elf Beauty Inc (ELF) 2017 Q3 法說會逐字稿

Greetings, and welcome to the e.l.f. Beauty Third Quarter Fiscal 2017 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Allison Malkin. Thank you. You may begin.

問候，歡迎來到 e.l.f.美妝 2017 年第三季度財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我想將會議交給東道主艾莉森·馬爾金女士。謝謝。你可以開始了。

Thank you. Good afternoon, everyone. Thank you for joining us to discuss e.l.f.'s third quarter 2017 earnings results. A copy of today's press release is available in the Investor Relations section of elfcosmetics.com. A recording of the call will also be available for 90 days on elfcosmetics.com.

謝謝。大家下午好。感謝您與我們一起討論 e.l.f. 2017 年第三季度的盈利結果。今天新聞稿的副本可在 elfcosmetics.com 的投資者關係部分獲取。通話錄音也將在 elfcosmetics.com 上保留 90 天。

As a reminder, this call contains forward-looking statements that are based on management's beliefs and assumptions, expectations, estimates and projections. These statements, including those related to the company's fiscal year 2017 outlook, are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially. Important factors that may cause actual results to differ from those expressed or implied by such forward-looking statements are detailed in today's press release and the company's SEC filings.

提醒一下，本次電話會議包含基於管理層的信念和假設、期望、估計和預測的前瞻性陳述。這些陳述，包括與公司 2017 財年展望相關的陳述，受到已知和未知的風險和不確定性的影響，因此，實際結果可能存在重大差異。今天的新聞稿和公司向 SEC 提交的文件中詳細介紹了可能導致實際結果與此類前瞻性陳述明示或暗示的結果不同的重要因素。

In addition, the company's presentation today includes information presented on a non-GAAP basis. We refer you to today's press release for a reconciliation of the differences between a non-GAAP presentation and the most directly comparable GAAP measures.

此外，該公司今天的演示文稿還包括基於非公認會計原則（Non-GAAP）的信息。我們建議您參閱今天的新聞稿，以了解非公認會計準則演示文稿與最直接可比的公認會計準則衡量指標之間的差異。

With us from management today are: Tarang Amin, Chairman and Chief Executive Officer; and John Bailey, President and Chief Financial Officer. For today's call, Tarang will begin with an overview of our results and as typical for us, John and Tarang will then alternate sharing the progress we made against our growth strategies, and providing additional details related to our financial performance and guidance. This will be followed by a Q&A session.

今天與我們一起出席的管理層包括： 董事長兼首席執行官 Tarang Amin；以及總裁兼首席財務官約翰·貝利 (John Bailey)。在今天的電話會議中，塔朗將首先概述我們的業績，按照我們的慣例，約翰和塔朗將輪流分享我們根據增長戰略取得的進展，並提供與我們的財務業績和指導相關的更多詳細信息。隨後將進行問答環節。

It is now my pleasure to turn the call over to Tarang.

現在我很高興將電話轉給塔朗。

Thanks, Allison, and hello, everyone. We're pleased to report Q3 results with net sales increasing 28% and adjusted earnings per share up 94% versus a year ago. In a category currently experiencing headwinds, we continue to exhibit strong growth and take share. According to Nielsen, in the 52 weeks ended October 7, e.l.f.'s market share of the color cosmetics category was 4.5%, up from 4% last year. We also continue to see strong growth in non-track channels.

謝謝艾莉森，大家好。我們很高興地報告第三季度業績，淨銷售額同比增長 28%，調整後每股收益同比增長 94%。在目前面臨逆風的類別中，我們繼續表現出強勁的增長並佔領市場份額。根據尼爾森的數據，截至10月7日的52週內，e.l.f.在彩妝品類的市場份額為4.5%，高於去年的4%。我們還繼續看到非軌道渠道的強勁增長。

For the full year, we're increasing our adjusted earnings per share guidance to $0.55, growth of over 50% versus year ago. We're revising our net sales growth to approximately $270 million. This reflects timing of pipeline and new distribution as well as current category trends. We remain focused on the execution of our 4 growth strategies. Our first strategy is to build a great brand. E.l.f. is a brand that beauty enthusiasts love.

對於全年，我們將調整後每股收益指引提高至 0.55 美元，較去年同期增長超過 50%。我們將淨銷售額增長修正為約 2.7 億美元。這反映了管道和新發行的時間以及當前的類別趨勢。我們仍然專注於執行 4 項增長戰略。我們的首要戰略是打造一個偉大的品牌。E.l.f.是美容愛好者喜愛的品牌。

In Q3, we expanded our Beautyscape program during New York Fashion Week. We reached a combined audience of 210 million with a message of inclusiveness that fits well with our mission to make luxurious beauty accessible for all. We also continue to build our loyalty program, Beauty Squad, which now has over 600,000 members.

第三季度，我們在紐約時裝週期間擴大了 Beautyscape 計劃。我們向總計 2.1 億受眾傳達了包容性的信息，這與我們讓所有人都能享受奢華之美的使命非常契合。我們還繼續建立我們的忠誠度計劃 Beauty Squad，目前已擁有超過 600,000 名會員。

I'll turn it over to John to discuss progress on innovation and brand penetration.

我會將其交給約翰討論創新和品牌滲透方面的進展。

Thanks, Tarang. Our second strategy is to lead innovation. We believe our depth and breadth of high-quality innovation at an extraordinary value sets us apart from other brands. In Q3, we launched 49 items, including 16 first-to-mass products. During the month of September, we had a new launch each and every day, highlighting our robust innovation capability. We also continue to innovate at opening price points with the introduction of our $1 satin eyeliner pencils and $2 blush, bronzer and highlighters.

