elf Beauty Inc (ELF) 2018 Q4 法說會逐字稿

Greetings, and welcome to e.l.f. Beauty's Fourth Quarter Fiscal 2018 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Willa Mcmanmon. Please, go ahead.

您好，歡迎來到 e.l.f.Beauty 2018 年第四季度財報電話會議。（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主持人威拉·麥克曼蒙 (Willa Mcmanmon)。請繼續。

Good afternoon, everyone. Thank you for joining us today to discuss e.l.f. Beauty's Fourth Quarter and Full Year 2018 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.Beauty 2018 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 transition period 2019 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，包括與公司過渡期 2019 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.

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。

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 discuss the business context and actions. John will then discuss our financial performance and guidance. It is now my pleasure to turn the call over to Tarang.

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，塔朗將討論業務背景和行動。然後約翰將討論我們的財務業績和指導。現在我很高興將電話轉給塔朗。

Thanks, Willa, and good afternoon, everyone. Fiscal 2018 was a challenging year for us, with net sales of $267 million, slightly down versus a year ago; and adjusted EBITDA of $62 million, slightly above a year ago. Despite top line weakness, we improved our margin profile, delivered adjusted EPS of $0.71 per share and delivered strong operating cash flow with a year-end cash balance of $51 million.

謝謝威拉，大家下午好。2018 財年對我們來說是充滿挑戰的一年，淨銷售額為 2.67 億美元，較上年略有下降；調整後 EBITDA 為 6200 萬美元，略高於一年前。儘管收入疲軟，我們仍改善了利潤率狀況，實現了每股 0.71 美元的調整後每股收益，並實現了強勁的運營現金流，年末現金餘額為 5100 萬美元。

The year closed with the second half that reflected significant deceleration across our track channels. We expect that the March 2019 quarter will also face headwinds from track channels in addition to difficult year-over-year comps, particularly at Walmart. Though we are disappointed in our top line, we are keenly focused on reasserting our position in the market. Today, I will discuss how we intend to do that.

今年下半年結束時，我們的軌道渠道顯著減速。我們預計，除了困難的同比比較之外，2019 年 3 月季度還將面臨來自軌道渠道的阻力，尤其是在沃爾瑪。儘管我們對我們的營收感到失望，但我們熱衷於重申我們在市場中的地位。今天，我將討論我們打算如何做到這一點。

Clearly, the mass beauty market has undergone a competitive transformation in the last 18 months, with new entrants and mega-influencers changing the way consumers are interacting with brands. In response to the changing market, we are leveraging e.l.f.'s core advantage, our ability to delight beauty enthusiasts with Prestige quality cosmetics and skin care at an extraordinary value. We plan to do this through initiatives of driving demand in our brand, focusing on our key first-to-mass products, getting optimal assortment and placement on shelf and online and generating the cost savings to help pay for these investments.

顯然，大眾美容市場在過去 18 個月中經歷了競爭轉型，新進入者和大影響者改變了消費者與品牌互動的方式。為了應對不斷變化的市場，我們正在利用 e.l.f. 的核心優勢，即我們能夠以非凡的價值為美容愛好者提供優質的化妝品和護膚品。我們計劃通過推動品牌需求的舉措來實現這一目標，重點關注我們的關鍵首發產品，在貨架和網上獲得最佳的分類和放置，並節省成本以幫助支付這些投資。

To drive demand in our brand, we are doubling down on our digital awareness. We are improving the curation of our social media content, beefing up our influencer programs, focusing on fewer and bigger product stories and putting a strong social push behind new item launches.

為了推動我們品牌的需求，我們正在加倍提高我們的數字意識。我們正在改進社交媒體內容的策劃，加強我們的影響者計劃，專注於更少和更大的產品故事，並在新產品發布後提供強大的社交推動力。

Three months ago, we brought in a new Head of Integrated Marketing, who joined us from Too Faced and is already making a meaningful impact within the team. We are seeing early indications of success from our digital efforts.

三個月前，我們聘請了一位新的整合營銷主管，他是從 Too Faced 加入我們的，並且已經在團隊中產生了有意義的影響。我們看到我們的數字化努力取得成功的早期跡象。

In January, our earned media value was up almost 60% year-over-year. We had over 9 million weekly Instagram social followers versus 3.5 million in January of 2018. And we added almost 47,000 Beauty Squad loyalty members, an increase of 37% compared to January of 2018. This brings our total Beauty Squad membership to over 1.4 million.

1 月份，我們的贏得媒體價值同比增長了近 60%。我們每周擁有超過 900 萬 Instagram 社交關注者，而 2018 年 1 月這一數字為 350 萬。我們增加了近 47,000 名 Beauty Squad 忠誠會員，與 2018 年 1 月相比增加了 37%。這使得我們的 Beauty Squad 會員總數超過 140 萬。

Let me share what's driving these numbers. First is an emphasis on the core e.l.f. value proposition that I just discussed. Second is the way we're mobilizing behind our value proposition, which is a dramatic change from the past. Two recent first-to-mass product stories illustrate this.

讓我分享一下推動這些數字的因素。首先是強調核心 e.l.f。我剛才討論的價值主張。其次是我們在價值主張背後的動員方式，這與過去相比發生了巨大的變化。最近的兩個首次量產產品的故事就說明了這一點。

In December, we launched our $8 putty primer that compares to a similar Prestige product priced at $52. We included this product in sample boxes that we sent to a wide variety of carefully targeted influencers. We also coordinated a social campaign around the product launch. Product feedback on social media was so positive that a major beauty influencer, Jeffree Star, who has a reach of 26 million followers, produced a video comparing our putty primer to the Prestige brand. His video resulted in putty primer becoming a Jeffree Star approved product, which in turn resulted in 6 million YouTube views. In total, putty primer has generated 87 million impressions. We're encouraged by the trends. 60% of putty primer e-commerce orders have come from new customers, of which 50% have joined our Beauty Squad loyalty program.

12 月，我們推出了 8 美元的膩子底漆，而類似的 Prestige 產品售價為 52 美元。我們將此產品放入樣品盒中，然後發送給各種精心定位的影響者。我們還圍繞產品發布協調了一場社交活動。社交媒體上的產品反饋非常積極，以至於擁有 2600 萬粉絲的主要美容影響者 Jeffree Star 製作了一段視頻，將我們的膩子底漆與 Prestige 品牌進行比較。他的視頻使膩子底漆成為 Jeffree Star 認可的產品，從而帶來了 600 萬次 YouTube 觀看次數。Putty Prime 總共產生了 8700 萬次展示。我們對這些趨勢感到鼓舞。60% 的膩子底漆電商訂單來自新客戶，其中 50% 加入了我們的 Beauty Squad 忠誠度計劃。

We are seeing similar response to another one of our key first-to-mass products for 2019, 16HR Camo Concealer, which we launched this month. While it's still early, Camo has generated huge excitement. Shortly after the product's launch, ELLE UK published an article entitled, The Internet Has Voted This is the Best Concealer Ever, And It's Less Than GBP 10. And in fact, it's only GBP 5. Taking a page from the putty primer campaign, we sent out press and influencer boxes prior to the launch. And last week, we hosted a Camo event for 160 U.K. influencers and guests, the largest event we've ever held in the U.K.

我們在 2019 年推出的另一款主要產品 16HR Camo Concealer（本月推出）也獲得了類似的反響。雖然現在還為時尚早，但迷彩已經引起了巨大的興奮。該產品推出後不久，英國版《ELLE》發表了一篇題為《互聯網投票選出這是有史以來最好的遮瑕膏，而且價格不到 10 英鎊》的文章。事實上，它只需 5 英鎊。借鑒 Putty Prime 活動的經驗，我們在發布前發送了新聞和影響力盒子。上週，我們為 160 位英國影響者和嘉賓舉辦了一場迷彩活動，這是我們在英國舉辦過的規模最大的活動。

These recent launches demonstrate our brand advantage that we'll continue to leverage and message. e.l.f. brings high-quality, buzzworthy products to market that hold their own against Prestige leaders for a fraction of the price. Our increased focus around our key first-to-mass products is helping to bring new consumers into the franchise and build relevancy around the e.l.f. brand.

最近推出的這些產品展示了我們的品牌優勢，我們將繼續利用和宣傳這一優勢。e.l.f.將高品質、值得關注的產品推向市場，這些產品以極低的價格與 Prestige 領先產品相媲美。我們更加關注我們的關鍵首發產品，這有助於將新消費者帶入該系列，並圍繞 e.l.f. 建立相關性。品牌。

To support these efforts, as I said previously, we plan to increase marketing spend gradually. We ended the year with marketing spend of 4% of net sales, and we expect to be in the mid- to high single-digit range this quarter. Leading the charge on these marketing efforts will be our new CMO, Kory Marchisotto, who will oversee brand, creative, innovation and digital. She'll lead the team in building on e.l.f.'s unique position while exploring innovative ways to increase consumer engagement and further differentiate the e.l.f. brand. Kory has more than 20 years of beauty experience, most recently as Senior Vice President of Shiseido U.S.A.'s bareMinerals division, where she led its digital transformation. Prior to that, Kory spent 16 years as part of Shiseido Beauty Prestige group and also held marketing and sales roles at LVMH. We're extremely excited to have her on our team.

為了支持這些努力，正如我之前所說，我們計劃逐步增加營銷支出。今年年底，我們的營銷支出占淨銷售額的 4%，預計本季度將達到中高個位數範圍。我們的新任首席營銷官 Kory Marchisotto 將負責這些營銷工作，他將負責品牌、創意、創新和數字化工作。她將帶領團隊鞏固 e.l.f. 的獨特地位，同時探索創新方法來提高消費者參與度並進一步使 e.l.f. 脫穎而出。品牌。Kory 擁有 20 多年的美容經驗，最近擔任資生堂美國 bareMinerals 部門的高級副總裁，領導該部門的數字化轉型。在此之前，Kory 在 Shiseido Beauty Prestige 集團工作了 16 年，並在 LVMH 擔任營銷和銷售職務。我們非常高興她加入我們的團隊。

In terms of innovation, one of our historical strengths has been our new products engine, where we introduce products across eyes, lips, face, tools and skin care in as quickly as 13 weeks. e.l.f.'s important differentiator is that we innovate rapidly and can do so with true Prestige quality. Looking at the success of products like putty primer, Camo Concealer and our recently launched Hello Hydration! skin cream, we know that highlighting our key products changes the game for us. It is our responsibility to make sure consumers are aware of our best-in-class products, and we are refocusing our brand messaging to make sure this is coming through loud and clear. As such, we plan to put more multichannel marketing dollars and attention behind our key first-to-mass products both at launch and beyond.

