elf Beauty Inc (ELF) 2017 Q4 法說會逐字稿

Greetings, and welcome to the e.l.f. Beauty Fourth Quarter Fiscal 2017 Earnings Call. (Operator Instructions) As a reminder, the conference is being recorded.

問候，歡迎來到 e.l.f.美妝 2017 年第四季度財報電話會議。（操作員說明）謹此提醒，會議正在錄製中。

I would now like to turn the conference over to your host, Allison Malkin. Thank you. You can begin.

現在我想將會議交給主持人艾莉森·馬爾金。謝謝。你可以開始了。

Good afternoon, everyone. Thank you for joining us today to discuss e.l.f. Beauty's fourth quarter and full year 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.

大家下午好。感謝您今天加入我們討論 e.l.f.美妝2017年第四季度及全年盈利結果。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 relating to the company's fiscal year 2018 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 2018 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 the non-GAAP presentation and the most directly comparable GAAP measures. Certain brand equity measures cited in this presentation are based on third party settings.

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，以了解非公認會計原則表述與最直接可比的公認會計原則衡量指標之間的差異。本演示文稿中引用的某些品牌資產衡量標準基於第三方設置。

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 strategy and providing additional details related to the financial performance and guidance. This will be followed by a Q&A session.

今天與我們一起出席的還有管理層的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，然後按照我們的慣例，約翰和塔朗將輪流分享我們在增長戰略方面取得的進展，並提供與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 full year 2017 results, with net sales of $270 million, an increase of 18% versus year ago, and adjusted earnings per share of $0.64, up 77%. We took market share in tracked channels from 4.1% in 2016 to 4.5% in 2017. We also continue to see strong growth in non-track channels, including both our direct business as well as Ulta Beauty.

謝謝艾莉森，大家好。我們很高興地報告 2017 年全年業績，淨銷售額為 2.7 億美元，比去年同期增長 18%，調整後每股收益為 0.64 美元，增長 77%。我們將跟踪渠道的市場份額從 2016 年的 4.1% 提高到 2017 年的 4.5%。我們還繼續看到非賽道渠道的強勁增長，包括我們的直接業務和 Ulta Beauty。

Stepping back, since establishing our growth strategy in 2014, we have made meaningful progress on our mission to make luxurious beauty accessible to all. Over the 4-year period, we've advanced each pillar of our strategy, delivering net sales and adjusted EBITDA growth at a CAGR of over 20%, and increasing our tracked market share from 1.9% to 4.5%. We will spend time on this call sharing perspectives on the progress we've made and the foundation we've created for future growth.

退一步來說，自 2014 年制定增長戰略以來，我們在實現讓所有人都能享受奢華美容的使命方面取得了有意義的進展。在 4 年期間，我們推進了戰略的每個支柱，實現了淨銷售額和調整後 EBITDA 的複合年增長率超過 20%，並將我們跟踪的市場份額從 1.9% 增加到 4.5%。我們將在這次電話會議上花時間分享我們所取得的進展以及我們為未來增長奠定的基礎的觀點。

Our first strategy is to build a great brand. e.l.f. is a brand that young, diverse beauty enthusiasts love. Over the past 4 years, we increased unaided awareness from 3% to 16%, followers from 19 million to over 37 million, brand retention from 55% to 65% and our value ratings from 63% to 73%. We now have amongst the highest retention and value ratings of any mass cosmetics brands. In 2017, highlights include growing unaided awareness 3 points, increasing our social following by 37% and further scaling our consumer engagement efforts. Beautyscape leads the combined audience of 600 million, and our Beauty Squad loyalty program grew to 850,000 members. We are pleased with both the efficiency and effectiveness of our engagement efforts in building a brand that consumers love.

我們的首要戰略是打造一個偉大的品牌。e.l.f.是年輕、多元化的美容愛好者喜愛的品牌。在過去4 年裡，我們的獨立知名度從3% 提高到16%，追隨者從1900 萬提高到3700 萬以上，品牌保留率從55% 提高到65%，我們的價值評級從63% 提高到73 %。現在，我們在大眾化妝品品牌中擁有最高的保留率和價值評級。2017 年的亮點包括將獨立意識提高 3 點、將我們的社交關注度增加 37% 以及進一步擴大我們的消費者參與力度。Beautyscape 的受眾總數達到 6 億，而我們的 Beauty Squad 忠誠度計劃會員數量已增至 850,000 名。我們對我們在打造消費者喜愛的品牌方面所做的努力的效率和效果感到滿意。

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

現在我將把它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 and is the linchpin of our strategy. Over the past 4 years, we've progressed from around 40 launches a year to over 120, shortened our average time to market from 32 weeks to 22 weeks and increased our gross margins from 47% to 61%.

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，也是我們戰略的關鍵。在過去 4 年裡，我們的產品發布次數從每年約 40 次增加到 120 多次，平均上市時間從 32 週縮短到 22 週，毛利率從 47% 提高到 61%。

In 2017, we launched 128 new items, an increase of 40% over the prior year, including 39 products that were first-to-mass. A major area of focus of our innovation last year was the continued expansion of skin care with the launch of our Beauty Shield and Active lines. Both are great examples of how our flexible innovation approach allows us to move quickly on trends.

2017年，我們推出新品128款，比上年增長40%，其中首發產品39款。去年我們創新的一個主要重點領域是通過推出 Beauty Shield 和 Active 系列來持續擴展皮膚護理領域。兩者都是我們靈活的創新方法如何使我們能夠快速順應趨勢的絕佳例子。

We were also able to improve our speed to market. In 2017, we were able to go from initial idea to selling online in 22 weeks, down significantly from our previous average of 27 weeks. Our fastest launches took 13 weeks. We believe our ability to quickly validate new items through our direct channels provides us with a significant advantage in our overall innovation approach.

我們還能夠提高上市速度。2017 年，我們從最初的想法到在線銷售只用了 22 週，大大低於之前 27 週的平均時間。我們最快的發布花了 13 週。我們相信，通過直接渠道快速驗證新產品的能力為我們的整體創新方法提供了顯著優勢。

Our third strategy is to expand brand penetration. Over the last 4 years, we've grown our shelf presence at leading national retailers from around 12,000 linear feet to over 70,000. In our direct business, we've expanded our e.l.f. store count from 1 Manhattan-based store to 22 stores in multiple markets, and more than doubled our digital sales and traffic. In 2017, we saw major space expansion at both Target and Walmart.

我們的第三個戰略是擴大品牌滲透率。在過去 4 年裡，我們在全國領先零售商的貨架面積從約 12,000 線性英尺增加到超過 70,000 線性英尺。在我們的直接業務中，我們擴大了 e.l.f.商店數量從曼哈頓的 1 家商店增加到多個市場的 22 家商店，我們的數字銷售額和流量增加了一倍多。2017 年，塔吉特 (Target) 和沃爾瑪 (Walmart) 都進行了大規模的空間擴張。

At Target, where we have long been the #1 unit share brand, we also became the #3 dollar share brand, with 11.2% share in 2017. We grew share at Walmart and continued to get more prominent positioning in space. Both customers continued to grow e.l.f. retail sales at double-digits in 2017. In addition, we are pleased that our early performance at Ulta Beauty is leading to chain-wide expansion during the first half of 2018. Finally, our direct business also exhibited strong growth, with the opening of 3 new e.l.f. stores and improved presence across digital channels.

在塔吉特，我們長期以來一直是單位份額第一的品牌，我們也成為美元份額第三的品牌，2017 年份額為 11.2%。我們在沃爾瑪的份額不斷增加，並繼續在空間領域獲得更突出的地位。兩個客戶的 e.l.f. 都在繼續增長。2017年零售額實現兩位數增長。此外，我們很高興我們在 Ulta Beauty 的早期表現正在導致 2018 年上半年全連鎖擴張。最後，我們的直營業務也表現出強勁增長，新開了 3 家 e.l.f.商店並改善跨數字渠道的影響力。

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've made significant investments over the past 4 years in our team and infrastructure to scale the business. We are proud that the team, which is 85% female, 80% millennial and over 60% diverse, reflects the young, diverse beauty enthusiasts that we serve. Our operational results over this period have also dramatically improved, with our on-time, in-full fulfillment rates increasing from 83% to 97% and first-pass quality increasing to 100%.