謝謝，塔朗。我們的第二個戰略是引領創新。我們相信，高質量創新的深度和廣度以及非凡的價值使我們有別於其他品牌。第三季度，我們推出了 49 個產品，其中 16 個首發產品。9月份，我們每天都有新品發布，凸顯了我們強大的創新能力。我們還繼續在開放價位上進行創新，推出了 1 美元的緞面眼線筆和 2 美元的腮紅、古銅色和熒光筆。

Our third strategy is to expand brand penetration. In national retailers, we are pleased to announce that we will be expanding e.l.f. into all Ulta Beauty stores during the first half of 2018. Ulta Beauty is a key destination for beauty enthusiasts and we're excited about the continued partnership. We also ship customized holiday assortment to both Target and Walmart during the quarter.

我們的第三個戰略是擴大品牌滲透率。在全國零售商中，我們很高興地宣布我們將擴大 e.l.f.2018 年上半年進入所有 Ulta Beauty 門店。Ulta Beauty 是美容愛好者的主要目的地，我們對持續的合作夥伴關係感到興奮。我們還在本季度向塔吉特和沃爾瑪運送定制的節日產品。

In Q3, we opened our first e.l.f. branded pop-up store in Times Square, allowing us to showcase the brand and engage with consumers in a high-traffic area. Our international business continues to demonstrate strong year-over-year growth.

在第三季度，我們開設了第一家 e.l.f.在時代廣場開設品牌快閃店，使我們能夠在人流量大的區域展示品牌並與消費者互動。我們的國際業務繼續呈現強勁的同比增長。

I'll now turn it back to Tarang to discuss our operational progress.

現在我將把它轉回塔朗討論我們的運營進展。

Thanks, John. Our fourth strategy is to drive world-class operations, which starts with world-class people. We're pleased to welcome Beth Pritchard to our Board of Directors. Beth has over 30 years of business leadership, helping grow leading consumer brands. She was a CEO of Bath and Body Works from its founding to over $2 billion in sales. Beth is an experienced board member, with expertise in international expansion, brand building and retail. This brings the number of women on our Board to 4 out of 8 members.

謝謝，約翰。我們的第四個戰略是推動世界一流的運營，這要從世界一流的人才開始。我們很高興歡迎 Beth Pritchard 加入我們的董事會。Beth 擁有 30 多年的商業領導經驗，幫助發展領先的消費品牌。從 Bath and Body Works 成立到銷售額超過 20 億美元，她一直擔任該公司的首席執行官。Beth 是一位經驗豐富的董事會成員，在國際擴張、品牌建設和零售方面擁有專業知識。這使得我們董事會的 8 名成員中女性人數達到 4 名。

In Q3, our fulfillment rates were above 99% for national retailers, direct and international. We also shipped the majority of our holiday assortment, giving our customers the ability to get to a faster start on holiday sales. In summary, we're making good progress on our strategy.

第三季度，我們的國內直營零售商和國際零售商的履行率均超過 99%。我們還運送了大部分節日產品，使我們的客戶能夠更快地開始節日銷售。總而言之，我們的戰略正在取得良好進展。

I'll now turn it back to John to discuss our financial progress and outlook for 2017.

現在我將把話題轉回給 John，討論我們 2017 年的財務進展和前景。

Thanks, Tarang. For the third quarter, net sales increased 28% to $71.9 million, reflecting strong growth across our business. We also benefited from shipments to international customers as well as the timing of our holiday program. Gross margin expanded from 58% to 60%, primarily as a result of margin-accretive innovation, coupled with improvements in customer terms, freight costs and foreign exchange, partially offset by customer mix.

謝謝，塔朗。第三季度淨銷售額增長 28% 至 7,190 萬美元，反映出我們整個業務的強勁增長。我們還受益於向國際客戶的發貨以及我們的假期計劃的時間安排。毛利率從 58% 擴大到 60%，主要是由於利潤增長型創新，加上客戶條件、貨運成本和外匯方面的改善，部分被客戶組合所抵消。

On an adjusted basis, SG&A as a percentage of sales was 40%. Adjusted EBITDA was $17.3 million compared to $11.7 million in the third quarter of 2016. Adjusted net income was $8.5 million or $0.17 per share, compared to $4.5 million or $0.09 per share in Q3 of '16. As compared to last year, year-to-date net sales increased 23%, gross margin expanded from 57% to 62%, adjusted EBITDA grew from $31.7 million to $38.9 million and adjusted net income grew 117%. Adjusted net income per diluted share rose from $0.17 to $0.39.

經調整後，SG&A 佔銷售額的百分比為 40%。調整後 EBITDA 為 1,730 萬美元，而 2016 年第三季度為 1,170 萬美元。調整後淨利潤為 850 萬美元，即每股 0.17 美元，而 16 年第三季度為 450 萬美元，即每股 0.09 美元。與去年相比，年初至今的淨銷售額增長了 23%，毛利率從 57% 增長至 62%，調整後 EBITDA 從 3170 萬美元增長至 3890 萬美元，調整後淨利潤增長 117%。調整後每股攤薄淨利潤從 0.17 美元增至 0.39 美元。

From a balance sheet perspective, we ended the quarter with an inventory balance of $63.6 million. For the full year, we are updating our guidance as presented in the press release. We're adjusting our 2017 outlook to approximately $270 million of net sales, reflecting the timing of pipeline and new distribution as well as current category trends. Our outlook for adjusted EBITDA remains within the previously provided range, and we are increasing our adjusted net income and adjusted diluted EPS guidance.