在創新方面，我們的歷史優勢之一是我們的新產品引擎，我們在短短 13 週內就推出了眼部、唇部、面部、工具和皮膚護理產品。e.l.f. 的重要區別在於我們創新迅速，並且能夠以真正的 Prestige 品質來實現這一點。看看膩子底漆、迷彩遮瑕膏和我們最近推出的 Hello Hydration 等產品的成功！護膚霜，我們知道突出我們的關鍵產品會改變我們的遊戲規則。我們有責任確保消費者了解我們一流的產品，我們正在重新調整我們的品牌信息，以確保這一點響亮而清晰。因此，我們計劃在我們的關鍵首發產品發佈時及之後投入更多的多渠道營銷資金和關注。

From an execution standpoint, getting the product right is just part of the equation. It's equally important to make sure e.l.f. is placed efficiently and attractively on the shelf. We've talked previously about Project Unicorn, which is aimed at elevating the brand presentation and improving the consumer's ability to navigate our sets. The first phase of this initiative, which includes over 350 SKUs affecting more than 50% of e.l.f. retail dollars, should be fully implemented by the end of March. We expect to have an update on its impact by our next call.

從執行的角度來看，獲得正確的產品只是等式的一部分。確保 e.l.f. 同樣重要。有效且美觀地放置在貨架上。我們之前討論過“獨角獸計劃”，該計劃旨在提升品牌形象並提高消費者瀏覽我們產品的能力。該計劃的第一階段包括超過 350 個 SKU，影響超過 50% 的 e.l.f.零售美元，應該在3月底之前全面實施。我們希望在下次電話會議上了解其影響的最新情況。

In terms of our retail partners, in calendar 2019, we expect to pick up overall shelf space including at Ulta Beauty, where we'll gain additional space in a subset of their stores. At our major national retail partners, Project Unicorn is underway, and as a result, we are seeing resets take slightly longer than typical due to the magnitude of product assortment, packaging and placement improvements. As we execute on these changes, we're getting a lot of support from our national retailer partners. For example, Target is giving us additional merchandising space for primers and brushes. And Walmart is working with us to improve in-stocks in our 4-way innovation centers, where we experienced replenishment challenges last year.

就我們的零售合作夥伴而言，在 2019 年，我們預計將獲得包括 Ulta Beauty 在內的整體貨架空間，我們將在他們的部分商店中獲得額外的空間。在我們主要的全國零售合作夥伴中，獨角獸計劃正在進行中，因此，由於產品分類、包裝和佈局的改進，我們發現重置時間比平常稍長。當我們執行這些變革時，我們得到了全國零售商合作夥伴的大力支持。例如，塔吉特為我們提供了額外的底漆和刷子銷售空間。沃爾瑪正在與我們合作，改善我們 4 向創新中心的庫存，去年我們在該中心遇到了補貨挑戰。

As I step back and think about our channel strategy, we have put effort behind national retailers, e-commerce and e.l.f. stores. We opened the majority of our e.l.f. stores in 2016 with the intent to expand our direct reach. However, today, e.l.f. stores are not profitable and collectively bring in less than 1/10 of the traffic that we see in our leading mass e-commerce site, elfcosmetics.com. We've also found e.l.f. stores require resources that we believe can be better deployed to other brand-building initiatives. Therefore, we've made the decision to close our 22 e.l.f. stores.

當我退一步思考我們的渠道戰略時，我們在全國零售商、電子商務和 e.l.f. 方面投入了很多努力。商店。我們打開了大部分 e.l.f.2016 年開設門店，旨在擴大我們的直接覆蓋範圍。然而，今天，e.l.f.這些商店並不盈利，並且帶來的流量總共還不到我們領先的大眾電子商務網站 elfcosmetics.com 的 1/10。我們還發現了 e.l.f.我們認為，商店需要的資源可以更好地部署到其他品牌建設計劃中。因此，我們決定關閉 22 e.l.f.商店。

This has been a difficult decision for us given the talent, passion and dedication of our stores associates. Despite their hard work, we've been unable to operate the stores in a way that makes financial sense. During 2018, with traffic pressure and rising wages, our store expenses have exceeded store gross margins by over $1.5 million. We don't see this situation improving without significant ongoing investment and believe the right answer is to swiftly redeploy those dollars against our national retailer and digital platforms.

鑑於我們商店員工的才華、熱情和奉獻精神，這對我們來說是一個艱難的決定。儘管他們努力工作，我們仍無法以具有經濟意義的方式經營這些商店。2018年，由於交通壓力和工資上漲，我們的商店費用超過商店毛利率超過150萬美元。如果沒有大量的持續投資，我們認為這種情況不會得到改善，並且相信正確的答案是迅速將這些美元重新部署到我們的全國零售商和數字平台上。

Our stores will be closed effective today. Employees have been notified and will be paid through March 9, at which time we'll provide above market severance benefit for all of our store associates and begin transitioning planning with our retail landlords. We thank our stores' associates for their hard work and for being champions of the e.l.f. brand. Again, this was a tough decision but one that supports our mission of investing in our leading national retailer and digital business while continuing to strategically reduce our cost structure.

我們的商店將從今天起關閉。員工已收到通知，並將在 3 月 9 日之前支付工資，屆時我們將為所有商店員工提供高於市場水平的遣散費，並開始與我們的零售業主進行過渡計劃。我們感謝商店員工的辛勤工作以及成為 e.l.f. 的捍衛者。品牌。同樣，這是一個艱難的決定，但它支持我們投資領先的全國零售商和數字業務的使命，同時繼續戰略性地降低我們的成本結構。

Another area of cost savings centers around our automation initiatives in both our distribution and manufacturing centers. Our Columbus e-commerce warehouse is up and running and is already providing cost savings while enabling 1- to 3-day delivery time across the country. We're currently on time and budget in automating our Ontario, California line for Walmart fulfillment and our U.S. liquid fill manufacturing line, which we expect to be complete in Q2 and Q4 of calendar 2019, respectively.

節省成本的另一個領域是我們在分銷和製造中心的自動化舉措。我們的哥倫布電子商務倉庫已建成並投入運行，已經節省了成本，同時在全國范圍內實現了 1 至 3 天的交貨時間。目前，我們正在按時按預算實現安大略省、加利福尼亞州沃爾瑪配送線和美國液體灌裝生產線的自動化，預計分別於 2019 年第二季度和第四季度完成。

We are also making changes to executive compensation. As background, we have always had a pay-for-performance program. Given our poor performance in 2018, executives will receive 0 bonus for the year. Personally, as the company's second largest shareholder who's purchased approximately 90% of my holdings, my interests are highly aligned with our stockholders to drive meaningful long-term value. For the upcoming calendar year, my total targeted compensation will be significantly less than it was in 2018, which itself was lower than 2017. As part of this, I will receive substantially less equity and half of my awards will be performance-based with price targets well above our current trading price. Net, our team is highly aligned with stockholders in long-term value creation.

我們還對高管薪酬進行了調整。作為背景，我們一直有一個按績效付費的計劃。鑑於2018年業績不佳，高管人員全年獎金為0。就我個人而言，作為公司第二大股東（購買了我約 90% 的股份），我的利益與股東高度一致，能夠推動有意義的長期價值。在即將到來的日曆年，我的目標薪酬總額將大大低於 2018 年，而 2018 年本身又低於 2017 年。作為其中的一部分，我將獲得大幅減少的股權，並且一半的獎勵將基於績效，目標價格遠高於我們當前的交易價格。Net，我們的團隊在長期價值創造方面與股東高度一致。

I'd also like to update you on initiatives at the board level. We have a strong, experienced public company board with 8 independent members plus myself. In January, we announced new committee assignments, with each independent director holding one committee seat that best aligns with his or her expertise. Additionally, we have appointed Beth Pritchard as Lead Independent Director. Beth is a highly experienced public company board member with strong governance experience, and I'm excited to work alongside her in this new expanded role.

我還想向您介紹董事會層面舉措的最新情況。我們擁有強大且經驗豐富的上市公司董事會，其中包括 8 名獨立成員以及我本人。一月份，我們宣布了新的委員會分配，每位獨立董事都擁有一個最適合其專業知識的委員會席位。此外，我們還任命 Beth Pritchard 為首席獨立董事。貝絲是一位經驗豐富的上市公司董事會成員，擁有豐富的治理經驗，我很高興能在這個新的擴展角色中與她一起工作。

Before I turn the call over to John, as we announced earlier today, it's with mixed feelings I'd tell you he'll be leaving e.l.f to return to the investment world. As you may recall, John was partner of our consumer, TPG Growth, and led the acquisition of e.l.f. in 2014. John is more than a colleague. He's a trusted and valued friend. I asked him to come to e.l.f. to help take the company public, and he's been a terrific strategic partner to me and the entire executive team. I thank him for his service and wish him the very best in his next role. We're working with Russell Reynolds on the CFO search. John's responsibilities as President will be absorbed by me and other members of the executive team.

正如我們今天早些時候宣布的那樣，在我把電話轉給約翰之前，我懷著複雜的心情告訴你，他將離開 e.l.f，重返投資界。您可能還記得，John 是我們的消費者 TPG Growth 的合夥人，並領導了對 e.l.f. 的收購。2014年。約翰不僅僅是一位同事。他是一位值得信賴和有價值的朋友。我請他來 e.l.f.幫助公司上市，他一直是我和整個管理團隊的出色戰略合作夥伴。我感謝他的服務，並祝愿他在下一個職位中一切順利。我們正在與 Russell Reynolds 合作尋找首席財務官。約翰作為總裁的職責將由我和執行團隊的其他成員承擔。

In closing, we're aggressively focused on initiatives to reignite growth across the business. While many of these initiatives will take time to play out, we are confident in our strategy and ability to execute for long-term success.

最後，我們積極致力於重振整個業務的增長。雖然其中許多舉措需要時間才能發揮作用，但我們對我們的戰略和執行能力充滿信心，以取得長期成功。

I'll now turn the call over to John.

我現在將把電話轉給約翰。

Thanks, Tarang. Before I jump into our results and guidance, I want to echo Tarang's sentiments. I'm also grateful for our partnership and the relationship we've built over the years. While it's a bittersweet decision to be leaving e.l.f., as the brand transitions, I'm comforted by the strong talent that exists in and continues to be added to the company. I look forward to working closely with Tarang and the team to ensure an orderly transition.

謝謝，塔朗。在我開始討論我們的結果和指導之前，我想回應塔朗的觀點。我也感謝我們的合作夥伴關係以及我們多年來建立的關係。雖然離開 e.l.f. 是一個苦樂參半的決定，但隨著品牌的轉型，我對公司現有並不斷增加的強大人才感到欣慰。我期待與 Tarang 和團隊密切合作，以確保有序過渡。

I'll now turn to our financial results for the full year 2018. Net sales decreased 1% to $267 million, primarily due to declining trends at select national retailers, a decrease in sales to our discount channel customers and a decline in holiday program sales. These impacts were partially mitigated by new distribution at Ulta, Walgreens and additional new accounts such as Rite Aid. As expected, gross margins were in line with prior year at 61%.