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。過去 4 年，我們在團隊和基礎設施方面進行了大量投資，以擴大業務規模。我們感到自豪的是，我們的團隊由 85% 為女性、80% 為千禧一代、超過 60% 為多元化，反映了我們所服務的年輕、多元化的美容愛好者。在此期間，我們的運營業績也得到了顯著改善，準時、完全履行率從 83% 提高到 97%，一次通過質量提高到 100%。

In 2017, we further strengthened the team and operational results, including penetrating the supply chains of our customers and improving the horizontal integration with our suppliers. We believe that we have the best combination of cost, quality and speed in our industry.

2017年，我們進一步強化了團隊和經營業績，包括滲透客戶的供應鏈、提高與供應商的橫向整合。我們相信我們擁有行業中成本、質量和速度的最佳組合。

In summary, we made good progress on our strategy over the last 4 years and in 2017 in particular.

總而言之，過去 4 年，特別是 2017 年，我們的戰略取得了良好進展。

I'll now turn it back to John to discuss our financial progress and 2018 outlook.

現在我將把它轉回約翰，討論我們的財務進展和 2018 年展望。

Thanks, Tarang. Our 2017 results are consistent with the expectations we provided in early January. For the full year, net sales increased 18% to $270 million, reflecting strong growth across our business. Gross margin expanded from 58% to 61%, primarily as a result of margin-accretive innovation, coupled with improvements in customer turns, freight costs and foreign exchange, partially offset by customer mix.

謝謝，塔朗。我們 2017 年的業績與我們 1 月初提供的預期一致。全年淨銷售額增長 18%，達到 2.7 億美元，反映出我們整個業務的強勁增長。毛利率從 58% 擴大到 61%，主要是由於利潤增長型創新，加上客戶周轉率、貨運成本和外彙的改善，但部分被客戶組合所抵消。

On an adjusted basis, SG&A as a percentage of sales is 43%. Adjusted EBITDA was $62 million compared to $54 million in 2016. Adjusted net income was $32 million or $0.64 per share compared to $18 million or $0.36 per share in 2016. I note that the 2017 figures include a significant tax benefit of $7.2 million or $0.15 per share, largely driven by a number of employees that exercised options post IPO.

調整後，SG&A 佔銷售額的百分比為 43%。調整後 EBITDA 為 6200 萬美元，而 2016 年為 5400 萬美元。調整後淨利潤為 3200 萬美元，即每股 0.64 美元，而 2016 年為 1800 萬美元，即每股 0.36 美元。我注意到 2017 年的數據包括 720 萬美元或每股 0.15 美元的重大稅收優惠，這主要是由許多在 IPO 後行使期權的員工推動的。

We are proud of our strong 2017 results, having delivered 18% net sales growth, over 300 basis points of gross margin expansion and 77% adjusted EPS growth in a category that has been experiencing headwinds.

我們對 2017 年的強勁業績感到自豪，在一直面臨逆風的類別中，淨銷售額增長了 18%，毛利率增長了 300 個基點，調整後每股收益增長了 77%。

Turning to 2018. In January, we outlined an expectation for net sales and adjusted EBITDA growth of 10% to 15% on a compound annual basis from 2016 to 2019. Consistent with this CAGR and our strong results in 2017, our outlook for 2018 includes net sales and adjusted EBITDA growth of 6% to 8%. While we build our forecast account by account, the outlook generally assumes that the overall mass color cosmetics category continues to experience headwinds throughout 2018.

轉眼進入2018年。一月份，我們概述了 2016 年至 2019 年淨銷售額和調整後 EBITDA 複合年增長率為 10% 至 15% 的預期。與復合年增長率和我們 2017 年的強勁業績一致，我們對 2018 年的展望包括淨銷售額和調整後 EBITDA 增長 6% 至 8%。雖然我們逐個建立預測賬戶，但前景普遍假設整個大眾彩妝品類在 2018 年繼續遭遇阻力。

Given our significant space expansion at existing national retailers in 2017, we have assumed minimal incremental space in 2018. A core part of the e.l.f. proposition is expanding to incremental space and then leverage insights from our direct channels to further optimize our merchandising and assortment in those expanded footprints. We noted specific opportunities coming into 2018 to optimize overall shelf flow, increase the number of SKUs per foot and secure more of our qualified new items on shelves. We are in the midst of applying these learnings during spring resets, which are currently in process for many of our national retailer partners. We expect to have a better sense of the impact of the changes we have made in coming months.

鑑於 2017 年我們對現有全國零售商的空間進行了大幅擴張，我們假設 2018 年增量空間最小。e.l.f. 的核心部分。我們的主張是擴展到增量空間，然後利用我們直接渠道的見解，進一步優化我們在這些擴展足跡中的商品銷售和分類。我們注意到 2018 年將出現優化整體貨架流量、增加每英尺 SKU 數量以及確保更多合格新商品上架的具體機會。我們正在春季重置期間應用這些經驗教訓，目前我們的許多全國零售商合作夥伴正在進行重置。我們期望在未來幾個月內更好地了解我們所做的改變的影響。

In summary, in 2018, our national retailer focus is to further optimize our productivity within existing national retailer partners. Therefore, in terms of new distribution, the only meaningful new doors embedded in our guidance are the Ulta Beauty stores we previously announced.

總之，2018 年我們全國零售商的重點是進一步優化現有全國零售商合作夥伴的生產力。因此，就新分銷而言，我們的指導中唯一有意義的新門是我們之前宣布的 Ulta Beauty 商店。

Over the last few years, we have made significant progress on gross margin. While we expect our Sweeten the Mix approach to continue to drive benefits through innovation and cost savings into 2018, we are pleased with our margin profile and expect that gross margins will be similar to 2017. I'd note that in 2017, we saw a benefit from the advantaged U.S. dollar to RMB exchange rate that we expect to become a headwind to margin in the coming year.

過去幾年，我們在毛利率方面取得了顯著進步。雖然我們預計“Sweeten the Mix”方法將在 2018 年繼續通過創新和成本節約來推動效益，但我們對我們的利潤率狀況感到滿意，並預計毛利率將與 2017 年相似。我要指出的是，2017 年，我們看到了美元兌人民幣匯率優勢帶來的好處，我們預計這將成為來年利潤率的阻力。

From an SG&A perspective, our outlook assumes continued reinvestment back into the business, consistent with our algorithm. While the thematic areas continue to be the same, people, infrastructure and brand, we expect specific investments in 2018 to support our digital leadership and increase our digital impact. An example is the launch of our new e-commerce platform earlier this year, which will improve our mobile experience and site functionality. We plan to continue to deploy the investments behind content, digital marketing, consumer loyalty and personalization and our brand presence at leading e-tailers in retailer.coms. As a digitally native brand, we believe that it is important to continue to double down on our strengths in these areas.

從SG＆A的角度來看，我們的前景假設繼續對業務進行再投資，這與我們的算法一致。雖然人員、基礎設施和品牌等主題領域保持不變，但我們預計 2018 年的具體投資將支持我們的數字領導力並提高我們的數字影響力。一個例子是我們今年早些時候推出的新電子商務平台，這將改善我們的移動體驗和網站功能。我們計劃繼續在內容、數字營銷、消費者忠誠度和個性化以及我們在retailer.com 領先電子零售商中的品牌影響力方面進行投資。作為一個數字原生品牌，我們相信繼續加強我們在這些領域的優勢非常重要。

Finally, with respect to adjusted net income, we are forecasting $30 million to $31 million for 2018, which translates to $0.59 to $0.61 based on a projected share count of 51.4 million. These income and EPS figures assume a tax rate of approximately 30% as we are significant beneficiaries of U.S. tax reform and the movement in the federal rate.

最後，關於調整後的淨利潤，我們預測 2018 年淨利潤為 3000 萬至 3100 萬美元，根據預計的 5140 萬股計算，這相當於 0.59 至 0.61 美元。這些收入和每股收益數據假定稅率約為 30%，因為我們是美國稅制改革和聯邦稅率變動的重要受益者。

There are a couple of important callouts as it pertains to our adjusted net income and adjusted EPS figures. First, in the 2017 period, we saw significant tax benefit from stock option exercises as a number of employees exercised options post IPO. As mentioned earlier, these benefits translated to $7.2 million or $0.15 per share in 2017. While we may see further benefits in the future, they're inherently difficult to forecast. Our guidance therefore, assumes no benefits from these equity awards in 2018.

有幾個重要的標註與我們調整後的淨利潤和調整後的每股收益數據有關。首先，在 2017 年期間，我們看到股票期權行使帶來了巨大的稅收優惠，因為許多員工在 IPO 後行使了期權。如前所述，2017 年這些收益轉化為 720 萬美元或每股 0.15 美元。雖然我們將來可能會看到更多好處，但它們本質上很難預測。因此，我們的指導假設 2018 年這些股權獎勵不會帶來任何好處。

The second callout pertains to a methodology change that would take place in the first quarter of 2018. Specifically, going forward, we will adjust our adjusted net income figures to remove the amortization and associated tax impact of intangibles related to the original TPG acquisition. This change is reflected in our 2018 outlook, and the amount of the item included in 2018 adjusted net income is $4.3 million.