從資產負債表的角度來看，本季度末我們的庫存餘額為 6360 萬美元。對於全年，我們正在更新新聞稿中提出的指導。我們將 2017 年淨銷售額展望調整為約 2.7 億美元，反映了管道和新分銷的時間安排以及當前的品類趨勢。我們對調整後 EBITDA 的展望仍保持在之前提供的範圍內，並且我們正在提高調整後淨利潤和調整後稀釋每股收益指導。

In closing, we are pleased with our progress, making luxurious beauty accessible for all. I'd like to now ask the operator to open the call for questions.

最後，我們對我們的進步感到滿意，讓所有人都能享受到奢華的美麗。我現在想請接線員開始提問。

(Operator Instructions) Our first question comes from Steph Wissink with Jefferies.

（操作員說明）我們的第一個問題來自 Jefferies 的 Steph Wissink。

Just a point of clarification, John, on the timing shipment. Could you give us in more detail on what was at play in the third and fourth quarter, and then how you're thinking about the opportunity into Q1. And then my question is just related to your comment on customer mix being a gross margin headwind. Could you talk a little bit about how we should think about the mix of business evolving and whether you expect that to eventually become a tailwind?

約翰，我想澄清一點關於發貨時間的問題。您能否更詳細地介紹一下第三季度和第四季度的情況，以及您如何看待第一季度的機會。然後我的問題與您對客戶組合是毛利率不利因素的評論有關。您能否談談我們應該如何考慮業務發展的組合以及您是否期望這最終成為一種順風？

Sure. So 2 parts to that question. The first is just timing of overall sales, I think you noted in the revision of our guidance, we did talk about the shift in timing of our reset pipeline. So Steph, as you'd be familiar in Q4 or Q1 of each year, depending on the retailer and depending on the year, we do have a pipeline that goes out relative to those shelf resets. We've seen the majority of our retailers actually want to do those resets later into the first part of 2018, and therefore, take that pipeline later, so that was one piece of it. The other piece I think you heard us talk to, which was more of a, both the Q3 and Q4 impact frankly, was the timing of our holiday program. And if you took a look last year as well as this year, we shipped holiday in each of Q3 and Q4. Our program was roughly similar in terms of overall size. We ended up shipping more in Q3 than we did prior year, and therefore, will ship less in Q4 than we did prior-year, which is a little bit the converse of what we would have expected and what we were hearing on the last call. In terms of the overall margin, we're quite happy with the continued expansion of our gross margin and not only in the quarter, but certainly, in the year-to-date period, and at its core, the drivers really remain the same. So innovation's the biggest piece, and to a lesser extent, some of the other items that I mentioned, FX, freight and customer terms. We also saw some offsetting impact from customer mix in the quarter and just a little bit more context on that. In each and every year of the company's history, we've had some portion of our sales that go through discounters, as we move through discontinued product that's coming off the wall as we put new items onto the wall. If you look at the last couple of years, that's been less than 5% of our business and this year will be no different. It just so happens that we saw a greater weighting of those sales in the third quarter.

當然。這個問題分為兩部分。第一個是整體銷售的時間安排，我想您在修訂我們的指導意見時注意到，我們確實討論了重置管道時間的轉變。因此，斯蒂芬，正如您在每年的第四季度或第一季度所熟悉的那樣，根據零售商和年份，我們確實有一條與貨架重置相關的管道。我們看到大多數零售商實際上希望在 2018 年上半年晚些時候進行這些重置，因此，稍後再採取該渠道，所以這就是其中的一部分。我想你聽到我們談論的另一件事，坦率地說，更多的是第三季度和第四季度的影響，是我們假期計劃的時間安排。如果你看看去年和今年，我們在第三季度和第四季度都推出了假期。我們的程序在總體規模上大致相似。我們最終在第三季度的出貨量比去年多，因此，第四季度的出貨量將比去年少，這與我們的預期和我們在上次電話會議中聽到的情況有點相反。就整體利潤率而言，我們對毛利率的持續擴張感到非常滿意，不僅在本季度，而且在今年迄今為止的期間，其核心驅動因素確實保持不變。因此，創新是最重要的部分，其次是我提到的其他一些項目，例如外匯、運費和客戶條款。我們還看到了本季度客戶組合的一些抵消影響，以及更多相關背景信息。在公司歷史上的每一年，我們都有一部分銷售是通過折扣店進行的，當我們把新產品放到牆上時，我們會處理那些從牆上掉下來的停產產品。如果你看看過去幾年，這還不到我們業務的 5%，今年也不例外。碰巧的是，我們在第三季度看到這些銷售額的權重更大。

Our next question comes from Oliver Chen of Cowen & Company.

我們的下一個問題來自 Cowen & Company 的 Oliver Chen。

Regarding your comments about categories experiencing headwinds, what are your thoughts about what you're seeing in the market and how you juxtapose that against what you're focused on in terms of innovation, and as you build out the different kinds of breadth and depth within what products you're choosing to emphasize and innovate. And then, just a modeling question. Inventories, they grew at a faster rate than sales. Should we expect that trend to continue? And any details on that going forward would be great.

