elf Beauty Inc (ELF) 2019 Q1 法說會逐字稿

Greetings, and welcome to the e.l.f. Beauty transition period ended March 31, 2019, conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Willa Mcmanmon, Investor Relations. Thank you. You may begin.

問候，歡迎來到 e.l.f.美容過渡期於 2019 年 3 月 31 日結束，電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係部的威拉·麥克曼蒙 (Willa Mcmanmon)。謝謝。你可以開始了。

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss e.l.f. Beauty's transition period 2019 earnings results. A copy of today's press release is available in the Investor Relations section of elfcosmetics.com. A recording of the call will also be available for 90 days on elfcosmetics.com.

謝謝接線員，大家下午好。感謝您今天加入我們討論 e.l.f.美的過渡期2019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 2020 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。這些聲明，包括與公司 2020 財年展望相關的聲明，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 me from management today are Tarang Amin, Chairman and Chief Executive Officer; and Mandy Fields, Senior Vice President and Chief Financial Officer. With that, I'll turn the call over to Tarang.

今天與我同在的還有管理層的董事長兼首席執行官塔朗·阿明 (Tarang Amin)；以及高級副總裁兼首席財務官 Mandy Fields。這樣，我會將電話轉給 Tarang。

Thanks, Willa, and good afternoon, everyone. Our transition period results exceeded our expectations with net sales of $66 million and adjusted EBITDA of $12 million. Excluding the impact of e.l.f. stores, net sales were up 3% versus a year ago. These results reflect the benefit of Project Unicorn and increased marketing activations behind our new first-to-mass products.

謝謝威拉，大家下午好。我們的過渡期業績超出了我們的預期，淨銷售額為 6600 萬美元，調整後 EBITDA 為 1200 萬美元。排除 e.l.f 的影響。商店淨銷售額比去年同期增長 3%。這些結果反映了獨角獸計劃的好處以及我們新的首次批量產品背後的營銷活動的增加。

We are making progress in our strategic repositioning and have defined 5 key initiatives that together form an integrated strategy designed to reinvigorate the e.l.f. brand and raise consumer awareness. We are seeing initial progress as we begin to execute against these initiatives. We believe the investments we are making in the brand will take time to fully realize, which is reflected in our fiscal 2020 guidance. Let me provide greater context on each of these initiatives.

我們正在戰略重新定位方面取得進展，並確定了 5 項關鍵舉措，這些舉措共同構成了旨在重振 e.l.f. 的綜合戰略。品牌並提高消費者認知度。當我們開始執行這些舉措時，我們看到了初步進展。我們相信，我們對該品牌的投資需要時間才能完全實現，這反映在我們的 2020 財年指導中。讓我為每項舉措提供更多背景信息。

Two of our key initiatives go hand in hand, driving demand in the brand and a major step-up in digital. As you know, in February, our Chief Marketing Officer, Kory Marchisotto, joined us from Shiseido. Kory has hit the ground running in redefining our marketing strategy and bringing more consumers into the brand. e.l.f.'s core value proposition, making the best of beauty accessible to every eye, lip and face still resonates with consumers. What's changing is the way we are telling our story. Kory and the team are crystallizing a campaign to reinvigorate what we've coined e.l.f.'s superpowers. These are unique brand tenets that e.l.f. users love. Our premium quality, unbelievable value, universal appeal, first-to-mass capabilities, and of course, the fact that we are vegan and cruelty-free. We plan to activate these core tenets by integrating behind fewer, bolder product stories, driving a constant drumbeat of influencers and events and transforming our approach in digital and social.

我們的兩項關鍵舉措齊頭並進，推動了品牌需求並在數字化方面取得了重大進展。如您所知，二月份，我們的首席營銷官 Kory Marchisotto 從資生堂加入了我們。Kory 在重新定義我們的營銷策略並吸引更多消費者加入該品牌方面已經取得了進展。e.l.f. 的核心價值主張——讓每一個眼睛、嘴唇和臉龐都能享受到最好的美麗——至今仍能引起消費者的共鳴。改變的是我們講述故事的方式。Kory 和他的團隊正在製定一項活動，以重振我們創造的 e.l.f. 的超能力。這些是 e.l.f. 獨特的品牌宗旨。用戶喜愛。我們的優質品質、令人難以置信的價值、普遍的吸引力、首次批量生產的能力，當然還有我們是純素食且不殘忍的事實。我們計劃通過整合更少、更大膽的產品故事、推動影響者和活動的持續鼓動以及改變我們在數字和社交方面的方法來激活這些核心原則。

To measure our progress, we're looking at metrics such as: our year-over-year search on Google, which we see as a proxy for consumer awareness and interest in the brand, was up double digits when compared to the same period in fiscal 2018. Our earned media value, or EMV, which reflects buzz by tracking organic influencer mentions, was up close to 18% compared to the prior year. And our reach on Instagram, which passed 4.5 million followers, was up about 30% year-over-year. These metrics reflect our move to double down on digital, which is already making a difference.

為了衡量我們的進展，我們正在考慮以下指標：我們在Google 上的同比搜索量（我們將其視為消費者對該品牌的認知度和興趣的代表）與去年同期相比增長了兩位數。 2018 財年。我們的贏得媒體價值 (EMV) 與上一年相比增長了近 18%，它通過跟踪有影響力的提及來反映嗡嗡聲。我們在 Instagram 上的粉絲數量已超過 450 萬，同比增長約 30%。這些指標反映了我們在數字化方面加倍努力的舉措，這已經產生了影響。

In our last earnings call, we shared that social media postings from influencers, particularly Jeffree Star, were creating a surge in demand for several of our first-to-mass products and driving awareness across the brand. We saw a halo effect from this social media enthusiasm and success in our own proactive influencer outreach, including our recent collaboration with Jkissa. The impact of these efforts was reflected in our overall results and particularly on elfcosmetics.com where we had one of our strongest quarters to date. We plan to expand our reach in the coming months through a new digital awareness campaign and we look forward to updating you periodically on our progress.

在我們上次的財報電話會議上，我們分享了有影響力人士（尤其是 Jeffree Star）在社交媒體上發布的帖子，導致我們的幾種首發產品的需求激增，並提高了整個品牌的知名度。我們看到了這種社交媒體熱情帶來的光環效應，以及我們在主動影響者推廣方面取得的成功，包括我們最近與 Jkissa 的合作。這些努力的影響反映在我們的整體業績中，特別是在 elfcosmetics.com 上，我們擁有迄今為止最強勁的季度之一。我們計劃在未來幾個月通過新的數字宣傳活動擴大我們的影響力，我們期待定期向您通報我們的進展情況。

We've talked a lot about our third key initiative, which is improving productivity in our national retailers. The primary driver behind this is Project Unicorn, which is aimed at shrinking our packaging footprint, elevating our brand presentation and improving the consumers' ability to navigate our sets. During the transition period, we implemented the first phase of Project Unicorn, which impacted 350 SKUs or over half of our volume. Our productivity trend improved during the period due to Project Unicorn and our marketing activations. You can see our retailers are incorporating Project Unicorn when you walk the stores.

我們已經談論了很多關於我們的第三個關鍵舉措，即提高我們全國零售商的生產力。這背後的主要推動力是“獨角獸計劃”，該計劃旨在縮小我們的包裝足跡，提升我們的品牌形象並提高消費者瀏覽我們產品的能力。在過渡期間，我們實施了獨角獸計劃的第一階段，影響了 350 個 SKU，占我們數量的一半以上。由於獨角獸計劃和我們的營銷活動，我們的生產力趨勢在此期間有所改善。當您走進商店時，您會看到我們的零售商正在整合“獨角獸計劃”。

At Target, in addition to better shelf sets, we have flex towers elevating our position as #1 in brushes and primers. Ulta Beauty has increased our space in a number of their stores as has Walgreens. At Walmart, we're seeing better in-stock results on our 4-way innovation centers. Phase 2 of Project Unicorn will roll out in the fall and convert our market-leading brushes to new designs. Along with the impact of Unicorn, our new integrated marketing approach is reflected at Superdrug in the U.K., where we've seen strong comp growth behind the marketing and merchandising of our 16-hour Camo Concealer. We're also seeing traction at Boots as we begin to roll out in stores across the U.K.

在 Target，除了更好的架子之外，我們還擁有柔性塔，提升了我們在刷子和底漆領域的第一名地位。Ulta Beauty 和沃爾格林 (Walgreens) 都增加了許多商店的空間。在沃爾瑪，我們在 4 向創新中心看到了更好的庫存結果。獨角獸計劃的第二階段將於秋季推出，並將我們市場領先的刷子轉變為新設計。除了 Unicorn 的影響之外，我們新的整合營銷方法也在英國的 Superdrug 得到了體現，我們看到 16 小時迷彩遮瑕膏的營銷和銷售背後的強勁業績增長。隨著我們開始在英國各地的商店推出產品，我們也看到了 Boots 的吸引力。

Our fourth key initiative is to focus on first-to-mass by providing Prestige quality products at an extraordinary value. This initiative is less about pivoting and more about focus. We're quite proud of our ability to innovate in as fast as 13 weeks. Going forward, we plan to use our innovation capabilities to reinforce our strengths in key product categories such as brushes, primers and brows. We're also making sure that each of our products, regardless of price point, is meeting our core value proposition of Prestige quality at an extraordinary value. In the past, we've primarily marketed our new products when they went on elfcosmetics.com. We're shifting our go-to-market approach by also supporting these products' integrated marketing campaigns as they are rolled out into our national retailer partners.

我們的第四個關鍵舉措是通過提供具有非凡價值的優質產品來專注於首次大眾化。這一舉措與其說是轉向，不如說是聚焦。我們對能夠在短短 13 週內實現創新的能力感到非常自豪。展望未來，我們計劃利用我們的創新能力來增強我們在刷子、底漆和眉毛等關鍵產品類別上的優勢。我們還確保我們的每件產品，無論價位如何，都能以非凡的價值滿足我們的核心價值主張：信譽品質。過去，我們主要在 elfcosmetics.com 上銷售新產品。我們正在改變我們的市場進入方式，在這些產品向我們的全國零售商合作夥伴推出時，我們還支持這些產品的整合營銷活動。

Recent examples include poreless putty primer, which has over 70,000 notify me sign-ups in elfcosmetics.com; Camo Concealer, which is helping build our leadership in complexion at a $5 price point; and Hello Hydration!, which offers a Prestige quality skin care cream at just $12. We plan to support these key first-to-mass products throughout the year. To measure how we're doing on this initiative, we will track relative rankings by product segment. Proudly, despite a challenging 2018, we ended the year at market leadership in brushes, primers, setting spray and eyelash curlers as measured by Nielsen.