第二個標註涉及 2018 年第一季度將發生的方法變更。具體來說，今後我們將調整調整後的淨利潤數據，以消除與最初 TPG 收購相關的無形資產的攤銷和相關稅收影響。這一變化反映在我們 2018 年的展望中，2018 年調整後淨利潤中包含的項目金額為 430 萬美元。

I will turn it over to Tarang to provide some final thoughts.

我會將其交給 Tarang 以提供一些最終的想法。

Thanks, John. As discussed, over the last 4 years, we've driven tremendous growth and value creation in the e.l.f. brand. Even with the progress to date, I'm encouraged about the significant white space ahead. Let me provide a few examples. We have an opportunity to continue to build one of the great brands in beauty. As far as we've come, we still only have 16% unaided awareness relative to legacy brands around 60%. Given we have some of the highest retention rates in the category, we believe we can further scale our efficient engagement tactics. In addition to Beautyscape and Beauty Squad, we plan to make additional investments in digital to build a larger, loyal e.l.f. community.

謝謝，約翰。正如所討論的，在過去 4 年裡，我們推動了 e.l.f. 的巨大增長和價值創造。品牌。儘管迄今為止已經取得了進展，但我對未來的巨大空白感到鼓舞。讓我舉幾個例子。我們有機會繼續打造美容領域的偉大品牌之一。就我們目前而言，我們的獨立認知度仍然只有 16%，而傳統品牌的認知度約為 60%。鑑於我們在該類別中擁有最高的保留率，我們相信我們可以進一步擴大我們的高效參與策略。除了 Beautyscape 和 Beauty Squad 之外，我們還計劃在數字領域進行額外投資，以建立一個更大、更忠誠的 e.l.f.社區。

We also believe we can further improve our industry-leading innovation output and speed. This innovation capability can be applied to new trends, segments and brands. For example, we believe that our evolving skin care portfolio has great runway, with global skin care even larger than global color cosmetics. We have significant opportunity to expand brand penetration. Our direct channels are the engine that drives our entire business model, and we continue to see strong growth potential.

我們還相信，我們能夠進一步提高行業領先的創新產出和速度。這種創新能力可以應用於新趨勢、新細分市場和新品牌。例如，我們相信我們不斷發展的護膚品組合擁有良好的發展前景，全球護膚品的規模甚至超過全球彩妝。我們有很大的機會擴大品牌滲透率。我們的直接渠道是推動我們整個業務模式的引擎，我們繼續看到強勁的增長潛力。

In national retailers, we are now the #3 dollar share brand at our most established customer, Target, and are delivering that performance in less than half the space of the legacy brands ahead of us. Similar to our history with Target, we believe we have a great opportunity to continue gaining share at other retailers, most of whom are predominantly in a 4-foot set. We also see continued ability to leverage our digital roots to partner with high-growth e-tailers in customer.coms.

在全國零售商中，我們現在是我們最知名的客戶 Target 中排名第三的美元品牌，並且在不到我們前面的傳統品牌一半的空間內實現這一業績。與我們在 Target 的歷史類似，我們相信我們有很好的機會繼續在其他零售商中獲得份額，其中大多數零售商主要銷售 4 英尺的產品。我們還看到我們能夠持續利用我們的數字根基與 customer.com 中高增長的電子零售商合作。

We are still in the early days of international expansion, having seen the brand resonate and deliver strong results in our initial focus markets of Canada, Mexico and the U.K.

我們仍處於國際擴張的早期階段，我們已經看到該品牌在我們最初的重點市場加拿大、墨西哥和英國產生了共鳴並取得了強勁的業績。

Finally, over the last 4 years, we've made meaningful investments in creating world-class operations. We have multiple capabilities that we believe can be leveraged to drive value in both the e.l.f. brand as well as prospective new brands. These capabilities include a world-class team; an innovation capability that spans various beauty segments; distinct supply chain advantages in cost, quality and speed; strong cross functional execution at leading national retailers; and importantly, a multi-channel digitally grounded engagement approach. We look forward to discussing how we're leveraging these capabilities in the coming year.

最後，在過去 4 年裡，我們在創建世界一流的運營方面進行了有意義的投資。我們擁有多種能力，我們相信可以利用這些能力來推動 e.l.f. 和 e.l.f. 的價值。品牌以及未來的新品牌。這些能力包括世界一流的團隊；跨越各個美容領域的創新能力；供應鏈在成本、質量、速度等方面具有明顯的優勢；領先的全國零售商強大的跨職能執行力；重要的是，多渠道數字化參與方法。我們期待討論來年如何利用這些功能。

In closing, we're pleased with our progress making luxurious beauty accessible for all and encouraged by the white space ahead of us.

最後，我們對我們在讓所有人都能享受奢華之美方面所取得的進展感到高興，並對我們面前的空白感到鼓舞。

I'd now like to ask the operator to open the call for questions.

我現在想請接線員打開提問電話。

(Operator Instructions) Our first question comes from the line of Steph Wissink from Jefferies.

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

Just a quick clarification, first, John, on the removal of the amortization and tax impact from the TPG ownership. I think you qualified that as $4.3 million or roughly $0.09 or so to earnings. That is excluded from your EPS guidance? Or that is embedded in your EPS?

約翰，首先簡單澄清一下取消 TPG 所有權帶來的攤銷和稅收影響。我認為您將其定性為 430 萬美元，即大約 0.09 美元左右的收益。這被排除在你的每股收益指導之外嗎？或者它已嵌入您的 EPS 中？

For 2018, it is excluded, Steph. That's correct.

2018 年，它被排除在外，Steph。這是正確的。

Okay. And then just my question, broader picture, is regarding your comments on gross margin kind of flattish in 2018. It sounds like you have some optimization opportunities with the existing shelf space that you've earned over the last year or so. But can you talk about that with respect to skin care? I think, Tarang, your comments on excitement around the skin care portfolio, how should we think about gross margin on a mixed basis? And then how should we think about it on an optimization basis?

好的。然後我的問題是，從更廣泛的角度來看，您對 2018 年毛利率的評論有點持平。聽起來您對過去一年左右獲得的現有貨架空間有一些優化機會。但你能談談皮膚護理嗎？我想，塔朗，您對皮膚護理產品組合興奮的評論，我們應該如何考慮混合基礎上的毛利率？那麼我們應該如何從優化的角度來思考呢？

Yes. So, Steph, what I'd say is it really comes back to our core approach, which isn't new. So outside of specific segments like skin care that's driving any particular sort of mix item, it really is across our entire assortment. And the way that we go in, sub out new items on the wall, take out old items, and in the process, often find that the new items that we're introducing are tremendous values, but do mix up that AUR a bit. Just to put a finer point on the 2017 to 2018 sort of walk, obviously, we've seen tremendous gross margin expansion in the business to the tune of 1,300 basis points over the last 4 years and over 300 in the last year alone. So we always want to be mindful of that broader balance between continuing to offer extraordinary value to the consumer, but also looking for opportunities to take margin through that innovation and Sweeten the Mix approach. Headed into 2018, as we mentioned, that will continue, but we do have some headwinds, specifically in the form of FX, that was a benefit to the numbers in '17 that we do not anticipate to be a benefit, but actually be a headwind in 2018.

是的。所以，斯蒂芬，我想說的是，這確實回到了我們的核心方法，這並不新鮮。因此，除了推動任何特定類型混合產品的皮膚護理等特定細分市場之外，它確實遍及我們的整個產品系列。我們進去的方式是，把牆上的新物品去掉，把舊物品拿出來，在這個過程中，經常會發現我們引入的新物品具有巨大的價值，但確實有點混淆了 AUR。為了更好地說明 2017 年至 2018 年的走勢，顯然，我們看到該業務的毛利率在過去 4 年中大幅增長，達到 1,300 個基點，僅去年一年就超過 300 個基點。因此，我們始終希望在繼續為消費者提供非凡價值與尋找機會通過創新和甜蜜混合方法獲取利潤之間保持更廣泛的平衡。進入2018 年，正如我們提到的，這種情況將會持續下去，但我們確實遇到了一些阻力，特別是在外匯方面，這對17 年的數字來說是一個好處，我們預計不會帶來好處，但實際上會帶來一些好處。 2018年的逆風。

And, Steph, what I'd add on your question on skin care, skin care follows that model very well. While the average unit retails are higher on skin care, each of those items are still an extraordinary value. And so our approach overall on our innovation is, it's been margin-accretive to the company and as we continue to mix that out, we've been pleased with the progress.

