Matt Koranda: Hey, guys. Good morning. Just wanted to spin back to the quarter-to-date trends that you shared. Maybe just — is there any way to unpack them or quantify them, what you saw in February and March? And I know you mentioned March getting a little bit better than February on a relative basis. Just was March actually up on a year-over-year basis or just down less badly than February, maybe just a little bit more there? And then just, Mary, if you could talk about the promotional tactics? I know you sort of touched on it in one of your previous responses, but just wanted to hear you speak a little bit more about the more frequent promotions that we’re running and the 30% off promotions, and how those are kind of faring relative to some of the broader promotions you mentioned in the industry?
Keith Siegner: I’ll start off and then pass it over to Mary to talk more about the promotional tactics. Just in terms of specifics, at this point, we’re not going to get into the exact specifics in relation to February and March, but Mary kind of gave the details. And look what — a lot of what it boiled down to in February, given that the category was about the same, according to the credit card data for both February and March, some of this was company specific, right, for the fact that as Mary said, we’ve tried to dial back on the promotions. However, the competitors were dialing up on the promotions at that time, as well as dislocations in our marketing program relative to the change in agency, which happened on the first day of the fiscal year, right?
So, it really impacted the entirety of P1. But we corrected for that. We adjusted for that. We tweaked the promotions as we headed into March and we saw a massive bounce back. It was a dramatic shift in trends. We’ve taken both February and March holistically into account as we think about our plans for P3, which is April, and that’s all compartmentalized within our guidance. Obviously, this is an ongoing constant effort to tweak and refine and tweak and refine, test and learn, all those types of things. So — but we — at this point, we think this is the best representation of our placement in this quarter. And then as we get later into the year, for all the things I talked about a little earlier, that’s when we really start to see the launches, right, that Mary highlighted before.
That’s when we see the touchpoint expansion really kicking in and that’s when we think we can get even sharper with our marketing and promotions, finance offers, all that kind of stuff to really crystallize and convert the interest we’re seeing from our customers. Mary, I don’t know if you want to talk more about the promotional tactics.
Mary Fox: Yeah. No, thank you, Keith. And I think, Matt, obviously, Black Friday, typically, we see the strongest promotions of the year, and we came out at 30% off and a couple of bundle deals. And as you know, compared to the rest of the category, that’s still substantially lower. We had a very strong performance. Then what we normally would do is step down a little bit coming out of that Black Friday. But as I shared, we saw everyone else holding. And it’s actually — in many ways, actually get more aggressive in using the clearance area just making core stock products and actually promoting it even more aggressively. We were seeing promotions up to 50% off. So, when we had dialed back down, as Keith just said, then we saw the velocity just tail back a little bit because people quote growth was really strong, conversion was just a little bit slower.
And we know we always have to have compelling value. So, as we tested back into the 30% off, as Keith said, we saw great growth in March. So, like anything, we’re going to continue to test and learn. I think one of the really interesting parts about this is from a consumer behavior point of view, we see a very high percentage of customers close a quote in about a week to two weeks. So, for us, we’re just really adjusting our promo campaigns and tactics, allowing [indiscernible] where we see when they’re coming in, and then able to drive them to conversion. So again, big advantage for us as we manage across all of our channels. And the guidance that Keith has baked in, we have industry-leading gross margin performance. And we talked earlier about the growth year-over-year and just all of that performance.
So, we’re just always threading the needle between top-line growth, gross margin growth and how that flows through. So, we’ll adjust through the year, but feel good now in terms of where we are settled in our programming.
Matt Koranda: Okay. Got it. And then, on the gross margin guide for the first quarter, it looks like there’s some expansion there. Just wondered maybe, Keith, if you could touch on sort of what’s factored in in terms of promotional headwind versus some of the continued sort of unlock that we’re seeing from lower inbound freight. Maybe just touch on that. And then, for the full year, if we look at the guidance, I guess we’re still seeing some deleverage on SG&A. Just wondered if you could maybe touch on sort of what the planned investments are there and maybe why not — why we can’t see or couldn’t see a little bit more leverage on that line this coming year.
Keith Siegner: Sure thing. I’ll start with the gross margin. So, the story for first quarter gross margin is really consistent with kind of what we’ve been talking about the last six months and with the full year. We got to this high-50%s range. We think this is a comfortable level. Last year’s first quarter was still burdened by a little bit of the capitalized inbound freight that hadn’t burned off as of then, that’s helping us a little bit year-over-year in first quarter. We do expect gross margin expansion for this year. Obviously, the total top-line will impact that range that you saw within our guidance that we provided. But there’s a few things Mary was talking about that have the potential to benefit both the inbound and outbound side of freight and logistics for us.
