雅詩蘭黛 (EL) 2024 Q1 法說會逐字稿

Good day, everyone, and welcome to The Estée Lauder Company's Fiscal 2024 First Quarter Conference Call. Today's call is being recorded and webcast.

大家好，歡迎參加雅詩蘭黛公司 2024 財年第一季電話會議。今天的通話正在錄音並進行網路直播。

For opening remarks and introductions, I'd like to turn the floor over to Senior Vice President of Investor Relations, Ms. Rainey Mancini. Ma'am, you may begin.

我想請投資人關係資深副總裁 Rainey Mancini 女士致開幕詞和介紹。女士，您可以開始了。

Hello. On today's call are Fabrizio Freda, President and Chief Executive Officer; and Tracey Travis, Executive Vice President and Chief Financial Officer.

你好。出席今天電話會議的有總裁兼執行長 Fabrizio Freda；崔西‧崔維斯（Tracey Travis），執行副總裁兼財務長。

Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the noncomparable impacts of acquisitions, divestitures, brand closures and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the Investors section of our website.

由於我們今天的許多言論都包含前瞻性陳述，因此請您參閱我們的新聞稿和向美國證券交易委員會提交的報告，您會發現可能導致實際結果與這些前瞻性陳述有重大差異的因素。為了便於討論我們的基礎業務，對我們的財務表現和預期的評論是在我們的新聞稿中披露的重組和其他費用和調整之前進行的。除非另有說明，所有有機淨銷售額成長也不包括收購、剝離、品牌關閉的不可比影響以及外幣換算的影響。您可以在我們的新聞稿和我們網站的投資者部分找到 GAAP 和非 GAAP 指標之間的調整表。

As a reminder, references to online sales include sales that we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. (Operator Instructions)

提醒一下，線上銷售包括我們透過 Brand.com 網站和第三方平台直接向消費者進行的銷售。它還包括我們的產品透過我們的零售商網站的估計銷售額。 （操作員說明）

And now I'll turn the call over to Fabrizio.

現在我將把電話轉給法布里齊奧。

Thank you, Rainey, and hello to everyone. We appreciate you joining us to discuss our first quarter results, revised outlook for fiscal year 2024 and accelerated profit recovery plan to benefit fiscal year 2025 and 2026.

謝謝你，雷尼，大家好。我們感謝您與我們一起討論我們第一季的業績、修訂後的 2024 財年展望以及加速利潤復甦計劃，以使 2025 財年和 2026 財年受益。

Before we begin, I want to start by expressing the tremendous grief and sadness we have for the victims and their families of the horrific terrorist attacks against Israel, the tragic loss of Palestinian lives and the growing humanitarian crisis in Gaza. Our hearts break for the profound suffering across the Middle East during this terrible time. We are committed to continuing to support the safety and well-being of all our employees in the affected areas and around the world.

在我們開始之前，我首先要向針對以色列的可怕恐怖襲擊、巴勒斯坦人的悲慘喪生以及加薩日益嚴重的人道主義危機的受害者及其家屬表示巨大的悲痛和悲痛。在這個可怕的時刻，我們為整個中東地區所遭受的深重苦難感到心碎。我們致力於持續支持受影響地區和世界各地所有員工的安全和福祉。

Let me now turn to our first quarter results. We delivered our outlook for organic sales and exceeded the expectation for adjusted diluted EPS. Organic sales decreased 11%. Our global travel retail business drove the decline, as expected, with organic sales lower by 51% given the combination of trade inventory reduction and a structured market containment.

現在讓我談談我們第一季的業績。我們公佈了有機銷售前景，並超越了調整後攤薄每股收益的預期。有機銷售額下降 11%。正如預期的那樣，我們的全球旅遊零售業務推動了下滑，由於貿易庫存減少和結構性市場遏制相結合，有機銷售額下降了 51%。

The entire rest of our global business rose 4% organically, led by mid- to high single-digit growth in the Americas and the markets of EMEA and double-digit growth in Asia Pacific, excluding Mainland China. The excellent performance in these regions enabled us to deliver our sales outlook despite a slower-than-expected recovery of overall prestige beauty in Mainland China.

我們的全球其餘業務有機成長了 4%，其中美洲和歐洲、中東和非洲市場實現了中高個位數成長，亞太地區（不包括中國大陸）實現了兩位數成長。儘管中國大陸整體名牌美容的復甦速度慢於預期，但這些地區的出色表現使我們能夠實現銷售前景。

Adjusted diluted EPS of $0.11 was ahead of the outlook as we achieved a better-than-expected adjusted operating margin. There were several drivers for this more favorable profitability, led by a greater contribution to sales from skin care than forecasted as well as disciplined expense management. Notably, we continued brand-building investments in the areas with the greatest growth opportunities with AP spending rising as a percentage of sales.

調整後攤薄每股收益為 0.11 美元，超出預期，因為我們實現了好於預期的調整後營業利潤率。這種更有利的獲利能力有多個驅動因素，其中護膚品對銷售的貢獻高於預期以及嚴格的費用管理。值得注意的是，我們繼續在成長機會最大的領域進行品牌建立投資，亞太地區支出佔銷售額的百分比不斷上升。

While we had a better-than-expected start of the fiscal year, we are lowering our fiscal year 2024 outlook given the further incremental external headwinds in 2 specific areas of our business. First, the expected growth rate of overall prestige beauty has slowed in Asia travel retail and Mainland China, which is currently also evidenced in the presale phase of the 11.11 Shopping Festival.

雖然我們的財年開局好於預期，但鑑於我們業務的兩個特定領域的外部阻力進一步增加，我們下調了 2024 財年的展望。首先，亞洲旅遊零售和中國大陸整體高端美容的預期成長放緩，目前11.11購物節的預售階段也證明了這一點。

To reflect this impact as well as the ongoing policies and efforts to contain a structured market activity, we are moderating our expectation for fiscal year 2024 retail sales for Asia travel retail and Mainland China. As part of this, we continue to expect to reset retail inventory in Asia travel retail by the end of the third quarter.

為了反映這一影響以及當前遏制結構性市場活動的政策和努力，我們正在下調亞洲旅遊零售和中國大陸 2024 財年零售額的預期。作為其中的一部分，我們繼續預計在第三季末之前重置亞洲旅遊零售的零售庫存。

Second, we are reflecting the risks of business disruption in Israel and other parts of the Middle East. For fiscal year 2024, our revised outlook continues to expect sequentially improving sales trend each quarter with double-digit organic sales growth in the second half. We also still expect sequentially stronger adjusted operating margin each quarter with continued consumer-facing investment in our growth engines.

其次，我們正在反映以色列和中東其他地區業務中斷的風險。對於 2024 財年，我們修訂後的展望繼續預計每季的銷售趨勢將持續改善，下半年有機銷售額將達到兩位數成長。我們也預計，隨著對我們成長引擎的持續面向消費者的投資，每季調整後的營業利潤率將連續走強。

Moreover, we are accelerating and expanding our profit recovery plan, which is designed to benefit fiscal year 2025 and 2026 for us to realize our ambitions to rebuild profitability despite the external headwinds' increased pressure on the business in fiscal year 2024.

此外，我們正在加速和擴大我們的利潤恢復計劃，該計劃旨在使2025和2026財年受益，使我們能夠實現重建盈利能力的雄心，儘管外部不利因素對2024財年的業務壓力加大。

On our earning call in August, I described our 4 strategic imperatives for fiscal year 2024, which are, drive momentum where our business is thriving, return to growth in the U.S., capture demand from the returning individual travelers in Asia travel retail, and begin to rebuild our profitability. Let me share with you our progress across these pillars as well as the framework of our accelerated and expanded profit recovery plan.

在 8 月的財報電話會議上，我描述了我們 2024 財年的 4 項戰略要務，即推動我們業務蓬勃發展的勢頭、美國恢復增長、抓住亞洲旅遊零售業回國散客的需求，並開始重建我們的獲利能力。讓我與您分享我們在這些支柱上取得的進展以及我們加速和擴大利潤恢復計劃的框架。

First, we are focused on extending the gains we achieved in fiscal year 2023 in the numerous developed and emerging markets around the world where we prospered. In the first quarter, we did just that. In the markets of EMEA, we achieved impressive results once more driven by the U.K. and Germany. Organic sales growth were balanced across brick-and-mortar and online as engaging activation in store and on social media resonated strongly with consumers across our brand portfolio.

首先，我們的重點是擴大我們在 2023 財年在我們繁榮發展的全球眾多已開發和新興市場所取得的成果。在第一季度，我們就是這樣做的。在歐洲、中東和非洲市場，在英國和德國的帶動下，我們再次獲得了驕人的表現。由於商店和社交媒體上的參與活動與我們品牌組合的消費者產生了強烈共鳴，實體店和線上的有機銷售成長保持平衡。

We extended our prestige beauty share gains in Western Europe driven by our high-quality hero products and innovation. In EMEA's emerging market, India was a standout driven by stellar gains by The Ordinary and double-digit growth by M·A·C. In Latin America, prestige beauty remains vibrant, and we again achieved strong results. Mexico and Brazil excelled, each up double digits organically. Our localized go-to-market initiatives in these 2 dynamic emerging markets have succeeded in attracting new consumers.

在我們高品質的英雄產品和創新的推動下，我們在西歐擴大了我們的聲望美容市場份額。在歐洲、中東和非洲的新興市場中，印度在 The Ordinary 的強勁成長和 M·A·C 的兩位數成長的推動下脫穎而出。在拉丁美洲，聲望之美依然充滿活力，我們再次取得了強勁的成果。墨西哥和巴西表現出色，有機成長均達到兩位數。我們在這兩個充滿活力的新興市場的在地化入市計劃成功地吸引了新消費者。

We continued our winning ways in many markets across Asia Pacific. The evolution of Hong Kong's SAR is especially compelling. And we realized very strong prestige beauty share gains with our brands' strong desirability, high-touch services and innovation engaging consumer as retail traffic increasingly returns.