而且，斯蒂芬，我想補充一下你關於皮膚護理的問題，皮膚護理很好地遵循了這個模型。雖然護膚品的平均單位零售量較高，但每件商品仍然具有非凡的價值。因此，我們的創新總體方法是，它為公司帶來了利潤增長，並且隨著我們繼續將其混合在一起，我們對進展感到滿意。

Our next question comes from the line of Bill Chappell from SunTrust.

我們的下一個問題來自 SunTrust 的 Bill Chappell。

For both John and Tarang, looking at the guidance for this year, I understand that's kind of what you had talked about a month ago, and I'm just trying to take a step back at $270 million in revenue in a $25 billion-plus industry, did you think or are you comfortable or are you happy that you're now a single-digit grower when there's so much unaided awareness still to go, so much shelf space still to go, so much new products? Shouldn't you at this stage still be growing double digits? Or -- and if you're comfortable with it, then maybe you can help us understand what's changed over the past year to 18 months within the industry that's kind of changed that algorithm?

對於約翰和塔朗來說，看看今年的指導，我知道這就是你們一個月前談論的內容，我只是想退後一步，在超過 250 億美元的收入中實現 2.7 億美元的收入行業中，當還有如此多的獨立意識尚未實現、仍有如此多的貨架空間、如此多的新產品時，您是否認為或感到舒服或高興，因為您現在是個位數的種植者？在這個階段你不應該仍然保持兩位數的增長嗎？或者 - 如果您對此感到滿意，那麼也許您可以幫助我們了解過去一年到 18 個月內行業內發生了什麼變化，這些變化在某種程度上改變了算法？

Sure. So, Bill, I'll give perspective. Overall, as we said in our comments, over the last 4 years, we delivered over 20% CAGR. Even in 2017, we delivered 18% sales growth, despite the category headwinds. So -- and as we talked about a month ago, our 2016 to 2019 CAGR is 10% to 15%. So we're not a single-digit grower. We've -- our history has been much better than that. In terms of drivers through 2018, let me turn it over to John and he can talk about that.

當然。那麼，比爾，我將給出觀點。總的來說，正如我們在評論中所說，在過去 4 年裡，我們的複合年增長率超過 20%。即使在 2017 年，儘管面臨品類逆風，我們的銷售額仍實現了 18% 的增長。因此，正如我們一個月前談到的，我們 2016 年至 2019 年的複合年增長率為 10% 至 15%。所以我們不是個位數的種植者。我們的歷史比這要好得多。至於 2018 年的車手情況，讓我把它交給約翰，他可以談談這個問題。

Yes, Bill, I mean what I'd tell you is long term, we continue to see tremendous white space on this brand. Obviously, we talked a lot about the inflection in the category in 2017, and as we think about that single digit guidance for 2018, obviously, we mentioned a few of the drivers that underpin that. First of all, continued headwinds in the category itself. Second of all, as we think about the drivers that are available to us in this business over time across space, new doors, within existing accounts and new distribution generally, we have very little of any of those drivers underpinning that baseline number in 2018 outside of the expansion in Ulta that we've already announced, and a lot of that pipeline for Ulta actually shipped last year. So we take a look at the drivers that are available to us, where we are relative to that broader kind of white space set, and we still think we have great opportunity for years to come, but the 2018 number, that's why you see the growth numbers that we talked about.

是的，比爾，我的意思是我要告訴你的是，從長遠來看，我們繼續在這個品牌上看到巨大的空白。顯然，我們談論了很多關於 2017 年該類別的拐點，並且當我們考慮 2018 年的個位數指導時，顯然，我們提到了一些支撐這一趨勢的驅動因素。首先，該類別本身持續面臨阻力。其次，當我們考慮隨著時間的推移，跨空間、新門、現有賬戶和新分銷中我們可以在該業務中使用的驅動因素時，我們幾乎沒有任何驅動因素支撐 2018 年的基準數字。我們已經宣布了Ulta 的擴張，並且去年Ulta 的很多管道實際上已發貨。因此，我們看看可用的驅動程序，我們相對於更廣泛的空白集，我們仍然認為未來幾年我們有很大的機會，但是 2018 年的數字，這就是為什麼你看到我們談到的增長數字。

So just kind of paraphrasing to make sure and a follow up, you don't necessarily look at '18 growth rate as the permanent new normal. It's more of -- and I think you had said it recently, you really wanted to focus on Ulta more than -- and getting that right and so, '18 is kind of a specific year that you're -- that will grow this level, is that the right way of looking at it?

因此，只是為了確保和後續行動而進行解釋，您不一定將 18 年的增長率視為永久的新常態。這更多的是——我想你最近已經說過了，你真的想更多地關注Ulta——並且正確地做到這一點，所以，'18 是你所處的一個特定的年份——這將讓這個增長水平，這是正確的看待方式嗎？

Yes. Look, I think we've probably given what we're able to give in terms of specific quantification for what happens in '19 or long term. For us, I think the paraphrase for me would be that in 2018, we're not opening a bunch of new doors. We're not getting a bunch of space, and it's really about optimizing within the accounts that we're in and focusing on that execution within the new Ulta doors. And so that rolls up in a tough category dynamic to 6% to 8%.

是的。看，我認為我們可能已經給出了我們能夠對 19 年或長期發生的事情進行具體量化的內容。對於我們來說，我認為 2018 年我們不會打開一堆新的大門。我們沒有獲得大量空間，這實際上是在我們所在的帳戶內進行優化，並專注於新 Ulta 大門內的執行。因此，這一數字在嚴峻的類別動態中上升至 6% 至 8%。

Our next question comes from the line of Oliver Chen with Cowen and Co.

我們的下一個問題來自 Oliver Chen 與 Cowen and Co. 的對話。

Regarding the productivity and existing doors, what are some of those opportunities when you spoke to optimization of shelf flow? And also, as you think about as you're prioritizing innovation within categories, which categories should we be most excited about in terms of where you see the biggest opportunities?

關於生產力和現有門，當您談到優化貨架流量時，有哪些機會？此外，當您考慮優先考慮類別內的創新時，就您看到的最大機會而言，我們應該對哪些類別最感興趣？

Sure. So on the productivity, our model all along has been get the space, optimize the space based on the insights we're getting from our direct channels. As we mentioned, we launched 128 new items last year. So we have a lot of data that we've been able to collect, both in terms of the sales as well as reviews on what some of the best items are. And our best opportunity is to apply those learnings is -- first one is here right now during the spring resets. So as we go through kind of what did we learn last year as we picked up new space? How are those items doing? What did we qualify from our new items? You're going to start to see some of that on shelf over the next couple of months. I think Walmart went first, so their numbers should be coming through pretty soon in terms of how they're doing. Target is behind that in terms of when they did their resets. And so you'll be able to see both the new items as well as what that does from a productivity standpoint, as I said, in the next couple of months here. In terms of product categories, I'd say, we have a great track record of innovating across eyes, lips, face, tools and skin care. I think in particular, last year, a big area of focus for us was skin care, just given the tremendous run rate we see ahead of us. And I'd say 2 launches, in particular, that we're pretty excited about. One is Beauty Shield and the other one is our Active line. And again, both of those, you can now start to see in retail and, again, we'll see some of the numbers coming off of those.

當然。因此，在生產力方面，我們的模型一直是根據我們從直接渠道獲得的見解來獲取空間並優化空間。正如我們提到的，我們去年推出了 128 款新產品。因此，我們能夠收集大量數據，包括銷售數據以及對一些最佳商品的評論。我們最好的機會是應用這些經驗教訓——第一個機會現在就在春季重置期間。那麼，當我們回顧去年我們在選擇新空間時學到了什麼？這些物品的表現如何？我們從新產品中獲得了什麼資格？在接下來的幾個月裡，你將開始看到其中的一些產品上架。我認為沃爾瑪先行一步，所以從他們的表現來看，他們的數據應該很快就會公佈。就重置時間而言，Target 落後於此。因此，正如我所說，在接下來的幾個月裡，您將能夠看到這些新項目以及從生產力角度來看它的作用。在產品類別方面，我想說，我們在眼部、唇部、面部、工具和皮膚護理方面擁有良好的創新記錄。我認為，去年我們關注的一個重點領域是皮膚護理，因為我們看到了巨大的運行速度。我想說的是，特別是我們非常興奮的兩次發布。一種是 Beauty Shield，另一種是我們的 Active 系列。再說一次，您現在可以開始在零售業中看到這兩個方面，並且我們將再次看到其中的一些數字。

Okay. And just a follow-up. Regarding the headwinds, and you've done a very helpful job speaking to us about this, what would you articulate in terms of the temporary versus not temporary nature of the headwinds and what should investors understand? Because there's a lot of crosscurrents in beauty depending on the channel or the product categories. Just love for you to frame up for how we should think about that risk factor.