最近的例子包括無孔膩子底漆，在 elfcosmetics.com 上有超過 70,000 名註冊者； Camo Concealer，以 5 美元的價格幫助我們打造膚色領先地位； Hello Hydration! 提供 Prestige 優質護膚霜，售價僅為 12 美元。我們計劃全年支持這些關鍵的首次量產產品。為了衡量我們在這一計劃上的表現，我們將按產品細分跟踪相對排名。值得自豪的是，儘管 2018 年充滿挑戰，但根據尼爾森的衡量，我們在刷子、底漆、定型噴霧和睫毛夾方面仍處於市場領先地位。

Our last key initiative is cost savings, where the strategic move to close our e.l.f. stores reduced our head count by around 50% and is expected to provide G&A savings on an ongoing basis that should help us fund our marketing and digital investments. Additionally, our tariff mitigation strategy, with the help of vendor concessions and improvements in our China operations, will help to offset the 10% tariff impact. If tariffs rise to 25%, we'll look to a mix of further operational savings, selective price increases and FX offsets to mitigate the higher tariff rate. Our other ongoing projects to improve operational inefficiencies include our Columbus and Ontario, California warehouse automation and U.S. liquid fill manufacturing, which we expect to generate $3 million in cost savings in fiscal 2020.

我們的最後一個關鍵舉措是節省成本，即關閉 e.l.f. 的戰略舉措。商店將我們的員工人數減少了約 50%，預計將持續節省一般管理費用，這將有助於我們為營銷和數字投資提供資金。此外，在供應商讓步和中國業務改進的幫助下，我們的關稅緩解策略將有助於抵消 10% 的關稅影響。如果關稅升至 25%，我們將尋求進一步的運營節約、選擇性提價和外匯抵消等綜合措施，以緩解較高的關稅稅率。我們正在進行的其他旨在改善運營效率低下的項目包括哥倫布市和安大略省、加利福尼亞州的倉庫自動化和美國液體灌裝製造，我們預計將在 2020 財年節省 300 萬美元的成本。

Before I turn the call over to Mandy Fields, our CFO, to cover the results and guidance, let me share a little bit about her. Mandy has a consumer-focused background with deep financial planning and analysis experience. From her start in FP&A at the Gap to her tenure as Vice President of Finance and Analytics of Albertsons $10 billion private brands portfolio, to her most recent role as CFO of BevMo! which has 163 stores and is the #1 specialty beverage retailer on the West Coast. Mandy was awarded best non-public company CFO by San Francisco Business Times last year, and we're delighted she's joined the e.l.f. team. She's been in the role for only 3 weeks and is already making a difference in the way we approach our key initiatives.

在我將電話轉給我們的首席財務官曼迪·菲爾茲 (Mandy Fields) 介紹結果和指導之前，讓我先分享一些關於她的信息。Mandy 擁有以消費者為中心的背景，擁有深厚的財務規劃和分析經驗。從她在 Gap 的 FP&A 開始，到擔任 Albertsons 價值 100 億美元的自有品牌投資組合的財務和分析副總裁，再到她最近擔任 BevMo 的首席財務官！該公司擁有 163 家商店，是西海岸排名第一的特色飲料零售商。去年，曼迪被《舊金山商業時報》評為最佳非上市公司首席財務官，我們很高興她加入了 e.l.f.團隊。她上任僅三週，但已經對我們實施關鍵舉措的方式產生了影響。

With that, I'll turn the call over to Mandy.

這樣，我就把電話轉給曼迪。

Thank you, Tarang. I'm excited to be a part of the e.l.f. team. Before I dive into the numbers, I'd like to share a bit about my journey to e.l.f. As Tarang mentioned, I've been immersed in the consumer world since the start of my career, and I admire the core values of the e.l.f. brand and its focus on accessible beauty for everyone. After my first meeting with Tarang, I was impressed with the energy and honesty with which the team is approaching recent challenges and equally impressed with the incredible culture of commitment to the e.l.f. consumer. It is clear to me that e.l.f. has a truly differentiated core value proposition and is a brand poised for revitalization. I look forward to working with the e.l.f. team and all of you as we move forward.

謝謝你，塔朗。我很高興能成為 e.l.f. 的一員。團隊。在深入研究這些數字之前，我想先分享一下我的 e.l.f 之旅。正如 Tarang 提到的，我從職業生涯開始就一直沉浸在消費世界中，我很欣賞 e.l.f. 的核心價值觀。品牌及其致力於為每個人提供觸手可及的美麗。在我第一次與 Tarang 會面後，我對團隊應對近期挑戰的活力和誠實印象深刻，同樣對 e.l.f. 令人難以置信的承諾文化印象深刻。消費者。我很清楚 e.l.f.擁有真正差異化的核心價值主張，是一個蓄勢待發的品牌。我期待著與 e.l.f 合作。團隊和你們所有人，我們一起前進。

Now I'll discuss our results for the transition period as compared to the same period in 2018. Net sales increased to $66.1 million, primarily due to Project Unicorn and our marketing activations within the period. This was partially offset by the timing of pipeline shipments and the closing of our 22 e.l.f. stores. Excluding e.l.f. stores, net sales increased 3%.

現在我將討論過渡期與 2018 年同期的結果。淨銷售額增加至 6610 萬美元，這主要歸功於獨角獸計劃和我們在此期間的營銷活動。這部分被管道運輸時間和我們 22 e.l.f. 的關閉所抵消。商店。不包括 e.l.f.商店淨銷售額增長3%。

Gross margin of 61% was in line with the prior year. Excluding e.l.f. stores, gross margin would have been about 100 basis points lower than the 61% reported as our stores yielded higher margins versus volume through other channels.

毛利率為 61%，與上年持平。不包括 e.l.f.商店的毛利率將比報告的 61% 低約 100 個基點，因為我們商店的利潤率高於其他渠道的銷量。

On an adjusted basis, SG&A was $33.6 million or 51% of net sales compared to $31.7 million or 48% of net sales in the same period of 2018, mainly driven by increased investment behind our marketing and digital efforts. Adjusted EBITDA was up 1% at $12 million versus $11.9 million a year ago. Adjusted net income was $3.2 million or $0.06 per diluted share, down from $5.5 million or $0.11 per dilute share a year ago.

調整後的銷售管理費用為3,360 萬美元，占淨銷售額的51%，而2018 年同期為3,170 萬美元，占淨銷售額的48%，這主要是由於我們營銷和數字化工作背後的投資增加所致。調整後 EBITDA 增長 1%，達到 1200 萬美元，而一年前為 1190 萬美元。調整後淨利潤為 320 萬美元，即稀釋每股收益 0.06 美元，低於一年前的 550 萬美元，即稀釋每股收益 0.11 美元。

We continued our disciplined working capital management in the transition period, generating over $8.5 million of cash flow from operations, bringing our cash balance to $53.9 million as of March 31, 2019, compared to $10.5 million last year. The improvement was primarily driven by the timing of receivables and continued progress on inventory management.

在過渡期間，我們繼續嚴格的營運資本管理，從運營中產生了超過 850 萬美元的現金流，截至 2019 年 3 月 31 日，我們的現金餘額達到 5,390 萬美元，而去年為 1,050 萬美元。這一改善主要是由於應收賬款的及時性和庫存管理的持續進展所致。

We are prioritizing investment behind our key initiatives to increase consumer awareness and build brand relevancy. Given the $54 million of cash in our balance sheet, we assessed our target and excess cash levels. As a result, in our earnings release today, we announced that our board approved a share repurchase program of up to $25 million. We are pleased that we can fund our strategic initiatives with cash from operations and also be in a position to return excess cash to shareholders through this program.

我們優先考慮對關鍵舉措進行投資，以提高消費者意識並建立品牌相關性。鑑於我們的資產負債表中有 5400 萬美元的現金，我們評估了我們的目標和超額現金水平。因此，在今天的財報發布中，我們宣布董事會批准了高達 2500 萬美元的股票回購計劃。我們很高興能夠用運營現金為我們的戰略舉措提供資金，並且能夠通過該計劃將多餘的現金返還給股東。

Turning to the financial impact of the February 2019 e.l.f. store closures. We incurred onetime accounting charges of approximately $22.2 million, which are presented in restructuring expenses. The majority of this expense is noncash in the period, including $16.1 million in accelerated rent and $5.4 million in accelerated depreciation expense. While closing the stores was a difficult decision, we believe it was the right choice to support our focus on national retailers and digital.

談到 2019 年 2 月 e.l.f. 的財務影響。商店關閉。我們產生了約 2220 萬美元的一次性會計費用，這些費用計入重組費用。該期間大部分費用為非現金，包括 1610 萬美元的加速租金和 540 萬美元的加速折舊費用。雖然關閉商店是一個艱難的決定，但我們相信這是支持我們專注於全國零售商和數字化的正確選擇。

Now let me discuss our 2020 guidance. Excluding stores, we expect fiscal 2020 net sales to be down 4% to 8%, or $235 million to $245 million, adjusted EBITDA between $45 million and $48 million and adjusted net income between $18 million and $21 million or $0.35 to $0.39 per share on a fully diluted basis, with a share count of 52.5 million. Recall that gross margin without stores is roughly 100 basis points lower than with stores because direct retail margins are higher than wholesale margins.

現在讓我討論一下我們的 2020 年指導。不包括商店，我們預計2020 財年淨銷售額將下降4% 至8%，即2.35 億美元至2.45 億美元，調整後EBITDA 將在4500 萬美元至4800 萬美元之間，調整後淨利潤將在1800 萬美元至2100 萬美元之間，即每股0.35 美元至0.39 美元。完全稀釋後，股數為 5250 萬股。回想一下，沒有商店的毛利率大約比有商店的毛利率低 100 個基點，因為直接零售利潤率高於批發利潤率。

I'd like to explain our thinking behind the ranges, particularly on net sales. As Tarang mentioned, I come from an FP&A background and believe that it's prudent to take a moderated approach in forecasting, particularly given our recent trends. We are seeing improvements in the business, but an improved quarter does not make the year. e.l.f. is heavily dependent upon track channels, which account for more than half of our revenue and, as you know, can be volatile. We are also in the initial days of our strategic repositioning. While we have seen early progress, we expect these initiatives will take some time to fully realize, and our guidance reflects this.

