Richard Hayne: Yes, we can.
Janet Kloppenburg: Okay. Congrats, everyone. Nice work. And Sheila, I really noticed the upgrade in the apparel at Urban. So I’m happy to hear that. I assume that the positive comps in apparel are at improved year-over-year margins. But as we look forward to the accessories turning positive in the third quarter, is there still hope that Urban could deliver flattish kind of fourth quarter comps? Or do you think we should be thinking down single digits for the second half of the year? And just for Melanie, I have been [indiscernible] by SG&A about plus mid-single for the back half. I think you had called for some moderation. I guess the incentive comp is pushing it up. But maybe you could help me there on how you think we should model it? Thank you.
Richard Hayne: Okay. Let’s start with, Sheila. And good news, right?
Sheila Harrington: Yeah. Good news. We’ve turned the corner in apparel. This is definitely happening first within stores. And so, I would like to say either we feel optimistic, but we’re not ready to over-promise that that correction will happen in Q4, just based on how much promotional activity, Q4 normally lends to itself and what we’re up against from last year’s promotional activity. So we want to give ourselves time to really build our DTC strategy in a strong way for go forward. And that will take time to do well. That being said, the improvement in MMU is real and I’m hopeful that we’ll continue to see quarter-over-quarter improvement as we rectify our inventory levels with fresh newness.
Richard Hayne: Yeah. Marni, I just will interject that we are definitely not ready to pass the champagne [Multiple Speakers] and we feel very good and positive about it. There’s a lot of positive momentum, but there’s a long way to go. And we do believe it’s taken us longer than we had hoped, and we’re not going to rush it, we’re going to do it right. So Mel, you want to talk about…
Melanie Marein-Efron: Yeah. And so, Janet, just to clarify, we are — the remarks that I provided earlier are a bit of an update. Let me prop you through Q3 and Q4. So for Q3, based on our current plans, you are correct that SG&A could grow in the low-double-digit range as a result of higher incentive-based pay. In addition, we are incrementally increasing our marketing expenses for Free People, Anthro and Nuuly to increase customer acquisition and further drive our share gains. Given the top line strength of these businesses, it feels like the right time to make this investment distortion. And of course, if we do have some flexibility to reduce these planned increases should current sales momentum slow a little bit. Now with respect to Q4 and the remainder of the year after that, we believe that based on our current plans for sales and expenses, our Q4 SG&A expense growth could lag sales.
So that’s a bit of an update since the last quarter, I just wanted to clarify that for you.
Richard Hayne: Yeah. And Janet, I think that the update Tricia gave about our marketing campaign — the global marketing campaign is one good example of the investments that we’re making in marketing in three of our four brands, but we’re also doing that slightly in Urban as well. So we feel good about making those investments. And so far, we’ve seen a nice return wherever we have made them.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Your line is open.
Dana Telsey: Hi. Congratulations on the nice results. As you mentioned…
Richard Hayne: Thank you.
Dana Telsey: Hi. As you mentioned one of the remarks at the beginning, I think, customer favoring fashion over price. For each of the brands, what is happening with price? And what’s changing this year as compared with last year? And then you gave a good update on Anthro with the potential for $2 billion in apparel and accessories sales, double Home to $1 billion and target 270 stores. As you think about Free People, any update on that and how you’re thinking about what the long term could look like? Thank you.
Richard Hayne: I’ll take — try to take the first question, because you ask about all the brands, although the focus on my right, please kick me if I misspeak. We think that in the Anthropologie, Free People and Free People Movement — FP Movement brands, the customer is definitely favoring the fashion over price, and that’s apparent to us. Fashion newness is what’s most important. She responds when the product first comes in and she is less responsive to markdowns. It’s not to say that price isn’t at all important, but I do think it’s secondary. At the Urban brand, I think it’s a little bit different. I think that while she also, if the item is right, and I would call that jackets is a good example, if the item is right, she will spend a reasonable amount of money for the item. But we do see many of our opening price points over-indexing. And so I think that at the Urban brand, the price is probably equally important to the fashion. And secondarily, you wanted…
Sheila Harrington: Long-term Free People growth.
Richard Hayne: Sure.
Sheila Harrington: Yeah. So I’m going to break it down into the two parts. FP Movement has been an incubated business for us, and we’ve started to grow this aggressively over the last several years. We think we’ll be within $1 billion or more within the next five to six years. That’s the goal that we’ve set for ourselves. And then with the Free People brand, we feel like there’s tremendous opportunity for this to grow. I’m not going to quote that number, but our international business is growing and growing profitably, which we wanted to grow a global FP brand for quite some time, and we’re feeling that traction take hold. That, along with some large market share classifications, I don’t — I think the sky is the limit for Free People.
Richard Hayne: Thank you.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Mark Altschwager with Baird. Your line is open.
Mark Altschwager: Thank you. Nice quarter. Wanted to ask about margins. Overall margins seem to be tracking in the mid-7% this year. Can you talk about the puts and takes to get to the 10% goal? You’ve made substantial progress in IMU, so I guess I’m wondering is the incremental improvement from here primarily a function of getting UO turning in the right direction? And then with the explosive growth you continue to achieve at Free People, how should we think about any step-up in reinvestment needs there in the near term beyond some of the incremental marketing investments you outlined? Thank you.