關於您對遇到逆風的類別的評論，您對您在市場上看到的東西有何看法，以及您如何將其與您在創新方面關注的內容並列，以及當您構建不同類型的廣度和深度時您選擇強調和創新哪些產品。然後，只是一個建模問題。庫存的增長速度快於銷售額的增長速度。我們是否應該預期這種趨勢會持續下去？關於未來的任何細節都會很棒。

Oliver, this is Tarang. I'll take the first part of the question on the category and then turn it over to John on the inventory question. Overall, in the category, in terms of what's tracked, if you take a look in 2016, the category grew about 3%. In the latest Nielsen period, it was down close to 3%. Now we believe we're better positioned than many as you can tell by us taking share, and our overall growth rates, but there are some headwinds in the category. What we would expect is, given the resiliency and the importance of this category to consumers over time, we'd expect it would eventually bounce back, but until then, we're taking a more conservative stance. On what makes us better positioned, you talked about one of the core elements, which is our innovation. So far this year, I think year-to-date, we've launched over 95 new items, and that's up from about 62 last year, and we're also getting faster in terms of the speed of that innovation. Like innovations against both color cosmetics as well as skin care, and so we're very well positioned in terms of the items that consumers are responding to as we look forward. We also have a very strong business in non-track channels, whether I look at elfcosmetics.com, our own stores, our customer.coms as well as international. We do quite well in those channels as well, and we'll continue to see that regardless what you're seeing in the overall category.

奧利弗，這是塔朗。我將回答關於類別的問題的第一部分，然後將其轉交給約翰關於庫存問題。總體而言，在該類別中，就跟踪的內容而言，如果您看一下 2016 年，該類別增長了約 3%。在尼爾森最新一期數據中，這一數字下降了近 3%。現在，我們相信我們比許多公司處於更好的地位，正如您從我們的份額和整體增長率中可以看出的那樣，但該類別存在一些阻力。我們期望的是，考慮到隨著時間的推移，該類別對消費者的彈性和重要性，我們預計它最終會反彈，但在那之前，我們將採取更為保守的立場。關於什麼使我們處於更好的位置，您談到了核心要素之一，那就是我們的創新。我認為今年到目前為止，我們已經推出了超過 95 款新產品，比去年的 62 款有所增加，而且我們的創新速度也在加快。就像針對彩妝和護膚品的創新一樣，因此我們在消費者所期待的產品方面處於非常有利的位置。我們在非軌道渠道方面也擁有非常強大的業務，無論是 elfcosmetics.com、我們自己的商店、我們的 customer.com 還是國際渠道。我們在這些渠道中也做得很好，無論您在整個類別中看到什麼，我們都會繼續看到這一點。

And then Oliver, on your inventory question, I'd say just generally, we feel great about our overall position, including what it's allowed us to do in terms of fulfillment rates with our key customers. You heard Tarang mentioned, over 99% fulfillment in the quarter. I would continue to caution the group on using 2016 as a baseline, given that it was artificially low with our warehouse move that we had last year and in Q4, we will have pipeline that's still on our books, related to those shelf resets. So I'd sort of guide everybody to 2018 as a cleaner year, if you will, to start doing some of those calculations.

然後奧利弗，關於你的庫存問題，我想說的是，一般來說，我們對我們的整體地位感覺很好，包括它允許我們在關鍵客戶的履行率方面所做的事情。您聽到 Tarang 提到，本季度的履行率超過 99%。我將繼續提醒該集團使用 2016 年作為基準，因為我們去年和第四季度的倉庫搬遷人為地降低了基準，我們的賬簿上仍將有與貨架重置相關的管道。因此，如果你們願意的話，我會引導大家將 2018 年視為更清潔的一年，開始進行一些計算。

Okay. And Tarang, just on the -- my first question about, the category. When you step back, why do you think the category slowed down on the factors outside of e.l.f.? Just to help characterize it for investors, in terms of what was happening and is your sense of that -- this is temporary versus permanent, it sounds like it, from what you were saying.

好的。塔朗，關於我的第一個問題，類別。當您退後一步時，您認為為什麼該類別會因 e.l.f. 之外的因素而放緩？只是為了幫助投資者根據正在發生的事情以及你的感覺來描述它——從你所說的來看，這是暫時的還是永久性的。

My sense is it is temporary, and I base that on when you look at over a long period of time within color cosmetics, it's been one of the best consumer categories, and again, it goes back to the importance the consumer has in the category and particularly, when you look at some brands like us, our makeup enthusiasts, for whom this isn't really a discretionary purchase. We have seen previous periods where you did have a few quarters where the category's soft. I mentioned last time we saw this was in 2014 and the category came roaring back, so we would expect it to bounce back at some point, but there are certainly current headwinds as we take a look, and I don't have to get in to brands that might be suffering out there. We just have to be well positioned, but the category is what it is.

我的感覺是它是暫時的，而且我的基礎是，當你在很長一段時間內觀察彩妝時，它一直是最好的消費類別之一，這又回到了消費者對該類別的重要性特別是，當你看看像我們這樣的化妝品愛好者的品牌時，對於他們來說，這並不是真正的隨意購買。我們已經看到，在之前的時期，確實有幾個季度該類別表現疲軟。我上次提到我們看到這一點是在 2014 年，該類別捲土重來，所以我們預計它會在某個時候反彈，但當我們觀察時，當前肯定存在阻力，我不必介入那些可能正在遭受苦難的品牌。我們只需要做好定位，但品類就是這樣。

Our next question comes from Jon Andersen of William Blair.

我們的下一個問題來自威廉·布萊爾的喬恩·安德森。

I guess I'll try a 2-parter here as well. So I think the latest scanner data has been up kind of high single digits for the brand and the implied Q4 growth is I think a bit below that. If you can just talk about again, a little bit more clarity around some of the puts and takes because I would think with the scanner data trending above the implied growth plus some of the shelf space expansion, I think you talked about in mass and shipping that in Q4, the number feels kind of conservative first blush. And then if I could talk -- ask you, just comment broadly on competition and some of the rapidly growing brands from social media influencers like Kylie cosmetics. Are these part of the slowdown in the color cosmetics category mass? Or do you not consider that a factor?