好的。只是後續行動。關於逆風，您在與我們談論這一問題方面做了非常有幫助的工作，您對逆風的暫時性與非暫時性有何闡述？投資者應該理解什麼？因為根據渠道或產品類別的不同，美容領域存在很多交叉流。只是希望您能夠幫助我們了解該風險因素。

Yes. So our point of view all along is we do not see this as a long-term structural issue in the category. And in fact, if you take a look at the CAGRs in beauty, in color cosmetics over a very long period of time, it's one of the healthiest categories in all of consumer, given the importance it plays with consumers, their love of new ideas and new products. So we do not see, particularly when we look at the data of our own direct channels, anything that would say this is a long-term trend. Having said that, I think there was a lot of noise last year in terms of, hey, where is the category and where are the headwinds, where is skin data, et cetera?, that we wanted to come up with a very clean kind of approach in terms of establishing that 6% to 8% baseline where we said, hey, let's just assume the category continues. If we see a change -- a dramatic change in the category or door space, et cetera, that we pick up, you'd see upside from there. But we feel it's a good baseline.

是的。因此，我們一直以來的觀點是，我們並不認為這是該類別中的長期結構性問題。事實上，如果你看一下美容、彩妝在很長一段時間內的複合年增長率，考慮到它對消費者的重要性以及他們對新想法的熱愛，它是所有消費者中最健康的類別之一和新產品。因此，我們沒有看到，特別是當我們查看我們自己的直接渠道的數據時，有任何跡象表明這是一個長期趨勢。話雖如此，我認為去年有很多噪音，嘿，類別在哪裡，逆風在哪裡，皮膚數據在哪裡等等？我們想提出一個非常乾淨的類型就建立6% 到8% 基線而言，我們說，嘿，讓我們假設該類別繼續存在。如果我們看到變化——我們發現的品類或門空間等發生了巨大變化，你就會從那裡看到好處。但我們認為這是一個很好的基線。

Our next question comes from the line of Andrea Teixeira from JPMorgan.

我們的下一個問題來自摩根大通的 Andrea Teixeira。

So I just want to clarify the math in terms of the base of comparison for the 2017 EPS, adjusted EPS, so we need to exclude the $0.09 from amortization of intangibles plus another $0.15. So the base, instead of $0.64 would be $0.40, so $0.09 plus $0.15? And then related to that, like, when you say EPS would fall within the guidance from 5% to 8%, are you including that? Or are you excluding that from the base? I'm just, like, trying to reconcile that part of the guidance. And then related to that, you also alluded in the press release that you had to increase, in terms of the gross margin, you had to increase your reserve for inventory. So I wanted to reconcile what is that related to, if you're having returns or if you're just having changes in your inventory of goods sold so that you'd have to write-down?

因此，我只想澄清 2017 年每股收益（調整後每股收益）比較基礎的數學計算，因此我們需要從無形資產攤銷中排除 0.09 美元，再加上另外 0.15 美元。那麼基數不是 0.64 美元，而是 0.40 美元，那麼 0.09 美元加上 0.15 美元？然後與此相關，例如，當您說每股收益將落在 5% 至 8% 的指導範圍內時，您是否包括在內？或者您是否將其排除在基礎之外？我只是想嘗試協調指南的這一部分。與此相關的是，您還在新聞稿中提到，就毛利率而言，您必須增加庫存儲備。所以我想協調一下這與什麼相關，如果你有退貨，或者如果你只是改變了已售商品的庫存，所以你必須減記？

Yes. So first, I'll start with the adjusted EPS numbers. Two major things happening in adjusted EPS. The first is in '17, we saw a significant benefit from stock option exercises and, therefore, the tax benefit that resulted, which is about a $0.15 benefit that is reflected in that '17 number. We haven't forecasted any tax benefits in 2018, because those are very difficult to forecast. So if we were to see benefits, that would be upside to the 2018 number. The other relates to a methodology change, which hasn't happened yet, but will be reflected in the Q1 results, that actually normalizes for amortization related to intangibles from the TPG acquisition in 2014. That is reflected in the adjusted EPS and adjusted net income figures in the 2018 outlook, and the amount going through that 2018 set of figures is $4.3 million net of the associated tax benefits. So that's how to think about the base. There is no adjustment of the amortization in the '17 base because we have not gone through that methodology change yet. With respect to gross margin, what I'd tell you, Andrea, is we're quite proud about the gross margin progress that we've made over the last 4 years and even 2017, over 300 basis points of improvement. During the Q3 call, we obviously talked about continued expansion, driven by our Sweeten the Mix initiative and FX, offset by customer mix. And we talked a little bit about customer mix pertaining to discount volumes that we have in each and every year of the history of this business, which tend to run at less than 5% of sales in any given year. We said that in 2016, that discount volume was very front-half weighted, and in 2017, conversely, it was very back-half weighted. So heading into Q4, our margins came in very consistent with our expectations. The one nuance I'd say is that, that discount business tends to be pretty deal-driven and in any given point in time, you can either have kind of capacity in that channel or not. And relative to our overall approach from a reserve perspective, instead of going through discounters, we ended up writing off $1.5 million of inventory. So very consistent with how we move through items that come off the wall.

是的。首先，我將從調整後的每股收益數字開始。調整後每股收益發生了兩件大事。第一個是在 17 年，我們看到股票期權行使帶來了顯著的好處，因此也帶來了稅收優惠，大約是 0.15 美元的好處，反映在 17 年的數字中。我們沒有預測 2018 年會有任何稅收優惠，因為這些很難預測。因此，如果我們看到好處，那將比 2018 年的數字有所上升。另一個與方法論的改變有關，雖然尚未發生，但將反映在第一季度的業績中，這實際上使與 2014 年 TPG 收購的無形資產相關的攤銷正常化。這反映在 2018 年展望中調整後的每股收益和調整後的淨利潤數據中，2018 年的數據中扣除相關稅收優惠後的金額為 430 萬美元。這就是如何考慮基礎。'17 基數的攤銷沒有調整，因為我們還沒有經歷方法上的改變。關於毛利率，Andrea，我要告訴你的是，我們對過去 4 年甚至 2017 年毛利率的進步感到非常自豪，提高了 300 個基點。在第三季度的電話會議中，我們顯然談到了由 Sweeten the Mix 計劃和外匯推動的持續擴張，但被客戶組合所抵消。我們還討論了一些與我們在該業務歷史上每年都有的折扣量有關的客戶組合，這些折扣量往往低於任何一年銷售額的 5%。我們說過，2016 年，折扣量非常前半部分加權，而 2017 年，相反，折扣量非常後半部分加權。因此，進入第四季度，我們的利潤率與我們的預期非常一致。我想說的一個細微差別是，折扣業務往往是相當受交易驅動的，在任何給定的時間點，你可以在該渠道中擁有某種能力，也可以沒有。相對於我們從儲備角度來看的整體方法，我們最終註銷了 150 萬美元的庫存，而不是通過折扣店。這與我們穿過從牆上掉下來的物品的方式非常一致。

Our next question comes from the line of Jon Andersen from William Blair.

我們的下一個問題來自威廉·布萊爾的喬恩·安徒生。

I wanted to ask, at this point in the calendar year, is it fair to say that your plans are set in terms of space and doors? So when you've guided for the year and assume no incremental space or door activity ex-Ulta, that there's good visibility that there will not be incremental space and doors. And then the second part to that question, if that's accurate, how are you thinking about space and door expansion with maybe some bigger whitespace retailers as you look beyond 2018, which sounds more like an optimized what you have here.