我想解釋一下我們對這些範圍背後的想法，特別是淨銷售額。正如 Tarang 提到的，我有 FP&A 背景，相信在預測中採取適度的方法是謹慎的，特別是考慮到我們最近的趨勢。我們看到業務有所改善，但季度改善並不能代表全年。e.l.f.嚴重依賴軌道頻道，軌道頻道占我們收入的一半以上，而且如您所知，軌道頻道可能不穩定。我們還處於戰略重新定位的初期。雖然我們已經看到了早期進展，但我們預計這些舉措將需要一些時間才能完全實現，我們的指導也反映了這一點。

The decline in adjusted EBITDA guidance year-over-year is primarily the result of 2 main factors: forecasted sales declines, as I just discussed; and the additional marketing and e-commerce expenditures. I should note that in the past, we've discussed marketing spend discreetly from the spend per user acquisition on elfcosmetics.com. As we double down on digital, we believe it makes sense to discuss the 2 together.

調整後 EBITDA 指導同比下降主要是由於兩個主要因素造成的：正如我剛才討論的那樣，預計銷售額下降；以及額外的營銷和電子商務支出。我應該指出，過去，我們從 elfcosmetics.com 上每個用戶獲取的支出中謹慎地討論了營銷支出。當我們加倍重視數字化時，我們相信將兩者放在一起討論是有意義的。

In fiscal 2019, marketing plus e-commerce expenses were 7% of net sales. We expect these to increase to approximately 10% to 12% of net sales in fiscal 2020. We expect the additional investments to cause deleverage in the short term, as in many cases, the ROI on the top-of-funnel marketing activity lacks spend. We will provide commentary on how marketing ROI is trending on future calls. Before we turn to the question-and-answer portion of the call, let me turn the call back to Tarang to summarize.

2019財年，營銷加電子商務費用占淨銷售額的7%。我們預計 2020 財年這一比例將增至淨銷售額的 10% 至 12% 左右。我們預計額外的投資將在短期內導致去槓桿化，因為在許多情況下，漏斗頂部營銷活動的投資回報率缺乏支出。我們將在未來的通話中提供有關營銷投資回報率趨勢的評論。在我們開始電話問答部分之前，讓我將電話轉回塔朗進行總結。

Thank you, Mandy. Looking at fiscal 2020, I believe we're on the right path with our strategic repositioning, supported with a clear set of initiatives. One of the things that give me confidence is the quality of the team, including the addition of Kory and Mandy. I strongly believe the long term looks promising yet remain cautious in the short term. We look forward to engaging with you over the coming quarters to discuss our progress. Operator, you may now open the call for questions.

謝謝你，曼迪。展望 2020 財年，我相信在一系列明確舉措的支持下，我們的戰略重新定位正走在正確的道路上。給我信心的事情之一是球隊的質量，包括科里和曼迪的加入。我堅信長期​​前景看好，但短期仍保持謹慎。我們期待在未來幾個季度與您合作，討論我們的進展。接線員，您現在可以發起提問。

(Operator Instructions) Our first question comes from the line of Oliver Chen with Cowen and Company.

（操作員說明）我們的第一個問題來自 Cowen and Company 的 Oliver Chen。

Regarding strategic repositioning, what are your thoughts on the timing of the positioning, relative to how some of your most important wholesale partners think about the beauty category and the choices they make for the beauty buys and spends? Because I'm just curious about the sequencing of sell-ins versus sellouts. And with the change happening, how will that work in terms of consumer reception and demand versus sell-in and planning? Related to that, I'm also just curious about the UPTs versus average unit retails and how those are trending relative to in-stock and your strategy on managing good in-stock levels and the AUR that you want?

關於戰略重新定位，相對於您最重要的一些批發合作夥伴如何看待美容品類以及他們為美容品購買和消費做出的選擇，您對定位的時機有何看法？因為我只是對賣出和賣出的順序感到好奇。隨著變化的發生，消費者的接受度和需求與銷售和規劃方面將如何發揮作用？與此相關，我也只是好奇 UPT 與平均單位零售量的比較，以及它們相對於庫存的趨勢如何，以及您管理良好庫存水平和您想要的 AUR 的策略？

Sure. Oliver, this is Tarang. Why don't I take a first stab at your questions. In terms of the strategic repositioning, it really is the 5 initiatives we talked about working in concert with each other. We feel we're well positioned when it comes to the actual assortment that we have in stores as part of our spring resets. Project Unicorn really gave us a major kind of leg-up, and we feel good about the progress we have on Project Unicorn of having the right items in the stores presented the right way. You can see that just as you walk these different stores. In particular, our focus on first-to-mass is really coming through, both the poreless putty primer as well as Camo Concealer, off to very fast starts behind the marketing that we're putting behind them. So the strategic repositioning is well under way and we see some promising signs.

當然。奧利弗，這是塔朗。為什麼我不先回答你的問題呢？就戰略重新定位而言，確實是我們談到的5個舉措是相互配合的。我們認為，作為春季重置的一部分，我們在商店中的實際品種方面處於有利位置。獨角獸計劃確實給了我們很大的幫助，我們對獨角獸計劃在商店中以正確的方式展示正確的商品所取得的進展感到滿意。當您走過這些不同的商店時，您就可以看到這一點。特別是，我們對首次大眾化的關注確實得到了體現，無論是無孔膩子底漆還是迷彩遮瑕膏，在我們投入的營銷背後都很快開始了。因此，戰略重新定位正在順利進行，我們看到了一些有希望的跡象。

In terms of the units per transaction versus average unit retail, if you look at the first quarter, our average unit retails are up anywhere between 5% to 10%. That's less than what we've traditionally done, where our averaging at retails were up often in the 20%-plus range, and that is a strategic focus of us, making sure that we're better balancing both units as well as averaging at retails and reinforcing our overall value equation. A great example of that is Camo Concealer, which compares to a $28 Prestige item. Yet we've priced it at $5, and it really is a screaming value. So we feel good in terms of our initial progress, particularly with the acceptance of our major customers on Project Unicorn and how it's doing out the gates.

就每筆交易的單位數量與平均零售單位數量而言，如果你看看第一季度，我們的平均單位零售數量增長了 5% 到 10% 之間。這比我們傳統上所做的要少，我們的零售平均增幅通常在 20% 以上，這是我們的戰略重點，確保我們更好地平衡兩個單位以及平均零售額零售並加強我們的整體價值方程式。一個很好的例子是 Camo Concealer，與 28 美元的 Prestige 商品相比。然而我們的定價為 5 美元，這確實是一個令人驚嘆的價值。因此，我們對我們的初步進展感到滿意，特別是我們的主要客戶對獨角獸項目的接受以及它的進展情況。

Okay. And then last question is, as you engage in the changes and also think about simplify to amplify on some of your old products and new ideas, what should roughly happen to the cosmetics versus non-cosmetics composition of your products mix over time? Or is there sort of evolution there that we should be aware of?

好的。最後一個問題是，當您參與變革並考慮簡化以放大您的一些舊產品和新想法時，隨著時間的推移，您產品組合中的化妝品與非化妝品成分大致會​​發生什麼變化？還是我們應該意識到其中存在某種進化？

Well, we always -- I mean certainly, one of our key hallmarks is our ability to innovate, both in terms of the speed as well as the breadth of innovation across eyes and face tools and skin care. You are seeing a concerted effort to focus in particular on those key first-to-mass items. And so when I take a look at our assortment on shelf, I don't see massive shifts in terms of the number of items on shelf. We always had a good rhythm of kind of what I call weeding and feeding to every year, going -- approaching our planograms and taking kind of what we believe will be some of the best items and taking other items off the shelf, so I feel good that way. What you -- probably the biggest shift that you're seeing is this much greater focus on these first-to-mass items more than we're deprioritizing a particular category. You will see us talk less about the total number of items we're launching. You'll hear us talk a lot more about the scale of the integrations we have on the ones that we deem the most important.

嗯，我們始終——我的意思當然是，我們的關鍵標誌之一是我們的創新能力，無論是在眼部、面部工具和皮膚護理領域的創新速度還是創新廣度方面。您會看到大家齊心協力，特別關注那些關鍵的首次批量生產項目。因此，當我查看貨架上的商品種類時，我沒有看到貨架上的商品數量發生巨大變化。我們總是有一種良好的節奏，我稱之為每年除草和餵養，接近我們的貨架圖並採取一些我們認為會是最好的物品並從貨架上取下其他物品，所以我覺得這樣很好。您所看到的可能是您所看到的最大轉變是，我們更加關注這些首次大眾化的產品，而不是我們取消特定類別的優先級。您會發現我們很少談論我們正在推出的產品總數。您會聽到我們更多地談論我們認為最重要的集成規模。

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

我們的下一個問題來自 SunTrust 的 Bill Chappell。

Just wanted to see if I can maybe translate some of the message for me. In terms of -- in the past, you had talked about your marketing and advertising was mid-single digits at best, and you'd never thought you would kind of go to the full double digits as a percentage of sales just because that's not really how you ran your business, and you felt like the sales would come back. Is it fair to say that -- I guess, one, you had a new Chief Marketing Officer, who said, look if we're really going to change the trajectory, we need to make a meaningful step-up. And then two, we had a new CFO in place, and welcome, Mandy, that thought of that's not how we're going to run our guidance, we need to set -- reset the bar here so that we can rebuild some investor trust. Is that the right way to look at it?