我現在來談談我們 2018 年全年的財務業績。淨銷售額下降 1%，至 2.67 億美元，主要是由於部分全國零售商的趨勢下降、折扣渠道客戶的銷售額下降以及假日計劃銷售額的下降。Ulta、Walgreens 的新分銷以及 Rite Aid 等其他新賬戶部分緩解了這些影響。正如預期，毛利率與上年持平，為 61%。

We remain highly focused on expense management amidst the broader business trend. On an adjusted basis, SG&A was $118 million or 44% of net sales compared to $116 million or 43% of net sales in 2017. Adjusted EBITDA was up 1% to $62.4 million versus $61.6 million a year ago. Adjusted net income was $35 million or $0.71 per share, down from $36 million or $0.73 per share a year ago.

在更廣泛的業務趨勢中，我們仍然高度關注費用管理。調整後的銷售、管理及行政費用為 1.18 億美元，占淨銷售額的 44%，而 2017 年為 1.16 億美元，占淨銷售額的 43%。調整後 EBITDA 增長 1%，達到 6240 萬美元，而一年前為 6160 萬美元。調整後淨利潤為 3500 萬美元，即每股 0.71 美元，低於一年前的 3600 萬美元，即每股 0.73 美元。

Note that our effective tax rate for the year was 14% or $2.4 million compared to a tax benefit of $11 million in 2017. Our effective rate was lower than guided, primarily due to a benefit of approximately $2 million from the vesting and exercise of equity instruments during the period.

請注意，我們今年的有效稅率為 14%，即 240 萬美元，而 2017 年的稅收優惠為 1100 萬美元。我們的實際利率低於指導值，主要是由於期內權益工具的歸屬和行使帶來約 200 萬美元的收益。

With disciplined working capital management, we generated over $55 million in cash flow from operations in 2018, bringing our cash balance to $51 million as of December 31, 2018 and compared to $10 million last year. Part of this was driven by our continued management of inventories throughout the period, ending the year with an inventory balance of $46 million, which was down from a balance of $63 million last year. In addition to our typical operational needs, we expect to use our cash balance to pay down debt and are currently evaluating other opportunities to allocate capital to drive value for shareholders.

通過嚴格的營運資本管理，我們在 2018 年從運營中產生了超過 5500 萬美元的現金流，使截至 2018 年 12 月 31 日的現金餘額達到 5100 萬美元，而去年為 1000 萬美元。部分原因是我們在整個期間持續管理庫存，年底庫存餘額為 4,600 萬美元，低於去年的 6,300 萬美元。除了我們典型的運營需求外，我們還希望利用現金餘額來償還債務，目前正在評估其他機會來分配資本，為股東創造價值。

In December, we announced that we are changing our fiscal year to the 12 months beginning April 1 and ending March 31. This move has been under consideration for some time. As discussed with many of you, the primary driver is to align our reporting periods with our business cadence as annual shelf resets by national retailer partners that drives the bulk of our business occur in February or March each year. Adjusting our fiscal year to begin after these resets puts us in a much better position to budget and plan for our fiscal year. This in turn should enable better informed annual guidance for the financial community. Therefore, today, we will be giving guidance only on the period from January 1, 2019 to March 31, 2019, which we are calling the transition period. e.l.f.'s fiscal year 2020 will begin on April 1, 2019 and end March 31, 2020. The company will provide fiscal 2020 guidance on our next quarterly call in May.

12 月，我們宣布將財政年度改為從 4 月 1 日開始至 3 月 31 日結束的 12 個月。這一舉措已經考慮了一段時間。正如與你們許多人討論的那樣，主要驅動力是使我們的報告週期與我們的業務節奏保持一致，因為全國零售商合作夥伴每年都會重置貨架，這推動了我們的大部分業務發生在每年的二月或三月。在這些重置之後調整我們的財政年度，使我們能夠更好地制定財政年度的預算和計劃。這反過來應該能夠為金融界提供更明智的年度指導。因此，今天我們將僅對2019年1月1日至2019年3月31日這段時間（我們稱之為過渡期）提供指導。e.l.f.的2020財年將於2019年4月1日開始，2020年3月31日結束。該公司將在 5 月份的下一個季度電話會議上提供 2020 財年指引。

Before I provide context for our transition period, I share Tarang's sentiments on the decision to close our e.l.f. stores. Our e.l.f. store employees have brought their passion to the brand, worked hard and deserve our gratitude. That said, with the traffic pressure on expense trends, our store expenses exceeded store gross margins by over $1.5 million in 2018. We believe we must take action to properly allocate resources to our key growth initiatives.

在介紹過渡期的背景之前，我先分享 Tarang 對關閉 e.l.f. 決定的看法。商店。我們的 e.l.f.店裡的員工為品牌注入了熱情，努力工作，值得我們感謝。也就是說，由於費用趨勢帶​​來的流量壓力，2018 年我們的商店費用超過商店毛利率超過 150 萬美元。我們認為，我們必須採取行動，為我們的關鍵增長舉措正確分配資源。

Turning to the impact of the closures. We currently expect to incur onetime accounting charges of approximately $23 million to $25 million in total, which will be taken in the transition period ended March 31, 2019. Approximately $16 million relates to assets and liabilities that will be recorded in the transition period upon the adoption of a new lease accounting standard. The remaining costs are expected to include noncash asset write-offs of approximately $5 million to $6 million, employee severance payments of approximately $0.5 million and other costs of approximately $1.5 million to $2.5 million. Most of these figures are noncash, and we expect the eventual cash outlay associated with the shutdowns to be substantially lower. Our guidance going forward will be provided on a pro forma basis to exclude the impact of our stores. In other words, all metrics provided will exclude our stores business.

轉向關閉的影響。目前，我們預計將在截至 2019 年 3 月 31 日的過渡期內產生總計約 2300 萬至 2500 萬美元的一次性會計費用。大約 1600 萬美元涉及資產和負債，這些資產和負債將在採用新租賃會計準則後的過渡期內記錄。其餘費用預計包括約 500 萬至 600 萬美元的非現金資產沖銷、約 50 萬美元的員工遣散費以及約 150 萬至 250 萬美元的其他費用。這些數字大部分都是非現金，我們預計與停工相關的最終現金支出將大幅降低。我們未來的指導將在預計的基礎上提供，以排除我們商店的影響。換句話說，提供的所有指標都將排除我們的商店業務。

Now for our outlook for the transition period ending March 31, 2019. We expect net sales of $55 million to $58 million, adjusted EBITDA between $8 million to $9.5 million and adjusted net income between $2 million and $3 million or $0.04 to $0.06 per share based on a fully diluted share count of 49.3 million. Again, this outlook excludes e.l.f. stores, which in the prior year period generated $3.3 million in net sales.

現在我們對截至 2019 年 3 月 31 日的過渡期進行展望。我們預計淨銷售額為5500 萬美元至5800 萬美元，調整後EBITDA 為800 萬美元至950 萬美元，調整後淨利潤為200 萬美元至300 萬美元，或每股0.04 至0.06 美元（基於4930 萬股完全攤薄後的股份數）。再次強調，這一前景不包括 e.l.f。商店，去年同期淨銷售額為 330 萬美元。

Also, as noted, this is a transition quarter as we have yet to fully assess the impact of our shelf resets and Project Unicorn. As such, current trends within our Nielsen universe are expected to largely persist until the resets firmly take shape.

此外，如上所述，這是一個過渡季度，因為我們尚未充分評估貨架重置和獨角獸計劃的影響。因此，尼爾森宇宙中當前的趨勢預計將在很大程度上持續下去，直到重置牢固成形。

Finally, we had approximately $3 million of national retailer pipeline in the comparable quarter last year that is impacting the overall comparison. We plan to update you on the impact of the shelf resets and the outlook for fiscal 2020 during our upcoming call in May.

最後，去年同期我們有大約 300 萬美元的全國零售商渠道，這影響了整體比較。我們計劃在 5 月份召開的電話會議上向您通報貨架重置的影響以及 2020 財年的前景。

On the bottom line, you will see that the declines implicit in our forecast result in negative operating leverage for the quarter. While deleveraging is expected with top line declines, I would note that the company has not yet begun to benefit from the number of cost-savings initiatives Tarang referenced earlier in his commentary. We plan to update you on these initiatives in May.

從底線來看，您將看到我們預測中隱含的下降導致本季度運營槓桿為負。雖然去槓桿化預計會導致營收下降，但我要指出的是，該公司尚未開始從塔朗在其評論中早些時候提到的成本節約舉措中受益。我們計劃在五月份向您通報這些舉措的最新情況。

In summary, 2018 was a challenging year, and though it will take time, we believe the right initiatives are in place to reassert our position as the leader in providing high-quality cosmetics and skin care at an extraordinary value.

總之，2018 年是充滿挑戰的一年，儘管這需要時間，但我們相信正確的舉措已經到位，可以重申我們作為提供超值高品質化妝品和護膚品的領導者的地位。

With that, operator, you may now open the call for questions.

接線員，您現在可以開始提問。

(Operator Instructions) Our first question comes from the line of Bill Chappell with SunTrust.

（操作員說明）我們的第一個問題來自 SunTrust 的 Bill Chappell。

I understand with the change in fiscal year and resets still in the mix. But can you give us any more color as we look to kind of apples-to-apples for '19 versus calendar '18? I mean, do you expect tills to grow? Do you expect EBITDA to grow? Anything you can kind of give there. And then when I'm saying that, I mean, as you're looking at resets and shelf space, are you losing any shelf space? Are you -- was there anything that would lead us to believe that things should get meaningfully worse over the next 12 months?

我了解財政年度的變化，並且仍在混合中進行重置。但是，當我們尋找“19 年日曆”與“18 年日曆”的比較時，您能給我們更多的信息嗎？我的意思是，你預計耕種會增長嗎？您預計 EBITDA 會增長嗎？你可以給那裡的任何東西。當我這麼說時，我的意思是，當您考慮重置和貨架空間時，您是否會失去任何貨架空間？有沒有什麼事情讓我們相信未來 12 個月情況會變得更糟？

Sure. Bill, this is Tarang. Why don't I start with the second half of your question in terms of overall kind of momentum, and particularly as you've asked specifically on shelf space. As I mentioned in the script, we will -- our expectation is that we will pick up shelf space in 2019. We called out in particular e.l.f. -- Ulta Beauty, where we'll get increased shelf space in subset of their doors. For competitive reasons, they've asked us not to disclose how many of the doors those will be, but what I can tell you overall is we're really happy with both the partnership and what we see. But I'd tell you broadly from a retailer standpoint, e.l.f.'s retail proposition in terms of our productivity, consumer profile, innovation, particularly on these first-to-mass items, and our ability to partner with these retailers, put us in good steps. So we overall expect to pick up shelf space. And then on top of that, I think our partnerships, particularly with Ulta, Target and Walmart, are quite strong. Target is rewarding us right now with incremental merchandising space. Walmart is working very closely with us on our 4-way innovation centers, kind of improving in-stocks on those. So feel good from a overall retailer partnership standpoint and our overall position in terms of space.

