“Given the rate of flow-through on these freight costs and overall favorable mix, we now expect gross margin for the back half to come in flat to last year.”

In context

“and up 20% on a two years stack, driven by strength in our national and international retailers. Consumption was strong this quarter as well, up 17% year-over-year and up 15% on a two-year stack basis. This exceeded our expectations and is an encouraging trend as we head into the fourth quarter. Gross margin of 66% was up approximately 100 basis points compared to prior year. We saw gross margin benefits from cost savings and margin accretive mix, specifically from consumers switching away from holiday kits into higher margin core products. We also benefited from the price increases we implemented on a subset of our skews in May. These gross margin benefits were partially offset by FX and elevated transportation costs, which flow through the P&L at a lesser rate than previously expected. Given the rate of flow-through on these freight costs and overall favorable mix, we now expect gross margin for the back half to come in flat to last year. On an adjusted basis, SG&A as a percentage of sales was 50%, up approximately 70 basis points versus prior year. The increase was mainly driven by investments in marketing and digital. Marketing and digital investment for the quarter was approximately 15% of net sales, slightly ahead of Q3 last year. We continue to expect marketing and digital to come in at 15% to 17% of net sales for the year. Q3 adjusted EBITDA was $22 million, and adjusted EBITDA margin was approximately 22% of net sales. Adjusted net income was $13 million or $0.24 per diluted share compared to $12 million or $0.22 per diluted share a year ago. Our liquidity remains strong with the combination of our cash balance and access to our revolving credit facility, sitting at approximately $130 million. We ended the quarter”