只是想看看我是否可以為我翻譯一些消息。就過去而言，您曾談到您的營銷和廣告最多只能達到中個位數，而且您從未想過您佔銷售額的百分比會達到完整的兩位數，因為這不是確實是你經營業務的方式，你感覺銷售額會回來。公平地說，我猜，你有一位新的首席營銷官，他說，看看我們是否真的要改變軌跡，我們需要做出有意義的進步。然後第二，我們有了一位新的首席財務官，歡迎曼迪，這不是我們執行指導的方式，我們需要在這裡設置——重置標準，以便我們可以重建一些投資者的信任。這是正確的看待方式嗎？

Sure, Bill, this is Tarang. Why don't I answer the first part of your question and turn it over to Mandy, so she can directly talk about the guidance. On the first, on the marketing -- first, the definitional. We used to always just talk about the SEC definition that you see on marketing, which for us was around 3% to 4% of net sales. So if you take a look from the marketing-only kind of investment, we had, I think, in FY '19, about 3% of net sales was roughly 3.2% of net sales. As we step forward, particularly with Kory coming in, and taking a more holistic view of our consumer engagement and marketing activities, she's saying, even though the SEC doesn't require us to break out the e-commerce spending or the spending we have to get people to our site, given that our approach is very digital and viral in nature, we're better, and a more accurate measure for us as well as investors is to combine the spending that we have in marketing as well as our e-commerce. And if you combine that spending, what we're really talking about in FY '19, that combined spend was about 7% in net sales.

當然，比爾，這是塔朗。我為什麼不回答你問題的第一部分並將其轉交給Mandy，以便她可以直接談論指導。首先是營銷——首先是定義。我們過去總是只談論 SEC 對營銷的定義，對我們來說，營銷大約占淨銷售額的 3% 到 4%。因此，如果你從純營銷投資的角度來看，我認為，在 19 財年，我們的淨銷售額約占淨銷售額的 3%，約為淨銷售額的 3.2%。她說，隨著我們向前邁進，特別是隨著 Kory 的加入，並對我們的消費者參與和營銷活動採取更全面的看法，儘管 SEC 不要求我們披露電子商務支出或我們擁有的支出為了讓人們訪問我們的網站，考慮到我們的方法本質上是非常數字化和病毒式傳播的，我們做得更好，對於我們和投資者來說，更準確的衡量標準是將我們在營銷方面的支出以及我們的電子支出結合起來。 -商業。如果你把這些支出合併起來，我們真正談論的是 19 財年，那麼合併支出約為淨銷售額的 7%。

In the transition period, it was about 8% of net sales, and as you heard in our guidance, 10% to 12%. The 10%, to 12%, so it's not as big a step-up as you see, mainly because we're combining both those metrics together. That is one, the first part of it. The second is a tremendous amount of confidence in terms of really bringing more consumers into the franchise. And on the macro, if you take a look, the strategic move we made to close down our stores, really, the SG&A that was involved in our stores and now being redeployed to kind of our marketing and e-commerce activities together. So we feel it's the better way to go for the long term of the business, just to give you a perspective on the marketing. Why don't I turn it to Mandy to talk to you a little bit about the guidance?

在過渡期間，該比例約為淨銷售額的 8%，正如您在我們的指導中聽到的，為 10% 至 12%。從 10% 到 12%，所以這並沒有你看到的那麼大，主要是因為我們將這兩個指標結合在一起。這是其中的第一部分。第二個是對真正吸引更多消費者加入特許經營權方面的巨大信心。從宏觀上看，如果你看一下，我們關閉商店的戰略舉措，實際上是涉及我們商店的SG&A，現在被重新部署到我們的營銷和電子商務活動中。因此，我們認為這是實現業務長期發展的更好方法，只是為了讓您對營銷有一個看法。我為什麼不請曼迪來和你談談指導呢？

So in terms of guidance, I just want to talk a little bit about my philosophy and approach. So I'd like to take a moderated approach with forecasting. And while we're encouraged about the things that we saw in the transition period, if we just take a step back and look at where we've been historically, so if we look at the back half coming out of calendar '18, we would have been on a negative 7% trend. If I take the transition quarter, plus what we saw in the back half, gets me to a negative 4% trend. So that bookends the guidance range from a net sales standpoint. And again, we're seeing positive traction. We're encouraged by that, but I want a chance to see progress on a sustained basis before we get too far ahead of ourselves.

所以在指導方面，我只想談談我的理念和方法。所以我想採取一種適度的預測方法。雖然我們對過渡時期看到的事情感到鼓舞，但如果我們退後一步看看我們歷史上的情況，所以如果我們看看 18 年日曆的後半部分，我們會發現將會呈負7% 的趨勢。如果我考慮過渡季度，加上我們在後半段看到的情況，我會看到負 4% 的趨勢。因此，從淨銷售額的角度來看，這涵蓋了指導範圍。我們再次看到了積極的推動力。我們對此感到鼓舞，但我希望在我們走得太遠之前有機會看到持續的進展。

Okay. I think that translates with what I was thinking. Second, just maybe a little more color around Project Unicorn. I mean we're now largely through the spring resets. Is there anything you can give us to kind of quantify how that's making a difference? And will it be expanded more this year to other retailers, to other SKUs? Or is it kind of set in place right now?

好的。我認為這符合我的想法。其次，也許可以為獨角獸計劃增添一點色彩。我的意思是，我們現在基本上已經經歷了春季重置。您能給我們提供什麼來量化這如何產生影響嗎？今年是否會進一步擴展到其他零售商、其他 SKU？或者現在已經就位了？

Sure, Bill. We're feeling really good about Project Unicorn. So the first phase has been implemented. So particularly, if I look at our Walmart, Target and Ulta, we have -- I think about 350 Unicorn SKUs that have been put in the Unicorn packaging. The shelves have been redrawn in a more efficient design. And what we see in terms of results at all 3 of those customers is an improvement in our productivity trend line. So we're feeling really good about it. For balance of customers, they do get the Unicorn packaging, but it will be later that they're able to draw them more efficiently. So that's a little bit about Phase 1.

當然，比爾。我們對獨角獸計劃感覺非常好。這樣第一階段就已經實施了。特別是，如果我看看我們的沃爾瑪、Target 和 Ulta，我們有大約 350 個 Unicorn SKU 已放入 Unicorn 包裝中。貨架經過重新設計，設計更加高效。從所有 3 個客戶的結果來看，我們看到我們的生產力趨勢線有所改善。所以我們對此感覺非常好。為了平衡客戶，他們確實獲得了獨角獸包裝，但稍後他們才能更有效地繪製它們。這就是第一階段的一些情況。

Phase 2 of Unicorn, as I mentioned, is -- involves our brushes. We have market leadership in brushes in the U.S., and those SKUs start to soft convert similar to how we did Phase 1 of Unicorn, and they will be in position by, I call it, the fall of this year. There'll be a Phase 3 as we take a look at broader elements of our lineup and other SKUs that we do in Unicorn. But I'd say the main parts of Unicorn in terms of the SKUs that were converted, the better shelf presentation and our ability to really call out some of our core segments in terms of helping consumers navigate, we're encouraged by the early signs, and you'll continue to hear more about it.

正如我提到的，獨角獸的第二階段是——涉及我們的畫筆。我們在美國的刷子領域擁有市場領導地位，這些 SKU 開始進行軟轉換，類似於我們在 Unicorn 第一階段的做法，它們將在我稱之為今年秋天之前就位。我們將進入第三階段，我們將審視我們的產品線和我們在 Unicorn 中所做的其他 SKU 的更廣泛元素。但我想說的是，獨角獸的主要部分包括已轉換的 SKU、更好的貨架展示以及我們在幫助消費者導航方面真正喚起一些核心細分市場的能力，我們對早期跡象感到鼓舞，您將繼續聽到更多相關信息。

Okay. And then last one for me. Just I get the kind of trend line of negative 4% going forward, similar to your historical trend. What does that imply versus the overall -- your expectation to the overall category? Are you going to be in line? Or do you think you'll grow faster or slower in the category?

好的。然後是我的最後一張。只是我得到了未來負 4% 的趨勢線，類似於你的歷史趨勢。與整體相比，這意味著什麼——您對整體類別的期望？你要排隊嗎？或者您認為您在該類別中的增長會更快還是更慢？

Right now, it's relatively in line. So if I look at the first quarter of the year, the color cosmetics category in the mass side was down 3%. We'll see. Obviously, our intention is to do better, but we wanted to at least, to Mandy's point, moderate our expectations.

目前來說，還是比較符合的。因此，如果我看今年第一季度，大眾彩妝品類下降了 3%。我們拭目以待。顯然，我們的目的是做得更好，但至少就曼迪的觀點而言，我們希望降低我們的期望。

The next question comes from the line of Steph Wissink with Jefferies.

下一個問題來自斯蒂芬·威辛克（Steph Wissink）和杰弗里斯（Jefferies）的對話。

I want to follow up on Bill's question and just digest or decompose this a little bit further. Tarang, if we were to hypothetically say the March quarter pattern continues, can you help us bridge what the potential leverage is in the business, given the increased digital spend? Meaning, if the business does deliver a flat or better growth rate, do we start to see some incremental margins return to the business over the course of the year?

我想跟進比爾的問題，並進一步消化或分解這個問題。Tarang，如果我們假設三月份季度的模式繼續下去，考慮到數字支出的增加，您能否幫助我們彌合業務中的潛在槓桿？這意味著，如果該業務確實實現了持平或更好的增長率，我們是否會開始看到該業務在一年中恢復了一些增量利潤？

Steph, what I'd tell you is, certainly, if we're seeing some deleverage with the sales decline, you will have leverage as if -- instead of seeing minus 4% to 8%, if you did see a flattening or growth in the business, there is leverage to be had there.

斯蒂芬，我要告訴你的是，當然，如果我們看到銷售額下降而出現一些去槓桿化，那麼你的槓桿率就好像——而不是看到負4% 到8%，如果你確實看到了持平或增長在商業上，那裡有槓桿作用。

So your plan wouldn't be to spend back any upside, but rather to see the benefits flow through to the bottom line?

那麼您的計劃不是花掉任何收益，而是看到收益流向底線？

That's right. I mean our current assumption -- I mean a part of it depends on -- and what Mandy and Kory both want to see is how do these investments pan out. And based on how they're panning out, we'll come back and update it. Obviously, if the return comes faster, I think we like that. But we also want to reserve the ability if we're seeing really good results to further accelerate our top line.

這是正確的。我的意思是我們目前的假設——我的意思是它的一部分取決於——曼迪和科里都想看到的是這些投資如何取得成功。根據他們的進展情況，我們會回來更新。顯然，如果回報來得更快，我想我們會喜歡這樣。但如果我們看到真正好的結果，我們也希望保留這種能力，以進一步加速我們的營收增長。

Right. That's great. And just the last one is on the Project Unicorn strategy. I'm wondering if you can give us some quantitative measures around the performance of those stores that have been fully converted versus a control group or an average, just to help us understand the degree of productivity enhancement that, that strategy is starting to show at retail.