當然。比爾，這是塔朗。我為什麼不從你問題的後半部分開始，從整體動力的角度來看，特別是當你特別詢問貨架空間時。正如我在腳本中提到的，我們將——我們的期望是我們將在 2019 年獲得貨架空間。我們特別呼籲 e.l.f.-- Ulta Beauty，我們將在其門的子部分中獲得更多的貨架空間。出於競爭原因，他們要求我們不要透露這些門的數量，但我可以總體告訴您的是，我們對合作夥伴關係和我們所看到的情況都非常滿意。但我想從零售商的角度廣泛地告訴您，e.l.f. 在我們的生產力、消費者形象、創新方面的零售主張，特別是在這些首次批量生產的商品上，以及我們與這些零售商合作的能力，使我們處於領先地位。好的步驟。因此，我們總體預計會增加貨架空間。最重要的是，我認為我們的合作夥伴關係，特別是與 Ulta、Target 和沃爾瑪的合作夥伴關係，非常牢固。塔吉特現在正在獎勵我們增量銷售空間。沃爾瑪正在與我們就我們的四向創新中心密切合作，以改善這些中心的庫存。因此，從整體零售商合作夥伴關係的角度以及我們在空間方面的整體定位來看，感覺良好。

And then, Bill, on your broader question around the trend line on the business and how that plays forward on an apples-to-apples basis, we recognize the difficult moment we're in relative to clarity ahead of the resets, and that was obviously a big driver of the fiscal year change. I think if you take a look at our transition period, you'll obviously see sort of a negative trend implicit in our guidance. Important to note that, that does not fully benefit from the impact of our shelf resets, Project Unicorn or the marketing initiatives that we have in play. But the company will be in a better position to quantify that in May. So we'll try and help you a bit off-line, but recognize that we're in a little bit of a moment right now.

然後，比爾，關於您關於業務趨勢線的更廣泛問題以及該趨勢線如何在同類基礎上向前發展，我們認識到我們在重置之前相對清晰地處於困難時刻，那就是顯然是財政年度變化的一個重要推動因素。我認為，如果您看看我們的過渡期，您顯然會看到我們的指導中隱含著某種負面趨勢。值得注意的是，這並不能完全受益於我們的貨架重置、獨角獸計劃或我們正在進行的營銷舉措的影響。但該公司將能夠在五月份更好地量化這一點。因此，我們會嘗試在線下為您提供一些幫助，但要認識到我們現在正處於一個非常時期。

Okay. And then in terms of -- on the cost front, I mean, certainly, that was better in the quarter than I would have expected, even excluding kind of the onetime stuff. I mean, can you just help us understand how well or how you're offsetting tariffs and kind of the outlook if tariffs roll back, if that changes anything or -- in your outlook over the next few months?

好的。然後就成本而言，我的意思是，當然，本季度的情況比我預期的要好，甚至排除了一些一次性的東西。我的意思是，您能否幫助我們了解您抵消關稅的程度或方式，以及關稅回滾後的前景，如果這會改變您未來幾個月的前景？

Yes. I would say, in many ways, no new messages there. And it seems like tariffs continue to be a bit of a moving target relative to news coming out of Washington. As you know, we already have been subject to the 10% tariff, which was in our plan, and we talked about a couple of the mitigating factors between concessions that we got from our vendor partners as well as what happened with the prevailing exchange rate on the U.S. dollar to the RMB. Right now, our plans and obviously our transition period guidance does not include the impact of a 25% tariff given that, that has been delayed. But as you've heard in prior calls, a few different mitigating items that we would have if and when those actions went through.

是的。我想說，從很多方面來說，那裡沒有新消息。相對於華盛頓傳來的消息，關稅似乎仍然是一個不斷變化的目標。如您所知，我們已經在計劃中繳納了 10% 的關稅，我們討論了我們從供應商合作夥伴處獲得的優惠之間的一些緩解因素以及現行匯率的變化美元兌人民幣。目前，我們的計劃以及顯然我們的過渡期指導不包括 25% 關稅的影響，因為這已經被推遲了。但正如您在之前的電話中所聽到的，如果採取這些行動，我們將採取一些不同的緩解措施。

And specifically, on that point, Bill, if 25% did go through, we already have worked kind of what we would take in terms of selective pricing, and we did that by analyzing every one of our SKUs, where competitive items were manufactured. And what we have to do, we've already communicated that with our customers. We obviously held off pending kind of what ends up happening with trade negotiations, but feel well positioned on the 10% and are prepared if there's a 25%.

具體來說，在這一點上，比爾，如果25% 確實通過了，我們已經採取了選擇性定價方面的工作，並且我們通過分析我們的每一個SKU（其中製造了有競爭力的產品）來做到這一點。我們必須做什麼，我們已經與客戶進行了溝通。我們顯然推遲了貿易談判最終發生的事情，但感覺在 10% 方面處於有利位置，並為 25% 做好了準備。

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

我們的下一個問題來自蒙特利爾銀行資本市場部的 Shannon Coyne。

Can you talk about just the competitive landscape? I know you talked about it being a lot different today than it was 1.5 years ago. Can you just talk about your biggest, I guess, surprises are? Where you think that you went wrong, maybe reasons why you haven't been able to keep pace and then what you expect kind of going forward?

您能簡單談談競爭格局嗎？我知道你說過今天的情況與 1.5 年前有很大不同。我想你能談談最大的驚喜是什麼嗎？您認為自己錯在哪裡，也許是您無法跟上步伐的原因，以及您對未來的期望是什麼？

Sure. Shannon, this is Tarang. So I'd say on the macro, if I take a look at 2018 as a year, there were pretty big shifts from a competitive landscape standpoint in terms of the number of new entrants and particularly the impact of many of these mega-influencer-driven brands. And what ended up happening for us is that it ended up having e.l.f. message get lost in all the noise that was out there. Our biggest learning coming off of that is really we need to make sure that we're reasserting kind of our position as really a unique player in terms of our ability to give high-quality cosmetics and skin care and extraordinary value. I talked about a couple of the examples, initiatives that we're doing, in particular this integration behind our biggest first-to-mass items. And just to back up a bit, historically, while we always had a great pipeline of innovation, we usually would only market that innovation when it went into our own direct channels, particularly elfcosmetics.com. By the time resets happened and the distribution was brought into Walmart, Target, Ulta Beauty, there was very little we said behind those products. So one of the biggest changes we've made, and again I gave you a couple of examples on the call, is to say when we have a first-to-mass item, particularly one of those that we believe actually beats the Prestige inspiration, let's make sure we're fully integrating behind that. And you've seen that in terms of how we stepped up our efforts both with influencers, on social and in digital. And we like the preliminary results of what we're seeing so far. And so I'd say, it goes hand in hand with some of the things we talked in terms of investing more behind the brand, finding the cost savings to help pay for that investment but, most importantly, integrating behind our first-to-mass products.

當然。香農，這是塔朗。因此，我想說，從宏觀角度來看，如果我把2018 年視為一年，從競爭格局的角度來看，在新進入者的數量，特別是許多超級影響者的影響方面，出現了相當大的變化——驅動品牌。最終發生在我們身上的是，它最終有了 e.l.f.消息在外面的所有噪音中消失了。我們從中學到的最大的教訓是，我們確實需要確保我們在提供高品質化妝品和皮膚護理以及非凡價值的能力方面重申我們作為真正獨特參與者的地位。我談到了我們正在做的幾個例子和舉措，特別是我們最大的首次批量項目背後的集成。從歷史上看，雖然我們一直擁有大量的創新渠道，但我們通常只會在創新進入我們自己的直接渠道（尤其是 elfcosmetics.com）時才會對其進行營銷。當重置發生並將分銷帶入沃爾瑪、塔吉特、Ulta Beauty 時，我們在這些產品背後幾乎沒有說什麼。因此，我們所做的最大改變之一是，我在電話會議上再次給了你們幾個例子，就是當我們有第一個批量產品時，特別是那些我們認為實際上擊敗了 Prestige 靈感的產品，讓我們確保我們完全融入其中。您已經從我們如何加強與社交和數字領域影響者的努力中看到了這一點。我們對目前所看到的初步結果感到滿意。所以我想說，它與我們談論的一些事情是齊頭並進的，即在品牌背後進行更多投資，尋找節省成本來幫助支付該投資，但最重要的是，整合我們的第一個-大眾產品。

Okay. And then just another follow-up. Can you talk about the international business? Just wondering if anything is changing there with your change in focus on the U.S. or if you continue to expect to grow internationally.

好的。然後是另一個後續行動。您能談談國際業務嗎？只是想知道隨著您對美國的關注點發生變化，或者您是否繼續期望在國際上發展，是否會發生任何變化。

Sure. We'll give full guidance in May, but what I can tell you in international overall is we're really pleased with what we're seeing, particularly in our direct international relationships. So I mentioned the example on our Camo concealer in the U.K. being called by ELLE UK the best concealer ever and at this incredible price point of GBP 5. That concealer right now we've partnered very closely with Superdrug in the U.K. And the amount of awareness, amount of sales that, that has driven has been incredible. And so we continue to see in these direct relationships really strong growth and growth potential, whether it be Superdrug, Boots in the U.K. as we started expanding the brand in other retailers directly. At the -- last year, we did have kind of -- continuing to kind of pull back on some of the distributors that we use. We have a number of good distributor relationships but are really prioritizing combination of kind of our direct relationships and see a great deal of whitespace ahead.

當然。我們將在五月份提供全面的指導，但我可以告訴你們的是，在國際整體方面，我們對所看到的情況感到非常滿意，特別是在我們的直接國際關係方面。所以我提到了我們在英國的Camo 遮瑕膏的例子，它被《ELLE UK》稱為有史以來最好的遮瑕膏，而且價格令人難以置信，價格為5 英鎊。我們現在與英國的Superdrug 合作非常密切。意識、所帶動的銷售量是令人難以置信的。因此，當我們開始直接在其他零售商中拓展品牌時，我們繼續在這些直接關係中看到真正強勁的增長和增長潛力，無論是英國的 Superdrug、Boots。去年，我們確實繼續對我們使用的一些分銷商進行縮減。我們擁有許多良好的分銷商關係，但確實優先考慮我們直接關係的組合，並看到未來有大量的空白。

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

我們的下一個問題來自 Mark Astrachan 和 Stifel 的對話。

This is [Kimberly] on for Mark. We had a question just about your incremental spending going forward and how that will be like allocated to product development versus marketing versus promotions and then how you're sort of balancing that with your cost-saving initiatives. So like how much of the savings are actually being reinvested into the business?

這是[金伯利]為馬克代言的。我們有一個問題是關於您未來的增量支出，以及如何將其分配給產品開發、營銷和促銷，以及您如何在成本節約計劃之間取得平衡。那麼，有多少儲蓄實際上被重新投資到了企業中呢？

Sure. So we will give, again, guidance in May for the 2020 period, but broadly speaking, what I'll tell you is the vast majority of the incremental spend is going into marketing behind our first-to-mass products. The actual R&D program and the new products engine that we have, we feel very good about. There is little bit more investment there, but most of the investment is really on how we activate behind these innovations and really make sure our consumers are aware of them, and we're speaking loudly and clearly. The cost savings would be reinvested back in that marketing investment. We'll give you a better picture of kind of how those go hand-in-hand kind of on our next call. I'd tell you in the first quarter or this transition quarter, as we mentioned, we've got marketing spend kind of in the mid- to high single digits. We do not have some of the cost-savings initiatives that I talked about. Many of those sequencing kind of Q2 to Q4 as we go throughout the year. And again, we'll be able to give you specific numbers as we put the full fiscal year picture together but very much have the intention of finding cost savings to help pay for those investments.