我們繼續在亞太地區的許多市場取得勝利。香港特別行政區的演變尤其引人注目。隨著零售客流量的不斷增加，我們憑藉著品牌的強烈需求、高接觸度的服務和吸引消費者的創新，實現了非常強大的聲望美容份額收益。

Our performance in Japan and Australia once again robust driven by our diversified brand portfolio catering to local desires. Around the world, our direct-to-consumer business performed especially well. Every region contributed, led by double-digit organic sales growth in freestanding stores in Asia Pacific.

我們在日本和澳洲的業績再次強勁，這得益於我們滿足當地需求的多元化品牌組合。在世界各地，我們的直接面向消費者的業務表現尤其出色。每個地區都做出了貢獻，其中亞太地區獨立商店的有機銷售額實現了兩位數的成長。

On a global basis, we are thrilled that the makeup renaissance is infusing, and we have been ready to meet consumers as they again embrace their enthusiasm for the category. Makeup thrived in the quarter as the Americas, the markets in EMEA and Asia Pacific each contributed high single-digit organic sales growth to offset the pressure in the category from global travel retail.

在全球範圍內，我們很高興彩妝復興正在興起，我們已經準備好與消費者見面，因為他們再次擁抱了對該類別的熱情。化妝品在本季度蓬勃發展，美洲、歐洲、中東和非洲和亞太地區市場均貢獻了高個位數的有機銷售成長，抵消了全球旅遊零售對該類別的壓力。

We are successfully tapping into and creating trends with on-point innovation like M·A·C Studio Radiance Foundation and Estée Lauder Futurist SkinTint Serum Foundation. During this exciting area for the category, our brands are leveraging their expert artists and social media know-how to engage with consumers and generate strong and expanding levels of earned media value.

我們透過 M·A·C Studio Radiance Foundation 和 Estée Lauder Futurist SkinTint Serum Foundation 等即時創新成功地利用和創造了趨勢。在這個令人興奮的類別領域，我們的品牌正在利用其專業藝術家和社群媒體專業知識與消費者互動，並產生強大且不斷擴大的贏得媒體價值。

Fragrance again prospered. We delivered our 11th consecutive quarter of organic sales growth led by outstanding performance in the Americas and Asia Pacific, strong share gains in prestige fragrance in Western Europe. We continue to believe that we are still in the beginning of a promising long-term phase of growth for fragrance in Asia Pacific as consumer increasingly embrace the category and penetration levels are low relatively to the West.

香氣又盛了。我們實現了連續 11 個季度的有機銷售成長，這得益於美洲和亞太地區的出色表現以及西歐名牌香水市場份額的強勁增長。我們仍然相信，隨著消費者越來越接受該類別，且滲透率相對於西方較低，亞太地區的香水仍處於充滿希望的長期增長階段的開始。

Indeed, in Asia Pacific, fragrance represent 8% of the prestige beauty industry, whereas in Western Europe, it is 40% of the industry. We are well positioned for this growth opportunity with our luxury and artisanal brands' alignment with the trends in the region as consumer gravitate to fragrance collections in addition to single use trends for multiple distinct scents of the highest quality.

事實上，在亞太地區，香水佔高端美容產業的 8%，而在西歐，這一比例為 40%。我們的奢侈品和手工品牌與該地區的趨勢保持一致，因為除了最高品質的多種不同香味的一次性使用趨勢外，消費者還傾向於香水系列，因此我們已為這一增長機會做好了準備。

Moving to our second pillar. We are focused on returning to growth in the U.S. for the full year and made strides in the first quarter when encouragingly, our organic sales growth improved strongly on a sequential basis and moved from a modest decline last quarter to mid-single-digit growth this quarter. Our multifaceted strategic plan included launching a robust innovation pipeline with increased focus on breakthrough ideas and leading trends, increasing engagement by brands on social media to realize greater earned media value, accentuating our strength in luxury and artisanal fragrance and in high-performance, ingredient-led and derma skin care and expanding brand reach in specialty-multi to attract new consumers.

轉向我們的第二個支柱。 We are focused on returning to growth in the U.S. for the full year and made strides in the first quarter when encouragingly, our organic sales growth improved strongly on a sequential basis and moved from a modest decline last quarter to mid-single-digit growth this四分之一.我們的多面向策略計畫包括啟動強大的創新管道，更加重視突破性創意和領先趨勢，增加品牌在社群媒體上的參與度，以實現更大的媒體價值，強調我們在奢華和手工香水以及高性能成分方面的實力。領導和真皮皮膚護理，並擴大專業多元化的品牌影響力，以吸引新消費者。

During the first quarter, innovation proved to be a powerful catalyst for growth in the U.S. across every category. The contribution are many from Clinique, High Impact High-Fi Full Volume Mascara and M·A·C Studio Radiance Serum Powered Foundation in makeup to Estée Lauder Advanced Night Repair Rescue Solution in skin care and more. Through these high-profile launches with sophisticated media strategies, our brands elevated their engagement on TikTok, Instagram and other platforms.

第一季度，創新被證明是美國各個類別成長的強大催化劑。其中包括彩妝領域的倩碧、High Impact High-Fi Full Volume Mascara 和 M·A·C Studio Radiance Serum Powered Foundation，以及護膚領域的雅詩蘭黛 Advanced Night Repair Rescue Solution 等。透過這些高調的發布和複雜的媒體策略，我們的品牌提高了他們在 TikTok、Instagram 和其他平台上的參與度。

Impressively, M·A·C's earned media value in the U.S. Beauty improved several ranks to #2 in the month of September, further solidifying its #1 rank globally.

令人印象深刻的是，M·A·C 在美國美容領域贏得的媒體價值在 9 月多次上升至第二名，進一步鞏固了其全球第一名的地位。

We also achieved strong progress in fragrance in the U.S. driven by our luxury and artisanal brands. Le Labo, Tom Ford and Jo Malone London each rose double digit driven by multiple growth engines from innovation to online, brick-and-mortar and expanded consumer reach.

在我們的奢侈品和手工品牌的推動下，我們在美國的香水領域也取得了強勁進展。 Le Labo、Tom Ford 和 Jo Malone London 在從創新到線上、實體店和擴大消費者覆蓋範圍等多種成長引擎的推動下均實現兩位數增長。

Encouragingly, we returned to growth in skin care in the U.S. The Ordinary was a standout. Consumers continue to gravitate to the brands for its scientific, ingredient-led skin care, driving strong prestige beauty share gains. The brand launch of Soothing & Barrier Support Serum drove exceptional new consumers acquisition trends on brand.com and strategically expanded The Ordinary portfolio to include more multi-active products. Moreover, Estée Lauder and La Mer further bolstered our improving performance in the category.

令人鼓舞的是，我們在美國的皮膚護理領域恢復了增長。 The Ordinary 表現出色。消費者繼續青睞這些品牌以科學、成分為主導的護膚品，推動了聲望美容市場份額的強勁成長。 Soothing & Barrier Support Serum 品牌的推出推動了 Brand.com 上非凡的新消費者購買趨勢，並策略性地擴展了 The Ordinary 產品組合，包括更多的多活性產品。此外，雅詩蘭黛和海藍之謎進一步增強了我們在該類別中不斷提高的表現。

Let me now discuss the third pillar, to capture demand from the return individual travel in Asia travel retail. For the first quarter, retail sales in global travel retail were substantially ahead of our organic sales decline, which reflects the execution of our priority to reduce trade inventory in alignment with retailers. Indeed, we are making solid progress through exciting activation of our heroes, capitalizing on innovation and investing in beauty advisers.

現在讓我討論第三個支柱，捕捉亞洲旅遊零售業返程個人旅遊的需求。第一季度，全球旅遊零售的零售額大幅領先我們的有機銷售額下降，這反映出我們與零售商一致執行減少貿易庫存的優先事項。事實上，透過啟動我們的英雄、利用創新和投資美容顧問，我們正在取得紮實的進展。

Across these 3 pillars, one of our greatest strengths to leverage is our diverse brand portfolio, which was a fundamental driver of our progress during the first quarter. M·A·C's excellent performance showcased the strength of our portfolio among large brands, while The Ordinary drove double-digit organic sales growth among our scaling brands and Le Labo excelled, rising over 40% among the developing brands.

在這三大支柱中，我們最大的優勢之一是我們多樣化的品牌組合，這是我們第一季取得進展的根本驅動力。 M·A·C 的出色表現展示了我們在大型品牌中的投資組合的實力，而The Ordinary 推動了我們規模化品牌的兩位數有機銷售額增長，而Le Labo 表現出色，在發展中品牌中增長了40% 以上。

Let me now turn to our fourth pillar, rebuilding our profitability. We are accelerating and expanding upon our profit recovery plan. We expect to realize $800 million to $1 billion of incremental operating profit across fiscal years 2025 and 2026. The plan consists of 4 building blocks to improve each of gross margin and operating margin.

現在讓我談談我們的第四個支柱，重建我們的獲利能力。我們正在加速並擴大我們的利潤恢復計劃。我們預計在 2025 和 2026 財年實現 8 億至 10 億美元的增量營業利潤。該計劃由 4 個組成部分組成，旨在提高毛利率和營業利潤率。

First, we are focused on optimizing mix by elevating luxury across brands, most especially in skin care and fragrance, driven by consumer preferences by expanding our direct-to-consumer ecosystem across brick-and-mortar and online.

首先，我們致力於透過提升跨品牌的奢華度來優化組合，尤其是在護膚和香水領域，在消費者偏好的推動下，透過在實體店和線上擴展我們的直接面向消費者的生態系統。

Second, we have identified many opportunities to maximize value through better price realization and accretive innovation. Third, we intend to increasingly leverage the strategic investment we have made over the last few years, most notably our new manufacturing facility in Japan, our new China innovation labs in Shanghai and expanded online capabilities.