我想問，在今年的這個時候，可以公平地說您的計劃是根據空間和門來製定的嗎？因此，當您全年進行指導並假設 Ulta 之外沒有增量空間或門活動時，可以清楚地看到不會有增量空間和門。然後是這個問題的第二部分，如果這是準確的，當你展望 2018 年之後，你如何考慮一些更大的空白零售商的空間和門的擴張，這聽起來更像是你這裡的優化。

So John, what I'd tell you is there is opportunity for additional space and doors in 2018. What we provided in our guidance is what the assumption was underlying the 6% to 8%, which basically was the 2 things we most are focused on, which is optimizing our space within existing retailers and the previously announced rollout of Ulta Beauty. We still have, if you take a look at how the brand resonates with kind of retailers from a total proposition in terms of our consumer profile, our new items and our productivity, there's plenty of space ahead of us from a whitespace standpoint. I think last year, kind of our learning is we entered the year kind of talking about all the space that was embedded and every time we went and kind of announced something, people are like, "Oh, is that additional -- is that in addition to your number?" I think our approach this year is, "No, we have what our focus areas are that leads to the baseline. And if we have additional news, we'll add that news as time goes on." Long term, as I said, if I look at the landscape, we've used the figures that we cited within Target, where we're now the #3 dollar share brand and we still are about half the footprint of the legacy brands ahead of us. Walmart is 4 years behind where Target was, still kind of predominant set there is a 4-foot set. Every time they tip touch a store, we get more prominent space and positioning within Walmart. And then we have entire channels of Ulta still in the early days of that rollout and in addition to that, I'd say, drug, we still have major whitespace left there. So that's just in the U.S. before we get to international and other opportunities that we have.

所以約翰，我要告訴你的是 2018 年有機會增加空間和門。我們在指導中提供的是 6% 至 8% 的假設，這基本上是我們最關注的兩件事，即優化現有零售商的空間以及之前宣布推出的 Ulta Beauty。如果你從我們的消費者概況、我們的新產品和我們的生產力等方面的總體主張來觀察該品牌如何與零售商產生共鳴，那麼從空白的角度來看，我們還有很大的空間。我認為去年，我們的學習是，我們進入了談論所有嵌入空間的一年，每次我們去宣布一些事情時，人們都會說，“哦，這是額外的 - 是在除了你的號碼？”我認為我們今年的方法是，“不，我們有我們的重點領域來引導基線。如果我們有更多新聞，我們會隨著時間的推移添加該新聞。”從長遠來看，正如我所說，如果我看看情況，我們已經使用了我們在塔吉特內部引用的數據，我們現在在塔吉特排名第三的美元份額品牌，但我們的足跡仍然只有我們前面的傳統品牌的一半左右。沃爾瑪比塔吉特落後了 4 年，但仍然佔據主導地位，有 4 英尺的集市。每次他們觸碰商店時，我們都會在沃爾瑪內獲得更顯眼的空間和定位。然後，我們的 Ulta 的整個頻道仍處於推出的早期階段，除此之外，我想說的是，藥物，我們仍然留有主要的空白。因此，這只是在美國，然後我們才能獲得國際機會和其他機會。

That's really helpful. One quick follow-up. Can you give us an update on the status of Ulta? To what extent have you shipped product in the fourth quarter? How much is kind of left to come? We've noticed some 4-foot sets in our region of the country. Just an update on kind of where we sit and what benefit you've seen already and what some of the incremental results are showing?

這真的很有幫助。一項快速跟進。您能給我們介紹一下 Ulta 的最新情況嗎？你們第四季度的產品發貨情況如何？還剩下多少？我們注意到我們所在地區有一些 4 英尺長的裝置。只是更新一下我們的立場以及您已經看到的好處以及一些增量結果顯示了什麼？

Yes. So Ulta is in the middle of their rollout. As we mentioned, that's going to be happening through the first half of 2018, but we've been making good progress, as you saw in your local market, Jon. What I'd tell you is the pipeline related to that rollout, a lot of that did go out in the fourth quarter. So while we'll certainly see a replenishment benefit in 2018 from the new stores that we've secured, a lot of that initial fill did go out in 2017. But we're very excited. Again, we don't comment on specific retailers. I'd just mention that we're quite pleased with the early days at Ulta.

是的。因此，Ulta 正處於推出階段。正如我們提到的，這將在 2018 年上半年發生，但我們一直在取得良好進展，正如您在當地市場所看到的那樣，喬恩。我要告訴你的是與該推出相關的管道，其中很多確實在第四季度推出。因此，雖然我們肯定會在 2018 年從我們已獲得的新商店中看到補貨效益，但很多最初的補貨確實在 2017 年就用完了。但我們非常興奮。再次強調，我們不對特定零售商發表評論。我只想提一下，我們對 Ulta 的早期時光非常滿意。

Our next question comes from the line of Bonnie Herzog from Wells Fargo.

我們的下一個問題來自富國銀行的邦妮·赫爾佐格。

I guess I wanted to verify, in terms of your guidance, what level of category growth is baked into that guidance? And then what your expectations are for category growth over the long term? And then I had a question on the Nielsen scanner data. I guess I'm wondering why we haven't seen an acceleration in the tracked channels sales from the incremental shelf space you've gotten at both Target and Walmart. I feel like in the past, you guys have talked about you first need to earn the space, then the next year, optimize it. So just trying to understand when the optimization phase begins and when we could begin to gauge your success in optimizing the new space? Just sort of wondering why we're not seeing this reflected in the data.

我想我想根據您的指導來驗證該指導中包含了何種程度的品類增長？那麼您對品類長期增長的預期是什麼？然後我對尼爾森掃描儀數據有疑問。我想我想知道為什麼我們沒有看到從塔吉特和沃爾瑪獲得的增量貨架空間中跟踪渠道銷售的加速。我覺得過去，你們談到首先需要贏得空間，然後在明年優化它。那麼，只是想了解優化階段何時開始以及我們何時可以開始衡量您在優化新空間方面是否成功？只是想知道為什麼我們沒有在數據中看到這一點。

Sure. Bonnie, it's John. I'm going to take the first part. I'll let Tarang take the second. So the first on the category, our assumption for 2018, what I'd tell you is, we build our plans account by account and bottoms-up versus taking a category growth assumption and then share off of that. Obviously, a dynamic business, not a mature grower. So that bottoms-up approach is much better in our view. What I would tell you and I think we alluded to it in the commentary, was that generally speaking, we're not assuming any big recovery in the category in 2018 versus the continued headwinds that underpin the overall plan. Long term, what I'd tell you is similar to what Tarang mentioned, which is this is not, in our view, something that's structural and going to be sustained over the long term. If you look back many, many years in mass color cosmetics, you will have these periodic pullbacks, particularly given various places that you find yourself in the cycle. But over time, it's been a very consistent grower, so beyond '18, we don't have specific guidance or perspective that we would give other than to say we don't see this sustaining over the long term.

當然。邦妮，這是約翰。我要講第一部分。我會讓塔朗拿第二個。因此，關於該類別的第一個，我們對 2018 年的假設，我要告訴你的是，我們逐個帳戶和自下而上地制定計劃，而不是採取類別增長假設，然後分享。顯然，這是一個充滿活力的企業，而不是一個成熟的種植者。因此我們認為這種自下而上的方法要好得多。我想告訴你的是，我想我們在評論中提到了這一點，一般來說，我們並不認為 2018 年該類別會出現任何大的複蘇，而支撐整體計劃的持續阻力。從長遠來看，我要告訴你的與塔朗提到的類似，即我們認為這不是結構性的，也不是長期持續的。如果你回顧很多年的大眾彩妝行業，你會發現這些週期性的回調，特別是考慮到你發現自己處於週期中的不同位置。但隨著時間的推移，它一直是一個非常穩定的種植者，因此在 18 年之後，我們沒有提供具體的指導或觀點，只是說我們認為這種情況不會長期持續。

And then on your second question in terms of when can you see -- when will you start seeing the benefits of the space expansion. I would tell you, you'll start seeing that benefit this year and just for perspective, even in 2017, the Nielsen data, which shows sell-through rates at both Target and Walmart in the double digits, amongst the highest in their category and we were able to take share at both customers. To the model that we talked, while we picked up space last year at both customers, our first real opportunity to optimize that space starts in the spring resets that are happening right now. And as I mentioned earlier, Walmart is a little bit ahead of Target in those resets, so pretty soon, I'd say, over the next month or 2, you probably start to see what's going on at Walmart to see what the benefit of that space gain is and that optimization, followed by that probably Target and then other customers. And that you won't be able to read everything because Nielsen only covers about 2/3 of our business. So it will exclude, continue to exclude kind of Ulta Beauty, our own direct business and certainly, international, which is also a growth vector for us.