當然。因此，我們將在 5 月份再次給出 2020 年期間的指導，但從廣義上講，我要告訴您的是，絕大多數增量支出都將用於我們首批批量產品的營銷。我們擁有的實際研發計劃和新產品引擎，我們感覺非常好。那裡的投資不多，但大部分投資實際上是關於我們如何激活這些創新，並真正確保我們的消費者意識到它們，並且我們大聲而清晰地說話。節省的成本將重新投資於營銷投資。我們將在下次通話中向您提供更好的圖片，讓您了解這些是如何齊頭並進的。我想告訴你，正如我們提到的，在第一季度或這個過渡季度，我們的營銷支出處於中高個位數。我們沒有我談到的一些成本節約舉措。隨著我們全年的發展，其中許多排序都是從第二季度到第四季度。再說一遍，當我們將整個財政年度的情況放在一起時，我們將能夠為您提供具體的數字，但我們非常希望節省成本來幫助支付這些投資。

Our next question comes from the line of Stephanie Wissink with Jefferies.

我們的下一個問題來自斯蒂芬妮·威辛克（Stephanie Wissink）和杰弗里斯（Jefferies）的對話。

Just a couple of follow-ups, and one is on Project Unicorn. If you could just give us an update on how widespread that distribution initiative is, across how many accounts, across how many doors, how we should think about the rollout of that in 2019. And then I just wanted to follow up, Tarang, on the decision to close the retail stores and how you're thinking about the consumer insight of your business. I know retail and online, your enthusiast community was an area where you would test new products and then ultimately bring those products to wholesales. Maybe give us an update on how you're thinking about the ecosystem of insights as it relates to some of the innovation we should expect over the course of the next year or 2 years.

只有幾個後續行動，其中一個是關於獨角獸計劃的。您能否向我們介紹一下該分銷計劃的最新情況、覆蓋了多少個帳戶、跨越了多少個門，以及我們應該如何考慮在 2019 年推出該計劃。然後，塔朗，我只想跟進關閉零售店的決定，以及您如何考慮您業務的消費者洞察。我了解零售和在線，您的愛好者社區是您測試新產品並最終將這些產品帶到批發市場的區域。也許可以告訴我們您如何看待洞察生態系統的最新情況，因為它與我們在未來一年或兩年內應該期待的一些創新有關。

Sure. So first on Project Unicorn. Project Unicorn really impacts all of our retail customers in one way or the other, so pretty much 100% of our distribution. There's 2 distinct phases kind of the Unicorn. What's currently taking place right now in Walmart, Ulta Beauty and Target is we're putting Unicorn product in, which is new product packaging, better placement, in much more efficient sets, which allow us to put more items on each of those sets. That's kind of Phase 1. A balance of customers will get the Unicorn product, but may not be drawn as efficiently as Walmart, Target and Ulta. In the fall, we'll come back and kind of go to Phase 2 of Unicorn, where we will then move kind of across the board all of our brushes into the Unicorn design. They will still be in packaging but more sleeker packaging that allows us to fit more brushes and more kits onto shelves as well as start drawing other customers in a more efficient design. So you'll hear me talk about Project Unicorn pretty much throughout the year in the multiple phases of rollout. As we go through the first phase, we expect to kind of have implemented by the end of March in the main planograms that we're currently doing. And then on your second question in terms of the role of stores. We love the insights that we got from our stores and particularly the passion of our store associates. Yet, when we took a look at the resources that required relative to other sources of getting those insights, we deemed we're better off putting resources against some of these other vehicles. So for example, elfcosmetics.com is the #1 mass e-commerce site in color cosmetics. It's a rich area of insights. And we looked at the insights there relative to our stores, we're getting many of these cores' same insights. Particularly, once we started creating Beauty Squad, our loyalty program, we now are able to do -- our innovation team is able to seed some of our newest products with our most loyal Beauty Squad members, and we've gotten a rich level of feedback that prior to creating Beauty Squad, which we really started after we started our first store, we didn't have another vehicle for. Lastly, I would say, we've gotten much better in terms of the partnership with some of our national retailers on the innovation front. Ulta Beauty, in particular, has kind of expressed kind of their desire to go even faster on some of our big innovations, as have Target and Walmart. And there's a number of different things we're doing by retailer in terms of being able to get innovation insights. So at Ulta Beauty, they are wanting to put some of our new products online faster than we ever would have before, and in return, will give us insights in terms of what they're learning. At Walmart, I mentioned the 4-way innovation centers, their ability to get more unique items into each of their doors that than what can fit on a typical kind of 4-foot shelf set. In Target, our longest-standing strategic partner, we're constantly looking at ways that we partner on innovation including kind of exclusive items. So as I step back, while the store has certainly played an important role in terms of getting insights, particularly from our associates and what they're learning and hearing from consumers on new items, we have other ways of getting those insights in a more efficient manner.

當然。首先是獨角獸計劃。獨角獸項目確實以一種或另一種方式影響我們所有的零售客戶，所以幾乎 100% 都是我們的分銷。獨角獸有兩個不同的階段。目前，沃爾瑪、Ulta Beauty 和Target 正在開展的工作是，我們正在將Unicorn 產品放入其中，這是新的產品包裝，更好的放置，更高效的套裝，這使我們能夠在每個套裝中放置更多的商品。這就是第一階段。平衡的客戶將獲得獨角獸產品，但可能不會像沃爾瑪、塔吉特和 Ulta 那樣有效地吸引客戶。秋天，我們將回來並進入 Unicorn 的第二階段，然後我們將把所有畫筆全面轉移到 Unicorn 設計中。它們仍將採用包裝，但包裝更加時尚，使我們能夠在貨架上放置更多刷子和更多套件，並開始以更高效的設計吸引其他客戶。因此，您會在全年的多個推出階段中聽到我談論獨角獸計劃。當我們經歷第一階段時，我們預計會在三月底之前在我們目前正在做的主要貨架圖中實施。然後關於第二個問題，關於商店的作用。我們喜歡從商店獲得的見解，尤其是商店員工的熱情。然而，當我們考慮相對於其他來源獲得這些見解所需的資源時，我們認為最好將資源用於其他一些工具。例如，elfcosmetics.com 是彩妝領域排名第一的大眾電子商務網站。這是一個富有洞察力的領域。我們研究了與我們商店相關的見解，我們得到了許多核心的相同見解。特別是，一旦我們開始創建Beauty Squad（我們的忠誠度計劃），我們現在就能夠做到- 我們的創新團隊能夠與我們最忠誠的Beauty Squad 成員一起播種我們的一些最新產品，並且我們已經獲得了豐富的反饋說，在創建 Beauty Squad 之前（我們在開設第一家商店後才真正開始創建 Beauty Squad），我們沒有其他車輛。最後，我想說，我們在創新方面與一些全國性零售商的合作關係取得了很大的進步。尤其是 Ulta Beauty，它表達了他們希望更快地推進我們的一些重大創新的願望，就像塔吉特 (Target) 和沃爾瑪 (Walmart) 一樣。為了獲得創新見解，零售商正在做許多不同的事情。因此，在 Ulta Beauty，他們希望以比以往更快的速度將我們的一些新產品上線，作為回報，他們將向我們提供他們所學到的見解。在沃爾瑪，我提到了 4 向創新中心，他們能夠將比典型的 4 英尺貨架組所能容納的更多獨特的商品放入每扇門中。在我們歷史最悠久的戰略合作夥伴塔吉特，我們不斷尋找創新合作方式，包括獨家產品。因此，當我退後一步時，雖然商店在獲取見解方面確實發揮了重要作用，特別是從我們的員工那裡獲取見解，以及他們從消費者那裡學到和聽到的關於新商品的見解，但我們還有其他方式來更深入地獲取這些見解。有效的方式。

Tarang, if I could just throw in one more. I just want to understand a little bit about scanner this year. If you could just help remind us, as we look at comparability March quarter, June, September, December progressing through the year, are there any things we need to be mindful of that were occurring last year that affected scanner that we should be considering in the comparables this year? I know there's a lot of noise in scanner as the year progresses. So just want to make sure we account for those things.

Tarang，如果我能再扔一個就好了。今年我只是想了解一點關於掃描儀的知識。如果您能幫助提醒我們，當我們查看全年 3 月季度、6 月、9 月、12 月的可比性時，我們是否需要注意去年發生的影響掃描儀的事情，我們應該考慮這些事情今年的可比情況是？我知道隨著時間的推移，掃描儀中會有很多噪音。所以只是想確保我們考慮到這些事情。

Yes. So I think the macro is, look, we still see headwinds in our track channels. If I think of the first quarter in particular, we're going through a bigger conversion than we normally do with Unicorn. As I mentioned, that kind of transition is taking a little bit longer just given the magnitude of the number of SKUs that we're talking about that are converting over. The biggest change, though, relative to Unicorn and scanner year-over-year is you're going to see a bit more volatility. So I saw a bunch of notes after last month's Nielsen of, wow, things look like they're getting a lot better. The next read that you see, maybe worse or better. And part of it depends on one of the things Unicorn allowed us to do, is during the changeover, put less items on clearance. And so typically, what happens when resets happen is retailers for those items that we're deleting to allow space for the new items to come in will kind of put on markdown or clearance, the items that we're deleting. Because Unicorn allows us to put more items on the shelf, we do not have to delete as much. So that actually has a negative impact in the scanner because the clearance items, while discounted, kind of do drive a lot of sales. So you'll have that bouncing around between kind of how much clearance did you have in the prior period versus the current period and where are we. But the overall trend, I'd say, is you're going to see scanner bounce around a bit this month, kind of month-to-month. The best read that we're going to start to get, frankly, I'd say, is after kind of this March period once it's set, where we actually have a clean base to be able to really compare off of.

是的。所以我認為宏觀方面是，看，我們的軌道渠道仍然面臨阻力。如果我特別考慮第一季度，我們將經歷比平常對獨角獸更大的轉變。正如我所提到的，考慮到我們正在談論的正在轉換的 SKU 數量的大小，這種轉換需要更長的時間。不過，與 Unicorn 和掃描儀相比，最大的變化是您將看到更多的波動性。所以我在上個月的尼爾森之後看到了一堆筆記，哇，事情看起來好多了。您看到的下一篇文章可能會更糟或更好。部分取決於獨角獸允許我​​們做的事情之一，就是在轉換期間減少清倉物品。因此，通常情況下，當重置發生時，我們正在刪除的那些商品的零售商會為新商品留出空間，從而對我們正在刪除的商品進行降價或清倉。因為 Unicorn 允許我們在架子上放置更多的物品，所以我們不必刪除那麼多。因此，這實際上對掃描儀產生了負面影響，因為清倉商品雖然打折，但確實推動了大量銷售。因此，你會在上一時期與當前時期的間隙有多少以及我們在哪里之間來回切換。但我想說，總體趨勢是，本月掃描儀數量會出現一些反彈，每月都會有一些反彈。坦率地說，我想說，我們將開始獲得的最佳讀物是在三月份的時期確定之後，我們實際上有一個乾淨的基礎可以真正進行比較。

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。

So maybe, Tarang, just to kind of follow on, on that thought. If I just think about the tough quarter guidance, even if I back up the retail business at this time last year, it seems like the guide is still down 8% to 11% from a sales perspective. So is that -- I mean, I recognize there are some changes that's kind of reset, but is that really a reflection of what you're seeing kind of for this quarter? Are there any other major retailer shift because Easter is later this year that would have impacted Q1 optically?