其次，我們發現了許多透過更好的價格實現和增值創新來實現價值最大化的機會。第三，我們打算更多地利用過去幾年進行的戰略投資，尤其是我們在日本的新製造工廠、我們在上海的新中國創新實驗室以及擴大的線上能力。

Lastly, we believe we can unlock meaningful cost efficiency from a combination of shorter supply chains, regionalization of our value chain and improved forecasting accuracy enabled by our new integrated business planning progress -- process across the global operation supported by advanced AI capabilities.

最後，我們相信，我們可以透過縮短供應鏈、價值鏈區域化以及透過我們新的綜合業務規劃進展（由先進人工智慧功能支援的全球營運流程）來提高預測準確性的組合來釋放有意義的成本效率。

Before I close, I'm pleased to share that today, we will release our fiscal year 2023 social impact and sustainability report. The future advancement made possible by the extraordinary efforts of our employees around the world across our ESG areas of focus and previously stated goals. Importantly, we again achieved Scope 1 and Scope 2 carbon neutrality and maintained our status of 100% renewal electricity globally for our direct operations.

在結束之前，我很高興與大家分享，今天我們將發布 2023 財年社會影響和永續發展報告。未來的進步是我們世界各地員工在 ESG 重點領域和先前設定的目標上的非凡努力所實現的。重要的是，我們再次實現了範圍 1 和範圍 2 碳中和，並在全球直接營運中保持了 100% 可再生電力的狀態。

The report also details that we obtained our global gender pay equity target for selected employees populations and achieved our spending targets with women- and black-owned suppliers and made strong progress toward our water withdrawal reduction and packaging targets. Today, we will also publish our second climate transition plan, which describes the effort in our ongoing climate transition journey.

該報告還詳細說明，我們為選定的員工群體實現了全球性別薪資平等目標，並實現了與女性和黑人擁有的供應商的支出目標，並在減少取水量和包裝目標方面取得了重大進展。今天，我們還將發布第二個氣候轉型計劃，其中描述了我們在正在進行的氣候轉型之旅中所做的努力。

In closing, in fiscal year 2024, we will remain focused on driving momentum in our markets of strength, returning to growth in the U.S., normalizing our Asia travel retail trade inventory, and expanding prestige beauty share further in Mainland China from our calendar 2-year date gains while accelerating our profit recovery plan for a robust acceleration of profitability in fiscal years 2025 and 2026.

最後，在2024 財年，我們將繼續專注於推動我們實力強勁的市場的發展勢頭，恢復美國的增長，使我們的亞洲旅遊零售貿易庫存正常化，並從我們的日曆2- 進一步擴大中國大陸的高端美容市場份額年初至今的收益，同時加速我們的利潤恢復計劃，以在 2025 和 2026 財年實現盈利能力的強勁加速。

To our employees, these are difficult times for the world and all of us. I'm grateful for what you do each and every day in caring for each other and for our beautiful company.

對我們的員工來說，這對世界和我們所有人來說都是困難時期。我感謝你們每天所做的互相關心和對我們美麗公司的關心。

Thank you. And I will now turn the call over to Tracey.

謝謝。我現在將把電話轉給特蕾西。

Thank you, Fabrizio, and hello, everyone. Let me begin with a brief review of our first quarter results in order to devote the majority of my discussion to our revised fiscal 2024 outlook and our profit recovery plan.

謝謝法布里奇奧，大家好。讓我先簡要回顧一下我們第一季的業績，以便將大部分討論集中在我們修訂後的 2024 財年展望和利潤復甦計劃上。

Our first quarter organic net sales declined 11%, and earnings per share was $0.11. From a geographic standpoint, organic net sales in the Americas increased 6%, led by mid-single-digit growth in North America and continued strength in specialty multi. In Latin America, net sales rose high single digits and was driven by continued strength in makeup as well as strong growth in both brick-and-mortar and online channels.

我們第一季的有機淨銷售額下降了 11%，每股收益為 0.11 美元。從地理角度來看，美洲的有機淨銷售額成長了 6%，這主要得益於北美的中個位數成長以及特種複合產品的持續強勢。在拉丁美洲，受化妝品持續強勁以及實體和線上通路強勁成長的推動，淨銷售額出現高個位數成長。

Organic net sales in our Asia Pacific region fell 3%, primarily due to incremental headwinds from the slower-than-expected recovery of overall prestige beauty in Mainland China. There were several bright spots in the rest of the region, led by triple-digit growth in Hong Kong SAR as well as double-digit growth in Japan and Australia. Our strategic investments in brand activation and new product innovation continue to resonate well with consumers in these markets.

亞太地區的有機淨銷售額下降 3%，主要是由於中國大陸整體高端美容復甦速度慢於預期帶來的不利因素。該地區其他地區也出現了一些亮點，其中以香港特別行政區的三位數增長以及日本和澳大利亞的兩位數增長為首。我們在品牌活化和新產品創新方面的策略投資繼續與這些市場的消費者產生良好的共鳴。

Hong Kong SAR also benefited from increased traffic in brick-and-mortar due to fewer COVID-related restrictions compared to last year and the resumption of tourism. Organic net sales fell 27% in Europe, the Middle East and Africa due to the ongoing headwinds in our Asia travel retail business.

由於與去年相比，與新冠病毒相關的限制減少以及旅遊業的恢復，香港特別行政區也受益於實體交通的增加。由於亞洲旅遊零售業務持續面臨阻力，歐洲、中東和非洲的有機淨銷售額下降了 27%。

The overall challenges in our travel retail business more than offset the performance in the rest of the region, where we saw strong growth in skin care and makeup as well as growth in most Western and emerging markets. Organic net sales growth was driven by our developed markets, led by the U.K., Germany and France.

我們的旅遊零售業務的整體挑戰遠遠抵消了該地區其他地區的業績，我們看到皮膚護理和化妝品的強勁增長以及大多數西方和新興市場的增長。有機淨銷售額成長是由以英國、德國和法國為首的已開發市場所推動的。

From a category perspective, fragrance continued to lead growth with organic net sales rising 5%. Strength from hero products as well as compelling innovation from Le Labo propelled double-digit increases in the Americas and in Asia Pacific. Tom Ford also contributed to growth, rising double digits in the Americas.

從品類角度來看，香水持續引領成長，有機淨銷售額成長 5%。英雄產品的實力以及 Le Labo 引人注目的創新推動了美洲和亞太地區兩位數的成長。湯姆福特 (Tom Ford) 也為成長做出了貢獻，在美洲實現了兩位數的成長。

Organic net sales rose 1% in makeup. We continue to enhance consumer engagement through strategic investments and brand campaigns, including social media activation and new product innovation. Once again, M·A·C was the overall top performer, and Too Faced, Tom Ford and Clinique all contributed to growth as well.

化妝品的有機淨銷售額增加了 1%。我們持續透過策略性投資和品牌活動（包括社群媒體活化和新產品創新）增強消費者參與度。 M·A·C 再次成為整體表現最佳的品牌，Too Faced、Tom Ford 和 Clinique 也都為成長做出了貢獻。

Organic net sales declined 7% in hair care and 21% in skin care. The pressures in Asia travel retail and in Mainland China drove the decrease in skin care. The declines from Estée Lauder and La Mer were somewhat offset by strong growth from The Ordinary. Consumer demand for the brand's hero products and new product innovation boosted its standout performance in the quarter.

護髮品的有機淨銷售額下降了 7%，保養品的有機淨銷售額下降了 21%。亞洲旅遊零售和中國大陸的壓力導致護膚品銷售下降。雅詩蘭黛 (Estée Lauder) 和海藍之謎 (La Mer) 的下滑在一定程度上被 The Ordinary 的強勁增長所抵消。消費者對該品牌主打產品和新產品創新的需求推動了該品牌本季的出色表現。

Our gross margin declined 440 basis points compared to last year. The benefits from the strategic pricing actions we took at the beginning of the fiscal year were more than offset by the under-absorption of overhead in our plants due primarily to the lower production of skin care products that accelerated in the second half of fiscal '23, higher obsolescence charges and an increase in promotional items, such as sets and samples, to support consumer activation.

與去年相比，我們的毛利率下降了 440 個基點。我們在本財年年初採取的策略定價行動所帶來的好處被我們工廠的間接費用吸收不足所抵消，這主要是由於護膚品產量的下降在 23 財年下半年加速。 、更高的報廢費用以及增加促銷品（例如套裝和樣品），以支持消費者激活。

Operating expenses increased 950 basis points as a percent of sales driven largely by the reduction in sales. We maintain key investment plans in areas such as advertising and promotional activities, innovation and selling to accelerate growth where we had momentum, which collectively accounted for 480 basis points of the increase compared to last year.

營業費用佔銷售額的百分比增加了 950 個基點，這主要是由於銷售額下降。我們在廣告和促銷活動、創新和銷售等領域維持了關鍵投資計劃，以加速我們有動力的成長，與去年相比，這些投資計劃總共實現了 480 個基點的成長。

Operating income declined 84% to $108 million, and our operating margin contracted to 3.1% from 17% last year. Diluted EPS of $0.11 decreased 92% compared to the prior year. The impact from the cybersecurity incident we disclosed this past July was $0.08 dilutive to EPS. The acquisition of the Tom Ford brand was neutral to EPS, including interest expense related to our debt financing and reflecting savings from royalties we no longer pay as we now own the brand.