正確的。那太棒了。最後一個是關於獨角獸計劃戰略的。我想知道您是否可以為我們提供一些關於那些已完全轉換的商店與對照組或平均值的績效的定量衡量標準，以幫助我們了解該策略開始顯示的生產力提高程度零售。

Yes. So maybe the best way I can do it, because Unicorn SKUs show up in all sorts of retailers, and so the places that you can see it probably the best are Target, Walmart and Ulta. And so as we isolate post-Unicorn versus pre-Unicorn, you can see it, frankly, at least Target and Walmart are covered in the track universe. The change in trajectory you saw in our track data over the last, I'll call it, 2 to 3 months, gives you an indication of Unicorn plus our marketing activities. Important to say, both go hand in hand. It's kind of a chicken and egg thing. The marketing would not be nearly as effective unless we had the right assortment on those shelves. The assortment wouldn't do as well unless we're amplifying that. So both, if you really take a look at the fourth quarter, of last year of calendar 2018, we were minus 4% versus the plus 3% that you see in the transition period quarter. Based -- there's only 2 things you can really attribute that to, which is Project Unicorn and the marketing activations that I talked about.

是的。所以也許這是我能做到的最好方法，因為獨角獸SKU 出現在各種零售商中，所以你能看到它的最好的地方可能是塔吉特(Target)、沃爾瑪(Walmart)和Ulta。因此，當我們將後獨角獸公司與前獨角獸公司分開時，坦率地說，您可以看到，至少塔吉特和沃爾瑪都包含在賽道宇宙中。您在過去（我稱之為 2 到 3 個月）的跟踪數據中看到的軌跡變化可以讓您了解獨角獸以及我們的營銷活動。重要的是，兩者齊頭並進。這有點像先有雞還是先有蛋的問題。除非我們的貨架上有正確的品種，否則營銷不會那麼有效。除非我們擴大這一範圍，否則該品種不會做得那麼好。因此，如果你真正看一下 2018 年第四季度，你會發現我們的增長率為負 4%，而過渡期季度的增長率為正 3%。基於——只有兩件事你可以真正歸因於，那就是獨角獸計劃和我談到的營銷活動。

Okay. Last question, just really quickly, is on the condition of retail level inventory. Do you feel like you have enough inventory in the channel to keep the consumption momentum going.

好的。最後一個問題，非常快，是關於零售水平庫存的情況。您覺得渠道庫存是否充足，能夠維持消費動力？

We feel good about our retail inventory. If anything, we're a little tight, particularly, on a couple of these first-to-mass items. We've had out-of-stock issues on poreless putty primer and Camo Concealer. So we're working to be able to get those back in better position in our first quarter of our new fiscal year. But overall, we've made great strides. We continue to partner well with our retail partners. Last year, for example, we saw some serious out-of-stocks on our 4-way innovation centers at Walmart. As I mentioned earlier, we're doing much better on our in-stocks there. Our in-stocks overall look pretty good, but it's something that given our unit movement is always something that we're focused and working on.

我們對零售庫存感覺良好。如果說有什麼不同的話，那就是我們有點緊張，特別是在其中一些首次批量生產的產品上。我們的無孔膩子底漆和迷彩遮瑕膏出現了缺貨問題。因此，我們正在努力讓這些在新財年第一季度恢復到更好的狀態。但總的來說，我們已經取得了很大的進步。我們繼續與零售合作夥伴保持良好的合作關係。例如，去年我們在沃爾瑪的 4 路創新中心發現了一些嚴重的缺貨情況。正如我之前提到的，我們在那裡的庫存做得更好。我們的庫存總體看起來相當不錯，但考慮到我們的單位變動始終是我們關注和努力的事情。

Our next question comes from the line of Rupesh Parikh with Oppenheimer & Co.

我們的下一個問題來自 Rupesh Parikh 與 Oppenheimer & Co. 的對話。

So I had a few modeling questions, I was hoping you can provide a little more granularity. So first, on the gross margin line. I was curious if there's any more specifics you can provide there, just the key puts and takes as you look at this year. And also, I was wondering if you can provide any clarity in term of how you see the phasing of the earnings growth this year.

所以我有一些建模問題，我希望你能提供更多的粒度。首先是毛利率。我很好奇您是否可以提供更多具體信息，只是您今年看到的關鍵看跌期權和看跌期權。另外，我想知道您是否可以澄清您如何看待今年盈利增長的階段。

Okay. So I'll start with the gross margin. Really not a lot of change in gross margin. So as I've stated, without the stores, we would have been 100 basis points lower. And so you can just trend that forward in your modeling. Currently, the gross margin rate assumes the 10% tariff rate. As Tarang spoke to, there are some mitigation strategies we have if it goes to the 25% rate. But as for now, we've assumed the 10% on the go forward. In terms of phasing of earnings, as you know, we don't give quarterly guidance, but I would say that there's some seasonality in our business. Q2 and Q3 are going to be the most important quarters for us, with Q4 and Q1 having a lesser impact. So that's what I would give you on the quarters.

好的。所以我將從毛利率開始。毛利率確實沒有太大變化。正如我所說，如果沒有商店，我們的價格將會降低 100 個基點。因此，您可以在建模中推動這一趨勢。目前，毛利率假設關稅率為10%。正如 Tarang 所說，如果稅率達到 25%，我們有一些緩解策略。但就目前而言，我們假設未來的增長率為 10%。在收益階段性方面，如您所知，我們不提供季度指導，但我想說我們的業務存在一些季節性。第二季度和第三季度將是我們最重要的季度，第四季度和第一季度的影響較小。這就是我在宿舍裡給你的。

Great. And then I guess a question for Tarang. Just on category growth there. It seems like -- all the beauty players I've called it a weak beauty category, it sounds like color cosmetics are still challenging. Just curious if you have any thoughts in terms of why you're continuously challenged out there, I think both on the mass side and Prestige has even slowed recently?

偉大的。然後我想問塔朗一個問題。只是那裡的品類增長。看起來——所有的美容玩家我都稱其為弱美容品類，聽起來彩妝仍然具有挑戰性。只是好奇您是否對為什麼不斷受到挑戰有任​​何想法，我認為大眾方面和聲望方面最近都在放緩？

Yes. I'll be honest, it's a little perplexing how long kind of the softness has been there. I mean we've taken over the category over a long period of time. We're a little surprised by how long the category has been soft. What I would tell you is the core dimensions of the category always come back to how strong or in totality, are the new products there. We feel -- we're really encouraged that we have a couple what look like to be pretty big hitters. I don't know if the category in total has that level of innovation that we have, so I feel well positioned, particularly if we can continue the momentum that we saw in the transition period. But that would be one. And then two, there's always some question for me on measurement. You see so much that's moving online that we often -- we need to see when we look at our own business, wonder if the measured categories are picking all of that up.

是的。老實說，這種柔軟已經存在了多久，這有點令人困惑。我的意思是，我們已經在很長一段時間內接管了這個類別。我們對這個類別持續疲軟的時間感到有點驚訝。我要告訴你的是，該類別的核心維度總是取決於新產品的強度或整體性。我們覺得——我們真的很受鼓舞，因為我們有幾個看起來相當大的人物。我不知道這個類別是否總體上具有我們所擁有的創新水平，所以我感覺自己處於有利位置，特別是如果我們能夠繼續我們在過渡時期看到的勢頭的話。但那隻是其中之一。第二，我總是有一些關於測量的問題。你會看到太多的東西在網上移動，我們經常需要看看我們自己的業務，想知道所測量的類別是否涵蓋了所有這些。

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。

Welcome, Mandy. I guess a couple of questions for me. First, on the e-commerce. You talk about it being a strategic initiative. Can you just remind us what percent of sales that is today? And then what are you seeing in terms of the growth of that channel currently and maybe where that could go over time?

歡迎，曼迪。我想有幾個問題要問我。首先，關於電子商務。你說這是一項戰略舉措。您能提醒我們今天的銷售額百分比是多少嗎？那麼您目前對該渠道的增長有何看法？隨著時間的推移，該渠道的增長可能會走向何方？

Sure. So Erinn, this is Tarang. We don't break out e-commerce right now, separately. In the past, we broke out our direct channel versus national retailers. And the end of the year, I think we'll again see that break. But in between quarters, we don't.

當然。艾琳，這是塔朗。我們現在不會單獨推出電子商務。過去，我們突破了直接渠道與全國零售商的競爭。到今年年底，我想我們將再次看到這種突破。但在季度之間，我們不會。

In terms of where e-commerce stands for us, it is critically important. It's obviously a digitally native brand that was our entire business for a few years. It is one of our main vehicles in which we engage our consumers, put our new innovation on first. And so when I think about the growth rates there, what I did mention in the prepared remarks is we saw one of our strongest growth quarters on e-commerce, on elfcosmetics.com that we have in quite some time. And it's a reflection of the initiatives -- strategic initiatives that I discussed earlier in terms of driving more people, more demand in the brand, more in terms of our digital strategies, but in particular, the focus, the days, we're out of stock right now in poreless putty primer. But when we have that in stock, I mentioned, I think there's 70,000 notify me requests on getting that product back in stock. I think you'll see many of these strategies were best on elfcosmetics.com, but really, our digital efforts go well beyond e-commerce.

就電子商務對我們的意義而言，這一點至關重要。顯然，這是一個數字原生品牌，幾年來一直是我們的全部業務。這是我們吸引消費者、將我們的創新放在首位的主要工具之一。因此，當我想到那裡的增長率時，我在準備好的發言中確實提到的是，我們在elfcosmetics.com 上看到了電子商務增長最強勁的季度之一，這是我們在相當長一段時間內的表現。這反映了這些舉措——我之前討論過的戰略舉措，包括吸引更多的人、品牌的更多需求、我們的數字戰略，但特別是重點、我們已經退出的日子無孔膩子底漆現在有庫存。但當我們有庫存時，我提到，我認為有 70,000 個通知我要求該產品恢復庫存。我想您會在 elfcosmetics.com 上看到其中許多策略都是最好的，但實際上，我們的數字化努力遠遠超出了電子商務的範疇。

Sure. Okay. And then maybe just sticking on the similar theme. As you think about the marketing and e-comm spend collectively moving towards that low double digits, has there been a change of philosophy of the mix of that spend, and what channels maybe you're starting to over-index socially? You talked a lot about that on this call. But just curious on what that could look going forward in terms of the mix versus where it was historically.