然後關於你的第二個問題，你什麼時候可以看到——什麼時候你會開始看到空間擴張的好處。我想告訴你，你今年就會開始看到這種好處，即使是在 2017 年，尼爾森數據顯示，塔吉特和沃爾瑪的售出率都達到兩位數，在同類產品中名列前茅。我們能夠在這兩個客戶中分享份額。對於我們談到的模型，雖然我們去年在兩個客戶處都獲得了空間，但我們優化該空間的第一個真正機會始於現在正在發生的春季重置。正如我之前提到的，沃爾瑪在這些重置方面領先於塔吉特，所以很快，我想說，在接下來的一兩個月內，你可能會開始看到沃爾瑪正在發生什麼，看看有什麼好處空間增益是優化，其次是目標，然後是其他客戶。而且您無法閱讀所有內容，因為尼爾森只涵蓋了我們大約 2/3 的業務。因此，它將排除、繼續排除 Ulta Beauty、我們自己的直接業務，當然還有國際業務，這也是我們的增長載體。

Our next question comes from the line of Erinn Murphy with Piper Jaffray.

我們的下一個問題來自艾琳·墨菲 (Erinn Murphy) 和派珀·賈弗雷 (Piper Jaffray) 的對話。

I was curious, you talked in your prepared remarks and just actually in the answer to the last question on the double-digit growth you're seeing at Target and Walmart. Can you reference kind of what you've seen in the drug channel broadly? Is it over- or under-indexing relative to the average?

我很好奇，您在準備好的發言中談到了這一點，實際上是在回答最後一個問題時談到的，即您在塔吉特和沃爾瑪看到的兩位數增長。您能大致參考一下您在毒品渠道中看到的情況嗎？相對於平均水平，它的指數是過高還是過低？

Yes. So in the drug channel, I think it was a challenging year in 2017, for the drug channel overall. There was, I know, for example, CVS pulled back on a lot of their merchandising support for color cosmetics, focusing in other areas, other changes they'd seen. Walmart -- I mean, Walgreens was quite busy with the integration of their Boots brands from that acquisition as well, or the integration of Boots with Walgreens. So I would say I'd characterize 2017 as probably a transitional year within drug overall. I would say we still have a tremendous opportunity when we take a look at drug as a channel and the number of doors kind of available to us, and we feel good about kind of how we stack up within drug.

是的。所以在藥品渠道方面，我認為2017年對於整個藥品渠道來說是充滿挑戰的一年。例如，我知道，CVS 取消了對彩妝的大量銷售支持，將重點放在其他領域，以及他們看到的其他變化。沃爾瑪——我的意思是，沃爾格林也非常忙於整合他們的 Boots 品牌，或者說 Boots 與 Walgreens 的整合。所以我想說，我認為 2017 年可能是整個藥物行業的過渡年。我想說，當我們將毒品視為一種渠道和可供我們使用的門的數量時，我們仍然擁有巨大的機會，並且我們對我們在毒品中的地位感到滿意。

Okay. And then with Walmart, the 20% linear footage expansion I think you had at the end of the year, are you starting to see now that the resets have started to unfold? Any of -- kind of sequential improvement from there?

好的。然後，對於沃爾瑪，我認為您在今年年底進行了 20% 的線性鏡頭擴展，現在您是否開始看到重置已經開始展開？從那裡開始有任何一種連續的改進嗎？

Yes, I'd just echo what Tarang said, Erinn, which is we're still early in that reset process. So we'll have a much better view of that in the coming month or 2.

是的，我只是重複 Tarang 所說的話，Erinn，我們仍處於重置過程的早期階段。因此，我們將在接下來的一兩個月內對此有一個更好的看法。

Okay. And then just the last question on the pace of newness. You guys had a stellar year in terms of the new products launched, I think, 128. Is that type of level what we should see going forward? Or is it kind of more in terms of the skin care, maybe a fewer number of new products that's much more earmarked towards skin care? Just trying to understand how sustainable that is.

好的。然後是關於創新步伐的最後一個問題。我認為你們在推出新產品方面度過了輝煌的一年，128。我們未來應該看到這種水平嗎？或者說更多的是在皮膚護理方面，也許是更少數量的新產品更多地專門用於皮膚護理？只是想了解這有多可持續。

Yes, sure. So I wouldn't say we have a target number in terms of how many launches, whether we did 128 last year, so we're going to do 130 this year. We -- what we really talk to is kind of our innovation capability and our ability to quickly be able to have the innovation that our consumers are looking for. A couple of things I'll point to in particular are our first-to-mass innovations. So we launched 39 items last year that were previously only available in Prestige. They're not available in the marketplace at all. And those, in particular, I think, are big focus areas of ours as addition to kind of what are the types of things that we can really make kind of luxurious beauty accessible on, and so that will continue to be our focus. Having said that, I think one of the great things that we have in terms of our core capability is being able to do, I'd say, all 3 things at the same time, which is have incredible output in terms of the amount of -- number of items that we're able to launch. The speed at which we're able to launch those items and also have and meet major consumer needs, similar to our examples on Beauty Shield and Active.

是的，當然。所以我不會說我們有發射次數的目標，去年我們是否發射了 128 次，今年我們將發射 130 次。我們真正談論的是我們的創新能力，以及我們快速獲得消費者所尋求的創新的能力。我要特別指出的一些事情是我們的首次大規模創新。因此，我們去年推出了 39 種以前僅在 Prestige 中提供的商品。它們在市場上根本買不到。我認為，這些尤其是我們重點關注的領域，除了我們可以真正使奢華之美變得觸手可及的事物類型之外，因此這將繼續成為我們的重點。話雖如此，我認為就我們的核心能力而言，我們擁有的最偉大的事情之一就是能夠同時做所有三件事，即在數量方面具有令人難以置信的產出——我們能夠推出的項目數量。我們推出這些產品並滿足主要消費者需求的速度，類似於我們在 Beauty Shield 和 Active 上的例子。

Our next question comes from the line of Jason Gere from KeyBanc.

我們的下一個問題來自 KeyBanc 的 Jason Gere。

Just one kind of follow-up, just wondering if you can maybe talk about the competitive landscape out there that -- we've heard a lot about some of your -- Coty and Revlon doing some relaunches on the mass category. So just wanted to see what type of impact they may have had into the guidance that you've provided us today. And then the second question, the direct-to-consumer business. How big you think that, that could be over the next couple of years? And especially from a marketing standpoint, how -- you used kind of these unpaid enthusiasts out there. Any thought in terms of going the traditional route that some of the other brands do when you think about the brick-and-mortar business in terms of trying to drive up, I guess, some of the unaided awareness and getting to levels that you are seeking?

只是一種後續行動，只是想知道您是否可以談談那裡的競爭格局——我們已經聽到了很多關於科蒂和露華濃在大眾類別上重新推出的一些消息。所以我只是想看看他們可能對您今天向我們提供的指導產生了什麼樣的影響。然後是第二個問題，直接面向消費者的業務。您認為未來幾年會有多大？尤其是從營銷的角度來看，你如何利用這些無償的愛好者。當你考慮實體業務時，任何關於走其他一些品牌的傳統路線的想法，我想，是為了提高一些獨立的意識並達到你現在的水平尋求？

So what I'd tell you from a competitive standpoint, we always take a look at the horizon and take a look at kind of what our competitors are doing. We have a lot of respect for our competitors. The way we build our plans and kind of the white space ahead of us, it's less about kind of who are we going to steal share from and how do we approach kind of helping our customers build their category. So there isn't anything particularly that's any of the legacy brands that particularly concern us. And in fact, I've always taken the point of view that I hope that many of them are more successful. I do believe it would be good for the category versus us driving that alone. We always, though, are looking at different brands, and which ones really appeal to us from an engagement standpoint, which ones really appeal from an innovation and speed and we'll continue to kind of take that in our model. The second, in terms of the unaided awareness, we love our approach on consumer engagement and how we've been able to build -- I cited the figure in the last 4 years being able to go from 3% unaided awareness to 16% unaided awareness in an approach that's highly efficient and effective and, more importantly, really continues to drive that authenticity that we have with our consumers. We see, even in 2017, an additional 3 points we're able to build, from 13% to 16%. So I would say we're really pleased with our efforts on Beautyscape, the amount of -- number of consumers we're able to reach that way in a way that makes a lot of sense, but we're a test and learn company, so we're always looking at different approaches of how do we engage consumers and we never say never to any particular approach, but we like the approach that we're on right now.