營業收入下降 84% 至 1.08 億美元，營業利益率從去年的 17% 降至 3.1%。稀釋後每股收益為 0.11 美元，比前一年下降 92%。我們去年 7 月披露的網路安全事件的影響對 EPS 攤薄了 0.08 美元。收購湯姆福特品牌對每股盈餘是中性的，包括與我們的債務融資相關的利息支出，以及我們現在擁有該品牌而不再支付的特許權使用費所節省的費用。

During the quarter, we utilized $408 million in net cash flows from operating activities compared to $650 million last year. The decrease from last year reflects lower levels of working capital, including lower inventory levels, partially offset by lower net income. We invested $295 million in capital expenditures, and we returned $236 million in cash to stockholders through dividends.

本季度，我們利用經營活動產生的淨現金流量為 4.08 億美元，去年為 6.5 億美元。與去年相比的下降反映出營運資本水準較低，包括庫存水準較低，但被淨利潤較低所部分抵銷。我們投資了 2.95 億美元的資本支出，並透過股息向股東返還了 2.36 億美元的現金。

Turning now to our outlook for the second quarter and the full year. As Fabrizio mentioned, while we delivered on our Q1 expectations, we are lowering our fiscal '24 outlook for the balance of the year to reflect the slower-than-expected pace of recovery due to incremental external headwinds that continue to evolve during the second quarter. This includes the slower-than-expected growth in overall prestige beauty as well as the containment of the unstructured market activity in Asia travel retail and in Mainland China. This reduction also reflects the risks of potential business disruptions in Israel and other parts of the Middle East as well as currency headwinds.

現在轉向我們對第二季和全年的展望。正如 Fabrizio 所提到的，雖然我們實現了第一季的預期，但我們正在降低今年剩餘時間的 24 財年展望，以反映由於第二季度外部不利因素持續增加而導致的復甦速度慢於預期。這包括整體聲譽美容成長低於預期，以及亞洲旅遊零售和中國大陸非結構化市場活動受到遏制。這一減少也反映出以色列和中東其他地區潛在業務中斷的風險以及貨幣不利因素。

Using September 30 spot rates of [1.055 for the euro, 1.219 for the pound, 7.302 for the Chinese yuan and 13 49] for the Korean won, currency translation is anticipated to negatively impact reported sales and diluted EPS for the second quarter and for the full year.

使用 9 月 30 日的即期匯率[歐元 1.055、英鎊 1.219、人民幣 7.302 和韓元 13 49]，貨幣換算預計將對第二季度和第三季度的報告銷售額和攤薄每股收益產生負面影響。全年。

We expect organic sales for our second quarter to decline 8% to 10%. The incremental pressures from impacting sales in our Asia travel retail business and Mainland China are expected to continue to more than offset anticipated growth in other markets globally.

我們預計第二季的有機銷售額將下降 8% 至 10%。亞洲旅遊零售業務和中國大陸的銷售受到影響而帶來的增量壓力預計將繼續超過全球其他市場的預期成長。

Currency translation and the potential risk of further business disruptions in the Middle East are each anticipated to dilute reported sales growth for the second quarter by 1 percentage point.

預計貨幣換算和中東業務進一步中斷的潛在風險將導致第二季報告的銷售成長減少 1 個百分點。

We expect second quarter adjusted EPS of $0.48 to $0.58 for a decline between 62% to 69%. This includes dilution of approximately $0.08 from assumed risks of potential business disruption in Israel and other parts of the Middle East and approximately $0.04 from currency translation.

我們預計第二季調整後每股收益為 0.48 美元至 0.58 美元，降幅在 62% 至 69% 之間。這包括以色列和中東其他地區潛在業務中斷的假設風險稀釋約 0.08 美元，以及貨幣換算稀釋約 0.04 美元。

The increases in our full year effective tax rate and net interest expense are collectively expected to dilute EPS by $0.04. In constant currency, adjusted EPS is expected to decline between 60% and 66%.

全年有效稅率和淨利息支出的增加預計將導致 EPS 稀釋 0.04 美元。以固定匯率計算，調整後每股盈餘預計將下降 60% 至 66%。

For the full year, we expect organic sales to range between a decline of 1% and an increase of 2%. Currency translation and the potential risk of further business disruptions in the Middle East are each anticipated to dilute reported sales growth for the fiscal year by 1 percentage point.

我們預計全年有機銷售額將下降 1% 至成長 2% 之間。預計貨幣換算和中東業務進一步中斷的潛在風險將導致本財年報告的銷售成長減少 1 個百分點。

We expect full year operating margin to be between 9% and 9.5%, a contraction from 11.4% last year due to the lower sales growth level. We now expect our full year effective tax rate to be approximately 28%, reflecting the full year estimate of our geographical mix of earnings.

由於銷售成長水準較低，我們預計全年營業利潤率將在 9% 至 9.5% 之間，較去年的 11.4% 有所收縮。我們現在預計全年有效稅率約為 28%，反映了我們對地理收入組合的全年估計。

Diluted EPS is expected to range between $2.17 and $2.42 before restructuring and other charges and adjustments. This includes approximately $0.22 from the potential risk of further business disruptions in the Middle East as well as approximately $0.16 from currency translation. The increases in our full year effective tax rate and interest expense are collectively expected to dilute EPS by $0.16. In constant currency, we expect EPS to fall between 25% to 33%.

在扣除重組及其他費用和調整之前，稀釋後每股收益預計在 2.17 美元至 2.42 美元之間。其中包括中東地區進一步業務中斷的潛在風險帶來的約 0.22 美元以及貨幣換算帶來的約 0.16 美元。全年有效稅率和利息支出的增加預計將導致 EPS 稀釋 0.16 美元。以固定匯率計算，我們預期每股盈餘將下降 25% 至 33%。

Given this more challenging backdrop for fiscal '24, we have advanced the development of our multiyear profit recovery plan to support our priority to progressively rebuild margin in fiscal years '25 and '26. This plan is designed to accelerate the pace at which we expect to rebuild our margins while also facilitating operational efficiencies to support go-to-market agility in our local markets.

鑑於 24 財年更具挑戰性的背景，我們推進了多年利潤恢復計畫的製定，以支持我們在 25 財年和 26 財年逐步重建利潤率的優先事項。該計劃旨在加快我們重建利潤率的步伐，同時提高營運效率，以支持本地市場的上市敏捷性。

The plan initiatives will target specific areas to deliver expanded gross margin and operating profitability improvements and is initially expected to drive $800 million to $1 billion of incremental operating profit over the next 2 fiscal years. We aim to accelerate many initiatives and substantially operationalize the plan in the second half of fiscal '24 to enable the realization of a meaningful amount of the benefits beginning in fiscal '25.

該計劃舉措將針對特定領域，以擴大毛利率並提高營業利潤，最初預計將在未來 2 個財年增加 8 億至 10 億美元的營業利潤增量。我們的目標是在 24 財年下半年加速多項措施並實質實施該計劃，以便從 25 財年開始實現大量效益。

Our first priority is to accelerate the rebuild of our gross margin. We plan to optimize our category, product and channel mix to support profitable growth as well as focus on accretive innovation. We aim to better capitalize on our strategic pricing initiatives by reducing discounts related to excess production and continuing to exercise our pricing power ahead of inflation in our markets. Furthermore, we plan to reduce excess and obsolete inventory by enhancing our operational efficiencies and begin to leverage the investments we've made to regionalize our supply network in Asia.

我們的首要任務是加快毛利率的重建。我們計劃優化品類、產品和通路組合，以支援獲利成長並專注於增值創新。我們的目標是透過減少與過剩生產相關的折扣，並在市場通膨之前繼續行使我們的定價權，更好地利用我們的策略性定價措施。此外，我們計劃透過提高營運效率來減少過剩和過時的庫存，並開始利用我們所做的投資來實現亞洲供應網路的區域化。

Our profit recovery plan will also target OpEx reductions while further investing in consumer-facing activities that are imperative to accelerating recovery and driving long-term profitable growth. Our main areas of focus include containing head count as well as reduction in costs related to indirect procurement, T&E and transportation. These are just a few examples of actions we expect to take under our profit recovery plan. We plan to share more during our second quarter earnings call in February.

我們的利潤恢復計畫也將以減少營運支出為目標，同時進一步投資於面向消費者的活動，這些活動對於加速復甦和推動長期利潤成長至關重要。我們的主要關注領域包括控制人員數量以及降低與間接採購、差旅費和運輸相關的成本。這些只是我們預計根據利潤恢復計劃採取的行動的幾個例子。我們計劃在二月的第二季財報電話會議上分享更多資訊。

In closing, while we are encouraged by the strength we are seeing across our brand portfolio and recovery markets, intensifying macroeconomic and geopolitical volatility as well as weakening consumer confidence in certain markets have unfortunately slowed the pace of our anticipated recovery in isolated markets. Given these incremental challenges, we are taking actions through the advancement of our profit recovery plan to support our intention to progressively rebuild our profit margins over the next few years.

最後，雖然我們對品牌組合和復甦市場的強勁表現感到鼓舞，但宏觀經濟和地緣政治波動的加劇以及某些市場消費者信心的減弱，不幸的是減緩了我們預期的孤立市場復甦的步伐。鑑於這些增量挑戰，我們正在透過推進利潤恢復計畫採取行動，以支持我們在未來幾年逐步重建利潤率的意圖。

We remain confident about the long-term prospects for global prestige beauty and in our corporate strategy to drive long-term sustainable profitable growth. The desirability of our brands as well as the positive momentum we are seeing across categories and in certain markets give us optimism for the future recovery in all of our markets and demonstrate the resilience of our multiple engines of growth and our ability to drive share gains globally.

我們對全球知名美容的長期前景以及推動長期可持續盈利增長的企業策略充滿信心。我們品牌的吸引力以及我們在各個類別和某些市場中看到的積極勢頭讓我們對所有市場的未來復甦持樂觀態度，並展示了我們多個成長引擎的彈性以及我們在全球範圍內推動份額增長的能力。

Our return to sales growth, combined with the profit recovery plan, which we plan to finalize and begin implementing in the second half of this year, as I said before, support the achievement of margin rebuilding and profit recovery in the next few years.