當然。好的。然後也許只是堅持相似的主題。當您考慮營銷和電子商務支出集體走向低兩位數時，該支出組合的理念是否發生了變化？您可能開始對哪些渠道進行過度索引？您在這次電話會議上談到了很多這個問題。但只是好奇從組合與歷史的角度來看，未來會發生什麼。

Sure. I mean I think our marketing spend, our e-commerce spend is always and primarily digital in nature. Yet, we, in the past, sometimes siloed both types of spending. So our e-commerce spending was very much direct response-related, whether it be search, affiliates, other things that bring people to our website, whereas some of our other marketing spending, whether it had been Beautyscape or some of our influencer programs, some of our social programs, the 2 didn't really go together. And I think one of the things that Kory Marchisotto is really bringing in is a more holistic view of how we're engaging our consumer, particularly, in putting forward what she coins some of our superpowers, that making sure our consumers understand that.

當然。我的意思是，我認為我們的營銷支出、電子商務支出本質上始終主要是數字化的。然而，我們過去有時會孤立這兩種類型的支出。因此，我們的電子商務支出與響應非常直接相關，無論是搜索、附屬機構還是其他將人們帶到我們網站的東西，而我們的其他一些營銷支出，無論是 Beautyscape 還是我們的一些影響者計劃，在我們的一些社交項目中，兩者並沒有真正結合在一起。我認為科里·馬爾基索托真正帶來的一件事是對我們如何吸引消費者有更全面的看法，特別是在提出她所創造的我們的一些超能力時，確保我們的消費者理解這一點。

So you'll continue to see us, probably, if I think of marketing from a funnel from an awareness standpoint, lower funnel activities as well as upper funnel activities, you'll continue us do a lot and be able to attribute quite a bit on the lower funnel activities to bring people to our site. But increasingly, you'll see more on the upper level -- upper funnel activities. We haven't done nearly as much there, and if you took a look at it via the incremental spend, in fact, if you even look at the transition period, really stepping up on social, really stepping up in terms of our ability of driving digital awareness and a number of -- more platforms than we have in the past, we're encouraged by site. I think you have -- being able to leverage the entire full funnel activities from an awareness standpoint, would be more effective and it very much ties into the vision that Kory and the team have in terms of how we engage our consumers.

因此，您可能會繼續看到我們，如果我從意識的角度考慮從漏斗進行營銷，下漏斗活動以及上漏斗活動，您將繼續我們做很多事情並且能夠歸因相當多在漏斗下部的活動中，將人們帶到我們的網站。但越來越多地，您會在上層看到更多內容——上漏斗活動。我們在這方面做得還遠遠不夠，如果你通過增量支出來看待它，事實上，如果你甚至看看過渡期，就會真正加強社交，真正加強我們的能力。推動數字意識和比過去更多的平台，我們受到網站的鼓勵。我認為，能夠從意識的角度利用整個渠道活動會更加有效，而且這與 Kory 和團隊在如何吸引消費者方面的願景密切相關。

Got it. And then just one clarification, Mandy, for you. I think you talked in the former response on kind of the shaping of the guidance, you don't typically break it out. But when you talk about 2Q and 3Q being the most important and 1 and 4Q being a little bit less relevant, are you implying that 1Q and 4Q should be below that of the average growth rate of down 4% to down 8%, and then the others above? Or just any help on the kind of sales cadence? And then just the other clarification in the guide. You guided 52.5 million share count. Should we assume that, that's no buyback then, and that's just the dilution from options?

知道了。曼迪，我想向你澄清一下。我認為您在之前的回應中談到了指導意見的形成，但您通常不會將其分解。但是當你說第二季度和第三季度最重要，第一季度和第四季度不太重要時，你是否暗示第一季度和第四季度應該低於下降4%到下降8%的平均增長率，然後上面的其他人？或者只是對銷售節奏有任何幫助？然後是指南中的其他說明。您指導了 5250 萬股。我們是否應該假設，這不是回購，而只是期權的稀釋？

Yes. Okay, so first, let me answer the question on the quarterly importance. Now my reference to Q2 and Q3 are simply because it's preholiday and holiday, which are typically larger quarters for us. So no implication there that Q1 and Q4 will be outside of the range to the negative. On the share count, the 52.5 million, yes, you're right, it's just the diluted share count.

是的。好的，首先讓我回答有關季度重要性的問題。現在我提到第二季度和第三季度只是因為現在是節前和假期，這對我們來說通常是較大的季度。因此，並不意味著 Q1 和 Q4 會超出負值範圍。就股份數量而言，5250萬股，是的，你是對的，這只是稀釋後的股份數量。

Okay, perfect. So no buyback? That would be incremental?

好的，完美。所以不回購了？那會是增量的嗎？

Correct.

正確的。

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

我們的下一個問題將來自摩根大通的 Andrea Teixeira。

Welcome, Mandy and Kory. I was just hoping if you can bridge the approach to your guidance, more like how if you're just trying to -- making it more conservative. When you think about the 7% to 10% to 12% of sales going to marketing, is that both above the line and below the line? And how can like you parcel that investment? Is that a broad advertisement to increase awareness of the e.l.f. brand? Or is it more R&D? Or is it more working on getting more distribution in some of the non-track channels on your doors? If you can help us elaborate that.

歡迎，曼迪和科里。我只是希望你能將這種方法與你的指導聯繫起來，更像是如果你只是想——讓它變得更加保守。當您考慮 7% 到 10% 到 12% 的銷售額用於營銷時，這同時是在線上還是線下？您如何分配這筆投資？這是一則廣泛的廣告，旨在提高人們對 e.l.f. 的認識嗎？品牌？還是更多的研發？還是更多地致力於在您家門口的一些非軌道渠道中獲得更多分銷？如果您能幫助我們詳細說明一下。

And on the EBITDA margin, so it's part of the first question on how you separate those components. Like if you take out marketing, so I'm just trying to see if you can -- there is some deleverage from revenues, the impact of the revenue of the doors that you're closing or existing in company-operated stores. But also, if you're seeing some deleverage there or you can now finally start to leverage your productivity, as Tarang discussed, with Project Unicorn, the productivity per store, if you can start leveraging on that and more like the known media or known marketing overhead expenses, how we should be thinking of those.

至於 EBITDA 利潤率，因此這是關於如何分離這些組成部分的第一個問題的一部分。就像如果你去掉營銷一樣，所以我只是想看看你是否可以——收入有一定的去槓桿化，你關閉的門或公司經營的商店現有的門的收入的影響。而且，如果你看到那裡有一些去槓桿化，或者你現在終於可以開始利用你的生產力，正如Tarang 與Project Unicorn 討論的那樣，每家商店的生產力，如果你可以開始利用它，就像已知的媒體或已知的那樣營銷管理費用，我們應該如何考慮這些。

Okay. This is Tarang, I'll take the question and have Mandy add. So on the first, in terms of the marketing, our marketing plus e-commerce spending going from 7% in FY '19 to the range that we provided 10% to 12%, the nature of that spend is highly digital awareness-related. So it's not to drive distribution, it's not to drive other activities. It's the range of activities, everything from bringing people to our site to driving greater awareness with our new campaign, primarily digitally and via social, very much what you saw in the transition period quarter. So we feel good about that spend and the nature of that spend that's authentic to e.l.f.'s history just in a much bigger stage. And then in terms of the leverage question on productivity, maybe I'll let Mandy talk about that.

好的。我是塔朗，我將回答這個問題並請曼迪補充。因此，首先，就營銷而言，我們的營銷加上電子商務支出從 19 財年的 7% 上升到我們提供的 10% 到 12% 的範圍，該支出的性質與數字意識高度相關。所以它不是為了推動分銷，也不是為了推動其他活動。這是一系列活動，從吸引人們訪問我們的網站到通過我們的新活動提高認識，主要是通過數字方式和社交媒體，這與您在過渡期季度所看到的非常相似。因此，我們對這筆支出以及這筆支出的性質感到滿意，這在更大的階段上是真實的 e.l.f. 歷史。然後就生產力的槓桿問題而言，也許我會讓曼迪談談。

And Andrea, so as you think about the marketing, you said you can take a look at EBITDA as marketing, is there any leverage there? And so I guess the way that I think about it is, we're investing in marketing and e-commerce in 2020, and so you should put that in the 10% to 12% range as we mentioned. But the sales, right, the sale is down 4% to 8%. It obviously makes for some deleverage there. So I think there was an earlier point that if we start to see sales come back around, would that moderate a bit? And it would. So I think what you're seeing is we're kind of putting -- laying the foundation for our marketing and e-commerce platforms going forward, our initiatives going forward, and then the sales will come subsequently.

安德里亞（Andrea），當您考慮營銷時，您說您可以將 EBITDA 視為營銷，那裡有任何槓桿作用嗎？所以我想我的想法是，我們將在 2020 年投資營銷和電子商務，所以你應該把它放在我們提到的 10% 到 12% 的範圍內。但是銷售額，對吧，銷售額下降了4%到8%。這顯然有助於去槓桿化。所以我認為之前有一點是，如果我們開始看到銷售回升，情況會有所緩和嗎？確實會的。所以我認為你看到的是我們正在為我們未來的營銷和電子商務平台、我們的舉措奠定基礎，然後銷售就會隨之而來。

Okay. But in terms of like what -- why do you -- sorry, just to follow up, what your activities have been trying to push in terms of your overhead expenses. Is that anything we should think about in terms of savings going forward, or that's going to be like a second process?

好的。但就什麼而言——你為什麼這麼做——抱歉，只是為了跟進你的活動在管理費用方面一直試圖推動的事情。這是我們在未來節省開支方面應該考慮的事情嗎？或者這將是第二個過程？

Sure. So one, I would say, if you take a step back, we closed all of our e.l.f. stores, 22 e.l.f. stores is a big move in order to generate some cost savings that we have repurposed over into our marketing and e-commerce initiatives. So I think we have taken some steps to generate cost savings. As we think about our ability to have mitigated the 10% tariff, we've taken steps there as well. And we're not feeling that impact on the P&L.