所以也許，塔朗，只是為了繼續這個想法。如果我考慮一下艱難的季度指導，即使我在去年這個時候支持零售業務，從銷售角度來看，指導似乎仍然下降了 8% 至 11%。那麼，我的意思是，我認識到有一些類似重置的變化，但這真的反映了您在本季度看到的情況嗎？由於今年復活節臨近，是否還有其他主要零售商的轉變會對第一季度產生視覺影響？

Sure, Erinn. It's a little better than that or a lot better than that in some respects because we did call out about $3 million of pipeline we had in the comparable period last year that we don't have this year. And so it's not only the retail stores that around $3 million -- $3.3 million, but the $3 million in pipeline. I would tell you overall, we'll be in a much better position coming out of these resets to really set kind of the guidance in May if where we really see kind of the year and then more importantly the progression of when you're going to expect different trends.

當然，艾琳。在某些方面，它比這個好一點，或者比這個好很多，因為我們確實調出了去年同期約 300 萬美元的管道，而今年我們沒有。因此，不僅是零售商店需要大約 300 萬美元至 330 萬美元，而且還有 300 萬美元的管道資金。總的來說，我會告訴你，如果我們真的看到了今年的情況，那麼更重要的是，我們將在這些重置之後處於更好的位置，以便在五月份真正制定指導方針，然後更重要的是，當你要去的時候的進展期待不同的趨勢。

Okay. And then maybe just on the marketing front. And I guess, 2 questions. I mean, you've made some interesting hires between CMO, Kory, and I think you hired a Head of Integrated Marketing recently. Are you pretty pleased with how the team has now assembled? Are there any other roles that are open, that you are still looking to fill on that front? And then one of the stats, I guess, related to what you're seeing in the Beauty Squad, I think you said there was 50% of the growth you saw was from your new consumers. I'm just curious what you're seeing in terms of similarities or characteristics of that consumer, anything that -- on the demographic side that is compelling to you.

好的。然後也許只是在營銷方面。我想，有兩個問題。我的意思是，您在首席營銷官 Kory 之間進行了一些有趣的招聘，我認為您最近還聘請了一位整合營銷主管。您對團隊現在的組建情況感到滿意嗎？在這方面還有其他職位空缺嗎？您仍在尋找填補空缺的職位嗎？然後，我想其中一項統計數據與您在 Beauty Squad 中看到的情況相關，我想您說過您看到的增長有 50% 來自新消費者。我只是好奇你所看到的消費者的相似之處或特徵，以及人口統計方面對你有吸引力的任何東西。

Sure. So first in terms of our hires, I think one of the great advantages that we've had is the strength of the team we have kind of across the board. So I'm overall very pleased and proud of kind of our team and on the whole. There are 3 areas in particular as we got in last year and we said, as we said like, hey, the brand is getting lost. Our message is getting lost in kind of the noise that I talked about. We really prioritized 3 core areas as I looked at kind of overall stepping up kind of our marketing and bringing in more talent in marketing, I'd say, on the whole and, in particular, in this area of social influencer activation as well as our overall digital kind of footprint. And so we've made a tremendous amount of progress, some of which we've announced, others that we haven't. For example, when I look at our digital business, we did talk about replatforming our site last year. We've also started bringing in a lot of the development kind of in-house. It both saves us money and gives us much better capability as we go forward on our personalization and other core key initiatives digitally. Marketing talent, we have a great marketing team before, and we continue to strengthen it kind of across the board and certainly under Kory's leadership. And an important point on that talent piece is not just the talent that we're enhancing, but also the way that we're integrating those functions. So Kory's role is quite broad, where she will have brand, creative, innovation and digital, being able to really tie together that in total kind of end-to-end consumer experience. And I think that's probably one of the big changes. We always were happy with the talent that we had, but how do we bring that talent together and to bear on these key first-to-mass innovations? And then on the second part of your question, yes, on the Beauty Squad. The specific stat we cited was what we're seeing by the activations, when we activate against one of these first-to-mass products. And I think in that particular case, I think I was talking about the putty primer. I can't -- putty primer. When we activated against putty primer, what we found was not only it was hugely appealing kind of the influencer and kind of in the social sphere, but it brought new users to our website. And then as new users came to our website, half of them signed up for Beauty Squad. So we're continuing kind of build Beauty Squad as a core platform for us for kind of growth in the future. And a lot of it is focused on how do we bring new consumers into the franchise through many of the marketing tactics I just talked about as integrating behind these key first-to-mass innovations. So we continue to see what we like there. I'd say the next frontier on that as we go forward is as we put some of our personalization initiatives kind of out there in terms of further being able to -- including testing this quarter for the first time, our first version of kind of receipt scanning that would allow us to tie together our national retailer sales and some of that data to our own online sales. So there's a lot we're doing on that front that will further build out Beauty Squad.

當然。首先就我們的員工而言，我認為我們擁有的最大優勢之一是我們團隊的整體實力。所以總的來說，我對我們的團隊和整體感到非常高興和自豪。去年我們進入了三個領域，我們說過，嘿，這個品牌正在迷失。我們的信息在我談到的噪音中迷失了。我們確實優先考慮了 3 個核心領域，因為我著眼於整體加強我們的營銷並引進更多的營銷人才，我想說，總體而言，特別是在社交影響者激活以及我們的整體數字足跡。因此，我們已經取得了巨大的進展，其中一些我們已經宣布，另一些我們還沒有宣布。例如，當我審視我們的數字業務時，我們去年確實討論過重新構建我們的網站平台。我們還開始引入很多內部開發。當我們以數字方式推進個性化和其他核心關鍵舉措時，它既可以為我們節省資金，又可以為我們提供更好的能力。營銷人才，我們之前擁有一支出色的營銷團隊，我們繼續全面加強它，當然是在科里的領導下。人才方面的一個重要點不僅是我們正在增強的人才，還有我們整合這些職能的方式。因此，Kory 的角色相當廣泛，她將擁有品牌、創意、創新和數字化能力，能夠將這些真正結合起來，形成一種端到端的消費者體驗。我認為這可能是最大的變化之一。我們一直對我們擁有的人才感到滿意，但我們如何將這些人才聚集在一起並實施這些關鍵的首次大規模創新？然後關於你問題的第二部分，是的，關於選美隊。我們引用的具體統計數據是當我們針對這些首次批量生產的產品之一進行激活時，我們所看到的激活情況。我認為在這種特殊情況下，我想我正在談論膩子底漆。我不能——膩子底漆。當我們激活 Putty Prime 時，我們發現它不僅對社交領域的影響者和社交領域具有巨大的吸引力，而且還為我們的網站帶來了新用戶。然後，當新用戶來到我們的網站時，其中一半人註冊了 Beauty Squad。因此，我們正在繼續建立 Beauty Squad 作為我們未來發展的核心平台。其中很多內容都集中在我們如何通過我剛才談到的許多營銷策略將新消費者帶入特許經營權，這些策略整合在這些關鍵的首次大規模創新背後。所以我們繼續在那裡看看我們喜歡的東西。我想說，隨著我們前進，下一個前沿領域是，我們將一些個性化舉措放在那裡，以進一步能夠——包括本季度的首次測試，我們的第一個版本收據掃描將使我們能夠將全國零售商的銷售情況以及其中一些數據與我們自己的在線銷售情況聯繫起來。因此，我們在這方面做了很多工作，這將進一步增強 Beauty Squad 的實力。

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

我們的下一個問題來自邦妮·赫爾佐格與富國銀行的對話。

I wanted to circle back to your business and where things are at right now. I guess, as I think about your business, you're entering a transition or a turnaround period, making a lot of changes that you discussed today. So how long realistically do you expect this transition to take? Should we think about this in the context of more than a year, for instance? And then on your Q1 guidance, I guess, you do have some read into what the retailers want or need given a lot of the resets have happened. So I'm trying to reconcile this with the pretty decent deceleration in the business. And then doesn't this suggest that this weakness will carry forward for the year? So I guess, I'm just trying to think through this and just trying to think through expectations that things really might not get better for a few quarters, especially given there's always a lag from some of the changes you're making, especially when I think about advertising. So just wanted to hear your thoughts on really how long things could take to turn.

我想回到您的業務以及目前的情況。我想，當我想到你的業務時，你正在進入一個過渡或周轉期，做出了你今天討論的很多改變。那麼您實際上預計這種轉變需要多長時間？例如，我們是否應該在一年多的背景下考慮這個問題？然後，我想，在您的第一季度指導中，您確實對零售商想要或需要的內容有所了解，因為已經發生了很多重置。因此，我試圖將這一點與業務相當大的減速相協調。那麼這是否表明這種疲軟將延續到今年呢？所以我想，我只是試圖思考這個問題，並試圖思考未來幾個季度情況可能不會變得更好的預期，特別是考慮到你所做的一些改變總是存在滯後，特別是當我想到了廣告。所以只是想听聽您對事情需要多長時間才能發生轉變的想法。

Sure, Bonnie. So maybe I'll start with the second part of your piece in terms of kind of the read and when resets happen. We're actually right in the middle of it. So no reset that I know of is fully complete yet. But I mean, across each of our customers, Ulta's time line is end of March. We're still in the middle of kind of Target and Walmart. So some of our key resets, to be honest with you, have not been completed yet. So we're not finished yet with the resets, and therefore, we don't have the full visibility of kind of the time line of how long is it going to take. And that's why we're setting the whole point of changing the fiscal year to the kind of April time frame. It was to be able to get the visibility so we can give you a much more accurate sense. I would say, yes, it will take some time on some of these initiatives as I should take a look at kind of where it goes, but I'm not yet ready to be able to tell you what specific quarter do you see that inflection point. I'll have much better sense on that once I get out of these resets.