正如我之前所說，我們的銷售成長回歸，加上我們計劃在今年下半年敲定並開始實施的利潤恢復計劃，將支持在未來幾年實現利潤率重建和利潤恢復。

I would like to extend our heartfelt appreciation to our employees around the globe for their continuing commitment and efforts to deliver our results during these challenging times.

我謹向我們全球的員工表示衷心的感謝，感謝他們在這個充滿挑戰的時期為實現我們的成果所做的持續承諾和努力。

That concludes our prepared remarks. We'll be happy to take your questions at this time.

我們準備好的演講到此結束。我們很樂意此時回答您的問題。

(Operator Instructions) Our first question today comes from Dara Mohsenian from Morgan Stanley.

（操作員指令）我們今天的第一個問題來自摩根士丹利的 Dara Mohsenian。

So apologies for a multipart question, but just had a few things on the profit recovery program. Conceptually, it sounds like it's more of a recovery from a depressed fiscal '24 base pushing even harder on some of the building blocks you outlined previously. Is that the case? Or are there more significant organizational changes that are now new in this plan to generate incremental savings?

因此，對於一個多部分的問題表示歉意，但只是關於利潤恢復計劃的一些內容。從概念上講，這聽起來更像是從 24 年蕭條的財政基礎中復蘇，更加努力地推動您之前概述的一些構建模組。是這樣嗎？或者，該計劃中是否有更重大的組織變革，以產生增量節省？

And also that $800 million to $1 billion profit recovery, should we think of that as just savings and recovery from a depressed base, and then base business top line growth on top of that could lead to greater recovery? How do we think about that?

此外，8 億至 10 億美元的利潤復甦，我們是否應該將其視為只是儲蓄和從低迷的基礎中復蘇，然後在此基礎上實現業務收入增長可以帶來更大的復甦？我們對此有何看法？

And then just, b, taking a step back, why not get even more aggressive here in terms of posture with a larger restructuring? Obviously, the external environment has changed. There's been some internal issues with supply chain and forecasting. So just thoughts on taking a more aggressive tack with the broader restructuring at some point?

然後，b，退後一步，為什麼不透過更大規模的重組採取更激進的姿態呢？顯然，外在環境發生了變化。供應鏈和預測存在一些內部問題。那麼是否只是考慮在某個時候採取更積極的策略進行更廣泛的重組？

And ladies and gentlemen, at this point, we may be having some technical difficulties with the speaker line. So one moment while we attempt to reconnect the speaker line.

女士們先生們，此時，我們的揚聲器線可能會遇到一些技術困難。我們嘗試重新連接揚聲器線路。

(technical difficulty)

（技術難度）

And ladies and gentlemen, we do have the speaker line reconnected to the conference. I'd like to turn the floor back over to Rainey for a quick statement.

女士們先生們，我們確實將揚聲器線重新連接到了會議上。我想請雷尼做一個簡短的發言。

Thank you, everyone, for your patience. We apologize for the difficulty. Fabrizio and Tracey are ready for our Q&A session now. So Jamie, if you can take us to our first question, please?

謝謝大家的耐心等待。對於造成的困難，我們深感抱歉。 Fabrizio 和 Tracey 現在已經準備好參加我們的問答環節。傑米，請您回答我們的第一個問題，好嗎？

And our first question, once again, is Dara.

我們的第一個問題再次是達拉。

So just wanted to start with a clarity question on the profit recovery program. It sounds like it's stemming more from a recovery versus a depressed fiscal '24 base and pushing even harder on some of the building blocks you had previously outlined. Is that the case? Or is it more of the larger organizational changes here that are new in this plan versus 3 months ago?

因此，我只想先明確一個有關利潤恢復計劃的問題。聽起來它更多地源於經濟復甦，而不是24年財政基礎低迷，並且更加努力地推動您之前概述的一些構建模組。是這樣嗎？或者與 3 個月前相比，本計劃中更多的是更大的組織變革？

And also, is that $800 million to $1 billion profit recovery, is that just the savings and recovery from a depressed base? Or -- and should we expect base business growth on top of that in terms of a top line rebound and the flow-through to profit?

而且，這 8 億至 10 億美元的利潤恢復是否只是從低迷的基數中節省下來的？或者—我們是否應該期望在營收反彈和利潤流入的基礎上實現基礎業務成長？

And then b, and apologize for the multipart but I want to get clarity there, just taking a step back, why not get more aggressive here with the larger restructuring? Obviously, the external environment has changed. There's been internal issues the last few quarters with supply chain and forecasting. In theory, SG&A levels have looked high ex marketing relative to peers. So just any thoughts on taking a more aggressive tack with a broader restructuring and how you guys think about that?

然後b，並為多部分道歉，但我想澄清一下，只是退後一步，為什麼不在這裡通過更大規模的重組變得更加積極？顯然，外在環境發生了變化。過去幾季供應鏈和預測出現了內部問題。從理論上講，除行銷因素外，SG&A 水平相對於同行來說看起來很高。那麼，對於採取更積極的策略進行更廣泛的重組，你們有什麼想法嗎？你們對此有何看法？

Thanks, Dara, for the question. And again, we do apologize for the technical difficulties. As it relates to the profit recovery plan, it is incremental to the growth that we expect from the base depressed level this year, as you indicate, Dara.

謝謝達拉的提問。再次，我們對技術困難表示歉意。由於它與利潤恢復計劃相關，因此正如您所指出的，達拉，它是我們預期從今年的基本低迷水平開始的增量增長。

So -- and we are looking at everything. Obviously, the first thing we're looking at is, as we mentioned in our prepared remarks, recovering our gross profit margin. And to your point, we've had issues with high levels of inventory. We've talked for years about and you all know that we typically, because of our lead times and our historic footprint carry high levels of inventory, which does affect our agility to be able to manage when shocks happen to the system, which is what's happened over the last couple of years.

所以——我們正在考慮一切。顯然，正如我們在準備好的發言中提到的那樣，我們首先要考慮的是恢復毛利率。就您而言，我們遇到了高庫存的問題。我們已經討論了很多年，你們都知道，由於我們的交貨時間和歷史足跡，我們通常會持有高水平的庫存，這確實會影響我們在系統發生衝擊時進行管理的敏捷性，這就是發生在過去幾年裡。

So certainly regionalizing our supply chain and completing the manufacturing facility we have in Japan will help us over the next few years in terms of being able to take more inventory out of transit and being able to produce a bit closer to demand.

因此，我們的供應鏈區域化和完善我們在日本的製造設施無疑將在未來幾年幫助我們從運輸中獲取更多庫存，並能夠更接近需求地進行生產。

We also have implemented and Fabrizio talked about our integrated business planning process, which is leveraging some of the tools that we've invested in over the last few years to really improve the accuracy of our forecast, to include a bit more of the commercial drivers that drive our business in our forecast, again, to improve the accuracy and have less excess inventory.

我們還實施了整合業務規劃流程，Fabrizio 談到了我們的整合業務規劃流程，該流程利用我們過去幾年投資的一些工具來真正提高我們預測的準確性，並納入更多的商業驅動因素這再次推動我們的業務預測提高準確性並減少過剩庫存。

And then the actions that we're already taking this year to help improve our gross margins for next year is a significant pull-down in our production volume. So our production units this year are down about 25% from what they were last year. So even though we are anticipating now more modest growth given the update to our forecast, we are drawing down on the inventory that we have on hand as well as, obviously, some of the actions we're taking from a shipment standpoint to draw down the inventory that we have in trade in Asia travel retail. So there are a number of actions that we're taking that will help gross margin.

然後，我們今年已經採取的旨在幫助提高明年毛利率的行動將顯著降低我們的產量。所以我們今年的產量比去年減少了約 25%。因此，儘管考慮到我們的預測更新，我們現在預計增長會更加溫和，但我們正在減少手頭的庫存，顯然，我們從發貨的角度採取了一些行動來減少庫存我們在亞洲旅遊零售貿易中擁有的庫存。因此，我們正在採取許多措施來提高毛利率。

We are going through a SKU rationalization program in addition to cutting some of our smaller diluted innovation programs that were planned over the next year or 2. So there are lots of actions we're taking. All of those actions are not finalized yet, but many of them are in flight. They just won't impact as much this year as they will in future years.

除了削減計劃在未來一兩年內進行的一些規模較小的稀釋創新計劃外，我們還在實施 SKU 合理化計劃。因此，我們正在採取很多行動。所有這些行動尚未最終確定，但其中許多行動正在實施中。它們今年的影響不會像未來幾年那麼大。

And then, yes, we are looking at our expense base and how we operate going forward, especially given our current level of sales and the lower base that we will be growing off of.

然後，是的，我們正在考慮我們的費用基礎以及我們未來的營運方式，特別是考慮到我們目前的銷售水平和我們將成長的較低基礎。

Our next question comes from Stephen Powers from Deutsche Bank.

我們的下一個問題來自德意志銀行的史蒂芬鮑爾斯。

I guess probably, Tracey, for you as well. Just maybe you could help provide a little bit more help bridging to the implied second half revenue and profitability outlook as implied in your guidance. It's a pretty significant step up from where you will be as of the end of December based on the 2Q guide. And that's despite battling what sounds like it will be headwinds in Asia travel retail inventory that will extend into at least the third quarter. So again, maybe you can -- just the building blocks there, your level of confidence and visibility.