當然。所以，我想說，如果你退一步，我們關閉了所有的 e.l.f.。商店，22 e.l.f.開設商店是一項重大舉措，旨在節省一些成本，我們已將其重新用於我們的營銷和電子商務計劃。所以我認為我們已經採取了一些措施來節省成本。當我們考慮減輕 10% 關稅的能力時，我們也採取了措施。我們沒有感受到對損益表的影響。

Secondly, I would say that there's $3 million that we called out in cost savings, and so that you should see impact 2020 as well. And that's tied to our manufacturing facility, our warehouses as we discussed in our prepared remarks.

其次，我想說的是，我們呼籲節省 300 萬美元的成本，因此您也應該看到 2020 年的影響。正如我們在準備好的發言中討論的那樣，這與我們的製造工廠和倉庫息息相關。

And just building on that, Andrea, we are always looking at abilities to take a look at our cost structure. I think we've made some pretty bold moves in closing the stores. The automation initiatives, we talked about how we're mitigating tariff impact. And we will continue to look, but we wanted to make sure our people are clear and all our investors are clear, is our #1 priority is making sure we're investing in the brand to help revitalize our growth.

在此基礎上，安德里亞，我們一直在尋找能力來審視我們的成本結構。我認為我們在關閉商店方面採取了一些相當大膽的舉措。在自動化計劃中，我們討論瞭如何減輕關稅影響。我們將繼續尋找，但我們希望確保我們的員工和所有投資者都清楚，我們的第一要務是確保我們對品牌進行投資，以幫助重振我們的增長。

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。

I just wanted to follow quickly on the last question on these productivity initiatives. Maybe just broadly, could you help us with percent of sales that will be fixed versus variable costs?

我只是想快速跟進有關這些生產力計劃的最後一個問題。也許只是籠統地說，您能幫助我們了解固定成本與可變成本的銷售額百分比嗎？

Sorry, you need to be a little bit more specific in what you're asking.

抱歉，您需要更具體地說明您的問題。

Well, I guess just in general, so if you look at your cost of goods, how much of that is variable versus fixed? And within SG&A, I guess, we come back out to $10 million to $12 million for the year to get a sense of how much might be this G&A piece. But effectively just trying to get a sense of what can be flexed and what is fixed, to try and get a sense of what the leverage can be if sales is better or worse than what you're guiding to?

好吧，我想一般來說，所以如果你看看你的商品成本，其中可變成本與固定成本有多少？我想，在 SG&A 中，我們會回算當年的 1000 萬至 1200 萬美元，以了解該 G&A 部分的金額。但實際上只是想了解什麼可以調整，什麼可以固定，嘗試了解如果銷售比你所指導的更好或更差，槓桿可以是多少？

So I would say, from -- let's just talk about the marketing piece of things. We have set aside funds to be invested behind our marketing and e-commerce initiatives. And so if you think about that as a fixed investment, as sales materialize behind that, you would start to see leverage in the business. In terms of other flexibility that we have, as Tarang mentioned, we're always looking at different opportunities to save on our cost across the P&L.

所以我想說，讓我們來談談營銷方面的事情。我們已撥出資金投資於我們的營銷和電子商務計劃。因此，如果您將其視為一項固定投資，那麼隨著銷售的實現，您將開始看到業務中的槓桿作用。就我們擁有的其他靈活性而言，正如 Tarang 提到的，我們一直在尋找不同的機會來節省整個損益表的成本。

And I'd just add there, Mark, I get you're -- where you're coming from in terms of, hey, how much -- can you help quantify how much leverage there is in this business? To your point, we haven't disclosed that before, so let me -- let us kind of huddle and think about whether that's something -- I understand the reason why that would be important, and let us come back and decide how we want to address and if we want to start disclosing exactly how much leverage is there.

我想補充一點，馬克，我知道你是從哪裡來的，嘿，有多少——你能幫忙量化一下這個行業有多少槓桿嗎？就你的觀點而言，我們之前沒有透露過這一點，所以讓我——讓我們聚在一起思考這是否是一件事——我理解為什麼這很重要，然後讓我們回來決定我們想要什麼解決這個問題，以及我們是否想開始披露到底有多少槓桿。

Okay, great. And then switching gears from a business standpoint. So I get that scanner data isn't the end all and be all of the business, but it certainly seems like in some categories like skin, it started to do a little bit better in recent months. I guess I'm curious how much of a focus maybe that can be especially given what you've talked about in terms of just overall makeup category trends.

好的，太好了。然後從商業角度轉變方向。所以我知道掃描儀數據並不是全部，而是業務的全部，但在皮膚等某些類別中，它在最近幾個月開始做得更好一些。我想我很好奇，考慮到您所談論的整體化妝品類別趨勢，這可能會受到多大的關注。

Yes, no, we're highly encouraged by, I'd call it, overall scanner trends across the board, both in makeup as well as skin care for us, if you take a look at the trajectories we were on last year to this transition period and what we're seeing. Skin care, as I've mentioned, I think for a long time, it's highly strategic for us, mainly because we can bring the same model that we've used on color cosmetics which is Prestige quality and extraordinary value, and there's a real need for that. And so what you're seeing on skin care is momentum behind many of our new items, and that focus. I mean I think Target has been our main customer for skin care for a while. We're highly encouraged that as Ulta Beauty tested skin care, they decided to take the entire full chain, given how well it's done. So skin care, all along has been one of those categories that we're highly interested in, and everything for us always goes back to the consumer. The reason we're interested in it is this overall insight of you need good skin to have good color cosmetics coverage, and both go hand-in-hand. And we believe we have an advantage of our ability to come out with meaningful innovation.

是的，不，如果你看一下我們去年到今年的發展軌跡，我會說，無論是在化妝品還是皮膚護理方面，我們都對掃描儀的全面趨勢感到非常鼓舞。過渡期以及我們所看到的情況。正如我所提到的，我認為長期以來，這對我們來說具有高度戰略意義，主要是因為我們可以帶來與我們在彩妝上使用的相同模式，即Prestige品質和非凡價值，並且有真正的價值。需要那個。因此，您所看到的護膚品是我們許多新產品背後的動力和焦點。我的意思是，我認為塔吉特長期以來一直是我們護膚品的主要客戶。令我們深受鼓舞的是，當 Ulta Beauty 測試護膚品時，鑑於其效果如何，他們決定採用整個鏈條。所以皮膚護理一直是我們非常感興趣的類別之一，我們的一切總是回到消費者身上。我們對此感興趣的原因是，您需要擁有良好的皮膚才能擁有良好的彩妝覆蓋範圍，並且兩者是相輔相成的。我們相信我們有能力進行有意義的創新。

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

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

So in the past, you had talked about strategically in terms of your marketing that you specifically -- or went toward influencers that are less well-known, but were up and coming. Has your strategy changed at all such that some of the increased marketing spending is going toward paying more influential influencers?

因此，在過去，您曾在營銷方面進行過戰略性的討論，或者專門針對不太知名但正在嶄露頭角的影響者。您的策略是否發生了根本性變化，以至於增加的營銷支出中的一部分將用於支付更有影響力的影響者？

And then secondly, in terms of the calendar year and the beginning of the year resets at retail, can you comment on if there has been any differences in performance among the retailers? I mean without naming names, are there some retailers where the resets are performing better than others? Or is it pretty uniform across your retailer base?

其次，就零售業的歷年和年初重置而言，您能否評論一下零售商之間的表現是否存在差異？我的意思是，不點名，是否有一些零售商的重置表現比其他零售商更好？或者您的零售商群中的情況是否相當統一？

Why don't I take this one? On our strategy with influencers, you're right that in the past, we primarily focused on micro or kind of macro influencers and avoided the mega influencers. What I would tell you is our strategy has not changed from when it comes to a sponsorship or paying standpoint. So I mentioned in the transition period quarter, we saw quite a bit of interest from a number of influencers, including one of the mega influencers, Jeffree Star. I think one of his videos is up to 10 million views.

我為什麼不拿這個呢？關於我們與影響者的策略，你是對的，在過去，我們主要關注微觀或宏觀影響者，而避開了超級影響者。我要告訴你的是，我們的策略在讚助或付費方面沒有改變。所以我提到在過渡期季度，我們看到許多有影響力的人都表現出了相當大的興趣，其中包括超級影響力人物杰弗裡·斯塔（Jeffree Star）。我認為他的一個視頻觀看次數達到了1000萬。

The other one is, I think, close to 7 million views on different e.l.f. products, and he started with e.l.f. poreless primer and then moved on to doing the entire full face with e.l.f. We did not pay for either of those video postings. It really came more from our strategy of how we're reaching out. I think in the past, we almost avoided the mega influencers and many of them actually really love e.l.f. because of what it does for their brand and with their communities and followers. And so Jeffree had seen, based on some of our other outreach efforts, a lot of buzz on our poreless putty primer, tried it out, was amazed with how well it compared to one of his favorite Prestige products that was priced at $52, and then decided to go do a full face. So I think it talks more about our strategy and our breadth of outreach than it does in terms of actually paying for endorsements, which we still haven't done outside of our normal product collaborations, where we'll collaborate with someone.

另一個是，我認為，不同 e.l.f. 的瀏覽量接近 700 萬次。產品，他從 e.l.f 開始。無孔底漆，然後繼續使用 e.l.f. 進行整個面部護理。我們沒有為這些視頻發布付費。這實際上更多地來自於我們的外展策略。我認為在過去，我們幾乎避開了那些超級有影響力的人，他們中的許多人實際上真的很喜歡 e.l.f.。因為它為他們的品牌、社區和追隨者所做的一切。因此，Jeffree 根據我們的其他一些推廣工作看到，我們的無孔膩子底漆引起了很多熱議，他嘗試了它，並驚訝於它與他最喜歡的一款售價52 美元的Prestige 產品相比的出色表現，並且然後決定去做全臉。因此，我認為它更多地談論了我們的戰略和我們的推廣廣度，而不是實際支付的代言費用，我們在正常的產品合作之外還沒有這樣做，我們將與某人合作。

And then on the retailers, I think one of the things that is encouraging for us is it's pretty uniform in terms of where we've seen the Project Unicorn sets go in. We saw that change in trajectory across the customers, that kind of -- if you can just see it right after post resets, which I think is encouraging. You always have some variation. And for competitive reasons, our customers won't let us -- won't want us to call out who's doing better or worse, but we at least are encouraged that it wasn't one place where we saw a change in trajectory. We saw it pretty uniformly across the board.

