Tracey Brown: Yes, good morning, Charles. Yes, so as it relates to our own brand expansion, as Tim has indicated, we have been accelerating this at a rapid pace. And if you’ve been tracking, our own brand penetration has been growing quite nicely. To your question around how quickly, there are some things that we can do very quickly. One of those, again, Tim mentioned around embracing and incentivizing our frontline team members to really showcase their own brand products and what is important to the consumers in their market. The second is in terms of store reach and shelf depth, we can move on those quite quickly. And then the third area is around new product innovation. And then the third area is around new product innovation.
And this is the part that actually takes a little bit longer, but just to give you a little bit of color, we launched 37 new products in Q2. And what this means for us is as the consumer’s behavior continue to focus on looking at value and finding own brand and being willing to lean into own brand, this is working out quite nicely for us. We are feeling quite good about the level of depth that we can go with own brands.
Operator: Our next question comes from Eric Percher with Nephron Research.
Eric Percher: Thank you. I appreciate the commentary on pharmacy services and reimbursement models, so a follow-up for Tim and Rick. It’s interesting to hear you call out looking beyond payer and PBM to the manufacturers and this core ability to get to patients. I’d love to get your updated view on Lilly Direct, and if the goal is to expand access, does it make sense to include retail? Do you view it possible to have direct relationships given PBM contracts? Any perspective there would be appreciated.
Tim Wentworth: Sure. Thanks. I’ll start and turn it over to Rick. First of all, I would prefer that Dave and the Lilly team talk about their strategy, but that being said, first of all, I’d point out we have a direct relationship with literally every American, and it may not be in their funded benefit in all cases, but they come into our stores for a lot of other things. And so I love where we start when it comes to looking at programs where pharma companies may want to go direct to patients for a particular product where the normal supply chain reimbursement model, et cetera isn’t working effectively. I think if you look at the GLP-1s, for example, the adherence on those drugs over a reasonable period of time is not what I believe anybody would hope for, not the patients, not the payers to the extent that it’s a paid for product, and certainly not the innovators.
And so we are uniquely positioned to be a partner. It’s one thing to have a distribution partner. It’s another thing to have a clinically aligned partner that can actually help a patient work their way through safely, because I believe the companies that made these products also want to ensure that they retain a high safety profile, otherwise there will be other issues downstream which are not what anybody would want. So we think we are a natural partner for those things, and Rick, I’ll let you add any color there, but from our perspective, again, our ability to work on a product basis, direct with pharma, is unencumbered by any of our other relationships, so Rick.
Rick Gates : Yes. The only thing I’d add is, you said we have relationships with whatever consumer walks into our store. We have a relationship with every pharma company. And I think what they see with us is that we are a natural partner. We roll up our sleeves. We help them solve what they’re really trying to solve for. And I think that’s a natural place first at that, because we are an independent provider. If you think about it that way, we don’t have any other assets vertically integrated. And so I think we’re a natural partner for them. And I think they see us as a willing partner to help them really drive programs in the market.
Eric Percher: Was this what drove the comment on your distributor relationship profile change?
Tim Wentworth: No, really nothing to add. I mean, we’ve had a longstanding relationship with Cencora. I did prior in another life. And that relationship has always got to be organic and dynamic, because the market changes. And while a long-term relationship is a great context into which to operate, it’s important that as well we sit down as we do with Cencora and look at not only where is it working, but where might it work a bit better? And more importantly, over the next three years, where are the changes in the marketplace likely to manifest? And how do we make sure that we retain a contemporary and a competitive situation as it relates to our cost structure, as it relates to the services that we receive, as it relates to the things that we can provide as a good partner?
So all of those things are things that we throw on the table. And I look forward to working with, I know my team does, with Bob in his new role. I congratulate Steve, who had a terrific run there and was a great partner to me over a lot of years. But again, you can’t just sit still, and we’re not going to.
Operator: Our next question comes from Kevin Caliendo with UBS.
Kevin Caliendo: Thanks for taking my question. I wanted to talk about the sort of second half guidance and what it implies as we think about the headwinds and tailwinds from that base into fiscal ‘25. So if we take that sort of midpoint $1.42, there’s no sale leasebacks there, presumably tax would be a headwind, or would it sort of be, I guess what I’m asking, like some headwinds and tailwinds from that base, whether it’s tax, we understand, core is probably going to be headwind, maybe 340B. And then the second question that I have above and beyond taking that run rate is, was there any effect from the changes in PBM reimbursement like the timing for the retail segment because of DIR fees going away, meaning did it change the cadence at all or impact the cash flows at?