因此，從競爭的角度來看，我要告訴你的是，我們總是放眼未來，看看我們的競爭對手在做什麼。我們非常尊重我們的競爭對手。我們制定計劃的方式和我們面前的空白區域，並不是我們要從誰那裡竊取份額，以及我們如何幫助我們的客戶建立他們的類別。因此，沒有什麼特別值得我們特別關注的傳統品牌。事實上，我一直認為我希望他們中的許多人更加成功。我確實相信，與我們單獨推動這一類別相比，這對該類別有利。不過，我們總是在關注不同的品牌，從參與度的角度來看，哪些品牌真正對我們有吸引力，哪些品牌從創新和速度上真正有吸引力，我們將繼續在我們的模型中採用這一點。第二，就獨立意識而言，我們喜歡我們在消費者參與方面的方法以及我們如何建立——我引用了過去 4 年的數字，能夠從 3% 的獨立意識提高到 16%以一種高效、有效的方式提高意識，更重要的是，真正繼續推動我們對消費者的真實性。我們看到，即使在 2017 年，我們也能夠再增加 3 個百分點，從 13% 增加到 16%。所以我想說，我們對我們在 Beautyscape 上所做的努力感到非常滿意，我們能夠以一種很有意義的方式接觸到大量的消費者，但我們是一家測試和學習的公司，所以我們一直在尋找如何吸引消費者的不同方法，我們從不拒絕任何特定的方法，但我們喜歡我們現在採用的方法。

Our next question comes from the line of Mark Astrachan from Stifel.

我們的下一個問題來自 Stifel 的 Mark Astrachan。

I wanted a clarification, first. Inventory on the balance sheet, John, so that reflects the $1.5 million write-down, which you said, I think, had already happened. And then taking the inventory reserve would suggest that there's more inventory write-down to come, would that be fair?

首先我想澄清一下。約翰，資產負債表上的庫存反映了 150 萬美元的減記，我認為你所說的減記已經發生了。然後，提取庫存儲備將意味著未來會有更多庫存減記，這公平嗎？

No. Taking the reserve was effectively the write-down. So they're one and the same. So that inventory balance does reflect the actual reserve, which would have lowered that inventory balance.

不。提取準備金實際上就是減記。所以它們是一體的。因此，庫存餘額確實反映了實際儲備，這會降低庫存餘額。

Okay. And then more broadly, just thoughts on overall A&P support, given comments on the slowing category and your own expectations for '18, sort of how do you think about responding to it? What do you think your customers are -- or what are you hearing from your customers in terms of what they would like to hear from you? And I guess, putting some of the questions in a different light, have you lost any shelf space with retailers, not absolute in terms of being taken out of store, but has any shelf space been reduced that you've had?

好的。然後更廣泛地說，只是對整體 A&P 支持的想法，考慮到對放緩類別的評論以及您自己對 18 年的期望，您認為如何應對？您認為您的客戶是什麼？或者您從客戶那裡聽到了什麼，他們希望從您那裡聽到什麼？我想，從不同的角度考慮一些問題，您是否失去了零售商的任何貨架空間，不是絕對的被撤出商店，而是您擁有的任何貨架空間是否減少了？

Oh, yes. And, Mark, to your question on A&P, I'd say absolutely no difference in terms of conversations we're having with retailers or consumers around our approach. We've continued -- leverage a lot of those same digital and socially driven tactics and been able to continue seeing really strong engagement from consumers. And I think our retailers really appreciate us for that. So as we think about A&P in 2017, it was still around 3% of sales, the way that the SEC has us report it, and no change or no change in the tone in our conversations with retailers around what we would need to go out and do.

哦是的。馬克，對於你關於 A&P 的問題，我想說的是，我們與零售商或消費者圍繞我們的方法進行的對話絕對沒有區別。我們繼續利用許多相同的數字和社會驅動策略，並能夠繼續看到消費者的真正強烈參與。我認為我們的零售商對此非常感激。因此，當我們考慮2017 年的A&P 時，它仍然佔銷售額的3% 左右，這是SEC 讓我們報告的方式，而且我們與零售商圍繞我們需要走出去的產品進行對話的語氣沒有改變或沒有改變並做。

And on your second question, Mark, on shelf space. We'll continue to gain space. We haven't seen any losses in any of our retailers. I talked a little bit about the optimization we're doing at Target and Walmart right now and our current existing retailers. We're in a very strong position with each of those core customers. If you just take a look at the consumer profile, the innovation, our productivity and us taking share, we're one of the key go-to brands for these retailers, and we have a lot of white space ahead of us. So no, space, we're still quite bullish on in terms of the white space ahead of us.

馬克，關於你的第二個問題，關於貨架空間。我們將繼續獲得空間。我們還沒有看到任何零售商遭受任何損失。我談到了我們目前在塔吉特和沃爾瑪以及我們現有的零售商正在進行的優化。我們在每個核心客戶中都處於非常有利的地位。如果你只看一下消費者概況、創新、我們的生產力和我們所佔據的份額，我們是這些零售商的主要首選品牌之一，而且我們還有很多空白空間。所以不，空間，我們仍然非常看好我們面前的空白空間。

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

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

So could you maybe comment on the cadence of sales growth through the 4 quarters of 2018? I seem to recall when you gave the guidance for fourth quarter, there was some shifting of some things into the first quarter. So should we assume a slightly higher sales growth rate for the first quarter? Or is it kind of equal across the 4 quarters?

那麼您能否評論一下 2018 年四個季度的銷售增長節奏？我似乎記得當您給出第四季度的指導時，有些事情轉移到了第一季度。那麼我們是否應該假設第一季度的銷售增長率略高一些？或者說四個季度的情況是相等的嗎？

Yes. So, Linda, we don't actually provide quarterly guidance, and a big part of that is just the dynamic nature of our business. There's so much that can happen in any given quarter between pipeline moves, merchandising programs, things that happen year to year that we've always found it very difficult to provide specificity on the quarters. And I think if you look back on our history as a public company, you can see that our growth rates vary pretty widely from quarter-to-quarter. To your core question about the first quarter, the only thing that I would come back to is what Tarang spoke a little bit about in terms of the timing of those resets, which were -- are still in process and, therefore, finding their way to actually setting pretty late in the quarter. So we're not going to see any replenishment benefit from the new products on those walls. And in fact, as retailers are sitting there with significant out-of-stocks and products that they're marking through probably more of a headwind than anything else. So in the first quarter, I wouldn't expect to be significantly higher than what we forecasted for the year.

是的。所以，琳達，我們實際上並不提供季度指導，其中很大一部分只是我們業務的動態性質。在任何一個特定季度，管道轉移、銷售計劃、每年發生的事情都可能發生很多事情，我們總是發現很難提供季度的具體情況。我認為，如果你回顧我們作為一家上市公司的歷史，你會發現我們每個季度的增長率差異很大。對於你關於第一季度的核心問題，我唯一想回到的是塔朗在這些重置的時間方面談到的一些內容，這些重置仍在進行中，因此正在尋找方法實際上在本季度很晚的時候就已經設定了。因此，我們不會從這些牆上的新產品中看到任何補貨的好處。事實上，零售商正面臨嚴重缺貨和產品短缺的情況，他們所標記的產品可能比其他任何因素都更不利。因此，我預計第一季度的業績不會顯著高於我們今年的預測。

And then just as a follow-up. So in terms of my understanding of your growth algorithm over the 3 years, in the unlikely event that you don't get any more additional shelf space and you report the 6% to 8% growth in 2018, does that mathematically correlate to then a high-teen sales growth rate in 2019 to get to the 3-year algorithm?

然後作為後續行動。因此，根據我對過去 3 年增長算法的理解，萬一您沒有獲得更多額外的貨架空間，而您報告 2018 年增長 6% 到 8%，這在數學上是否與當時的增長相關？ 2019 年銷售額增長率達到3 年算法？

The only thing I'd say is we're not giving 2019 guidance on the call, obviously, implied by the 10% to 15% from 2016 to 2019, with a 6% to 8% growth rate in this year. Obviously, there are a variety of outcomes in 2019. What I'd tell you is we continue to see a lot of different opportunities on this business in various levers. This is a year that doesn't see a lot of those opportunities baked into the plan, and probably just leave it at that.

我唯一要說的是，我們不會在電話會議上給出 2019 年的指導，顯然，2016 年至 2019 年的增長率為 10% 至 15%，今年的增長率為 6% 至 8%。顯然，2019 年的結果是多種多樣的。我要告訴你的是，我們繼續在這個業務的各個方面看到很多不同的機會。今年計劃中並沒有太多這樣的機會，因此可能就這樣吧。

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

女士們、先生們，問答環節已經結束。現在我想將電話轉回給塔朗進行總結髮言。

Well, thanks, again, for joining us. We really look forward to discussing our Q1 results in May. I hope everyone has a great day. Thanks.

好的，再次感謝您加入我們。我們非常期待在五月份討論我們的第一季度業績。我希望每個人都有美好的一天。謝謝。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。