然後在零售商方面，我認為對我們來說令人鼓舞的事情之一是，就我們所看到的“獨角獸計劃”套裝的使用情況而言，它非常統一。我們看到了客戶軌蹟的變化，如果你能在帖子重置後立即看到它，我認為這是令人鼓舞的。你總是有一些變化。出於競爭原因，我們的客戶不會讓我們——不希望我們指出誰做得更好或更差，但至少我們感到鼓舞的是，這不是我們看到軌跡發生變化的地方。我們看到的情況非常一致。

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 actually was hoping to maybe circle back and then have you guys possibly drill down just a little bit further on the expected slowdown in FY '20 in terms of your net sales. I guess if I think back, a key reason you guys changed your fiscal year was because you'd have better visibility from the retailers. So hoping to hear just a little bit more color on what you are hearing from them regarding space, especially given the category softness that you mentioned and some of the resets that you've seen that I guess makes you guys think that your sales are going to decline 4% to 8% in FY '20.

實際上，我希望可以回過頭來，然後讓你們進一步深入了解 20 財年淨銷售額的預期放緩。我想如果我回想一下，你們改變財政年度的一個關鍵原因是因為您可以從零售商那裡獲得更好的可見性。因此，希望聽到他們從他們那裡聽到的有關空間的更多信息，特別是考慮到您提到的類別柔軟性以及您所看到的一些重置，我想這會讓你們認為您的銷售正在增長20 財年將下降 4% 至 8%。

Yes, sure. So first of all, on your first question, in terms of the change of fiscal year, we believe that was a good move because it did allow us to see kind of how these resets are performing. If we had given full-year guidance back in kind of February, I mean, if you look at the quarterly guidance we gave you in February, it was down 8% to 12%. So this is an improvement relative to that, and that improvement was aided by our ability to see how we're coming out of these shelf sets.

是的，當然。首先，關於你的第一個問題，就財政年度的變化而言，我們認為這是一個很好的舉措，因為它確實讓我們看到了這些重置的執行情況。如果我們在 2 月份就給出了全年指引，我的意思是，如果你看看我們在 2 月份給出的季度指引，你會發現它下降了 8% 到 12%。因此，這是相對於此的改進，而這種改進得益於我們了解我們如何擺脫這些貨架組的能力。

The second thing I would tell you is separating our guidance approach, particularly with Mandy coming on and her approach, how she wants to do guidance and really make sure that we see the proof versus what we're seeing in that first transition period. We're well positioned relative to any of our core competitors and our key customers. So if you just take what I just mentioned from the track channel data of the first quarter, track channels were down 3% and we're plus 3%, we're obviously doing better than where the rest of the category was, or has -- is right now, and a lot of that reflects promising early signs we're seeing at both Project Unicorn as well as our marketing activations. So I try to separate out initial signs. I'm glad we changed the fiscal year. We have a much better position in terms of where we are relative to where we would have been, and then I'd say guidance is more both philosophical as well as really wanting to see the proof in it and not get ahead of ourselves.

我要告訴你的第二件事是分離我們的指導方法，特別是曼迪上場和她的方法，她想要如何進行指導，並真正確保我們看到證據與我們在第一個過渡期看到的情況。相對於我們的任何核心競爭對手和主要客戶，我們都處於有利地位。因此，如果你只看我剛才提到的第一季度的軌道頻道數據，軌道頻道下降了3%，而我們增加了3%，我們顯然比其他類別的公司做得更好，或者已經做得更好。 ——就是現在，這在很大程度上反映了我們在獨角獸計劃以及我們的營銷活動中看到的有希望的早期跡象。所以我嘗試分離出最初的跡象。我很高興我們改變了財政年度。就我們相對於我們本來應該達到的位置而言，我們處於一個更好的位置，然後我想說，指導更多地既是哲學的，也是真正希望看到其中的證據，而不是超越我們自己。

Okay. But like you mentioned, Tarang, you are seeing some signs of improvements. Because I'm also trying to understand, with the stepped up spending and some of the changes you're putting into place, obviously, there's a lag. And I'm just trying to kind of understand how many quarters we -- it will take before you see further improvements and really how much of a lift you're expecting to see from some of the stepped up spending. Any color there on some of the -- what you've implemented so far.

好的。但就像你提到的，塔朗，你看到了一些改善的跡象。因為我也在試圖理解，隨著支出的增加和你正在實施的一些改變，顯然存在滯後。我只是想了解一下，我們需要多少個季度才能看到進一步的改進，以及您真正期望從一些增加的支出中看到多少提升。到目前為止您所實施的某些內容上的任何顏色。

Sure. So what I'd tell you is, this is a pretty responsive business and we did see really good lift and response in the transition period quarter. It exceeded our expectations in terms of how it did. Now part of that was aided by, I mentioned, the Jeffree Star videos and the massive amount of activation we had against that. So that's a little bit of where I say I don't want to get too ahead of ourselves in terms of how much we attribute to that versus marketing.

當然。所以我要告訴你的是，這是一個反應非常靈敏的業務，我們確實在過渡期季度看到了非常好的提升和響應。它的表現超出了我們的預期。我提到，現在的部分原因是 Jeffree Star 視頻以及我們對此進行的大量活動的幫助。因此，這就是我所說的一點，我不想在我們對營銷的貢獻程度方面太過超前。

Your second point is absolutely right. I mean what you see embedded in this guidance is the assumption that marketing and e-commerce and stepping that investment up in a noisy category is absolutely the right thing to do. But let's not forget that there is a lag within that. We're hoping, over the next couple of quarters, we can see, where is that response. Again, I don't want to get ahead of ourselves, we could have easily just gone forward. But we are seeing both -- both is true. We're seeing promising signs, and at the same time, want to be cautious in terms of how we approach the year.

你的第二點是絕對正確的。我的意思是，您在本指南中看到的內容是這樣的假設：營銷和電子商務以及加大對嘈雜類別的投資絕對是正確的事情。但我們不要忘記其中存在滯後。我們希望在接下來的幾個季度中，我們能夠看到這種反應在哪裡。再說一遍，我不想超前，我們本來可以輕鬆地繼續前進。但我們看到了兩者——兩者都是真的。我們看到了有希望的跡象，同時希望在對待這一年的方式上保持謹慎。

Okay, that make sense. And just a couple of other questions for me if that's okay. Just wanted to ask if you guys are expecting to gain shelf space in FY '20. Is that embedded into your guidance? Just to clarify that or not.

好吧，這是有道理的。如果可以的話，還有其他幾個問題要問我。只是想問一下你們是否希望在 20 財年獲得貨架空間。這是否已納入您的指導中？只是為了澄清或不澄清。

So what's embedded in our guidance right now is the shelf space that we've announced before. So we talked last quarter, Ulta giving us more space, as well as where we are with Walgreens and some of our international. It doesn't assume more than that. So if there was additional space or doors that came up, that will be an addition to what we've put out.

因此，我們現在的指南中包含的是我們之前宣布的貨架空間。所以我們上個季度討論過，Ulta 給了我們更多的空間，以及我們與沃爾格林和我們的一些國際公司的關係。它並沒有假設更多。因此，如果有額外的空間或門出現，這將是我們已經推出的內容的補充。

Okay, that's helpful. And then final question is I'd be curious to hear from some of the store closing that you did a few months ago, were you guys able to recapture any of the lost sales, either through online or any of the national retailers? Is there any way for you guys to quantify that at all?

好的，這很有幫助。最後一個問題是，我很想听聽你們幾個月前關閉的一些商店的消息，你們是否能夠通過在線或任何全國性零售商重新奪回任何損失的銷售？你們有什麼辦法可以量化這一點嗎？

It's hard for us to quantify it other than when we close the stores, we did do some incentive offers for people to come on elfcosmetics.com. I mentioned earlier it was one of our best quarters in elfcosmetics.com and some of that was due to people coming from stores onto elfcosmetics.com. The other thing I would tell you is one of the reasons why strategically we decided to close our stores beyond the focus and making the difficult choice and really making sure that we took that SGA and put it against the brand and e-commerce spend that I talked about earlier, was our consumer is a multichannel consumer, and we felt pretty confident that they would migrate to national retailers. And so far experience, even just from a consumer reaction standpoint, given how small that footprint was, we feel pretty confident they're getting their e.l.f. in one of those other channels.

我們很難量化它，除了當我們關閉商店時，我們確實為人們來到 elfcosmetics.com 提供了一些激勵措施。我之前提到過，這是 elfcosmetics.com 上最好的季度之一，部分原因是人們從商店來到 elfcosmetics.com。我要告訴你的另一件事是，我們從戰略上決定關閉我們的商店，超越焦點，並做出艱難的選擇，並真正確保我們採取SGA 並將其與我所考慮的品牌和電子商務支出相抵觸。之前談到，我們的消費者是多渠道消費者，我們非常有信心他們會遷移到全國零售商。到目前為止的經驗，即使只是從消費者反應的角度來看，考慮到足跡是多麼小，我們非常有信心他們正在得到他們的 e.l.f.在其他渠道之一。

It appears we have no further questions at this time, so I'd like to pass the floor back over to Tarang Amin for any additional concluding comments.

目前看來我們沒有其他問題了，所以我想將發言權交還給塔朗·阿明，以徵求任何其他結論性意見。

Great. Well, thank you, everyone. Really appreciate the time, and we look forward to seeing some of you at the William Blair and Jefferies conferences in June and look forward to speaking to all of you on our first quarter call in August. Thanks, everyone.

偉大的。嗯，謝謝大家。非常感謝您能抽出時間，我們期待在 6 月的 William Blair 和 Jefferies 會議上見到你們，並期待在 8 月的第一季度電話會議上與你們所有人交談。感謝大家。

Ladies and gentlemen, this does conclude today's teleconference. Again, we thank you for your participation, and you may now disconnect your lines at this time.

女士們、先生們，今天的電話會議到此結束。我們再次感謝您的參與，您現在可以斷開線路。