new frozen Mac and Cheese. We are expanding our Delimex and Taco Bell into more spaces with the Mexican meals, and as we speak, we’re also launching new Oscar Mayer scramblers as we continue to expand on the Brexit platform. So you see, it’s comprehensive in terms of how we are approaching innovation in order to continue to shape the categories as we increase its shelf space and quality display as we go forward, and that’s already paying us. And in fact, just to give you a factoid, if you look at our Lunchables, we are creating a new golden wall in Lunchables as we go into a second half, and we are seeing that in some of our top customers that increases about 40% our space within the shelf. So again, it’s not only thinking through the kind of promotional event, but also what we’re doing in terms of our driving, volume-driving activities that are important as we go forward.
Operator: Thank you. One moment for our next question. Our next question comes from Pamela Kaufman with Morgan Stanley. You may proceed.
Pamela Kaufman : Hi! Good morning.
Miguel Patricio: Good morning.
Andre Maciel: Good morning.