我想我也會在這裡嘗試兩人合作。因此，我認為該品牌的最新掃描儀數據已經上漲了較高的個位數，而我認為隱含的第四季度增長略低於該數字。如果您可以再次談論一下，請更清楚地了解一些投入和投入，因為我認為掃描儀數據趨勢高於隱含增長加上一些貨架空間擴張，我認為您談到了質量和運輸在第四季度，這個數字乍一看有點保守。然後，如果我可以談談——請問你，請廣泛評論競爭和來自社交媒體影響者（如凱莉化妝品）的一些快速增長的品牌。這些是彩妝類別質量放緩的一部分嗎？或者您不認為這是一個因素？

Yes, Jon. I'll take the first and then let Tarang take the second part of the question. Just generally speaking, we go back to the difficulty in our business of looking at any single quarter and trying to tie that back to the broader Nielsen trend. I go back to some of the dynamics that we touched on mainly that timing of pipeline and what we saw on the comparable quarter in Q4 of '16 versus what we're seeing in Q4 of '17 as well as the holiday sales that we're anniversary-ing, which were a benefit to Q3 over prior year, but end up hurting that optical growth rate in Q4.

是的，喬恩。我將回答第一部分，然後讓塔朗回答問題的第二部分。一般來說，我們回到我們業務中的困難，即查看任何單個季度並試圖將其與更廣泛的尼爾森趨勢聯繫起來。我回到我們主要談到的一些動態，主要是管道的時間安排，以及我們在16 年第四季度的可比季度中看到的情況與我們在17 年第四季度看到的情況以及我們在假日銷售中看到的情況。週年慶，這對第三季度比去年同期有利，但最終損害了第四季度的光學增長率。

And then on the question regarding competition. I believe what you're seeing overall in the marketplace is a trend we've been seeing for some time, which is there are certain brands that are resonating strongly with these core makeup enthusiasts, including e.l.f. and they're better positioned frankly, than some of the legacy brands in the marketplace. The other thing I'd tell you from a consumer standpoint in terms of where are these brands are winning, is there's a real blurring of the lines between traditional, kind of definitions of prestige or mass. When we look at our own users and look at kind of in their makeup bags, you'll often find prestige products in addition to e.l.f. and some other brands that resonate with them so our consumers incredibly savvy in understanding which brands work for her, which brands speak to her and you'll see brands like ours continue to be well positioned.

然後是關於競爭的問題。我相信你在市場上看到的總體趨勢是我們一段時間以來看到的趨勢，即某些品牌與這些核心彩妝愛好者產生了強烈共鳴，包括 e.l.f.坦率地說，與市場上的一些傳統品牌相比，它們的定位更好。我要從消費者的角度告訴你的另一件事是，這些品牌在哪裡獲勝，傳統的聲望或大眾定義之間的界限確實模糊了。當我們觀察我們自己的用戶並查看他們化妝包中的物品時，您經常會發現除了 e.l.f 之外的知名產品。以及其他一些與他們產生共鳴的品牌，因此我們的消費者非常精明地了解哪些品牌適合她，哪些品牌與她交談，你會看到像我們這樣的品牌繼續處於有利地位。

Our next question comes from Bill Chappell of SunTrust Robinson Humphrey.

我們的下一個問題來自 SunTrust Robinson Humphrey 的 Bill Chappell。

Can you just talk a little bit more just, I understand there's some pull forward of shipments into the third quarter. Is there any way to quantify that of kind of what percentage of sales you saw that were pulled into the September quarter? Did it add 5%, 10% to the top line growth?

您能否再多說一點，我知道第三季度的出貨量有所提前。有什麼方法可以量化您看到的九月季度銷售額的百分比嗎？它是否使收入增長增加了 5%、10%？

Yes, Bill, we're not going to be able to break that down that way for you, but again, it is just a shift between Q3 and Q4 on those holiday -- on that holiday timing.

是的，比爾，我們無法為您詳細解釋這一點，但同樣，這只是在假期的第三季度和第四季度之間的轉變 - 在假期時間上。

I guess, I'm trying -- was it meaningful and a meaningful change from the retailers from that? Or it just got -- it happens to fall sometime in September versus October?

我想，我正在嘗試——零售商對此做出的改變是否有意義？或者它恰好是在 9 月和 10 月的某個時候發生的？

Yes, it's more of the latter. I mean it's -- as you think about traditional holiday periods for those retailers that can -- it can vary by a week and have an impact year-over-year in terms of where they take it.

是的，更多的是後者。我的意思是，當你考慮那些零售商的傳統假期時，它可能會發生一周的變化，並且會逐年影響他們的假期安排。

And I think just adding to that, this year, obviously, they wanted to get to a faster start on their own holiday and you're starting to see some of that holiday product show up in some of our leading retailers and we feel really great about kind of both the presentation as well as the overall program and we're happy to support them being to get off to a faster start on holiday.

我想補充一點，今年，顯然，他們希望更快地開始自己的假期，你開始看到一些假期產品出現在我們的一些領先零售商中，我們感覺真的很棒關於演示和整體計劃，我們很高興支持他們更快地開始假期。

Okay. And then on the SG&A side, just to make sure I understand it, it was certainly lower than expected and obviously from prior quarters where you've been spending a lot of money back in behind the brands and was that on purpose with just the timing? Should I expect an acceleration as we move forward? Or I'm just trying to understand if there was -- that had to do with kind of timing of orders or this was always in the plan?