我想，特雷西，可能也適合你。也許您可以幫助提供更多幫助，以彌合您的指導中暗示的下半年收入和盈利前景。根據第二季指南，與 12 月底的情況相比，這是一個相當重大的進步。儘管亞洲旅遊零售庫存聽起來像是在與逆風作鬥爭，但這種逆風至少會持續到第三季。再說一次，也許你可以——只是那裡的基石，你的信心和可見度水平。

And alongside that, it might help just if you have a view on what consumption is for your brands through this first quarter, maybe through the first half versus what you're actually shipping. Because I think a big a big part of that bridge is that you start to ship more to consumption as you get out from underneath the inventory headwinds. But again, it's a very big step up. So just some clarity and some more detail there would be great.

除此之外，如果您了解您的品牌在第一季的消費情況（也許是上半年的消費情況與您實際發貨的情況），這可能會有所幫助。因為我認為這座橋樑的一個重要組成部分是，當你擺脫庫存逆風時，你開始運送更多的消費。但同樣，這是一個非常大的進步。所以只要有一些清晰度和更多細節就很好了。

Yes. So no, you're exactly right. The assumption is that we ship more towards -- we're able to ship more towards the retail trends. I mean, as we said in the prepared remarks, our retail trends are ahead of our net trends in Asia travel retail, both still down because we are destocking the trade. And so the expectation is that, that will be completed by the end of the third quarter, so in the second half of the year.

是的。所以不，你是完全正確的。我們的假設是，我們能夠更朝著零售趨勢出貨。我的意思是，正如我們在準備好的發言中所說，我們的零售趨勢領先於亞洲旅遊零售的淨趨勢，兩者仍然下降，因為我們正在去庫存貿易。因此預計這將在第三季末完成，也就是今年下半年。

So part of this -- a large part of the step-up that you see in the second half of the year is our shipping more towards the retail trends that we are expecting in the second half of the year. That's a big part of it. And when you think about what happened to us and what we're anniversarying from the second half of last year, where we had the policy changes first in Korea that impacted our third and fourth quarter and then the policy change -- or policy reinforcement in Hainan, which impacted our fourth quarter. We had, in some parts of our Travel Retail business, very low shipments given those policy changes. And so we are anniversarying as well some of the initial shocks of that.

因此，您在今年下半年看到的成長的很大一部分是我們的出貨量更符合我們預計的下半年的零售趨勢。這是其中很大一部分。當你想到我們發生的事情以及我們去年下半年以來的周年紀念時，我們首先在韓國進行了政策變化，影響了我們的第三和第四季度，然後是政策變化 - 或者說政策強化海南，這影響了我們的第四季。鑑於這些政策變化，我們的旅遊零售業務的某些部分的出貨量非常低。因此，我們也正在慶祝這事件最初帶來的一些衝擊。

Lastly, I would say that we are seeing travel come back slowly, so again, more slowly than what we anticipated. We are seeing lighter levels of conversion relative to what we saw certainly prepandemic or even pre- the significant changes in policy across the Asia region. And -- but we are seeing traffic pick up, and we are certainly expecting that, that conversion will gradually pick up as well in the second half.

最後，我想說的是，我們看到旅行的恢復速度很慢，比我們預期的要慢。與我們在大流行前甚至整個亞洲地區政策發生重大變化之前所看到的情況相比，我們看到的轉換水平較低。而且，我們看到流量增加，我們當然預計，下半年的轉換率也會逐漸增加。

So those are some of the things that are underlying our second half expectations and the reason you see that big step-up in terms of volume. It's a combination of multiple factors, mostly in our Asia travel retail. A bit of it is a pickup as well in China also. Fabrizio, I don't know if there's anything you want to add.

這些是我們下半年預期的一些因素，也是您看到銷售量大幅成長的原因。這是多種因素綜合作用的結果，主要是在我們的亞洲旅遊零售領域。其中一部分在中國也有所提升。 Fabrizio，我不知道你是否還有什麼要補充的。

No. I just want to add that the -- our retail -- underlying retail calendar year-to-date is the mid-high single digits already globally. And our estimate of retail continue to be actually improving on this point. So the retail base, which is driven by the consumption of consumers, by the innovation, by the strength of the brand, by the demand from the consumer standpoint is very solid.

不。我只是想補充一點，我們的零售業今年迄今的基礎零售日曆在全球範圍內已經達到中高個位數。在這一點上，我們對零售業的估計實際上仍在繼續改善。因此，由消費者消費、創新、品牌實力、消費者需求驅動的零售基礎非常穩固。

For calendar year.

對於日曆年。

For calendar year-to-date. And as Tracey has said, the readjustment of inventories is the big things that we are dealing with. And the evolutions of the policies that have created these readjustments is what has been difficult to predict and anticipate, and it's been pretty volatile. And so that's the adjustment. But the underlying fundamentals are already strong. It's not that we need to develop them in order to deliver the retail in the future. We just to continue evolving on these fundamentals.

對於日曆年至今。正如特雷西所說，庫存的調整是我們正在處理的大事。導致這些調整的政策的演變是難以預測和預見的，而且非常不穩定。這就是調整。但基本面已經很強勁。這並不是說我們需要開發它們來提供未來的零售服務。我們只是在這些基礎上繼續發展。

Our next question comes from Jason English from Goldman Sachs.

我們的下一個問題來自高盛的 Jason English。

Thanks for sharing that encouraging data point on retail sales. Tracey, you're talking about how shipments weighed down last year and it's kind of following the story for last year. We've been thinking, once you get leverage back in, and once you're able to turn back on the sales, catch up of retail sales is going to give you a lot of operational leverage to aid the gross margin recovery, and that's really a sales problem.

感謝您分享有關零售銷售的令人鼓舞的數據點。崔西，你談論的是去年的出貨量如何下降，這有點像去年的故事。我們一直在思考，一旦你重新獲得槓桿，一旦你能夠扭轉銷售，零售銷售的成長將為你提供大量的營運槓桿，以幫助毛利率恢復，這就是確實是銷售問題。

But if I objectively stop back -- step back and look at the composition of the P&L, it does tell a slightly different story. I mean it doesn't look like a revenue problem. Revenue is actually just a round trip to where you were in the first quarter of '19. It looks like it's really a cost problem. Despite revenue being back where it was in first quarter '19, COGS up $250 million, SG&A up $320 million, and this is despite cost-cut program that you announced in late 2020, which so far doesn't appear to have yielded any savings.

但如果我客觀地退後一步，看看損益表的組成，它確實講述了一個略有不同的故事。我的意思是，這看起來不像是收入問題。收入實際上只是 19 年第一季收入的一個往返。看來這確實是成本問題。儘管收入恢復到 19 年第一季的水平，COGS 增加了 2.5 億美元，SG&A 增加了 3.2 億美元，儘管你們在 2020 年底宣布了成本削減計劃，但到目前為止，該計劃似乎沒有產生任何節省。

So can you help us understand what's caused the cost to run up so much over the last couple of years? Where have the efficiency savings gone so far? And I guess you are announcing the new actions to kind of go after it. Is that enough to kind of take that back out with the initiatives you have in place?

那麼您能否幫助我們了解是什麼導致成本在過去幾年大幅上漲？到目前為止，效率節省都去哪了？我猜你正在宣布新的行​​動來追趕它。這是否足以透過您所採取的措施來消除這種情況？

Yes. No, great question, Jason. So if you look back to the composition of the P&L in fiscal '19, you'll see that our gross margins were higher. And certainly, our cost as a percent of sales was a bit lower. And obviously, given the pull-down that we've had in this latest guidance review, our cost as a percent of sales are higher as well.

是的。不，很好的問題，傑森。因此，如果您回顧 19 財年損益表的組成，您會發現我們的毛利率較高。當然，我們的成本佔銷售額的百分比要低一些。顯然，考慮到我們在最新的指導審查中的下降，我們的成本佔銷售額的百分比也更高。

But we did have -- we've had 2 cost-saving programs. We had the Leading Beauty Forward program, and then we had the post-COVID Business Acceleration program. In both of those instances, certainly Leading Beauty Forward gave us runway. We were actually expanding operating margins by over 100 basis points a year, anywhere between 60, 80 to 100 basis points a year through that program. And that program allowed us to reinvest in capabilities that we needed, in particular to accelerate some of our digital marketing activities, to create some shared service structures in some of our functional areas and to be able to leverage cost better in those areas. So those programs -- that program was successful in both delivering margin expansion and expense leverage at the time.

但我們確實有——我們有兩個節省成本的計劃。我們有“領先美容前進”計劃，然後我們有“新冠疫情後業務加速”計劃。在這兩種情況下，Leading Beauty Forward 無疑為我們提供了跑道。透過該計劃，我們實際上每年將營業利潤率提高了 100 多個基點，幅度在 60、80 到 100 個基點之間。該計劃使我們能夠對所需的能力進行再投資，特別是加速我們的一些數位行銷活動，在我們的一些職能領域創建一些共享服務結構，並能夠在這些領域更好地利用成本。因此，這些計劃當時在利潤擴張和費用槓桿方面都取得了成功。

Advanced allowed us to close some of our underproductive brick-and-mortar doors and take a little bit of or adjustments as well. But we have, over the last few years, invested in a number of capabilities that have been needed in terms of in our regulatory area. That includes cyber, but also in the regulatory area given the increasing regulations in all of the countries that we do business with and the claims and -- that we need to support our brand marketing initiatives going forward.

高級功能使我們能夠關閉一些生產力低下的實體大門，並進行一些調整。但在過去幾年中，我們投資了監管領域所需的許多能力。這包括網絡，但也包括監管領域，因為與我們開展業務的所有國家/地區的法規都在不斷增加，我們需要支持我們未來的品牌行銷計劃。

We've made investments in areas like our sustainability program. So we have made a number of investments that, other than the shocks that we've had over the last couple of years, have been investments that were needed in the company.