當然，邦妮。所以也許我會從你文章的第二部分開始，內容是閱讀的類型和重置的時間。我們實際上正處於其中。因此，據我所知，重置還沒有完全完成。但我的意思是，對於我們的每個客戶來說，Ulta 的時間表都是三月底。我們仍然處於塔吉特和沃爾瑪的中間。因此，老實說，我們的一些關鍵重置尚未完成。所以我們還沒有完成重置，因此我們無法完全了解需要多長時間的時間線。這就是為什麼我們將財政年度更改為四月份的時間框架的原因。這是為了能夠獲得可見性，以便我們可以給您更準確的感覺。我想說，是的，其中一些舉措需要一些時間，因為我應該看看它的發展方向，但我還沒有準備好告訴你你在哪個具體季度看到這種拐點觀點。一旦我擺脫這些重置，我就會對此有更好的認識。

Okay. And then just to ask again on that. So as you talked to that, the resets, you're in the middle of it. But from what you know right now, Tarang, things do seem to be a lot weaker in terms of your guidance. Or are you just trying to be ultraconservative as you lay out your Q1 expectations?

好的。然後再問一遍。所以當你談到重置時，你正處於其中。但塔朗，據你目前所知，在你的指導下，事情似乎要弱得多。或者您只是在闡述第一季度的預期時試圖變得極端保守？

Yes. So look, we put out -- if I think about our top line guidance and you take a look at that range, I think one of the earlier questions talked about, once you put the stores, the right comparable on the stores, and then if you take that pipeline, it would imply kind of a 3% to 8% decline in this transition quarter. So if you just do that math, 3% to 8%. For perspective, kind of Q3 was minus 9%. We had pipeline things going on there. Q4 is minus 4%. So it's in the range of what we've seen kind of in the last couple of quarters. So I don't want to tell you like, hey, I look at 3% to 8% and project that out or not. I'm just giving the transition. The transition, as I mentioned, is a funny period just given kind of all of the reset that we have going on with Unicorn and kind of lot of puts and calls, including the stores. But that's 3% to 8% once you add kind of the pipeline and take a look at the stores. It isn't that far off with kind of the trend we've been on.

是的。所以看，我們推出- 如果我考慮一下我們的頂線指導，並且您看一下該範圍，我認為之前討論的問題之一是，一旦您將商店放在商店中，就可以在商店中進行正確的比較，然後如果你考慮這個管道，這將意味著這個過渡季度會出現 3% 到 8% 的下降。所以如果你算一下，就是 3% 到 8%。從長遠來看，第三季度的增長率為-9%。我們在那裡正在進行管道工作。第四季度為-4%。所以它在我們過去幾個季度所看到的範圍內。所以我不想告訴你，嘿，我會考慮 3% 到 8%，然後將其預測出來。我只是提供過渡。正如我所提到的，過渡是一個有趣的時期，考慮到我們對獨角獸進行的所有重置以及大量的看跌期權和看漲期權，包括商店。但一旦你添加某種渠道並查看商店，這個數字就為 3% 到 8%。這與我們一直以來的趨勢並不遙遠。

Okay. That's fair enough. And then just one final quick question for me on the advertising spend. You said as a percentage of sales, I think you said it was 4% in 2018 and that you're expecting to be around mid- to high-single digits in Q1. So just maybe confirm that. And then how do you think about the right level of spending going forward? Like what are you guys targeting for this business? And then maybe drill down a little bit on your expected returns on some of this advertising. You touched on this, but are you seeing the lift that you think is required for the spending levels?

好的。這很公平。最後問我一個關於廣告支出的快速問題。您提到佔銷售額的百分比，我認為您說 2018 年為 4%，並且您預計第一季度將達到中高個位數左右。所以也許可以確認一下。那麼您如何看待未來適當的支出水平？你們對這項業務的目標是什麼？然後也許可以深入了解一些廣告的預期回報。您談到了這一點，但是您是否看到了您認為支出水平所需的提升？

Sure. So backing up, I would say, very little of our spend is kind of traditional advertising. Almost none of it is. A lot of it is kind of core activation that we're doing on social with influencers and in our digital channels. But you had the numbers right. We did finish 2018 at 4%. First quarter is mid- to high-single digits. I like that level from what we're seeing in this quarter, and part of where I like it is back to the ROI question. Some of the activations we've done, particularly against these first-to-mass products, have really great return profiles. So I described the putty primer example, where by sending out influencer kits, doing integrated marketing on social, we are able to get incredible pickup from some pretty big influencers out there, pretty big word of mouth. In fact, putty primer is now out of stock. We're getting more kind of in-stock but every time you get another wave in, you see this big surge kind of online in terms of what else consumers are buying, the new consumers I talked about, et cetera. And so we will give you a much better sense, specifically, of the full range of kind of like here's where marketing is. I'd say I'm comfortable with the current levels of kind of mid- to high single digits. But again, want to put that picture together with you, with the cost savings that we'll have and the overall kind of business profile.

當然。因此，我想說的是，我們的支出很少是傳統廣告。幾乎沒有一個是。其中很多是我們在社交媒體上與影響者和我們的數字渠道所做的核心激活。但你的數字是對的。我們 2018 年的增長率確實為 4%。第一季度的業績為中高個位數。我喜歡我們在本季度看到的這個水平，而我喜歡它的部分原因又回到了投資回報率問題。我們所做的一些激活，特別是針對這些首次批量生產的產品，具有非常好的回報。所以我描述了膩子入門的例子，通過發送影響者工具包，在社交上進行整合營銷，我們能夠從一些相當大的影響者那裡獲得令人難以置信的收穫，相當大的口碑。事實上，膩子底漆現在已經缺貨了。我們的庫存越來越多，但每次你再出現一波浪潮時，你都會看到網上消費者購買的其他商品、我談到的新消費者等方面的大幅增長。因此，我們將為您提供更好的感覺，特別是全方位的體驗，就像營銷的所在。我想說我對當前中高個位數的水平感到滿意。但再次，我希望將這張圖片與您放在一起，包括我們將節省的成本以及整體業務概況。

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

我們的下一個問題來自摩根大通的 Andrea Teixeira。

I just wanted to just make sure I understood some of the -- just a clarification, and then I will ask more of a cash flow question. So on Bonnie's question, pretty much you implied that the 4% to be mid- to high-single digits, and the shelf space resets are still like in the making. And so what we're seeing, the 10% in the middle of the range decline on an adjusted basis for revenues are still not fully incorporating all the shelf resets. So we should be seeing potentially some -- I mean, potentially a lot of more impact instead of the -- more in the middle of the range, the 10%. But I think Tarang had said something in between 3% to 8%. So I'm just trying to reconcile the 2 numbers to see if that's more of a pipeline number that we're not necessarily seeing, if that's a net from the shelf space? And then the second question is on cash flow. If I just -- I don't know if you want to answer the first question first and then I'll go...

我只是想確保我理解了一些——只是澄清一下，然後我會問更多關於現金流的問題。因此，關於邦妮的問題，您幾乎暗示 4% 為中高個位數，並且貨架空間重置仍在進行中。因此，我們看到，在調整後的收入下降範圍中間 10% 仍然沒有完全納入所有貨架重置。因此，我們應該會看到潛在的一些——我的意思是，潛在的更大的影響，而不是——更多的影響在範圍的中間，即 10%。但我認為 Tarang 所說的數字在 3% 到 8% 之間。所以我只是想協調這兩個數字，看看這是否更多的是我們不一定看到的管道數字，是否是來自貨架空間的網絡？第二個問題是關於現金流。如果我——我不知道你是否想先回答第一個問題，然後我就去……

Sure. Why don't I take the first question? So Andrea, if you take a look at the transition period guidance on the top line, we said $55 million to $58 million. If you add in the $3.3 million for stores and you add the $3 million of pipeline we had last year that we do not have this year for national retailers, that's what gets you to the 3 -- minus 3% to minus 8% range on the top line. So that's my 3% to 8% versus kind of the 10%, is you have to take a look at kind of the pipeline we had the year before. On -- related to that, it is a messy period just given that you do have all of the transitions taking place from a shelf standpoint. And when I'll be able to -- the reason why I know it's frustrating to not be able to tell you exactly what kind of like the future view will be, but the future view will be informed once I get a clean rate coming off of these shelf resets. There's a lot going on in the shelves right now. We'll be able to provide a much clearer picture kind of come May of kind of where do we see that top line and marry that up with both the marketing spend, including ROI as well as the cost savings.

當然。我為什麼不回答第一個問題呢？因此，Andrea，如果你看一下頂線上的過渡期指導，我們說 5500 萬至 5800 萬美元。如果你加上商店的 330 萬美元，再加上我們去年擁有的 300 萬美元的管道，而今年我們沒有為全國零售商提供管道，這就是你達到 3 - - 3% 到 - 8% 的範圍頂線。這是我的 3% 到 8% 與 10% 的比例，你必須看看我們前一年的管道類型。與此相關的是，這是一個混亂的時期，因為從貨架的角度來看，所有的轉變確實都在發生。當我能夠的時候——我知道無法確切地告訴你未來的觀點會是什麼樣子是令人沮喪的，但一旦我得到一個乾淨的利率，未來的觀點就會被告知這些架子重置。現在貨架上有很多東西。我們將能夠在 5 月份提供更清晰的畫面，即我們在哪裡看到營收，並將其與營銷支出（包括投資回報率）以及成本節省結合起來。

Okay. And then -- that's helpful. The other question that I had is like, obviously, you've done a tremendous work in terms of getting your supply chain together. You've invested in a couple of facilities in the U.S. So can you kind of like guide us into the cash flow, how we should be seeing cash flow, potentially like you need to also give more support to that initiative given that you're going to be focusing more on e-commerce? Like how should we be thinking of the other side of the business, which is the online business, now that it gets probably more investments vis-à-vis the stores?

好的。然後——這很有幫助。我的另一個問題是，顯然，你們在整合供應鏈方面做了巨大的工作。您在美國投資了幾處設施。那麼您能否指導我們了解現金流，我們應該如何看待現金流，您可能還需要為該計劃提供更多支持，因為您會更加關注電子商務嗎？就像我們應該如何考慮業務的另一面，即在線業務，既然它可能比商店獲得更多的投資？

Yes. Andrea, it's John. We obviously feel very good about the cash flow generation in 2018, a lot of proactive management on the working capital side. And in particular, I know a theme that we talked about a year or so ago was our overall inventory position. And as you've seen throughout the year, really been able to bring those into -- that balance rather into a good place. So feel really strong overall in terms of the balance sheet, finishing the year with over $51 million in cash and a completely undrawn revolver. To your core question around kind of investments on the capital side and particularly as that relates to both e-commerce and some of the capital initiatives that we mentioned that'll drive cost savings, a lot of that capital investment has actually already been made in 2018. So feeling very good about obviously our operation in Ontario and some of the automation initiatives we have there. Feeling good about the Columbus warehouse and what that's doing for us not only from an efficiency perspective but also in terms of customer experience and the speed in overall delivery. And as we also mentioned, right now in the process of exploring domestic manufacturing, which should be online sometime near the end of 20 -- calendar 2019. So I think a lot of those investments have been made and feeling very good about the condition of our balance sheet sitting here today.