好的。然後在SG&A方面，只是為了確保我理解這一點，它肯定低於預期，而且顯然與前幾個季度相比，你在品牌背後投入了大量資金，而且是故意的，只是時間安排？當我們前進時我應該期待加速嗎？或者我只是想了解是否存在 - 這與訂單的時間安排有關，或者這始終在計劃中？

Yes. So I would say we were consistent with our own expectations. And if you take a look at SG&A spend over each of the last 3 quarters, it's been roughly consistent and obviously, the levels that we're talking about on a year-over-year basis represents significant investment back into the business namely in the areas that we discussed on brand, people and infrastructure. And so we continued investing in the third quarter. What I'd tell you on a go-forward basis is you will see some elevation of that SG&A line just given the higher volumes that you do see in Q4, but overall, very consistent with what we expected.

是的。所以我想說我們符合我們自己的期望。如果你看一下過去 3 個季度每個季度的 SG&A 支出，你會發現它基本上是一致的，而且顯然，我們談論的同比水平代表了對業務的大量投資，即在我們討論了品牌、人員和基礎設施等領域。因此我們在第三季度繼續投資。我要告訴你的是，在未來的基礎上，你會看到SG&A線有所上升，只是考慮到你在第四季度看到的更高的銷量，但總的來說，與我們的預期非常一致。

Our next question comes from Shannon Coyne with BMO Capital Markets.

我們的下一個問題來自 BMO 資本市場的 Shannon Coyne。

So the mass channel including Target and Walmart, are they making big bucks in beauty rolling out -- to about roll out new store formats, bumping up staffing and technology. Can you give us your thoughts on whether or not you think they're on the right path to regain market share? What are you most excited about? And what do you think they need to look at, that they haven't looked at already in order to gain some share back?

因此，包括塔吉特和沃爾瑪在內的大眾渠道，他們在推出新的商店模式、增加人員配備和技術等美容產品方面賺了大錢。您能否告訴我們您認為他們是否走在重新奪回市場份額的正確道路上？你最興奮的是什麼？您認為他們需要關注哪些尚未關注的內容才能贏回一些份額？

Yes, I mean, I think beauty, first and foremost, for many of these retailers is the core destination category. I mean, I'd say long treated as a very important category within the overall box, and we continue to see them invest and position themselves that way. We talked on the last quarterly call, Walmart's investment in their kind of light wall initiative and really creating a better presentation of beauty. Target is long seen beauty as the destination and you continue to see players like Ulta Beauty really be well positioned amongst these core beauty enthusiasts. So what I'll tell you is everyone is going after this category given the importance to them overall and again, where we are a key partner to each one of our customers we're in to be able to help grow.

是的，我的意思是，我認為對於許多零售商來說，首先也是最重要的是，美容是核心目的地類別。我的意思是，我想說長期以來一直被視為整個框架中非常重要的類別，我們繼續看到他們以這種方式投資和定位自己。我們在上一季度的電話會議上談到了沃爾瑪對其光牆計劃的投資，並真正創造了更好的美感呈現。Target 長期以來一直被視為美容目的地，您會繼續看到像 Ulta Beauty 這樣的玩家在這些核心美容愛好者中確實處於有利地位。所以我要告訴你的是，考慮到這一類別的整體重要性，每個人都在追求這一類別，我們是每一位客戶的關鍵合作夥伴，我們能夠幫助他們成長。

Okay. And can you talk about the amount of shelf space you're getting in Ulta when you roll out in the first half of '18? And then I guess, just lastly, do you think you're getting a new customer there? Or is this just (inaudible) mass channel?

好的。您能談談您在 18 年上半年推出 Ulta 時獲得的貨架空間嗎？然後我想，最後，你認為你會在那裡找到新客戶嗎？或者這只是（聽不清）大眾頻道？

Yes, so what I'd tell you is we can't talk about the space for 2018, but you can already see the brand in a subset of Ulta stores, and we're really, really happy with the presentation in those stores and what they do. And then in terms of customer, I think one of the reasons why we're excited about Ulta is what we saw with in ulta.com as well as in the subset of their stores. And since it's a really strong overlap with this core beauty enthusiast customer and so I think both e.l.f. as well as Ulta Beauty resonates very strongly with that enthusiast and that's what made it a natural fit.

是的，所以我要告訴你的是，我們不能談論 2018 年的空間，但你已經可以在 Ulta 商店的一部分中看到該品牌，我們對這些商店的展示非常非常滿意，他們做什麼。然後就客戶而言，我認為我們對 Ulta 感到興奮的原因之一是我們在 ulta.com 及其部分商店中看到的情況。因為它與這個核心美容愛好者客戶有很強的重疊，所以我認為 e.l.f.Ulta Beauty 與該愛好者產生了強烈的共鳴，這就是它自然適合的原因。

Our next question comes from Linda Bolton-Weiser of D.A. Davidson.

我們的下一個問題來自 D.A. 的 Linda Bolton-Weiser。戴維森。

Can you comment a little bit on the Walmart linear footage expansion? And I think you had originally said that was going to benefit the second and fourth quarter growth rates? So can you just comment, is that still the case? And if so, excluding the incremental Walmart space and shipments related to that, it looks like your revenue would probably be down year-over-year in the fourth quarter given your new guidance so maybe you could comment on that. And then related to that, the 20% increase at Walmart looked to us equivalent to now your Target space. So is that accurate? And if so, would the next jump up in footage at those retailers be harder to get to? In other words, going from like AC to significantly more, that would be like the Cover Girl or the Maybelline space. So would that take longer for you to achieve? Or are there still increments that you could make at Walmart and Target above what you have already?

