“In 2024, we plan to use our free cash flow to repay a $450 million bond maturity and then return the remaining cash to shareholders through share repurchases.”

In context

“uarter of 2023. As I mentioned on our last call, this is not because we are forecasting an improvement in demand trends this year, it's just that the compares are easier in the second half. In terms of flow-through, we expect operating margin to remain under pressure in Q2, largely due to sales deleverage and cycling a favorable legal settlement. Taking these factors into account, we expect Q2 operating margin rate to be approximately 150 basis points below the prior year rate and flow through of productivity to improve in the second half of the year. Before I close, I'd like to reiterate that our capital allocation strategy remains intact. First, reinvest in the business; second, target a 35% dividend payout ratio and third, return excess cash to shareholders through share repurchases. In 2024, we plan to use our free cash flow to repay a $450 million bond maturity and then return the remaining cash to shareholders through share repurchases. In closing, we remain focused on investing in our Total Home Strategy. As Marvin mentioned, we are also executing against a multiyear road map of PPI initiatives, which will continue to unlock productivity well beyond 2024. We are well positioned to capitalize on home improvement demand when the market recovers and continue to deliver sustainable shareholder value. And with that, we'll open it up for your questions. Operator: [Operator Instructions] Our first question comes from the line of Chris Horvers with JPMorgan. Christian Carlino: It's Christian Carlino on for Chris. Just to dig in on the gross margin. Could you help us understand some of the drivers there? And are you seeing the full run rate of vendor clawbacks at this point? Or does that build over the year. And just broadly,”