我們在永續發展計劃等領域進行了投資。因此，除了過去幾年我們所遭受的衝擊之外，我們還進行了許多投資，這些投資都是公司所需的。

Certainly, as we look forward, we are looking at, as I said before, the profit recovery program is both focused on gross margin because we're not back at the gross margin levels that we were at in fiscal '19 or even before. And we also are looking at expense areas, everything from our procurement program where we expect that we can get some savings there, to other org efficiencies. So more to come in January, February, actually when we give you our second quarter results on what the final plan will look like. But it's -- believe me, we are as focused on the P&L structure recovery as you are, Jason.

當然，正如我之前所說，我們正在考慮利潤恢復計劃，重點是毛利率，因為我們沒有回到 19 財年甚至之前的毛利率水準。我們也關注費用領域，從我們希望能夠節省一些開支的採購計劃到其他組織效率。因此，一月、二月還會有更多內容，實際上當我們向您提供有關最終計劃的第二季度結果時。但相信我，我們和你一樣專注於損益結構的恢復，傑森。

Yes, just I would like -- Jason, just I would like to add the point on the fact that in really the profit recovery plan needs to rebuild gross margin. And as you said, also our new capability that we invested in that Tracey mentioned also in IT in many other areas needs to align to our current sales levels. And that's the work we are going to do as well. So those are the 2 big areas of focus. And in February, we will give much more specifics and details how will affect -- will impact 2025 in the majority in 2026.

是的，我只是想——傑森，我想補充一點，即利潤恢復計劃實際上需要重建毛利率。正如您所說，我們在許多其他領域的 IT 領域投資的新能力也需要與我們目前的銷售水準保持一致。這也是我們要做的工作。這些是兩大重點領域。在 2 月份，我們將提供更多細節和細節，這些細節將如何影響 2025 年的大部分時間和 2026 年的影響。

And so it's a pretty clear plan. I just want to say the entire organization is aligned on this plan. We have teams already working on this. We are completely committed to deliver that. And I just want to make a clarification on the programs that we announced in 2020 because you said it didn't deliver saving. It did deliver saving in the area of selling. That was the focus.

所以這是一個非常明確的計劃。我只想說整個組織都同意這個計畫。我們已經有團隊致力於此工作。我們完全致力於實現這一目標。我只想對我們在 2020 年宣布的計劃做出澄清，因為你說這些計劃沒有帶來節省。它確實在銷售領域節省了成本。這就是焦點。

Remember, this program was tailored a lot to the fact that the COVID had disrupted the go-to-market part of the business and then increased our sales online versus the sales in brick-and-mortar. So we need to reallocate resources more to online and less to brick-and-mortar and to create the right future in -- the future balance of cost between the 2 areas, that's what we did.

請記住，該計劃是根據以下事實量身定制的：新冠疫情擾亂了業務的上市部分，然後增加了我們的線上銷售額（相對於實體店銷售額）。因此，我們需要將資源更多地重新分配到線上，減少到實體，並在這兩個領域之間的未來成本平衡中創造正確的未來，這就是我們所做的。

In fact, we invested in the online progress. Today, we are still leveraging the benefits. And we did reduce our cost in the brick-and-mortar selling areas accordingly to the trends that COVID had created. So when we did in the past these kind of programs, we have been pretty successful in delivering what we wanted.

事實上，我們對線上進度進行了投資。今天，我們仍在利用這些好處。我們確實根據新冠疫情造成的趨勢降低了實體銷售區域的成本。因此，當我們過去進行此類計劃時，我們非常成功地交付了我們想要的東西。

Our next question comes from Olivia Tong from Raymond James.

我們的下一個問題來自 Raymond James 的 Olivia Tong。

A bit of a multipart question and follow-up to a few. But first, just a point of clarification on the global retail number that you gave of up mid- to high single digits. What's that for you or for the category? And then on travel retail, can you give us a sense on your visibility into how much inventory is still sitting with the groups or individuals versus in a brick-and-mortar duty-free channel, which we have a little bit better clarity in?

有點多部分的問題和一些後續問題。但首先，請澄清一下您所提供的中高個位數的全球零售數據。這對你或這個類別來說意味著什麼？然後在旅遊零售方面，您能否讓我們了解團體或個人的庫存量與實體免稅管道的庫存量（我們對此有更清晰的了解）？

Yes. Yes, it was -- it's our retail sales I was referring to. So calendar year-to-date in 2023, our trend of retail is mid-high single digit up to date. And our estimate for the future is to continue improving that trend. So my point is that retail is solid. And the negative net sales that we see in this first 6 months, for sure, our -- first, this month of the fiscal year are related to the readjustment of inventories that Tracey was mentioned.

是的。是的，我指的是我們的零售額。因此，從 2023 年至今，我們的零售趨勢迄今處於中高個位數。我們對未來的估計是繼續改善這一趨勢。所以我的觀點是零售業是穩固的。當然，我們在本財年的前 6 個月看到的負淨銷售額與特雷西提到的庫存調整有關。

Second, on the visibility on these inventories in travel retail and -- by the way, when we say this retail, we say ex the travel retail numbers, just one clarification. So it's once the travel retail number. The point we are trying to make is that when the travel retail number, the retail and the net will be aligned, and we said they will be aligned as of the end of the third quarter. As of this moment, the retail -- the solidity of the retail progress is already in the making. That's the point we are trying to make.

其次，關於旅遊零售中這些庫存的可見性，順便說一句，當我們說這種零售時，我們說的是旅遊零售數據，這只是一個澄清。所以它曾經是旅遊零售號碼。我們想要表達的觀點是，當旅遊零售數量、零售和網路將保持一致時，我們表示它們將從第三季末開始保持一致。截至目前，零售業——零售業進步的堅實性已經在形成。這就是我們想要表達的觀點。

Anyway, on travel retail, we had a significant stock reduction in this first quarter. And we aim to be in line with the inventory expectation of retailers by the end of March. And we have visibility into these numbers. We have visibility. We have exactly the understanding for -- with each one of our retailers on where we are today, what are the programs that we are doing in order to accelerate sales retail of the existing stocks and what are the programs to obviously replenish and sell in innovation and all what we need to do in these areas. And finally, how by end March, we aim to have the retail and the net aligned. That's the program.

無論如何，在旅遊零售方面，我們第一季的庫存大幅減少。我們的目標是在三月底前達到零售商的庫存預期。我們可以看到這些數字。我們有可見度。我們對我們的每一位零售商都了解我們今天所處的位置，我們正在採取哪些計劃來加速現有庫存的銷售零售，以及哪些計劃可以明顯地補充和銷售創新以及我們在這些領域需要做的一切。最後，我們的目標是在三月底之前實現零售和網路的一致性。這就是程序。

Our next question comes from Filippo Falorni from Citi.

我們的下一個問題來自花旗銀行的 Filippo Falorni。

So I wanted to ask a question on Mainland China. It's the first quarter where you guys talked about a bit of a slowdown relative to prior quarters. So maybe, Fabrizio, can you give some context on the level of slowdown that you're seeing in the category? And then from a competitive standpoint, we've seen some local brands doing a little bit better, more on the mass side. But have you seen any trade-down within the category, both on skin care and cosmetics?

所以我想問一個關於中國大陸的問題。這是第一季度，你們談到了相對於前幾季的一些放緩。那麼，Fabrizio，您能否提供一些有關您在該類別中看到的放緩程度的背景資訊？然後從競爭的角度來看，我們看到一些本土品牌做得更好一些，在大眾方面做得更好。但您是否看到該品類在護膚品和化妝品方面有任何降價？

Yes. No. First of all, the market was growing 2% in the first quarter in China. Our retail during this quarter was flat, but our retail in China calendar year-to-date is growing, and we are building market share. But in that specific quarter, the market growth went down to 2%. Now our estimate of the recovery of the beauty market in prestige was higher than that, and that is the -- one of the key readjustments we are making in the -- in projecting the year. That's the point.

是的。不會。首先，中國市場第一季成長了 2%。本季我們的零售額持平，但年初至今我們在中國的零售額正在成長，我們正在擴大市場份額。但在那個特定季度，市場成長率下降至 2%。現在，我們對美容市場聲譽復甦的估計高於此，這就是我們在預測這一年時所做的關鍵調整之一。這才是重點。

And so this 2% is the current trend level. Also, as I said in my prepared remarks, the presale period of Tmall and particularly on -- in general, the Singles Day, confirms a softer trend versus a year ago, and that's why we are reflecting this confirmation. Now we are more optimistic about the next part of the Singles Day events in November, but is -- the presale was confirming a softer market.

所以這2%就是當前的趨勢水準。此外，正如我在準備好的發言中所說，天貓的預售期，尤其是雙十一，證實了與一年前相比的疲軟趨勢，這就是我們反映這一確認的原因。現在，我們對 11 月雙十一活動的下一部分更加樂觀，但預售證實了市場疲軟。

In term of your second part of the question, is the -- there are local brands in mass and in masstige, which are doing well, we start doing well in China for sure. In prestige, the impact of that is for the moment limited. And so we see prestige being solid in comparison to mass in general. And we don't see a big movement from prestige to mass at this point in time.

就你問題的第二部分而言，大眾和大眾品牌都有本土品牌，它們做得很好，我們肯定在中國開始做得很好。在聲望方面，目前其影響有限。因此，我們認為與大眾相比，聲望是穩固的。目前我們還沒有看到從聲望到大眾的大轉變。

Our next question comes from Bryan Spillane from Bank of America.

我們的下一個問題來自美國銀行的 Bryan Spillane。

I wanted to go back to Jason English's question regarding margins. And I guess, as we kind of look forward and try to think about the rebuild to the previous margin aspirations, how much of it will -- do you expect to come from the expanded cost savings? And how much is just resetting the business mix? Because travel retail is so profitable. And so do we need travel retail to get back to kind of a similar percentage of sales as where it was 3 years ago? Or would you be able to get there if travel retail ended up being smaller for reasons given how cyclical it is?