您能評論一下沃爾瑪線性鏡頭擴展嗎？我想您最初曾說過這將有利於第二季度和第四季度的增長率？那麼你能評論一下嗎，現在還是這樣嗎？如果是這樣，排除沃爾瑪的增量空間和與之相關的發貨量，根據您的新指導，您第四季度的收入可能會同比下降，所以也許您可以對此發表評論。與此相關的是，在我們看來，沃爾瑪 20% 的增長相當於現在您的 Target 空間。那麼這準確嗎？如果是這樣，這些零售商的下一個鏡頭跳躍是否會更難獲得？換句話說，從像 AC 到更多，就像封面女郎或美寶蓮空間。那麼你會需要更長的時間才能實現這一目標嗎？或者，您在沃爾瑪和塔吉特是否還可以在現有的基礎上進行更多的增量？

Yes. So why don't I take the one on space and then have John talk a little bit more about the sales question on what quarter. So what I'd tell you overall in terms of space, we have seen a variety of in terms of where increments come in terms of space, so it is not always kind of you have to do it in 4 feet chunks, you'll see a variety of planograms at Walmart, at Target so there's an ability for us to continue to earn more space based on what those customers see and we'll talk about that space gain as time goes on, but we're quite satisfied in terms of how the brand performs and what that results in. And then on the Walmart space expansion, I think just a point of nuance, what we did say is that we would see an expansion of linear footage both in Q2 as well as in Q4 with the majority of that actually setting in Q4. Important to note that the impact of space, whether it's Walmart or any other retailer, is we actually land this space, and then we work to leverage our data to optimize assortment and merchandising within that space. So I'm not sure that you would actually see a material benefit to sales until we got into next year, Linda.

是的。那麼，為什麼我不把這個放在太空中，然後讓約翰多談談哪一季度的銷售問題呢？因此，我要告訴您的總體空間方面，我們已經看到了各種空間增量的情況，因此您並不總是必須以 4 英尺的塊來完成它，您會在沃爾瑪和塔吉特看到各種貨架圖，因此我們有能力根據這些客戶所看到的內容繼續贏得更多空間，隨著時間的推移，我們將討論空間增益，但我們對這些方面感到非常滿意品牌的表現以及結果。然後，關於沃爾瑪的空間擴張，我認為有一個細微差別，我們確實說過，我們將在第二季度和第四季度看到線性鏡頭的擴展，其中大部分實際上是在第四季度設置的。值得注意的是，空間的影響，無論是沃爾瑪還是任何其他零售商，都是我們實際登陸這個空間，然後我們努力利用我們的數據來優化該空間內的分類和銷售。所以我不確定在我們進入明年之前你是否真的會看到銷售的實質性好處，琳達。

Our next question comes from Andrea Teixeira of JPMorgan.

我們的下一個問題來自摩根大通的安德里亞·特謝拉。

It's Christina for Andrea. Just going back to the sales trends for fiscal '17, just how much of the cut was related to timing and distribution versus the category softness over all like any kind of parsing out in color will be helpful. And then for the Ulta rollout, how is your performance versus your expectations especially as you're kind of seeing an implied slow down and in terms of like productivity through the Nielsen data, so how does that compare in Ulta stores, are you seeing better productivity there? And how should we be thinking about the timing of the sell-in period for incremental Ulta doors into next year?

這是安德里亞的克里斯蒂娜。回到 17 財年的銷售趨勢，到底有多少削減與時間和分銷有關，而不是與類別的軟度有關，就像任何類型的顏色解析一樣，將會有所幫助。然後，對於Ulta 的推出，您的表現與預期相比如何，特別是當您看到隱含的放緩以及通過Nielsen 數據得出的類似生產力時，那麼與Ulta 商店相比，您是否看到了更好的結果生產力在那裡？我們應該如何考慮明年增量 Ulta 門的銷售期的時間安排？

Yes, so overall, in terms of the guidance and the revision that we've made, obviously the category has been a reality throughout the last few quarters so certainly, we're incredibly well positioned against that broader context, and that's evidenced in the share that we've been able to take, but whenever you have a category that goes from up a few points to down a few points, we're not immune from seeing some impact of that. A bigger part was really the timing that we saw in terms of these pipeline shipments as well as some assumptions for new distribution that we had, which we see as good long-term opportunities into '18 and '19, but ones that we strategically decided to pause on and obviously, really happy about our distribution progress including the announcement of our full chain partnership with Ulta into 2018.

是的，總的來說，就我們所做的指導和修訂而言，顯然該類別在過去幾個季度中已成為現實，因此，當然，我們在更廣泛的背景下處於令人難以置信的有利位置，這一點在分享我們已經能夠接受的，但每當你的類別從上升幾個點到下降幾個點時，我們都不能倖免於看到它的一些影響。更重要的部分實際上是我們在這些管道發貨方面看到的時機，以及我們對新分銷的一些假設，我們認為這是 18 和 19 年的良好長期機會，但我們戰略上決定的機會暫停一下，顯然，我們對我們的分銷進展感到非常高興，包括宣布我們與Ulta 的全鏈條合作夥伴關係將持續到2018 年。

(Operator Instructions) Our next question comes from Erinn Murphy of Piper Jaffray.

（操作員說明）我們的下一個問題來自 Piper Jaffray 的 Erinn Murphy。

I guess I have a couple of questions. First on the full year guidance, I think you'll end up from a sales perspective around 17%. How confident are you guys that this can reaccelerate to that 20% growth rate beyond this year? Do you need to see the category reaccelerate or is there enough newness in that kind of pipeline to kind of get you back there beyond this year? And then secondly, could you just talk a little bit more about how your own stores performed in the third quarter? Did it follow a similar shape from a sellout perspective as you saw on wholesale?