是的。安德里亞，是約翰。我們顯然對 2018 年的現金流產生感覺非常好，在營運資金方面進行了大量主動管理。特別是，我知道我們大約一年前討論的一個主題是我們的整體庫存狀況。正如您在這一年中所看到的那樣，確實能夠將這些平衡帶入一個良好的位置。因此，就資產負債表而言，總體感覺非常強勁，年底時擁有超過 5100 萬美元的現金和完全未提取的左輪手槍。對於您關於資本方面的投資類型的核心問題，特別是與電子商務和我們提到的一些將推動成本節約的資本舉措相關的核心問題，很多資本投資實際上已經在2018.因此，顯然我們對安大略省的運營以及我們在那裡的一些自動化舉措感到非常滿意。對哥倫布倉庫以及它為我們所做的一切感到滿意，不僅從效率的角度來看，而且從客戶體驗和整體交付速度的角度來看。正如我們還提到的，目前正在探索國內製造，預計將於 2019 年 20 月底上線。因此，我認為其中很多投資已經完成，並且對我們今天在這裡的資產負債表狀況感到非常滿意。

Your next question comes from the line of Oliver Chen with Cowen.

你的下一個問題來自 Oliver Chen 和 Cowen 的對話。

I think the rise of the influencer brands is led by one person like Kylie and Rihanna. What are your thoughts on your core competitive advantages and how it may or may not inform you in terms of pivoting, how you can make sure to drive your fair share of awareness and also get credit for the innovation you're doing? And the second question is just about the future in terms of your relationships with key wholesale accounts. Is there a way to enhance like the frequency of drops in order to make sure that the newness is what you want that's present just given that there's change ahead in how you're innovating and making sure that your customers are buying the product that customers want to buy?

我認為影響者品牌的崛起是由凱莉和蕾哈娜這樣的人領導的。您對自己的核心競爭優勢有何看法？它可能會或可能不會在轉型方面為您提供信息，您如何確保提高自己的知名度並為您正在進行的創新贏得讚譽？第二個問題是關於您與主要批發客戶的關係的未來。考慮到您的創新方式正在發生變化並確保您的客戶購買客戶想要的產品，是否有一種方法可以提高下降頻率，以確保新穎性是您想要的買？

Sure. Thanks, Oliver. So on the first, on kind of the impact of the rise of the influencer brands and how do we -- kind of what is our core competitive advantage and how do we get credit for that innovation, I would say that was probably one of the biggest learnings we had last year, was we allowed ourselves kind of get lost in all of the noise. And so the best -- in the end of the day, like there's no question and nothing has changed almost from the inception of kind of the company from the early roots. The core competitive advantage we have is this Prestige quality, cosmetics and skin care and extraordinary value. That's what really differentiates our proposition from any other. There are some that have pretty decent quality. There are some propositions that have good price points. Our unique ability to bring that Prestige quality at these phenomenal price points, for example on the putty primer, being able to compare to a $52 Prestige product and be able to do that at $8 and have some of the leading influencers out there saying like, "This is amazing. I can't believe this." We're even more proud, frankly, of our Camo concealer, our 16HR Camo concealer that compares to a Prestige product that normally prices at $28, and ours is at $5. That really is kind of the core competitive advantage we have. And I think what ended up happening last year is we allowed that to get diffused or lost, right? We had kind of this great track record of just put some of these items on shelf, consumers would figure it out, and we would be able to maintain kind of our productivity. Our ability -- and what we're finding is it doesn't take that much effort to really be able to shine the light on some of these key innovations and stay focused on that versus, I would say, all the different items that we will launch throughout the year. So I feel good long term about our competitive positioning and competitive advantage. Because to be honest, and I'm not going to single out any one brand, but as we take a look at reviews in the marketplace, we see plenty of -- some people have very high reach and are able to get that initial trial only to have the review say, "Gosh, I tried this, and that was $24, and it's not very good," right? And at the same time, when you take a look at e.l.f., one of the things that really sustains for us is not only that overall value rating, but that we have amongst the highest retention ratings in the category given the quality of the proposition in addition to the great price point. And then in terms of our future with our retail partners, national retailer partners, one of the biggest areas that we're in discussions with them is all of them look to e.l.f. as one of the key kind of innovation engines within their categories, their new product engines. They love the -- both the scope of our innovation as well as the speed of it. And the biggest opportunity, frankly, for quite some time has been how do they better take advantage of that innovation just given some of the structural limitations they have of when they bring product in or not. And to that end, we are testing a number of different things. So we've now tested both at Ulta Beauty being able to bring their -- our leading -- kind of some of our new products online on ulta.com at the same time we do on elfcosmetics.com. That's something we've never done before, and Ulta is willing to take the risk on kind of taking that inventory and making sure they do that. With Walmart, I talked about an entirely different approach on kind of our display space at Walmart, where it is unique to the items they have on their shelves. And our ability -- and we'll talk next in terms of our ability to sell through innovation there further. And I'd say the third thing is we have the ability to actually drive exclusive items with each of our core retail partners for them to be able to really drive kind of their own uniqueness and ability to bring news to customers and we can do more there -- there's a lot we're doing on that front while admitting that there are some structural barriers in terms of how fast can they take. Frankly, no one can move as fast as we can in the market, and so we're trying to help kind of our partners to be able to take advantage of that speed.

當然。謝謝，奧利弗。因此，首先，關於影響力品牌崛起的影響，以及我們如何——我們的核心競爭優勢是什麼，以及我們如何獲得創新的榮譽，我想說這可能是其中之一。去年我們學到的最大的教訓是，我們讓自己迷失在所有的噪音中。所以最好的——歸根結底，毫無疑問，從公司的早期根源開始，幾乎沒有任何改變。我們擁有的核心競爭優勢就是這種Prestige品質、化妝品和護膚品以及非凡的價值。這就是我們的主張與其他主張的真正區別。有一些質量相當不錯。有些提議具有良好的價格點。我們獨特的能力能夠以驚人的價格點提供Prestige 品質，例如在膩子底漆上，能夠與52 美元的Prestige 產品進行比較，並且能夠以8 美元的價格做到這一點，並且有一些領先的影響者說， “這真太了不起了。我簡直不敢相信。”坦率地說，我們對我們的 Camo 遮瑕膏感到更加自豪，我們的 16HR Camo 遮瑕膏與通常售價為 28 美元的 Prestige 產品相比，我們的價格為 5 美元。這確實是我們擁有的核心競爭優勢。我認為去年最終發生的事情是我們允許它擴散或丟失，對吧？我們有這樣的良好記錄，只需將其中一些商品放在貨架上，消費者就會明白，我們就能夠保持我們的生產力。我們的能力——我們發現，與我想說的所有不同的項目相比，我們不需要付出太多的努力就能真正能夠揭示其中一些關鍵創新並保持專注。將在全年推出。因此，從長遠來看，我對我們的競爭定位和競爭優勢感覺良好。因為說實話，我不會挑出任何一個品牌，但當我們查看市場上的評論時，我們看到很多——有些人的影響力非常高，並且能夠獲得初步試用結果評論卻說：“天哪，我試過這個，價格是24 美元，而且不太好，”對嗎？與此同時，當你看看 e.l.f. 時，真正讓我們堅持的事情之一不僅是整體價值評級，而且考慮到我們的主張質量，我們在該類別中擁有最高的保留評級之一。除了優惠的價格之外。然後就我們與零售合作夥伴、全國零售商合作夥伴的未來而言，我們與他們討論的最大領域之一就是他們都希望 e.l.f.作為其類別中關鍵的創新引擎之一，即新產品引擎。他們喜歡我們的創新範圍和速度。坦率地說，相當長一段時間以來，最大的機會是，考慮到他們在引進或不引進產品時所面臨的一些結構性限制，他們如何更好地利用這種創新。為此，我們正在測試許多不同的東西。因此，我們現在已經在 Ulta Beauty 上進行了測試，能夠在 ulta.com 上同時在 elfcosmetics.com 上推出我們領先的一些新產品。這是我們以前從未做過的事情，Ulta 願意承擔風險，清理庫存並確保他們這樣做。在沃爾瑪，我談到了沃爾瑪展示空間的一種完全不同的方法，它對於他們貨架上的商品來說是獨一無二的。還有我們的能力——接下來我們將討論我們通過創新進一步銷售的能力。我想說的第三件事是，我們有能力與我們的每個核心零售合作夥伴一起真正推動獨家商品，使他們能夠真正推動自己的獨特性和為客戶帶來新聞的能力，我們可以做得更多我們在這方面做了很多工作，同時承認在速度方面存在一些結構性障礙。坦率地說，在市場上沒有人能夠像我們一樣快速行動，因此我們正在努力幫助我們的合作夥伴能夠利用這種速度。

Okay. And last question on Beauty Squad. What's your perspective on the broadening and the future of this program? In the space, we're just seeing a lot of really powerful partnerships across different retailers or health and wellness, one concern with Beauty Squad is that it's a specialist program and some of the -- some of what we're seeing is just the big getting bigger with apps and loyalty. So would love your thoughts on what that program might look like on a longer-term basis.

好的。最後一個問題是關於美麗小隊的。您對該計劃的擴展和未來有何看法？在這個領域，我們看到了許多不同零售商或健康和保健領域真正強大的合作夥伴關係，美容小隊的一個擔憂是，它是一個專業項目，其中一些——我們所看到的一些只是通過應用程序和忠誠度變得更大。因此，希望您對該計劃的長期發展有何想法。

Yes. So we see great potential in Beauty Squad. And to your point, I think part of where the potential comes from really is broadening the approach on Beauty Squad. So when we first started Beauty Squad, it was a loyalty program just for elfcosmetics.com. We expended to our store. The next frontier is how do we take advantage when somebody buys something in a Target or a Walmart, an Ulta Beauty of being able to tie together that dataset. I'd say the ultimate vision, though, similar to many other people, is to have a truly delightful consumer experience that's highly personalized to each of our core users. And there's a lot of work that we're doing from a technology standpoint to enable much greater personalization across our platform, and Beauty Squad is a key component of that. So you'll hear more about that as we go forward because it is the nature of a lot of the investments that we're making on how do we really get the most delightful experience for our core users.

是的。所以我們看到了Beauty Squad的巨大潛力。就你的觀點而言，我認為潛力的部分來源實際上是拓寬了 Beauty Squad 的方法。因此，當我們第一次啟動 Beauty Squad 時，這是專門針對 elfcosmetics.com 的忠誠度計劃。我們去我們的商店消費了。下一個前沿領域是，當有人在塔吉特或沃爾瑪購買商品時，我們如何利用這一優勢，將這些數據集結合在一起，這是一種終極之美。不過，我想說，與許多其他人類似，最終的願景是為我們的每個核心用戶提供高度個性化的真正令人愉快的消費者體驗。從技術角度來看，我們正在做很多工作，以在我們的平台上實現更大的個性化，而 Beauty Squad 是其中的關鍵組成部分。因此，隨著我們的前進，您會聽到更多關於這一點的信息，因為這是我們為如何真正為核心用戶獲得最愉快的體驗而進行的大量投資的本質。

(Operator Instructions) At this time, we have no further questions. Thank you for joining us today. This does conclude today's conference and you may disconnect your lines at this time.

（操作員說明） 目前，我們沒有其他問題。感謝您今天加入我們。今天的會議到此結束，此時您可以斷開線路。