Kimberly Scott: Yes, absolutely, Andy. And thank you for your questions and for being with us today. So I can definitely confirm to you that these service opportunities are not related to the logistics optimization and the rerouting of customers. These challenges have been in our business for quite some time, and I’ve dug in quite deeply into these root causes of quits to really understand how do you get to the root of this and improve customer retention. And so you’ve got to go really deep and far to get to the right answer. And so as I’ve explored this and listen to customer feedback, it’s just really clear that we are not tight on our processes as it relates to disciplined loading of trucks, delivering on time, delivering full loads.
And so this is, the good news here is these are processes that can absolutely be improved. And people can be trained on these processes and do a great job and our teammates want to do a great job, so they’ll be happy to follow new processes and have better procedures. But it is something that I believe Andy, has persisted in this business for some time and has not been realized or addressed. And so I think this is a great opportunity for us to step back and rethink these processes and really enhance the customer experience.
Andrew Wittmann: Thank you.
Kimberly Scott: Thank you.
Operator: Thank you. [Operator Instructions] We’ll take our next question from Stephanie Moore with Jefferies.
Stephanie Moore: Hi, good morning. Thank you.
Kimberly Scott: Good morning, Stephanie.
Stephanie Moore: So maybe, Kim, given such a change in tone here in the last 90 days since you reported 1Q, I think including in the short period of time an erosion in national account business and now a reversal in pricing capabilities, how do we get comfortable that you have her arms around the operations and can meet this revised guidance for the year?
Kimberly Scott: So Stephanie, we feel very confident in the strategy. We remain incredibly committed and we know that the value creation opportunity for Vestis this year. So this is about improving some service processes to make sure that our service experience with our customers is outstanding because improving revenue — or excuse me, improving retention is the heartbeat of this model. So our strategy is built on keeping loyal customers and then enhancing the lifetime value by cross-selling them. So we feel it’s really imperative that we continue to enhance our processes and improve the retention experience. As we drive up that experience and it continues to improve and more customers continue to be loyal, it just fully supports our cross-sell initiatives and our desire to penetrate those customers and cross-sell other products and services.
So we feel incredibly confident that we are on the right path and that making these corrections around service efficacy is just going to further strengthen our plan. As it relates to sales, there is without a doubt an opportunity to have a more high-performing sales team. We have great people who absolutely want to do a great job for the company and drive sales, but we need to support them with better enablement tools. We need to have more sophisticated processes around how we go to market. We are doing things like improving sales collateral, working on onboarding, recruiting the right profile of teammate who will thrive in this environment, but also training them and getting them the right tools and resources to sell effectively. So these are very known and understood opportunities, and we’re incredibly mobilized around them.
But I do want to reiterate, Stephanie, we believe in this plan. We believe in the value creation opportunity, and we have no doubt that there’s going to be great value generated here over the long term.
Stephanie Moore: Got it. And then just as a follow-up. I mean, clearly, it does sound like a lot of changes are being implemented, and you kind of noted just that we should start to see the benefits in fiscal 2025. So does that mean in your minds, we should be able to return to revenue growth in 2025, maybe in line with the targets you provided at your Analyst Day? And then how will pricing be part of that so — since it looks like you’re probably going to be a pretty decent comp on the pricing front as we look to 2025?
Kimberly Scott: Yes. So as it relates to growth, we absolutely intend to return to positive growth in FY ’25. We’ll talk more about what those growth rates will look like when we guide for the year. But we absolutely are accountable to and expect to return growth in FY ’25. So you can count on that happening for sure, and we’ll talk about those rates as we exit ’24 and we guide for ’25 so without a doubt. And then as it relates to pricing, we believe very strongly that we could take more price right now if we wanted to. But we believe strongly that it is important to improve service efficacy and to make sure that we are not taking price in the short-term only to jeopardize customer retention rate in the long term. So we will return to the ability to take more pricing, and we still feel strongly that inflationary environments, we can pass that price through as appropriate and that price will stick.
So we will definitely continue to address pricing. We feel that we will improve our ability to take more price as we improve our service processes and our customer experience. And so we also will take price though, and we are taking price this year, and I want to be really clear about that. We have annual price increases and we have off-cycle price increases. We continue to take our normal annual price increases but our subjective discretionary off-cycle price increases are the price increases that we’re moderating. We will also still be surgical and take price in certain areas as it relates to multiple stops in a week or a customer that is largely underpriced versus the average in the market, so there will still be pricing taking place. We’re not shutting off pricing.
We are just moderating pricing as it relates to the discretionary off-cycle pricing.
Operator: Thank you. Our next question comes from Ollie Davies with Redburn Atlantic.
Oliver Davies: Yes, good morning, guys.
Kimberly Scott: Hey, Ollie.
Ricky Dillon: Good morning.
Oliver Davies: So just two from me. I guess, firstly, volume growth in the quarter, I think it was about 50 basis points lower than Q1. So can you kind of just talk through the cadence through the months and into the latest quarter? And then secondly, probably one for Rick, can you talk about the level of sort of underlying costs and labor inflation and how you see that playing out through the rest of the year?