我想我有幾個問題。首先，就全年指導而言，我認為從銷售角度來看，最終會達到 17% 左右。你們對今年之後能夠重新加速到 20% 的增長率有多大信心？您是否需要看到該類別重新加速發展，或者此類渠道是否有足夠的新鮮感讓您在今年之後重返該類別？其次，您能多談談您自己的商店在第三季度的表現嗎？從銷售角度來看，它是否遵循與您在批發市場上看到的類似的形狀？

Yes, so overall on the guidance, I think the latest figures that we just provided imply an 18% growth rates for the year. But, obviously, a lot of good growth for us into 2017, Erinn. In terms of future period, we are not in a position to talk about 2018 until we are together on the next call. All I'd say from that 20% figure that you referenced is that, that figure is a CAGR from 2016 to '19 and that obviously it's early.

是的，總體而言，就指導而言，我認為我們剛剛提供的最新數據意味著今年的增長率為 18%。但是，很明顯，我們在 2017 年取得了很大的良好增長，Erinn。就未來而言，在我們下次電話會議之前，我們無法談論 2018 年。從您提到的 20% 數字中我想說的是，該數字是 2016 年至 19 年的複合年增長率，顯然還為時過早。

Got it. And then just on your stores?

知道了。然後就在你的商店裡？

Yes, so stores are doing incredibly well. I think you heard in the commentary to open the call that we continue to invest behind our stores, including our most recent store in Time Square. We continue to see incredible results off of those locations, including the engagement that we see from consumers, the passion of our associates and importantly, the insights that we continue to get. Growth continues to be quite attractive in our stores. And there's one other question, I think from before, there was a second part question asking about our performance versus expectations and productivity. I can't talk to specific numbers for competitive reasons, but, obviously, we and Ulta Beauty were very happy with our performance, otherwise, I don't believe they would expanded us into all of their stores in 2018. And then, in terms of our overall productivity, I think probably the most important thing is what the relative productivity of us is, relative to many of the brands that actually have more space than us and we feel really good about that as well.

是的，所以商店的經營狀況非常好。我想你在評論中聽到我們繼續投資我們的商店，包括我們在時代廣場最近的商店。我們繼續在這些地點看到令人難以置信的成果，包括我們從消費者那裡看到的參與度、我們員工的熱情，以及重要的是我們不斷獲得的見解。我們商店的增長仍然相當有吸引力。還有一個問題，我想從之前開始，第二部分問題詢問我們的績效與期望和生產力。出於競爭原因，我無法透露具體數字，但顯然，我們和 Ulta Beauty 對我們的表現非常滿意，否則，我不相信他們會在 2018 年將我們擴展到他們的所有商店。然後，就我們的整體生產力而言，我認為最重要的可能是我們的相對生產力，相對於許多實際上比我們擁有更多空間的品牌，我們對此也感覺很好。

Our next question comes from Mark Astrachan of Stifel.

我們的下一個問題來自 Stifel 的 Mark Astrachan。

This is Claire on for Mark. Just wanted to ask about one other comment on the category. So makeup is slowing, and if that continues into next year, can you give some comments on what the offset might be and how you might, or if you might need to refocus on any different categories like beef up the focus on skin care.

這是克萊爾為馬克代言的。只是想詢問有關該類別的另一條評論。因此，化妝正在放緩，如果這種情況持續到明年，你能否就抵消可能是什麼以及如何抵消提出一些評論，或者你是否可能需要重新關注任何不同的類別，例如加強對皮膚護理的關注。

So we feel -- first of all, as I mentioned earlier on the category, we don't believe, as we look at long history of color cosmetics and the importance it has for consumers, we believe it's a great category for the long term. We are very well positioned when it comes to our own skin care line, and we are seeing more and more consumers kind of respond to the insight that you need good skin to have good makeup coverage, and we're particularly excited about our recent launches with e.l.f. Beauty Shield as well as Ulta Active, and kind of how that positions us as well as the overall pipeline we have in skin care. Again, I can't talk about the specific products that we're most excited about for 2018, but you'll hear more about that in future calls, but again, we're well positioned, given the amount of innovation we have across both color cosmetics as well as skin care.

所以我們覺得——首先，正如我之前提到的，我們不相信，當我們審視彩妝的悠久歷史及其對消費者的重要性時，我們認為從長遠來看，這是一個偉大的類別。在我們自己的護膚系列方面，我們處於非常有利的地位，我們看到越來越多的消費者對這樣的見解做出反應，即您需要良好的皮膚才能獲得良好的化妝覆蓋率，我們對我們最近推出的產品感到特別興奮與 e.l.f.Beauty Shield 和 Ulta Active，以及這對我們以及我們在皮膚護理領域的整體管道的定位。再說一次，我無法談論 2018 年我們最興奮的具體產品，但您會在以後的電話會議中聽到更多相關信息，但考慮到我們在各個領域的創新量，我們已經處於有利位置無論是彩妝還是護膚品。

Ladies and gentlemen, we have reached the end of our question-and-answer session. I would like to turn the call back to Mr. Tarang Amin for closing remarks.

女士們先生們，我們的問答環節已經結束了。我想將電話轉回給塔朗·阿明先生，讓他致閉幕詞。

Well, thanks for joining us. We hope that you have a wonderful holiday season, and we look forward to seeing you at the ICR Conference in January. We also look forward to discussing our full year 2017 results and 2018 outlook with you in February. Thanks, everyone.

嗯，感謝您加入我們。我們希望您度過一個愉快的假期，並期待在一月份的 ICR 會議上見到您。我們還期待在 2 月份與您討論 2017 年全年業績和 2018 年展望。感謝大家。

Thanks, all.

謝謝大家。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與，祝您度過美好的一天。