我想回到 Jason English 關於利潤率的問題。我想，當我們展望未來並嘗試考慮重建先前的利潤目標時，您預計其中有多少來自於擴大的成本節約？重置業務組合需要多少錢？因為旅遊零售非常有利可圖。那麼，我們是否需要旅遊零售業才能恢復到與 3 年前相似的銷售百分比？或者，如果旅遊零售業因週期性原因而最終規模縮小，您還能實現這一目標嗎？

Yes. No, it's a great question. Given where travel retail is right now, and certainly, we, I'm sure many others are thinking about the future of travel retail, which we are very encouraged by in terms of a return to growth but a return to the prior levels? Don't know. You have much now of the volume that has shifted to the local market. And I would expect to continue to see growth in the local market as well. So there may be a rebalance as it relates to the consumption for the Chinese consumer in particular as well as perhaps other consumer groups.

是的。不，這是一個很好的問題。考慮到旅遊零售業現在的狀況，當然，我們，我相信許多其他人都在思考旅遊零售業的未來，我們對恢復成長感到非常鼓舞，但又回到之前的水平？不知道。現在大部分銷售已經轉移到本地市場。我預計本地市場也將持續成長。因此，可能會出現重新平衡，因為這與中國消費者以及其他消費群體的消費有關。

So we're not counting on travel retail to get back to prior levels. If it does, that's great. But our profit recovery program, combined with some of the growth plans that we have for our markets and brands going forward, are not relying on that to return to profit margin -- the profit margins that we had previously.

因此，我們並不指望旅遊零售業能夠恢復到先前的水準。如果是這樣，那就太好了。但我們的利潤恢復計劃，加上我們為市場和品牌制定的一些成長計劃，並不依賴於此來恢復利潤率——我們先前的利潤率。

And I would like to offer a bit of historical perspective on what happened during this COVID period and the volatility that this brought. I mean when you -- because you were comparing in your question versus before COVID versus the 3 years ago previous -- so take 2019. Our business in Mainland China versus 2019 is more than doubled. Our TR business today globally versus 2019 is by now, with this estimate that we are giving to you now, is actually well below.

我想就新冠疫情期間發生的事情以及由此帶來的波動提供一些歷史視角。我的意思是，因為你在問題中比較了新冠疫情之前和三年前的情況，所以以 2019 年為例。我們在中國大陸的業務與 2019 年相比增加了一倍多。我們目前在全球範圍內的 TR 業務與 2019 年相比，根據我們現在向您提供的估計，實際上遠低於這一水平。

So -- but it's true that during this COVID period, the TR business, also driven by the unstructured phenomenon that we have discussed previously was actually up. But then by now, this has been reabsorbed. So the profile of the business in -- with Chinese consumers in 2019 was that there was a base sales in Mainland China. There was a lot of the sales to Chinese consumer that were happening around the world in their travel. This was estimated to be up to 40% of what was the total consumption at that time before COVID. And this -- a lot of this was in travel retail and also was in the cities that were visited like, I don't know, London, Paris, New York, Hong Kong, Tokyo, et cetera.

所以，但確實，在新冠疫情期間，TR 業務也在我們之前討論過的非結構化現象的推動下實際上有所增長。但現在，這已經被重新吸收了。因此，2019 年針對中國消費者的業務概況是，在中國大陸有基礎銷售。中國消費者的許多銷售都是在他們在世界各地旅行時發生的。據估計，這相當於新冠疫情爆發前當時總消費量的 40%。其中很大一部分是在旅遊零售業，也發生在那些我不知道的城市，像是倫敦、巴黎、紐約、香港、東京等。

So now during COVID, obviously, the frontier were all closed. So this consumption came back into Mainland China. In fact, our business in Mainland China today, as I said, has doubled the world was. And some of it went into travel retail, like Hainan development and all the other things that happened, which are very good for the long term. And some of it went into the unstructured business, which is actually going down now and is part of the readjustment. And these are positive things for the long term.

所以現在在新冠疫情期間，顯然，邊境全部關閉了。所以這種消費又回到了中國大陸。事實上，我們今天在中國大陸的業務，正如我所說，已經是全球的兩倍了。其中一些進入了旅遊零售業，例如海南的開發和所有其他發生的事情，這對長期來說非常有利。其中一些進入了非結構化業務，該業務現在實際上正在下降，並且是調整的一部分。從長遠來看，這些都是正面的事情。

And so the resulting -- the result of all these movements is frankly solid and sustainable for the long term because the results is a solid business in Mainland China, which we are supporting and will continue to support. We have built an R&D center. We have created all the abilities to be more locally relevant in the future and to continue to support this business and invest in this business and invest in this very important market for us in the long term that we believe is core to -- also to our future growth algorithm.

因此，坦白說，所有這些舉措的結果是穩固且長期可持續的，因為這些結果在中國大陸是一項穩固的業務，我們正在並將繼續支持這一點。我們建立了研發中心。我們已經創造了所有能力，以便在未來更加貼近當地，並繼續支持這項業務並投資於這項業務，並從長遠來看投資於這個對我們來說非常重要的市場，我們認為這是核心— —也是我們的核心未來成長演算法。

At the same time, the amount of volatile business that went into the TR in the period of COVID has been derisked and is going down. And as we said, we need to continue to derisk it in this fiscal year. And that's what we are planning and that's what we are announcing in term of the resulting guidance of that.

同時，在新冠疫情期間進入TR的不穩定業務量已經消除了風險，並且正在下降。正如我們所說，我們需要在本財年繼續消除風險。這就是我們正在計劃的，這就是我們根據由此產生的指導而宣布的。

And the travel business, meaning the regular travelers and Chinese consumer that are traveling the world, this is gradually going up again and so will create good consumption by regular travelers. In this moment, it's going up more in Asia than in the West. The travel into the West is still relatively limited, but we forecast this over time to continue to improve. And the lending place of these movements will be the sustainable profitable business that we are coming back to.

而旅遊業務，即定期旅行者和環遊世界的中國消費者，正在逐漸回升，因此將為定期旅行者創造良好的消費。目前，亞洲的成長速度超過了西方。前往西方的旅行仍然相對有限，但我們預計隨著時間的推移，這種情況將繼續改善。這些變動的借出地將是我們即將回歸的可持續獲利業務。

Okay. So to be clear, we can get back to kind of the previous profit algorithm even if travel retail and basically Hainan is not as big as it was previously?

好的。因此，需要明確的是，即使旅遊零售業和海南基本上沒有以前那麼大，我們也可以回到先前的利潤演算法嗎？

Yes, we believe so.

是的，我們相信是這樣。

And ladies and gentlemen, with that, we've reached the end of today's question-and-answer session. I'd like to turn the floor back over to Fabrizio for any closing remarks.

女士們先生們，今天的問答環節到此結束。我想請法布里奇奧（Fabrizio）發表結束語。

Thank you. And I just wanted to try to summarize this enormous moving part and make sure that we give you the clarity of what we are focused on at this point in this moment. So we expect calendar year 2023 to be the final, and frankly painful, post-COVID reset period for the company. We move forward with confidence as our fundamentals are strong in this attractive prestige beauty industry.

謝謝。我只是想嘗試總結這個巨大的移動部分，並確保我們讓您清楚地了解我們此時此刻的重點。因此，我們預計 2023 年將是該公司最後的、坦白說是痛苦的後新冠疫情重置期。我們滿懷信心地前進，因為我們在這個頗具吸引力的知名美容行業擁有強大的基礎。

Our calendar year-to-date retail sales performance remain very solid in all recovery markets and in general, both developed and emerging in the mid-single high digit that I quoted before.

我們的歷年迄今的零售銷售業績在所有復甦市場中仍然非常穩健，總體而言，無論是已開發市場還是新興市場，都處於我之前引用的中高位數。

Our brand portfolio is better than ever with the recent acquisition of Tom Ford, solidifying our luxury strategy and The Ordinary, which we didn't talk a lot in this call but is becoming a powerhouse brand at the entry of growing active derma segment and is definitely our fastest-growing brand in our portfolio.

隨著最近收購Tom Ford，我們的品牌組合比以往任何時候都更好，鞏固了我們的奢侈品策略和The Ordinary，我們在這次電話會議中沒有談論太多，但在不斷增長的活躍真皮細分市場中正在成為一個強大的品牌，絕對是我們產品組合中成長最快的品牌。

Our innovation pipeline is robust for fiscal year 2024, but it gets even better and bigger and stronger in fiscal year 2025 with the expansion into the white space opportunity that we have identified.

我們的創新管道在 2024 財年非常強勁，但在 2025 財年，隨著我們已確定的空白機會的擴展，它會變得更好、更大、更強。

We are on track to align retail and net sales via inventory reduction with our retailers in China private retail, as discussed during the call. We are focused on accelerating a more balanced growth in the future by market, by channel. And importantly, via the profit recovery plan, we are preparing to rebuild gross margin, leverage our new capabilities to align our expenses to our current sales level and further strengthen our consumer-facing activities. And we have the strategic focus and the talent to do this work, and together, intend to return to our historical cadence of delivering sustainable sales and profit growth.

正如電話會議中所討論的那樣，我們有望透過減少庫存與中國私人零售零售商協調零售和淨銷售額。我們致力於在未來按市場、按管道加速更平衡的成長。重要的是，透過利潤恢復計劃，我們正準備重建毛利率，利用我們的新能力使我們的支出與當前的銷售水平保持一致，並進一步加強我們面向消費者的活動。我們擁有完成這項工作的策略重點和人才，並希望共同恢復實現永續銷售和利潤成長的歷史節奏。

And thank you for your time and for your attention today.

感謝您今天的時間和關注。

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

女士們先生們，我們今天的電話會議和演示就到此結束。我們感謝您的加入。現在您可以斷開線路。